Tuesday, July 1, 2008

The Coming Economic Night

Is there any hope for the American economy? The news is in...and it is all bad, every single piece of it. Bad news from the people, bad news from the banks, bad news from the government, and bad news from the corporations. We're broke. No one is saying America is broke, but it is. The shoes haven't all dropped, there are still mountains of untold debt hidden, almost ready to burst through the door, the keepers of the secrets sweating and groaning to keep it back. They are almost exhausted and the night is about to splash forth.

The secrets are already slipping out on the people side: foreclosures are up, inflation is up, bills are up, and credit is down. Job cuts have started, tent cities are growing, and families across America toss and turn more each night, wondering how to pay the bills, wondering what will happen if that unexpected medical expense happens, wondering if they'll be living out of their car soon.

Now the news on the government side is carefully massaged and managed. Millions in taxpayer money goes into the statisticians payrolls to crunch the numbers and tell us that core inflation is low, that life in America is better than it was a generation ago, that our future is on track. The data is carefully rolled out and the government spokesmen are well rehearsed, comfortable in the lime light, glib with the half-truths their mathematicians have spun. The people are lulled asleep by these monotonous, soothing voices, not realizing they are listening to sirens luring them onto the rocks.

The banks have the strongest game in town. Surrounded by the creme de la creme of Wall Street marketing, they can sell fire to a demon burning in the pits of Hell. Money, investments, dividends, astronomical returns, all of these are the tricks of their trade. They live by selling financial products, charging fees and interest. Whether the product actually benefits the customers, well, buyer beware. Who could not love the opaque financial instruments they've created: the derivatives, the CDS's, the CDO's, and the multiple tranches of the subprime MBS's? Such terms sound imposing so they must be worth millions and you know your future is secure because your portfolio is stuffed with these exotic financial instruments. But hidden in the small print, on page 87 at the bottom, in 6-point font, it reads that returns promised will only happen if a secondary market forms for these instruments. So look around you: are people actively trading this alphabet soup? Only kind of and certainly not for a profit? These instruments are in every drawer and every vault of every pension plan, municipality, bank, credit union, in every country of the world. Surely this would mean that people would be buying and selling, cranking the value of the alphabets upward to the stratosphere. You could retire early, if they were being traded at their market value, but they're not. Instead, they're being hidden down on Level 3 and not counted toward the bottom line. Marked to market, its called, and everyone says it has value. But you know, and everyone else that bought into this scam knows -- the paper declines in value every day and is headed for worthlessness. When everyone finds out how worthless it is, when the instruments are brought from Level 3 into the light of day, a great wailing, a great keening cry will cross our land. The instruments will dissolve when examined and be shown for what they really are: nothing, things with no value. Everyone spent billions, maybe trillions, they gambled on a new money and found only the old confidence game. So you really believe you have any money left in your bank? It's gone, now and forever, eaten alive by alphabet soup.

The corporations will keep America together. They will be there as a foundation for a new future and a new wealth. Our corporate might brought us through 2 world wars and a depression. It is unequaled in the world and it will keep us great. Except, it is gone, a hollow echo of its former glory. Plants are closed, natural resources are locked behind laws, corporations are about servicing other companies or about compliance with government law. How exactly does this build wealth? Most real manufacturing has been outsourced overseas, leaving Americans with fewer opportunities to earn a decent wage. Wages stagnate, our economy stagnates, our government and taxes grow, and the American dream is squeezed out because multi-national corporations followed the profit principle, greed comes before all else.

So here we sit with a government that lies to her people while gorging on whatever wealth remains, a banking system that hides toxic financial secrets in the dark, a citizenry growing poorer every day, and corporations that are treating their employees not that differently than Pharaoh treated his slaves. There is gloom growing across our land. I for one am glad for the darkness because it helps me to hide my shame. Our ancestors, our mothers and fathers, our grandparents, gave us an inheritance, and we spent it on geegaws from China, on pointless foreign wars, and on worthless, shiny financial instruments. We are fools here in America, all of us. We have lost our way, we have forgotten the freedom and liberty that was given to us. We did not respect our heritage, we have sold it for a bowl of stew, and like Esau, we have lost our birthright too.

The coming economic night is spreading thickly over our land and no morning will dawn from it. It will stay until our shame and foolishness is squeezed from inside all of us, until our common sense returns, until we remember who we are, what we value, and the great land that is America. This long night will cost lives, maybe millions of them. It will cost misery unlike anything that our country has experienced before. It will be a refining fire. We have worshipped the false god of mammon and received darkness in return.

Now while there is still time, learn how to bring light into your soul. Remember all that is good and right. Know what is true and honest and value it, no matter the cost. Only by holding on to the values that made us great, can we be great again. Not great as a conqueror but great in character, great in honor, great in mercy, and great in our humility. Against such, no military can stand, no disaster can have power. America can be reborn after the coming economic night but only if something bright burns in the bosom of each of us. Build and stoke that fire now. There is no stopping the coming night, but we can endure it. Make a pact with yourself that you will endure it. The America on the other side of this night will indeed be a country of legend and a country where another economic night can never happen again.

Take your medicine. It's good for you.


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