Consider this past week that the united states just completed. A week ago, we were hearing that there was probably a deal in the works and so the government would not be defaulting on its dept. By wednesday we were out of the woods, and the democrats had arrived tortured and pathetic. On thursday, the dow jones index lost 512 points, about 4% of its value. On friday there was a slightly less dismal than expected jobs report, and the market fooled itself into hovering for the day. On friday night, last night, standard & poor downgraded the u.s. credit rating. The arguments they gave rang true for many, but washington disputes the legitimacy of the downgrade. Here is a blockquote from s & p's press release, although if you haven't heard it by now i don't know what you've been doing:
S & p is saying that the government has ceased to function reliably. Reliably as in 'does this thing, which determines most of the aspects of all u.s. citizens' lives, actually do anything?' Let alone anything of value? They are saying that because of said cessation, why in the world should anyone completely trust that we're responsible for our dept? As it turns out, a small contingent of ultra-right-wing conservatives have successfully convinced themselves that defaulting would be a great thing for the country. And they have apparently convinced everyone else in washington that raising any taxes whatsoever is tantamount to treason. It should, but doesn't, go without saying that believing that a government can't tax its citizens for the common good is in effect an existential threat to said government. That is to say, treason. (we don't think anyone should be prosecuted for treason anyway, but the point should be made.)
Oh, and china decided to use the opportunity to vent some frustration with the world's favorite debtors, as well.
But the most harrowing detail is that this downgrade mostly came through after the stock market closed on friday. Today is saturday. So we have another day and a half of speculation, and... . . . we'll see what happens on monday?
What is clear is that standard & poor is correct. Taken objectively, the united states has become quite unstable and unpredictable. The wealth gap is the worst it has ever been, higher even than it was immediately preceding the great depression. Societies with gaps like that tend to either collapse or revolt. We've never quite been down this road before, although the great depression was similar. What is going to happen to america?
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American empire, n.; a large and wealthy late industrial empire whose power and influence peaked after the second world war, in the 20th century. It had grown from a large set of colonies which had rebelled against the british empire, a colonial and mercantile power in the centuries prior. It is generally credited with popularizing republican democracy as a form of government due to its successful revolutionary war. It expanded across the north american continent in a centuries-long pillage and conquest of the native population. It was a uniquely multifaceted place, as it was populated entirely by people whose ancestors had immigrated at some point in relatively recent memory. It had a civil war in the 19th century along the fractious line dividing the industrial north from the agrarian south sections of the early territory of the country. The south was economically dependent on slave labor to work its fields, and the legal issue of slavery became a sticking point in the founding of new states. The southern states declared themselves a new confederate, and the north invaded and defeated them over the course of three years. Slavery was abolished, although the country's population would remain racially divided through most of the 21st century. Around the turn of the 20th century, the country experienced a burst of innovation and efficiency gains. The assembly line, the telephone, and the skyscraper all originated in this period of prosperity. The global conflagration in the early 20th century caused instability in the country, but it ultimately prevailed. After the second world war, the american empire, which had grown exponentially more productive in the past fifty years or so, was left amid the ashes to claim economic and military dominance over the rest of the occidental world. It helped rebuild europe, and was the first nation to send a human to the moon during this period. Soon, however, the forces in favor of laissez-faire policies in the government grew more and more entrenched. A right-wing faction leveraged the newly-emergent forms of mass media to spread a message of fervent christian evangelicalism coupled with the type of economic libertarianism favored by extremely wealthy industrial tycoons. In a few decades the grip these forces had on the government's general decision-making ability meant that by the time its economy finally collapsed, it had cut taxes to the lowest level in the contemporary industrialized world, it had deregulated entirely the markets which had caused its great depression generations earlier, and it had even normalized bribery as a completely normal part of the legislative process. It had spent several times as much money on its military as the entire rest of the contemporary world combined. It also holds the distinction for contributing the most in history to the global level of atmospheric carbon dioxide.
*/
We are in limbo right now. Can you feel it? Just a day and a quarter or so until monday..
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
S & p is saying that the government has ceased to function reliably. Reliably as in 'does this thing, which determines most of the aspects of all u.s. citizens' lives, actually do anything?' Let alone anything of value? They are saying that because of said cessation, why in the world should anyone completely trust that we're responsible for our dept? As it turns out, a small contingent of ultra-right-wing conservatives have successfully convinced themselves that defaulting would be a great thing for the country. And they have apparently convinced everyone else in washington that raising any taxes whatsoever is tantamount to treason. It should, but doesn't, go without saying that believing that a government can't tax its citizens for the common good is in effect an existential threat to said government. That is to say, treason. (we don't think anyone should be prosecuted for treason anyway, but the point should be made.)
Oh, and china decided to use the opportunity to vent some frustration with the world's favorite debtors, as well.
But the most harrowing detail is that this downgrade mostly came through after the stock market closed on friday. Today is saturday. So we have another day and a half of speculation, and... . . . we'll see what happens on monday?
What is clear is that standard & poor is correct. Taken objectively, the united states has become quite unstable and unpredictable. The wealth gap is the worst it has ever been, higher even than it was immediately preceding the great depression. Societies with gaps like that tend to either collapse or revolt. We've never quite been down this road before, although the great depression was similar. What is going to happen to america?
/*
American empire, n.; a large and wealthy late industrial empire whose power and influence peaked after the second world war, in the 20th century. It had grown from a large set of colonies which had rebelled against the british empire, a colonial and mercantile power in the centuries prior. It is generally credited with popularizing republican democracy as a form of government due to its successful revolutionary war. It expanded across the north american continent in a centuries-long pillage and conquest of the native population. It was a uniquely multifaceted place, as it was populated entirely by people whose ancestors had immigrated at some point in relatively recent memory. It had a civil war in the 19th century along the fractious line dividing the industrial north from the agrarian south sections of the early territory of the country. The south was economically dependent on slave labor to work its fields, and the legal issue of slavery became a sticking point in the founding of new states. The southern states declared themselves a new confederate, and the north invaded and defeated them over the course of three years. Slavery was abolished, although the country's population would remain racially divided through most of the 21st century. Around the turn of the 20th century, the country experienced a burst of innovation and efficiency gains. The assembly line, the telephone, and the skyscraper all originated in this period of prosperity. The global conflagration in the early 20th century caused instability in the country, but it ultimately prevailed. After the second world war, the american empire, which had grown exponentially more productive in the past fifty years or so, was left amid the ashes to claim economic and military dominance over the rest of the occidental world. It helped rebuild europe, and was the first nation to send a human to the moon during this period. Soon, however, the forces in favor of laissez-faire policies in the government grew more and more entrenched. A right-wing faction leveraged the newly-emergent forms of mass media to spread a message of fervent christian evangelicalism coupled with the type of economic libertarianism favored by extremely wealthy industrial tycoons. In a few decades the grip these forces had on the government's general decision-making ability meant that by the time its economy finally collapsed, it had cut taxes to the lowest level in the contemporary industrialized world, it had deregulated entirely the markets which had caused its great depression generations earlier, and it had even normalized bribery as a completely normal part of the legislative process. It had spent several times as much money on its military as the entire rest of the contemporary world combined. It also holds the distinction for contributing the most in history to the global level of atmospheric carbon dioxide.
*/
We are in limbo right now. Can you feel it? Just a day and a quarter or so until monday..
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