Dw. Dunphy On… Absolute Double-Dip — We Are Going There

Written by Consumerism, Current Events, Dw. Dunphy On...

In spite of what the financial pundits say, Popdose’s Dw. Dunphy says double-dip recession is not only possible, but inevitable.

The current fight in Washington DC is the seemingly never-ending budget battle, with Republicans proposing a slash-and-burn model fueled by the fiscal conservatives in the Tea Party movement, and the Democrats trying to hold their own, proposing more modest cuts with the headline caption reading, “Now is not the time to slash into the heart of the economic recovery.” In the next week or so, you will see both parties getting very tough about their positions, perhaps even militant and willing to look very badly in the process. This would seem counter-intuitive to the  reality that this year is, in most ways, the first year of the presidential election cycle. Why would anyone want to look bad while fighting for their position?

Because they want to lose, that’s why. The loser in this fight wins the popular public opinion come election day, and here is why: it no longer matters what either party proposes, retains or cuts. We’re headed into a double-dip recession, no matter what the insider geeks and pundit crones say, and both political wings know it. If the Republicans push ahead with the close-to-austere cuts they want to enact, the recession will return anyway. If the Democrats hold firm on some of the policies and practices they feel are propping up and clinging onto recovery, they will lose as well.

So, draconian cuts will drive us back into recession and moderate spending does the same. You can’t spend and you can’t save, so the only “winning” side, if such a thing can be distilled from this fetid mash, is being the losing dog in the fight. The Republicans get their cuts, the economy tanks again, and the Democrats say, “It’s your fault because you stole the crutch out from under a lame economic movement.” The Democrats retain some of their incentives and initiatives, the economy tanks again, and the Republicans say, “It’s your fault for your tax and spend liberal agenda.” The only common threads are that the victor will be found at fault and returning to recession is an inevitability. All the rest is just trying to look like you fought the best fight you could as you were going down.

Sins of the Fathers – There is a small sub-section of the Climate Change movement that says convincing the public of global warming is a doomed action, primarily because we’re not suffering the ill-effects of current pollution and thoughtless action; this is all about pollution that occurred at the dawn of the Industrial Revolution. We are the beneficiaries of toxins released more than a century ago, now coming home to roost.

The same can be said of the unrest in the Middle East right now, our toleration of the Hosni Mubaraks and Muamar Qadafis of that world, how even though Qadafi had been Enemy-Number-One during a brief period in the 1980’s, we learned to accept the wacky little bugger in time, still as nuts as ever, but less like Hitler and a lot more like Max Klinger bucking for a Section 8. It is the same as it was when the Afghanis were fighting the Russians, or when Sadaam Hussein was on against the Iranians. The enemy of my enemy is my friend, and if he brings oil to the party, so much the better. And if he has no oil to bring, he’s not that much of a threat (Note to Kim-Jong Il and whoever succeeds him — get some oil).

Here we are now, with regimes in turmoil and in the midst of turnover, and what exactly does the United States represent to the people on the ground? The bastion of democracy? The leading light for the much-ballyhooed “way,” or the friend of my enemy, the co-conspirator, indeed the enemy himself? The crisis we tried to tamp down all these years by getting in bed with unsavory characters will now need reexamination as those characters are gone, supplanted by people who don’t just think we sided with them, but supported them with money, power and blood. We today face the air pollution created by decades of bilious policy, and will suffer the consequences of the sins of the fathers for many years to come. But hey, if you sell your honor cheap, you run out of cash all that much faster.

“What Trenton Makes, The World Takes” – Once upon a time, Trenton, New Jersey was a major manufacturing hub. So proud of their industrial output were they that the slogan, “What Trenton Makes, The World Takes” was affixed to the Trenton Bridge with illuminated letters. Trenton doesn’t make all that much anymore, and that decline began long before the shift over to Chinese manufacturing.

The current economy is balanced on smaller businesses and work where product doesn’t change hands. For the smaller businesses, everything depends on receiving and delivering. You deliver product to the customer, or you receive the product to sell to the customer. No product, no customer, so the crucial element  is always being able to get that product, whether you have to gas up the trucks at $100 or $500 or $1000. Otherwise, you’re out of business. It is better to run a company with five employees and functional transportation than ten employees and no product and no way to deliver it. In the grand scheme of things, the trucks must keep rolling, and if you have to let go of the five people you just hired to facilitate that, so be it. If you have to fire most of them and drive your own self, so be it. No trucks, no work, no business, no company — no joke.

You know this already. So my assertions that our disastrous foreign interventions and alliances have screwed the balance of who provides the oil flow directly to our flimsy, struggling economy, and mostly to those new jobs the Department of Employment was patting themselves on the back for only a week or so ago, should not be a vague connection at all. How does Libyan oil, which the US does not buy, affect our prices? Well, every other country is in the same boat. If they can’t get their Libyan oil, they’ll go to where they can get oil, where we get oil, and their sudden interest creates a top-dollar market. They have to keep their trucks rolling too, otherwise they’re also out of business. It seems the US isn’t so unique after all.

How does that affect the non-transportable goods sector? Sick people without benefits or money do not go to doctors. Software designers can develop all they want, but if the larger populace can’t afford the latest iPad, they won’t buy it. And at the quasi-atomic level, everybody has to get to work somehow (gas, oil), everybody has to hook into the grid if they telecommute (energy), and the costlier these become, the harder it will be to convince people to keep shopping to bolster the economy.

We’re Going To Need The Left Arm Now Too – It’s not like we’re in some awesome, rocket pack resurgence now either. Every step back from the fiscal brink has been a painfully shaky one. While economists have been making the rounds on the talk show circuit poo-poohing the possibility of double-dip recession, as has Chairman of the Federal Reserve Ben Bernanke, who could deny that someone with a propensity for contracting pneumonia is more likely to get pneumonia? That which doesn’t kill you leaves you weaker come the next strike, and so the clap-trap of the pundits that ruled out the double-dip reveals itself as just that; and their narrow-sightedness further indicates they should be the first ones fired, neglecting once again the biggest failure of the US economic status: that we have little to no influence on it whatsoever.

So, how do we fix this? The answer is that, for our lifetime, we don’t. We can’t. These are ruts that have been made for us a long time ago, ruts we don’t have the ability to get over and out of. We need to accept a new reality and learn to make the best of it. The one thing a Super-Power should never, ever do is get comfortable with contracting it all out.

But we need to stop digging that rut, not for ourselves, but for the future generations. They will suffer our folly just as we’re suffering that of those who came before us. We’re going to have to have that conversation again…

Deja Vu To You Too – Back during the last oil crisis, and the one before that, and certainly the one before that, we started talking about alternative fuel and energy. We seemed to recognize that the reliance on foreign oil was, as I just said, like contracting out the power of the Super-Power. The dealer became the junkie, and the only way to break the cycle is to get off the junk. But then something happened, as it always seems to do, and the prices for oil came down because demand quelled as the economies of countries like Greece and Ireland started hitting the fan. Things were getting itchy. Buyers backed off of oil and slid into the safety of gold, sending the metal’s price skyward. With demand drifting back and without that pressing need to think about ending business with the crude pusher, we made our usual deal with the devil and decided that the drug is only really a problem when it is expensive.

We were real friendly with our Middle Eastern allies too during this time, while they were holding their people in pseudo-dictatorships and we were refilling their crystal stemware with the fruits of a bad romance. This is when we relegated the conversation about energy independence and breaking the foreign fuel cycle back to where it belonged: as lip service in campaign promises to shore up the Vegan/Hippy electorate (Apologies to my Vegan and Hippy friends, but you’re smart. You know you were just being sweet-talked too, right?)

This is not about the left versus the right, or the Republicans versus the Democrats, or the Tea Party versus whatever-you-got. If we’re ever to actually make this happen, the country has to move into a real desire to change and not just a propensity for adaptation, but at the heart of it, we don’t like change. It’s too hard, and the game’s coming on TV and can’t I do it next weekend? If National Interest is treated with all the respect of a “Honey-Do” list, then we get what we get, and so will further generations because we’ll likely be dead when they’re feeling the full impact of our decisions.

Are we ready for the real change though? Probably not. If you could perform a miracle and catch any single elected official in a moment of true honesty, they’d tell you that the best possible outcome would have been if the resistance in Egypt and Libya just gave up, accepted the standing dictatorial reign and things just went back to the way they were. Democracy is only great when we get to wave it around and print it on bumper stickers, and if we’d prefer they’d just return to the old ways, how could we ever hope to extricate ourselves via new ways?

Welcome to the double-dip. We’re already here.