fluff ball economy

The US economy is in a recession. Although it has not officially been announced yet, everyone knows it. It does not look good. This recession could be a tad worse than others in recent memory. Meanwhile the US banking system is in trouble. Even the almighty dollar is not doing so well. No wonder the Federal Government had to step in and bail out Bear Stearns. It seems quite likely that before this is over, others will need to be bailed out too.

Above all, the government needs to restore confidence. Otherwise there will be widespread trouble. We have deficits galore, trade deficits, budget deficits, you name it. And more and more of that debt is held by foreigners. The budget deficit alone amounts to about $30,000 per person -that includes babies and elderly people too-. $8,000 of that is owned to foreigners. We don't want to scare these foreigners away. That would cause trouble. Major trouble.

What do you do with an economy that is based on discretionary spending? I.e. spending on things nobody needs. An economy that is made up of doctors, lawyers, nurses, nannies, gardeners, psychologists, massage therapists, family coaches, concierges, spa personnel, and other fluff? All these people do is shift wealth around.

We have an economy whose value is in churning through materials at ever faster rates. Whose collateral is huge homes in swamps and deserts. Homes that can only be sustained by the flow of copious cheap oil -and guess what? It is no longer so cheap anymore.

Fortunately we have Madison avenue to package it all and make it appear as if there is something there. And we have a great military to beat up anyone who disagrees with that view.

The American economy works as follows. Pump in vast quantities of oil, natural gas, and coal. Unfortunately, more and more of that needs to be imported from other places so that is where our military comes in: to guarantee that we keep getting it at a good rate.

Bring in tons of cheap, preferably below minimum wage labor. Labor that is free of rights. Such labor can be found in abundance in Central and Latin America, although Asian sweatshops are acceptable too. Here is another job for our brave soldiers: keep all these volatile "labor units" under control. These labor units are responsible for all the real value produced in our economy. They work the farms, mine the resources, and are essential in creating the wealth.That is why Washington has problems with the current illegal immigration debate. How do you tell working class Americans that the only reason we can live the way we do is because of the vast labor pools south of the border?

Now unleash a formidable media and advertising campaign to get the engine rolling and keep it revved up at all times. That is where Madison comes in. Hollywood plays a key role in all this too and it is the main reason why we pay these actors and actresses so much money. They fuel consumption. They drive consumption's big wheel, called fashion. Fashion makes it so that you discard good stuff that is practically new and buy other stuff. The geniuses on Madison Avenue make sure you stick to the program. Because the economy is in churn.

Another key ingredient is people. Bored people. Bored because there is nothing real for them to do. So we stoke their desire to outdo the neighbors, their unlimited greed, their hugely inflated and fundamentally insecure egos, and their inherent laziness. That makes it all work. Add to that the mind's addiction to moving images and the body's virtual unlimited capacity to store fat, and there is your recipe for success.

So what do those American's do to sustain their spending habits? They work in the services business. In the fluff ball economy. The economy of make believe. They scratch each other's backs. They help you move money around. They sell and resell housing and all the stuff in it. They advise you on finances, retirement, consumption, and other "important" matters. They do planning. They build and endlessly upgrade houses. They sell trinkets. They defend people who divorce and fight with their neighbors, they cure imaginary illnesses, and they help people reduce stress and cope with life. They teach fluff.

Despite its intricate structure and tremendous track record, this fluff ball economy is unsustainable. It won't last. Like one giant bubble it will explode. Better move out of the way when that happens.