Many gods have blessed America. The god of greed gave us victory over the Indian savages , the god of slavery gave us a thriving cotton industry, the god of exploitation gave us an industrial revolution and the god of the atom gave us the bomb.
Now we have a new god watching over our economic meltdown: the god of unintended consequences as the Fed bails out one financial dolt after another. The latest to be rescued, after being hoisted by its own petard, is the American International Group (AIG), a company that became hooked on insuring debtors a sane banker would have thrown off the premises.
But, fear not. In exchange for their $85 billion loan, the Fed bought itself a 79.9 percent equity stake in the company. That’s kind of like buying a stake in the Titanic after it struck the iceberg.
I’ve lost track of how much taxpayer money has been dumped down the Wall Street rat hole. My brain went into hibernation right after the Fed agreed to back $6 trillion of Fannie and Freddie’s toxic paper. That’s how it is with numbers. Once you reach a critical mass, they become meaningless.
Anyhow, it’s increasingly likely that the god of unintended consequences is getting set to ream us big time. The Fed is trying to prop up a house of cards by adding even more cards, and nobody knows how many cards a house of cards can hold when a house of cards holds too many cards.
So, it’s time we look to history to find the best way to bail us out of an economic disaster.
Q: How do you end a Great Depression?
A: Start a war.
But, and this is a big but of a but, you start a conventional war.
Forget these guerilla wars. Quite frankly, we suck at them. Our track record is much better with conventional wars, if you don’t count Korea.
Granted, there are some differences between now and 1940. First, we’ve gutted our manufacturing base. However, there’s no reason armament production couldn’t be outsources to countries that are still our friends, though these are becoming harder to find.
Then there’s a little problem with our potential warriors. When World War II started, we had a large demographic of muscular factory workers and farmers to draw on. Now our demographic is made up of geeks and slackers. This is why the next war will have to be nuclear. America’s too fat to be storming beaches, so we’ll just have to nuke the world. The most effective strategy for dealing with a heavy debt load is to torch your bank.
Thank God your “can-do” spirit has always compensated for your administration’s innate incompetence. With enough nuclear devices to toast the world there is no doubt we will emerge from this next war victorious.
Best of all, with no one left to say otherwise, our fiat currency will still be good, and ten-thousand years from now when the melted mass of the worlds gold supply is no longer radioactive, our dollars will actually be backed by something of value.