The Bushobama Depression

Well it’s official. It’s a Depression. Two days ago at a regional conference in Kuala Lumpur, IMF Managing Director Dominique StaussKahn said that the big world economies are already in a depression. Of course this is coming from a guy with a hyphenated name like a Singing Nun who is also known in France as le grand seducteur for bonking a colleagues wife at last years Davos festivities. Maybe we should wait for a second opinion from someone not from France. How about say, from Japan? In the 1990’s they went through their own depression and only briefly pulled out of it in the past 5 years with the debt fueled world boom but now it looks like they are back in their depression with the rest of us in our globalized death spiral. But take heart. Bushobama has picked some real winners to pull the US out of it’s flat spin with some really creative ideas tried during the Japanese depression. Bushobama’s first face plant was picking some real winners to head his economic team like Larry Summers and Tim Geithner. This is the same Larry who was fired as the Dean at Harvard for saying women are too dumb to do math and science. I’m sure they are too stupid to do the kind of economics practiced by old larry. Geithner and the terminally arrogant Summers actually have some knowledge of Japan’s attempts to fix their depression and they say that that those attempts failed because they were too halfway and weak and too poorly timed. We will take a detailed look at their comments but I am starting to think that men are too stupid to do economics. In 1990 Japans public debt was 19% of their GDP and now it’s the highest in the developed world at 180%. The US by contrast was 60% in 2007 but obviously much higher now with $9.7 Trillion dollars in debt already borrowed or promised as of this month. Does this sound like a country who used half way measures? In the 1990’s the Japan spent more than $1 Trillion on 10 stimulus programs which most observers including Summers said was money down a spiderhole. The NY Times last week did a segment of the Japanese stimulus concluding it was a waste of money building bridges and highways to nowhere. The Japanese prevented the default of insolvent banks and corporations by preventing markdowns of their debt and buying equity and commercial paper. The more money they poured into their banks, the more the banks hoarded the money. And what was worse the companies actually tried to pay down their debt and the doggone Japanese consumers wouldn’t consume and instead saved their money at a 12% clip, one of the highest in the world.
So you ask, is it fair to compare the US economy to the Japanese economy or for that matter the Swiss or Swedish or Chilean economy if we are trying to avoid a repetition of their mistakes? If you believe in John Maynard Keynes it is fair, because the solutions are the same Keynesian solutions of digging a hole and filling it up. In 1980 the Japanese Central Bank interest rate was 9%. By 1987 Japan was fueling a ferocious bubble in real estate and their stock market. The central rate was 2.5% and cheap and easy credit fueled a boom which drove the Nikkei from 8000 in 1983 to almost 40,000 near the end of the decade. As an aside, the Nikkei is now today exactly where it was in 1983. The bubble finally popped when the Central bank suddenly raised their rates to 6%. Then to stop the carnage they tried dropping interest rates to nearly zero in the 1990’s. Nada. They cut taxes following the lead of Reagan and other Alzheimer economists. Nada. Nothing trickled, not up, not down, not sideways. The citizens of Japan were fried and refused to consume and instead did the only rational thing: they saved while their government borrowed and floundered and spent to no avail. Do these blunders sound familiar? The so called stimulus working its way through the Washington pork and sausage factory is a a real mishmash of unrelated plundering of of my children’s future. . The national debt at the end of the Texan Bushwhacker was said to be about 10.8 Trillion which is 78% of our GDP. There are all manner of trillions allocated or promised which run from about another 4 Trillion to $9.7 Trillion which will take us to well over 100% this year and Bushobama promises trillion dollar annual deficits into the future and so it appears the US is catching up with Japan’s 180% debt to GDP at a rapid clip. The perps who fueled our own real estate and debt driven boom are in charge of the solutions which are attempting to solve the problem with yet more debt and propping up the wealthy and the financial institutions by running the printing presses which serve to increase the power of the Wall Street and Beltway Elite and increase the power and reach of the government. It goes without saying that this will produce inflation down the line which will destroy the savings of our citizens who are only just now trying to stop consuming and start saving. This is a cruel betrayal and a cynical disregard for the millions of young people who voted for change who will soon find their futures are being sold down the river by a charming black president with a good jump shot and a bad cigarette habit. So the depression is on and will be likely picking up speed in coming months as other dominoes fall like the commercial real estate market, commercial paper,credit card and student loan debt, regional banks and assorted and sundry corporations who made the mistake of not trying to suck on the Federal Tit while they had the chance. The financial meltdown which started under the bushies is picking up speed under the already failed policies of a corporate financial and military state which like the Bourbon Dynasty, has learned nothing and forgotten nothing.


Published by Rendezvous Mountain Farm

I was born in Cascade county Montana and raised in a dozen Air Force SAC bases. I attended Holy Cross,West Point and UNC in Chapel Hill(MD"71). Army doc in the last years of the Viet Nam fiasco. My wife and I live in a log cabin I built from standing dead lodgepole trees we cut from Shadow Mountain and regional local timber in 1976 . I've done a dozen different jobs including construction, boat building,magazine writing and commercial fishing and retired from the Emergency and Operating Room in 2004. We manage a small diversified organic farm including leased land which totals about 40 acres in the Jackson Hole valley. We raise a variety of livestock which includes some heritage breeds of animals and poultry. We grow most of our food and forage. Our land is irrigated from Granite Creek and the Snake River and we raise and bale our own organic hay. We supplement with food collected from Jackson Hole Food rescue which is mostly dairy, bread and past date vegetables and food from the grocery stores and restaurants.

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