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http://kunstler.com/blog/2009/12/forecast-2010.html

Forecast 2010
By James Howard Kunstler on December 28, 2009 7:32 AM

The Center does Not Hold...
But Neither Does the Floor

Introduction

There are always disagreements in a society, differences of opinion, and contested ideas, but I don't remember any period in my own longish life, even the Vietnam uproar, when the collective sense of purpose, intent, and self-confidence was so muddled in this country, so detached from reality. Obviously, in saying this I'm assuming that I have some reliable notion of what's real. I admit the possibility that I'm as mistaken as anyone else. But for the purpose of this exercise I'll ask you to regard me as a reliable narrator. Forecasting is a nasty job, usually thankless, often disappointing - but somebody's got to do it. There are so many variables in motion, and so much of that motion is driven by randomness, and the best one can do in forecasting amounts to offering up some guesses for whatever they are worth.

I begin by restating my central theme of recent months: that we're doing a poor job of constructing a coherent consensus about what is happening to us and what we are going to do about it.

There is a great clamor for "solutions" out there. I've noticed that what's being clamored for is a set of rescue remedies - miracles even - that will allow us to keep living exactly the way we're accustomed to in the USA, with all the trappings of comfort and convenience now taken as entitlements. I don't believe that this will be remotely possible, so I avoid the term "solutions" entirely and suggest that we speak instead of "intelligent responses" to our changing circumstances. This implies that our well-being depends on our own behavior and the choices that we make, not on the lucky arrival of just-in-time miracles. It is an active stance, not a passive one. What will we do?

The great muddlement out there, this inability to form a coherent consensus about what's happening, is especially frightening when, as is the case today, even the intelligent elites appear clueless or patently dishonest, in any case unreliable, in their relations with reality. President Obama, for instance - a charming, articulate man, with a winning smile, pectorals like Kansas City strip steaks, and a mandate for "change" - who speaks incessantly and implausibly of "the recovery" when all the economic vital signs tell a different story except for some obviously manipulated stock market indexes. You hear this enough times and you can't help but regard it as lying, and even if it is lying ostensibly for the good of the nation, it is still lying about what is actually going on and does much harm to the project of building a coherent consensus. I submit that we would benefit more if we acknowledged what is really happening to us because only that will allow us to respond intelligently. What prior state does Mr. Obama suppose we're recovering to? A Potemkin housing boom and an endless credit card spending orgy? The lying spreads downward from the White House and broadly across the fruited plain and the corporate office landscape and through the campuses and the editorial floors and the suites of absolutely everyone in charge of everything until all leadership in every field of endeavor has been given permission to speak untruth and to reinforce each others lies and illusions.

How dysfunctional is our nation? These days, we lie to ourselves perhaps as badly the Soviets did, and in a worse way, because where information is concerned we really are a freer people than they were, so our failure is far less excusable, far more disgraceful. That you are reading this blog is proof that we still enjoy free speech in this country, whatever state of captivity or foolishness the so-called "mainstream media" may be in. By submitting to lies and illusions, therefore, we are discrediting the idea that freedom of speech and action has any value. How dangerous is that?

Where We Are Now

2009 was the Year of the Zombie. The system for capital formation and allocation basically died but there was no funeral. A great national voodoo spell has kept the banks and related entities like Fannie Mae and the dead insurance giant AIG lurching around the graveyard with arms outstretched and yellowed eyes bugged out, howling for fresh infusions of blood... er, bailout cash, which is delivered in truckloads by the Federal Reserve, which is itself a zombie in the sense that it is probably insolvent. The government and the banks (including the Fed) have been playing very complicated games with each other, and the public, trying to pretend that they can all still function, shifting and shuffling losses, cooking their books, hiding losses, and doing everything possible to detach the relation of "money" to the reality of productive activity.

But nothing has been fixed, not even a little. Nothing has been enforced. No one has been held responsible for massive fraud. The underlying reality is that we are a much less affluent society than we pretend to be, or, to put it bluntly, that we are functionally bankrupt at every level: household, corporate enterprise, and government (all levels of that, too).

The difference between appearance and reality can be easily seen in the everyday facts of American economic life: soaring federal deficits, real unemployment above 15 percent, steeply falling tax revenues, massive state budget crises, continuing high rates of mortgage defaults and foreclosures, business and personal bankruptcies galore, cratering commercial real estate, dying retail, crumbling infrastructure, dwindling trade, runaway medical expense, soaring food stamp applications. Meanwhile, the major stock indices rallied. What's not clear is whether money is actually going somewhere or only the idea of "money" is appearing to go somewhere. After all, if a company like Goldman Sachs can borrow gigantic sums of "money" from the Federal Reserve at zero interest, why would it not shovel that money into the burning furnace of a fake stock market rally? Of course, none of this behavior has anything to do with productive activity.

The theme for 2009 - well put by Chris Martenson - was "extend and pretend," to use all the complex trickery that can be marshaled in the finance tool bag to keep up the appearance of a revolving debt economy that produces profits, interest, and dividends, in spite of the fact that debt is not being "serviced," i.e. repaid. There is an awful lot in the machinations of Wall Street and Washington that is designed deliberately to be as incomprehensible as possible to even educated people, but this part is really simple: if money is created out of lending, then the failure to pay back loaned money with interest kills the system. That is the situation we are in.

The inertia displayed by our system - especially its manifest ability to keep stock markets levitating in the absence of value creation - is strictly a function of its size and complexity. It is running on fumes. I thought it would finally crash and burn in 2009. The Dow Jones industrial average certainly fell on its ass last March, bottoming in the mid-6000 range. But then it picked its sorry ass off the ground and rallied back up again thanks to bail-outs and ZIRPs and really no other place to look for returns on the accumulated wealth of the past two hundred years, especially for large institutions like pension funds that need income to function. I'd called for a Dow at 4000. A lot of readers ridiculed that call. Was it really that far off?

A feature of 2009 easily overlooked is what a generally placid year it was around the world. Apart from the election uproar in Iran, there were few events of any size or potency to shove all the various wobbly things - central banks, markets, governments, etc - into failure mode. So things just kept wobbling. I don't think that state of affairs is likely to continue. With that, on to the particulars.

The Year Ahead

Just about everything which evaded fate via gamed numbers, budgets, and balance sheets in 2009 seems destined to hit a wall in 2010. To pick an arbitrary starting point, it is hard to see how states like California and New York can keep staving off monumental changes in their scale of operations with further budget trickery. Those cans they've been kicking down the street have fallen through the sewer grate. What will they do? They can massively raise taxes or massively lay off employees and default on obligations - or they can do all these things. The net result will be populations with less income, arguably impoverished, suffering, and perhaps very angry about it. Welcome to reality. Will Washington bail the states out, too? I wouldn't be surprised to see them pretend to do so, but not without immense collateral damage in everybody's legitimacy and surely an increase in US treasury interest rates.

But backing up a moment, I'm writing between Christmas and New Year's Eve. The frenzied distractions of the holidays ongoing for much of Q4-2009 are still in force. In a week or so, when the Christmas trees are hauled out to the curbs (and it turns out that municipal garbage pickup has been curtailed for lack of funds) a picture will start to emerge of exactly how retail sales went leading up to the big climax. My guess is that sales were dismal. Reports of such will start a train of events that sends many retail companies careening into bankruptcy, including some national chains, leading to lost leases in malls and strip malls, leading to a final push off the cliff for commercial real estate, leading to the failure of many local and regional banks, leading to the bankrupt FDIC having to go to congress directly to get more money to bail out the depositors, leading again to rising interest rates for US treasuries, leading to higher mortgage interest rates for whoever out there is crazy enough to venture to buy a house with borrowed money, leading to the probability that there are few of the foregoing, leading to another hard leg down in house values because so few are now crazy enough to buy a house in the face of falling prices - all of this leading to the recognition that we have entered a serious depression, which is only a facet of the greater period of hardship we have also entered, which I call The Long Emergency.

This depression will be a classic deleveraging, or resolution of debt. Debt will either be paid back or defaulted on. Since a lot can't be paid back, a lot of it will have to be defaulted on, which will make a lot of money disappear, which will make many people a lot poorer. President Obama will be faced with a basic choice. He can either make the situation worse by offering more bailouts and similar moves aimed at stopping the deleveraging process - that is, continue what he has been doing, only perhaps twice as much, which may crash the system more rapidly - or he can recognize the larger trends in The Long Emergency and begin marshalling our remaining collective resources to restructure the economy along less complex and more local lines. Don't count on that.

Of course, this downscaling will happen whether we want it or not. It's really a matter of whether we go along with it consciously and intelligently - or just let things slide. Paradoxically and unfortunately in this situation, the federal government is apt to become ever more ineffectual in its ability to manage anything, no matter how many times Mr. Obama comes on television. Does this leave him as a kind of national camp counselor trying to offer consolation to the suffering American people, without being able to really affect the way the "workout" works out? Was Franklin Roosevelt really much more than an affable presence on the radio in a dark time that had to take its course and was only resolved by a global convulsion that left the USA standing in a smoldering field of prostrate losers?

One wild card is how angry the American people might get. Unlike the 1930s, we are no longer a nation who call each other "Mister" and "Ma'am," where even the down-and-out wear neckties and speak a discernible variant of regular English, where hoboes say "thank you," and where, in short, there is something like a common culture of shared values. We're a nation of thugs and louts with flames tattooed on our necks, who call each other "motherfucker" and are skilled only in playing video games based on mass murder. The masses of Roosevelt's time were coming off decades of programmed, regimented work, where people showed up in well-run factories and schools and pretty much behaved themselves. In my view, that's one of the reasons that the US didn't explode in political violence during the Great Depression of the 1930s - the discipline and fortitude of the citizenry. The sheer weight of demoralization now is so titanic that it is very hard to imagine the people of the USA pulling together for anything beyond the most superficial ceremonies - placing teddy bears on a crash site. And forget about discipline and fortitude in a nation of ADD victims and self-esteem seekers.

I believe we will see the outbreak of civil disturbance at many levels in 2010. One will be plain old crime against property and persons, especially where the sense of community is flimsy-to-nonexistent, and that includes most of suburban America. The automobile is a fabulous aid to crime. People can commit crimes in Skokie and be back home in Racine before supper (if supper is anything besides a pepperoni stick and some Hostess Ho-Hos in the car). Fewer police will be on guard due to budget shortfalls.

I think we'll see a variety-pack of political disturbance led first by people who are just plain pissed off at government and corporations and seek to damage property belonging to these entities. The ideologically-driven will offer up "revolutionary" action to redefine some lost national sense of purpose. Some of the most dangerous players such as the political racialists, the posse comitatus types, the totalitarian populists, have been out-of-sight for years. They'll come out of the woodwork and join the contest over dwindling resources. Both the Left and the Right are capable of violence. But since the Left is ostensibly already in power, the Right is in a better position to mount a real challenge to office-holders. Their ideas may be savage and ridiculous, but they could easily sweep the 2010 elections - unless we see the rise of a third party (or perhaps several parties). No sign of that yet. Personally, I'd like to see figures like Christopher Dodd and Barney Frank sent packing, though I'm a registered Democrat. In the year ahead, the sense of contraction will be palpable and huge. Losses will be obvious. No amount of jive-talking will convince the public that they are experiencing "recovery." Everything familiar and comforting will begin receding toward the horizon.

Markets and Money

I'll take another leap of faith and say that 6600 was not the bottom for the Dow. I've said Dow 4000 for three years in a row. Okay, my timing has been off. But I still believe this is its destination. Given the currency situation, and the dilemma of no-growth Ponzi economies, I'll call it again for this year: Dow 4000. There, I said it. Laugh if you will....

I'm with those who see the dollar strengthening for at least the first half of 2010, and other assets falling in value, especially the stock markets. The dollar could wither later on in the year and maybe take a turn into high inflation as US treasury interest rates shoot up in an environment of a global bond glut. That doesn't mean the stock markets will bounce back because the US economy will only sink into greater disorder when interest rates rise.

Right now there are ample signs of trouble with the Euro. It made a stunning downward move the past two weeks. European banks took the biggest hit in the Dubai default. Now they face the prospect of sovereign default in Greece, the Baltic nations (Estonia, Latvia, Lithuania), the Balkan nations (Serbia, et al), Spain, Portugal, Italy, Ireland, Iceland and the former soviet bloc of Eastern Europe. England is a train wreck of its own (though not tied into the Euro), and even France may be in trouble. That leaves very few European nations standing. Namely Germany and Scandanavia (and I just plain don't know about Austria). What will Europe do? Really, what will Germany do? Probably reconstruct something like the German Deutschmark only call it something else... the Alt.Euro? As one wag said on the Net: sovereign debt is the new sub-prime! The Euro is in a deeper slog right now than the US dollar (even with our fantastic problems), so I see the dollar rising in relation to the Euro, at least for a while. I'd park cash in three month treasury bills - don't expect any return - for safety in the first half of 2010. I wouldn't touch long-term US debt paper with a carbon-fiber sixty foot pole.

I'm still not among those who see China rising into a position of supremacy. In fact, they have many reasons of their own to tank, including the loss of the major market for their manufactured goods, vast ecological problems, de-stabilizing demographic shifts within the nation, and probably a food crisis in 2010 (more about this later).

Though a seemingly more stable nation than the US, with a disciplined population and a strong common culture with shared values, Japan's financial disarray runs so deep that it could crash its government even before ours. It has no fossil fuels of its own whatsoever. And in a de-industrializing world, how can an industrial economy sustain itself? Japan might become a showcase for The Long Emergency. On the other hand, if it gets there first and makes the necessary adjustments, which is possible given their discipline and common culture, they may become THE society to emulate!

I'm also not convinced that so-called "emerging markets" are places where money will dependably earn interest, profits, or dividends. Contraction will be everywhere. I even think the price of gold will retrace somewhere between $750 and $1000 for a while, though precious metals will hold substantial value under any conditions short of Hobbesian chaos. People flock to gold out of uncertainty, not just a bet on inflation. My guess is that gold and silver will eventually head back up in value to heights previously never imagined, and it would be wise to own some. I do not believe that the federal government could confiscate personal gold again the way it did in 1933. There are too many pissed off people with too many guns out there - and I'm sure there is a correlation between owners of guns with owners of gold and levels of pissed-offness. A botched attempt to take gold away from citizens would only emphasize the impotence of the federal government, leading to further erosion of legitimacy.

Bottom line for markets and money in 2010: so many things will be out of whack that making money work via the traditional routes of compound interest or dividends will be nearly impossible. There's money to be made in shorting and arbitrage and speculation, but that requires nerves of steel and lots and lots of luck. Those dependent on income from regular investment will be hurt badly. For most of us, capital preservation will be as good as it gets - and there's always the chance the dollar will enter the hyper-inflationary twilight zone and wipe out everything and everyone connected with it.

Peak Oil

It's still out there, very much out there, a huge unseen presence in the story, the true ghost-in-the-machine, eating away at economies every day. It slipped offstage in 2009 after the oil spike of 2008 ($147/barrel) over-corrected in early 2009 to the low $30s/barrel. Now it's retraced about halfway back to the mid-$70s. One way of looking at the situation is as follows. Oil priced above $75 begins to squeeze the US economy; oil priced over $85 tends to crush the US economy. You can see where we are now with oil prices closing on Christmas Eve at $78/barrel.

Among the many wishful delusions operating currently is the idea that the Bakken oil play in Dakota / Montana will save Happy Motoring for America, and that the Appalachian shale gas plays will kick in to make us energy independent for a century to come. Americans are likely to be disappointed by these things.

Both Bakken and the shale gas are based on techniques for using horizontal drilling through "tight" rock strata that is fractured with pressurized water. It works, but it's not at all cheap, creates plenty of environmental mischief, and may end up being only marginally productive. At best, Bakken is predicted to produce around 400,000 barrels of oil a day. That's not much in a nation that uses close to 20 million barrels a day. Shale gas works too, though the wells deplete shockingly fast and will require the massive deployment of new drilling rigs (do we even have the steel for this?). I doubt it can be produced for under $10 a unit (mm/BTUs) and currently the price of gas is in the $5 range. In any case, we're not going to run the US motor vehicle fleet on natural gas, despite wishful thinking.

Several other story elements in the oil drama have remained on track to make our lives more difficult. Oil export rates continue to decline more steeply than oil field depletion rates. Exporters like Iran, Mexico, Saudi Arabia, Venezuela, are using evermore of the oil they produce (often as state-subsidized cheap gasoline), even as their production rates go down. So, they have less oil to sell to importers like the USA - and we import more than 60 percent of the oil we use. Mexico's Pemex is in such a sorry state, with its principal Cantarell field production falling off a cliff, that the USA's number three source of imported oil may be able to sell us nothing whatsoever in just 24 months. Is there any public discussion about this in the USA? No. Do we have a plan? No.

A new wrinkle in the story developing especially since the financial crisis happened, is the shortage of capital for new oil exploration and production - meaning that we have even poorer prospects of offsetting world-wide oil depletion. The capital shortage will also affect development in the Bakken play and the Marcellus shale gas range.

Industrial economies are still at the mercy of peak oil. This basic fact of life means that we can't expect the regular cyclical growth in productive activity that formed the baseline parameters for modern capital finance - meaning that we can't run on revolving credit anymore because growth simply isn't there to create real surplus wealth to pay down debt. The past 20 years we've seen the institutions of capital finance pretend to create growth where there is no growth by expanding financial casino games of chance and extracting profits, commissions, and bonuses from the management of these games - mortgage backed securities, collateralized debt obligations, credit default swaps, and all the rest of the tricks dreamed up as America's industrial economy was shipped off to the Third World. But that set of rackets had a limited life span and they ran into a wall in October 2008. Since then it's all come down to a shell game: hide the giant pea of defaulted debt under a giant walnut shell.

Yet another part of the story is the wish that the failing fossil fuel industrial economy would segue seamlessly into an alt-energy industrial economy. This just isn't happening, despite the warm, fuzzy TV commercials about electric cars and "green" technology. The sad truth of the matter is that we face the need to fundamentally restructure the way we live and what we do in North America, and probably along the lines of much more modest expectations, and with very different practical arrangements in everything from the very nature of work to household configurations, transportation, farming, capital formation, and the shape-and-scale of our settlements. This is not just a matter of re-tuning what we have now. It means letting go of much of it, especially our investments in suburbia and motoring - something that the American public still isn't ready to face. They may never be ready to face this and that is why we may never make a successful transition to whatever the next economy is. Rather, we will undertake a campaign to sustain the unsustainable and sink into poverty and disorder as we fight over the table scraps of the old economy... and when the smoke clears nothing new will have been built.

President Obama has spent his first year in office, and billions of dollars, trying to prop up the floundering car-makers and more generally the motoring system with "stimulus" for "shovel-ready" highway projects. This is exactly the kind of campaign to sustain the unsustainable that I mean. Motoring is in the process of failing and now for reasons that even we peak oilers didn't anticipate a year ago. It's no longer just about the price of gasoline. The crisis of capital is making car loans much harder to get, and if Americans can't buy cars on installment loans, they are not going to buy cars, and eventually they will not be driving cars they can't buy. The same crisis of capital is now depriving the states, counties, and municipalities of the means to maintain the massive paved highway and street system in this country. Just a few years of not attending to that will leave the system unworkable.

Meanwhile President Obama has given next-to-zero money or attention to public transit, to repairing the passenger railroad system in particular. I maintain that if we don't repair this system, Americans will not be traveling very far from home in a decade or so. Therefore, Mr. Obama's actions vis-à-vis transportation are not an intelligent response to our situation. And for very similar reasons, the proposal for a totally electric motor vehicle fleet, as a so-called "solution" to the liquid fuels problem, is equally unintelligent and tragic. Of course something else that Mr. Obama has barely paid lip-service to is the desperate need to retool our living places as walkable communities. The government now, at all levels, virtually mandates suburban arrangements of the most extremely car-dependent kind. Changing this has to move near the top of a national emergency priority list, if we have one.

Even with somewhat lower oil prices in 2009, the airlines still hemorrhaged losses in the billions, and if the oil price remains in the current zone some of them will fall back into bankruptcy in 2010. Oil prices may go down again in response to crippled economies, but then so will passengers looking to fly anywhere, especially the business fliers that the airlines have depended on to fill the higher-priced seats. I believe United will be the first one to go down in 2010, a hateful moron of a company that deserves to die.

My forecast for oil prices this year is extreme volatility. A strengthening dollar might send oil prices down (though that relationship has temporarily broken down this December as both oil prices and the dollar went up in tandem for the first time in memory). So could the cratering of the stock markets, or a general apprehension of a floundering economy. But the oil export situation also means there is less and less wiggle room every month for supply to keep pace with demand, even in struggling economies if they are dependent on foreign imports. Another part of the story that we don't pay attention to is the potential for oil scarcities, shortages, and hoarding. We may see the reemergence of those trends in 2010 for the first times since 1979............

...........Political upheaval can get underway pretty quickly, without a whole lot of warning. I'm still waiting to hear the announced 2009 bonuses for the employees of the TBTF banks. All they said before Christmas was that thirty top Goldman Sachs employees would be paid in stock instead of money this year, but no other big banks have made a peep yet. I suppose they'll have to in the four days before New Years. I still think that could be the moment that shoves some disgruntled Americans into the arena of protest and revolt. Beyond that, though, there is plenty room for emotions to run wild and for behavior to get weird.

President Obama will have to make some pretty drastic moves to salvage his credibility. I see no sign of any intention to seriously investigate or prosecute financial crimes. Yet the evidence of misdeeds piles higher and higher - just this week new comprehensive reports of Goldman Sachs's irregularities in shorting their own issues of mortgage-backed securities, and a report on the Treasury Department's issuance of treasuries to "back-door" dumpers of toxic mortgage backed securities. And on Christmas Eve, when nobody was looking, the Treasury lifted the ceiling on Fannie Mae and Freddie Mac's backstop money to infinity. Even people like me who try to pay close attention to what's going on have lost track of all the various TARPs, TALFs, bailouts, stimuli, ZIRP loans, and handovers to every bank and its uncle in the land.

Good luck to readers in 2010. To paraphrase Tiny Tim: God help us, every one.........

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More excellent info from Rice Farmer:

http://www.ricefarmer.blogspot.com/

US States’ Fiscal Deterioration

The fiscal situation of US states is going from bad to worse. California is $68 billion in the hole and begging for help from the federal government. Help from the federal government of course means that taxpayers in other states will foot the bill. There goes the nation’s love for California. Arizona is staring into the abyss. New York State parks are shutting down. New Jersey is slashing its budget. Hawaii’s tourism decline is battering the beleaguered state (see the recent post on Hawaii, below). So many people have defected from Michigan that the state’s population is now below 10 million. And nationally, state and local governments have $530 billion in unfunded pension liabilities. This last item is the tip of the iceberg, as pension systems around the world are in big trouble.This is what happens to a system predicated on economic growth when growth slows and begins its decline. In that connection, take a look at this chart and then assure me that we will return to the good old days.

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http://www.ricefarmer.blogspot.com/

Some more great info at the Rice Farmer Blog:

Sunday, December 20, 2009

America’s Really, Really Big Debt Problem

This isn’t the first time I’ve written about the absolutely hopeless debt situation that the US faces. Perhaps you think I am exaggerating. World’s largest economy! High bond rating! Frontier spirit! Yes indeed, these and other sterling qualities of the US and its people will pull the fat out of the fire. Just in time, as in a Hollywood movie.

But even sterling qualities cannot prevail over insurmountable odds. On that note, I turn your attention to a quite shocking article over at Forbes, “Trillions Of Troubles Ahead: A crushing burden of debt threatens to sap America’s growth for years to come.” Sap America’s growth? You have got to be kidding. Just check out some of these desperate, impossible figures.

According to the article, adding up public, household, and corporate debt comes to a whopping 557% of GDP. And then it goes on to say, “Add the unfunded portion of entitlement programs and we’re at 840% of GDP.” Allow to remind you to breathe here.

Even the writer of the article recognizes that America’s situation is worse than Japan’s, when you start adding up all the numbers. So when finance/business gurus or politicians tell us that somehow, everything will turn out all right, we can safely conclude that (1) they are self-deluded, or (2) they are lying through their teeth.

For more fun facts, read the whole article. And get ready for the defaults.

State of Hawaii on the Ropes

Things are hard everywhere. But in some places, they’re harder. Unless there is a dramatic turnaround, things could get really ugly in Hawaii. “Hawaii dimmed by severe cuts” gives us a snapshot of how the island paradise is falling apart. Food sanitation, homelessness, education cutbacks, and what have you — Hawaii is the poster child of down-at-heel states. Hawaii’s situation is particularly serious because of its isolation. If food and energy imports were curtailed, deterioration would proceed more quickly than a in state with more ready resources at hand. So here’s another canary in the coal mine. When it falls off its perch is anyone’s guess, but although it might be the first, it certainly won’t be the last.

Friday, December 18, 2009

Paved Roads Revert to Gravel

An AP news story tells how insufficient infrastructure funding is pushing local governments to return some stretches of paved road to gravel road. First street lamps, then paved roads. What next?

Pavement, of course, is a hallmark of civilization. In previous ages, people used stones and bricks. Now we have asphalt and concrete. People have considered it a sign of progress to a higher state of existence when a gravel road is paved. So it is in these new times — the latter days of the Empire — that pavement returning to gravel signifies a transition to a new state. Whether one considers it a “higher state” or not will be hotly debated. Nevertheless, it is happening, just like reducing bus and subway services, and downsizing cities.

Keep watching for these and other signs of the times.

Thursday, December 17, 2009

Sovereign Debt and Austerity Budgets

Governments are digging themselves deeper and deeper into debt, beating a dead horse in a bid to ramp up the economy and bring back the good times. Now even Germany has decided to embark on record borrowing to stave off the worst. National and local governments are slashing expenditures and introducing austerity budgets.

The second linked article notes, “By the end of 2009, global sovereign debt will hit almost $50 trillion.”

$50 trillion! And who will pay that back? Any realistic person knows the answer to that: nobody. Of course some of it will be paid back, but there’s a disaster in the making. So what if the EU bails out Greece? That wouldn’t make the debt go away. So far the US has been bailed out by China and Japan, but there are limits. Japan itself is in very dire straits (world’s second-highest debt-to-GDP ratio), and it’s anybody’s guess when the Chinese bubble pops. Same thing within the US: Even if the federal government bails out states, it doesn’t solve any problems in the long run. The Day of Reckoning will surely arrive.

Since the only two ways to deal with debt are paying it off or defaulting, and because paying off $50 trillion is clearly impossible, some big fish will be going belly-up.

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http://ampedstatus.com/the-critical-unraveling-of-us-society

....Report Contents:———————

I: U.S. Societal Breakdown———————

II: Environmental Crisis———————

III: The Obama Myth———————

IV: Economic Coup - Theft of Trillions———————

V: National Emergency

The economic elite have launched an attack on the U.S.public and society is unraveling at an increased rate.

I: U.S. Societal Breakdown

You may have missed it in the mainstream news media, but statistical societal indicators are reading red across the board. Before exposing the root causes of this breakdown, let’s look at some vital statistics and facts......

Read the whole thing at the address above. It will be worth your time. As Freeacre would say,Gaaaaaaah!

Ain't no rock big enough to hide under with this kind of stuff providing for a grim future for us all :-(

Ok now its off to bed where Ben Bernake, as one of the Four Horsemen of the apocalypse chases me around in my dreams, or maybe something worse!

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http://www.marketskeptics.com/2009/12/preview-of-work-in-progress.html

.........If you read an economic, financial, or political analysis for 2010 that mention the food shortage looming next year, throw it in the trash, as it is worthless. There is overwhelming, irrefutable evidence that the world will run out of food next year. When this happens, the resulting triple digit food inflation will lead to the collapse of the dollar, the treasury market, derivative markets, and the global financial system. The US will experience economic disintegration.

The 2010 Food Crisis Means Financial Armageddon

Over the last two years, the world has experience faced a series of unprecedented financial crisis: the collapse of the housing market, the freezing of the credit markets, the failure of Wall Street brokerage firms (Bear Stearns/Lehman Brothers), the failure of Freddie Mac and Fannie Mae, the failure of AIG,Iceland’s economic collapse, the bankruptcy of the major auto manufacturers (General Motors, Ford, and Chrysler), etc… In the face of all these challenges, the demise of the dollar, derivative markets, and the modern international system of credit has been repeatedly anticipated and feared. However, all these doomsday scenarios have so far been proved false, and, despite tremendous chaos and losses, the global financial system has held together.

The 2010 Food Crisis is different. It is THE CRISIS. The one that makes all doomsday scenarios come true. The government bailouts and central bank interventions which have held the financial world during the last two years will be powerless to prevent the 2010 Food Crisis from bringing the global financial system to its knees.

Astounding lack of awareness

The world is blissful unaware that the greatest economic/financial/political crisis ever seen is a few months away. While it is understandable that general public has no knowledge of the economic pandemonium headed their way, that same ignorance on the part of professional analysts, economists, and other highly paid financial "experts” is mind boggling, as it takes only the tiniest bit of research to realize something is going critically wrong in agricultural market.

USDA estimates for 2009/10 are an insult to common sense.

All someone needs to do to know the world is headed is for food crisis is to stop reading USDA’s crop reports predicting a record soybean and corn harvests and listen to what else the USDA saying.

Specifically, the USDA has declared half the counties in the Midwest to be primary disaster areas this year, including 274 Midwest counties in the last 30 days alone. These designated are based on the criteria of a minimum of 30 percent loss in the value of at least one crop in a county. The chart below shows counties declared primary disaster areas by the Secretary of Agriculture and the president of the United States.

The same USDA that is predicting record harvests is also declaring disaster areas across half because of catastrophic crop losses! To eliminate any doubt that this might be an innocent mistake, the USDA is even predicting record soybean harvests in the same states (Oklahoma, Louisiana, Arkansas, and Alabama) where it has declared virtually all counties to have experienced 30 percent production losses. It doesn’t take a rocket scientist to realize that these conflicting accounts mean the USDA is lying.

USDA motivated by fear of higher food prices

The USDA is terrorized by the implications of higher food prices for the US economy, most likely because it realizes the immediate consequence of sharply higher food will be the collapse of the US Treasury market and the dollar, as desperate governments and central banks dump their foreign reserves to appreciate their currencies and lower the cost of food imports. Fictitious USDA estimates should be seen as proof of the dire threat posed by higher food prices, as the USDA would not have turned its production estimates into a grotesque mockery of reality if it didn't believe the alternative to be apocalyptic.

Dynamics behind 2010 Food Crisis

Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world was experiencing a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Meanwhile, China and other Asian exporters, in effort to preserve their economic growth, were unleashing domestic consumption long constrained by inflation fears, and demand for raw materials, especially food staples, was exploding as Chinese consumers worked their way towards American-style overconsumption, prodded on by a flood of cheap credit and easy loans from the government.

Normally, food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened, because the USDA, instead of adjusting production estimates down to reflect decreased production, has been adjusting estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed rise in food prices by ensuring a severe food shortage in 2010.

USDA induced overconsumption leading to disaster

It is absolutely key to understand that the production of agricultural goods is a fixed, once a year cycle (or twice a year in the case of double crops). The wheat, corn, soybeans and other food staples are harvested in the fall/spring and then that is it for production. It doesn’t matter how high prices go or how desperate people get, no new supply can be brought online until the next harvest at the earliest. The supply must last until the next harvest, which is why it is critical that food is correctly priced to avoid overconsumption, otherwise food shortages will occur.

The USDA, by manufacturing the data needed to keep the supply demand in balance, has ensured that agricultural commodities are incorrectly priced, which has lead to overconsumption and has guaranteed disaster next year when supplies run out...........

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http://www.independent.co.uk/arts-entertainment/films/features/the-road-a-film-that-every-one-of-us-needs-to-see-1841829.html

The Road: A film that every one of us needs to see

What would happen if some catastrophe laid waste to the earth and society broke down?

As the credits roll and we fall stricken and tear-stained out onto the dark streets of Soho, it seems fitting that I am accompanied by the director of the second bleakest film ever made – Franny Armstrong, creator of the The Age of Stupid. The bleakest film ever made we have just endured together, over two relentless, harrowing hours, and are now so emotionally raw that we know not where we are going, nor do we much care. It doesn't seem to matter. "Oh my God," moans Franny, repeatedly, head in hands.........

......... The Road is about the human condition, and how humans might behave to each other if the worst does happen, in whatever way. If we ever do push the planet so far that the majority of the human race is left without food or water in uninhabitable areas, what will it feel like to be one of the starving millions? Initially we might all come together in adversity, in a kind of global blitz spirit. McCarthy admits this possibility: at first, others had "come to help" the survivors. But "within a year there were fires on the ridges and deranged chanting. The screams of the murdered. By day, the dead impaled on spikes along the road." We won't stay united for long.

How can anyone prepare for this kind of outcome? Over the years, I have received many emails from people asking where they might need to set up home if runaway global warming begins. New Zealand, perhaps? Norway? I'm sure all the questioners share the same survivalist fantasy, the one where they take their family into the hills and survive on a small farmstead, stockpiling rice and baked beans and keeping a loaded rifle by the well-guarded front door. The Road exposes even this limited comfort as being futile: sooner or later the ammunition will run out, the pounding on the door will begin to splinter away the hinges, and the ravening, faceless horde will pour in. If the worst happens the truth is that there is nowhere to hide, and the road itself will offer no comforts. Of that we can be certain...........

Check out the rest of the great review of this new film at the address listed above. Yikes! If you were not having nightmares already about our dire future, this film looks like it will do the trick for sure!

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http://www.globalresearch.ca/index.php?context=va&aid=16569

2010: "The Year of Severe Economic Contraction"

.........Policymakers have decided to create conditions that are favorable to financial sector consolidation and the further privatization of public assets. The economy is being strangled by design........

............While financial institutions have been propped up with zero-rates, myriad lending facilities and boatloads of Fed liquidity, the real economy continues to on a downward path. As households rebalance accounts and increase savings, the signs of distress are becoming more apparent. In Europe, the ECB and IMF have begun to use the financial crisis to wrest control of the budgets of deficits-plagued nations to apply business-friendly austerity measures. The economic meltdown--that was generated by overleveraged banks trading dodgy investment paper--is now being used to assert corporate/bank control over sovereign nations. Greece, Ireland, Iceland, Ukraine, Latvia, Lithuania, Portugal and Spain are all presently in the crosshairs of neoliberal restructuring. Surely, the same policies will be applied within the United States under the guidance of supply-side economist and chief advisor to the president, Lawrence Summers. Thus, in 2010, economic contraction will continue to force state and local governmnets to lay off millions of more workers while public assets and services are made available at firesale prices to private industry.

Debt deflation and deleveraging will continue into 2011, while foreclosures, personal bankruptcies and defaults continue to mount. The public's frustration with ineffective government policies, is likely to change from pessimism to rage on short notice. The prospect of social unrest or sporadic incidents of violence can no longer be excluded.

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http://www.globalresearch.ca/index.php?context=va&aid=16488

Obama's Big Sellout

The president has packed his economic team with Wall Street insiders

...........The point is that an economic team made up exclusively of callous millionaire-assholes has absolutely zero interest in reforming the gamed system that made them rich in the first place. "You can't expect these people to do anything other than protect Wall Street," says Rep. Cliff Stearns, a Republican from Florida. That thinking was clear from Obama's first address to Congress, when he stressed the importance of getting Americans to borrow like crazy again. "Credit is the lifeblood of the economy," he declared, pledging "the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money."

A president elected on a platform of change was announcing, in so many words, that he planned to change nothing fundamental when it came to the economy. Rather than doing what FDR had done during the Great Depression and institute stringent new rules to curb financial abuses, Obama planned to institutionalize the policy, firmly established during the Bush years, of keeping a few megafirms rich at the expense of everyone else..............

Read the rest of this great article by Matt Taibbi to learn more about how Obama has installed the very people who brought this country to the edge of collapse into all the key positions of power regarding how this economy is ultimately run. Clearly they are showing that they will be doing all they can to preserve the mass casino they built which has worked so effectively at transfering obscene amounts of wealth from the poorer classes to the rich.

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http://www.joebageant.com/joe/2009/12/the-devil.html

The Devil and Mr. Obama

Well lookee here! An invite from my limey comrades to recap Barack Obama's first year in office. Well comrades, I can do this thing two ways. I can simply state that the great mocha hope turned out to be a Trojan horse for Wall Street and the Pentagon. Or I can lay in an all-night stock of tequila, limes and reefer and puke up the entire miserable tale like some 5,000 word tequila purged Congolese stomach worm. I have chosen to do the latter........

Read the rest of this article, an excellent rant indeed!

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http://carolynbaker.net/site/content/view/1423/1/

CRITICALLY THINKING COPENHAGEN

........First of all, I have absolutely no doubt that climate change is real AND is unequivocally caused by humans. Along with myriad other topics, I've been researching this one for years, and as some of you know who've attempted, I refuse to debate my position for a host of reasons which I am also unwilling to discuss. Furthermore, why would one debate phenomena that are already happening. Isn't that a lot like debating whether the sun will rise in the east tomorrow morning?

The incoherent assumption made by climate change deniers when encountering the argument that climate change is both real and human-caused is that if one subscribes to these two positions, one is invariably opening oneself to legislation by a world government or New World Order. It is assumed that anyone arguing these two realities is begging for domination by a fascist international dictatorship.

Similar incoherent assumptions are shared by climate change proponents and Copenhagen enthusiasts. The assumption, which in my opinion could not be more naive, is that climate change is controllable, that it can be stopped or reversed, and that the governments of industrial nations will do anything beyond giving lip service to even attempting to eradicate it.

What both proponents and deniers do not get is that, as with nearly all of the challenges our species currently faces, we are dealing not with a problem that can be solved, but with a predicament that is unsolvable and can only be responded to. I refer you again to an article sent out in todays Daily News Digest, ”Climate Change Is Inevitable: It’s Time To Adapt.” I would also reiterate the articles recently written by Adam Sacks, particularly “The Fallacy of Climate Activism.”

The crux of these pieces is the reality that climate change cannot be stopped and must be adapted to. To this I would add: adapted to on the local level. Those who accuse me of being putty in the hands of the New World Order because years ago I made up my mind (long before ”The Inconvenient Truth”) about the reality of climate change and its human origins and am no longer willing to debate the topic—those folks have not yet grasped the impossibility of addressing the majority of the converging crises bearing down on the planet on anything but the local level.

Not the least of these crises is the tyranny of global government.

But I ask those who lie awake nights worrying about it: What is it you plan to do to stop it? What makes you think its stoppable in the first place?

Were all familiar with the slogan, “think globally and act locally,” but I challenge anyone concerned with these issues to start thinking and acting locally. This is not to imply that one should ignore what ones national government is doing or disregard the machinations of the international ruling elite. However, what those frantic about what the NWO is up to usually disregard (and often deny as well), is the reality of Peak Oil, Peak Water, Peak Money, and as goes the title of Richard Heinbergs book, Peak Everything. To assume that the NWO is going to have the resources necessary to converge on every hamlet and village on earth and obliterate innocent citizens attempting to survive and thrive, is a credulous supposition that does not take other daunting realities into account.

As the collapse of industrial civilization intensifies, exacerbated by climate chaos and natural disasters, I believe that it will become painfully obvious that truly discerning individuals must organize with others in their neighborhoods and communities with resilience and discernment to adapt to climate events, energy depletion, and the end of money as we know it. Focusing predominantly on the NWO and minimizing local mobilization in response to all of the life-threatening challenges faced by every species on earth is a tragic waste of energy which will manifest horrific consequences in the coming years.........

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http://www.informationclearinghouse.info/article24115.htm

Walled in by Myth and Deceit

........Unfortunately for the Palestinians and for the people of the mid-east, Ben Gurion’s lies and deceptions have insulated Israel from censure for stealing the land of Palestine from its rightful indigenous population. As Sand puts it, “The book (Bible) was transferred from the shelf of theological tracts to the history section, and adherents of Jewish nationalism began to read it as if it were reliable testimony to processes and events” (127).

On May 14th of 1948, President Harry S. Truman received a letter from the Jewish Agency in Mandate Palestine seeking his support, indeed his recognition, of the newly declared State of Israel. In that letter the Jewish Agency declared in no uncertain terms that their government of the new state would bring peace to the area since it would abide by and uphold the United Nations Partition Plan that provided for two states in Palestine, one for the Palestinians and one for the Jews. What the letter did not say was that Jewish forces had been invading and destroying Palestinian villages and towns for the preceding months, most notably, and only a month before the letter, the village of Deir Yassin where a brutal massacre had been inflicted on its inhabitants. The consequence of this deception was the eradication and razing of 418 towns and villages by the combined Jewish forces, the ethnic cleansing of approximately 750,000 natives to refugee camps and to neighboring lands, and the annexation of their lands and homes to the new Israeli state. Yet another form of mythistory created by deception.

All of which brings us to Ben Gurion’s “forging” of the hundreds of thousands of new immigrants into a unified people by means of a Mafia-like control over the masses of Jews brought to Palestine before 1947. The absoluteness of this control as established in documents seized by the Mandate Police and kept by Sir Richard Catling in the Rhodes House Archives at Oxford, included forced taxation to support the military arm of the Agency, the violence used to control “laggards,” the availability of jobs once in Palestine, the network of Zionists in Europe and England to maintain control of desirable immigrants versus undesirable, as well as the control of politicians to enable the Zionist terror against the Mandate forces to continue unhindered, the means of communication within the Jewish community and of all external communication about the Jewish community especially in England and America, and the education of all youth followed by forced enlistment in the Jewish armed forces. Ilan Pappe’s The Ethnic Cleansin
g of Palestine corroborates the documents secured by Catling.

Today that ethnic cleansing continues because the Mafia-like controls imposed on the Jews immigrating to Palestine in those early years still exists through the almost total control of the people of Israel by the Israeli military and by the Zionist government’s control of the United States Congress through the coercion of the Jewish lobbies as noted by Mearsheimer and Walt as evidenced in the Congress’ acquiescence to the dictates of AIPAC. One need only look at the most recent capitulation to Israel’s demands by our Congress as it lobbied against the Goldstone Report.

Why should we care that Ben Gurion’s deception became the fodder of the Jews brought to Palestine during the Mandate period? The answer is clear enough. The Zionists controlled all Jews entering Palestine as noted above including the molding of their minds to a religion that was a lie and rights to land that did not exist. That same mythistory was conveyed to the west in numerous books based on interpretations of the Bible as historically accurate renderings of a race of people that do not exist as a race but who believe in truths dependent on hearsay, the mythological flight of a people from Egypt and their wandering in the desert for forty years, an exodus that never happened, the conquering of the Canaanites that did not occur, and the existence of ancient kingdoms for which there is no evidence. Indoctrinated with those beliefs, the Jews under Ben Gurion’s oligarchy believed that they were coming home to a land they had an historical right to regardless of the reality that it was inhabited by others for c
enturies. That belief allowed for no acceptance of others as neighbors on a land for believers alone, a strange definition of a democracy.

The horror of this deception cuts two ways: the innocent Jews fleeing Nazi Europe were commandeered for the Zionist cause which used their faith for both political and economic ends and the sympathetic allies of the west, conscious of the devastation wrought on the Jewish people by the Nazi regime and feeling guilt for allowing it to happen became innocent accomplices of those willing to manipulate truth to gain power, land, armaments, and wealth. As a result of this baptism in deceit, the Jewish state now grapples with hordes of fanatical “settlers” that firmly believe they have a right not only to the land of Palestine but to the killing of Palestinians because they live on the land given only to the Jews by G-d Himself. Even more horribly, the United States and the United Kingdom have been seized by the Zionist forces through the manipulations of the lobbies that control our representatives thus providing the means to sustain the brutality of the Israeli States’ subjugation of the indigenous people of Pale
stine against the will of the citizens of these alleged democratic countries.

And this brings us to the Wall that has been built around Barak Obama. Obama is a captive of the Zionist forces that control America’s representatives, its corporations and its mass communications. No one disputes the intent of the American people when they elected Obama as President. He was the man to bring change—to end the wars, to bring health care to all Americans, to fight for the environment, to expand educational opportunities for all—all promises that require the support of the Congress. Yet despite his overwhelming victory at the polls, he is a virtual lame duck President. Why?

Early in his Presidency, Obama made overtures to the Arab world and to Russia and the European Union asserting that America was no longer the pre-eminent world power that thirsted for world domination. His Cairo speech appeared to open a dialogue that suggested the possibility for peace through a return to the Saudi Prince’s Plan based on the 1967 UN resolution, a plan that provided full recognition of the State of Israel by all Arab nations. Almost immediately, Israel reacted, questioning his faithfulness to the Jewish State. From that time to this, Obama’s mid-east policies have towed the line even though he has had to bow before the likes of Netanyahu and Lieberman. Why?

The answer is simple enough. With the Congress controlled by AIPAC and its affiliates, Obama can do nothing requiring Congress’ action if he opposes or even seems to oppose what the Zionists’ dictate. Perhaps the most blatant decision by the Obama administration that confirms this perspective is the decision to object to the Goldstone Report that condemns Israel for crimes against humanity, crimes identified and confirmed by B’Tselem in Jerusalem, the Jewish states’ Human Rights organization, the International Red Cross, and Amnesty International.
Now we know what Obama must have known these past few months, that the United Nations Human Rights Council has proposed a Resolution on “The Human rights situation in the Occupied Palestinian Territory, including East Jerusalem.” This resolution endorses unqualifiedly the “recommendations contained in the report, and calls upon all concerned parties including UN bodies, to ensure their immediate implementation in accordance with their respective mandates.” But the Obama administration and our Congress has opposed what the world understands to be a valid and true account of the brutal actions of the Zionist government of Israel.

There is a wall around this President, a wall he did not know existed when he made his famous speech in Berlin when still a candidate; a wall he did not know he could not tear down even if he became President; a wall that has been built by powers that control America not by the people of America; a wall that uses fear as its mortar, bigotry and racism as its buttress, coercion as its cement, and money as its allurement to maintain control. It is a wall created out of myth twisted into history, taught repetitively as truth till it becomes truth, deceptively designed to drag this once free nation into the depths of darkness and despair that allow the few to control the multitude and in the process to enslave the minds that would be repulsed by what they support if they knew the truth behind the myths.

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http://www.statesman.com/life/content/life/stories/books/2009/12/06/1206hedgesweb.html

EMPIRE OF ILLUSION

Chris Hedges sees, in America, a nation that has lost its way. He sees a country that places prosperity above principle, celebrity above substance, spectacle above nuance and introspection. He sees a "timid, cowed, confused" populace disconnected from language, governed by consumerism, ambivalent toward the common good, enamored by an American myth that has no basis in the American reality.

"We are a culture that has been denied, or has passively given up, the linguistic and intellectual tools to cope with complexity, to separate illlusion from reality," Hedges writes in his new book, "Empire of Illusion: The End of Literacy and the Triumph of Spectacle." "We have traded the printed word for the gleaming image. Public rhetoric is designed to be comprehensible to a ten-year-old child or an adult with a sixth-grade reading level.

"Most of us speak at this level, are entertained and think at this level. We have transformed our culture into a vast replica of Pinocchio's Pleasure Island, where boys were lured with the promise of no school and endless fun. They were all, however, turned into donkeys — a symbol, in Italian cutlure, of ignorance and stupidity."

Hedges paints a bleak picture in this book — all the more sobering when one considers that this Pulitzer Prize-winning journalist has spent decades covering violence and war around the globe, in Africa and the Balkans, South America and the Middle East. He states, plainly, that the age of American Imminence is over. Our standard of living is going to drop. Our consumptive tendencies are going to change. Yet the biggest problem, as Hedges sees it, is American denial — an eagerness to cling to the good-times, anything-we-want illusion, "the the dark message of corporatism," at the expense of this perilous end-of-empire reality.........

........American Illusion

"You strive toward a dream; you live within an illusion. And societies that cannot distinguish between illusion and reality die. If you look at the twilight periods of all great empires – Roman, Ottoman, Austro-Hungarian — there is, in those final moments, not only a deep moral degeneration but an inability to distinguish what is real from fantasy.

"During the election between McCain and Obama, we were waging two wars, pre-emptive wars that under post Nurmberg laws are defined as criminal wars of aggression. We were running offshore penal colonies where we openly tortured individuals stripped of all rights. We had suspended habeas corpus. We had engaged in warrant-less wiretapping and eavesdropping on tens of millions of Americans . ... And yet we spoke of ourselves as the greatest democracy on Earth – and that as the embodiment of the highest values, we had a right to deliver it to others by force."


American Values

"We talk about (the importance of) American culture. (But in truth): American culture was destroyed after World War I, with the rise of Madison Avenue and the implanting of mass corporate culture which sought to instill new values into the American consciousness. Instead of the values of thrift, communitarianism, modesty (and) self-sacrifice, we developed, courtesy of the advertising industry, this cult of self — this deep narcissism and hedonism that disconnected us from others and gave us mass corporate culture.

"So it's not American culture that we embrace for the moment. It's not American culture we export. It's corporate culture. And I think that altered situations will force us back into a moral system that defies the dark ethic of corporatism. And hopefully reconnects us to those values within our past that I think were brought us closer to fostering the building of common good.


'Vocational America'

"Education in the United States has become vocational. ... Many of the state universities, community colleges and online for-profit universities — that are growing faster than any other university sentiment — have no use for the Humanities, literature, history, philosophy, classics, art. Why? Because the Humanities ask the kind of broad questions of meaning that those systems that prize above all else vocational workers do not want to ask.

"The problem with our vocational system is that it measures and rewards a very narrow kind of intelligence, a kind of analytical intelligence to create legions of systems managers — people who have a drone-like ability to work for very long hours, and (have) a kind of penchant or capacity for manipulation, but don't know how to question assumptions or structures.".........

........Capitalism

"Capitalism is probably ingrained in human nature. But there are different kinds of capitalism. The kind of penny capitalism that I saw at the farmer's market in the town I grew up in is not a dangerous form of capitalism ... but corporate capitalism is something else. Corporate Capitalism is cannibalizing the nation.

"Karl Polanyi in 1944 wrote a brilliant work called 'The Great Transformation' in which he talked about the inevitable totalitarianism and wars and breakdown that was caused by a system that permitted unregulated capitalists to flourish. When everything becomes a commodity, including human labor, when the natural world becomes a commodity that is valued only by its capacity to generate profit, then you commit collective suicide, because you exhaust human beings and human resources, you deplete them, until they die. And that's precisely what's happening. Look at the oil and natural gas industry, the coal industry, our permanent war economy. ..."


Capitalism and Celebrity

"The ethic of celebrity culture ... is the ethic of unfettered capitalism. What are the values promoted on reality television programs like "Survivor"? A capacity for manipulation. Building false friendships (with) those you betray. A destruction of real community and solidarity. Basically: the traits of psychopaths. And what do you get in return? Fleeting fame and money.

"Well, that is the ethic of Wall Street. That is what allowed the titans of large corporations to fleece their shareholders, people who had put month by month small sums aside for their retirement, for their college, destroy these institutions like Lehman Brothers, and then like Richard Fuld did, walk away with a severance package of $45 million. The ethic of celebrity culture is the ethic of Wall Street. And the crisis that faces the country at its core is not so much an economic crisis or a political crisis as it is a moral crisis.

The Bankruptcy of Liberalism

"I fear more the bankruptcy of liberalism than I do the fanaticism of the right. ... I think the book for our times is probably Dostoyevsky's "Notes from the Underground," (1864) in which he writes about a defeated dreamer, who becomes a cynic at a time when liberalism is bankrupt and who descends into a state of moral nihilism ... which understood precisely where his country was going."


The Failure of Democrats

"Those of us who care about the working class in this country – and much of my own family comes from the working class — should have walked out on the Democratic party in 1994 when they passed NAFTA. That thrust a knife in the back of the working class in this country – followed by Clinton's so-called welfare reform, followed by a Democratic party that quite consciously did the bidding of corporations to receive (campaign) money. That was the intent. So by the 1990s, the Democratic party had parity with the Republicans in terms of corporate donations — and of course now they get more.

"The bankruptcy of American liberalism is that it continued to speak against war, continued to speak on behalf of the working class, continued to support constitutional rights, and yet backed the party (the Democratic party) that betrayed all of these values. This wasn't lost on the working class. The anger of the working class toward liberals in this country is not misplaced, because liberals continue with that type of hypocrisy. They continue to espouse values and yet support political parties that tear down those values. And that's very dangerous. . . .

"The progressive movements in this country rely on the working class to propel our democracy fowrward. (But) our working class has been decimated. It doesn't exist any more, because there are no jobs, no meaningful jobs. And so that rage and frustration which you're already seeing leaping up around the fringes of society — and of course America is a very violent nation, that undercurrent of violence runs very deep — is presaging, I fear, a backwash. But a right wing backwash. And that is largely because the liberal class in this country became gutless."


Health Care

"Any discussion of health care in this country should begin with the factual acknowledgment that the for-profit health care industry is a problem and must be destroyed. This is an industry that's not only responsible last year for the deaths of 20,000 Americans who could not get proper health care, medical coverage. But it (is) legally allowed (to) hold sick children hostage while parents bankrupt themselves to try to save their sons and daughters. This is a system, in theological terms, of death.

"Our for-profit health care system makes money off of death, the same way our arms merchants make money off of death. And the inability within our country to face this reality, the inability in a corporatized media to even have this discussion is, I think, evidence of the power of the corporate state, which drives debate, which permits institutions that are morally bankrupt to have a seat at the table. And that is symptomatic of a society in deep decay."...........

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http://www.globalresearch.ca/index.php?context=va&aid=16414

Trickle-Up Economics

Goldman Sachs senior executives are arming themselves with New York gun permits, according to Alice Schroeder on Bloomberg.com. The banksters "are now equipped to defend themselves if there is a populist uprising against the bank."

One can understand why the banksters are worried. The company, now known as Gold Sachs, has a large responsibility for the financial crisis and the fraudulent "securities" that wrecked the world economy and Americans' pensions. A former Gold Sachs CEO had control of the U.S. Treasury during the Bush regime, from which he diverted $750 billion to bail out the banks, thus supplying them with free capital. Gold Sachs made $27,000 million during the first three quarters of 2009 and is paying out massive bonuses, leaving the busted taxpayers with the debt and interest charges.

Little wonder the U.S. can't afford health care for the uninsured and unemployed. It is far more important to finance multimillion-dollar bonuses for investment bankers. I mean, what would we do without capitalism?

Of course, it is not really capitalism. It is an oligarchy or a financial plutocracy.

In a failed state, the government's priorities are totally separate from those of the people. The U.S. can't afford health care or a bailout for jobless homeowners, but it can afford a pointless war and multimillion-dollar bonuses for banksters who wrecked the economy.

Millions of laid-off workers lost their health insurance subsidies on Dec. 1, the day President Obama announced a $30 billion "surge" in Afghanistan.

The expensive "surge" came 24 hours after the Detroit Free Press published a 127-page supplement of home foreclosures in its metro area. In Michigan, 48 percent of mortgages are on properties that are worth less than the loan, according to a report from First American CoreLogic.

As bad as it is in Michigan, the state ranks seventh in foreclosures, so six states are in even more dire straits.

Why does President Obama think the U.S. can afford a war in Afghanistan when the U.S. economy is falling apart? Massive joblessness. Massive homelessness. Millions of Americans without medical care.

The additional $30 billion for the war comes on top of the $65 billion already appropriated for the year. These appropriations are always fattened with supplementary appropriations. The true cost is well in excess of $100 billion.

Whose going to pay for it? Democratic Rep. David Obey, chairman of the House Appropriations Committee proposes to raise income taxes on everyone earning more than $30,000.

This is called "trickle-up" economics. You tax the little guy and give the money to the armaments companies.

There was a time when Democratic presidents represented the little man, and Republicans represented business. Today, both parties represent the moneyed interests. On Dec. 3, at the jobs summit with business leaders, Obama said, "We don't have enough public dollars to fill the hole of private dollars that was created as a consequence of the crisis."

In other words, all the public's money has been spent on the banks and the wars.

Despite Democratic majorities in the House and Senate and the ease with which Obama won the presidential election over McCain-Palin, the Democratic Party has totally collapsed.

The Democrats have abandoned every constituency. Democrats have discarded the American people. Democrats, in pursuit of campaign contributions, represent the moneyed interests on Wall Street, the munitions companies, the insurance companies, the agribusinesses that have destroyed independent farmers, despoilers of the environment, unaccountable police and the builders of detention centers. The exception is Rep. Dennis Kucinich.

The Democrats have become Brownshirt Republicans.

The American people, except for the 1 percent of super-rich, have been abandoned.

Obama had a different message during the presidential campaign. On May 4, 2008, he went to Elkhart, Ind., to sympathize with the unemployed. On Feb. 9, 2009, just after his inauguration, he returned to Elkhart to say:

"You know, we tend to take the measure of the economic crisis we face in numbers and statistics. But when we say we've lost 3.6 million jobs since this recession began — nearly 600,000 in the past month alone; when we say that this area has lost jobs faster than anywhere else in America, with an unemployment rate over 15 percent; when we talk about layoffs at companies like Monaco Coach, Keystone RV and Pilgrim International — companies that have sustained this community for years — we're talking about Ed Neufeldt and people like him all across this country.

"We're talking about folks who've lost their livelihood and don't know what will take its place. Parents who've lost their health care and lie awake nights praying the kids don't get sick. Families who've lost the home that was their corner of the American dream. Young people who put that college acceptance letter back in the envelope because they just can't afford it.

"That's what those numbers and statistics mean. That is the true measure of this economic crisis. Those are the stories I heard when I came here to Elkhart six months ago and that I have carried with me every day since. I promised you back then that if were elected president, I would do everything I could to help this community recover. And that's why I've come back today — to tell you how I intend to keep that promise."

What's the story in Elkhart nine months after President Obama reaffirms his promise? "Long-term unemployed face dwindling options."

Lawrie Covey, 58, has been out of work for two years. "I can't even get a job cleaning rooms at a local motel." Her son, who was night shift foreman for a local manufacturer and who lost his job after eight years, was splitting the rent. Winter is upon them, and the heating bill is rising. Their transportation is 20 years old and needs a new radiator. Both her and her son's unemployment benefits have run out.

Covey has fallen back on her experience growing up on a farm. She is raising chickens and picking wild mushrooms and has a garden. If she makes it through the winter, she hopes to get a couple of baby pigs to raise to see them through the next year.

Covey, to whom President Obama made a promise, could just as well be an Afghan peasant. She doesn't count any more than the thousands of Afghans who have been murdered in their sleep by U.S. air strikes on "terrorists."

She voted for a president who spent all the money on wars based in lies and deceptions and on Gold Sachs, the richest institution in the world.

The maniacal left-wing hates Ronald Reagan because "he cut taxes for the rich," but Obama is loading up the poor with enormous debts that imply hyperinflation in order to make Gold Sachs too heavy to lift and in order to reward the munitions industry for its service to world peace and American hegemony.

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http://www.globalresearch.ca/index.php?context=va&aid=16407

This is Obama's plan for Afghanistan, a carbon-copy of George Bush's.

The Audacity of Ethnic Cleansing

"Today, we Afghans remain trapped between two enemies: the Taliban on one side and US/NATO forces and their warlord hirelings on the other." Malalai Joya "A Woman Among the Warlords" Scribner Publishing, New York

The Bush administration never had any intention of liberating Afghanistan or establishing democracy. The real aim was to remove the politically-intractable Taliban and replace them with a puppet regime run by a former-CIA asset. The rest of Afghanistan would be parceled-off to the warlords who assisted in the invasion and who had agreed to do much of the United States dirty-work on the ground. In the eight years of military occupation which followed, that basic strategy has never changed. The U.S. is just as committed now as it was at the war's inception to establish a beachhead in Central Asia to oversee the growth of China, to execute disruptive/covert operations against Russia, to control vital pipeline routes from the Caspian Basin, and to maintain a heavy military presence in the most critical geopolitical area in the world today.

The objectives were briefly stated in a recent counterpunch article by Tariq Ali:

"It’s now obvious to everyone that this is not a ‘good’ war designed to eliminate the opium trade, discrimination against women and everything bad – apart from poverty, of course. So what is Nato doing in Afghanistan? Has this become a war to save Nato as an institution? Or is it more strategic, as was suggested in the spring 2005 issue of Nato Review:

The centre of gravity of power on this planet is moving inexorably eastward … The Asia-Pacific region brings much that is dynamic and positive to this world, but as yet the rapid change therein is neither stable nor embedded in stable institutions. Until this is achieved, it is the strategic responsibility of Europeans and North Americans, and the institutions they have built, to lead the way … security effectiveness in such a world is impossible without both legitimacy and capability." ("Short Cuts in Afghanistan", Tariq Ali, counterpunch)

President Barak Obama's speech at West Point was merely a reiteration of US original commitment to strengthen the loose confederation of warlords--many of who are either in the Afghan Parliament or hold high political office--to pacify nationalist elements, and to expand the war into Pakistan. Obama is just a cog in a much larger imperial wheel which moves forward with or without his impressive oratory skills. So far, he has been much more successful in concealing the real motives behind military escalation than his predecessor George W. Bush. It's doubtful that Obama could stop current operations even if he wanted to, and there is no evidence that he wants to.

The Pentagon has settled on a new counterinsurgency doctrine (COIN) which it intends to implement in Afghanistan. The program will integrate psyops, special forces, NGOs, psychologists, media, anthropologists, humanitarian agencies, public relations, reconstruction, and conventional forces to rout the Taliban, assert control over the South and the tribal areas, and to quash any indigenous resistance. Clandestine activity and unmanned drone attacks will increase, while a "civilian surge" will be launched to try to win hearts and minds in the densely populated areas. Militarily, the goal is to pit one ethnicity against the other, to incite civil war, and to split the country in smaller units that can be controlled by warlords working with Washington. Where agricultural specialists, educators, engineers, lawyers, relief agencies and NGOs can be used, they will be. Where results depend on the application of extreme violence; it will also be...unsparingly. This is the plan going forward, a plan designed for conquest, subjugation and resource-stripping...........

.........Obama's escalation is not aimed at strengthening democracy, liberating women or bringing
an end to the brutal, misogynist rule of religious fanatics. It is pure, unalloyed imperial politics, the rearranging of the map and its people to serve Washington's interests. As journalist Alex Lantier notes on the World Socialist Web Site, the plan does not end with Afghanistan, but stretches across the globe. The hard-right policymakers behind Obama, still have not abandoned their dream of global rule. Here's an excerpt:

"As Obama indicated elsewhere in his speech, this escalation is one step in plans for even broader wars. “The struggle against violent extremism will not be finished quickly,” he said, “and it extends well beyond Afghanistan and Pakistan.” Mentioning Somalia and Yemen as potential targets, he added, “our effort will involve disorderly regions and diffuse enemies.”

The inclusion of this passage made clear that Obama was basing his Afghan policy on a report issued last month by Anthony Cordesman of the influential Center for Strategic and International Studies (CSIS). Cordesman wrote: “The President must be frank about the fact that any form of victory in Afghanistan and Pakistan will be part of a much wider and longer struggle. He must make it clear that the ideological, demographic, governance, economic, and other pressures that divide the Islamic world mean the world will face threats in many other nations that will endure indefinitely into the future. He should mention the risks in Yemen and Somalia, make it clear that the Iraq war is not over, and warn that we will still face both a domestic threat and a combination of insurgency and terrorism that will continue to extend from Morocco to the Philippines, and from Central Asia deep into Africa, regardless of how well we do in Afghanistan and Pakistan.”

He added: “…the present level of US, allied, Afghan and Pakistani casualties will almost certainly double and probably more than triple before something approaching victory is won.” (Alex Lantier "Obama’s speech on Afghanistan: A compendium of lies" World Socialist web Site)

In the years ahead, we can expect to see relief and reconstruction efforts stepped up to provide security in the heavily-populated areas while the war in the south is expanded and intensified. Tajiks and Uzbeks, in the Afghan military will be enlisted to fight or expel their Pashtun countrymen, while warlords, druglords and human rights abusers are handed over large swathes of the countryside. 30,000 more troops is not enough to lock-down all of Afghanistan, but it may be enough to force hundreds of thousands of people into regional bantustans where they can be controlled by bloodthirsty chieftains, the very same men who leveled Kabul on April 28, 1992, killing 80,000 Afghan civilians.

This is Obama's plan for Afghanistan, a carbon-copy of George Bush's.

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http://www.aspousa.org/index.php/2009/12/paul-krugmans-free-lunch-theory/

Paul Krugman’s Free Lunch Theory

........The List

Why might I think that the kind of growth Krugman envisions is impossible? Rather than resort to subtle arguments, I will deploy overwhelming brute force.

This is an economy & a society:

whose automobile industry is a shambles

whose manufacturing base has been in decline for decades

where “full” employment (~5%) likely will not return until sometime in the 2016-2020 period (see Figure 4 and the discussion below)

where non-wealth-creating consumption (PCE) makes up about 71% of GDP

whose total (public & private) debt-to-GDP ratio is north of 350% and is now rising faster than defaults, asset sales or payments can pare it down due to increased public debt (see Figures 1, 2, and 3 and the discussion below)

where real income actually declined over the last decade

where “over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.”

where home prices, which were the principal source of household wealth in a bubble economy, have likely not yet hit bottom

where household wealth has fallen precipitously as a result

whose overbuilt residential investment sector (new housing) will stagnate for many years to come

where there are 23.1 square feet of shopping center space for every American

where rising health care, food and energy costs are eroding household disposable income

where over 45 million Americans lack any kind of health insurance

where the cost of an college education has increased far in excess of the inflation rate for decades

where wealth & income inequality is at its highest level since 1928

where 49 million Americans went hungry at some point in 2008

where 1 in 8 Americans and 1 in 4 children receive food stamps

where total bank credit of all commercial banks is contracting, not expanding where several regional banks fail each week

where the government insurance system for depositors (FDIC) is insolvent

where “enormous budget deficits in nearly every State in the Union are ‘wreaking havoc’ on government employees, the services they provide, and the residents who need them most”

where the Central Bank (aka “the Fed”) is accountable to no one, and is thus free to print money for any purpose it deems important, including monetizing the debt or bailing out too-big-to-fail (TBTF) banks

where Congress has been “captured” by those they must regulate across all industries, and so does literally nothing or practically nothing in the name of reform

where the Executive branch of government (i.e. the Treasury) mostly serves the interests of highly over-leveraged TBTF banks

whose politically powerful TBTF banks drain huge amounts of capital away from wealth-creating activities

whose negative current accounts (trade) balance exploded during the years leading up to the financial crisis and still shows a substantial deficit (exports versus imports)

whose declining oil production peaked in 1970 whose concomitant dependency on oil imports has been rising for decades (see trade balance)

whose government debt must be funded by Asian & European central banks and oil exporters

which is involved in one costly but pointless occupation (Iraq) and one pointless but costly foreign war, and is on the verge of expanding the war (Afghanistan)

* Not all items are documented (linked), but ample documentation could be provided


That’s enough—you get the idea. The list is not comprehensive. I didn’t stop because I ran out of material. Some indicators more time-sensitive than others, so improvements will vary over time if the situation is reversible. For example, home prices should bottom out sometime in the next few years. On the other hand, nothing will fix our declining oil production. Some items are sensitive to political circumstances, e.g. the non-accountability of the Fed.

Other indicators, for example those illustrating growing poverty, may not directly affect GDP growth. These points are meant to show a society going rapidly downhill.............

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http://www.informationclearinghouse.info/article24085.htm

All Politicians Are Alike

An Open Letter to President Obama from Michael Moore

Dear President Obama,

Do you really want to be the new "war president"? If you go to West Point tomorrow night (Tuesday, 8pm) and announce that you are increasing, rather than withdrawing, the troops in Afghanistan, you are the new war president. Pure and simple. And with that you will do the worst possible thing you could do -- destroy the hopes and dreams so many millions have placed in you. With just one speech tomorrow night you will turn a multitude of young people who were the backbone of your campaign into disillusioned cynics. You will teach them what they've always heard is true -- that all politicians are alike. I simply can't believe you're about to do what they say you are going to do. Please say it isn't so.

It is not your job to do what the generals tell you to do. We are a civilian-run government. WE tell the Joint Chiefs what to do, not the other way around. That's the way General Washington insisted it must be. That's what President Truman told General MacArthur when MacArthur wanted to invade China. "You're fired!," said Truman, and that was that. And you should have fired Gen. McChrystal when he went to the press to preempt you, telling the press what YOU had to do. Let me be blunt: We love our kids in the armed services, but we f*#&in' hate these generals, from Westmoreland in Vietnam to, yes, even Colin Powell for lying to the UN with his made-up drawings of WMD (he has since sought redemption).

So now you feel backed into a corner. 30 years ago this past Thursday (Thanksgiving) the Soviet generals had a cool idea -- "Let's invade Afghanistan!" Well, that turned out to be the final nail in the USSR coffin.

There's a reason they don't call Afghanistan the "Garden State" (though they probably should, seeing how the corrupt President Karzai, whom we back, has his brother in the heroin trade raising poppies). Afghanistan's nickname is the "Graveyard of Empires." If you don't believe it, give the British a call. I'd have you call Genghis Khan but I lost his number. I do have Gorbachev's number though. It's + 41 22 789 1662. I'm sure he could give you an earful about the historic blunder you're about to commit.

With our economic collapse still in full swing and our precious young men and women being sacrificed on the altar of arrogance and greed, the breakdown of this great civilization we call America will head, full throttle, into oblivion if you become the "war president." Empires never think the end is near, until the end is here. Empires think that more evil will force the heathens to toe the line -- and yet it never works. The heathens usually tear them to shreds.

Choose carefully, President Obama. You of all people know that it doesn't have to be this way. You still have a few hours to listen to your heart, and your own clear thinking. You know that nothing good can come from sending more troops halfway around the world to a place neither you nor they understand, to achieve an objective that neither you nor they understand, in a country that does not want us there. You can feel it in your bones.

I know you know that there are LESS than a hundred al-Qaeda left in Afghanistan! A hundred thousand troops trying to crush a hundred guys living in caves? Are you serious? Have you drunk Bush's Kool-Aid? I refuse to believe it.

Your potential decision to expand the war (while saying that you're doing it so you can "end the war") will do more to set your legacy in stone than any of the great things you've said and done in your first year. One more throwing a bone from you to the Republicans and the coalition of the hopeful and the hopeless may be gone -- and this nation will be back in the hands of the haters quicker than you can shout "tea bag!"

Choose carefully, Mr. President. Your corporate backers are going to abandon you as soon as it is clear you are a one-term president and that the nation will be safely back in the hands of the usual idiots who do their bidding. That could be Wednesday morning.

We the people still love you. We the people still have a sliver of hope. But we the people can't take it anymore. We can't take your caving in, over and over, when we elected you by a big, wide margin of millions to get in there and get the job done. What part of "landslide victory" don't you understand?

Don't be deceived into thinking that sending a few more troops into Afghanistan will make a difference, or earn you the respect of the haters. They will not stop until this country is torn asunder and every last dollar is extracted from the poor and soon-to-be poor. You could send a million troops over there and the crazy Right still wouldn't be happy. You would still be the victim of their incessant venom on hate radio and television because no matter what you do, you can't change the one thing about yourself that sends them over the edge.

The haters were not the ones who elected you, and they can't be won over by abandoning the rest of us.

President Obama, it's time to come home. Ask your neighbors in Chicago and the parents of the young men and women doing the fighting and dying if they want more billions and more troops sent to Afghanistan. Do you think they will say, "No, we don't need health care, we don't need jobs, we don't need homes. You go on ahead, Mr. President, and send our wealth and our sons and daughters overseas, 'cause we don't need them, either."

What would Martin Luther King, Jr. do? What would your grandmother do? Not send more poor people to kill other poor people who pose no threat to them, that's what they'd do. Not spend billions and trillions to wage war while American children are sleeping on the streets and standing in bread lines.

All of us that voted and prayed for you and cried the night of your victory have endured an Orwellian hell of eight years of crimes committed in our name: torture, rendition, suspension of the bill of rights, invading nations who had not attacked us, blowing up neighborhoods that Saddam "might" be in (but never was), slaughtering wedding parties in Afghanistan. We watched as hundreds of thousands of Iraqi civilians were slaughtered and tens of thousands of our brave young men and women were killed, maimed, or endured mental anguish -- the full terror of which we scarcely know.

When we elected you we didn't expect miracles. We didn't even expect much change. But we expected some. We thought you would stop the madness. Stop the killing. Stop the insane idea that men with guns can reorganize a nation that doesn't even function as a nation and never, ever has.

Stop, stop, stop! For the sake of the lives of young Americans and Afghan civilians, stop. For the sake of your presidency, hope, and the future of our nation, stop. For God's sake, stop.
Tonight we still have hope........

As of tonight, Mr Nobel Peace Prize is sending 30,000 more troops over to Afganistan to act as Cannon Fodder and Pawns for the elites and their nefarious agendas. So much for hope.