Why Will it be a Tragedy?

Our protagonist of the Great Crash novel, Follow the Money, Barack Obama, has tied his star to a very weak and unreliable vessel. While he is making noble efforts to build a new way of running a GM kind of country, he has taken on too much for any one person to achieve. The compromised individuals he has gathered around him and appointed to his cabinet may well be the best he can find – but they are not adequate. I watch, breathless, for signs of his success in such a noble venture, but I cannot possibly be optimistic.

Leaving aside all the foreign policy disasters that threaten to drown him – the legacy of more than thirty years of cynical imperialist meddling – one has only to focus on the economic problems to recognise what a hopeless task he has taken on. As the excesses of credit for the last twenty years have turned the western economies into bubble economies, so the great leveler – debt – has punctured them. His administration officials are busy trying to cure a debt problem by creating huge new debts – they cannot possibly succeed.

The supposed signs of recovery in the stock markets are beginning to fray around the edges –as those observers who identified it as a bear rally forecast. That is not the tragedy. The gyrations of stock markets are no reliable indicator of the future or of the health of the real economy. As they have recently been too optimistic they will soon tumble headlong in fear and become too pessimistic. The US can recover but not by going farther into debt – the bubble economy has been built on credit and as I quoted here a couple of weeks ago – the Chinese have cancelled the US’s credit card.

Who will suffer from this? No doubt we all will if the Benanke-Geithner plan continues and builds up a huge inflationary overload. Welcome to the Weimar Dollar and hyperinflation when the monetarist policies get away from them. Monetarism needs to be buried deep – with a stake through its heart, and Keynsianism will likely prove incapable of correcting the problems that it created.

But let us say the policy of printing dollars works. Since it is already impossible for the US to repay its current debts it has only one way out of the jam – printing almost worthless dollars to pay off the creditors with. So – who suffers most? The creditors, of course, as well as all the generations who will follow the current profilgate scoundrels into a severely compromised future. That means your kids and grandkids – and their kids.

The only source of value in human society is people. Not dollars, not oil, not capital, not gold – only well educated, well adjusted, healthy and wise people. And lord knows – the present generations have proved themselves incapable of raising them. Maybe I should repeat that for those who are so quick to dismiss the idea and prefer to cling to their current idols. People are the only renewable resource we have, and are the only measure of value in human society. Bankrupting them – before most are even born – is a crime commited against posterity.

That’s why Obama cannot possibly be any more than a hero of tragedy – another Othello – because if he succeeds, he fails.

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