The Long Crisis

President Obama came to office on the back of change. Now as his policies are emerging it is fair to ask change to what? His team of brilliant cabinet members and advisers seem intent to bring the nation back to what it once was.

The Obama team effort seems to be to restore to the world in its full past glory a nation of consumers and paper shufflers who thought that they were becoming rich by exchanging real estate and exotic derivative financial instruments that no one really understood among themselves. This is clearly an impossible task.

Sometime in 2006 or 2007 the United States reached a limitation of rapid growth threshold, a growth based more on foolishness than sound economic principals. We can not roll back the present state of affairs and reinstate the past period of misguided growth. Once through the threshold there is no way to reenter the world that you have left. We have reached and exceeded the tipping point.

Our online friend James Howard Kunstler has a way of expressing how the Obama economic team is trying to sustain the unsustainable that much like a good horror movie is both entertaining as well as frightening. A sample of his writing follows:
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People of good intentions and progressive predilection are scratching their heads wondering just how President Barack Obama managed to turn himself into George W. Bush Lite with sugar-on-top just twelve weeks after that fateful walk down the US Capitol’s east stairway to the waiting helicopter. I’m hardly the first observer to note that Mr. Obama’s actions in the face of an epochal finance fiasco and economic collapse are a mere extension of the pre-January-20 policies, carried out by much the same cast of characters.

The assumption up until now was something about the reassuring value of continuity — if we could just prop up an ailing set of banks for a little while, the US public could resume a revolving credit way-of-life within an economy dedicated to building more suburban houses and selling all the needed accessories from supersized “family” cars to cappuccino machines. This would keep everyone employed at the jobs they were qualified for — finish carpenters, Realtors, pool installers, mortgage brokers, advertising account executives, Williams-Sonoma product demonstrators, showroom sales agents, doctors of liposuction, and so on.

This was a dumb strategy for such a supposedly bright group of people surrounding Mr. Obama. That old economy was dead on arrival January 20th. Even the kindest physicians don’t put corpses on life support.
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What Obama and team are doing is to waste valuable finite resources in an attempt to recapture pre crash America. Without a doubt this will make matters worse as little effort will be expended upon setting a new course. The puzzle in all of this is that Obama and his brilliant team seem to be unable to process new information. All of their efforts seem to try and capture the evil genie, the one that wrecked our economy and much of the world’s economy as well, and to stuff him back into the old bottle.

Not even team Obama, as brilliant as they may be, will be able to complete that task. Meantime time is a wasting and the mood of the public will turn very ugly as unemployment soars well above 10% and the Dow hits new lows.

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