Monday, May 18, 2009

Economy Due to Suffer as War Drums Beat More Loudly

In an astonishing Sunday editorial, the Washington Post has adopted the Bush-Cheney central Asian strategy. In the curiously titled: Mr. Obama's War?
No. Like it or not, it's America's war,

the Post channels the duo it once despised, reminding its readers:

There are forces in the world that continue to wage war against the United States and its allies, whether or not the United States wants to acknowledge that war. (Ed.: I thought the War on Terror was a bumper sticker slogan in the Post's world. Now it's a real war?)

Mr. Obama's recent decisions on paying for Afghanistan, reviving military tribunals and withholding photos of detainee abuse, among others, all reflect this reality. . .

His commitment to fighting al-Qaeda and its allies in Afghanistan and Pakistan recognizes that pretending a threat does not exist will only increase the danger to America.

So intent is the Establishment that sold America on Barack Obama as an agent of change that in almost no time it is back to supporting the same policies it hated when a white guy was in charge that it can blatantly lie:

Once before this country abandoned the battlefield in central Asia; Osama bin Laden moved into the vacuum. Today, he and like-minded terrorists continue to conspire in Pakistan, Afghanistan, Somalia, Yemen and elsewhere. (Emph. added in bold)

DoctoRx here. Presumably the central Asian nation the U. S. allegedly abandoned the battlefield of was Afghanistan, as Viet Nam is not usually considered a central Asian nation and Mr. bin Laden was a young child when JFK and LBJ were enmeshing us in that disaster. The obvious lie is that the U. S. was never a real combatant in Afghanistan, so there was no abandonment. Furthermore, Osama was our guy back then. Our client state Pakistan created the Taliban to fight the Soviets, remember? Further-furthermore, after the Soviets abandoned Afghanistan, the situation was so chaotic that is unclear what the U. S. was supposed to do there. Join in a civil war?

The language of this editorial would be expected from the National Review or the Weekly Standard. From WaPo, it's amazing. What about giving peace, and negotiations a chance? The tilt in Obama-land toward pro-war "realism" was further verified today in an op-ed by a lady named Salena Zito titled Anti-War Voices Lose Influence:

Will the last activist who hopes the antiwar cause will re-emerge as a central tenet of the Democratic Party please turn out the lights on the way out the door? . . .

While President Obama gingerly takes ownership of the war in Afghanistan - pumping up troop levels, hand-picking his own commander, adding Pakistan as part of the solution and the problem - he is disowning antiwar activists who voted for him, expecting him to put an end (to) all wars.

In the meantime, the blogosphere has been busily reprinting the "Chart of the Day" from a couple of days ago, showing that Q1 earnings for the S&P 500 were the lowest based on records from 1936 onward when adjusted for inflation, at $10, equating roughly to a 20X P/E, and a projected infinite P/E on a Q4 2008 through Q3 2009 basis, given the huge loss in Q4 2008.

The Merchants of Debt are merging with the Merchants of Death. Each needs a war. The Post editorial leaves little doubt that American "advisers" are soon to appear in Pakistan (likely they are there already) to tell them how to win (meaning perpetuate) this conflict.

The real economy in the U. S. needs to simply focus on reducing debt levels with a fair and open set of negotiations between those who lent unwisely and those who borrowed unwisely. What instead is happening is phony bank accounting, without which the reported $10 in S&P earnings might have been zero, creating zombie banks that will do what their new masters in Washington tell them to do. Contrary to the drumbeat of opinion from Big Finance and its hucksters, more borrowing and lending is NOT what is needed. There is no time like a Depression to save and then use the compounding power of saving to build capital and thereby meet the needs of the country and its people, businesses, natural assets, etc.

For the nonce, industrial capacity is at its lowest percentage of capacity since the Great Depression. There is little legitimate need to borrow, as almost everything is in excess. Until the next Viet Nam occurs, Treasuries are a reasonable buy as deflation is actually here. Cash makes sense and gold makes sense given that the Establishment wants inflation and generally gets its way, though at what pace is uncertain.

As this blog has opined since its founding in December 2008, at higher Dow and S&P levels than today, the stock market remains for speculators rather than investors.

Copyright (C) Long Lake LLC 2009

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