I started another thread to try and get people to relish the history unfolding before them in the debt ceiling battle. I didn't really expect it to turn into a debate on the debt ceiling, but that's ok. To expand my original point however, I think we have a front row seat to a rare event, the passing of an era and the birth of a new era. Let's look at modern history. I would divide it into three "eras." First, there was the "Era of the Great Depression." It was the life-molding experience of our parents and grandparents, who would later be called the "Greatest Generation" because of their courage and tenacity. The Depression taught them to abhor debt, to value a steady job above all else, to avoid risk and to fear the dislocations of pure capitalism. They were desperate and they were tough, qualities that in history often produced despotic leaders. We got FDR, who was equally revered and loathed. He pushed through his "New Deal", a radical leftwing package of social engineering and big government activism. It wasn't enough to bootstrap us out of the Great Depression, but WW II did the trick. That lead to the second era. The post WW II years were the "Era of American Dominance." We friggin' ruled. Europe was flat on its back and totally dependent on us. The Marshal Plan to rebuild europe was a giant subsidy to US industry because realistically, who else was going to be able to supply the stuff to rebuild? Europe's factories were bombed out. Japan was bombed out too. China was struggling to feed itself. Over the next 25 odd years, the US prospered mightily. We got a little too big for our britches however, and foolishly became ensnared in a war of attrition in vietnam. We compounded that error by a radical increase in the size and scope of govenrment under LBJ's ironically titled Great Society. We hit bottom in the 1970's, with democrats moving far to the left and destroying the national consensus to oppose communist aggression. Jimmy Carter came to symbolize the face of defeatism, domestically and abroad. American "dominance" had become a bad joke. Ronald Regean's election in 1980 brought in a new era, one that I will call the "Era of Leverage." I love Reagan, I credit him with saving our country or at least buying us 25 years to right the ship, but his term did see a radical change in economics. We had forgotten the lesson of debt avoidance. Instead, we eagerly lapped up the idea that we could buy now and pay later. Financial service firms were as happy to oblige us as were the congress and Treasury. This was the age of Michael Milken, the original junk bond king. A soaring stock market gave rise to a soaring real estate market, and the head of the Fed became a rock star. When the shit hit the fan in 2000, we doubled down and bought ourselves another 8 years of mania, fuled by , what else, leverage. Now we appear to be transitioning to a new era. Let's call it the "Era of the Tea Party." It will be an era that recognizes limits. It will be one that our ancestors would recognize, one in which leverage is seen as foolish and dangerous. Like the transitional period between other eras, it is likely to be bumpy. Hopefully, another world war will not mark it. Certainly, political war will be pervasive. Barrack Obama, three years removed form being hailed as a transitional figure himself, is now seen as a relic of the last era, trying desperately to stitch together some dodge that will get him past the election. His demagogic defense of failed, big government programs sounds curiously tone deaf. Dude, we have so moved on from there. Or maybe we haven't. Time will tell.
The first era should be earlier, the Federal Reserve Act of 1913 was a huge victory for the bankers over the people of the US... In the 1920's the Supreme Court decided that the sole role of a corporation is to make money, that could have gone way differently. Things could have been defined in a much better way so that corporations would be better citizens. German corporations are not allowed to invest money outside of their own area of expertise for example, while some large US corporations invest very little in R&D and will sell products and services that kill their fellow countrymen... Some ideas about the greater good should have been incorporated into the legal thinking about corporations...
that second item is thought provoking and perhaps a good idea. I observe that companys who constantly maximize profits... frequently screwup and then wither on the vine. Is it really better to always charge that extra five percent or ten percent more. Is it really better to find a slightly cheap supplier for your cotton shirts or shoe laces or what ever it is your selling. Is it always wise to take you brand into national retailers, and then wind up with a bankrupt name in costco a few year later?
10 years ago I had a conversation with some folks from EU. They were appalled by the habits of the general public in US to speculate in the stock market and to load up themselves with credit/mortgage debt. The funny thing is that 10 years later both US and EU are in deep sh*t.
Clearly it's endgame time. Dems. want to more or less kick the can by making "funny money" cuts, like pretending Iraq and Afghanistan will continue for the next 10 years and back loading other cuts so there will be basically few real cuts in the next year. The GOP is in a tough spot. If they stand and test what will happen without raising the debt limit, they run the risk of a financial disaster and losing in 2012. If they compromise, it's wait until 2012 to see if they can wrest control of the White House and Senate. My guess is that a compromise will be reached although it may not happen until after the "deadline" and both sides see how the markets react. Seneca
That was to get around any social responsibility that might be imposed, which is a tricky problem because who defines what is "socially responsible" beyond the obvious act of physical harm. I have more of a problem when someone claims they are acting "amorally" rather than "immorally". I understand that the word "amoral" exists with a dictionary definition, but it seems more that in practice there is no such thing. Instead it is an amalgam of "immoral" and "cowardice". If you are acting immorally (like pornography - you know it when you see it) and say "I'm Behaving Evilly!", at least you have the courage of your conviction. "Amoral" is more like "I'm Behaving Evilly - but not really - I'm really a nice guy and if I had friends you could ask them."
I often wondered. During the internet bubble, there was a lot less money in circulation than now and people ran the market up to "irrational exhuberance" levels. Now the Fed is supporting the market and not getting the same results. Seems as though when many individuals with small amounts of money do better than what's happening currently. I could have things back asswards, I haven"t given this idea much analysis but just thinking about it.
Quote from EIGHT: Good for you, EIGHT!!! Finally, someone seems to recognoze what has been going on!! You have to check out this video ... it'll curl your toes and whiten your knuckles: http://www.youtube.com/watch?v=swkq2E8mswI
US will be unrecognizable in 10 years as Asia continues to rise. Twilight on the empire has set in and it is far too late for a reversal.