Take the $10 and be grateful... you think we are going to be MADE of money round here?! Okay. To bring you up to speed. We have been chatting at
LiberalStreetFighter lately about all the things that jangle our nerves to do with the economy, our job, our house, our car, our long-dreamed-of trip to Europe, and our nest-egg for when we are 65.
Now LSF Guest Poster and Kos Diarists TustonDAZ has thrown down his own scenario for how the Great Unraveling comes to be set in motion.
I fear we will have to go through a trajectory like 1940's Japan (complete with updated versions of Hiroshima and Nagasaki) before we start to understand real "value" and even begin to consider re-thinking and retooling our systems.
I'm also inclining to the all-hell-breaks-loose scenarios myself. There are maybe half a dozen ways in which the Great Unraveling gets set in motion.
Nuclear? These days, it just might be. Americans are surprisingly nervous people. Complete carelessness on the proliferation front and the port-protection front kinda assures that a bomb will pop off somewhere one day. A dirty bomb, or the taking out of a few 747's, or some oil wells, or oil tankers, or the US power grid, or [your suggestion here], or something worse than anthrax, could also do the trick.
Dollar? Major move out of the dollar by the Japan & China Central Banks is the biggie everyone has on their minds. Huge bets have already been made on this - Warren Buffet's bet against the dollar is $21 billion.
Large stockmarket slide? I am not a big truster of the American stockmarket. It's a jumpy beast, and some of the charts people argue that the Dow needs to hit 5,000 or 4,000 to fully purge wrong expectations and poor bets.
Property? I wrote a few days ago at LSF of the Property Bubble. I think that will be a serious compounder - accelerant - rather than a prime cause.
Recession? Stagflation? Both in the cards if small investors and consumers pull in their horns. These two are more or less assurred if any of the above hit us.
After the Great Unravelling, the breakthrough approach now on the cards (links at the bottom) becomes EXTREMELY relevant to rebuilding the politico-economy on correct lines for a 21st century surge that pays all our bills and gets us back up in all the indicators.
That rebuilding COULD also happen less dramatically than via the Great Unravelling. A long shot, but possible.
I don't see it happening too easily when the macro-management is so screwed. (SOCIAL SECURITY DEFICIT as our primary economic concern? Ha ha ha ha ha.) But let's explore it anyway.
Our LSF friend Madman in the Marketplace seems to favor starting the rethink and rebuild at the top. I guess that would mean getting a few people like Howard Dean and Corzine up to speed and seeing the opportunity for the Party? Or would it take a third party? I'm fascinated by the third party in Britain, which is now well on its way to becoming the second party.
This kinda thing adds to my come-and-go pessismism about our own present second party here on Ruy Teixeira's Donkey Rising.
Democrats need to change to take advantage of both their long-term opportunities (as laid out in The Emerging Democratic Majority) and the considerable opening that has been provided in the short-term by Bush's and the GOP's recent political missteps. As a number of recent surveys have documented, despite these missteps, Democrats have not generated commensurate political gains and remain bedeviled by public perception that they stand for little and lack clear ideas to deal with the nation's problems.
My own view here is that we FIRST need a wave of examples and success stories "out there" for the leaders to understand and to point to. They won't lead on an issue so hard to explain to the Average Joe. And it will take other than blogs to get this stuff across - not hard, but face-to-face with spreadsheets etc is 100 times more effective than blogging.
If either top-down or bottom-up breaks through, the strategic possibilities for Party positions now divide up very neatly and starkly.
(1) The Republicans are clearly the party of extreme cost-cutting: cut investment taxes, cut workers' wages and benefits, cut the rate of the dollar. This is the purest cost-cutting scenario it is possible to imagine. Hitting every base. Well done guys.
(2) The Democrats or whatever party siezes the opportunity should be the party of high invention; of high value added; of premium pricing. Kind of like where Japan is headed, as described in this post here.
This is potentially a huge plus for the second party to seize upon, as the Republican cost-cutting model is so stark.
But the worrisome thing is that there is not too much time. 2006 or bust? I think so. Reason? Just about the whole of the rest of the world has figured out that (2) the high-invention route is the one for their future. China will follow Japan at a thundering pace soon.
I strongly believe much of Wall Street and much of business and most investors (say 60-70 million families) will prove to be our friends here. The number of investors on Wall Street happy at the Dollar and the Dow and corporate healthcare situation these days?
Somewhere around 0 in my day-to-day experience in NYC. That's a big ZERO...
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These previous posts explain how to set about getting value and systems right. This on value (second half), and, this on systems up to the level of complete economies. Get to think correctly in these terms (maybe a month's evening reading) and your perceptions will become as Alice Through The Looking Glass...