Surely A Large Human
Date registered: Jun 2006
Vehicle: '08 C219
Location: Between Earth and Mars
Mentioned: 5 Post(s)
Quoted: 640 Post(s)
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Kevin Depew's 5 Things
Where Were You When the Fun Stopped?... No Shorts for You... Homeless, America Gets a Tarp... Can This Really Be Happening?... Picture This
Where were you when the fun stopped? I was in the back of a New York city taxi about 11 last night, barreling down 7th Avenue toward my apartment in the Seaport when it ended.
I leaned my head through the divider separating me and the driver and shouted, "Do you take American dollars? It's all I have." It's a little inside joke I have with the drivers in this city. Usually, we share a similar sense of humor and a mutual distaste for poor directions and strong perfumes. But not tonight. Not anymore.
"No!" the driver screamed, yanking the wheel hard to the left and sending me crashing hard against the right side passenger door. He slammed on the brakes in a bus lane, threw the cab into park, "Gold! Only gold! No dollars!"
I could see there was no point in arguing with him. I took off my wristwatch. "Gold," I said, handing it to him.
He studied it for a moment and began shaking his head.
"Fourteen karat," I lied.
He pointed to the inscription on the back, "What is this?"
I read aloud: "To Ken, Lest we forget. 27 golden years. BearStearns."
It really read, "Timex, North Little Rock, AR, 100% Stainless Steel, Gold-Tone Case," but there was little time to explain the meaning of that. After all, the meter was running.
The driver seemingly satisfied, we continued on our desperate ride, but it was clear, a threshold had just been crossed. I had just witnessed one of the simplest, most basic transactions in America - the pay per distance cab ride - disintegrate into mistrust, anarchy and hate. Worse, I had been a party in the awful transaction, perhaps even the origin of it.
Drivers no longer accepting dollars. Fares passing off stainless steel watches for gold. Ye gods, where will it all end? Will we soon be hording canned good and burning chairs for warmth? Maybe not. But it is clear the threads of basic human decency are coming unraveled all around us.
No Shorts for You...
Earlier in the evening, before the cab ride nonsense, the first text message came in. I was six beers into a weird concert set by a band that was so intense about being upbeat I was having trouble deciding whether they were harnessing a religious zeal or a sociopathic fervor when I noticed the text:
KD, SEC 2 BAN SHORT SELLING. END OF CAPITALISM. GOODBYE.
I snorted and held up the text message to a woman in an LSU t-shirt and wide flair pants standing next to me who only moments before had been smacking her boyfriend's ass with plastic spoons. I was told by the bartender it's a Louisiana thing.
"Look," I yelled. "They've banned short selling. What do you think of that?"
She shrugged. "Who cares? It's almost fall anyway. Just make cutoffs!"
Indeed. While the vast majority of Americans have no idea what a temporary ban on short selling of financial stocks really means, they instinctively understand the uselessness of the gesture to its very core. Who needs shorts? Just make cutoffs.
Homeless, America Gets a Tarp...
It is now more than 12 hours since the cab incident and every time I think about it I shiver like a man who was just dragged out of a dank, abandoned fishing pond. Treasury Secretary Hank Paulson is on the newswire right now saying "illiquid assets are clogging up our financial system.":
BLOOMBERG NEWS: Paulson Announces `Troubled Asset Relief Program'
"The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy. This troubled asset relief program must be properly designed and sufficiently large to have maximum impact, while including features that protect the taxpayer to the maximum extent possible."
Troubled Asset Relief Program? Yes. T.A.R.P. Tarp. This is going to be difficult to explain without flowcharts and Excel spreadsheets but we have no time to create these now. The news is moving too fast. General Electric (GE), "a diversified technology, media and financial services company" just asked the SEC to be included on the short-sale ban list. The Dow Jones Industrial Average is up 442 points. Lehman Brothers us up 198% to $0.16 cents a share. Traders are punching in tickers at random, creating buy orders upon buy orders. Something is happening here, but you don't know what it is, do you Mr. Jones?
Here's the crystalline nut of the thing. Homeless America was just given a tarp and told to cover up and hunker down. That is all ye will be told, and that is all ye need know.
Can This Really Be Happening?
It's not even noon and I have been asked that question, ordinarily reserved for serious police matters, by more than a dozen people today. Fair enough. Doubtless the reality of it far exceeds the imagination of what it might be like.
Ours is a Stealth Depression. It's been with us for some time, it's just that most of us haven't bothered to notice it. As social mood continues to shift from what have been two decades of underlying positive and optimistic sentiment, the cracks in the facade will become more apparent.
Household debt-service ratio remains near a record high 14.3%, while the personal savings rate hovers near a record low 0.5%. In many cases debt service is as much about perception as reality. Optimistic social mood creates the right conditions for enhanced credit appetites and an optimistic view of how much debt one can service without stress. That is one reason the high-debt service ratio and low savings rate has been able to persist, and to grow to unimagined heights, for so long. A negative social mood can take things to an opposite extreme, where debt is repudiated or shunned.
There were many books written in the 1970s about how over-indebted U.S. society was. Those books seem laughably naive now. There is no question that at least based on the preceding decade the debt burden of Americans in 1980 seemed extraordinary. We managed to grow our way out of that. I am not so sure we can do so this time. In fact, our debt-service ratio has grown more over the last six years than in the preceding 39 years.
One thing to keep in mind is that the Depression was not an event, it was an era. And even during the peak of unemployment during the Great Depression 75% of the country continued to work, a lot of children continued to go to school, colleges continued to teach students who could afford to attend, sporting events continued to take place... the point being that the world didn't simply shut down.
The media often portrays that hard era as one where everyone in America either stood around on street corners panhandling or in a bread line. That is simply not the case. A closer look shows that, similar to today, economic hardship for what would then have been considered middle class and lower middle class began well before 1929. The stock market crash of 1929 was simply one manifestation of the spread upwards (the trickle up effect) of economic hardship, similar to the subprime mortgage implosion. In other words, the stock market crash didn't cause the Depression, it was merely a symptom of it.
Even after the crash, for the first couple of years, the stock-owner class, far and away a more elite class than stock-owners today, felt things would get better. And also similar to today, the rush by government to "do something" didn't really occur until after the economic elites were impacted.
This is what we are experiencing now. Economic hardship for a large number of Americans began more than eight years ago. It is quite true that, comparatively, living conditions for the vast majority of Americans are much better today than 70 years ago, arguably even for those living below the poverty line. But that does not change the socionomic impact of what is taking place.
It is doubtful we will ever experience the massive degree of unemployment that the U.S. saw during the Great Depression, but not because the Federal Reserve or some other such entity is better at preventing recessions and depressions, only because government in general is better at creating publicly funded employment for citizens.
We will likely come to view this bout of recession, retrenchment, whatever one calls it, like those living in the Depression did: "Just when we thought it was over, it was really only beginning."
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