06/02/11 Baltimore, Maryland – Somewhere in the sad tale of Raymond Zack lies a warning about the future – the new financial crisis the catalysts for which we were searching yesterday and the day before.
Zack, depressed and on disability, walked into San Francisco Bay on Monday…and allowed the tide to wash him away to his death. He was 52.
The windsurfers and joggers at Crown Memorial State Beach stood and watched. One called 911. Alameda police and firefighters showed up. They too stood and watched.
And that’s all they did.
Funding for the fire department’s water-rescue training program dried up in 2009. That meant firefighters had to use overtime hours to train… and OT has been cut back recently. So no one had the proper certification. “Without it, the city would be open to liability,” reports KGO-TV.
Two hours later, an off duty nurse swam out 50 yards to retrieve Zack’s body. Liability was no longer an issue.
“It’s like you are living in a different country,” a witness told the San Jose Mercury News.
Indeed it is. The country is broke. And the impact of its bankruptcy is beginning to show from the bottom up. Libraries are closing in Charlotte, N.C. Garbage pickup is being cut back in Columbus, Ga. Camden, New Jersey’s police force has been cut in half.
As early as January 21, 2010 the Atlanta Journal Constitution was beginning to report on the seeds of the new crisis: “About 80 percent of stimulus money has gone directly to state governments,” the paper observed. “Instead of being used to create new jobs, the bulk of the money has been used to save existing state government jobs – teachers, law enforcement and others – and for shoring up sagging state budgets.”
In a new documentary, we’ve tentatively titled “Risk!”, we’ve been chronicling the challenge of entrepreneurs in the post-Panic environment to create and sustain new jobs. The policy mix that has come along with the effort to save government budgets has been anathema, in our opinion, to an environment that encourages entrepreneurship.
Unless the politics change, and people begin to realize that government, even at the local level, cannot be the guarantor of American prosperity, the economy will continue to be hollowed out from the inside. Capital, in large quantities, is being misallocated to saving unproductive government assets… and crowding out investment in job creating entrepreneurial efforts.
Worst of all, it’s not like the government is using its savings to fund their spending sprees. As you know, the US government has no savings. Instead policymakers have chosen to swipe Uncle Sam’s credit card and…poof, everything has been magically “paid” for.
We can’t help but sit back and wonder what the world looks like when that credit card is eventually cut off. Or when it becomes much more expensive for the Federal government to borrow money.
As we pointed out in our first film, I.O.U.S.A., the States can’t print money. They have to cut spending. They have to cut services like policeman, firefighters and trash collection. For most Americans, those cuts won’t be popular. As we’ve seen all across the country, people get angry they things they’ve been “promised” are cut.
But unlike the States, when the Federal government’s credit card it cut off they don’t have to cut back. They can continue to spend. Continue to promise. And continue to run the printing presses day and night to pay for political whims. But for how long?
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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It is a chilling spectre that we are facing as a nation. The commoner on the street seems to “get it”….finally but those within the beltway seem completely oblivious to the looming financial shipwreck this nation is heading for. Better batten down the hatches, storms a comin’!
The more I think about it the more convinced I am this will all end in a whimper not a bang, as we slowly and quietly sink into the quagmire of financial oblivion.
When you run government like a business, you get crap like this.
a bunch of people stand around watching a man drown – and you say the root problem is mis-allocated capital?
it’s not the capital that is mis-allocated. it’s your soul. get right with god.
The ‘commoner on the street’ doesn’t get it. Nancy Pelosi was re-elected. BHO prolly will be too. The commoner on the street doesn’t get it. I think he will eventually. After the lights have been turned off.
The ‘Hanging on a Lampost’ moniker is shameful.
When fiat is more important than life it’s time to do a system check…
Scottie, you’ve got it reversed.
When you run a business like government, you get sued or thrown in jail.
In Canada we have:
Good Samaritan Law or Doctrine:
a legal principle that prevents a rescuer who has voluntarily helped a victim in distress from being successfully sued for ‘wrongdoing.’ Its purpose is to keep people from being so reluctant to help a stranger in need for fear of legal repercussions if they made some mistake in treatment.
Get with the program America.
NWT:
You mean the Canadian provinces have Good Samaritan Laws. There is no Federal level law.
The various US states have similar laws.
Morality is lost when you let someone drown when you could have help just because you’re afraid of being sued if something goes wrong.
The impending crisis in America will arrive on schedule. Because the root cause is embedded into national culture. Then either America will settle into decline and end up like some kind of China back in the 60′s-70′s, or there will be an explosion that blows away the current culture of extremes and polarization. If the latter happens, then a new and perhaps better America may emerge in about 15-20 years.
oh ! what to do, what to do? jobs will be disappear, equities will drop, bonds will default, gold/commodities will crash, & real estate is already dead. so whadawedo, just lay there in a fetal position while the country implodes around us?……. in a crisis,you revert back to your training. so daily reckoning, are you providing adequate training to survive the impending crisis?