DOWN WE WILL GO AGAIN.
In his blog, June 10, 2009, Paul Krugman observes that:"has the economic news started to darken again? Up through about March, every report was worse than you expected, often worse than you could have imagined. Since then, most reports -- although continuing to be bad in an absolute sense -- have "surprised on the upside." But my sense is that in the last few days we've been getting reports -- Korean trade, Japanese orders, German exports -- that are once again surprising on the downside.This thing ain't over yet."
How could the crisis be over? American bankers, private individuals in charge of the public money supply for their own personal profit, are back in charge. Representative Collins Peterson said, speaking of Congress, alluding to the bankers: "They run the place". (June 6, 2009.)
The USA has such powerful bankers banking, that is is, indeed, banking, instead of having a massive, long term industrial policy. It has an industrial policy only for the military-industrial complex (which does careful long term planing, hence produces the best tools and weapons in the world in its specialty).
Bankers have small financial minds, focused on what they know, usury and leverage (to describe it parodically). Seriously, they live off credit, and, if one left it to them, everybody would be indebted to them as much as possible (this is the sense of the subprime crisis). Pushed to the max, one would go back to serfdom, with the lords, the bankers, owning everything. it seems they own already the political process, in the USA.
Bankers cannot deploy anything investment that does not provide them with short term profit. The smarties in the Obama administration said they will try to encourage rewards for longer term profits. The fact is, though, that we are still talking financial profits, and the basic profits of civilization are not financial, but provided by the State (example of these profits that cannot be monetized: security, democracy, a healthy environment, a legal system). By having only the financially obsessed ones steering the country, they steer it off civilization, by confusing the superficial for the fundamental .
Obama said that one should steer away from a cliff, if one is driving towards one. But, so far, he has just stepped on the gas. Total liabilities of the USA is over 100 trillion dollars, whereas the GDP is no more than 14 trillion, and the U.S. federal tax revenue is 2.4 trillion. (See A. Laffer, Wall Street Journal June 10, 2009.)
How course there is a stimulus. But it mostly compensate the catastrophic collapse in states' spending. Obama speaks renewables, but the investments in renewables have collapsed. One of the reasons is that renewable energy produced in the desert or geothermally, or by the wind, has to be transported. but the electric grid is hopeless. It needs 300 billion dollars right away, way more than anything Obama dreamed of.
A 3,500 Megawatts (2 large EPR nuclear reactors worth) geothermal plant is ready to go by the Sutton sea, but the tini tiny line there could never transport the power to LA.
An example of long term lunacy of the USA is the dearth of financing of advanced civilian nuclear power. It should be financed enough to produce a profitable, full scale fourth or fifth generation nuclear reactor in a private-public partnership (it is one of the sectors where the USA is still ahead). Such reactors basically solve the waste problem, and can be made completely safe. The reason they have existed only in baby form so far has been that technological progress, especially in high temperature materials, has to be made, to get large scale profitability.
But this does not interest the Obama administration: too intellectual, too much oriented towards hard science? Although it is clear that such reactors are necessary. Be it only to get rid of the 60,000 tons of piled up wasted, barely used nuclear fuel that constitute most of the waste of the U.S. open nuclear cycle in the last 65 years, or be it only to provide with a clean base load capability (coal officially kills 24,000 people a year, in the USA, and apparently around as many miners a year in China).
Many other countries are not that stupid and arrogantly leaving their destiny to the money manipulators. To stick to the nuclear example, several countries have advanced programs (even Iran knows it needs nuclear). Without mentioning France and its deployment of advanced reactors, India has embarked on a very sophisticated program with three types of interlocking reactors using thorium (because India has little uranium, but a lot of thorium).
Meanwhile, the aerospace industry threatens to follow the car industry. A lot, actually most, of the future, mythical "Dreamliner", Boeing's 787, is made and conceived overseas, including some of its most crucial parts (wings, fuselage, landing gear). The Computer Assisted Design, for the entire plane is the, worldwide ubiquitous in aerospace, CATIA, made by Dassault Systemes S.A.. Not to say it is not smart to collaborate with European powers (it is, because it's the exact same democratic, republican civilization, joined at the brain). What is not smart is to depend upon non democratic powers. What is not smart is to leave financial vultures in charge of an entire gigantic country. That, in turn, drains the entire world economy down.