I admit I am still puzzled as to how a period of near-zero interest rates is going to cure problems partly precipitated by the housing bubble that grew on the fertilizer of a few years of unprecedented 2% and 1% fed funds rates between October 2001 and May 2004.
So is there any good news in the economy? Housing starts and sales are cadaverous, manufacturing activity has fallen off a cliff and price index measures sure seem to signal an incipient deflationary period.
Ah ha! There is one US business sector where the bloom is still on the boom. [It happens to be the industry, I confess, that often pays my salary]. Does that $40 billion in arms sales to dictators and dubious allies make up for the $40 billion that Madoff embezzled? I compare the "good" profits of our one healthy industry with the bad of our worst crook because I see the same ill deep in their hearts. It is all too human a trait to be able to blind oneself morally with the glittering light that shines from a pile of gold. Both the arms merchants and the crooked investment adviser ruin people's lives. They just do it in different ways.
But as Jarecki made so clear in his documentary Why we fight, the arms merchants are so in bed with the government that they are the one industry the government will guard from foreign ownership, even if they have to prevent "wasteful" domestic spending to persevere. We partner and cooperate with other countries in making war but we like to keep the profits for ourselves as much as possible.
There are some who can question the morality of this business:
The New America Foundation, a nonprofit research group, has called on Obama, who will be sworn in January 20, and the new U.S. Congress to consider multilateral efforts to curb "destructive and destabilizing" weapons exports.
More than half of the top 25 U.S. arms purchasers in the developing world were "undemocratic governments or regimes that engaged in major human rights abuses," in 2006 and 2007, the foundation said in a report last week.
But even the French masters of war just come out and say it: the terror they combat is the prospect that the world would become unsafe for war profiteering. Lord, we don't need another jet fighter.
What if the foreign investors go after our last growth industry: the death merchants? Don't you worry now, quick and sloppy death and the constant rattling of sabers in the third world will always have MADE IN USA on it somewhere.
Will the masters of war rescue our jobs as Bernanke has not? I think the case is the exact opposite and Bernanke just isn't aware or won't admit that he is trying to breath life into a domestic economy bled to death by a gargantuan tumor of defense appropriations.