Tie me Kangarupe down, sport
July 10th 2011
I can’t help but think that over the next month, things will be coming to a crux. It’s not a sentiment I express often, especially since a friend of mine, one given to apocalyptic conspiracy theories, used words such as “crux”, “crisis” and “crucial” a lot, and I would tease him about the crucifixion imagery that suffused his writing. It didn’t alter his writing style, but it made me more conscious when I use it.
Nevertheless, we seem to be heading for a convergence of paths that will prove to be a decisive time that will determine our lives for much of our future. Yes, this is a crucial moment.
The most obvious element is economic. This morning the media is reporting that Boehner has blinked on the credit limit negotiations and is no longer pressing for $4 trillion in spending cuts. Whether prompted by a sudden gust of sanity or just a sense of the political realities, Boehner has assured a revolt among the teabaggers in his ranks. It may be enough in the long term to topple him as Speaker of the House. In the meantime, Democrats, unnerved by a trial balloon sent up by the White House that Obama was considering massive cuts to Medicare and Social Security, wait to see what is put on the table. If those programs are messed with, a Democratic revolt is likely. And at that point, with the clock ticking out, the latest effort to raise the credit limit will fail. (Have you ever noticed that the party out of power likes to refer to the credit limit as “the debt limit”?)
He is now willing to return to the proposal floated by Vice President Joe Biden, which prompted Eric Cantor, Speaker-to-Teabaggers-in-waiting, to bolt the talks last week. Two trillion in deficits reduction, including closing a bunch of tax loopholes.
Treasury Secretary Geithner said that failing to raise the credit limit by August 2nd would be “catastrophic” and I’m guessing that he, or someone from Wall Street, sat Boehner down and told him what he could expect if the US began defaulting.
For starters, the annual cost of servicing the national debt (the interest we shell out to the banks and bondholders) would take a big jump, perhaps as much as $300 billion a year. That by itself would be enough to wipe out the deficit reductions, most of which are described over a ten year period.
The economy, hardly a picture of health, would go into a tailspin. We would probably end up in a plunge far steeper than the one in 2007, and that would put a big cut in revenues, since slower economies generate less taxable activity.
At this point, it’s safe to say that by refusing to accept a compromise from four trillion in savings to just three trillion, the teabaggers will have pissed away another $5 trillion. They keep saving money like this, and we’ll all be starving by 2012.
But there’s another shadow overlying all of this, one that has gotten very little attention in the media. When the world economy collapsed, it was mostly because derivatives, primarily in the form of credit default swaps (derivative notationals), according to the Bank for International Settlements, were US$684 trillion as of June 2008. That was the good old days. Nobody is quite certain, but they might total over one quadrillion ($1,000,000,000,000,000.00) dollars by now. In the event of a 2008-style meltdown, it represents a freeze on currency circulation more than powerful enough to utterly incinerate all of the world’s economies.
The fear that an American default could trigger these swaps is one of the reasons why corporate debt has swelled to $15.7 trillion, nearly trebling since 2008. They are funding the CDS in hopes of being covered if the wheels come off. They obviously haven’t been using those trillions of dollars to create jobs or make stuff.
And if the US goes into default, the wheels will certainly come off. It nearly happened a couple of weeks ago, when Greece threatened to default, and the Greek economy is far smaller than is the American economy.
Not only would the meltdown be far worse than 2008, but the US is far worse equipped to deal with it. Back then, real unemployment ran about 11%, compared to at least 18.5% now (and in all likelihood about 25%). World economies hadn’t been badly weakened—even in the US, 2007 was considered a quick-and-dirty recession, one that might have been gone by the end of 2008 had the world markets not melted down.
So we stand at the edge of something that could be worse than the Great Depression, and all Congress can do is play chicken and cling to hideously stupid ideas like “let’s stimulate the economy by reducing the people’s purchasing power”.
A lot of people can’t understand why the lunatic notion that “an unregulated capitalist economy would make everyone rich and address society’s needs” didn’t die in the wake of the 2008 meltdown, and at least some of the blame for that must be laid to the billions of dollars in propaganda and lobbying that Wall Street and major international financial groups engaged in after the fact, blaming the mortgage crisis on subprime loans made 20 years earlier, and claiming that the middle class, not the banks and corporations, racked up all the debts and must now pay for them. This is known as Austerity Programs, best described as “Man the lifeboats! Bankers and investors first!”.
Much of the propaganda must be laid at the feet of one Rupert Murdoch, the Australian media magnate who has twisted and deformed societies worldwide by making neo-fascism fun and entertaining and a populist dream. Don’t forget the Teabaggers got started by some whiny day-trader who thought it was terrible that the undeserving poor blamed criminal traders in the financial sector for the 2008 collapse. People need to be responsible for their actions, and in this case, the pronoun “their” is deliberately ambivalent.
But the Murdoch empire, the biggest driving force behind the neo-fascism that has enveloped America and much of the west, is sputtering badly.
In the UK, phone tapping scandals involving Murdoch newspapers have been bubbling along for several years. When the scandal was just celebs, football players and royals, the public figured it was just the sort of sleazy crap you expect from Murdoch and his minions.
But when it came to light that they had hacked the phone of then-missing Milly Dowler in 2002, and deleted her voice-mail in order to make room for more messages (in hopes that something juicy would roll in), public fury erupted. The fact the mails were being deleted remotely gave the parents false hope that she was alive, and of course eliminated an unknown number of possible leads. Public fury about that news in the UK is on the same level as the public’s reaction to the Casey Anthony trial here. This was followed by revelations that Murdoch employees hacked the phones of troops killed in Afghanistan and Iraq, and relatives of victims of the 7/7 terror attacks.
Then there was the remark that nobody got to be PM without Murdoch’s approval since before Maggie Thatcher.
Murdoch is radioactive in the UK, and it’s spreading over here. After months of stonewalling the developing scandal, they finally admitted that staffers at the News of the World may have made some mistakes, and that’s why the noble Mister Murdoch stepped in and shut them down. Heaven forbid a News Corp outlet should ever make mistakes or be perceived as unfair.
It’s safe to say that Murdoch has had undue influence on elections in the US for 30 years. Anyone taking a look at GOP policies realistically would wonder how they could survive as anything other than a splinter party. At best, 5% of the population would actually benefit from their platforms. But Faux is there to dress their class warfare up in populist terms, and paint the Democrats as Marxists, Communists, minions of evil, and so on. Fox News is one of the reasons why Americans don’t seem to do better than right of center moderates, and usually do far worse.
But the British scandal is seeping into public consciousness here, and people are taking a sharper look at some of the practices of the myriad Murdoch outlets beyond the endless crawl gaffes and ambush interviews.
Faux is feeling the pressure, too. Two weeks ago they launched an unprecedented campaign against Jon Stewart, one of their main detractors, asking 15 or 20 times a day “if Jon Stewart is a racist”. They based this on a piece Stewart did mocking pizza magnate and day trader Herman Cain for saying he would not sign any bill more than three pages long. Stewart mimicked Cain’s speaking style to do so, which is what Faux used to label him racist. Stewart, of course, was delighted, and ran clips of him mimicking most other GOP candidates, or faking Italian accents.
This week, Faux went after David Brock, head of Media Matters. In an unbelievable segment, they had a hack psychiatrist deconstruct Brock (who wasn’t there, of course) painting Brock as insecure and deprived, based on the fact that Brock, a former darling of the far right, had left the movement because it had become a body of ritualized lies. Oddly enough, this shrink didn’t have anything to say about other figures who had switched allegiances, such as Newt Gingrich or David Horowitz.
Faux is in full damage-control mode; aside from shutting down the 168-year-old News of the World, Murdoch traveled to England to confer with Rebekah Brooks, the Red Medusa, and presumably to give Prime Minister David Cameron some new marching orders. For one thing, the Liberal Democrats have split from the Conservatives on the issue of selling the satellite giant, B Sky B, to Murdoch, something that would have given Murdoch control of nearly half of all British media.
Peter Osbourne called the Murdoch empire “a criminal enterprize” on This Week with Christiane Amanpour today.
The scandal and fallout are spreading to America. People are asking if Fox, the New York Post, or the Wall Street Journal have fallen to the level of Murdoch’s other outlets, and the answer, inevitably, is “yes, they have.”
The corporatists can’t afford to lose their most effective propaganda voice right now, when they need to be able to convince Americans that deprivation in the name of tax cuts for billionaires is utterly necessary for getting to heaven.
But thanks to his own viciousness and excess, Rupert Murdoch may have managed just that.