The Mirage of Economic Recovery, Revisited

One of the pleasures of keeping a thought diary (h/t: George Orwell) is that you can observe your own ideational evolution. You can see where your grasp of things has been, where you went wrong, where you overstated the case, where you had it about right, even where you were correct to maintain a particular position in the face of conventional wisdom to the contrary.

I was reading, for example, a post I wrote in July, 2009, on the "the mirage of economic recovery." One of the subjects I tried to describe was the notion, popular at the time, that the Federal Reserve was funding banks on Wall Street in order to allow them to play the stock market so that at least one economic parameter (the American stock exchanges) would appear positive in the face of consistently downbeat econ stats from other quarters, such as high unemployment, declining house prices, exploding federal deficits, increasing use of food stamps, and rising gasoline prices. In this one narrow sphere, the Federal Reserve appeared to succeed, although my description of how it was being done was vague and uninformed. I still don't know exactly how the secretive Fed funnels money to its cabal of Primary Dealers, domestic and foreign, but it's become more apparent that the Fed is also desperately determined to create money through variously numbered Quantitative Easing episodes so that Treasury auctions proceed smoothly and give the government the patina of solvency. In the process, the Fed has increased its balance sheet from about $800 billion in 2008 to the $2.8 trillion we see today.

So what has been accomplished through this massive increase in the monetary base? And if the national debt has gone from about $9 trillion to $14.3 trillion (actually in excess of the statutory debt ceiling) since November, 2008, as it has, do we have a lot to show for that either? As someone whose natural instincts are more along the lines of social satire, what interests me most is the mindset that produces these anomalies. I'm not surprised that no national politician of prominence ever comes out and says that America simply lived on borrowed money for too long and attempted to sustain a standard of living incongruent with the underlying economic reality. The political classes are just incapable of that kind of realism; it doesn't "play." It doesn't sound "exceptional" enough. Unicorns and rainbows work better on the public airwaves, such as the "wealth effect" of bubbling house prices from 1998 to 2008. These provided the mirage of general prosperity, and since 2/3rds of Americans claim their house as the most important financial asset, it's obvious that the illusion was maintained for as long as it was because of debt-fueled unreality. The estimates of lost wealth in the residential real estate market, so far, run to about $6 trillion, and if Deutsche Bank is right about its forecast (made about two years ago) that housing prices will continue to slump until 50% of homeowners have no equity at all, then this downward trajectory is far from over.

The re-fi, line-of-credit game of fueling consumer spending has ended, replaced for a while by the Squatter's Rent game, where people spend into the general economy with money "saved" by not paying their mortgages as they await foreclosure. That game has a certain end point, and then what? I think the federal government is nearing the end of its borrowing capacity, no matter what Paul Krugman says, and then how do we keep the game going?

If you measure this decline from the summer of 2007, when George W. Bush emerged from his emergency meeting with Hank Paulson and Bernanke and other tribal chiefs of High Finance with W's unadulterated look of sheer panic on his face, having been presented with the inevitable result of his indifference and neglect, then we're coming up on four full years of getting nowhere. There's still no talk of anything fundamentally different, no recognition of a paradigm shift. Everything is still directed toward restoring the status quo ante. Water up those camels at the next oasis; we've still got a long caravan ahead of us.

Multiplying Errors in the End Times

It's a slight play on words, natch. But I have become curious regarding Harold Camping's miscalculation of The Rapture. When the trap door in the sky failed to open last Saturday, Camping, understandably nonplussed, went back to the blackboard and redoubled his efforts, to understand how he could have been so terribly wrong. First, however, he repaired with his wife to a motel to think things through, and, even at the age of 89, maybe to engage in still other things. That is not for me to know, anymore than it is for me to know the hour that the Lord returneth, other than as revealed by Harold Camping. Hats off to this eschatological expert, whatever his motivations.

I feel remorseful that some of my comments last week, before Rapture Saturday, were intemperate re: Mr. Camping. I suppose in part, as I mentioned, that I just think Saturday is a terrible time to schedule the end of the world. There are plenty of other days (six, I guess) to choose from, and I'll confess to you that there have been days (the reelection of George W. Bush in November, 2004, comes immediately to mind) when hearing a voice like a trumpet out of the clear blue sky would have been fine with me. But Saturday? Eggs, bacon, coffee, NY Times crossword Saturday? Gimme a break. So I developed a 'tude about The End. I objected mainly to its calendaring, that's all. We all gotta go sometime. Let us recall Shakespeare: "By my troth, I care not. A man can die but once. We owe God a death, so let it go which way it will: he that dies this year is quit for the next." Henry IV, I believe. Those who escape death altogether because of The Rapture can avoid unpleasantries like Medicare Death Panels and suddenly attentive heirs-at-law.

Yet still...I'm perplexed, especially now that Harold is back with a new date: October 21, 2011. Only a five month reprieve. It's like a call from the governor at the 11th hour, except instead of a commutation of sentence, we now have to go through the death watch all over again. (By "death watch," of course, I'm referring to the dead rising from their graves, all as foretold. Something you'd definitely want to watch out for.) It's not a Saturday, at least, but it's a Friday, offering further proof that Harold Camping is a major buzzkill.

The actual calculations are in the picture up above. Obviously, the words "atonement, completeness and heaven" play a major role. Atonement, which has 9 letters, is assigned a value of 5. Completeness, which has 12 letters, is assigned a value of 10. And heaven, which has 6 letters, is assigned a value of 17. All of this is straightforward so far. These are also the values I would have assigned to these words, if I had arbitrarily chosen these words and then arbitrarily assigned values to them. I don't see how anyone can doubt that Camping is correct about April 1, 33, unless you're Jewish, Muslim, Buddhist, Zoroastrian, pagan, existentialist, or some other damned soul, in which case who really cares what you think? We then add 1,978 years since the Crucifixion to bring us to our current, End Times.. We then calculate the days from the Crucifixion to April 1, 2011, using (in a neat bit of astronomical precision!) solar years instead of just the sloppy calendar years, because Camping is an engineer. Naturally, we then would add 51 days; I see this addition as akin to the Cosmological Constant or other fixes necessary to make arcane calculations work, and there is nothing extraordinary about that. Einstein did the same kind of thing. Without Camping's Constant, the multiplications described below...okay, I'm getting lost.

We then take our words, chosen at random, and multiply them by the randomly chosen values chosen for each, then square the products of these multiplications (of course) and find that the number of days since the Crucifixion to April 1, 1978 + 51 just happens to equal exactly the square of the multiplied word-value factors chosen by Camping on the basis of deep study. That gave us May 21, 2011. Quod erat demonstrandum. I think what Camping has demonstrated, besides a marked paranoid-schizophrenic tendency, is that The Rapture is calculated more or less along the lines of Easter, which if I remember right is the first Sunday after the first full moon which occurs after the vernal equinox. The good pastor is thus arguing that The Rapture occurs on the first day which occurs after the 1,978th anniversary of the Crucifixion where the date corresponds to the number of days reached by multiplying Camping's word values to reach a product which is then squared. Nothing could be more obvious.

Why 1,978? you may ask. You're suspicious, aren't you, thinking that Camping just wanted The Rapture to occur on his own Watch, so he made sure it would happen, oh, around Now. Well, nice try, but you obviously are not a Biblical scholar or you would realize that May 21, 2011, is in fact the date which corresponds to the multiplication of atonement, completeness and heaven squared + 51 and I thought we already covered that. I can hear you begin to argue that this whole line of reasoning is circular, but I'm not buying it. Camping was spot on. His error is not in his calculations, which were pristine and elegant. He had it nailed. He shouldn't panic and "recalculate." It looks sketchy to grab another date which lacks the rigor of the first. The Rapture was just very subtle. Small trap door, toy bugle, quiet voice, and The Good Book may not have meant "all" the Dead will rise from their graves. The Dead could be just one, and I hope it's Jerry Garcia.

Abba Comes to Congress

Not the Swedish pop group, cool as they were, but the Hebrew word for Papa. As in Abba Eban. 'Twas something to behold, to watch Bibi Netanyahu hold the joint session of Congress in the palm of his hand yesterday. Leaving aside the content for a moment, which is fractious and controversial as ever (but see: John M.'s comment to my recent post on Palestine and the pre-1967 borders. I think his historical reconstruction is exactly right, and as often the case, his comments are better than my blogs. But thinking about this history, you can see why Sirhan Sirhan was called a "Jordanian" in 1968 and a Palestinian later.), it was amazing to see Congress respond to an actual, true-to-life, citizen-soldier, alpha male leader.

And it made me reflect on this propensity of the American electorate always to elect a vaguely epicene, wan, anemic, glad-hander in the mold of Reagan-Bush I-Clinton-Bush II-Obama, guys who are as uneasy in their role as President as they are in their own skin, who "fake" leadership with a lot of pomp and circumstance but lack the essential innards to pull the role off. I think of all this nonsense which has surrounded Obama's fearless leadership in the whacking of bin Laden - look, this was a plan developed by the CIA and the Department of Defense, start to finish. I've always thought the CIA (and FBI) do very good work; it's simply a question of whether anyone wants to listen to them or not. If Bush had listened to the FBI, or to the suspicions of George Tenet at the CIA, then 9/11 would not have occurred. (At breakfast the morning of the attacks, Tenet said to the person across the table from him, "I hope this wasn't the guys who were taking the flying lessons.") Obama's role was to say, "Go," pose for a picture in the Situation Room where he looked engaged, and then deliver a fictional account of the raid on national television.

Netanyahu's brother was killed at Entebbe in an Israeli commando raid where the degree of difficulty was about 4 to 5 times higher than the bin Laden hit. Netanyahu himself fought in the 1973 war in the Middle East. Thus, he brings a heavy dose of gravitas to his presence, the real thing, a real leader leading a country forcefully, powerfully. He does it all: he shmoozes, he kvells, he kvetches, he lightens it up, he gets menacing. He draws clear lines and he lets you know where he stands. None of this leadership by committee bullshit, this constant appointment of commissions to study issues the President wants to dodge, the fear of hard consequences implied in the decision always To Look Forward, Not Backward.

As I say, leave aside the content for a moment, since the question of Israel seems to deprive otherwise sane people of the ability to see straight. Netanyahu brings back memories of the American Dad of yesteryear, the strong patriarch, the protector, the I Like Ike type, where we equated leadership with strength of character and deeply-held principle, instead of electing technocratic dime-a-dance men who serve a corporate agenda first and America second, if at all.

It's nice to see something a little different, something even the nerds and twerps in Congress could grow faint over as they recognized the difference. Not that it will actually change anything; we're just as likely now to wind up with an exciting contest between the red-blooded he-man Tim Pawlenty and Mr. Cool next fall. But for nostalgic purposes, it was nice.

Something else we have to import these days if we want to see the real thing.