Dirt Simple

Over the past couple of weeks, I’ve written several posts in which I asserted that Governor Sarah Palin was not sufficiently qualified to be the Vice President, nor, in the event of some calamity, President. I even went so far as to suggest that she step down, and I suggested that John McCain had demonstrated a serious lack of judgment through his selection of Palin. I stand by my assertions, but I want to elaborate on why I think this is so important.

The financial issues currently facing the United States, have global consequences. It remains to be seen if the current financial crisis will prove to be as catastrophic as we have been led to believe it may be. But at the very least, it should be taken as a wake-up call. What we have learned over the past six months or so, and most strongly in the last two weeks, is that all of the world’s economies are linked in a complex web of debt. The global monetary system relies on a constant flow and cycling of debt in order for economies to function, and no nation relies on debt more heavily than the United States.

We have all become familiar with a new phrase during this crisis–”too big to fail.” Fannie Mae, Freddie Mac, and AIG, were corporations which were deemed to be, too big to fail. In other words, if they collapsed, the whole system would collapse with them. I suggest to you that the United States is itself, too big to fail. This is why I am so concerned with the quality of the leadership of this nation. The risks of getting it wrong are enormous, not just for the United States, but for the world.

The fact is, at this point in time, neither Republicans, nor Democrats show any signs of getting it. The Republican ticket promises more war along with spiraling costs in the trillions of dollars, and the Democrats promise universal healthcare when ultimately the nation cannot afford the Medicare and Medicaid it already has, nevermind Social Security. Both parties just agreed to put another $700 billion on the national credit card. The only people who do seem to get this are unelectable fringe candidates. While they understand the fiscal crisis, they are politically unpalatable, and in some cases, out to lunch on other issues.

Politics have deadlocked the United States into following an unsustainable fiscal policy. The problem is now so bad, and so deeply entrenched, that any politician even suggesting a cure, commits political suicide. It is politically more expedient to carry on as usual, and hope that somehow the nation can spend its way to prosperity. The most dangerous thing about that strategy is that it actually works, for a while. In historical terms, it doesn’t work for very long, but in relation to human lifespans, and political lifespans, it can work for quite a while. So, we end up deluded into thinking that if we just throw more debt at the problem, the economy will outpace the debt.

But compound interest doesn’t work that way. As the debt grows, more and more of the country’s productive capacity goes to servicing the interest on that debt. I would compare it to a consumer who only makes the minimum payment on their credit card, but it’s worse than that. Credit cards have limits, the U.S. Government does not–at least it’s not a fixed limit. The limit is, whatever amount the rest of the world is willing to lend to Uncle Sam. The question is, at what point does the rest of the world say, “You’re credit’s no good anymore Sam. Time to pay your tab.”

I believe the world is starting to seriously ponder that question right now. Other nations have gotten the wake-up call, and have realized they need to take steps to insulate themselves from massive financial failures like the ones we’re seeing now. I don’t think it’s unreasonable to draw a parallel between the balance sheet of the United States, and those of corporations like Fannie, and Freddie, and AIG. I also don’t think it’s unreasonable to assume that America’s creditors are drawing the same parallel, and seeing another “too big to fail” situation. Only in this instance, no one will have the capacity to launch a bailout. Everybody gets hurt.

This is why I harp so much on poor Governor Palin, and John McCain for having chosen her for purely political reasons. Palin not only doesn’t get this kind of stuff, she doesn’t want to get it. She thinks that if she can get by on a wink and a smile, then America can too. It can’t. McCain doesn’t want to get this either. He is a man of singular vision, who has come to believe his own war hero mythology, and would like to extend it to another war, or maybe two, or three. He would sooner bankrupt his nation in pursuit of victories that just aren’t there to be had.

I could go on about a lot other things which have gone wrong in America over the last eight years, like imprisonment without trials, torture, secret interrogation facilities, warrantless wiretapping, the abandonment of international law, etcetera, etcetera. But as reviling as these things may be, none of them has sparked the kind of outrage and concern as has the current financial crisis. “Guantanamo shmantanamo! What’s happening to my 401(k)!?!” If any issue can galvanize Americans to a cause, it may just be a threat to their collective wallet.

Barrack Obama is far from perfect, but in him I can at least see a man of intelligence with an open mind. It is that open mind which distinguishes him from his competition. It will take a willingness to accept new, and painful realities if America is to climb out of the hole it has dug. If this sounds alarmist to you, that’s because it is. But this crowded theater, really is on fire.