Monday, September 15, 2008

From Wall Street to Galveston: "Sometimes the aftermath of the storm is worse than the storm itself ..."

Disintegration of the Persistence of Memory, Salvador Dali


From Wall Street to Galveston: "Sometimes the aftermath of the storm is worse than the storm itself ..."

By Richard Power


From downtown Manhattan to the Gulf of Mexico, it was a day of fear and loathing in the USA, one worth providing some perspective on.

On Wall Street, the "Masters of the Universe" fantasy continued to unravel. Over the last thirty plus years, we have succumbed to the Ayn Rand mentality and allowed it to warp our economic world view and undermine our financial institutions; our collective conscience and common sense has proved powerless against the foolishness of the Fountainhead cult, but the chill, impersonal truth of the math has finally caught up with all of us.

The Federal Reserve and Treasury Department struggled yesterday to contain the fallout from an upheaval among the country's largest investment banks as they moved on to their next challenge -- engineering a $75 billion private rescue of the nation's largest insurance company. ... Investors sent the Dow Jones industrial average plunging more than 500 points, or 4.4 percent, for the biggest point loss since the Sept. 11 terrorist attacks seven years ago. About $700 billion in shareholder value disappeared in a single day of trading. Washington Post, 9-16-08

To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” ... And here’s the thing: The defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis. That creates the real possibility that 2008 could be 1931 revisited. Paul Krugman, New York Times, 9-15-08

Meanwhile, we have lost a second US city in only a few short years. This is the beginning of a trend, one which will only accelerate. We must re-think what infrastructure means. We must re-think what disaster recovery, business continuity and crisis management mean. And we must act to rapidly increase both the mobility of our populace and the flexibility of our systems, while drastically reducing our dependence on fossil fuels and our output of greenhouse gas emissions.

For thousands of people stuck on an increasingly fetid Galveston Island, the aftermath of Hurricane Ike is proving to be far worse than the storm itself.
With no water or power, no working toilets, no food or phones, people faced growing public health concerns here on Sunday. More than 2,000 residents who had defied an evacuation order were taken off the island, and state officials tried to ensure that no one could return. ...
Five people were found dead in Galveston on Sunday, including one person in a submerged vehicle near the airport. Officials expressed fears that more would be found as other areas of flooding were searched, particularly on the west end of the island, where there was “horrendous” devastation ...
New York Times, 9-15-08

iReporter Carlos Ortega says there's "not an inch that isn't damaged" in his Galveston, Texas, neighborhood.
"Galveston cannot safely at this point accommodate its population," City Manager Steve LeBlanc said at a news conference.
And LeBlanc warned those who heeded evacuation warnings not to return to the island.
"We would go in a downward spiral if everybody started coming back," he said. "Our resources are stretched to the max." ...
Galveston residents had been warned as Ike approached the Texas coast to leave or face "certain death" from its 12- to 15-foot storm surge.
On Monday, LeBlanc called the island "unhealthy and unsafe" and said the cleanup could take months.
"Sometimes the aftermath of the storm is worse than the storm itself," Galveston Mayor Lyda Ann Thomas said. "There's nothing to come here for right now. ... Please leave."
WIBW, 9-15-08

Richard Power's Left-Handed Security: Overcoming Fear, Greed & Ignorance in This Era of Global Crisis is available now! Click here for more information.

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