Dubai’s Problems and America’s

Well since Numerian has written about it, I don’t have to, since he’s done a better job than I would have anyway.

Dubai gambled that it could turn itself into the Beverly Hills of the Persian Gulf now that it has no oil. It lost its gamble. The people who could afford a $10,000 purse have taken a big beating in the financial crisis and recession, and they are embracing a more moderate and discreet spending lifestyle. Dubai not only has half-finished buildings, it has many completed buildings uninhabited, like Miami and Las Vegas and other overbuilt desert mirages.

Couldn’t happen to a nicer city built on slave labor.  While this is “bad”, well, if it had to happen to someone…  Of course, who else might it happen to?

So here we have a country that used to have oil which has now run out of the same. It has turned to massive amounts of debt to sustain not only its existing lifestyle, but to build a fantasy land of McMansions, luxury malls, trophy office buildings and theme parks for the wealthy. It has nothing anyone wants to buy and consequently stocks the shelves of its stores with goods from other countries it buys on debt. It has done all this using impoverished labor that works under a modern form of indentured servitude, in which the typical worker incurs excessive debts of their own that can never truly be paid off by their earnings. It creates an enormous income disparity between its privileged few and the huddled masses kept out of sight.

Sound familiar? When do you think global investors will start connecting these dots and ask: exactly what is backing the debt of the United States that has flooded the markets in the past nine years under Bush and Obama? At least Dubai had a presumed rich uncle in Abu Dhabi that would come to the rescue, even though now everyone realizes that was a very costly mistaken assumption. In the case of the US, the United States was the rich uncle everybody else looked to in order to solve global problems. Now that rich uncle has gone crazy in its own orgy of gambling, whoring, and over-indebtedness.

Except there is no one – absolutely no one – who can come to the United States’ rescue.

Go read the entire thing. Of especial interest is the question Numerian raises, but doesn’t answer—why didn’t the other Emirates bail out Dubai?  Are they running out of money? Oil?  Or just fed up with Dubai’s profligacy?

Note also that this is another indication that the last 10 years, economically, did not happen.  Much of the building that didn’t occur in the first world, happened in Dubai.  And that was an illusion, same as banks profits were.

So, of course, the current plan is to try and reboot the Busheconomy.  Get the land casino going again, reboot the financial casino, and party like it’s 2005.

Which is an even stupider plan than it was the first time since at least when Bush did it there was more of a real economy to cash out.  Being stupider than Bush is an accomplishment. In fact, it’s an accomplishment that is literally mind boggling.  My mind hurts every time I try and think like anyone stupid enough to do it.