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Post details: Energizer Bernie

Energizer Bernie

Trying to tweet on any subject of some depth can be frustrating. The effort makes you feel like a motivational speaker in a sloth pavilion. And rightly so. Twitter is the hip new medium catering to the demographic whose attention span is defined by a passing fly. Its list of trending topics is mostly populated by mindless trivia, such as what kind of lip stick is Britney Spears using on her pet dog, or how to tell if your significant other has been secretly pouring water into your beer. Don't expect much more than that. So when I found Bernie Sanders, a hoary US senator, firmly occupying the top hitting spot for much of this Friday afternoon, I knew something was up.

Early this November, voters sent the White House a little missive: We need an adult in charge of the public purse. Unfortunately, when Obama received the memo, he read it upside down: his dubious deal to extend the Bush's tax cuts was the exact opposite of what the public purse needed - the expenditures will go up, the Treasury revenues down. Is that how they balance budgets in Chicago? While many within his own party grumbled on the side, Vermont senator Bernie Sanders took his argument to the Senate floor and in an unusual 8 hour oratory marathon exposed the deal for what it was - a fiscal time bomb wrapped in a logically bankrupt surrendering of basic accounting principles.

It is one thing to make a tax cut when you have a budget surplus, it is another to make the same when you are running a trillion dollar deficit. Borrowing money from China and forking it over to assorted financial wizards, CEOs who earn their bonuses by shipping our jobs out to cheap Asian markets, local politicians who break public coffers by making unrealistic promises or the darlings of the military industrial complex is not the way to improve economy. Why would your average hedge fund manager even bother creating jobs here when he can get much better return on investment in India or Brazil? Wealthy people do not create jobs. Demand creates jobs. Demand coming from little shmucks like you and me having little extra money to spend on goods and services that other little schmucks make.

And that observation smoothly dovetails into another central theme of Sanders' diatribe: the specter of growing income inequality. Billionaires are more likely to park money in unproductive assets where they clog the flow of capital like muddy dregs at a river's bottom. Concentration of wealth is now reaching levels that are not exactly well correlated with forward growth. The poor won't have any money to spend, and rich are too few and far between to pick up the slack. A nation - much like a private company - is more likely to thrive if it shares its profits with its laborers, who can immediately recycle them in future sales. Henry Ford figured that out 100 years ago. We have to choose whether we want to have a democracy with a vibrant economy, or a banana republic whose moneyed rulers will have to insulate themselves in gated communities.

Standing on the Senate floor for over eight hours and pounding away at President's reckless policy would be a heroic feat for any man. More so for one 69 years old. Just think of the physical effort needed to pull it off. As I watched the twitter feed in mild disbelief, the oratory exercise turned into a drawn out battle somewhat reminiscent of the Old Man and the Sea. Sentence by sentence, slide by slide, one raised finger at a time, Sanders pointed out where the country went astray, never giving fatigue or hunger a fighting chance.

Having grown up in a Soviet bloc, some 300 hundred miles behind the Iron Curtain, I have little sympathy for the failed Marxist tenets. So when I find myself in a violent agreement with a self described socialist senator, I take it as a sign that our world has grown so complex that no single person, no single group and no single ideology can hold all the answers any more. People have to start thinking outside of the box rather than hiding behind their simplistic partisan flags.

The United States has reached the peak of the credit driven expansion in this decade. The return to the old way of living is virtually impossible. We are standing still at a major intersection, in great need of fresh air, wondering which way to go. Kind of like Soviet Union in early 1980s, except in our case the stifling milieu does not come from the dictatorial proclivity of the Politburo in Kremlin, but rather from the overgrown and self serving financial sector on Wall Street.

In it instructive to peek at how the Soviet leaders dealt with the new reality. At first their leaders, Andropov and Chernenko, did not grasp the gravity of the situation and tried to pretend that the existing system can be just mildly tweaked and it will function again. They just reshuffled the empty words in their speeches and continued to kick the national can down the road. It took Gorbachev to realize that the status quo was untenable and a radical change and reevaluation had to take place.

In a normally functioning economy, banking sector creates and maintains the financial blood stream necessary for commercial operations. Unfortunately, our beloved banksters have strayed far from that ideal. The environment festering with greed and fraud, the "moral hazard" implicit in taxpayers' backing , their obscure and poorly understood "innovations" lead to excesses that still haven't been fully addressed and redressed. Channeling Ronald Reagan, Bernie Sanders threw a gauntlet to Barack Obama:

"Tear down that Wall Street, Mister President".

But no matter how much I prick my ears, I don't hear any jackhammers on lower Manhattan. Day by day, bailout by bailout, one compromise at a time, Obama is making it painfully clear that he doesn't have what it takes to change the system. He is our Andropov.

Let's hope that a real Gorbachev will stand up in 2012.


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