Dysfunctional Politics & the Beginning Depression

We have noted in past radio shows and prior posts how the Fed appears to be using unemployment to hold down inflation.  We have noted that the "Recovery" appears to be focused solely on the return of the financial system status quo prior to the Financial Crisis and the resumption of risky but profitable business trading.  Volcker has commented on the fact that no economy, which has 30% of its GDP from synthetic financial services, can continue without risking another financial crisis.  In fact, we have noted the "Recovery" appears to be setting the stage for the very same financial crisis.

In a long post Edward Harrison  has written on his belief that the Recession is over but the Depression has just begun.  His argument is essentially that the political process, of which Congressional actions are only one example, has created a dysfunctional economic debate, economic recovery policies, and a divisive political debate which serves the special interests but not the Nation.  He goes into some detail on what it means globally as well as nationally and what needs to be addressed.  While I do not entirely agree with him, his arguments are very worthy of consideration for anyone who is desirous of dealing with the economic conditions as they exist.

It is well known that I believe Geithner and Larry Summers need to go, because they serve Wall Street more than the Nation.  Washington'sblog has been very good at delineating Summer's insistence on his way or no way to the point where Volcker is now in Europe speaking for financial reform because Summers has muzzled and isolated him in the United States.  Still, there is opposition loyal to President Obama which are attempting to debate and contradict him, however, dangerous that may be.  Despite what Summer's says, unemployment will continue to rise and it cannot be ignored.  Read the post "Larry Summer's is like the guy who yells the Sun really does revolve around the Earth ..." and sharpen your critical skills.

In past radio shows we have talked about food shortages and riots, economic protests, and even a Joint Special Operations University faculty member's speech at a former intelligence officers conference about the possibilities that prolonged economic crisis could cause social upheaval in countries.  My first career was intended to be military and I still do extensive readings on military subjects including papers and publications at the War College and the JSOU.  It again appears that there will be food and commodity shortages with increasing prices in 2010.  There are two scenarios which could evolve with one being demonstrations, riots, and perhaps revolution in some parts of the world and the other being that the population will become so demoralized by their treatment from the elite who run their governments that they will be passive and do what they are told.  Here is one recent article that lists a variety of sources from the establishment and from the fringe for your critical review.  Here is an article about how a demoralized people can be made to be passive and do what they are told, although there are more scholarly books over the last 60 years.  Constructive political action by an educated and knowledgeable public is not something that should be suppressed in a healthy republican democracy.

James Kwak in The Baseline Scenario has also addressed his frustration with the dysfunctional qualities of the political and economic debates with a "partisan post" on the 8 things of which he is sick.

Again these links are provided for your critical review as comments worthy of being analyzed and thought about in order to peek your research interests or to form opinions which can be substantively argued.





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