American Politics Journal

Act of Carnage: Aftermath
SPECIAL to American Politics Journal
Brace Yourselves
It's going to get worse before it gets better
By Bryan Zepp Jamieson

Sept. 15, 2001 -- MT. SHASTA (ZeppNews) -- If you thought suffering an attack that cost 5,000 lives and cost us about $20 billion in damages was bad, brace yourselves: it's about to get worse.

I'm not expecting any more terrorist attacks. I think that they'll do what terrorists always do, and retreat into the bushes, and wait until the next opportunity. Terrorists don't, as a rule, mount sustained offensives against a much stronger adversary that is on high alert. I think -- I hope -- we won't see any more such attacks in the immediate future.

Without any mention at all in our domestic media, and with delayed reports in the foreign press, it seems that we are in the middle of a full-blown world-wide financial panic of a type not seen since 1929. It began early on Thursday morning eastern time and was going full bore as exhausted foreign markets closed for the weekend. Most markets were down 5-7% Friday, some as much as 12% over the past two days. Here in America, a sign of what is to come is in the big jump in the bond market, as people scurry to the quiet, but safe shores of the bonds. That most are doing it without being able to liquidate in the stock markets, closed for a record fourth day, indicates the level of desperation investors are feeling right now. They want something that isn't going to lose half its value over the next week, and might even defray the gigantic loses that are looming.

In the event of a full-blown market crash, the economy stands to lose over ten trillion dollars in just hours. The market lost five trillion on the day the market crashed in '89, and this week coming up could be far worse than that.

Depressions kill people. We lost thousands, perhaps tens of thousands, in the 1930s. We didn't track it carefully, because our capitalist leaders didn't want such deficiencies in their system such as starvation receiving much public comment.

People will blame the terrorists, but basically, all they did was trip up a drunk who was already falling. Regular readers of my news feed know that in the three trading days prior to the WTC catastrophe, I had taken up paying close attention to the foreign markets, in particular the Nikkei and London. Before those jets rammed into buildings that processed 10% of the national economy, I felt we might be on the verge of a crash. The day the unemployment figures came out, I marked the effect on the Dow (it dropped to 9,745, and has since sagged to about 9,500). The Nikkei was already at a 17 year low (and is now 10% below that) and the English market blew through the psychological 5,000 point benchmark, and is now quivering fitfully at 4,600.

Things looked bad before last week's little exercise in downsizing on Wall Street. Now things look cataclysmic.

If there is one faint ray of hope, it lies in the fact that we learned in 1989 that a market melt-down doesn't necessarily presage a depression. But it's a faint ray; the levels of wealth in America have become fantastically concentrated in the past quarter century, to a level far greater than we saw in 1929. Consumer and public debts are at extremely high levels.

Our brave captains of industry have managed, over this past quarter century, to forget that in a consumer economy, you need to have consumers who can buy stuff. Financiers hit on the notion that not only was it cheaper to extend credit rather than pay consumers more, but they could also make money on the interest on the debt. It seemed like a win-win situation.

It works only if you maintain abnormally high increases in productivity and growth, as we have for the past twenty-five years. But they have to be maintained indefinitely, and of course, that is impossible. As recently as a year ago, economists living in a fool's paradise were assuring us that the boom and bust cycle was history, and depressions a thing of the past.

It's predictions like that which leave me thinking that about all economists are good for is kindling.

We haven't had a real slowdown since 1978. And now we're looking at something much worse than that tiny little energy dislocation that caused stagflation.

So we start with a general slowdown initially brought on by a speculative bubble bursting in the tech sector. Add a normal, cyclical recession that was long overdue. Pour on extreme debt, mostly racked up by efforts to avoid recessions in the past, and an extraordinarily unwise system that concentrated the wealth at the top 1% of the socio-economic ladder. Add the events of last week, and we are staring into an economic abyss.

Forecasts like this one are never worth making. If we all look at the Dow next Friday, and it's up 60 points on light trading for the week, I look like a fool. The only alternative to that-being right-is worse. No fortune teller ever got rich by telling their clients bad news, and folks who make dire predictions that come true tend to be real unpopular, and often get blamed, however irrationally, for whatever eventuated. Heinlein once remarked, "Cassandra didn't get half the kicking around she deserved."

And of course, in this case, for most of us, there isn't anything we can do about it. You are in the position of lying on a tropical beach, basking in the sun, when suddenly, a shadow blots out the sun. You open your eyes to see what it is, and observe that a two hundred foot tsunami is breaking directly over you.

Your options are limited.

Nobody really knows what Putsch and his gang of cold war retreads is planning in their "first war of the twenty-first century". But our European allies are starting to backpedal in a hurry. Even American lapdog Tony Blair is visibly hesitating. Our allies clearly don't think that whatever Putsch has in mind is going to be in anyone's best interest, and know that this shallow shadow of a president is quite capable of believing that all he needs to do to solve the problem of terrorism is "to kick a little ass". Europeans have been around long enough to understand the cycles of vengeance usually just escalate until a bloodbath leaves everyone too exhausted to fight any further. No amount of frightfulness on America's part will convince the terrorists that they were wrong, or unjustified in their actions. It will just make them more determined to strike again, and no free society can really protect itself against such attacks.

The minute we throw away our freedoms to defend against the terrorists, they have won.

It would be nice if Putsch came up with something that nailed those bastards without leaving a bunch of dead civilians strewn about the countryside, but I'm not expecting it, not from a man who believes that the only reason the terrorists did what they did was because they resented our wealth and freedom. This is not the thought of a creative, just, or profound mind. Putsch is a shallow idiot, a whiny silver-spoon passive-aggressive who needs to play victim in order to justify monstrous behavior. And he can act out the poor little rich boy routine with all of America's military might.

With the result that the terrorists will escape into the bushes, and we'll end up with a lot of dead civilians, and a whole world region that will hate us even more and give more support to future attacks.

Will we survive all this? Probably. Remember, the day FDR took office, a third of the banks in the US weren't accepting US currency, the economy had shrunk by over 40% in the past three years, and one third of the population was starving, ill-housed, destitute. And Hitler was on the rise in Europe. We survived that.

Of course, FDR was a leader, who could say things like "The only thing we have to fear is fear itself", or "...a day which shall live in infamy". Now we have a puppet who is likely to say, "Don't be afraid. Your president is resolute. I am resolute" or "Yesterday was a real bummer."

So don't expect anything from the clown. The American people will have to lead from below.

About time we got back in the habit of doing that, anyway.