A Snake Eating Its Own Tail

By James Howard Kunstler
on June 22, 2009 7:59 AM

I'd like to know what Barack Obama thinks he's doing with the fiasco we call the US economy. He can't pump it back into the credit-fueled freak show it used to be, of course, but he could steer it in a practical new direction. Even people who have lost a lot, and stand to lose more, can be motivated to behave more self-beneficially. The president doesn't have very long before his economic problems become really awful political problems.

The current mass delusion that will go down in history as the "green shoots fugue" can't possibly bring the credit freak show back because the credit -- i.e. money borrowed from the American future -- was swindled away. Something like $14 trillion worth of nominal dollars is being sucked into a cosmic vortex never to be seen again. It was last seen in the spectral forms of so many collateralized debt obligations, credit default swaps, so-called structured investment vehicles and other now-obvious frauds. That giant sucking sound we hear means the process is still underway, and the "money" disappearing into yawning oblivion will out-pace any effort orchestrated by the Federal Reserve and the US Treasury to replace it with new "money" (or credit). Therefore there is no chance between heaven and hell that the pre-2008 suburban homesteading and shopping fiesta can ever come back. The American polity is tapped out in all sectors, personal, corporate, and public.

Notice the two words largely absent from whatever public discussion exists around these matters -- "swindle" and "fraud." The reason they're missing is because if they happened to enter the conversation, something would have to be done about them, namely investigations and prosecutions. The president is the person in the best position to set the terms of this public discussion, and by avoiding these two words he's blowing the chance to begin the process of correcting the tragic course we're on.

http://kunstler.com/blog/2009/06/a-snake-eating-its-own-tail.html#more?ref=patrick.net

I always enjoy his writing.

I think he's 100% right this time.

... sometimes his "suburban apocalypse" yarn is a bit hyperbolic. But this article is not, it is the simple truth.

This is where it's at, and I sure hope, as Jim says, Obama figures this out soon. Real soon.

are the guys who got us into this mess! dont count on the President seeing the light anytime soon!!!

Moving up the power ladder to the presidency isn't just a quantitative move. The role is qualitatively different from merely sitting in the Senate. Obama now has his hands close to the levers of power, and has by now discovered that there are a lot of stakeholders he didn't know about before he took the oath of office. You don't get to become (or stay) President unless you bow to the interpretation of reality as expressed by the oligarchy. That group forms the pinnacle of the pyramid of Guardian Institutions that define and protect our cultural story. Because they are the ones who profit from its stability, they will not let anything destabilize their position if they can help it -- least of all a johnny-come-lately outsider President with populist leanings.

Anyone who is surprised by this unfolding hasn't been listening for the last 60 years.

as in "correct," you're right....and correct.... Alas. Ms Bigmack