Saturday, November 15, 2008

The Sick Man Of The West

Xiao Chen's boss at the port let him off early today, told his hours would be scaled back, but was relieved he wasn't one of the dozen laid off worrying how they will support their families. He rides his bike home around a great, snaking wall of 18 wheelers full of Blackberries and iPhones, turned back from the dock because the shipment was canceled. Mountains of cotton slated for this month's Abercrombie and Prada lines surges out into the streets, blackening as they soak up the carbon and sulfur stew of Beijing atmosphere like great cotton balls. Xiao coughs, he feels like a fish trying to breath air, having adapted to the heaviness of concentrated pollution.

But back in the USA, we're trying to keep The Eternal Friday Night going. Fists pump to the thundering bull-beat on the dance floor of the New York stock exchange. Each time the music goes off and the market tanks again, DJ Henry Paulson, the news network cheerleaders spin up the next track of "systemic stabilization" news. The virtual confetti of e-trade paper flies in celebration of "the bottom" as the Dow indefatigably climbs and falls again like the Little Engine That Could. "If we could just get more liquidity, get more credit out there so people can borrow and spend again, we can get back to last year's levels."

Unfortunately, No We Can't.

We're in a recession that's going to get much worse. We're all drunk to the point of poisoning on credit, on the big house + big car + dog + 1.5 kids + boxes of toys American Dreams forcefed daily, and now we're vomiting all over the dance floor. The hangover and the long and painful but necessary detox process has to happen, and more booze is only going to make the problem worse, or possibly kill us.

And what poetic justice, that the unraveling of the US financial/economic system was initiated by speculators and bankers scamming the sinking middle class for trillions in debt and price inflation on that same big green-lawned house Dream that "anyone could achieve in America".

Essentially you've got the slave class in China, just builds all the astronomical amounts of Stuff all day, makes the pyramids, milks the cows to make the baby powder, lives in a polluted hell hole.

Then there's the owner class, the top 1%, the royalty, just makes money by owning things and making sure they keep owning things which siphon money off everyone else through dividends, interest, and inflation.

Then you've got your servant class, the teachers, plumbers, architechts, McD's kids, the consumers. Their job it is to keep the infrastructure functioning and keep all the Stuff circulating so the siphoning mechanism continues to work smoothly and more 6-figure trips to the spa and G5 jets and Cancun vacations can be had by the owners. Servants get to live in the King's castle, so they've got it a bit better than the slaves slaving away in the scorching desert. The servants get the tossings from the King's table, enough so they don't up and behead the king, but don't be expecting any health care or relief from debt-slavery or anything.

Then you've got the wizards and the emissaries, the lawers and media and accountants and economists and politicians, who's job it is to make sure the owners of everything continue to own everything, make sure the servants remain stupid and don't realize what's going on, defend against rival feudal lords. Wizards get the biggest share of the king's riches, but can be exiled at any moment.

So we Americans don't actually produce much of anything. We're a nation of paper-pushers and window washers, and we keep papering over the cracks in the broken American Dream with Chinese debt, and polishing our Disney castles made of Chinese plastic.

But amazingly enough, given all that, China and the rest of the world isn't really better off than we are, and possibly worse off. Because the rest of the world has been playing the China-producer US consumer game as well. European banks in places like the UK, Germany were even WORSE in some cases than US banks with leverage ratios up to 60x, and then there's Iceland that went completely *boom*.

And China's "wealth" is just as fake as ours has been and driven by currency and trade imbalances; they are FAR more vulnerable than we are as they must maintain serious positive GDP growth in order to avoid huge numbers of their people literally starving.

So now the red-white-and-blue butterfly is flailing, and it's causing an even bigger shitstorm in China, who need to examine their own dreams as well.

Back home again, Xiao reclines in his brand new Ikea love seat as he for the first time partakes in that great American ritual that we celebrate each December -- he cuts the scotch tape from his XBox 360 box. He checked his license plate this morning -- an even number -- so it was his turn to take a bite of that forbidden fruit, eat a piece of that apple pie for the prosperity of China. Yes, by government mandate, Xiao had to go shopping.


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