Before the fiddlers have fled
Before they ask us to pay the bill
And while we still
Have the chance
Let’s face the music and dance
Last March, the BBC ran a story about shanty towns springing up in the US.
At the time BoingBoing and those few others who saw it asked why we were learning about this from the UK media and not from the US media. Now, a scant six months later, the US press has paused from parsing porcine lipstick and noticed.
The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans. The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood. In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters. Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.
We’ve already had a bank run in the classic sense and one updated for today’s world: Yesterday’s announcement that Putnam was liquidating a “$12bn prime money market fund because of a spike in redemption requests from clients.” Just because they have the money to cover this — as it appears they eventually will — doesn’t make it any less of a run.
Today the early headlines say Stocks soar at opening after gov’t rescue plan. Forgive me for thinking the markets are indulging in some irrational exuberance. We’ve seen this sort of response before. This is from the Wall Street Journal on March 19:
Stocks and commodities plummeted on Wednesday as the euphoria that carried equity markets to massive gains a day earlier gave way to nervousness that the broader U.S. economy hasn’t yet escaped the dangers of the credit crisis.
At some point we are going to see a huge impact from the Fed’s determination to once again deal with another issue by printing more money. Some commentators say this will simply mean an explosion in the size of the national debt. I wish that was all. The current crisis was created by pumping increasing amounts of money and credit into the economy, it is beyond me to understand why doing more of this will help fix it. You know what they call it when you keep repeating the same behavior and expect different results, right?
I am not smart enough to determine if we are about to hit a period of inflation or deflation but I know something is going to happen and will keep happening until all the difference between the amount loaned and the actual value of assets comes into balance. (If you’re a debtor start rooting for deflation — it means any money you do use to pay off a debt will be worth less than the money you originally borrowed. A net gain, if not a happy one.)
As the year has gone along, I’ve tagged a number of items under Recession? What Recession? I can’t say they make for happy reading:
- Economists emerge from drug-addled haze long enough to say US will avoid a recession March 11, 2008 · 1 Comment Being high on crack seems to me the only plausible explanation for saying: “This is a tough call, but I will be very surprised if this thing actually precipitates into recession.”
- The horse having long ago left the barn, economists think maybe it’s time to close the door and declare a recession March 14, 2008 · 6 Comments The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month. What part of the word Duh don’t you understand?
- No matter how many times it bounces, the cat isn’t getting any less dead March 20, 2008 · 2 Comments Has anyone else noted that we are no longer trying to avert a recession? Now the news stories all say that various actions are being taken in order to avert either a “deep” or “prolonged” recession. Expect to soon read about the steps being taken to end the recession without any formal announcement of its actually having begun. Of course, as M Horn likes to point out, the word recession has been redefined to a point of uselessness. Where it once meant “a decline in GDP for two or more consecutive quarters,” it now is a synonym for “the current mess.”
In March, when the BBC ran that shanty town story, it still seemed possible to have a reasonable disagreement over whether or not we were in a recession. Now the D word is in play. Soon we will be hearing that we are not in a depression and that we are trying to avert one. That is becoming the economic equivalent of promising to have the troops home by Christmas. As soon as you hear it, you know it’s a lot worse than anyone is willing to say.
The leading indicator of the “we are not in a Depression” meme came last week when Alan Greenspan — who is mostly responsible for the crisis — tried to put lipstick on this pig by saying, “First of all, let’s recognize that this is a once-in-a-half-century, probably once-in-a-century type of event.” Given that the Mississippi river keeps getting hit by floods that were once described as “once in a century” events, this is not a heartening phrase. Another troubling indicator is that the folks who decided what’s in the Dow Jones Industrial Average have replaced the now defunct AIG with Kraft. I suspect the real problem with leaving AIG is that it would have made the Dow actually reflect the economy.
Someone once asked Tom Lehrer why he stopped writing those wonderful, witty songs about the news. Having turned out anthems on topics from pollution to nuclear proliferation, Lehrer said he had begun to feel like a citizen of Pompeii being asked to say funny things about lava. Without having matched Mr. Lehrer’s accomplishments, I can certainly empathize. I have been saying for the last seven years that the real problem with the Bush administration is that it took all the fun out of being able to say “I told you so.” Unlike Mr. L, I refuse to leave the scene — especially when we are in such a target rich environment.
There may be trouble ahead
But while there’s moonlight and music
And love and romance
Let’s face the music and dance
While many people have recorded this song — but not Roxxy Music, for some reason — I still prefer the original by Fred Astaire. It’s on the soundtrack to Follow The Fleet. A happy little musical by Irving Berlin that was made into a movie in 1936.