Mainstream Media | - Part 4

Der Spiegel Does 9/11

Wow. Apparently the Germans who write for Der Spiegel don’t think much of our little 10-year anniversary of the September 11th terrorist attacks on New York City and Washington, filing these two reports to mark the occasion:

Bush’s Tragic Legacy: How 9/11 Triggered America’s Decline
Opinion: Ten Lost Years

Some highlights from the first:

“American exceptionalism” was always the US’s trump card. The new candidates for the White House still refer to it in the election campaign, but it sounds like a hollow mantra — one of those election promises that shouldn’t be examined too closely.

Because if it was, then people might realize that many things in America are only exceptional because they are exceptionally bad. The country has lousy health statistics despite having one of the most expensive health care systems in the world. Then there are the billions wasted in education, not to mention the armaments madness — the US spends almost as much on defense as the rest of the world put together.

And then there is the fixation on a financial system that rewards gamblers, where the country’s most talented young people no longer work on developing new patents, but devote themselves to financial wizardry. Meanwhile, China and other emerging economies can happily concentrate on their own ascent.

And from the second:

The policy of the United States after 9/11 wasn’t merely immoral. It actually damaged the country. The roughly 3,000 people who died on Sept. 11 were followed by more than 6,000 dead American soldiers in Afghanistan and Iraq, countless civilian victims, 5 million refugees and costs currently estimated at more than $3 trillion (€2.13 trillion).

What should the West have done after the attacks on America? The “War on Terror” should have ended when al-Qaida was driven out of Afghanistan. Instead, the United States turned it into an ideological world war.

It expended so many of it resources in this struggle, beyond all reasonable measure, that it led to shifts in the global tectonics of power. The rise of China, which may have been unstoppable already, was accelerated. The United States overestimated its abilities, and the neocons’ fantasies of omnipotence failed as a result.

Yikes! Maybe they’re just mad about the whole Greek default thing…

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Christina Romer Sums It Up

Appearing on Real Time with Bill Maher on Friday, shortly after the announcement that Standard & Poor’s had downgraded the U.S. credit rating, Christina Romer, former chair of the White House Council of Economic Advisers, reflected on our current condition.

I suppose this would just be funny rather than both funny and disturbing had Romer not uttered the line with a giggle in her belly and a twinkle in her eye. As it was, viewers were left with the impression that: a) she’s quite happy to be thousands of miles away from Washington, and b) we really are ‘Pretty Darn F**ked’.

Tent City, New Jersey

The series of high-resolution pictures that accompany this Mail Online story (from the U.K.) about a growing tent city in New Jersey are, unfortunately, a sign of things to come as aid from the government slows in the months and years ahead.

In scenes reminiscent of the Great Depression, these are the ramshackle homes of the desperate and destitute U.S. families who have set up their own ‘Tent City’ only an hour from Manhattan.

More than 50 homeless people have joined the community within New Jersey’s forests as the economic crisis has wrecked their American dream.

And as politicians in Washington trade blows over their country’s £8.8 trillion debt, the prospect of more souls joining this rag tag group grows by the day.

Building their own tarpaulin tents, Native American teepees and makeshift balsa wood homes, every one of the Tent City residents has lost their job.

These people have been reduced to living on handouts from the local church and friendly restaurants and the community is a sad look at troubles caused as the world’s most powerful country struggles with its finances.

Based on the interviews, they are a surprisingly upbeat group given their circumstances, a renewed sense of community fostered by common financial difficulties apparently making a very unpleasant situation a bit more tolerable.

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The Fed Enters a Cul-de-sac

The U.S. economy and financial markets at “a tipping point” was the headline generated by this Bloomberg interview with Pimco’s Bill Gross yesterday, but the comments about Federal Reserve policy in a rapidly changing environment were important as well. That discussion starts at about the six minute mark.

Gross sees the next round of quantitative easing taking the form of extended period language for zero short-term interest rates and the setting of caps for long-term rates.

A related story by Neil Irwin in the Washington Post neatly summarized the situation:

With the U.S. economy flatlining and at risk of falling into a new recession, the Federal Reserve lacks good tools to do much of anything about it — though that won’t necessarily stop the central bank from trying.

With a whiff of deflation in yesterday’s report on personal income and spending (see this related story in the New York Times), it would appear that sufficient cover may be developing for the central bank to again crank up the printing press this fall.

Buy Japan!

Stock market mavens have been yelling “Buy Japan!” at the top of their lungs for about the last week, ever since the earthquake and tsunami struck and the Nikkei Index tumbled 20 percent (it’s already gained about half that back). In this story at Reuters, billionaire investor Warren Buffett  talks about how recent events have created a buying opportunity.

If not for the growing headwinds facing the global economy and Japan – rising food prices, rising energy prices, rising debt troubles, and the possibility of widespread contamination due to the nuclear crisis to name just a few – buying Japanese stocks “with both hands” would seem to make a good deal of sense.

But, with those concerns casting a pall over markets this spring, I’m not so sure…

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