No more turning away
From the weak and the weary
No more turning away
From the coldness inside
Just a world that we all must share
It’s not enough just to stand and stare
Is it only a dream that there’ll be
No more turning away.
-- Pink Floyd (1987)
In case you haven’t noticed, we’ve been in recession since the third quarter of last year. It’s just taking distracted Americans awhile to catch up to the rest of the industrialized world which got there before us.
The old rule of thumb about the stock market being six months ahead of the greater economy no longer works in the era of highly computerized speculation where profits are taken and stocks bought or sold fast than humans can bat an eye.
I called the “Great Recession” of 2007-08 in 2005 not because I’m some genius but because I read a lot. All you have to do is keep tabs on top gun banker Robert Barone in the Reno Gazette-Journal and Nobel Prize-winning economist Paul Krugman in The New York Times and patterns emerge.
Their red flags are now on fire. An inverted bond curve has preceded every recession in the past 60 years. Savvy money managers are moving to safe debt instruments (bonds) and out of volatile stocks. A 30-year bond now pays less than a five-year bond, which makes no sense at all. Exactly. Ships of state are taking on water. Perverted demagogues rule formerly democratic countries all over the world. The perversion has created inversion.
The Emir of the United Arab Emirates is the richest man in the world at $1.3 trillion and owns the governments of Egypt and Saudi Arabia among others.
It usually takes a catalyst to start widespread panic. The infamous stock market crash of 1929 was the red flag of its day. Money men like JP Morgan pumped in tons of money trying to shore up Wall Street and failed.
Most economists believe that a garden variety recession was turned into the Great Depression because the Smoot-Hawley tariff of 1930 walled off the American economy. (Sound familiar?)
Republican President Herbert Hoover was an able public servant who had managed European recovery after World War I. He tried to do some of the things his successor Franklin D. Roosevelt later implemented. His millionaire-banker treasury secretary, Andrew W. Mellon, advised letting the invisible hand of the market correct itself. Big mistake.
Lord John Maynard Keynes’ advocacy for government stimulus to kick start a depressed economy had not yet crossed the pond. Tariffs made matters immeasurably worse.
All that’s needed is a catalyst for us to likewise tumble.
Alas, a perfect storm looms this fall. The stock market crashed on October 29, 1929, Black Tuesday. (Oct. 29 also falls on a Tuesday this year. Mayday!)
Mad King Ludwig’s Mexican tariffs go to 20 percent in October and 25 percent on Nov. 1.
Meanwhile across the pond, the Brits will commit economic suicide in (drum roll, please) October when the UK exits the European Union. Instant depression in the British Isles. Dominoes, anyone?
Vladimir Putin will have proven himself the most powerful man in the world, along with Osama bin Laden. The latter has impacted the behavior of most of the world and continues today long after his death. Bad Vlad elected his own US president and used the same techniques to break the European Union, all for less than the cost of a US F-35 fighter plane. That’s fiscal conservatism
Nevada, as always, stands ill-positioned to weather the coming storm. We can’t even raise the minimum wage to 1968 levels with a Democratic legislature and governor.
SILVER LINING: A NEW FDR. America has had three great presidents: Federalist George Washington, Republican Abraham Lincoln and Democrat FDR.
In early 2016 with 17 candidates in the GOP primaries, I noted that the cycles of history predicted a Republican presidential victory. (I read a lot.) The cycle also foreshadows a liberal victory in 2020.
A new Roosevelt is waiting to catch the children coming through the rye. His or her identity may not yet be on the national radar.
Only a major meltdown can turn this corporate-dominated pseudo-democracy back into a truly republican representative form of government. That’s the only thing that allowed Roosevelt’s creation of The New Deal during GD-1. It’s taken the bad guys and the fat cats eight decades to destroy it but they’ve finally won.
Great Depression2 will hurt. A lot of people will be injured and many will die young. Kinda like now.
As an apocryphal wise person once stated, history does not repeat, but it rhymes.
Fasten your seatbelts. We’re in for a bumpy ride.
Be well. Raise hell. Esté bien. Haga infierno.
Andrew Barbano is a 50-year Nevadan and editor of NevadaLabor.com. E-mail firstname.lastname@example.org Barbwire by Barbano has originated in the Tribune since 1988.