Mike Whitney and the "Invisible Hand"

There's only one thing that the administration can do to ensure that energy dealers keep trading in dollars: control the flow of oil. That means that an attack on Iran is nearly a certainty

I've spent quite some time reading and thinking about Mike Whitney's latest piece at Counterpunch. To read the whole article in its original form, click here: The Economic Tsunami: Coming Sooner Than You Think.

It seems that there are a growing number of people who believe as I do, that the economic tsunami planned by the Bush administration is probably only months away.

Yep. Well, one, anyway.

In just 5 short years

Short? These have been very long years for me... but I know what you're saying. Please...

the national debt has increased by nearly 3 trillion dollars while the dollar has continued its predictable decline. The dollar has fallen a whopping 38% since Bush took office, due largely to the massive $450 billion per year tax cuts.

Tax cuts correspond to roughly three-quarters of the $3 trillion increase in the national debt. Increases in military spending surely cover the rest. For how many years could you keep spending and giving away money you don't even have? Four? Eight? Even if you're spending it all on weapons systems? You can't be vulnerable if you're spending billions of dollars on weapons systems, can you?

At the same time, numerous laws have been passed (Patriot Act, Intelligence Reform Bill, Homeland Security Bill, National ID, Passport requirements etc) anticipating the need for greater repression when the economy takes its inevitable nosedive.

You noticed that too, did you? I don't think we were supposed to notice that. I don't think we were supposed to mention it, either. Especially in the same breath as "billions of dollars on weapons systems". Add 'em up and here's the result: "greater repression when the economy takes its inevitable nosedive."

Regrettably, that nosedive looks to be coming sooner rather than later.

Oh yeah? How soon? I've been thinking about that myself for a while now. Not even sure whether it's to be feared or applauded. But ... Yeah. It really does seem inevitable. Sooner rather than later. But how soon? What's happening?

The Iraq war has contributed considerably to our current dilemma. The conflict has taken nearly one million barrels of Iraqi oil per day off line.

Yikes!

In other words, the astronomical prices at the pump are the direct result of Bush's war.

Well he never said the war was being waged for cheap oil!

The media has failed to report on the negative affects the war has had on oil production, just as they have obscured the incredibly successful insurgent strategy of destroying pipelines.

There are a few other things the media have failed to report, or obscured. For instance, do you think we actually voted for more of this? Or did something fishy happen in November? But anyway...

This isn't a storyline that plays well to the American public, who expected that Iraq would be paying for its own reconstruction by now.

And ain't that the stinkin'est lie you ever heard? "Iraq would be paying for its own reconstruction"? Well OK maybe not the stinkin'est ever but it certainly does reek, does it not? I never bought it and I never imagined anyone buying it. Shows what I know. Did you buy it? I thought it sounded like the victim of an unprovoked attack being forced to pay reparations to his attacker. Didn't make any sense to me at all. Looked like sheer wishful propaganda. But people did buy it, didn't they?

Instead, the resistance is striking back at the empire's Achilles heel (America's need for massive amounts of cheap oil) and it's having a damaging affect on the US economy.

As if the American economy needs any more damaging affects. Sometimes I think the national economy is run by a bunch of blockheads. Other days I think the situation is much much worse. But I digress...

The administration is currently putting as much pressure as possible on OPEC to ratchet up the flow of oil another 1 million barrels per day (well over capacity) to settle down nervous markets and buy time for the planned bombing of Iran in June.

Nervous Markets! Why are the markets suddenly nervous? They should have been nervous about this bunch a long, long time ago.

Like Fed Chief Alan Greenspan's artificially low interest rates, the manipulation of oil production is a way of concealing how dire the situation really is. Rising prices at the pump signal an upcoming recession, (depression?) so the administration is pulling out all the stops to meet the short term demand and maintain the illusion that things are still okay.

But, of course, things are not okay.

You noticed that too, did you, Mike? It has seemed to me for a long time that things are not okay... But boil it all down for us. How serious do you think this is?

This is much more serious than a simple decline in the value of the dollar. If the major oil producers convert from the dollar to the euro, the American economy will sink almost overnight. If oil is traded in euros then central banks around the world would be compelled to follow and America will be required to pay off its enormous $8 trillion debt. That, of course, would be doomsday for the American economy

Not really. Just do the math. It's only 8 trillion dollars. We are something like 300 million people. What's that? It's about $30,000 per person, is it not? I think that's right. If each person kicked in a measly thirty grand, we could pay off the entire national debt right now! And remember, that $30K/person is just a rough guess; by the time we pay this whole thing off, we will probably have an extra trillion dollars lying around, and we can have a party. More on that later. But first, consider this:

For a family of four, it's only a hundred and twenty thousand dollars. Most families of four probably have that much lying around in a sock somewhere. Or in the fridge. My uncle used to keep his loose cash in a paper bag in the fridge. He figured that's the last place a thief would look. But anyway that's my late uncle. He passed away. He doesn't keep anything in the fridge anymore. So don't get any ideas. Don't go out robbing houses looking for cash in the fridge. That's the last place anyone would put loose cash. They probably keep it in a sock somewhere. Thirty grand per person, more or less. But there's a catch:

A recent report indicates that two-thirds of the world's 65 central banks have already "begun to move from dollars to euros."

And so America is about to be slapped in the face by the "Invisible Hand" of Adam Smith, whose inviolate rules of supply and demand specify that if the demand for something [like American dollars] decreases while the supply of it remains constant [or increases], the price [or value] of that commodity [all that money] will decrease as well. So we may need 40 or even 50 grand apiece to buy our foolish asses out of debt to the rest of the world, which we continue to ignore -- except for business or war -- at our peril. But that's another story. Or maybe this is still all the same story... And did you notice that your money all of a sudden became a commodity? Well them's the breaks, kid. Economists talk and all the rest of us can take a hike. We're commodities too, by the way. Did you notice that, too? But I digress...

The Bush plan to savage the dollar has been telegraphed around the world and, as the New York Times says, "the greenback has nowhere to go but down". There's only one thing that the administration can do to ensure that energy dealers keep trading in dollars: control the flow of oil. That means that an attack on Iran is nearly a certainty.

Emphasis in that last paragraph was mine. The slashing and thrashing beast is determined to devour another victim before it goes extinct -- or goes on to its next feeding! Who knows? Not this lowly and nearly frozen somebody. I just wanted to warn you it might be coming: Some day in the near future you may need to go get that sock and pay your share of the national debt.

Or maybe you keep it in the fridge.

Thanks to Peg C. at the Brad Blog for mentioning this article on that blog. If not for Peg, I would probably be sleeping now. Thanks again, Peg.


We haven't had a song in a long time. Here's one from Peter Hammill.

The Sleepwalkers

At night, this mindless army, ranks unbroken by dissent,
is moved into action and their pace does not relent.
In step, with great precision, these dancers of the night
advance against the darkness - how implacable their might!
Eyes undulled by moon, their arms and legs akimbo,
they walk and live, hoping soon to surface from this limbo.
Their minds, anticipating the dawn of the day,
shall never know what's waiting mere insight away
-- too far, too soon.

Senses dimmed in semi-sentience, only wheeling through this plane,
only seeing fragmented images, prematurely curtailed by the brain,
but breathing, living, knowing in some measure at least
the soul which roots the matter of both Beauty and the Beast.
From what tooth or claw does murder spring,
from what flesh and blood does passion?
Both cut through the air with the pendulum's swing
in deadly but delicate fashion.
And every range of feeling is there in the dream
and every logic's reeling in the force of the scream;
the senses sting.
And though I may be dreaming and reality stalls
I only know the meaning of sight and that's all
and that's nothing.

The columns of the night advance,
infectiously, their cryptic dance
gathers converts to the fold -
in time the whole raw world will pace these same steps
on into the same bitter end.

Somnolent muster -- now the dancing dead
forsake the shelter of their secure beds,
awaken to a slumber whose depths they dread,
as if the ground they tread would give way
beneath the solemn weight of their conception.
I'd search the hidden corners of all this world,
make reason of the sensory whorl
if I only had time,
but soon the dream is ended.

Tonight, before you lay down to the sweetness of your sleep
do you question your surrender to the drop from Lover's Leap
or does the anaesthetic darkness take hold on its very own?
Does your body rise in service with not one dissenting groan?
These waking dreams of life and death
in the mirror are twisted and buckled;
lashes flicker, a catch of breath,
skin whitening at the knuckles.
The army of sleepwalkers shake their limbs and are loose
and though I am a talker, I can phrase no excuse
not to rise again.
In the chorus of the night-time I belong
and I, like you, must dance to that moonlight song
and in the end I, too, must pay the cost of this life.
If all is lost none is known
and how could we lose what we've never owned?
Oh, I'd search out every knowledge that I could find,
unravel all the mysteries of mind,
if I only had time,
if I only had time,
but soon my time is ended.