Author: Thomas H. Naylor

So effective are the CNBC, Fox News, and Wall Street Journal spin masters at distorting economic reality, that few Americans realize that the current economic crisis is fueled by the confluence of four separate, yet interdependent, forces including the real estate bubble, the subprime mortgage loan crisis, peak oil, and the crash of the dollar. Any one of these forces alone has the potential to bring the economy crashing down to earth. One cannot even imagine the catastrophic potential of all four of them being in play simultaneously.

Erin Burnett, Maria Bartiromo, and the other beautiful women at CNBC who spin the financial news assure us that the real estate market will soon stabilize and that the worst is behind us in terms of the subprime loan crisis. But is it really so? They completely downplay the fact that the dollar is in free fall, that the price of crude oil seems to know no upper limit, that the end is nowhere in sight, and that the plunging dollar and skyrocketing oil prices are likely to exacerbate both the real estate problem and the subprime problem. Everything is related to everything else.

So-called Wall Street analysts view ever ascending stock market prices as though they were an entitlement bestowed upon us by a beneficient empire. Since stock market prices have always gone up over the long run, it follows that their never ending upswing will soon resume. We are merely experiencing a temporary setback soon to be followed by the next bull market. On the basis of what?

These guys either just don’t get it, or they are all pathological liars. We are in uncharted territory. Never before have we simultaneously experienced soaring energy and commodity prices, the collapse of the dollar, plunging real estate prices, and complete chaos in all financial institutions. What’s happening is truly unprecedented! The way out of this multidimensional crisis is far from clear.

These same analysts glibly predict that crude oil prices will soon retreat from their zenith highs and return to more benign levels. No one mentions the very real possibility of war with Iran and what that might do to energy and commodity prices.

In spite of all the hype by the Wall Street spin masters, it’s not business as usual either on Wall Street or in Corporate America. The future is a moving target which has become much more of a venture into the unknown. The tired old policies being proposed by our presidential candidates are tickets to nowhere.

Vermont’s Governor, Legislature, and Congressional delegation should all stop pretending that everything is just fine. Everything is not fine, and the sooner we all come to terms with that fact, the better off we will all be.

Rebél
Thomas H. Naylor
May 1, 2008

http://www.vermontrepublic.org