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Friday, March 27, 2009


was there ever really any difference?

i'm inclined to call this a belated realization on the part of many who, for some cloudy reason, expected the united states to be exceptional in some way in how it manages its affairs under duress and who now face the disturbing entreats of reality. glenn greenwald at salon highlights first the disaffected commentary of former salomon and IMF hand desmond lachman in the washington post and then the atlantic article penned by former IMF chief economist simon johnson, also of baseline scenario, which follows on some of his earlier recent writing.

i would be the last to deny that the united states in reality falls far short of both its stated ideals and the narcissistic image held by many of its citizens under the malleable catchall abstraction of nationalist fantasia, 'patriotism'. (though i would certainly differentiate qualitatively between the concepts of patriotism and jingoism which so many seem unable to separate.) what strikes me odd is that any large fraction of sensible folks would think otherwise -- to the point of having their disaffections become a focal point of their interpretation of the crisis.

to be sure, without high ideals there is no hope of worthy achievement -- relativist cynicism, however useful, isn't a recognized quality of leadership. but it is simply the peculiar zeitgeist of nationalism that encourages people of all walks to conflate those ideals with a nation, and then by unfortunate extension a government. i think anyone might have seen that economic crisis would not result first in the improvement of the lot of the common man vis-a-vis his overseers in a declining age characterized by a power elite that has for some time now most efficiently described as predatory.

the real question, it seems to me, is whether the predatory dominant minority now ensconced within a dessicated parochial state which toynbee rightly labeled as the singular "menace to civilization" can see the threat to its own existence presented by further rapine. thusfar, i see absolutely no reason to believe so. but hope springs eternal.

the mechanics of a slow resolution are available. and the method is even friendly to the maintenance of some vested interests. but first we must put aside the desire to expend precious government balance sheet capacity in a foolish, shortsighted and predatory attempt to restore the array of now-crippled financial intermediaries to what would appear to be not only immediate solvency but immediate profitability by sacrificing demand management.

even if the united states were to win the international sovereign fundraising game, that is sure to be the surplus savings of some other nation in desperate need of those funds at home whose resulting economic weakness will in this globalized world likely wash up on our shores. our financial institutions in the main have, with forbearance and time, the means to recapitalize themselves out of income. more than a few will genuinely require restructuring and some even assistance; the vast majority won't, provided demand is supported. moreover, should demand not be supported, the declines in money supply, deposits, incomes and cash flows will serve to deal damage to banks that would more than undo all efforts of a misguided government.

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well written

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