Let’s be clear that the US Federal deficit has been running from 10% to 15% of GDP month after month for almost 48 months and after WWII a number near 6% was considered extreme. There are a lot of things to call this but austerity isn’t one of them. Granted what we borrow to spend on is often silly and wasteful as far as the ordinary citizen but then again 20% of all personal income now comes directly from government. Again that isn’t austerity by any historic measurement.

Sure we can borrow at near or below a 0% real rate but only because of the unholy alliance between the Fed, the Treasury/government, and the worlds gigantic banks. If you want even the current levels of government borrowing then know that you want ultra powerful, law breaking, To Big To Fail Banks. You cannot have one without the other. Both being, borrowing vast amounts of money for essentially zero and gigantic powerful banks. They go hand in hand. Period.

By not avoiding over consumption on a global climate altering path the last 30 years most now think that what we have now is austerity. What they have lived through instead was an era of debt driven over consumption. More debt will not solve the problem it will only make it worse in the long run. That doesn’t mean less borrowing, by everyone including government and households will bring us back to the 90′s or take your pick of some golden economic age in your memory.

It is of course an impossible political message to tell that most everyone is going to be poorer and have to work harder. Get by on less. Such is an impossible sell even among those who fret about global warming, ironically.

We had a Credit Bubble. We are still having one, on life support mind you. In that instance it was a mortgage bubble and it was launched with knowledge aforethought buy Greenspan et. al. in order to keep systematic credit growing rapidly outside the traditional banking sphere. The beauty of it was that ordinary citizens could participate in what was leveraged speculation and to boot could take incremental gains from the home appreciation and borrow and spend more. Which inflated jobs, tax receipts and the entire economy. Which is why Greenspan, the entire financial world and every politician in America was all on board.

Only two things can grow a modern economy. Either ever expanding credit or new money coming into a system from outside. The government borrowing and spending $100 billion a month for the last 48 months has been an existential necessity for the economy.

The US in now actively counting on a meltdown in the EU in order to attract capital flows from there. This has been going on for 6 months and the more the better, for us. All that money flowing here reduces the need for more credit which either few want to take or few want to give, in the amounts necessary to expand the economy, which is about $2 trillion in new credit a year, while ignoring or hiding the credit which is going bad.

I am not going to take any sides on the Shia vs Sunni struggles but will only note that the US is 100% in with the Sunni kingdoms who are actively fighting what is a religious war with Shiites. The Saudi’s antipathy to Iran and it’s version of Islam is in the end I think why Iran has been cast as our enemy since the Revolution. Such serves their purposes far more than ours.

Essentially on all matters in the Gulf and the Arabic speaking world we are the Saudis bitch.

That’s the best defense but the guy who wrote/sponsored the law said when the story broke nationally that the law had nothing to do with this case. So the prosecution calls him as a witness and unless he recants, and boy is he in a pickle now on this, then Zimmerman’s case gets very weak.

You might recall that $50 billion of the TARP money, the emergency bailout money put into Paulson’s Treasury and then Geithner’s was to be to go to the aid of mortgage holders. Well there was no way in the world citizens were going to get those billions so Obama let Geithner desiged HAMP I and HAMP II, which insured citizens would see almost nothing.

In the meantime that $50 billion has been languishing in a Treasury account and for a couple of years there has been a furious scramble to let the banks get that money. Well the payoff is here. Now admittedly much of it will not reach the bottom line directly but will fund writeoffs but in any case the banks will get it all.

Good job Tim and Barack

Rahm made Obama president. Rahm the insiders insider who assured everyone who is anyone that his man would not rock their boats. Rahm gave Obama legitimacy, not the other way around so getting rid of Rahm at that early date was risky.

The dystopian movies of the 70′s and 80′s from Soylent Green to Blade Runner to Aliens made determining if government or corporations were in control impossible. So too it is impossible in these cases to determine who the storm trooper police are defending exactly.

The protest encampments are little more than a public nuisance but it is their symbolic meaning that carries weight. So too the police response is purely symbolic.

It is no use bothering your little mind about who the police are defending since there is no longer any real separation between government and corporations, just like those dystopian movies of old which made the combination implicit. That such visions in movies has disappeared is not coincidental.

Fraud now defines the financial world. The markets are now broken and volume in all markets is plunging. Leaving market movements in the hands of the giant players gaming the system and or playing each other. With the invisible hand of government pushing things around as well.

It is inappropriate to call the financial markets, markets, now. The markets and the financial system, such as it is, is running on fumes and fraud. The emperor has no clothes.

A dislocation and collapse could happen at any time. The Euro bailouts are funding capital flight out of Europe and much of that money is flowing here which is propping things up. It is possible with so few hands now in the game, with enough close cooperation with the Fed and Treasury, ie. the government, a panic might be averted. In the meantime the system rots.

The age of ‘growth’ is over. Done, it is finished. Hope all you will, it’s over.

http://theautomaticearth.blogspot.com/2011/11/november-14-2011-growth-paradigm-has.html

http://wallstreetexaminer.com/paid/rf111611.mp3

In every possible short term; bailout, borrowing, money printing and phoney accounting will always be the best policy. There will never come a time when this isn’t true. So wish all you want that the system can be ‘fixed’ and we can get back to normal ‘growth’ with just one more bailout but every bailout will beget another. Until that is that the system just dislocates. In the meantime the rich and powerful will become more rich and more powerful with each iteration of rescue.

By my reckoning every elected government in the Western world is unpopular with perhaps the exception of Australia. Well and Canada where nobody cares.

Since every Western government is responding only to entrenched institutional power especially financial/corporate. Governments are no longer responsive to the people except to the extent they respond to reactionary populists but in those cases only at the margin of hot button social issues.

No right populist will be elected president. It won’t happen. For they are loose cannons.

Sadly the Fed did not take up my recommendation. That was to run the sewer pipe from JP Morgan into the NY Fed’s basement and every inch it rose give $100 billion to Jamie Dimon.

Listen, only monetizing stool will save the system.

The Fed is buying and selling already existing bond and notes. So no new ‘loans’ are being made. No new credit is produced. Now the Fed always buys existing bonds so do not directly produce new credit into the system but the money they print to buy them is new cash that can go to buy more new bonds. However in this case they are selling exactly as much as they buy so there is a zero increase in cash, or so called liquidity, in the system.

First the theme song.

http://www.youtube.com/watch?v=LVQ0MXp-8ds

Anyway these moves won’t do a thing. The fact is the Fed and ‘monetary policy’ cannot fix the economy. If it could than 25 years of activist Fed policy would have made things just swell now but instead have run us into this dead end. I know I know, now Progressives are supposed to believe in the Monetary Magic Pony. Sorry, there are no magic ponies.

Shame on the Fed for doing these lame moves that pretend to do something but kudos to them for admitting, so obliquely, that they can’t.

Oh sure, when the time comes, that being when stocks and the markets are in full panic, the Fed will ‘print again like they did last summer’ and the summer before and presumably will save the markets again. That isn’t saving the economy exactly but what the hell it’s something. Just not for you.

You can take it to the bank that just as the brain has specific THC receptors no modern national government, which by definition are based upon the standard economic model, will ever legalize or decriminalize marijuana. I can’t explain it beyond alluding somehow to an almost biological mistrust of anything that is an hallucinogen.

Until proven wrong I assume the review will be used to affirm that race based sentences are just fine.

There is an essential flaw in ozone regs in that they focus on regions and not point sources. Well that’s my understanding anyway. So downwind localities end up with alerts and having to take some measures while the big point sources upwind roll merrily along.

Admittedly trucks and autos are a big source but I think that there are actually no penalties for large individual ozone producers. Correct me if I am wrong. I am not saying rolling back these regs is wrong but it is my feeling that the regs themselves are hardly maximal.

The essential BS here is that JPM is American. JPM is as American as Mecca or the Great Wall of China. It’s place of incorporation is meaningless. Or at least meaningless in any sense like being a citizen. Mitt may be right, sort of, that corporations are people but they are not citizens.

On a level beyond person or citizen JPM and all the giant corporations don’t just represent American power, they are American power. America the powerful nation.

Dimon is going to get his wish probably about the capital requirements. Even if it takes the destruction of the banking giants of Europe. A thing that is happening now and which will only make ‘American’ corporations all the better down the road.

In the great game of nations the giant corporations best friend is America. JPM is worth more than any 50 million individual Americans. America the great nation would do just fine if 50 million citizens just starved to death. America the great nation would be badly wounded if JPM collapsed.

In a sense none of this is new, even to the general, not really that into it, public. At least not the general story if not the details and this is just more details. Everyone who cares to knows the CIA screwed up. The CIA always screws up, always has, and so more than half it’s job has always been enlisting the all the institutions of government and media to deflect by misinformation and disinformation, making it political and partisan. It’s a fight they never lose. Not the institution nor the people.