JAPAN'S DIFFICULTIES VERSUS COLLAPSE OF THE USA:
Let me quote from Paul Krugman blog, as part of this interesting biofeedback we are engaged in. Krugman extensively quotes Adam Posen, "who really really knows what went down during Japan’s lost decade:
"What the Obama team is proposing is disconcertingly similar to the actions of Japanese Prime Ministers Hashimoti, Obuchi, and Mori in 1995 and 1998: Rather than ask the legislature for straightforward recapitalization money, you have the political leadership preferring to risk overpaying current owners of toxic assets rather than forcing sales. For all of Japan’s supposed intervention in markets, its government still lacked the stomach for taking over banks, let alone closing them."
And Krugman to add: "To be fair: the Obama team really does face huge political obstacles in doing the right thing. Maybe it really can’t be done; as Rahm Emanuel said about me, “[unprintable].”"
Krugman concludes: "But we shouldn’t kid ourselves. Japan is us."
OK, let me add now my grain of salt. President Obama himself has evoked Japan's "Lost Decade", to justify nothing drastic, like firing the influence peddlers and financial scam artists in tight orbit around him. As I pointed out before, though, and as Krugman reminds us, it is politically dangerous for Obama to do the right thing before he has done the wrong thing, and shown the average US citizen that he got it all wrong, in nearly all ways.
In Japan real GDP per person went up during the "lost decade". In the USA, real GDP per person has been going down for a full decade prior to the economy tipping out of control in the last six months. That why I call this slump made in the USA, a depression, not a recession.
So "Japan is us" is too rosy a scenario. Japan has a distinct oligarchy, but it did not fall into outright plutocracy since W.W.II. Financial rewards at the top have been kept reasonable, all along. Japan remembered that its oligarchy led it to disaster by attacking China, South East Asia, and then the USA, during W.W.II. Ever since, it has kept tight reins on it.
The French oligarchie (14 century) comes from the Greek oligarkhia "government by the few", from oligoi "few, small, little" and arkhein "to rule". Plutocracy means that it is the wealthy, and the underground, that rules. This is the case in Banana Republics, and, now, in the USA.
Sending trillions of dollars to the corrupt hedge funds-bank holding companies complex, "without keeping track" while millions of US citizens are threatened with foreclosure, and the Obama administration stresses out about a few dozen billions for the car industry, is par for the course.
How does one get rid of a plutocracy when it's firmly in control of the state? Well, revolution. Or then one elects someone one could hope was out of the system: Obama. So, as the Economist wrote it in its latest lead editorial: "lead, damn it".
Instead the young chief of staff, "Three seconds away from the president", got 16 millions in two years from a bank. Among ethical people, we call that a bribe from the bank holding companies, so that, when the guy is chief of staff, trillions can be sent to bank holding companies, while claiming disingenuously that the USA is the only country that ever was, which does not know how to temporarily nationalize banks. As long as this sort of enormity is not fixed, the economy of the USA will not be fixed.
Geithner on ABC news this weekend claimed that he "always worked in public service". Either he deliberately lied, or he has lost track of reality. Many of those guys have such a wrapped notion of reality that, when they work for a "consultancy" such as "Kissinger and Associates", as Geithner did, for years, they envision themselves as in public service.
Patrice Ayme
http://patriceayme.wordpress.com/
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