The collapse of financial solvency of many of our corporations and [View All]

the solvency of the U.S. Government itself have been on parallel tracks ever since the 80's except for the brief spell during the Clinton years. This is no accident.In the Reagan Era, it became fashionable to make supermen out of CEOs who, through rigged deals with investment banks, made themselves rich by looting their corporate treasuries.The same CEOs through the revolving door wound up at the highest levels of our government when the socalled CEO president Bush took over.Bush the first presided over one of the colossal financial fiascos called the S&L scandal until his son bested him with an incredible array of financial scandals.

The root cause of the problems of profitablity faced by our corporations lies in the total destruction of equity capital built up by solid management over many decades.This was done by greedy managers in collusion with Investment banks like Citibank, Merrill Lynch and J.P.Morgan.Many previously profitable profitable companies assumed too much debt as they got passed from hand to hand much like Elizabeth Taylor changed her husbands.The collapse of equity and the assumption of debt resulted in debt service becoming a major item on their operating costs.This is why corporations are now scarmbling to go to India and China to reduce their labor costs blaming everyone but themselves for this disaster.

In the same way, Mr.Bush and his financial managers, who inherited a healthy economy from Mr.Clinton, decided to pass on tax cuts to the wealthy following their ideological mumbo jumbo and have now saddled this country with a debt load that, according to david Walker the Comptroler General threatens to explode out of sight.The strom clouds are on the horizon and the only sure thing awaiting the U.S. is the prospect of becoming another Argentina.When 50% of your GDP is devoted to debt service and you have maxed out your credit cards, even the gullible Chinese and Japanese bankers are going to take their money elsewhere.

As General Zinni said, in his own colorful way:"We are f---ed".