And Who Will Have the Last Laugh?
Contributed by: Y.Yamamoto
Gullible people who swallow anything they hear from an authoritative figure such as Alan Greenspan are now puzzled over how to interpret recent news stories that seem to indicate that the worst is over by now. It looks as though the global crisis has proved far more short-lived than initially expected. Maybe the former FED chairman just wanted to pull their leg when he exaggerated the enormity of the situation in September last year.
With stock prices seemingly bottoming out, analysts and investors are upbeat everywhere and with financial institutions quickly ridding their balance sheets of tons of toxic assets, they are foreseeing rosy pictures based on their hefty second-quarter results.
Budget deficits are still ballooning and jobless rates remain high all over the world, but never mind; these are side issues.
So, have the governments of the G-20 nations performed miracles? Or was it yet another cheap trick?
They call it a business cycle inherent to capitalism which is, like climatic changes, basically unavoidable, if can be alleviated to a certain degree. It's just that a handful of bandits in Wall Street aggravated the downtrend with their excessive greed. But I don't agree to this characterization of the downturn because in all likelihood this looks more like an artificial crisis than a cyclic one.
This perception naturally leads you to these questions:
■ who were shaken off in the course of the deepening of the crisis?
■ and who are poised to have the last laugh in anticipation of a handsome profit to be reaped from it.
Small wonder most journalists, pundits and professors agree to the greed theory because they always side with the real culprits whoever they actually are. This is the easiest and the most effective way to defend, or even boost their vested interests in the status quo. To that end, they always see a conflict where there is none.
Their pet subjects, therefore, are constant struggles between two different groups of people, such as the working class v. capitalists, producers v. consumers, whites v. colored, men v. women, creditors v. debtors, democracy v. autocracy, the West v. the East, the North v. the South, Wall Street v. Main Street, and so on and so forth. In fact, though, none of these abstract groups represents any specific people. This is no way to deal with multifaceted issues in the current world order which is in the process of a total disintegration today.
To me these struggles are too stereotypical and more or less imaginary. I see the real battleground somewhere else.
For one thing, last fall we were supposed to see every participant in the equity market panic-selling all the shares he had held. Although no one seems to have doubted that was true, that wasn't true. You can't sell if you don't find a buyer. And recent rebound in stock prices is an unmistakable sign that the ones, who sneaked into market using the "dollar-cost averaging method" or the like, have now started shifting to the selling side, if slowly and carefully, so individual investors can buy back at a "minimized" loss what used to be in their portfolios.
By the same token, banking business also takes two, like tango. You can't lend money so recklessly unless there are reckless borrowers at the other end. This is a commonsense matter, but our regulators have always portrayed the creditors as the victims. They have a good reason to distort the picture this way.
In the October 13 issue of TIME Magazine, Niall Ferguson pointed out that as of 2006, American households were indebted as much as 100% of nation's gross domestic product whereas back in 1980, their debts had only accounted for 20% of GDP. According to Ferguson, American banks and other financial institution were even deeper in debt. By 2007, their indebtedness had accumulated to 116% of GDP.
In April, U.S. president showed a transparent gesture by asking his friends in the 13 major credit card companies to refrain from "unfair" and "deceptive" practices with their debtors. Once again he failed to address the real issue indicated by the fact that millions of card holders are already "maxed out." for a different reason.
Actually tough disciplinary measures should have been imposed on the credit card users as well - and more importantly on their role model, president himself. His administration is habitually acting even sillier than its debt-ridden supporters. In the absence of this awareness, not a few independent analysts have been warning that they see a credit card crisis on the horizon if the current one triggered by the subprime woes may subside before long.
Just listen to Elizabeth Warren, Harvard law professor, talking in this YouTube video about America's Debt Epidemic. It is these sick people incapable of living within their means that elected Obama as their role model.
So, who will have the last laugh this time around?
In the last Great Depression, it was the likes of Joseph P. Kennedy, Sr. who won the game. JFK's father made a fast buck by manipulating the stock market in the 1920s. After the NYSE crashed, Franklin D. Roosevelt set up the Securities and Exchange Commission and appointed him to become the inaugural chairman of the SEC. At that time, Kennedy asked the president why he had picked "such a crook" to straighten out the mess. FDR famously answered: "Takes one to catch one."
Obama's approach is no different, or even worse. Indications thus far is that he believes, under the mask of a populist president, that crooks should remain the winners. He should be aware that his charitable policies will never help the poor break their losing streak. That is why the primary concern of his administration is how to keep the losers learning-disabled from generation to generation. Unfortunately, this also holds true with other industrialized countries.
But hold on for a while. The fox is not caught twice in the same snare. The self-styled disciple of JFK and his cronies should save the last laugh until the real battle comes to an end.
These days I have a premonition which some of you may find a little too optimistic. My way of thinking is: Yes, we can change the status quo by leveraging all these turbulence and volatility - if we really want to laugh the last laugh, that is. By learning our lessons from the plight and humiliation we have experienced throughout these twilight years of the American century, will we be able to beat those who cling to the vested interests they have in the status quo and turn the once-in-a-century crisis into a once-in-a-lifetime opportunity to reinstate our innate dignity. ·