This flu epidemic comes just as global economy itself lies comatose in the economic intensive care unit, with IV lines of dollars, euros, yen, and renminbis transfusing its hollowed-out carcass. It's an odd time for attention to be diverted from that awful spectacle.
The cash transfusions have sent the Cable TV gang into raptures of "optimism" -- meaning they expect debt securitization to resume as before, along with Yuletide-level credit card shopping sprees in the malls, a mass splurging on new cars, and a renewed frenzy of house-building in the Florida buzzard flats. Those "green shoots" and sprouting "mustard seeds" they report seeing may themselves be a flu-like symptom. I don't know what the so-called Mexican swine flu will lead to, but the global economy as we've known it is a goner.
Even if the Mexican swine flu turns out to be something of a false alarm, it will require billions of dollars in unexpected new outlays for prevention operations here in the USA -- reinforcing the false idea that the nation has bottomless resources (the same idea that has been driving the bail-out fiesta). My guess is that the fear emanating from the story will be a potent generator of paranoia in the meantime, leading to widespread closures of things, canceling of events, restrictions on travel (official or otherwise), and a sell off in the financial markets. And that's if the flu turns out not to amount to anything.
If the flu is the real deal, it will surely drive a stake through the faintly-beating heart of that invalid global economy, and possibly even continental-scaled economies like the United States, the Euro-zone, and China -- any place where things and people have to move long distances to keep life going. The United States, obviously, suffers in this instance from its proximity to Mexico, and the fact that so much of our food comes from places that employ casual Mexican labor. A serious flu outbreak would be a short path to food shortages in the US, with our three-day supermarket inventories and just-in-time shipping methods. It would not be such a bad idea now to lay in supplies of beans, brown rice, cooking oil, onions, and toilet paper.
The big story at the end of last week was New York Attorney General Andrew Cuomo's pursuit of former Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke in the matter of Bank of America's gobbling of Merrill Lynch last fall. It is alleged that the dynamic duo importuned BOA chief Ken Lewis to avoid disclosing some important particulars to the BOA shareholders, as required by law.
The outstanding stage-whisper coming from all this was the word "indictable" in reference to messers Paulson and Bernanke. It goes to show how swiftly events can move beyond "unthinkable" in extraordinary times. Now, former Merrill Lynch chief John Thain -- of thousand-dollar trash-basket infamy -- has come back out of the woodwork to backbite BOA's Ken Lewis over who-said-what in regard to a treasure chest of bonuses divvied up during the blur of TARP payouts last fall. Thain complains of being unemployed since then -- though one wonders why he doesn't just shut the fuck up, buy half of Nantucket with his untold millions of booty, and learn to play the oboe or something. This giant CEO cat fight was just getting interesting when the Mexican flu pulled the news-plug on it.
Of high interest to those confused and perplexed over President Obama's actions so far in the banking fiasco, I commend a great piece by fellow blogger-on-the-margins Charles Hugh Smith: Obama's Secret Plan. This analysis is low on the paranoia and high on the Machiavellian maneuvering insight. The basic idea is that Mr. Obama has gone along with all the TARPing and PPIPing because it was tactically the only way that he could give the Wall Street plutocrats enough rope to hang themselves -- and that this was the only reality-based strategy that could get public opinion in the mood for real change. It explains a lot, if it's true. Alternately, it would be very sad to learn that Mr. Obama really believes he can rev back up a securitized-debt-and-consumption fiesta by turning the Federal Reserve into an ATM.
In any case, the banking-and-investments sector has been on auto-pilot for a few weeks. Lesser banks are crashing around the country (Idaho, Florida, California last week), but the remaining Big Boyz are still lurching through the landscape like so many Frankenbanks, jazzed up on electric surges of digital cash. There are ever more hints of a peasant uprising against the castle of privilege, but no sign just yet of the flaming brands and shaking fists from the village below. This flu thing will put the schnitz on their distempers for a while.
For an excellent background briefing on flu matters, I direct you to a recent blog by Elaine Meinel Supkis. Have a healthy week.
My 2008 novel of the post-oil future, World Made By Hand, is available in paperback at all booksellers.