Remember this quote from the 1976 movie Network?
“I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth. Banks are going bust. Shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do about it and there’s no end to it! We know the air is unfit to breathe and our food is unfit to eat. We sit watching our TVs while some local newscaster tells us that today we had 15 homicides and 63 violent crimes as if that’s the way things are supposed to be! We know things are bad. Worse than bad. They’re crazy. It’s like everything everywhere is going crazy so we don’t go out anymore. We sit in the house and slowly the world we’re living in is getting smaller. And all we say is, “Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won’t say anything. Just leave us alone.” Well, I’m not going to leave you alone. I want you to get mad! I don’t want you to protest, I don’t want you to riot, I don’t want you to write to your Congressman because I wouldn’t know what to tell you to write. I don’t know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first, you’ve got to get mad! You’ve got to say, “I’m a human being, God damn it! My life has value!” So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now, and go to the window. Open it, and stick your head out and yell, “I’m as mad as hell, and I’m not going to take this anymore!”
Funny how the more things change, the more they stay the same. Reminds me of a certain candidate running on a campaign of empty “change” platitudes. Not that his competitor is any better. Here are some more fun quotes, this time from the Depression era (remember the date of the stock market crash was October 29, 1929 and the Depression lasted until 1939):
December 5, 1929
The Government’s business is in sound condition.”
Andrew W. Mellon, Secretary of the Treasury
December 28, 1929
Maintenance of a general high level of business in the United States during December was reviewed today by Robert T. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.”
Associated Press dispatch
January 13, 1930
“Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.”
May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States that is, prosperity.”
June 29, 1930
“The worst is over without a doubt.”
James J. Davis, Secretary of Labor.
June 9, 1931
“The depression has ended.”
Dr. Julius Klein, Assistant Secretary of Commerce.
Today’s article of doom: What the housing bailout bill looks like from across the pond.
Rather than continuously rant about the inevitable crash, I’ve decided to approach it in a more practical manner, so I’ve been perusing sites like this and this and this. I spent the weekend gathering things from garage sales and craigslist at a huge discount, stocking up on useful tools that will become invaluable as time goes on.
At one garage sale, where I found a nice welding helmet for $3, I noticed that all the people rummaging through the goods skipped the tools, skipped the non-electric appliances, and skipped the glass jars. Instead, they all huddled through the DVDs, VHS tapes, and video games. What a difference a year will make. Contrast that behavior to what will occur next summer when people realize they may have to radically re-think their existence.
Ironically, at this crux which will re-define what it means to live in the 21st century — this period which will occupy an entire chapter in the high school textbooks of World History like the Great Depression does — we hear only quibbling among the mainstream media whether the growth is 1% or 1.2% here in the United States. Completely irrelevant numbers that mean nothing in the larger context of what’s occurring, and the last to know are generally those who are most greatly invested in the system — the same system that brought you “Iraq has WMDs!”
Rather than tell the truth that the dollar is plummeting, inflation is spiraling out of control and is 3 to 6 times the official numbers, our national debt is beyond the point of no return, our manufacturing base is gone, and we are doing a balancing act upon a knife’s edge to not go bankrupt as a nation, taking out half of Europe with us, the powers that be are convinced that the best approach is to convince people everything is okay, and the hypnotic suggestion will somehow turn into self-fulfilling prophecy.
But, if you look hard enough, you hear something completely different. You hear it loudly. And it’s scary. There is a lot you can do, however. Dig up some vegetable beds. Use the clothesline. Mend things when they break instead of throwing them away. Learn to can. Build the confidence you’ll need to survive in a world where the illusion of safety is no longer there, and real threats to security, rather than phantom terrorists, are around every corner.
Today’s article of doom: Gas prices could rise by 70%.
Well, this one’s even bigger than Bear Stearns. We’re going to bail out Fanny Mae and Freddie Mac, both technically insolvent (their liabilities are greater than their assets) and it’ll only be to the tune of TRILLIONS. “…a complete bailout of these huge mortgage finance players could double the fiscal deficit.” Double the national debt. Double. Words fail me. Most of the foreign owners of the 6 trillion dollars worth of owned or secured mortgage debt are China, Russia, and Saudi Arabia. However, from what we hear on the news, buying stock in the worthless companies with taxpayer money so the shareholders on Wall Street and the debt holders in foreign countries get bailed out is somehow good for the American homeowner. Go figure. The Federal Reserve says no more bailouts are expected. Right. I’m sure they’ll have to bail out a few of the 150 banks that are expected to soon go belly up.
In other news, not only are food prices going up, but I’ll bet few people notice the size of the food products are stealthily shrinking. Most people don’t know the weight of the food they buy, so it’s a great marketing trick. Oh, and here’s an ex-government employee in the UK affirming that the official inflation rate there (and here too) is rubbish. I mostly agree, but I think it’s more like 18%, not 10%, here in the US. I like this article too. “This recession could easily tip into a depression.” Hahaha, really? Another interesting read was this person’s take on why the bailouts must occur — to prevent lawsuits forcing the banks to buy back their fraudulent mortgages. I don’t know much about the legal world, but I wouldn’t be the least bit surprised.
You may have heard that the Federal Reserve, over the weekend, took over the second-biggest bankrupt bank since the FDIC came into play, IndyMac. You may have heard how many billions this would cost. What you probably didn’t hear about, however — and the lack of coverage was no coincidence — was that there was a run on the bank leading up to and culminating in its doors closing on Friday. Fear spreads fast, and the talking heads want it contained.
Today’s article of doom: might as well keep harping on the oil price. Up to $147 now.