Sunday, March 2, 2008

Desolation Row

Random economic thoughts and quotes, in no particular order ...

Ludwig von Mises (1881-1973), Austrian Economist: "The essence of so-called war prosperity is it enriches some by what it takes from others. It is not rising wealth, but a shifting of wealth and income."

Vice-President Dick Cheney's Energy Task Force Report issued May 2001: "... Middle East oil producers will remain central to world security. The Persian Gulf will be a primary focus of U.S. international energy policy."

Herr von Mises also said, "The worst evils which mankind has ever had to endure were inflicted by bad governments."

Economist Paul Craig Roberts: "America is a ship of fools in denial of their plight ... offshoring kills American economic prospects ... while war imposes enormous costs on a bankrupt country ... neconservatives call for more war, and congress appropriates war funds which can only be obtained by borrowing abroad."

Alan Greenspan during a recent investment conference in Saudi Arabia: "As of right now, US economic growth is at zero. We are at stall speed." Greenspan also said that oil prices would continue to grow, even as a new all-time record of $101/barrel was reached last week. Greenspan indicated that the US mortgage market will continue to worsen. [note: I cannot quote Greenspan very much since his words in an exact quote are one of the prime causes of narcolepsy] ...

Wall Street giants like Goldman Sachs and Merrill Lynch share similar view points. Experts in both firms say that the US economy will continue to decline in 2008 due to the reduction of real estate prices, fluctuating financial markets, high oil prices and reduced bank lending. This is a painful reality for Americans who are already experiencing higher unemployment, more expensive fuel costs, poor credit and unwieldy debt-to-income ratios.

Presidential election years are not usually recessionary, but this year is an exception. Why? Well, the artifical short term stimulus that the Bush-Cheney administration gave the economy just before the 2004 and 2006 elections, through a combination of large tax cuts and large increases in military contracts, has pretty much run its course. It's obvious they believe they will lose control in this election and intend to leave as big a mess as possible for the incoming opposition party to clean up. How convenient!

In addition, we are feeling the pinch of years of monetary inflation on the part of the Federal Reserve resulting in a continuing decline in the value of the US Dollar in international monetary markets. The Fed's single solution for every problem, i.e. reducing interest rates, cannot be utilized much longer without generating an international fear of a collapse of the US Dollar. Financing our wars with foreign loans was an attempt to insulate American citizens from feeling too much war deprivation, thus banishing thoughts of impeachment, but a collapsing US Dollar will bring the loan shark henchmen home to roost. If China won't accept devalued US Dollars for loan repayments, they may start demanding a pound of flesh. How about signing over the deed to the Crawford Ranch?

Add to all this a construction industry in disarray, the sub-prime mortgage fiasco resulting in foreclosures and loss of consumer confidence, and we are looking at an almost perfect storm of economic factors indicating a painful recession, maybe even a full-blown depression. All we'd need now to transform an economic slowdown into a global meltdown is for the Bush-Cheney neocon wetdream of bombing Iran to be implemented. Just think, with peak oil production pushing energy prices ever higher, we could turn the world's richest oil producing region in to a hot war zone for the foreseeable future! The slurping sound you hear and the foul bits of moisture hitting your face is Halliburton and Blackwater, et al, slavering at that enticing prospect.

The preceding commentary was inspired after listening closely to "Desolation Row" (which itself seems partially inspired by T.S. Eliot's "The Waste Land" -- scroll down for more on that -- as well as Jack Kerouac and John Steinbeck). Set here to scenes from the movie, "Days of Heaven" (a beautifully filmed, but ultimately lousy film), the juxtaposition of such a bleak song with gorgeous scenery sums up my view of ostrich-headed americans ... 10-minutes:

Bob Dylan's lyrics:
They're selling postcards of the hanging. They're painting the passports brown. The beauty parlor is filled with sailors. The circus is in town. Here comes the blind commissioner. They've got him in a trance. One hand is tied to the tight-rope walker, the other is in his pants. And the riot squad, they're restless.They need somewhere to go as Lady and I look out tonight from Desolation Row.

Cinderella, she seems so easy. "It takes one to know one," she smiles, and puts her hands in her back pockets, Bette Davis style. And in comes Romeo, he's moaning, "You Belong to Me, I Believe". And someone says," You're in the wrong place, my friend, you'd better leave". And the only sound that's left after the ambulances go is Cinderella sweeping up on Desolation Row.

Now the moon is almost hidden. The stars are beginning to hide. The fortunetelling lady has even taken all her things inside. All except for Cain and Abel and the hunchback of Notre Dame, everybody is making love or else expecting rain. And the Good Samaritan, he's dressing. He's getting ready for the show. He's going to the carnival tonight on Desolation Row.

Now Ophelia, she's 'neath the window. For her I feel so afraid. On her twenty-second birthday, she already is an old maid. To her, death is quite romantic. She wears an iron vest. Her profession's her religion. Her sin is her lifelessness. And though her eyes are fixed upon Noah's great rainbow, she spends her time peeking into Desolation Row.

Einstein, disguised as Robin Hood with his memories in a trunk, passed this way an hour ago with his friend, a jealous monk. Now he looked so immaculately frightful as he bummed a cigarette. Then he went off sniffing drainpipes and reciting the alphabet. You would not think to look at him, but he was famous long ago for playing the electric violin on Desolation Row.

Dr. Filth, he keeps his world inside of a leather cup. But all his sexless patients, they are trying to blow it up. Now his nurse, some local loser, she's in charge of the cyanide hole. And she also keeps the cards that read, "Have Mercy on His Soul". They all play on the penny whistles, you can hear them blow, if you lean your head out far enough from Desolation Row.

Across the street they've nailed the curtains. They're getting ready for the feast. The Phantom of the Opera is a perfect image of a priest. They're spoonfeeding Casanova to get him to feel more assured. Then they'll kill him with self-confidence after poisoning him with words. And the Phantom's shouting to skinny girls,"Get outta here if you don't know Casanova is just being punished for going to Desolation Row".

At midnight all the agents and the superhuman crew come out and round up everyone that knows more than they do. Then they bring them to the factory where the heart-attack machine is strapped across their shoulders. And then the kerosene is brought down from the castles by insurance men who go check to see that nobody is escaping to Desolation Row.

Praise be to Nero's Neptune. The Titanic sails at dawn. Everybody's shouting, "Which Side Are You On?" And Ezra Pound and T. S. Eliot, fighting in the captain's tower, while calypso singers laugh at them and fishermen hold flowers between the windows of the sea where lovely mermaids flow. And nobody has to think too much about Desolation Row.

Yes, I received your letter yesterday, about the time the door knob broke. When you asked me how I was doing, was that some kind of joke? All these people that you mention, yes, I know them, they're quite lame. I had to rearrange their faces and give them all another name. Right now I can't read too good, don't send me no more letters, no ... not unless you mail them from Desolation Row.

Click on the Ezra Pound and T.S. Eliot link in the lyrics & tell me young Ezra isn't a dead ringer for younger Bob Dylan. Read more:
poem link to T.S. Eliot: The Waste Land (dedicated to Ezra)
and useful interpretation of The Waste Land's rich imagery.
A memorable image: "There is shadow under this red rock
(Come in under the shadow of this red rock),
And I will show you something different from either
Your shadow at morning striding behind you
Or your shadow at evening rising to meet you;
I will show you fear in a handful of dust."


A few economic articles/sources/further reading mined for this post:
Wall St. Banks Confront a String of Write-Downs NYTimes 2.19.2008
Banks “quietly” borrow $50 billion from Fed: report Reuters 2.19.2008
Bernanke Warns of Worsening Economy AP Economics Writer 2.14.08
Soros predicts worst recession for 50 years The First Post 1.23.08
Odds are, U.S. is in a recession Marketwatch 1.18.08
Recession in the US ‘has arrived’ BBC 1.08.2008
The World’s Largest Banks Are Now Trapped Lew
Crisis May Make 1929 Look Like a ‘Walk in the Park’
The Great Depression-2008


TomCat said...

"The essence of so-called war prosperity is it enriches some by what it takes from others. It is not rising wealth, but a shifting of wealth and income."

That sums it up!

D.K. Raed said...

Tomcat: you're right, I should've stopped there! unfortunately, brevity is not my long suit. I wish I'd paid better attn to all those economic graphs & charts in college. Instead, I have to work my way through them verbally.

Cart said...

Oh red, you know I keep saying Americans don't do economics. But poetry and literature, well that is a different issue.
I'm not so sure about Pound, but the mix of Eliot, Steinbeck and Kerouac is magic.
Mind you, after those and a few poets that literary stream is interesting but thin.
(I wonder how much more chauvinistic and patronizing I can be here...)

D.K. Raed said...

Cart: I'm probably saw Desolation Peak in the Cascades when I lived in Washington state ... though at the time I didn't connect it to Kerouac. Some day I'll have to read Dharma Bums & hope it's less chauvinistic than I fear. Now Eliot & Steinbeck I don't find chauvinistic, but Pound is in an odd class by himself, being too enamored of fascism for my taste. I was really shocked how much the young Pound physically resembled a younger Dylan.

Cart said...

I was never enamored of Pound, but more because his writing was just plain difficult.
Dharma Bums I think was my first Kerouac experience, but Desolation Angels was the one I enjoyed most.
The chauvinistic and patronizing was aimed at me. Thought I was being a bit rough on US culture :( But I still don't think you (as a nation) understand economics...

D.K. Raed said...

Cart: you can be as rough as you want about US culture here. The perspective is sorely needed. What is it we don't understand about economics? Crack-pot supply-side and free-market Freidmanism aside, I think we do understand recession & it scares those of us who heard tough depression stories first-hand from our own parents/grandparents. Sadly, many americans look at suffering 3rd world countries & think that could never happen here. Yet these are the same people who are about 3 meals and 1 paycheck away from bankruptcy. I guess jingoistic patriotism goes a long way to convince us that we are the top of the heap & so we turn a blind eye to obvious signs & signals.

Cart said...

Economics? Well from the Fed down, or even the WH down, economics is invariably expressed as 'the market' and/or monetarism.
The reality of real economics includes those things and far more. It should include the whole social structure.
My complaint against the US perception is that it is truncated to the stage that markets and the dollar are the only things that matter.

D.K. Raed said...

Hear, Hear! The Right Honorable Gentleman from Australia has reminded us that money does NOT make the world go 'round. Medical care will be provided to those American members whose jaws have dropped to the floor. Please indicate to the nurse whether payment will be cash or credit card!

Cart said...

Now I don't know if you are taking the piss or what! But hey! I'll stick with the position.

Fran said...

Crazy time we live in. Desolation row is quite befitting.
Can't wait for the results to come in tomorrow!

Thanks Greenspan for 20/20 hindsight! Ptttt.

D.K. Raed said...

I was agreeing with you (re: social economics), but just reminding myself that those programs need to be funded (ie, money).

Yeah, Greenspan can kiss my behind. He can't bring himself to speak simple declarative sentences and then he points back to his vague pronouncements as vindications of his economic prowess. I'm always amazed how many sides of his mouth he can speak out of. He should've been put out to pasture decades ago. Him & Kissinger could use some time in a close paddock with an angry bull in full rut.

Cart said...

d.k. the money is there, it's a matter how it is distributed. At the moment the money is flowing to corporate welfare instead of people's welfare.
I guess that is a big mental shift for the US, but it is supposed to be government for the people, not for the privileged few.

D.K. Raed said...

you got that right. so did Dennis Kucinich and John Edwards. that probably explains why they were pushed aside so quickly this year. but yes, absolutely, people tend not to notice the hefty corporate-friendly pkgs constantly being passed around, but let one new social program be proposed and it's oh-no, the budget will simply not allow for that kind of spurious expenditure.