Alas, it usually takes a disaster or a demagogue to make the masses into true believers. By then, you’re in foreclosure.
Crystal balls are a dime a dozen, but brass balls remain rare. Princess Cassandra and her descendants always suffer for warning drunken Greeks not to let that wooden horse into Troy. Pass the wine jug.
BARBWIRE, Memorial Day weekend 2005: We may not be able to avoid economic collapse ... As economist Paul Krugman noted in The New York Times (5-27-2005), the dot-com bubble was replaced by the real estate bubble.
Once the housing boom busts, he asserted that we have nothing else available to prop up a faltering economy.
World War II deficit spending and tax hikes are often credited for pulling the U.S. out of the Great Depression.
But we have been on a full war footing for four years, so the military remedy will not be available come the next crash.
The ancient Mayans, who accurately predicted their civilization’s destruction by Spain, have warned us about 2012.
Nikolai Kondratieff (1892-1938), a Russian economist writing in the 1920s, issued similar medium range warnings.
We are now at the edge of the fabled Kondratieff Wave, which forecasts a cyclical tsunami, a major economic contraction followed by a flood of widespread destruction.
The real estate bubble officially burst a couple of months later.
BARBWIRE AUG. 7, 2005: No less than Intel guru Andrew Grove warns that a bad moon is on the rise. Grove is a bear on the globalization, which helped make him megarich.
“I don’t think there is a good outcome,” he told New York Times business columnist Joseph Nocera.
“Although mainstream economic thought holds that America’s history of creativity and entrepreneurialism will allow it to adapt to the rise of such emerging economies as India and China, Mr. Grove thinks that is so much wishful thinking. In his view, globalization will not only finish off what’s left of American manufacturing, but will turn so-called knowledge workers, which was (sic) supposed to be America’s competitive advantage, into just another global commodity. What particularly bugs Mr. Grove is that he can’t see a way that this country can find the equivalent of a disruptive technology that will allow it to retain its current place atop the economic heap,” Nocera reported.
BARBWIRE AUG. 12, 2007: “Just like the few remaining reasonable Republican conservatives, I have been warning that it won’t take much of a scare for our financial house of cards to fall,” I wrote in March 2007. “My money, if I had any, would be on a crash caused by hedge fund speculation in market derivatives, a deadly financial game of Russian roulette with lots of zeroes to the left of the decimal point, which very few people understand. Let’s just say that such investors are betting on a quadruple trifecta on any given day.”
In June 2007, the huge investment firm Bear Stearns bailed out two of its hedge funds to the tune of $3.2 billion. They had lost almost all their value in less than a month. BS didn’t have to cover the losses of its casino bettors, but apparently did so to avoid a major crash in market confidence.
No less than Bill Clinton did the same thing — twice. When Brazil and Mexico at separate times teetered at the brink of financial collapse, the Clinton administration rescued them. The fear was the same: domino theory, a cascading worldwide financial cratering followed by global depression.
Late last week (2007), the Federal reserve made two huge cash infusions into the market and bought up a bunch of probably worthless home loan packages in an attempt to stabilize matters. Some major banks tried the same thing in 1929, postponing that legendary crash by all of a single day.
Borrowing from the House of Saud and the Temple of Mao to finance our wars will haunt us for decades to come.
I wish I had sage advice for those in power on what to do before it’s too late, but it’s probably already too late. Since Dubya’s dunces have made a pig’s breakfast of everything they’ve tried — other than keeping blacks, Jews and senior citizens from voting — I wouldn’t trust them to fix anything.
Everything they do is filtered through the lens of royalist dogma. They just don’t see anything wrong with the way things have been trending. Like King Ronald the Vague, Bush the Lesser has lately been touting the economy’s strong fundamentals. I believe that the captain of the Titanic was fundamentally a strong sailor.
All I can do is repeat that you should put some away for a rainy day because a hard rain’s gonna fall and the first sprinkles have begun.
ON THE LOCAL LEVEL, (as predicted) Charter Communications filed bankruptcy and Reno City Manager Charles McNeely resigned. The bankruptcies of Sparks and Reno are still a little ways out. (8-12-2007)
Washoe County officials are now openly predicting a Reno default in 2012. Sparks can’t make the $25 million balloon payment due on its Marina project.
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Andrew Barbano is a 43-year Nevadan and editor of NevadaLabor.com. E-mail email@example.com. Barbwire by Barbano has originated in the Tribune since 1988.