For generations, going back to the middle of the last century, people have been warning about systemic problems in American society. Some of the warnings have been tricks to continue the cultural revolution. Some have been part of the financial legerdemain that defines so much of our economy and politics. There have been, however, many sincere warnings about long term structural problems. Out of necessity and expediency they were ignored, but that may be about to change.
The most obvious is the most immediate. Going back to the Clinton years people who understood money were warning about loose money policy. People forget that Clinton winning was a surprise. After all, Bush came into the election with a huge war victory and a solid economy. The Reagan expansion was viewed not only as a miracle of Republican policy, but a rebuke of left-wing economics. Then the economy soured before the elections and Clinton was president.
Much of official Washington blamed the tight money policies of Alan Greenspan for tanking the economy under Bush. Team Clinton made sure this could never happen again, especially with a Democrat in office. Loose money became official policy and only got worse with each administration. By the Obama years, we were in a world of Zero Interest Rate Policy. Now those ZIRP chickens are coming home to roost in the form of a systemic banking failure.
No one should be deceived by what is happening. Last weekend, the Federal Reserve decided that the banks are all broke due to holding assets that have a declining market value, so the Federal Reserve effectively nationalized the banks. The only way they can regain control of money policy is to eliminate the market for long dated bonds by promising to buy them at face value. The Federal Reserve has nationalized the banks by nationalizing the bond market.
This is required to avoid a bank collapse but also allow for the long overdue reorganization of the financial sector. A generation of free money has turned Wall Street into a drug addict. It is entirely organized around getting the narcotic of free money from the government, rather than the normal practice of banking. All of its schemes are designed not to create value in the economy but to generate the need for more free money, a portion of which ends up in executive pay.
This did not happen in isolation. The great auctioning off of the manufacturing base that began in the 1980’s has finally caught up to America. The subtext to the Ukraine war is the fact that America no longer has the ability to make the weapons it requires to wage war on the world. Russia, with a third of the population, can now make more weapons for war than America. Her production of ammunition dwarfs what America can muster, which is why Russia is slowly grinding down the Ukrainians.
Of course, one main reason for the auctioning off of the manufacturing base is it raised quick money to invest in the rigged casino that is Wall Street. This fact was masked to a great degree by cheap consumer goods. In fact, the culture of cheap consumer goods has justified all of the nation wrecking policies. Everything from open borders to wholesale political corruption have been justified by cheap lawn care and cheap products sold in big box stores.
The price tag for decades of cheap goods underwritten by the sale of the manufacturing base is now coming due. The only thing America makes now is sexual deviance and lectures in favor of sexual deviance. It turns out that there is no global market for rainbow colored marital devices and films promoting the culture around them, which means America does not have a real economy. The ongoing economic crisis is about to get much worse as that reality becomes clear.
In fairness, some of the proceeds from auctioning off of the manufacturing base went into the technology sector. In the fullness of time, the robot historians may remember America for having singlehandedly created the technological revolution. This has changed the world. The trouble is, the technological revolution ended decades ago, but Silicon Valley continues to consume trillions in money. With the collapse of SVB, that great money drain is now ending.
The war with Russia and the looming war with China has also brought other chickens home to roost. For a long time people have been warning about the military industrial complex and its addiction to expensive, high tech weapons. Those whiz-bang systems look great, but they are not what wins wars. What wins a war are the tools the average soldier uses to kill the enemy. We no longer bother making them and instead focus on rocket ships and space lasers.
What the war in Ukraine has revealed is that NATO would have to use nuclear weapons in a war against Russia, because NATO lacks the men and machines to fight a ground war against the Russians. Most NATO countries would run out of ammunition in a few weeks and have to surrender. Against China, the American military would deliver some serious early blows, but then run out of supplies. Chinese manufacturing capacity is now greater than America and Europe combined.
Overlaying all of this is the crisis of competence. The SVB fiasco is a great example of a problem that permeates American society. Instead of rewarding skill and accomplishment, our system is rigged to reward nonwhites at the explicit expense of whites, especially white males. The only market that is booming in America is the racial revenge market and the result is colorful people in positions of authority who lack the basic skills to do the jobs they have been given.
Thirty years ago, people warned about this. What started as tolerance in the 1980’s, became sensitivity in the 1990’s, then diversity in the new century. It has now turned into a full blown cult of anti-whiteness. While towns in Ohio suffer from an ecological disaster, the people in charge fret of racist sidewalks. Corporate America is more concerned with its ESG and DEI scores than its financial stability. We have combined demographic reality with anti-white fanaticism into a ruling ethic.
No society can run this way. Good luck fighting China with a rainbow coalition of drag diverse drag queens trying to operate space guns. Good luck weathering a reorganization of the financial system when the banks are run by people who were just recently coaxed from caves by European explorers. Imagine surviving an end of empire crisis with the productive portion of society seething with rage at the fanatics who brought about this disaster.
One could go on a long time listing the things that should never have been allowed to happen that are now turning up in the nation’s crisis list. All of these are the result of bad polices hatched in the late 20th century and used to loot the country by the new generations of rulers ushered in by the Clintons. The bill for the great bust-out is now coming due and there is no avoiding it. Like drunks at closing time, we await the bill for generations of reckless behavior.
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