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The Robber Barons Are Back -- Hide Your Money!

The Dow's at 10,000, and the bankers are reaping huge bonuses, but the economy in which the rest of us live is a disaster.

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"Of course," Frankel clarified, "this could all change, for example, if there were a new financial collapse or a hard landing for the dollar. A double-dip recession is a danger, because at the moment the demand expansion is coming from federal fiscal stimulus and firms' rebuilding of inventories, both of which will end in 2010."

The double-dip recession is another cute terminological choice. Isn't a recession that devolves backward to its worst state the same as a depression? Isn't revisiting a collapse that almost nuked the global marketplace confirmation of recovery's failure?

A double-dip, W-shaped recession isn't just a visual confirmation that the Bush administration's disaster capitalism succeeded in bleeding the New Deal dry. It's confirmation that the United States government, as Texas Republican Congressman Ron Paul argued, is basically one massive toxic asset.

But at this stage of the so-called Great Recession, you can pick your poison from the "alphabet soup," Palley said. "It could be a W or even a L, or a W that ends with a L."

Just make sure you stop calling it a recession. That ship has sailed.

"I thought the financial markets were nuts two or three years ago, when they failed to reflect that there were any risks out there," Frankel said. "If we had continued to accumulate the budget surpluses that were bequeathed to the nation in January 2001, that would have put us in much better shape to deal with the recession of 2007-09, as well as with any rude shocks, as yet unknown, that may still be lying in wait out there."

What's out there is what will ultimately warrant the change in comfortable terminology. There are still securitized debts yet to be deleveraged, as our dystopian iteration of "pass the parcel" continues, according to Margaret Atwood, award-winning speculative fiction author, most recently of Year of the Flood , as well as debt historian behind Payback: Debt and the Shadow Side of Wealth .

"The music is played, and when it stops, someone gets to peel off a layer of the parcel," Atwood explained by phone during a tour supporting Year of the Flood , released in September. "At the end, someone gets to open it up. This is what happened with the mortgages, except that when the music stopped, the parcel was empty because it was based on toxic debt.

"There's nothing wrong with debt as a tool; in fact, we probably couldn't get along without it. But it's when you incur a debt that you cannot pay back that the ripple effects begin."

Those ripple effects began in late 2007, although it can be argued (as it always can) that our current recession started, as Frankel argued, once we started throwing away the nation's surplus. Either way, we're climbing up on four years of a deep, long, painful recession that most everyone is too afraid to call a depression, even when the evidence is before their bleary eyes.

Geithner says the U.S. is going to be on what amounts to indefinite life support. The Fed is vigorously hiding its dirty books from the public, while opening its vaults for pretty much any corrupt bank still standing, but especially Goldman Sachs and JP Morgan Chase, whose $3.6 billion in earnings initially sent the Dow over 10,000 in October.

If you think that earnings report and the Federal Reserve's historical changes in borrowing aren't related, then I have a McMansion to sell you in Detroit.

Even as they rake in bloated profits and ride a 2009 stock rally propped up by government spending and intervention, banks are still refusing to pay back money they owe to the United States.

 
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