By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth
In yesterday’s State of the Union, Obama said The ‘Shadow Of Crisis Has Passed’, and the one and the only thing I thought was: ‘Good, so now we can tackle the crisis itself?!’. If speeches like the SOTU last night, and the reactions to it, make anything clear, it’s that the PR guys won the fight against critical thinking. Sure, there are people for whom that shadow has passed, but a president is supposed to be there for all Americans, not just for those who finance his campaigns and those of his successors.
And for most Americans, the shadow hasn’t passed at all, and the crisis certainly hasn’t. And hollow promises to help the middle class are not going to change anything about that. It’s an elite game, and all others are left to fend for themselves. For now that remains hidden behind the veil of over 50% of Americans receiving some kind of government benefit, but that won’t last. We may have some idea of how much richer the rich are getting, and even that is a stretch, but we have much less idea of how much the poor got poorer.
And the President, of all Americans, won’t tell us, he’d rather hail his ‘achievements’ as prepared and blown out of all proportions by his spin team. His political ‘adversaries’, who play their role of ‘hating’ him only halfway convincingly, won’t call him on the spin, because they have nothing to gain from trying to blow up the newfangled American Dream.
Their message looking forward to the 2016 elections is that they would do even better, but that doesn’t sound credible with the 5% GDP growth and 5.2% unemployment numbers the White House pulls out of its top hat. They’re just as dependent on spin as Obama is, and he trumped them on it. What are they going to do? Promise 10% GDP growth?
The GOP will look to drastically cut those benefits, and they know full well that that would cut growth numbers, not raise them. 5% growth is already so far out of left field that Obama’s spin doctors have the other side cornered on US economy. They have on international politics, too.
The White House’s ludicrous stance on Russia’s involvement in Ukraine, ludicrous because none of its accusations have ever been proven over an entire year, and the sanctions that were instated because of the hollow accusations, are a hard act to follow even for John McCain and his dementing octogenarian rabble rousers who crave nothing more than for that final grand scale deadly battle in their lifetime. Can we make in nuclear plese? After them the flood.
All they could do to better Obama from here is send in American boots on the ground in the Donbass, and they know that would be the least popular decision in many decades. But domestically, economically, and internationally, it’s back to the drawing board for the Grand Old Elephants all the time, they’re always a step behind. Must be frustrating. The Obama people have played them as much as they have played the American people.
Who, as should be obvious by now, have nothing to expect from either side, since both owe allegiance not to the flag or the Founding Fathers, but to the rich getting richer who fund them, without whom they’d have to give up their power plays and -dreams. Something a certain kind of people will resist at any price. The kind that floats to the top of this kind of cesspool.
Allow money into politics and the former will end up owning the latter, no exceptions. Money won’t support candidates with a conscience, only those who’ll do anything to advance their careers, who are as pliable as and spineless as a stick of wet gum, and those are all that will be left. If anything typifies American politics, it’s moral bankruptcy. One dollar one vote. 100 million dollars, 100 million votes. And then they insist on calling that democracy, a concept promoted by the media purchased the same way the politicians are.
All you need to do is get people to believe whatever it is you got for sale. And 99.9% of people are easily fooled. That’s how you define democracy in 2015: how many people can you fool? Which is the most convincing sleight of hand?
The Europeans are well down that same road. Mario Draghi is set to announce over $1 trillion in QE tomorrow, and none of it will ever reach the alleged target, the real economy. He set up his QE in a ‘proportional’ way, meaning most of that trillion will go to Germany and France, not the Greeks and Italians who need it most.
Draghi will buy government bonds, but that doesn’t help Europe’s businesses. And not just because they are far more dependent on bank loans than American companies are, who issue more bonds, but because demand, and spending, is way down. That’s what it means that Europe is in deflation. It’s not falling prices, it’s that people don’t spend, and they certainly don’t borrow.
Draghi is engaging in the classic central banker’s ‘pushing on a string’, and Goldman’s former banker and present day acolyte knows it. He’s created a situation in which another $1 trillion looks acceptable, necessary even, to the majority of the eurozone politicians. Who mostly are clueless about the effects of such expenditures. But who look at the US and think it must have worked over there; who fall for Obama’s spin doctor narratives as much as the America people do.
Draghi’s $1 trillion has long been priced in, it won’t do anything for EU economies but gut them even further, and it may be completely irrelevant as soon as this Sunday when Greece may well elect a government that has vouched to blow up the deals the Troika made with the technocrats the EU itself installed in Athens.
Not a pretty picture, is it, either in Washington or in Brussels?! Well, I can guarantee you it’ll get a lot worse before it gets any better. We’ve let the clowns come too far. Way too far.