Yes folks, that one song captures the collective mindset of both the Roaring Twenties and the Reaganomics Revolution: “Forever blowing bubbles. Pretty bubbles in the air. Dreaming dreams. Scheming schemes. Building castles in the sky. Fortune’s always hiding. I’ve looked everywhere. Forever blowing bubbles. They fly so high, nearly reach the sky. Then like my dreams they fade and die.”

Then … like our dreams … they fade … and die. Nearly a century ago the bubbles popped in the Crash of 1929. Then the bubbly went flat during the long Great Depression. It repeats again with the Reaganomics Revolution’s endless “pretty bubbles.” Tornadoes merging. Destroying the American Dream. For a generation we have watched the damage created by a selfish ideology: The S&L disaster. Dotcom crash. Wars. Subprime meltdown. Great Recession. And yes, there’s more to come, more “pretty bubbles.” You’ll see below.

Irrational exuberance blinds us. On March 20, 2000, as dotcom exuberance raged, our column began: “Next Crash, You Won’t Hear It Coming.” Then came a 30-month recession. We went on reporting twenty advance warnings of the 2008 meltdown. Nobody listened. Till it was too late. Till a conflicted Treasury Secretary, myopic Fed Chairman and clueless Congress all panicked. Making matters worse. Setting up a new meltdown, dead ahead.

“Reaganomics Revolution” destroyed values of American Revolution 1776

Today our collective brain has been consumed by a “greed-is-good” virus. We have lost our moral compass. The values of the American Revolution of 1776 are dead. The Reaganomics Revolution has replaced those values with the unregulated free market with an “every man for himself, get rich quick” ideology that’s destroying America from within: Yes, “we are forever blowing bubbles. Dreaming dreams. Scheming schemes. Building castles in the sky. Pretty bubbles fly so high. Nearly reach the sky. Then like our dreams they fade and die.”

They fade and die. In the Bush years some cocky conservatives predicted a “permanent majority” lasting “for years, maybe decades.” The hubris gods had other plans. Then after Obama’s election, one cocky liberal wrote a book, “40 More Years: How the Democrats Will Rule the Next Generation.” Wrong again. Both parties will lose in the final flame-out of the Reaganomics Revolution.

Yes, so many “pretty bubbles” merging. And still, the pundits and press love the bull, arguing that no one bubble is a game-ender. Even after a generation of increasingly bigger, more frequent economic disasters drain our fiscal and monetary resources, raising our debt to unsustainable levels, destroying our trust in democracy and the dollar, it’s now obvious that America’s “pretty bubbles” are making us vulnerable, inviting trouble. Get it? Today any one “pretty bubble” can trigger a flash point, ignite a chain reaction, an economic nuclear bomb exploding the American Dream. Here are America’s most toxic bubbles, warnings of the “coming crash … the one we refuse to hear.” ….

read more on MarketWatch

Update: With the 2012 election lineup up for grabs, Stockman may be the GOPs best candidate for President. A hero in American politics, he’s a rare no-BS truth-teller who’s been delivering the same message since his 1986 Triumph of Politics: Why the Reagan Revolution Failed, an expose written after leaving the White House. Better yet, he’s the kind of fighter who could easily go the distance with Obama on the key issues that will dominate the 2012 election: the economy, employment, interest rates, entitlements, war budgets, the devalued dollar, our rapidly collapsing monetary system, another meltdown.

Last fall, Stockman’s hard hitting op-ed was loaded with jabs like: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt” screams “for austerity and sacrifice,” instead, the GOP insisted “the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.” Obama blinked, pulled his punch. Let’s get both in the ring.

His latest attack proves he’s still a powerful fighter. Recently, Reason magazine’s editor-in-chief Nick Gillespie did a long interview with Stockman. The title builds on the book: “The Triumph of Politics Over Economics.” But instead of just looking back at the failure of a self-destructive Reaganomics, an older and wiser Stockman focuses us on the paradigm shift that’s destroying America from within.

Warning: GOP’s self-destructive capitalism is destroying U.S. economy
In this new “Triumph of Politics Over Economics” we see America at a historic crossroads, struggling to redefine itself. Politicians have become the new economists. Politicians their big money backers and lobbyists now rule the American economy like banana republic dictators. Stockman calls this corrupt system the new “crony-capitalism.” The old capitalist economics that made America the world’s greatest superpower no longer exists …. more ….

Complete column: MarketWatch.com

Today, a harsh lesson from history, facts, and a warning. Listen closely America. It’s already happening again. The collective “Reaganomics Brain” has gone from crash to cover-up to comeback kids to capitalism-for-the-super-rich in three short years. Now with absolute power over America. But the worst is yet to come. The forces behind the 2008 crash are stronger today. Like the villain in a horror flick sequel, the darkside is now hungrier. “Phase Two” is already in full swing as the “Reaganomics Brain” aggressively races to complete unfinished business the 2008 meltdown, and will implode Wall Street banks and the Fed, ending the reign of the dollar as the world’s reserve currency

Recently we reported some bearish predictions for 2011 by two respected market leaders: Ned Davis warns of a “midyear peak” before a new cyclical bear. Jeremy Grantham warns investors to get out before Christmas. Bad news for investors angry at the past, worried about the future. Remember, the Dow’s barely above its 2000 peak of 11,722. Adjusted for inflation, the market has flatlined the past decade.

Get it? Wall Street is a loser. Wall Street lost about 20% of America’s retirement money in the past decade. If you’re a boomer and a betting man, odds are Wall Street will lose another 20% by 2020. America’s boomers don’t have to be rocket scientists to see the workings of the “Reaganomics Brain” here, how it’s self-destructing capitalism, democracy and your retirement. Here’s hard evidence of lies and cover-ups in past and future catastrophes:

March 2004. Fed Chairman Greenspan “cover-up” of coming crash
In a Bloomberg Market’s magazine column last year, “Greenspan Coverup,” Roger Lowenstein, author of The End of Wall Street, wrote that in a newly released transcript of a March 2004 meeting Greenspan “argues against disclosing too much to the public lest the Fed ‘lose control of a process that only we fully understand’.” Yes, a cover-up. Lowenstein, a classy guy, went ballistic: “This statement ranks as a sign of monumental arrogance. It was Greenspan himself who didn’t understand, much less ‘fully understand,’ that the Fed’s lax mortgage regulation and easy monetary policies were setting America up for a disastrous fall.” The new Oscar-winning film, Inside Job, exposes more of the many lies.

My full commentary in MarketWatch 3.8.11

Subtitled “Tax Bomb Dead Ahead: Former GAO Chief says your taxes will double” is now worth a second look, especially when you consider states and local governments are already desperately adding taxes to make up for lost property tax, sales and income revenues. The New York Times warns: “As Revenue Slump, States Look to Tax Services, From Head to Toe.” If you wonder whether we really are in an economic recovery, take a look at the bigger picture unfolding across America, at the 22 reasons all taxpayers at all levels of government will be impacted for years to come …

Imagine doubling your taxes: Yes, that’s what David Walker, the former U.S. Comptroller General and GAO chief warned on CNN: “Why Your Taxes Could Double: The federal government has spent more money than it takes in at an increasing rate. Total federal debt almost doubled during President George W. Bush’s administration and, as much as we needed some stimulus spending to boost the economy, the nonpartisan Congressional Budget Office now estimates total debt levels could almost double again over the next eight years based on the budget recently outlined by President Obama,” with our “tax bill doubling over time.” Don’t say you weren’t warned!

Debt is killing the American Dream. We’ve mortgaged our future, and now Obama’s adding a new $1.84 trillion federal deficit. That’s four times Bush’s record deficit his last year. Plus deficits over $500 billion annually for the next decade. The president’s gambling, doubling down, betting the farm, going “all in” with a huge bet that could break the bank. Is this America’s “last hand” in high-stakes poker game? More grim tax facts: A few years ago Peter Orszag, Obama’s Budget Director warned: “Balancing the budget would require a 41% cut in spending on Social Security and Medicare, a 47% cut in discretionary spending, or a 17% cut in all non-interest spending.”  

Secretary Geithner gave us an update: “The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.” Those two trust funds already eat up more than a third of the federal budget and are increasing $2 trillion a year. Still, AARP and other lobbyists resist all benefits cuts (that affect Boomers) more than tax increases (paid by younger workers), despite a new study telling us: Medicare surpluses will run out in 2016, Social Security by 2037, both earlier than previously estimated. Together they account for roughly $80-to-$120 trillion in unfunded liabilities, with Medicare 80% of the total … and please note, America’s debt now exceeds the $50 trillion GDP of all economies in the entire world!

Wake up, you’re in denial, the “tax bomb” is dead ahead

Still, most Americans are in denial. We want to believe Bernanke’s recent optimism about a recovery this year … recent new securities offerings …. plus investor sentiment got a big boost since March from that 30% market gain … many believe we’ve hit bottom … it’s not a sucker’s rally, not a dead cat bounce in a secular bear … then we hear corporate insiders are selling their stock … still, we’re in denial. So please listen: Excessive debt virtually guarantees your taxes are going up, way up. But how much debt will drive the demand increased taxes? In March of 2008 when it looked like a McCain vs. Clinton contest we wrote an earlier challenge: “10 Reasons the New President Will Raise Your Taxes.” We saw this coming, knowing that it did not matter who got elected, Bush left a massive pile of debt.

But let’s go back even further, to 2005 when we started surveying America’s burgeoning debt as a trigger for a coming meltdown. The Dow was roughly 10,000. It peaked at 14,164 in October 2007, in spite of the obvious warning signs. Get it? Our average Main Street investors saw the global meltdown coming nearly three years before it happened. In fact, it was quite obvious to 86% of our readers back in 2005. But not to a greedy Wall Street and Reaganomics-obsessed Washington. They were in total denial into 2008 (… and are back there again in 2010!).

So we researched, updated and reprioritize 22 debt/deficit areas that will push us over the edg and double our taxes, as Walker predicts. There’s a perfect storm dead ahead: Any one of the 22 could trigger the dominoes cascading into a black hole, demanding higher taxes, triggering the “Great Depression 2” we’ve discussed often. Unfortunately, most politicians are in denial, refuse to see the longer-term, the bigger picture. So please take charge, be prepared:

1.   Federal budget deficits/debt:  Federal debt now $12 trillion. Add $1.4 trillion this year. That’s almost 100% of GDP.
2.   Social Security unfunded debt:  No longer a political ‘third rail.’ No choice: We must raise taxes, or cut benefits.
3.  Medicare unfunded obligations:  Unfunded after 2016, $65 trillion by 2041, consuming 100% of tax revenues by 2075.
4.  Health care insurance liabilities: Costs rising at double the inflation rate. 47 million uninsured. Obama plan’s universal coverage of this mega-$2.5 trillion business. Can we trust insurers sudden offer to help?
5.  Military defense budget costs: Budget $662 billion. Add veterans affairs, Afghan, Iraq: $1.45 trillion 55% of budget.
6.  Homeland Insecurity risks:  Ports, chemical plants, borders at risk. Black Swans are lurking; with unpredictable mega-buck consequences.
7.   Real estate/mortgage losses.  Global real estate from $40 to $70 trillion in 5 years. Total global wealth lost since 2007, $50 trillion. US Mortgages shot from $7 to $14 trillion in 8 years, now down $6 trillion, with 20% worth less than the mortgage.
8.   Peak oil and energy alternatives.  Oil’s soon declining. Extraction costs will exceed sale price. Nuclear energy cost: $75 trillion. Coal’s dirty. Wind, biofuels, costly. 
9.   Cap and Trade.  Tax fossil fuel emissions will increase energy costs. But it won’t change much. China won’t stop. So population grows, with demand and global warming.
10.   Foreign trade deficits.  Annual deficits continue hovering around $600 billion. Foreigners buy 70% of our debt. Many convert to equity: Today foreigners own a net value of $2.5 trillion in America.
11.   Corporate pensions. Two-thirds of them are under-funded. Taxpayers cover losses in Pension Benefits Guarantee Corporation, also under-funded by $500 billion.
12.   Local government pensions:  Latest estimates of retiree benefits and healthcare costs now called a “$2 trillion hole.”
13.   Weak US dollar. US foreign debt nearly equals our $15 trillion GDP; China’s replacing dollar reserves.
14.  Personal savings debt.   We’re consumers. Our savings rate dropped from 8% in 1980 to zero last year. Only 30% save enough to retire. And yet, economists warn increased savings would slow economy recovery. They want consumption.
15.  Credit card & consumer debt.  Consumer debt now at $2.5 trillion. Personal bankruptcies rising. Still, we’re card addicts. And card companies are stealing from us.
16.  Fanny Mae/Freddie Mac.  They’re owners of $5.5 trillion in mortgage debt, half the nation’s total, with foreclosure rates at historical record highs.
17.  War on drugs. Drug addiction in America plus our misguided unwinnable supply-side wars-on-drugs in Mexico, Afghanistan, all over the globe, costs hundreds of billions annually. Worse, our domestic demands are increasing the total costs.
18.  Shadow banking system. The Fed and Treasury prefer secrecy with loans and credits now over $5 trillion. Auto and insurance companies now getting money.
19.  Democracy by Lobbyists. Forget socialism, capitalism, democracy. America is run by 42,000 lobbyists. It’s “Washington’s Biggest Business” controlling all politicians.
20.  Class gap widening.  CEOs salaries vs. workers pay rose from 40:1 in 1980 to over 400:1 before the meltdown, while inflation-adjusted pay of workers fell.
21.  International credibility. With friends and enemies, our war/torture was costly.
22.  What did we miss? Resources, tech, educational, environment, jobs, you pick!

New taxes are inevitable at this level of debt, after a generation of wild-spending Reaganomics, Bush/Cheney war debt and now out-of-control Obamanomics and Bernankonomics spending. Add up your scores, six points for each of these tax-creating debt areas. What’s your total score? Add comments and tell us your opinions about the coming “tax bomb” that will double local, state and federal taxes, as former GAO chief David Walker warned in 2008?  Can we stop it? Is this the last gamble before the “Great Depression II?” Is the president doubling down in a high-stakes poker game, betting the farm, going ‘all in,’ gambling on your kids future, with a bet that will break the American Treasury?

original: MarketWatch.com May’09

But this was so predictable. As Naomi Klein, author of Shock Doctrine: The Rise of Disaster Capitalism warned: “Free-market ideology will come roaring back when the bailouts are done, and the massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis.” Get it? The Zombie Capitalism of Reaganomics couldn’t kill us during the dotcom crash or subprime credit collapse, but now Zombie Wall Street is shooting for the “Third Meltdown of the 21st Century.”

Wait, an even better title would be, “Zombie America.” Why? America is not only enjoying Halloween, the great celebration of the undead, but in our election madness we also created a historic “trick-or-treat,” with invisible monster billionaire backers, ghoulish politicians, blood-sucking vampires emerging from graves in foreign sovereign nations, to poison our souls from within.

But the scariest monster this Halloween is the “China Zombie-Eaters” who are devouring the dying jobs of Zombie Americans. China’s “Zombie-Eaters” are infinitely more dangerous than all the spooky foreign nations funneling megabucks into the Chamber of Commerce’s Supreme Court-sanctioned lobby. Here are 8 demonic reasons why China’s aggressive “economic warfare” is also a secret long-term defensive military strategy:

One: Zombie-eating China has a long-range plan to conquer America
Listen closely, because the nuttiest theories are so often revealed later as hidden truths. Remember Delaware Tea Party Senate candidate “I’m no witch” O’Donnell. You may question her credibility about secret classified documents revealing that China has a “carefully thought out and strategic plan to take over America.” But still, the facts are that the China “Zombie-Eaters” are destroying and devouring millions of American jobs.

We also know China is stealing U.S. state secrets, stealing proprietary patents, stealing our technology. We know China is hacking away, aggressively engaged in a not-so-secret cyber-war against America. We also know China has forged alliances with America’s enemies, including Iran, Venezuela and North Korea. So while you’ll chuckle at a non-witch’s “classified” plans, the fact is, China “Zombie-Eaters” are our worst nightmare, aggressively engaged in wars against America on multiple fronts.

As Ross Terrill, a China expert at Harvard, put it in the Wilson Quarterly: “The Chinese Communists are very aware of this contest with the United States, though Americans (beyond the Pentagon) are not.” Yes, Zombie America is clueless about the threat from the China “Zombie Eaters.” And Terrill warns, our lack of awareness will destroy us: “By being a shrinking violet, the United States would simply hand over the future to China.”

Two: Zombie-eating China “buys” Australia with surplus U.S. dollars
Want more proof? Read Malcolm Knox’ recent piece in Bloomberg-BusinessWeek: “The Deal is Simple. Australia Gets Money. China Gets Australia.” Wake up Americans. While our zombie politicians are fighting selfish turf wars this election cycle, China is using its foreign currency reserves (US dollars) to buy rights to Australia’s commodities and natural resources, giving China “Zombie-Eaters” long-term access to natural gas, minerals, iron ore, much of which is found in Queensland, Australia, the home of John Quiggin, the economics professor who wrote the book Zombie Economics. Quiggin also summarizes the five main undead ideas of Zombie Capitalism in Foreign Policy.

Three: China “Zombie-Eaters” easily bullies Japan into submission
In a recent New York Times column Nobel Economist Paul Krugman warned: “Last month a Chinese trawler operating in Japanese-controlled waters collided with two vessels of Japan’s Coast Guard. Japan detained the trawler’s captain; China responded by cutting off Japan’s access to crucial raw materials.” Bad news: Like a wounded tiger, China’s “Zombie-Eaters” will turn against anyone. China controls 97% of “the world’s supply of rare earths, minerals that play an essential role in many high-technology products, including military equipment. Sure enough, Japan soon let the captain go.”

Four: China “Zombie-Eaters” are aware of Pentagon war strategies
That trawler incident got me thinking of the Pentagon study from Fortune back during the Bush/Cheney years: “By 2020 there is little doubt something drastic is happening.” The Pentagon warned that “as the planet’s carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge … warfare is defining human life.” You can bet China’s generals have the same strategic playbook.

Krugman fears the “Zombie-Eaters” long-range plans: “I don’t know about you, but I find this story deeply disturbing, both for what it says about China and what it says about us. On one side, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials. On the other side, the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation.” Maybe even military action?

Five: Zombie-eating China way ahead of Pentagon’s war planners
Krugman calls this “economic warfare.” But the Marine Corps veteran in me sees a long-range strategy of out-flanking a complacent Zombie America. It’s well-known the China “Zombie-Eaters” are making deals all over the world – in Africa, South America, Russia and Asia – tying up long-term natural resources, using their surplus credits of U.S. dollar reserves to lock up essential global commodity futures. Meanwhile America’s zombie politicians waste time in myopic election turf wars for personal gain, failing to see that America’s consumers and taxpayers are financing China’s war plans. Wake up. Admit it.

So to echo Krugman: “I don’t know about you,” but on so many fronts China’s behavior smells like their leaders are doing lots more than expanding China’s economy (the Foreign Policy Journal predicts China will explode from 11% to 40% of the global GDP by 2040, creating a $123 trillion economy that will dwarf America’s GDP). But even more “deeply disturbing.” China’s behavior tells us they are obviously engaged in long-term defensive military strategies as well as economic planning, and that in the future, another trawler incident may well provoke “dangerously trigger-happy” Chinese leaders into escalating from defensive military strategies to a preemptive strike protecting China’s economic power.

Six. “Zombie-Eating” China aided by the Goldman Conspiracy vampires
The Wall Street Journal reports that CEO Lloyd Blankfein (obviously supported by the ghost of former CEO Hank Paulson who left the American Treasury buried in a graveyard of trillions of debt) “is trying to rehabilitate its public reputation with an ad campaign.” Yes, that undead Wall Street zombie will try “to show how it helps create jobs, is planning to make changes in the way it reports its finances and how it relates to clients, investors and analysts.”

Warning: Goldman’s no passive zombie. They’ll always be the textbook bloodsucking Wall Street vampire for all future Halloweens, what Rolling Stone’s Matt Taibbi called a “giant vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” That image forever defines Goldman as an enemy of America, especially now for using its conspiracy of anti-capitalists to aid-and-abet China “Zombie-Eaters” in their economic war to bury America for all eternity.

Seven. Zombie AARP retirees vs American under-40 taxpayers
Unfortunately the coming domestic class war revolution will further drain America’s global power. Soon America will resemble France. Total chaos today. President Sarkozy’s under siege for raising the retirement age from 60 to 62. French bankers are still getting rich, like Wall Street. But they control government, budget cuts, austerity. Result? Class wars: Students stormed the French Senate. Trade unions blocked airports. Oil refineries forced closure of 3,000 French gas stations. Cost: $100 million a day.

French voters are not zombies, they’re role-models. Soon Zombie Americans will revolt, arising as the undead. France has 62 million, America’s five times bigger. Imagine an American class war when Zombie-AARP’s 40 million members react after our Zombie Congress raises the Social Security retirement age (or cuts benefits, or raises taxes). Bet on a nationwide revolution of young voters, unions, unemployed and poor, as in France.

Eight. Warning: “Zombies can’t vote … but zombies will revolt!”
Remember “The Night of the Living Dead?” Their time is on the horizon. In the full moon, cemeteries will empty of the undead. Revolting, they will fulfill their destiny. They will take back America from the eternally greedy zombie bankers and fleckless zombie politicians. Happy Halloween all you zombies, ghouls, vampires, witches and devilish monsters sucking the blood out of America’s soul … your time is coming soon, the end of your evil ways, when a new “night of the living dead” revives our great nation.

original.MarketWatch 10.26.10

Mr. President: We know that the future—seen through a broader historical lens—will reveal a natural cycle with you cast in the predictable scene of a Shakespearean-style plot driven by fate, the same dramatic destiny of all great nations and civilizations. We know a “Happy Conspiracy” of Wall Street, Corporate CEOs and the Forbes 400 controls Washington, limiting and manipulating you. Shakespeare says: “All the world’s a stage, and all the men and women merely players. They have their exits and their entrances.” As this past year unfolded it became painfully obvious you are indeed playing a role in a historic drama, along with other leaders in a staged, life-cycle, endgame that includes Presidents Reagan, Clinton and the Bushes, Fed Chairmen Greenspan and Bernanke, and Wall Street’s bosses Paulson and his “Fat Cat” banker buddies. The final scene of this historic Shakespearean drama is playing out this very moment, with 10 improvisational plot points driving your character’s role:

1.  Failing to grasp John Adams’ warning: All democracies “commit suicide”
“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide:” Yes John Adams, a great American president made that famous prediction at the beginning of our great nation. And yet, paradoxically, when a democracy commits suicide, it also kills off the very capitalism that made it powerful, the economic system Adam Smith identified the same year our Declaration of Independence was signed. Today we are neither independent nor free, King George has been replaced by a far more powerful moneyed conspiracy that you sold out to last year.

2.  Failing to sense the psychological impact of being an aging democracy
Yes, our time is up says Scottish historian Alexander Tytler, recently quoted by economist Marc Faber: “The average life span of the world’s greatest civilizations has been 200 years.” Then “once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” We’re on ‘suicide watch,’ acting out the final scenes President Adams predicted for democracy, as Wall Street murders capitalism.

3.  Failing to demand sacrifices, instead adding to Bush’s massive war debt
Back in 2003, coincidental with the “greatest foreign policy blunder in American history,” the Iraqi War, Kevin Phillips, President Nixon strategist and political historian, published Wealth and Democracy. Phillips warned: “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.” Three trillions wasted, says Nobelist Economist Joseph Stiglitz. And now, Mr. President, you’re playing your role, along with Bush, Paulson, Bernanke and Congress, piling on an unsustainable $23.7 trillion in what is the greatest domestic blunder in American history.

4.  Failing to lead with “once-in-a-lifetime” systemic financial reforms
Former Fed vice-chair Alan Blinder recently wrote in The Journal: “When economists first heard Gekko’s now-famous dictum, ‘Greed is good,’ they thought it a crude expression of Adam Smith’s ‘Invisible Hand’—which is one of history’s great ideas. But in Smith’s vision, greed is socially beneficial only when properly harnessed and channeled,” with incentives for risk taking, honest competition, regulatory safeguards, and regulators who will actually enforce the rules. But “when these conditions fail to hold, greed is not good.” Blinder fears “that a once-in-a-lifetime opportunity to build a sturdier and safer financial system is slipping away.” No consumer protection, no mortgage clawbacks, no derivatives regs, nothing. You are setting the stage for another, bigger meltdown, the “Great Depression 2,” the last tragic act in this drama, dead ahead.

5.  Failing to pick a “cast-of-characters” that could have changed history
Recently Financial Times John Kay said: “Our banks are beyond the control of mere mortals.” But it’s not just banks: Our American government and economy is “beyond the control of mere mortals.” Each president picks his own actors to play out this grand epic historical drama: 21 cabinet officers and 6,722 other senior bureaucrats. Last year many voted for you fearing McCain might pick Phil Gramm as Treasury secretary. Unfortunately, Mr. President, your picks not only revived Reaganomics under the guise of Keynesianism, you sidelined a real change-agent, Paul Volcker, and picked Paulson-clones like Geithner and Summers. But worse of all, you’re reappointing Bernanke a Greenspan-clone as Fed Chairman, an economist who, as Taleb put it, “doesn’t even know he doesn’t understand how things work.” And with that pick, you proved you also don’t “understand how things work.” And yet forever true to the script, your decision fits perfectly in the final act captured by your predecessor, President Adams.

6.  Failing to stand up to our 100 senatorial assassins and 261,000 lobbyists
Instead of leadership, you let Congress run the show, a strategy that may work in community organizing but in Washington reminds us of the old adage that “the inmates are running the prison.” We now know why Adams used words like “murder” and “suicide” as the endgame in a democracy. Suicide was a theme in a third of Shakespeare’s dramas: Romeo and Juliet, Brutus, Cassius, Othello, Lady MacBeth, Ophelia, Anthony and Cleopatra. But Julius Caesar is the best comparison: Senators were Caesar’s assassins, a loyal friend even drew first blood. Today, any one of 100 self-interested senators can legally threaten to “assassinate” the entire nation. And you seem unwilling to stand up to their totally dysfunctional kamikaze mission.

7.  Failing to act Presidential, while “Fat Cat Bankers” hijack your presidency
Economist Peter Morici writes in the Baltimore Sun: “On banks, Obama talks tough, does little.” Matt Taibbi is far more caustic in “Obama’s Big Sellout,” Mr. President: “A once-in-a-generation political talent” has “allowed his presidency to be hijacked. Instead of reining in Wall Street, Obama has allowed himself to be seduced by it … pulled a bait-and-switch on us.” And yet while it’s so blatant and obvious, Wall Street gets away with it because your presidency has merged into a “Fat Cat Bankers Conspiracy.”

8.  Failing to protect 95 million investors, letting Wall Street loot America
Wall Street bankers are stealing trillions: In “Not So Radical Reform” BusinessWeek says the “top five U.S. commercial banks … were on track” earning at the rate of $70 billion “in 2009 trading unregulated derivative contracts.” The Journal connects the dots: The same banks “allocated about $90 billion for overall compensation,” with average bonuses of $500,000, ten times the income of most Americans. Yes, Wall Street looted that money from taxpayers as you turned a blind eye, Mr President. The Journal commentator from Yale Law says “the government should make it clear that it will allow these institutions to fail.” Except no one believes you have the guts or the will to do that, Mr. President. You are a Wall Street bankers dream. But you have failed America’s 95 million investors and the consequences will be disastrous in the near future.

9.  Failing to avoid the “hubris virus” disease killing America’s leaders
Before you took office Mr. President (and while Paulson was looting the American Treasury to save his old firm), Portfolio warned: For “every highflier who is chastened, another would-be mogul pops up elsewhere, convinced he’s smart enough to game the system … When things are very good, people take ridiculous risks, and then things come crashing down and the risk just moves somewhere else … We don’t know where it’s going next, but someone will be making money somewhere.” Why? Because “like a lethal virus, it seems, hubris never really disappears, it simply finds a new host.” Yes, that deadly virus, that insatiable greed, mutates fast among Wall Street’s “Fat Cat Bankers.”

10.  Failing to see the “ticking time-bomb scenario,” the next big meltdown
“Bring Back Glass-Steagall,” demands Journal columnist Thomas Frank, author of The Wrecking Crew, How Republicans Rule. We hear the same message from Volcker, Stiglitz, McCain and others. But it’ll merely delay the inevitable. The end-game is “never different,” whether penned by Shakespeare, Adams, Tytler or Reinhart and Rogoff. As Frank says of the Financial Crisis Review Commission: Wall Street bankers will “skate away yet again by deflecting blame or mouthing pro forma mea culpas … a sign that this inquiry, like so many other promises of reform since 9/15, is likely to leave Wall Street’s status quo largely intact. That’s the ticking-bomb scenario that truly imperils us all.”

But all this in the unfolding script: All the actors, cabinet officers, Fed chairmen, regulators, lobbyists are playing set roles in a well-known theater, waiting for their “entrance and exit” cues, “merely players” in a larger predestined historical drama re-written so many times, in the same repetitive plot. Like Shakespeare, economists Reinhart and Rogoff made clear in This Time Is Different: Eight Centuries of Financial Folly, we are performing yet another revival of a 800-year-old history of self-destructive bull/bear, boom/bust cycles, with each ending in the same old Shakespearean-style final tragic act. For fact, you could break off Goldman’s derivatives trading division from their commercial banking operations and I guarantee you their mega-bonus traders will find new ways to run Wall Street’s gambling casino as fast as they were able to convert TARP billions into record bonuses in one year.

Epilogue: Midterms? Reelection? New GOP president 2012? All irrelevant!
The endgame script won’t change. GOP-controlled House? 59 Dem senators? Romney? Palin as president? None of this matters, Mr. President. We’re all “merely actors” in an epic drama well-known to Adams as well as Shakespeare. But don’t get us wrong, we still do admire you. We know you’ll honor your Nobel legacy, like Carter and Gore, after you leave office. But meanwhile, you are playing your role well in this tragic final act. Indeed, all of America’s “merely actors” are right on cue with their “entrances and exits.” Yes, even our 95 million investors are playing their designated roles too. In fact, it really doesn’t matter much whether anyone goes to the voting booth, ever again, because the final scene has already been written … by your predecessor, President John Adams.

Wow, what an epic Hollywood blockbuster this will make: You know the drama, can’t miss the warnings. The financial press is flooding us with plot lines … a Forbes cover story focuses on a “Global Debt Bomb: How It Could Wreck Your Life” … Last year leaders at the World Economic Forum on Swiss Mt. Davos fear another global meltdown will trigger mass rebellions … The Economist calls the plot a “Global Asset Bubble,” with cheap money fast driving up asset prices, a new trigger for the ticking debt time-bomb. Plus, Bloomberg-BusinessWeek is adding jet fuel to the ticking time-bomb in: “After the Stimulus Binge, a Debt Hangover: Trillions of dollars have been spent keeping the global economy afloat. But now fears about the Great Recession are giving way to worries about something else: The Great Reckoning” when massive debts come due. Then the debt bomb explodes “and the results won’t be pretty for investors or elected officials.”

You’ll find the trigger mechanism deep in your brain, your irrational behavior and your DNA. You’ll also find it in historical cycles: For example, in This Time It’s Different: Eight Centuries of Financial Folly by economists Reinhart and Rogoff we discover: The “90% ratio of government debt to GDP is a tipping point in economic growth.” For 800 years “you increase it over and beyond a high threshold, and boom!” Well guess what? “The U.S. government-debt-to-GDP ratio is 84%.” Soon, Ka-Booom! Depression. Kiss your retirement goodbye.

Who knows? Forbes? Bloomberg/BusinessWeek? The Economist? Davos-World Economic Forum? True, they’re all looking at the same plotline for a Hollywood blockbuster about the “Global Debt Time-Bomb.” But the financial press navigates in a fog. There’s not just one, but many triggers, all linked in a lethal network, we’ve reported on it for years. Any one could easily trip this debt-bomb, set off a chain reaction of unintended consequences, ignite the 21st Century’s third meltdown, spread the coming “Great Depression II,” the new Black Plague. You tell us: What triggers this firestorm?

Poll: 20 economic “WMDs” triggering ticking “Global Debt Time-Bomb”

1.   Federal Budget Deficit Bomb
The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama’s 2010 budget, to $14.3 trillion vs $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America’s debt at “84% of GDP” will soon pass that toxic 90% trigger point.

2.   U.S. Foreign Trade Bomb
Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.

3.   Weakening US Dollar as Foreign Reserve Currency
Fear China and other currencies will replace dollar as main foreign reserves. The dollar’s fallen: From the $120 range at the Clinton-to-Bush handoff to a $70-$90 range.

4.  “Cheap Money” Bomb: Credit Ratings Down, Rates Up
Economists at S&P, Fitch and Moody’s were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.

5.  Global Real Estate Bomb
Dubai Tower, new “world’s tallest building” is empty. BusinessWeek warns that China’s housing collapse could be worse than America’s. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a “ticking time-bomb” bloating 25% of bank balance sheets.

6.   Peak Oil & the Population Bomb
China and India each need 500 new cities. UN estimates world population exploding 50% from 6-to-9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling “America Dream.

7.  Social Security Bomb
We have no choice, eventually we must either cut benefits or raise taxes. Politicians hate both, so they’ll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.

8.  Medicare: a Nuclear Bomb
Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

9.  Healthcare Insurance Bomb
Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

10.  State & Local Gov’t Budget Bombs
Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.

11.  Underfunded Corporate Pensions Bomb
From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now under-funded. Defaults guaranteed by taxpayers.

12.  Consumer Debt Bomb
Americans are still living beyond our means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

13.  Personal Savings Bomb  
Before 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero, now increasing, slowing retail recovery. Today, government’s the big “unsaver.”

14.  War and Military Defense Deficits
Costs of Iraq and Afghanistan wars costs $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.

15.  Homeland Insecurity Deficits
Security at airports, seaports, borders, vulnerable chemical plants alls increase budgets.

16.  Fed/Treasury Bailout Bombs
Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail “Fat-Cat” banks to taxpayers.

17. Insatiable Washington Lobbyists Bombs
Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America’s new “corporate-socialism.”

18.  Shadow Banking: The Derivatives “WMD” Bomb
Wall Street wants no regulation of this $670 trillion, hi-risk, out-of-control, gambling casino that’s highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives akmost destroyed global economies in 2008-09, finally will by 2012.

19.  Dysfunctional Two-Party Political Bomb
Polarized partisanship increasing: Every day both parties show zero interest cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points; make the other side look bad.

20.  The Coming “Populous Rebellion” Bombs
Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting, and a lack of long term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: “Doing what’s right for the common good and country” is just empty political rhetoric.

Forbes. The Economist. Davos-World Economic Forum. Bloomberg-BusinessWeek. All one voice, one loud, lonely chorus echoing that famous Beatles tune: “Head in a cloud … The fool on the hill, sees the sun going down … a thousand voices talking perfectly loud. But nobody ever hears him, or the sound he appears to make … And the eyes in his head, see the world spinning ‘round …ooh, round and round and round.”

A decade ago, on March 20, 2000 as Nasdaq and the DJIA peaked I wrote a column: “Next crash? Sorry, you won’t hear it coming.” But nobody wanted the party to end. What followed? A 30-month recession and an $8 trillion market cap loss. We reported on warnings again many times starting in 2004. Till Wall Street triggered another meltdown in 2007. You know what happened. Same today. Nobody listens. Lessons not learned. Warning: A third great meltdown is coming. But nobody listens to the “fools on the hill.”

Historians and behavioral economists tell us most investors are blind optimists. Investors cannot see bubbles from inside their bubble. Nor “Fat Cat Bankers” from inside their mega-bonus-bubble. Nor politicians from inside the “beltway bubble.” Why? The optimist’s brain filters out “bad” news. They “know” their dreams of prosperity will come true. Then, when they finally do see that the proverbial “light at the end of the tunnel is an oncoming train,” it’s always too late.

I will say it again, gently: A new meltdown coming. The “Great Depression II” is coming, soon. And yet, I know your mental filters are working overtime, blocking warnings of a bomb. I can even hear you calling me “the fool on the hill who sees the sun going down, the world spinning round” … sees us kissing our retirement goodbye.

Stockman also condemned the Dems’ Keynesian policies. But what this indictment by a party insider—someone so close to the development of the Reaganomics ideology—says about America, helps all of us better understand how America’s toxic partisan-politics “holy war” is destroying not just the economy and capitalism, but the “America Dream,” and unless this “war” stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman’s message? It’s already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We’ve arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The “American Dream.” All dying. Why? Because of the economic decisions of the GOP the past forty years, says this leading Reagan Republican. Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for “destroying the U.S. economy.” Listen closely:

Reagan Republican: the GOP should file for bankruptcy
Stockman rushes into the ring swinging like a boxer: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt … will soon reach $18 trillion.” It screams “out for austerity and sacrifice.” But instead, the GOP insists “that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.”

In the past forty years Republican ideology has gone from solid principles to hype and slogans. Stockman says: “Republicans used to believe that prosperity depended upon the regular balancing of accounts—in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too.” No more. Today there’s a “new catechism” that’s “little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes” making a mockery of GOP ideals. Worse, it has resulted in “serial financial bubbles and Wall Street depredations that have crippled our economy.” Yes, GOP ideals backfired, crippling our economy. Stockman’s indictment warns that the Republican party’s “new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:”

Stage One. Nixon irresponsible, dumps gold, U.S starts spending binge
Nixon’s gold policies get Stockman’s first assault, for defaulting “on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world.” So for the past forty years, America’s been living “beyond our means as a nation” on “borrowed prosperity on an epic scale … an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves.”

Remember Friedman: “Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.” Friedman was wrong by trillions. And unfortunately “once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.” And without discipline, America was also encouraging “global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve.” Yes, the road to the coming apocalypse began with a Republican President listening to a misguided Nobel Economist advice.

Stage Two. Crushing debts from domestic excesses, war mongering
Stockman says “the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970.” Who’s to blame? Not big-spending Dems, says Stockman, but “from the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.”

Back “in 1981, traditional Republicans supported tax cuts,” but Stockman makes clear, they had to be “matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces—the welfare state and the warfare state—that drive the federal spending machine.”

Okay, stop a minute. As you absorb Stockman’s indictment of how his Republican party has “destroyed the U.S. economy,” you’re probably asking yourself why anyone should believe a traitor to the Reagan legacy? I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it’s having huge negative consequences, reinforcing the risks of an “American Apocalypse,” an economic collapse, a black swan … dead ahead.

Yes, the GOP does have a welfare-warfare state: Stockman says “the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending, exempted from the knife most of the domestic budget—entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.”

When Volcker “crushed inflation” in the 80s we got a “solid economic rebound.” But then “the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.” By 2009, they “reduced federal revenues to 15% of gross domestic product,” lowest since the 1940s. Still, today they’re irrationally demanding an extension of those “unaffordable Bush tax cuts would amount to a bankruptcy filing.”

Recently Bush made matters far worse by “rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures.” Bush also gave in “on domestic spending cuts, signing into law $420 billion in non-defense appropriations, a 65% percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy.” Takes two to tango.

Stage three. Wall Street’s deadly “vast, unproductive expansion”
Stockman continues pounding away: “The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector.” He warns that “Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation.” Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street’s “too-greedy-to-fail” banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business-as-usual blowing another bigger bubble/bust cycle that will culminate in the coming “American Apocalypse.”

Stockman refers to Wall Street’s surviving banks as “wards of the state.” Wrong, the opposite is true. Wall Street now controls Washington, and its “unproductive” trading is “extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives.” Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and “virtually free money from the Fed’s discount window to cover their bad bets.”

Stage four. New “American Revolution” class-warfare coming soon
Finally, thanks to Republican policies that let us “live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore,” while at home “high-value jobs in goods production … trade, transportation, information technology and the professions has shrunk by 12% to 68 million from 77 million.”

As the “apocalypse” draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes the past forty years since Nixon and Friedman dumped the gold standard: No wonder “that during the last bubble (from 2002 to 2006) the top 1% of Americans—paid mainly from the Wall Street casino—received two-thirds of the gain in national income, while the bottom 90%—mainly dependent on Main Street’s shrinking economy—got only 12%. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.” Get it? The decaying fruit of the GOP’s bad economic policies is destroying our economy.

Warning: this black swan is a dangerous killer “ugly duckling”
His bottom line: “The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing … it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach—balanced budgets, sound money and financial discipline—is needed more than ever.”

Wrong: There are far bigger things to “pity” … first, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it’s just another TV reality show … second, that unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind …and third, there’s a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle … until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long “Great Depression II” and a historic class war … so be prepared, it will hit soon, when you least expect.

Original: MarketWatch Aug’10

From the left: Even Frank Rich’s column in the New York Times (who’s 2006 The Greatest Story Ever Sold tore apart Bush) warns its “Obama’s Make or Break Summer,” anxiously worrying that Obama is “tilting at windmills” rather than confronting the big boys, doing “battle with fierce and unrelenting adversaries, starting with the banking lobby.” Rich worries Obama just “punted,” pushing failure not far down the road. Maybe. But we all know that Wall Street Trojan Horses on Obama’s team (Geithner, Summers, Bernanke and the ghost of Hank Paulson) are making sure Wall Street gets what critics call putting “lipstick on a pig,” not the plastic surgery it really needs.

And from the right: They’ve already written his obituary. And the toe-tag says he’s a loser. Seriously, I did a double take reading Kevin Baker’s eye-grabber in Harper’s, “Barack Hoover Obama.” Barry as Hoover? What a twist. Baker’s grand conclusion says that “much like Herbert Hoover, Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free from the dogmas of the past, without accepting the inevitable conflict. Like Hoover, his is bound to fail.” So apparently in six short months Obama’s already done what it took Bush and Reaganomics 27 years to do.

Fascinating. So I googled deeper, discovering that the same “Hoover” indictment was leveled by Obama’s critics even before the election, and yes, even before the nomination. On the other hand, one fan did balance the Hoover handle with “Barack Delano Obama.” And we all remember many of the nastier names-calling that compared him with certain WWII leaders, casting him as a “socialist” and even “communist.” That’s politics. In each case, however, the titles of the articles told us more about the writer and where they sat in the political spectrum: Extreme right field, center field bleachers, or in the extreme left field. Ah yes, baseball analogy was emerging.

So after more googling and noodling, a list of possible names for our president began flashing across my brain’s radar scope, names for lefties, right wingnuts, center independents, late-night comedians, and … suddenly, baseball fans. Seriously, so let’s sidestep the darkside, get in the right mood, what name would you give the team captain?

1. Barack Hoover Obama (a conservative attack)
2. Barack Delano Obama (the liberal’s comeback)
3. Barack Clinton Obama (many see him more like Bill)
4. Barack Lincoln Obama (of course, his favorite hero)
5. Barack “Shoeless Joe” Obama (if you really don’t like him or Chicago)
6. Barack “Barry Bonds” Obama (you don’t like him, Frisco or the Giants)
7. Barack “A-Rod” Obama (if you don’t like New York and the Yankees)
8. Barack “Jackie Robinson” Obama (if you like him and the Dodgers )
9. Barack “Babe Ruth” Obama (because he can point and hit home runs)
10. Barack “Yogi Berra” Obama (you like him ‘cause he makes you laugh!)

So what name did you pick? I picked “Yogi Berra” because my brain homed in on that wonderful Yankee catcher who could make everyone laugh even today in an America dominated by mean-spirited contentious ideological rhetoric. Yes, Jackie Robinson fits Obama’s image, both forged new ground. And Babe Ruth for other reasons, especially that “called shot” in the 1932 World Series against Chicago, pointing to the right field, then knocking a 440-foot homer over the bleacher’s flagpole. Still I’m going with one of my favorite baseball heroes, because all the nonsense about predicting whether Obama will “make it” this summer or maybe “break” because he’s a reincarnation of Herbert Hoover is no more than an epidemic of “pundit predictionitis.” Yogi Berra’s humor and the baseball metaphor were just right to defuse the situation, if only for a few moments, in today’s heated often mean-spirited political theater.

Barack “Yogi Berra” Obama … laughs and home runs.
As I read Rich and Baker I thought of piece I wrote titled “Yogi Berra on Dent vs. Prechter.” November 2004, shortly after Bush’s reelection. Back then Yogi Berra’s wit and wisdom was very in a deeply-divided America, as stock market prices skyrocketed to the heavens, and casualties piled up in the Iraq War hell. Back then, as the bull market roared, Harry Dent was riding high predicting the Dow at 40,000 by 2009 (Now it is 2010 and he’s “predicting” a long-term “Great Depression.” Go figure). In contrast, back in 2004 Robert Prechter was one of the few early ones who saw the meltdown coming. He went to the other extreme, predicting Dow 400. Yes low, but his followers were better prepared than Dent’s back then, and may be in the future.

Here’s what one rather wise reader emailed to me, “Instead of reading Dent or Prechter, you should be reading Yogi Berra who said, ‘Forecasting is very difficult, especially when it involves the future’.” That got me thinking: What would a Barack “Yoga Berra” Obama say today about playing a bruising game against a baseball team made up of scorched-earth GOP critics and Dems pocketing big bucks from all kinds of special interest lobbies hell-bent on defeating every one of Obama’s big plans. His enemies smell blood, think Obama’s tired, already fading. Yes, they are writing his obituary. They’re convinced it’s the bottom of the ninth and they got him. Worse, they think they’re way ahead, even though they can’t see the scoreboard before the end of the game, let alone next Friday’s score or 2012’s.

You have to feel some compassion here: After 27 years in power, the hitters on the opposing GOP team lost not just a big game, but tickets to the “skyboxes” (part of the metaphor). So they’re hurting, still haven’t adjusted to life as the losing team, without all the perks and ego strokes from owning the series winning team, sitting high up in the skyboxes, lording over average ticket-holders far below. So now they’re in the bleachers. They hate it. Left with little to do other than act like angry teenagers, they endlessly plot self-destructive revenge plays. Like all politicians they’re myopic, conveniently forgetting the 27 painfully-long years it took them to get us into this mess, while refusing to take any responsibility, as they do everything possible to trick the new team into screwing things up so they can return to the skyboxes and go back to screwing things up their way.

Anyway, here’s what Barack “Yogi Berra” Obama might say to defuse the tension, turn things around and win the game, maybe, the pennant and the series, or at least give us a few chuckles along the way with these “Yogiisms” from the “Zennist Master of All:”

· Bi-partisanship: “If you come to a fork in the road, take it.”
· Healthcare passage: “Slump? I ain’t in no slump. I just ain’t hitting.”
· Wall Street reforms: “This is like deja vu all over again.”
· Dollar as reserve currency: “The nickel isn’t worth a dime today.”
· Obesity epidemic: “Cut the pizza in 4 pieces, I’m not hungry enough to eat 6.”
· Hiring staff behaviorists: “90% of this game is half mental.”
· Working with Congress: “impossible to get a conversation going; everybody was talking too much.”
· Air Force One: “Why buy good luggage? You only use it when you travel.”
· Subprime-Credit Meltdown: “We made too many wrong mistakes.”
· Dems voting against him: “90% of putts that are short don’t go in.”
· Reaganomics: “I knew that record would stand until it was broken.”
· Talks with Iran? “If the world were perfect, it wouldn’t be.”
· GOP negativity: “Other teams could make trouble for us if they win.”
· Biden: “He can run anytime he wants. I’m giving him the red light.”
· The agenda: “Be very careful if you don’t know where you’re going, you might not get there.”
· Campaign promises: “I didn’t really say everything I said.”
· Doomsday 2012. “The future ain’t what it used to be.”
· Teleprompters “If you ask me a question I don’t know, I’m not going to answer.”
· Where the buck stops: “I never blame myself when I’m not hitting. I just blame the bat, and if it keeps up, I change bats. After all, if I know it isn’t my fault that I’m not hitting, how can I get mad at myself?”

Want more? Read Berra’s What Time Is It? You Mean Now? And remember Yogi next time you’re worried where the Dow will end up in December. Can’t even predict it for this Friday. Or worried about the elections. Remember, writing about this stuff keeps pundits in business, even though most are usually wrong. But then, so are most economists, and Wall Street bankers, corporate CEOs, talking heads and politicians, so I guess that puts me in good company. As Yogi would say to wrap up his message to me: “It was a once-in-a-lifetime opportunity, and you’ve had a few of them.” Thanks Yogi Barry!

original: MarketWatch.com 6.30.09

There are many reasons future historians may rate your presidency “average,” some even a “failure,” at least based on the gap between the promise a year ago and the reality today, certainly for investors. But we also know that the future—seen through a broader historical lens—will reveal a natural cycle with you cast in the predictable final scene of a Shakespearean-style plot driven by fate, the same dramatic destiny of all great nations and civilizations. We know a dark conspiracy of Wall Street, Corporate CEOs and the Forbes 400 controls Washington, limiting and manipulating you. So we know it’s not all your fault—for you are playing your role well in America’s epic historical drama.

As Shakespeare put it: “All the world’s a stage, and all the men and women merely players. They have their exits and their entrances.” As this past year unfolded it became painfully obvious you are indeed playing a role in a historic drama, along with other leaders in a staged, life-cycle, endgame conspiracy that includes Presidents Reagan, Clinton and Bush, Fed Chairmen Greenspan and Bernanke, and Wall Street’s bosses Paulson and your “Fat Cat Banker” buddies. The final scene of this Shakespearean drama is playing out this very moment, with 10 improvisational plot points driving your character’s role:

Failing to grasp John Adams’ warning: All democracies “commit suicide”
“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide:” Yes John Adams, a great American president made that famous prediction at the beginning of our great nation. And yet, paradoxically, when a democracy commits suicide, it also kills off the very capitalism that made it powerful, the economic system Adam Smith identified the same year our Declaration of Independence was signed. Today we are neither independent nor free, King George has been replaced by a far more powerful moneyed conspiracy that you sold out to last year.

Failing to sense the psychological impact of being an aging democracy
Yes, America’s time is up says Scottish historian Alexander Tytler, recently quoted by economist Marc Faber: “The average life span of the world’s greatest civilizations has been 200 years.” Then “once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” We’re on ‘suicide watch,’ acting out the final scenes President Adams predicted for democracy, as Wall Street murders capitalism.

Failing to demand sacrifices, instead adding to Bush’s massive war debt
Back in 2003, coincidental with the “greatest foreign policy blunder in American history,” the Iraqi War, Kevin Phillips, President Nixon strategist and political historian, published Wealth and Democracy. Phillips warned: “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.” Three trillions wasted, says Nobelist Economist Joseph Stiglitz. And now, Mr. President, you’re playing your role, along with Bush, Paulson, Bernanke and Congress, piling on an unsustainable $23.7 trillion in what is the greatest domestic blunder in American history. 

Failing to lead with “once-in-a-lifetime” systemic financial reforms
Former Fed vice-chair Alan Blinder recently wrote in The Journal: “When economists first heard Gekko’s now-famous dictum, ‘Greed is good,’ they thought it a crude expression of Adam Smith’s ‘Invisible Hand’—which is one of history’s great ideas. But in Smith’s vision, greed is socially beneficial only when properly harnessed and channeled,” with incentives for risk taking, honest competition, regulatory safeguards, and regulators who will actually enforce the rules. But “when these conditions fail to hold, greed is not good.” Blinder fears “that a once-in-a-lifetime opportunity to build a sturdier and safer financial system is slipping away.” No consumer protection, no mortgage clawbacks, no derivatives regs, nothing. You are setting the stage for another, bigger meltdown, the “Great Depression 2,” the last tragic act in this drama, dead ahead.

Failing to pick a “cast-of-characters” that could have changed historyRecently Financial Times John Kay said: “Our banks are beyond the control of mere mortals.” But it’s not just banks: Our American government and economy is “beyond the control of mere mortals.” Each president picks his own actors to play out this grand epic historical drama: 21 cabinet officers and 6,722 other senior bureaucrats. Last year many voted for you fearing McCain might pick Phil Gramm as Treasury secretary. Unfortunately, Mr. President, your picks not only revived Reaganomics under the guise of Keynesianism, you sidelined a real change-agent, Paul Volcker, and picked Paulson-clones like Geithner and Summers. But worse of all, you’re reappointing Bernanke a Greenspan-clone as Fed Chairman, an economist who, as Taleb put it, “doesn’t even know he doesn’t understand how things work.” And with that pick, you proved you also don’t “understand how things work.” And yet forever true to the script, your decision fits perfectly in the final act captured by your predecessor, President Adams.

Failing to stand up to our 100 senatorial assassins and 261,000 lobbyists
Instead of leadership, you let Congress run the show, a strategy that may work in community organizing but in Washington reminds us of the old adage that “the inmates are running the prison.” We now know why Adams used words like “murder” and “suicide” as the endgame in a democracy. Suicide was a theme in a third of Shakespeare’s dramas: Romeo and Juliet, Brutus, Cassius, Othello, Lady MacBeth, Ophelia, Anthony and Cleopatra. But Julius Caesar is the best comparison: Senators were Caesar’s assassins, a loyal friend even drew first blood. Today, any one of 100 self-interested senators can legally threaten to “assassinate” the entire nation. And you seem unwilling to stand up to their totally dysfunctional kamikaze mission.

Failing to act “Presidential,” while “Fat Cat Bankers” hijack your presidency
Economist Peter Morici writes in the Baltimore Sun: “On banks, Obama talks tough, does little.” Matt Taibbi is far more caustic in “Obama’s Big Sellout,” Mr. President: “A once-in-a-generation political talent” has “allowed his presidency to be hijacked. Instead of reining in Wall Street, Obama has allowed himself to be seduced by it … pulled a bait-and-switch on us.” And yet while it’s so blatant and obvious, Wall Street gets away with it because your presidency has merged into a “Fat Cat Bankers Conspiracy.”

Failing to protect 95 million investors, letting Wall Street loot America
Wall Street bankers are stealing trillions: In “Not So Radical Reform” BusinessWeek says the “top five U.S. commercial banks … were on track” earning at the rate of $70 billion “in 2009 trading unregulated derivative contracts.” The Journal connects the dots: The same banks “allocated about $90 billion for overall compensation,” with average bonuses of $500,000, ten times the income of most Americans. Yes, Wall Street looted that money from taxpayers as you turned a blind eye, Mr President. The Journal commentator from Yale Law says “the government should make it clear that it will allow these institutions to fail.” Except no one believes you have the guts or the will to do that, Mr. President. You are a Wall Street bankers dream. But you have failed America’s 95 million investors and the consequences will be disastrous in the near future.

Failing to avoid the “hubris virus” disease killing America’s leaders
Before you took office Mr. President (and while Paulson was looting the American Treasury to save his old firm), Portfolio warned: For “every highflier who is chastened, another would-be mogul pops up elsewhere, convinced he’s smart enough to game the system … When things are very good, people take ridiculous risks, and then things come crashing down and the risk just moves somewhere else … We don’t know where it’s going next, but someone will be making money somewhere.” Why? Because “like a lethal virus, it seems, hubris never really disappears, it simply finds a new host.” Yes, that deadly virus, that insatiable greed, mutates fast among Wall Street’s “Fat Cat Bankers.”

Failing to see the “ticking time-bomb scenario,” the next big meltdown
“Bring Back Glass-Steagall,” demands Journal columnist Thomas Frank, author of The Wrecking Crew, How Republicans Rule. We hear the same message from Volcker, Stiglitz, McCain and others. But it’ll merely delay the inevitable. The end-game is “never different,” whether penned by Shakespeare, Adams, Tytler or Reinhart and Rogoff. As Frank says of the Financial Crisis Review Commission: Wall Street bankers will “skate away yet again by deflecting blame or mouthing pro forma mea culpas … a sign that this inquiry, like so many other promises of reform since 9/15, is likely to leave Wall Street’s status quo largely intact. That’s the ticking-bomb scenario that truly imperils us all.”

But all this in the unfolding script: All the actors, cabinet officers, Fed chairmen, regulators, lobbyists are playing set roles in a well-known theater, waiting for their “entrance and exit” cues, “merely players” in a larger predestined historical drama re-written so many times, in the same repetitive plot. Like Shakespeare, economists Reinhart and Rogoff made clear in This Time Is Different: Eight Centuries of Financial Folly, we are performing yet another revival of a 800-year-old history of self-destructive bull/bear, boom/bust cycles, with each ending in the same old Shakespearean-style final tragic act. For fact, you could break off Goldman’s derivatives trading division from their commercial banking operations and I guarantee you their mega-bonus traders will find new ways to run Wall Street’s gambling casino as fast as they were able to convert TARP billions into record bonuses in one year.

Epilogue: Midterms? Reelection? New GOP president 2012? All irrelevant!

The endgame script won’t change. GOP-controlled House? 59 Dem senators? Romney? Palin as president? None of this matters, Mr. President. We’re all “merely actors” in an epic drama well-known to Adams as well as Shakespeare. But don’t get us wrong, we still do admire you. We know you’ll honor your Nobel legacy, like Carter and Gore, after you leave office. But meanwhile, you are playing your role well in this tragic final act. Indeed, all of America’s “merely actors” are right on cue with their “entrances and exits.” Yes, even our 95 million investors are playing their designated roles too. In fact, it really doesn’t matter much whether anyone goes to the voting booth, ever again, because the final scene has already been written … by your predecessor, President John Adams.