- SEIU: "Destabilize The World!"

The economic illiteracy of union reps and community organizers cannot be underestimated. And for that reason, I think this guy is barking at the moon. Even if he were able to fulfill his plans, I think the most likely scenario now does not in fact involve our economy going over the waterfall at all.... ever.

I've shared these thoughts with a few friends via email, but let me lay them down here too.

Japan had a 9.0 earthquake, a Tsunami that killed thousands, and a meltdown of a Nuclear reactor. While all that was going on, ringing up hundreds of billions in destruction and uncountable damage to the industrial supply chain, we also began our third simultaneous shooting war in the greater middle east. In the meantime protests have broken out in Egypt, Bahrain, and Saudi Arabia, which threatened the Suez Canal, and 25% of the world global oil production.

None of that set off a cataclysm in the markets.

The banks have writing down lots of AAA rated debt since 2008. Iceland is insolvent, Ireland, Greece and Portugal are nearly so, and Fannie Mae and Freddie Mac are bankrupt. If we see a sovereign debt default I don't think it will be the kind of thing to make them panic. And on an infrequent but not completely uncommon basis, high frequency program trading systems drive markets to 9 or 10 standard deviations from the mean, only to see them snap back again in seconds.

None of that has set off a cataclysm either.

I've actually come to the view that the Japanese model is probably the most likely scenario. We'll have debt at 200% of GDP, then 500%, then even further and it won't matter. We'll simply never go over the waterfall. the debt will be bought because the alternative is the abyss, and that's a powerful incentive to risk capital loss. We'll simply have soaring commodity prices and a falling living standard, but we'll never hit the bottom.

We say our fiscal situation is unsustainable, but people have been saying that about Japan for going on 2 decades now, and even with everything but Godzilla hitting them all in one weekend, they still aren't going over the edge. That makes me believe the bottom of the well is much further away than any of us realize.

This guy, (this economically illiterate guy) thinks 500,000 people failing to pay their mortgages will push America over the edge, but I can't tell you how unlikely I believe that to be. More likely I think will be that the National Guard get's co-opted to serve the eviction notices.

Personally I think he should be arrested immediately as a domestic terrorist, but seeing as one of his peers was elected President recently, I don't see that happening either. shame though. this used to be a nation of laws, but now it's a nation of people like this.