Please don't miss Eric Fry's impassioned and eloquent Rude Awakening today. A couple of choice excerpts:
American-style capitalism has evolved into a bizarre marriage of financial gimmickry and governmental coddling. Very few companies produce much of anything, other than derivatives and press releases. This situation would not be so bad if the derivatives possessed a bit of value and the press releases possessed a bit of truth. Instead, the U.S. economy lurches from greed to deception to disaster, and back to greed, without ever eliminating all the flaws and the felons that cause all the problems.
When we should be lopping off heads (so to speak), we dispense multi-million dollar severance packages; when we should be marking to market we mark to mark-up; when we should be allowing idiotic speculations to fail we devise new ways to finance idiotic speculations.
I have my own name for what Eric describes: We are Loman Nation. Like Willy Loman in Death of a Salesman: "He don't put a bolt to a nut, he don't tell you the law or give you medicine. He' s a man way out there in the blue, riding on a smile and a shoeshine."
Case in point: Citigroup.
Late yesterday, Citi agreed to sell part of itself to the Abu Dhabi Investment Authority for $7.5 billion – a recapitalization deal which, conveniently, admits to no crisis, acknowledges no error, eliminates no executive positions, reduces no executive bonuses and solves absolutely no problems. The deal merely perpetuates the status quo – the same inept and broken status quo – a system that nourishes corrupt mediocrity, while squandering shareholder capital and crowding out legitimate economic endeavors.
To the extent that Citi's gimmicks and theatrics succeed, America's economy fails. No first-world economy can thrive on the power of price-fixing, bailouts and deception. The largest bank in the land should not be colluding with the Treasury Secretary to conduct a game of "hide the toxic waste."
How long can international investors continue to prop up the dollar — and by extension, the U.S. empire? As the rest of that line from Death of a Salesman goes, "And when they start not smiling back – that's an earthquake. And then you get yourself a couple of spots on your hat, and you're finished."