Extend and pretend -- in praise of reckless populism.

"Extend and pretend" is a great way to describe our national economic policies of the last 60 years.

The Central State's "extend and pretend" policy requires heavy borrowing every year to prop up the status quo, pushing the Central State (or equivalent, i.e. the Eurozone) into an inescapable double-bind: either continue increasing public debt and cripple the economy with high taxes and high public-debt servicing costs, or let the financial status quo of "profits are private, losses are public" implode.

The first path leads to default, as the Tyranny of Debt cannot be masked for long, while the second path wipes out the Financial Power Elite which feeds the politicians.

I vote for cleaning out the FPE. There was a long period of time where I assumed that people with financial and business expertise indeed acted to feather their own nests but, push come to shove, were our sons of bitches and weren't such as would pursue policies and alternatives that would beggar the nation.

Well, it turns out they did both. They got rich, beggared the nation, and turned a communist dictatorship and strategic competitor into an economic powerhouse buying up natural resources over the entire world. No wonder Caroline Glick speaks of America's "strategic imbecility."

I'm weak on American history but I have the impression that the early Progressives were on to something where they pushed populist measures. It seems that the legacy of those Progressives is today's progressivism which is about anything but popular sovereignty and all about sticking it to the unwashed, f/k/a the bedrock of the Nation or, if you will "us." Vice President Biden isn't my favorite politician but there's something admirable about the fact that he did not turned his Senate career into an opportunity for personal enrichment. Way to go, Joe Biden.

What we need is (1) more populism that (a) positively forbids and reverses socialization of loss and (b) wields the recall and impeachment options with reckless abandon and (2) a lot more breaking of furniture. To the objection that only the educated, technocrat class has the expertise to understand the modern economy and high finance one needs only to lay eyes on the catastrophic results of that expertise. If we aren't all living in the beginning of a Steven King novel I'll eat my keyboard.

Bring on those first 1,000 names out of the Tulsa, Oklahoma phone book. Forget New York. I want a red, red phone book out of fly-over country. Failing that, it looks like the Tea Party movement is just what the doctor ordered.

"Why the World Is Financially Doomed in Four Charts." By Charles Hugh Smith, of two minds.com, 1/6/11.

H/t: The Daily Crux.