By now all of us know the reach of the auto industry in our society.Fully one fifth of the jobs in this country is in some way or other tied to the auto industry.It is on the strength of this industry and its reach that the US got prosperous.Conversely, if that industry vanishes, we are likely to see the impoverishment of many communities from coast to coast.

For a society already poised on a knife edge as a result of years of accumulating debt, removing the prop provided by the auto industry is likely to topple the house of cards built by the financial industry unleashed by Alan Greenspan's bubble blowing with other people's tax money.

The  disappearance of the auto industry will savage the tax base of many communities which use the tax base to issue municipal bonds that finance road construction, hospital upkeep,police and fire services, the essential services that are needed by any community.Ironically, the contraction of the tax base will hit even the Wall Street firms that specialize in bond issues bringing down their fortunes.

The wizards of Wall Street who set about destroying the health of communities and states to enrich themselves have dispalyed all the wisdom of a man who saws off the limb of a tree on which he is perched.

In looking at the plight of the auto,banking and housing industries,it occurred to me that the agricultural subsidies of many years ago might offer a model for us to climb out of this mess.

Remember that most of these problems have been created,in the end, by overcapacity.Too much money in the hands of bankers;too many cars produced by the auto industry and of course, too many homes built by the homebuilders.

The remedy:Government stockpiling of all these goods and services.

The government should have a budget to simply buy excess auto inventories, homes and even soak up the money supply when it becomes too much.

The success of the agricultural subsidies in propping up the prices of grain is a good example.We should simply let this become our national bailout plan for anything and everything that causes dislocations in our economy.

From the very beginning,it was clear that Obama was favored by a faction of American jews who were getting tired of the steady drumbeat of war by the likes of Perle,Feith and Kristol.That suppport is now out in the open after the discreet and decent interval of the election season.The appointment of Rahm Emmanuel,the jockeying for power among Richard Holbrooke,Dennis Ross says that a new group of intellectuals is stepping forward to assist Obama in solving the problems in the Middle East.

Obama also has the support of many powerful Jewish business and political leaders who want a different approach to the problems.The Pritzker family in Chicago,which has been very forthcoming in its support to Obama comes to mind.

I believe that this will strengthen Barack Obama's hand in dealing with  the Palestinians in a spirit of give and take.The great advantage Obama has over past American administrations is that the color of his skin makes him immune to attacks by the Arabs as a white colonial master perpetuating the dominance of the Europeans.

I am hoping Obama will recognize this and see the opening for a new day of peace in the Middle East.

Last week the grim reaper was at GM's door.It had bled nearly 2.5 billion dollars in the last quarter and had just enough cash on hand to get by till the end of 2008.

That was the signal for GM's arrogant and incompetent management to go with hats in hand to Washington to seek a bailout.The Democrats, led by Nancy Pelosi and Harry Reid, were sympathetic but want to wait for a signal from the new President elect before they set the wheels in motion for a bailout of the auto industry.

There is a very strong reason not to proceed with this.

THE WORLD IS NOW AWASH IN CARS.Atleast sixteen million more cars are being produced than there are customers for them each year.And more cars are being added each day.In effect, cars are becoming commodities and profit margins are under assault from a worldwide glut of cars.

So no matter what cost cutting is carried out at the margins, the industry will be starved for profits and will be living from hand to mouth for a long time.In effect,the plight of the steel industry about two decades ago has moved up the food chain.

This validates the marxist analysis of capitalist contradiction.That the ruthless efficiency practised by capitalist economies carries within it the seeds of its own destruction.

If Shakespeare were alive today, he would write "Our fault, Dear Brutus, lies not in our stars but our ruthless eficiencies'

So, the more we worship profits the more we plant the seeds of our destruction.

As Barack Obama inches ever closer to his rendezvous with destiny,these thoughts came to mind:

1. Within two generations this nation has had two great leaders,Martin Luther King and now Barack Obama provide the transformational leadership that shreds the hate filled past and ushers in a future that makes Martin's vision of a color blind society a reality.

2.By embracing this change, America announces to the world it is still the one place where change is possible.

3.Ben Wattenberg at one time called us the First Universal Nation.When he uttered those words, it sounded pompous.Not any more. We truly have become the First Universal Nation.

4.With the ascension of Barack Obama,it will be possible for us to achieve everything that we have failed to achieve with military might.

How fortunate can one nation be?

By now it must be clear to all but the most blind that American capitalism has lost its legitimacy after three decades of extreme right wing political interpretation of what it means.

That interpretation,led by unregulated financial engineering, supply side economics and wall street manipulations has led to a collapse of massive proportions taking down many pillars of Wall Street.

In short, US capitalism,by forsaking the very people it needs to bolster its fortunes, has lost its legitimacy.

President Obama will now have a historic mandate to restore this lost legitimacy.Unlike the rightwing reactionaries, he can build this legitimacy by invoking Abraham Maslow's thesis on the Hierarchy of needs driving every human being.

What Maslow proposed early in the last century was that we proceed from fulfilling the very basic human needs to the higher ones.For instance we need to have our physical needs like food,clothing,shelter,health fulfilled along with our need for security before we can venture further to seek fulfilment in love,approval,self esteem and self actualization.

This hierarchy of values tells us that the capitalist premise of opposing the very fundamentals of human needs is wrong if we want our people to become all that they can be in a capitalist society.

This means that American capitalism should not blindly oppose universal health care and universal higher education and instead actively promote those in a profit free system so that all citizens can become the kind of enterpreneurs American society needs.The best example of this can be found in India one of the world's poorest societies.By treating its citizens as a resource and providing them with a higher education access in a meritocratic system, India has been able to lift itself up as the World's premier Information Technology provider.

In the current context in America, capitalism can only survive if it is seen as the pathway through which all of our citizens can access health care and the minimum means of sustenance before they can become assets of the society.That is the challenge Barack Obama must address if we want to have economic freedom which is usually the precursor to political freedom.

In a recent interview the man who is credited with breaking the back of inflation and setting this country on a course toward fiscal sanity made the above comment attributed to him.By financial engineering, he meant the ways by which ordinary financial transcations like a  mortgage or a loan was sexed up to make it look like it is a an eternal fountain of wealth and called a Derivative by exotic acronyms like CDOs,CDS,MBS and so on.This intentionally generated opacity in an otherwise simple transaction has led to the current meltdown which,Volcker has correctly frowned upon.

Less devious nations like China,Japan and India have remained true to keeping transparency of financial transactions intact,not just for the immediate parties involved but for anyone else who may later join the party.It is this maintenance of transparency for a long time that is at the basis of our problem.If that problem is not solved,as seems to be the case right now even after the bailout program, consider the economy to be ready for the toilet bowl.

Although he doesn't resemble Alec Guinness, it is his equanimity in the face of crises that Colin Powell was talking about.And his way of handling openly racist bimbettes like Michelle Bachmann.

So here is one to Obie Van Kenobie (Note: I am drinking Cindy's beer right now.)

For those who do not know,Larry Summers was until recently the President of Harvard University and considered a whizkid economist destined for the Nobel Prize in Economics.

Three years ago, using his bully pulpit as the President of that University,Summers harangued others that women are congenitally incapable of dealing with the sciences and any discipline that required mathematical skills.That produced an outcry from scientists well versed in such things and Summers retreated sulking saying he did not imply any thing that his words were designed to convey.

He must be carefully watched as he has stuck himself in the inner circle of Barack Obama's advisers from where he can do more damage.

At the time he uttered those words about the inferiority of women, I wondered what would impel a man of Summers' stature to go off on such a vile rant.

The answer was Elizabeth Warren.Again, for those of us who don't know it,Elizabeth Warren is the holder of the prestigious Chair of Gottlieb Professor of Commercial Law at Harvard law School.In that role, she deals with subjects like mortgages,insurance and other topics of interest to ordinary citizens.

Although Law Professors are not known for dwelling on economics, Elizabeth Warren has delved into these subjects with a discerning eye and writes with a clarity unknown to economists.

In the past year Elizabeth Warren has shown,using government statistics, that although many families now earn 50% more as a result of the two income families becoming prevalent,they are unable to save more primarily because their residences cost much more and the mortgages eat up all additional income.This is why using the residence as a nest egg for retirement has become normal.

Secondly,Elizabeth has also shown that most of the bankruptcies declared by individuals are due to unforeseen medical expenses incurred by uninsured or underinsured families.

These two pieces of information were lying there for all economists including Larry Summers to see.Perched on their high horses and dealing with these as trivia that they need not be concerned with, Summers and his ilk ignored them until Elizabeth Warren used them to show why we are in this fix.Without a single word of gobbledygook.

That does not sit well with Larry Summers.So he goes out obliquely at women deriding their capability to reason analytically.

Only a man as steeped in Wall Street wisdom as Henry Paulson could have diagnosed our problems as one of nonavailability of credit and proceeded to set up a bailout plan that remedied this perceived problem.Even if this works,it is my belief that it will be a short term solution to a long term problem and the same problem will keep recurring on a regular schedule.

The fundamental problem in our economy is that somewhere in 1980,our economy was handed over on a silver platter to the financial manipulators sidelining the wealth creators in the real economy.
This is sadly seen in the episode of Robert Stempel,the engineer in charge of General Motors being swept aside by John (Jack) Smith in a palace coup.Since then GM has been on a downhill slide from which it does not appear to have a chance to recover.That is because the financial manipulators like Rick Wagoner,the current CEO, have no interest in producing a superior product that the market needs or wants.They only want an ever rising bottom line to appear miraculously every three months so that they can take home fat bonuses.

In the compensation end of the game, the manufacturing executives are now playing second fiddle to the financial executives.In another example,Richard Fuld, the greedy snake oil salesman at Lehman Brothers, after conning millions of investors for the past ten years with his worthless derivatives,took home nearly half a billion dollars worth of loot,all legal,of course.Compare that to the measly 15 million dollars a year that Rick Wagoner takes home.

The ascension of financial executives in the American corporate landscape and the disparity between the compensation of manufacturing and financial managers makes it inevitable that many "real" corporations will fail in the coming years.It is the death of the "real" economy that will cause another meltdown.That is a problem Hank Paulson,himself a financial executive,is incapable of diagnosing let alone cure.

Our economy has now been transformed from dealing in real goods and services such as a good reliable car giving plenty of gas mileage to one that deals in the metaphysical numbers cooked up by accountants who assure you that they know the value of a corporation and that your wealth is increasing.Until,the value collapses,of course,giving rise to another opportunity for the same criminals to get into your wallets for another looting.

As the man says:  "What's in your wallet?"

This is the way the world ends.
This is the way the world ends.
Not with a bang but a whimper.

T.S.Eliot's poem came to mind when the people in Washington, consumed by a surfeit of hubris let loose their violence against Iraq, a country that had posed no threat whatsoever to this country.The reason that was given for this misadventure was the need to control the smooth flow of oil to these shores so that American diminance of the world's economic system could be kept alive.

Rather than its intended aim, the war and the relentless deficits it engendered has brought this country's economy to a standstill and while we were at it, the usual crooks at Wall Street's pyramid schemes feasted on the loot that they were able to unload on unsuspecting foreign investors in the form of derivatives.

It will no longer be possible to pretend that USA is number one as the real economy comes crashing for lack of demand from people whose purchasing power has been decimated.Professor Roubini of NYU says that the recession which we are about to enter will be deep and long lasting.

A population that did not experience any economic hardship during the years when Bush unleashed his wars was more supportive of hegemony.As hardship descends on even previously well off segments of our population,I doubt that it will be supportive of foreign adventures because now the connection between such militarism and their own pocket books is well established.What is even more obvious to the population at large is that while they endure hardships the real culprits,from Bush,Cheney,Rumsfeld on down never even feel any after effects.The disconnect between our ordinary lives and those of our rulers is total.

I also want to say that while we will feel the pain in the coming months and years,it will be as nothing compared to the death and destruction that these megalomaniacs have visited on the Iraqi and Afghan people in our name.

By now all of must agree that these two are not intellectual giants.In fact, we can probably agree that their ability to converse in clear English and enunciate a logical thought pattern on matters of economics,national security,health care and myriad issues confronting us is non existent.

Yet, I hear these two mental dwarfs constantly attacking Barack Obama as though he is their intellectual inferior.

Another person well versed in the psychology of such behavior, has called it the arrogance of white skin privilege.The term is very appropriate in this case.

The continuous harping on the national security of the United States by the two candidates and the unrelenting din of the media would make you believe that the US is indeed in danger of being overrun by the mongol hordes of the past.

That is clearly far from reality.

For the record,this is a country that has launched wars on the flimsiest pretexts,manufacturing many of these pretexts on its own and taking the fight to its perceived enemies far from our own own shores.No other nation on earth maintains and feeds a massive high technology military or even comes close.To augment this capability is a huge network of intelligence with paid and unpaid informers in every continent,including the elites of the countries who are bribed to maintain their allegiance to Uncle Sam.Subverting popular will as in Chile,assassinations and installing puppets are routine for the CIA.

Yet, we are led to believe that somehow ogres materialize from thin air and pose a serious threat to us.That was the premise of the war on Vietnam and that is the premise of the war on Iraq.

The mindless repetition of national security threats has now become a congenital defect of the American political scene with both parties taking turns at who is better or worse on national security issues.No candidate for either party can even suggest that there is indeed no security threat to the U.S. from any source in the world.Such a statement would condemn the candidate to the scrap heap right away and no politician worth his salt would dare to utter such a thought.In fact, if you come right down to it, an honest politician would have to say that it is the United States that has posed a threat to the security of many nations of the world and continues to do so with impunity.

As a cruel joke, one may want to consider if our economic crisis has a military origin.You would think that the sheer magnitude of our military budget,nearing one trillion dollars per year, would make some politicians question at least the size of this bloated budget if not the basis of such a gargantuan budget.

That would be a thought crime on a par with considering Sara Palin for the Nobel Prize in economics.

I have some good news for our maximum leader,George W.Bush, who searched in vain for WMDs under his desk at the oval office sending the assembled worthies of the Press into hysterical laughter.

We can now state that the real WMDs have been found and they were made right here at home and dispersed through the entire planet by a process called conning the world.

The WMDs I am talking about are called Credit Default Swaps (CDSs) which are huge bets taken by big financial houses and wannabes like AIG on everything from whether Lehman Brothers can survive to whether your local municipality can pay its bills.

According to one estimate, there are now 55 Trillion Dollars worth of such CDS are outstanding around the world ready to go off at any time dragging the world as we know it to its inglorious end.

As you ponder the implications of this finding over your sunday morning coffee,two quotes you may relish for their funny side up.

"The fundamentals of our economy are strong"-- John Hoover McCain.

"We have become a nation of whiners"-- Punxatawney Phil Gramm.