Opinion Editorials, January 2011

Economic Implosion:

Will America's Economic Tower Topple in 2011?

By Ben Tanosborn

Al-Jazeera, CCUN, January 3, 2011

 
I’ve just received the 3-paragraph obligatory, year-end email from my friend John.  A friend of four decades going back to graduate school, John is now a retired professor from a major Northeastern school where he has taught Real Estate Economics for more than thirty years.  And our friendship has unfortunately compressed to this annual, short communication which I call “disobituary,” just reminding each other we are still around.
 
“Ben,” he starts in the second paragraph, “the chickens are finally coming home to roost in 2011.  We both had predicted this economic collapse would occur in our lifetime, but I am sticking my neck out and saying that it’s finally upon us.”
 
When I read that paragraph, the first thing that came to mind was that same saying, then as reference point in Jeremiah Wright’s 9/11 sermon… an inconvenient truth that Americans refuse to accept – forcing Barack Obama, then candidate to the presidency, to repudiate his former spiritual adviser.  John’s prediction, however, is not a sermon, but a conclusion he has reached as a man of knowledge and the evidence he sees.   
 
One need not be a latter-day Nostradamus to predict a collapse of the American economy… as that economic future meteorically descends towards us.  What needs to be asked is “when will it happen,” for unlike a meteorite following a prescribed trajectory, the route and timing of an economic collapse is often manipulated by politicians and their economists-consiglieri, always clouding the time of impact by adding on to an existing insurmountable debt, our legacy to generations of unborn Americans.
 
Public outcry and fear inflicted by Osama bin Laden (Al-Qaeda) and his 9/11 signature date, whether he was the true inflictor or just a US government tool, will likely descend to a secondary role.  This economic unraveling which is likely to occur in 2011, will be, consequentially, a thousand-fold more damaging, finally force-educating – although too late – much of the American public: that 80 percent of the population that has been kept ignorant, and in a state of servitude, by that other 20 percent of their fellow citizens – and not just the mythical 2 percent – who kept them in chains thanks to a government eager to provide shelter to unregulated, predatory capitalism of the worst kind.
 
Sometime in 2011, possibly in the third quarter, close to the one decade anniversary of that 9/11 event, America’s economic chickens will come home to roost… I agree with my friend John.  Our economy, far from being recovered from a real estate crisis, where residential and commercial properties are still overvalued by 2 to 3 trillion dollars, will be confronting two new bubbles that will serve as coup de grâce: State/Municipal Debt and Student Loans.  Not just by virtue of their size, close to a trillion dollars each, but by getting close to home for most Americans, in the amount and quality of government services they will get. 
 
Perhaps from these economic ashes, a moral phoenix will rise that will humanize America; a grass-roots backlash to an errant foreign policy that had to be enforced, particularly in the Middle East and Afghanistan, via a bellicose American military.  All at a cost of trillions of dollars that purchased for the United States nothing but ill-will!
 
Obama’s administration, and its subservient Fed, will try to put the fire out adding one or two trillion dollars more to the existing 14 trillion National Debt… but China, now fully grown, will have none of that; like it or not, our problems will be our own and economic growth elsewhere in the world will be minimally affected by this nation being bankrupt.   
 
Our economic fate is really tied, totally dependent, to the economic growth in the emerging nations which at this point affects more than half of the world’s population.  And this dependency is almost inversely proportional in how it affects us, since there is relatively little we produce, and that includes high technology, that we can sell to the world.  So, in this finite world in which we live, other nations’ demand for commodities, or finished products, will make the price we have to pay for them dearer and dearer… sinking our living standards as other nations raise theirs.
 
America is no longer the economic clearinghouse, whether in commodities, technology or finance, that it once was, no matter what leftover delusions of grandeur we still have.  Our economic-financial ivory tower has toppled, not by a single act of terrorism – such as the Twin Towers at the World Trade Center back in 9/11 – but by economic erosion caused by the unregulated globalization that American governments have adopted for the last three decades.
 
It’s been a while since much of the world got wise to America’s lack of a plenipotentiary role in the economic affairs of the world.  But Americans would not believe it, or accept it.  Finally, Americans are going to see the emperor, themselves, not wearing any clothes.  And that’s what John and I mean when we say… “The economic chickens have finally come home to roost.”  Welcome to 20/11!
 
Ben Tanosborn
[email protected]
www.tanosborn.com

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