Thursday, January 03, 2008

Brain-Dead Predictions about More Stuff

Once again, I'm going with predictions so obvious they qualify as brain-dead. And once again they carry profound implications for the U.S. and the world.

1. The working class and middle class finally face up to their declining living standards and find some righteous anger. Let's face it--the shell game is over. Living standards (as defined by purchasing power of wages/earned income) have been falling for most wage-earners for decades. The dot-com era gave many a brief boost (or perhaps merely the perception of a boost via pension and 401k gains), then the housing bubble cranked up the house-ATM, enabling people to offset their declining living standards by extracting and spending real estate equity.

That party is over and now presidential candidates Edwards and Huckabee are firing up crowds in both parties with appeals to a middle class which is finally seeing what the end of the borrow-and-spend decade will look like: a pinced lifestyle without many of the upper-middle class trappings they enjoyed when their equity was rising.

The Bush administration successfully tamped down this realization by constructing very simple sentences for seven years: a noun, a verb and the words "war on Terror." Now that canard has worn thin and people are waking up to massive debt, stagnant wages and sinking purchasing power. It's dusk in America, folks; that housing ATM has been ripped out and boarded up.

2. Hillary Clinton's campaign implodes (see item 1 above). Regardless of what platitudes she may mouth, Ms. Clinton's constituency is not the middle class. I know her campaign is doomed for a very simple reason: the three women I know who should be for her-- busy parents with careers who are registered Democrats and politically liberal--are not voting for her.

That suggests to me her "support" is the proverbial inch deep and a mile wide. Let's also note that the media is terrified of her, her staff is terrified of her, and her experience is basically social-climbing/glad-handing everyone who passed through the Clinton White House. No senator has won a presidential election since Jack Kennedy.

As people'a anger ignites, they're not cheering for Hillary; they're cheering for John Edwards, whose campaign has focused on alleviating poverty and income inequality. Whether you agree or not, he has been consistent (just as John McCain has been consistently positive about staying the course in Iraq).

Wishy-washy senators who inspire fear and loathing don't win presidential elections. Maybe if people thought she stood for something other than Hillary and Corporate America, it might be different. Not only that: early favorites have a habit of imploding, and if Hillary doesn't win decisively in both Iowa and New Hampshire, her shallow support may vanish like mist in a hot Mojave wind.

3. The U.S. "healthcare" system gets even more Kafka-esque, more idiotically inefficient and more expensive while even the wimpiest attempts at reform are shot down by entrenched interests. You must have your own stories, but here's one for the record: a friend's elderly father went to a first-rate hospital complaining of abdominal pain. Tests were done and the verdict: a gallstone. He felt better after some modest drug treatment and wanted to go home the first day, but nope, the stay stretched into 8 days and various invasive things were done to remove the gallstone. End result: a bill for $120,000 (paid for mostly by taxpayers, via Medicare, of course) and he still has the gallstone.

The instances of insanely poor care at supposedly "top-notch" hospitals are legion. Nobody knows what medications the patient is taking, or if he/she has taken them; rest is impossible with all the noise; patients are shuttled around with no explanation (we can assume to save money, but perhaps not--there's no one to ask who knows anything) and a Kafka-esque mix of insurance company gatekeepers and primary-care physicians, nurses, and specialists are in control--you are told, but you rarely get to see them unless you make a big stink.

Absolutely nothing is remotely on the horizon which would change any of this insanity in a fundamental way. Rather, 46 million uninsured and millions of illegal immigrants will continue to get their medical care at emergency rooms, which are closing as the flood of non-paying customers bankrupts the hospitals. What a great system! Just hope you don't get in an auto accident far from one of the few remaining emergency rooms; you might just die because the nearest emergency care is now far far away.

4. Americans' physical and mental health follows the same track as their broken "healthcare" system: down. Eating the American diet is a classic case of "garbage in, garbage out." A no-exercise lifestyle of salt, sugar and fat-loaded food leads to chronic illness. It did so last year and will do so this year. No surprise there.

5. There will be more sports and doping scandals (yawn). As long as sports allegiances substitute for identity and social engagement, any scandal will be tolerated.

6. The U.S. economy will implode, starting a chain reaction which causes the global economy to implode--though in slow motion. Blah blah blah--please visit my archives (in right sidebar) for dozens of fact-filled explanations of how this will unfold.

7. U.S. financial stocks will leap up before settling back into a downtrend. Nothing goes down in a straight line forever, and there are always moments when "the smart money" detects a bottom. We're approaching just such a moment. Sure, the banks/lenders are essentially insolvent, but that doesn't mean their stocks can't double in value before foundering.

8. The Olympics will be an anti-climax, heralding China's relative decline (i.e. slower rates of everything good and higher rates of everything bad). Combine a grandiosely hyped event with high expectations and a huge extreme of over-investment, and you get if not a complete flop then at least a disappointment--one which seems perfectly timed to signal a slowdown/malaise in the China miracle.

Lagniappe: Americans will continue to waste prodigious quantities of petroleum, food, water and other valuable resources. They're just not expensive enough yet to be conserved.

Readers Journal has been updated! Three great new essays, a half-dozen thought-provoking comments plus a terrific short poem.

Readers commentariesGovernment bail-outs, Texas S&Ls, Eichler homes, polls, Anchorage and more

An Oxbridge Education (protagoras)

No Knowledge, No Accountability, No Problem: How Financial Institutions Use "Unknowable" to Dodge Responsibility for Their Own Mess (Zeus Y.)

Innovative Financing and the Housing Bubble: leasing with an option to buy (Peter F.)

Sitting with the Body (poem, Verona U.)

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Thank you, Tom S. ($50), for your continuing extremely generous support of this humble site. I am greatly honored by your contributions and readership. All contributors are listed below in acknowledgement of my gratitude.

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