So are we all still here, post-6pm on 5/21? (Any chance of a do-over?)

Although this, er, "story" was a "gimme" for the
cartooning community, thank you, Pat B!

[T]he rules of sovereign democratic government and global finance have mutated beyond recognition. Today when banks need more of their assets purchased by the public purse in order to relieve them of possible losses, the public purse is opened without discussion. What this means is that you and I are NO LONGER simply buying up, as a temporary, emergency measure, mistakes made in the bubble of three years ago. We are there to buy up the results of any greedy speculations made in the last two years. Government purchases and the QE which fund them are no longer part of dealing with any 'crisis' at all. They are now part of how the banks do business.They are the new normal.

This isn't a crisis. This is the new business of profit without risk. It isn't even really a 'bail out'. The new normal is a no risk machine for expropriating public wealth. [Emphasis added.]

-- Golem XIV, in the blogpost "The New Normal"

by Ken

Could someone explain to me how it is that right-wing crackpots never suffer embarrassment for being laugh-out-loud wrong?

I have to admit, it's pretty otherworldly how much attention that crackpot scumbag got with his massively hyped forecast of the end of the world. A lot of people should be ashamed. The thing that gives me pause is why the asshole would have gone so far out on his twiglike limb. Yes, the world is in deeply rotten shape today, but only incrementally more deeply rotten than on May 20, and incrementally less rotten than it will be on May 22. I mean, shouldn't he be hanging from the rafters tomorrow with a sign hung around his severed neck saying, "I AM DUMBER THAN DIRT"?

BLAME IT ON THE DAMN GAYS

My favorite take on the story was that of a colleague who passed along the Raw Story report, "Doomsday leader says gay pride is proof the world will end," with a note saying something like: "In case you thought this wasn't going to be blamed on the gays."

This may not be an appropriate moment, or segue, but seeing as how we're already on the subject of the deeply rotten state of the world, that reminds me that my principal piece of business tonight (and if the world has come to an end after I went ahead and toiled heroically over this post, I will be some kind of pissed) is to make sure that everyone has seen a terrific recent blogpost by Golem XIV (David Malone, author of The Debt Generation) called "The New Normal." It's not that anything he has to say is going to startle, or even be especially unfamliar to, DWT readers, but it's such an earnest and elegant exposition that I can't recommend it highly enough.

I can't do justice to it here, but I can at least give you the crux. First, G posits "two broad narratives of our present situation":

The dominant, official narrative, is that there was a technical crisis of money flow, precipitated by a bolus of bad debts which then caused a collapse of confidence in the value of several large asset classes. What was required was to show that such assets would always retain their ability to find a buyer and thus their value, even if the buyer had to be, in the immediate term, the public purse. The public purse was duly opened to steady nerves and sales, and massive purchases of whatever could not find any other buyer were duly made. The plan was and is that the purchased assets would be sold by our governments, back to the market once other buyers returned.

The dissident narrative is that this was never a technical crisis of money flow - liquidity - but one of insolvency due to the troubled asset classes being, in fact, vastly over valued. The collapse in value and the lack of buyers was not a temporary lack of confidence in an otherwise sound financial system, but a rational shunning of paper assets whose previous value was almost entirely due to the press of gullible buyers who were keen to partake in the buy, flip and buy some more ponzi scheme of speculation.

There was no problem, no fear of "reality intruding," "as long as the paper value was never questioned by all the players." I think maybe we can think of this as an analog of the famous "Emperor's New Clothes" situation. As long as nobody pointed out the emperor's nakedness, he was effectively arrayed in his stunning new wardrobe. Of course in the case of a faked economy, it takes more than some indiscreet kid to bring the thing down -- but not all that much more.

Of course as soon as someone defected from the grand lie, then the rational thing for everyone to do was to defect as quickly as possible. This is what every insider tried to do as quickly as they could and why the collapse was as fast as it was and was led by the banks themselves.

The end game of such a scenario would have been the ruination of those left holding the worthless paper. And if those holding the paper had been you and me then this is what Wall Street and The City of London would have been happy to see happen. But in this case the collapse was so shockingly rapid and in the preceding euphoria of the bubble so much of the paper had been retained by the banks and super-wealthy that this was NOT going to be permitted to happen. Instead actions were taken to ensure that the worthless paper assets were transferred to the public purse. Should they recover their value they would be re-purchased, but if not then they would be left where the loss would fall on people who were more accustomed to being poor and whose prior poverty has often been seen by the wealthy as an indication that they deserved to be poor.

G then describes the monumental effort of rewriting of reality that has been deployed with stunning rapidity and pervasiveness, whereby "the 'debt crisis' is seen as something that is under control," and the bankers who did so much to create the crisis and then precipitate the in-any-case-inevitable crash "are being airbrushed out of the story," and the true evil turns out to be "public expectation of a free lunch for their children at school or a pension for their life's work or a health service paid for through taxes -- these socialist weapons of fiscal destruction."

What we are left with in the official narrative is that our betters have one crisis under control -- the cash flow/liquidity crisis and are now taking equally heroic steps to deal with the recently uncovered, deeper, systemic crisis -- the 'true' crisis - of out-of-control public spending which is responsible for sovereign debt levels that are injurious to the efficient workings of the markets. Markets whose fearless leaders are trying, despite pubic profligacy and obstinate stupidity, to help us out of debt and back on to the true path of prosperity via necessary austerity and more 'realisitic' expectations of what we are worth and what we deserve.

What G is wondering is whether exponents of what he calls "the dissident narrative" "have been swept aside"? "The press are supine collaborators, the rule of law has been bought and whored, and academia is either captured by the dominant ideology and too dimwitted to escape or just too concerned with grovelling for tenure and a city sinecure."

What we have in place now is a system of permanent and institutionalized acceptance that the largest accumulations of wealth and those who own, manage and serve them can never be imperilled or threatened either by democratic rule of law nor even the workings of the markets themselves. Both perils have been removed for the super rich and their banks because it is now established that the purpose of government is to make sure the system and the hierarchy of wealth and power at its peak, remains untouchable and unchangeable.

"Crisis?" G concludes. "What crisis?"

The only crisis for the elite and their banks will be if the next round of QE in America and of ECB bail outs for German and French Banks via Greece, Portugal and Ireland somehow do not happen. If there is a minor miracle and our leaders remember we exist -- THEN there will be a crisis for the banks and the financial elite and some small hope for us.

And this would appear to be, per G, the best-case scenario! Sort of gives you second thoughts about the May 21 doomsday forecast.

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