Remember 1789

Commentary By Ron Beasley

A lot of comparisons have been made about other times in history and the problems we have now. James Howard Kunstler has a new one - the French Revolution.  France in 1789 consisted of a few wealthy and sheltered elites who wouldn't admit how bad things were and resisted all reform.  Fast forward 211 years:

Senator Levin pretty much had Goldman Sach's Lloyd Blankfein dead
in a casket with that now-notorious email from GS's head of sales and
trading, Tom Montag, describing one of their billion-dollar investment
"products" as "one shitty deal."  Levin seemed to delight in crossing
the boundary into the realm of the unspeakable, knowing that even the
so-called "family" newspapers and cable TV networks would have to report
it. And just to make sure nobody missed the point, the senator repeated
that phrase at least twenty times before the day was over. It was like
the climactic scene in that old Hammer Films classic, The Horror of
Dracula, where Professor Van Helsing moves from coffin to coffin
pounding stakes through the hearts of Drac and all his fellow
bloodsuckers.   

It's hardly the climax of our story,
though.  Ours has barely started. It seems to me lately that the
crack-up we've entered is liable to play out more gruesomely for our
privileged elites than the orgy of bloodletting that attended the French
Revolution.

1789 and 2010

The France of 1789 and the USA of today have a few important elements in common: a striking inability to sort out any national problems, an arrogant, depraved ruling elite resistant to reform, and an intellectual underclass motivated by blind fury. Some signal differences: most of our even theoretically best-intentioned "leaders" -- i.e. elected officials, business, education, and media figures -- are unable to articulate the problems we face, which go way beyond the mere distribution of political power or even wealth. (In fact much of the so-called Left, especially the faculty intellectuals, are preoccupied with esoteric sideshows around wealth, power, and the ridiculous "politics" of gender.) Paul Krugman and David Brooks have no more of a clue about the implications of Peak Oil than Rush Limbaugh and Sarah Palin.

The Tea Party VS the global financial system

By August, it's possible that the entire country except for the editorial board of the New York Times will be members in good standing of the Tea party, and it will have split into a dozen warring factions. By then, too many other destabilizing events will be in motion. The hangover of the British election will reveal the fatal insolvency of the UK, torpedoing the pound -- a huge event that would certainly trigger a cascading fiasco of credit default swap obligations. I don't see how the global financial system emerges from that in any form recognizable to someone watching the scene in the first week of May, 2010. In the background of all this, something wicked this way comes in the matter of oil prices and availability. The eco-disaster underway from the Deepwater Horizon oil spill is looking every hour more like an event horizon that will rock the whole industry and, with it, the developed world. At the moment, oil is over $86 a barrel (and gasoline over $3 for regular at the pumps).

How safe are The Hamptons?

I continue to wonder how it will all go down this summer in the Hamptons where, like Versailles in 1789, the elite mega-wealthy of today cavort shamelessly in a semi-private fantasy-land of status vamping for the Vanity Fair shutterbugs. The Hamptons are not defensible -- unless you count privet hedge as an effective fortification. Any bloody-minded gang of unemployed, grievance-maddened mudlarks can creepy-crawl down the Sunrise Highway to Gin Lane with firearms bought at the WalMart (and modified to full-automatic in the garage). What if hundreds -- thousands! -- of them get the same idea? Louis XVI and his homeys probably never thought the mobs would scale the ha-has of his fabulous estate, either.

I have been wondering about this scenario.  One of the fastest growing businesses in the US is private security guards.  The Wall Street elites know they are in danger. 

Update:

This is what Kunstler was talking about:

A top executive at JPMorgan Chase told clients Monday that senators
displayed "an unnerving ignorance of fundamental principles of market
economics" during last week's Goldman Sachs hearing, that "Goldman was
no more culpable in the housing debacle than Congress" -- and lest he
didn't insult Congress enough, with "the financial reform debate...in
the final innings, it's time for the grownups to step in."

The note, written by James E. Glassman, a managing director and
senior economist at the $2 trillion bank, included shots at U.S. Senator
Carl Levin of Michigan (a graph showing Michigan's job woes was titled
"People who live in glass houses shouldn't throw stones"), the entire
Congress, and pretty much everyone involved in the financial reform
debate.

It's sad that he may actually be right if for all the wrong reasons.  Where's my pitchfork?