Now What?

SUBHEAD: The mortgage problem is not going away. It is going to paralyze the real estate industry for as far ahead as anyone can see. Image above: Burning house in Australia in 2008. From (http://www.rainbowreporter.com/australian-property-downturn). By James Howard Kunstler on 31 October 2010 in Kunstler.com - (http://kunstler.com/blog/2010/10/now-what.html) On Tuesday, when the Republican Party and its Tea Party chump-proxies re-conquer the sin-drenched bizarro universe of the US congress, they'll have to re-assume ownership of the stickiest web of frauds and swindles ever run in human history - and chances are the victory will blow up in their supernaturally suntanned, Botox-smoothed faces.

But don't cry for John Boehner, Barack Obama.

The President and his Democrats may have inherited this clusterfuck from the feckless George Bush but they flubbed every chance to mitigate any part of it, ranging from their failure to restore the rule of law in banking (by prosecuting the executives of major banks who oversaw the systematic swindle), to mis-directing our dwindling resources toward ends (such as "shovel-ready" new super-highways) that won't promote a credible future for this society, to misleading the public in the fantasy that alt-energy will offset the disruptions of peak oil (and allow us to keep running suburbia, the US Military, and WalMart by other means).

It's really too late for both parties. They're unreformable. They've squandered their legitimacy just as the US enters the fat heart of the long emergency. Neither of them have a plan, or even a single idea that isn't a dodge or a grift. Both parties tout a "recovery" that is just a cover story for accounting chicanery and statistical lies aimed at concealing the criminally-engineered national bankruptcy that they presided over in split shifts. Both parties are overwhelmingly made up of bagmen for the companies that looted America.

Alas, the damage is now so pervasive in money matters that the federal government could be toast as a viable enterprise, even if a new party or two spontaneously rose up out of the ruins of a plundered democracy. Anyway, one of them will not be the Tea Party, with its incoherent agenda and moron cadres who seek to put Jesus back in the US constitution, where he never was in the first place - though they don't know that.

Nor is there any party on the left or even in the center with a clue or a moral compass. Its just one of those tragic moments in history - like 1850s America, when a strange vacuum of thought occupied the heart of political life, and the scene was cluttered up with mere place-holders like Millard Fillmore, Franklin Pierce, and James Buchanan. (Can you state a single idea or position, these political ciphers advanced?)

Where we stand now is on the cusp of another giant step into the abyss, since the latest storm of Foreclosure-Gate suggests pretty strongly that mega-tons of mortgage-backed securities are assured of blowing up, as well as the sundry derivatives of these things (CDOs, CDOs-squared, plus the massive fetid matter infesting the alternative cosmos of credit default swaps). If you follow the media-of-record like The New York Times and the Wall Street Journal, you would have to conclude that there is no extant plausible notion among financial leaders as to how the fiasco of botched mortgage-and-title documentation can be resolved. After three weeks of emerging events around this debacle, the consensus among the power brokers is to pretend that there's no problem, that the issue of missing, forged, post-dated, trashed, or non-existent paper related to claims on property can just be put aside, brushed under the rug, glossed over, ignored.

Let me tell you something: this problem is not going away. At the very least it is going to paralyze the real estate industry for as far ahead as anyone can see. For another thing, it could force the disclosure of what the banks are holding in their vaults in the way of worthless paper and expose their insolvency. For still another thing, it could lead to rafts of lawsuits that would additionally shove the banks toward collapse, demolish the claims that underlie our currency, call into question the meaning of property ownership per se that is the basis of Anglo-American law, and tie up the court system until kingdom come. In any case, every pension fund, state government, and insurance operation would be crippled. I could go on but you get the picture.... This might all sound extreme, but I repeat: nobody with any authority in this land has proposed a plausible way out.

By the way, I haven't even touched on the totally insane but now accepted practices of the Federal Reserve attempting to stage manage the velocity of money by so-called quantitative easing - a.k.a. the US writing checks to itself - because even that nonsense assumes that everything else remains more or less stable.

This is what the two major parties can look forward to as we swing around into the Yuletide season and then into 2011. The proud winners of seats in congress and the senate might as well put on clown suits and little pointed hats on Wednesday morning and drive around the Washington monument in toy cars. There will be a desperate need for a new politics in this country, for people unafraid to tell the truth and act in the genuine public interest. If we can't generate it from the saner quarters of this country where people think thoughts that comport with reality, I'm afraid we could see some generals step into the picture.

I write literally over the middle of the Pacific Ocean, en route from Australia where I spent the past week - not on vacation. It's a reminder that there are a lot of other players in the wide world - not all of them nations on the verge of a nervous breakdown. See also: Ea O Ka Aina: The Tonmstone Blues 10/14/10 .