First of all, I just want to say, I predicted this current financial crisis a long time ago. I have been saying it for years. Everyone who knows me personally as heard me say it is all a house of cards and one day it will all come down. I said it would inevitably happen, the only question was when. So, is this it?
Has the house of cards finally fell? Yes and no.
What I was saying was two things. On the one hand I said that the US could not continue to mount a debt and have other countries finance it. Eventually, those holding the debt would come calling. It was no secret that U.S. households as well as the U.S. government were living beyond its means. The only thing of value that the US exported to the rest of the world was its military might and why would countries continue to finance our bullying around the world.
So, I said that house of cards would fall soon and this is what appears to be underway right now. I thought it would come sooner, but with each passing year as the debt mounted and the cards stacked higher, I predicted the crisis would be that much greater. I was Chicken Little. I told those that listened that eventually our troops would be stranded in Iraq, because we would be too broke to bring them home. Hmm… I am certainly a nutjob at times. But, my point was still that we could not continue on the pace we were going at. What is troubling is that Obama’s plan to get us out of this mess is still too much of the same thing that got us into this mess. While the debt mounted, the wealth distribution in this country was increasingly being divided between the haves and have-nots. Under Obama’s plan this will continue. The consolidation of wealth and power has never been in so few hands and the ones in the Obama administration writing the plans to get us out of the present financial crisis are the ones who got us into trouble in the first place.
In a way it can’t be any other way. I always said that to get where he is, Obama had to shake hands with a lot of dirty players. The financial sector paid for Obama’s campaign by and large and the deal that was cut was that they would be in charge of certain operations, one of them being any bail-outs or regulations of the finance industry. What else do people make these large donations for, but to further their own interests? Obama’s hands are tied.
But, that does not mean he can’t or won’t do something to make life better for those who actually voted for him, if not the ones who paid his way. Its just that his options are limited.
But, there is another way that our economy was doomed that is much more fundamental and structural than the finance industry and the fact that there were risky investments made by large financial institutions with unregulated derivatives and hedge funds that would some day crash just as every other bubble has done before it. Even if we can get out from under this financial crash, we are still up against another wall or limit. The other crisis I was always warning of to anyone who would listen were limits to growth. Something here would eventually give as well. We could not grow our economy forever. Sooner or later we would come up to a limit that had nothing to do with wealth distributions and debtors/creditors. This limit was with out environment and ecology as well as our own technological limits. We would not be able to solve all our problems with technology, because each technological solution to an environmental problem creates a larger problem waiting down the road. In a way this is similar to the financial crisis where we have been offering temporary solutions time and time again over the last half century as we moved from one crisis to the next forestalling the next bigger crisis until we arrive at where we are today where the solution being offered is again only temporary.
With the ecological crisis (and I am not talking about climate change which is really a small and irrelevant problem compared to other environmental limits imo) we can grow no more without causing more hardship. There are no technological solutions. Human ingenuity has reached its environmental limits. The Earth just becomes too small to support our entire economy and we are forced to adjust through various measures including famine, death and disease until our present means of living and economy are long gone and we learn to once again live day to day with little surplus to carry over and barter with others. That day has not come, yet, but it still awaits us in the future. This present financial crisis says nothing about how close we are to the true economic crisis which will end our civilization as we know it. I’m not sure we can avoid it and if our reaction to this financial crisis is any indicator, we will almost certainly not. We will continue to march right up to our doom.