http://www.ricefarmer.blogspot.com/
Infrastructure Deterioration
More on the Great Fall-Apart. One of today’s news links, which I’m sure many readers noticed, is “DoT budget isn’t keeping up with need for road, bridge repairs.” The article kicks off with the truly grim observation by the transportation secretary that “The Transportation Department has a backlog between $80 billion and $100 billion in high-priority infrastructure improvement projects that it cannot afford to fund” (emphasis mine). That represents a lot of miles of road and many bridges that will be repaired or replaced later than needed, and I predict that repair or replacement will never come for a significant percentage.
In the same vein, recently the New York Times ran an op-ed piece lamenting the woefully insufficient amount of investment in infrastructure. For those with shock-resistant hearts, this article gives a number of specific examples showing the horrendous state of America’s infrastructure. Here I will mention one of the best examples, which was that even though the state of Pennsylvania more than tripled its expenditures on bridges, it ended up with an even longer list of bridges needed repairs!
Of course, the US isn’t the only country with this problem. Britain isn’t known as “pothole nation” for nothing. And Japan, which at first glance seems to have a very modern and well-maintained infrastructure, has, for example, loads of bridges that need repair or replacement. According to this article (in Japanese), Japan has about 150,000 bridges that are 15 meters or more in length, and about 90% of them are managed by municipalities. Of those, 121 are totally closed to traffic, and 680 are still open but have instituted weight restrictions because of their deteriorated conditions. Recall that Japan is a geographically much smaller country than the US, and you can see the significance of these figures. Because many bridges and roads were built during Japan’s years of rapid economic growth, over the next decade a slew of them will be up for repair or replacement, and the money surely won’t be there. But bridges and roads aren’t the only problem. This post from last year provided some information on the grave state of sewage pipe in Tokyo.
We won’t make any headway on infrastructure because energy is too expensive now. Only a few years ago crude oil was still in the $20–30 range, which enabled countries to go on infrastructure construction sprees. Now that the same barrel of oil costs three times as much, we can buy only one-third as much energy for the same amount of money. And because — thanks to peak oil — budgets are severely constrained, that further limits the amount of energy we can expend on infrastructure. In a word, we’re fighting a losing battle. Infrastructure will crumble faster than we can possibly fix it.
The upshot is that vehicles will in time no longer be able to navigate broken roads and bridges, and that alone will strangle economies. Meanwhile, when aged water mains and sewage pipes break, the cities they serve will become uninhabitable. The big cities of the world now bill themselves as “24-hour cities” offering every kind of luxury and serving as economic and cultural centers, but when toilets are stopped up, sewage overflows in the streets, and there is no water, those masses of concrete will be hell.
Friday, February 26, 2010
Wednesday, February 24, 2010
SC101-14
Comment at the MCR Blog:
https://www.blogger.com/comment.g?blogID=22903415&postID=8901553460030154073
sosheyack said...
It is a sign of our times that if a citizen expresses dismay with our government, then one is likely to be labeled a Tea Partier, Tenther, Truther or a Militia Member. These labels are meant to carry derogatory connotations. Recently, someone I know, responded to me in that manner. Although I guess I shouldn't have been all that surprised, since it has been the central theme of the news media for several years now. They have been conditioning people to think in this manner. I won't go too far down this "rabbit hole", in the interest of time, but the psychology of predictive programming is well known and the freedom of information act long ago exposed the intelligence program called "Operation Mockingbird", in which the American news media was thoroughly infiltrated to coordinate the government message. In short, the elites have put a great deal of effort into categorizing the ideal of questioning authority, as some sort of fringe movement. Witness the recent rants of Glenn Beck or Chris Matthews' about the 911 Truthers or even former VP Dick Cheney's recent ominous warning that terrorism is imminent. I have come to understand that whenever there is a spike in these type of media communications, it always appears to be laying the groundwork for a cataclysmic event, which soon follows. They are in fact following the same script that they once stated Bin Laden did when he released his videos or audio tapes preceding a terrorist event. Don't you find that strange?
A citizen used to be known as patriotic if he engaged in critical analysis of government and questioned authority. This was and is necessary, in order to provide a cross check against excesses and the corrupting influences of government. Sadly, in present day, dissent is marginalized and those that dare to question authority are looked upon as potential terror suspects themselves. This represents a fatal departure from the core values of our country. Is this what terrorism has done to the USA? Apparently, this is exactly what Benjamin Franklin warned us about in the following quote, "Those who sacrifice liberty for security deserve neither".
I have news for you. I'm not wearing a label. I'm not a Democrat. I'm not a Republican. I'm not a Tea Party person and I'm not exactly Libertarian. I'm certainly not a militia member. I don't believe in violence and I strive to believe in the inherent goodness of people. I belong to no clubs - Period. I am simply a husband and a father who DEEPLY cares about the world we are leaving for our children. That's it. That's all that I am. I'm a guy who has noticed that I personally dropped the ball and that we as a people have dropped the ball. We got too comfortable with our freedom. I'm a guy who now believes we have a responsibility to fix the problem, by voting, protesting, waking up our friends and family to do the very same thing and to throw our bodies upon the gears of corruption, to stop their progress through non-violent passive resistance.
It is time for people to step up to the plate. To get up off our knees and to stop allowing our freedoms to be carted away in the name of security. Its' time to speak up, speak out and notice what's going on in the world. To take a giant step back from the television monitor in your living room and to question authority. It is American - to question authority. Never forget that. Do not let it be taken away. It is American to seek out alternative views and balance the corporate-government message that is being balanced for us through the left-right paradigm of Fox, CNN, ABC, CBS and NBC. If we fail to realize our responsibility, I fear that the world will one day look upon the people of the United States, as the world previously looked upon the people of Germany, following the end of World War Two. The haunting question will be, "how did they let this happen?"
https://www.blogger.com/comment.g?blogID=22903415&postID=8901553460030154073
sosheyack said...
It is a sign of our times that if a citizen expresses dismay with our government, then one is likely to be labeled a Tea Partier, Tenther, Truther or a Militia Member. These labels are meant to carry derogatory connotations. Recently, someone I know, responded to me in that manner. Although I guess I shouldn't have been all that surprised, since it has been the central theme of the news media for several years now. They have been conditioning people to think in this manner. I won't go too far down this "rabbit hole", in the interest of time, but the psychology of predictive programming is well known and the freedom of information act long ago exposed the intelligence program called "Operation Mockingbird", in which the American news media was thoroughly infiltrated to coordinate the government message. In short, the elites have put a great deal of effort into categorizing the ideal of questioning authority, as some sort of fringe movement. Witness the recent rants of Glenn Beck or Chris Matthews' about the 911 Truthers or even former VP Dick Cheney's recent ominous warning that terrorism is imminent. I have come to understand that whenever there is a spike in these type of media communications, it always appears to be laying the groundwork for a cataclysmic event, which soon follows. They are in fact following the same script that they once stated Bin Laden did when he released his videos or audio tapes preceding a terrorist event. Don't you find that strange?
A citizen used to be known as patriotic if he engaged in critical analysis of government and questioned authority. This was and is necessary, in order to provide a cross check against excesses and the corrupting influences of government. Sadly, in present day, dissent is marginalized and those that dare to question authority are looked upon as potential terror suspects themselves. This represents a fatal departure from the core values of our country. Is this what terrorism has done to the USA? Apparently, this is exactly what Benjamin Franklin warned us about in the following quote, "Those who sacrifice liberty for security deserve neither".
I have news for you. I'm not wearing a label. I'm not a Democrat. I'm not a Republican. I'm not a Tea Party person and I'm not exactly Libertarian. I'm certainly not a militia member. I don't believe in violence and I strive to believe in the inherent goodness of people. I belong to no clubs - Period. I am simply a husband and a father who DEEPLY cares about the world we are leaving for our children. That's it. That's all that I am. I'm a guy who has noticed that I personally dropped the ball and that we as a people have dropped the ball. We got too comfortable with our freedom. I'm a guy who now believes we have a responsibility to fix the problem, by voting, protesting, waking up our friends and family to do the very same thing and to throw our bodies upon the gears of corruption, to stop their progress through non-violent passive resistance.
It is time for people to step up to the plate. To get up off our knees and to stop allowing our freedoms to be carted away in the name of security. Its' time to speak up, speak out and notice what's going on in the world. To take a giant step back from the television monitor in your living room and to question authority. It is American - to question authority. Never forget that. Do not let it be taken away. It is American to seek out alternative views and balance the corporate-government message that is being balanced for us through the left-right paradigm of Fox, CNN, ABC, CBS and NBC. If we fail to realize our responsibility, I fear that the world will one day look upon the people of the United States, as the world previously looked upon the people of Germany, following the end of World War Two. The haunting question will be, "how did they let this happen?"
Tuesday, February 23, 2010
SC101-13
http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle/print
Wall Street's Bailout Hustle
Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash
MATT TAIBBI
.........Not to worry, Blankfein reassured employees. "In a year that proved to have no shortage of story lines," he said, "I believe very strongly that performance is the ultimate narrative."
Translation: We made a shitload of money last year because we're so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.
Goldman wasn't alone. The nation's six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. "What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?" asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.
Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America's populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what's the difference if some fat cat in New York pockets $20 million instead of $10 million?
The only reason such apathy exists, however, is because there's still a widespread misunderstanding of how exactly Wall Street "earns" its money, with emphasis on the quotation marks around "earns." The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street's eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its "performance" was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?
The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.........
You must read the whole article, your head will literally explode!
Wall Street's Bailout Hustle
Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash
MATT TAIBBI
.........Not to worry, Blankfein reassured employees. "In a year that proved to have no shortage of story lines," he said, "I believe very strongly that performance is the ultimate narrative."
Translation: We made a shitload of money last year because we're so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.
Goldman wasn't alone. The nation's six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. "What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?" asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.
Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America's populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what's the difference if some fat cat in New York pockets $20 million instead of $10 million?
The only reason such apathy exists, however, is because there's still a widespread misunderstanding of how exactly Wall Street "earns" its money, with emphasis on the quotation marks around "earns." The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street's eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its "performance" was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?
The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.........
You must read the whole article, your head will literally explode!
Monday, February 15, 2010
SC101-12
http://www.alternet.org/economy/145667/the_economic_elite_have_engineered_an_extraordinary_coup%2C_threatening_the_very_existence_of_the_middle_class?page=entire
THE ECONOMIC ELITE HAVE ENGINEERED AN EXTRAORDINARY COUP
"The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight." -- Michael Lind, To Have and to Have Not
We all have very strong differences of opinion on many issues. However, like our founding fathers before us, we must put aside our differences and unite to fight a common enemy.
It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99 percent of the U.S. population no longer has political representation. The U.S. economy, government and tax system is now blatantly rigged against us.
Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99 percent of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep...and make no mistake, they have launched a war to eliminate the U.S. middle class.
To those who feel I am using extreme rhetoric, I ask you to please take a few minutes of your time to hear me out and research the evidence put forth. The facts are there for the unprejudiced, rational and reasoned mind to absorb. It is the unfortunate reality of our current crisis.
Unless we all unite and organize on common ground, our very way of life and the ideals that our country was founded upon will continue to unravel.
Before exposing exactly who the Economic Elite are, and discussing common sense ways in which we can defeat them, let's take a look at how much damage they have already caused.
Casualties of Economic Terrorism, Surveying the Damage
The devastating numbers across-the-board on the economic front are staggering. I'll go through some of them here, many we have already become all too familiar with. We hear some of these numbers all the time, so much so that it appears as if we have already begun "to normalize the unthinkable." You may be sick of hearing them, but behind each number is an enormous amount of individual suffering, American lives and families who are struggling worse than they ever have.
America is the richest nation in history, yet we now have the highest poverty rate in the industrialized world with an unprecedented amount of Americans living in dire straights and over 50 million citizens already living in poverty.
The government has come up with clever ways to downplay all of these numbers, but we have over 50 million people who need to use food stamps to eat, and a stunning 50 percent of U.S. children will use food stamps to eat at some point in their childhoods. Approximately 20,000 people are added to this total every day. In 2009, one out of five U.S. households didn't have enough money to buy food. In households with children, this number rose to 24 percent, as the hunger rate among U.S. citizens has now reached an all-time high.
We also currently have over 50 million U.S. citizens without health care. 1.4 million Americans filed for bankruptcy in 2009, a 32 percent increase from 2008. As bankruptcies continue to skyrocket, medical bankruptcies are responsible for over 60 percent of them, and over 75 percent of the medical bankruptcies filed are from people who have health care insurance. We have the most expensive health care system in the world, we are forced to pay twice as much as other countries and the overall care we get in return ranks 37th in the world.
In total, Americans have lost $5 trillion from their pensions and savings since the economic crisis began and $13 trillion in the value of their homes. During the first full year of the crisis, workers between the age of 55 - 60, who have worked for 20 - 29 years, have lost an average of 25 percent off their 401k. "Personal debt has risen from 65 percent of income in 1980 to 125 percent today." Over five million U.S. families have already lost their homes, in total 13 million U.S. families are expected to lose their home by 2014, with 25 percent of current mortgages underwater. Deutsche Bank has an even grimmer prediction: "The percentage of 'underwater' loans may rise to 48 percent, or 25 million homes." Every day 10,000 U.S. homes enter foreclosure. Statistics show that an increasing number of these people are not finding shelter elsewhere, there are now over 3 million homeless Americans, the fastest-growing segment of the homeless population is single parents with children.
One place more and more Americans are finding a home is in prison. With a prison population of 2.3 million people, we now have more people incarcerated than any other nation in the world -- the per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000, France has 80 per 100,000, Saudi Arabia has 45 per 100,000. The prison industry is thriving and expecting major growth over the next few years. A recent report from the Hartford Advocate titled "Incarceration Nation" revealed that "a new prison opens every week somewhere in America."
Mass Unemployment
The government unemployment rate is deceptive on several levels. It doesn't count people who are "involuntary part-time workers," meaning workers who are working part-time but want to find full-time work. It also doesn't count "discouraged workers," meaning long-term unemployed people who have lost hope and don't consistently look for work. As time goes by, more and more people stop consistently looking for work and are discounted from the unemployment figure. For instance, in January, 1.1 million workers were eliminated from the unemployment total because they were "officially" labeled discouraged workers. So instead of the number rising, we will hear deceptive reports about unemployment leveling off.
On top of this, the Bureau of Labor Statistics recently discovered that 824,000 job losses were never accounted for due to a "modeling error" in their data. Even in their initial January data there appears to be a huge understating, with the newest report saying the economy lost 20,000 jobs. TrimTabs employment analysis, which has consistently provided more accurate data, "estimated that the U.S. economy shed 104,000 jobs in January."
When you factor in all these uncounted workers -- "involuntary part-time" and "discouraged workers" -- the unemployment rate rises from 9.7 percent to over 20 percent. In total, we now have over 30 million U.S. citizens who are unemployed or underemployed. The rarely cited "employment-participation" rate, which reveals the percentage of the population that is currently in the workforce, has now fallen to 64 percent.
Even based on the "official" unemployment rate, just to get back to the unemployment level of 4.6 percent that we had in 2007, we need to create over 10 million new jobs, and most every serious economist will tell you that these jobs are not coming back. In fact, we are still consistently shedding jobs, on just one day, January 27, several companies announced new cuts of more than 60,000 jobs.
Due to the length of this crisis already, millions of Americans are reaching a point where the unemployment benefits they have been living on are coming to an end. More workers have already been out of work longer than at any point since statistics have been recorded, with over six million now unemployed for over six months. A record 20 million Americans qualified for unemployment insurance benefits last year, causing 27 states to run out of funds, with seven more also expected to go into the red within the next few months. In total, 40 state programs are expected to go broke.
Most economists believe the unemployment rate will remain high for the foreseeable future. What will happen when we have millions of laid-off workers without any unemployment benefits to save them?
Working More for Less
The millions struggling to find work are just part of the story. Due to the fact that we now have a record high six people for every one job opening, companies have been able to further increase the workload on their remaining employees. They have been able to increase the amount of hours Americans are working, reduce wages and drastically cut back on benefits. Even though Americans were already the most productive workers in the world before the economic crisis, in the third quarter of 2009, average worker productivity increased by an annualized rate of 9.5 percent, at the same time unit labor cost decreased by 5.2 percent. This has led to record profits for many companies. Of the 220 companies in the S&P 500 who have reported fourth-quarter results thus far, 78 percent of them had "better-than-expected profits" with earnings 17 percent above expectations, "the highest for any quarter since Thomson Reuters began tracking data."
According to the Bureau of Labor Statistics, the national median wage was only $32,390 per year in 2008, and median household income fell by 3.6 percent while the unemployment rate was 5.8 percent. With the unemployment rate now at 10 percent, median income has been falling at a 5 percent rate and is expected to continue its decline. Not surprisingly, Americans' job satisfaction level is now at an all-time low.
There are also a growing number of employed people who, despite having a job, are still living in poverty. There are at least 15 million workers who now fall into this rapidly growing category. $32,390 a year is not going to get you far in today's economy, and half of the country is making less than that. This is why many Americans are now forced to work two jobs to provide for their family to hopefully make ends meet.
A Crime Against Humanity
The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all the immense individual suffering behind them. This is how they "normalize the unthinkable" and make us become passive in the face of such a high causality count.
Behind each of these numbers, is a tremendous amount of misery; the physical toll is only outdone by the severe psychological toll. Anyone who has had to put off medical care, or who couldn't get medical care for one of their family members due to financial circumstances, can tell you about the psychological toll that is on top of the physical suffering. Anyone who has felt the stress of wondering how they were going to get their child's next meal or their own, or the stress of not knowing how they are going to pay the mortgage, rent, electricity or heat bill, let alone the car payment, gas, phone, cable or Internet bill.
There are now well over 150 million Americans who feel stress over these things on a consistent basis. Over 60 percent of Americans now live paycheck to paycheck.
These are all basic things every person should be able to easily afford in a technologically advanced society such as ours. The reason we struggle with these things is because the Economic Elite have robbed us all. This amount of suffering in the United States of America is literally a crime against humanity.
THE ECONOMIC ELITE HAVE ENGINEERED AN EXTRAORDINARY COUP
"The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight." -- Michael Lind, To Have and to Have Not
We all have very strong differences of opinion on many issues. However, like our founding fathers before us, we must put aside our differences and unite to fight a common enemy.
It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99 percent of the U.S. population no longer has political representation. The U.S. economy, government and tax system is now blatantly rigged against us.
Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99 percent of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep...and make no mistake, they have launched a war to eliminate the U.S. middle class.
To those who feel I am using extreme rhetoric, I ask you to please take a few minutes of your time to hear me out and research the evidence put forth. The facts are there for the unprejudiced, rational and reasoned mind to absorb. It is the unfortunate reality of our current crisis.
Unless we all unite and organize on common ground, our very way of life and the ideals that our country was founded upon will continue to unravel.
Before exposing exactly who the Economic Elite are, and discussing common sense ways in which we can defeat them, let's take a look at how much damage they have already caused.
Casualties of Economic Terrorism, Surveying the Damage
The devastating numbers across-the-board on the economic front are staggering. I'll go through some of them here, many we have already become all too familiar with. We hear some of these numbers all the time, so much so that it appears as if we have already begun "to normalize the unthinkable." You may be sick of hearing them, but behind each number is an enormous amount of individual suffering, American lives and families who are struggling worse than they ever have.
America is the richest nation in history, yet we now have the highest poverty rate in the industrialized world with an unprecedented amount of Americans living in dire straights and over 50 million citizens already living in poverty.
The government has come up with clever ways to downplay all of these numbers, but we have over 50 million people who need to use food stamps to eat, and a stunning 50 percent of U.S. children will use food stamps to eat at some point in their childhoods. Approximately 20,000 people are added to this total every day. In 2009, one out of five U.S. households didn't have enough money to buy food. In households with children, this number rose to 24 percent, as the hunger rate among U.S. citizens has now reached an all-time high.
We also currently have over 50 million U.S. citizens without health care. 1.4 million Americans filed for bankruptcy in 2009, a 32 percent increase from 2008. As bankruptcies continue to skyrocket, medical bankruptcies are responsible for over 60 percent of them, and over 75 percent of the medical bankruptcies filed are from people who have health care insurance. We have the most expensive health care system in the world, we are forced to pay twice as much as other countries and the overall care we get in return ranks 37th in the world.
In total, Americans have lost $5 trillion from their pensions and savings since the economic crisis began and $13 trillion in the value of their homes. During the first full year of the crisis, workers between the age of 55 - 60, who have worked for 20 - 29 years, have lost an average of 25 percent off their 401k. "Personal debt has risen from 65 percent of income in 1980 to 125 percent today." Over five million U.S. families have already lost their homes, in total 13 million U.S. families are expected to lose their home by 2014, with 25 percent of current mortgages underwater. Deutsche Bank has an even grimmer prediction: "The percentage of 'underwater' loans may rise to 48 percent, or 25 million homes." Every day 10,000 U.S. homes enter foreclosure. Statistics show that an increasing number of these people are not finding shelter elsewhere, there are now over 3 million homeless Americans, the fastest-growing segment of the homeless population is single parents with children.
One place more and more Americans are finding a home is in prison. With a prison population of 2.3 million people, we now have more people incarcerated than any other nation in the world -- the per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000, France has 80 per 100,000, Saudi Arabia has 45 per 100,000. The prison industry is thriving and expecting major growth over the next few years. A recent report from the Hartford Advocate titled "Incarceration Nation" revealed that "a new prison opens every week somewhere in America."
Mass Unemployment
The government unemployment rate is deceptive on several levels. It doesn't count people who are "involuntary part-time workers," meaning workers who are working part-time but want to find full-time work. It also doesn't count "discouraged workers," meaning long-term unemployed people who have lost hope and don't consistently look for work. As time goes by, more and more people stop consistently looking for work and are discounted from the unemployment figure. For instance, in January, 1.1 million workers were eliminated from the unemployment total because they were "officially" labeled discouraged workers. So instead of the number rising, we will hear deceptive reports about unemployment leveling off.
On top of this, the Bureau of Labor Statistics recently discovered that 824,000 job losses were never accounted for due to a "modeling error" in their data. Even in their initial January data there appears to be a huge understating, with the newest report saying the economy lost 20,000 jobs. TrimTabs employment analysis, which has consistently provided more accurate data, "estimated that the U.S. economy shed 104,000 jobs in January."
When you factor in all these uncounted workers -- "involuntary part-time" and "discouraged workers" -- the unemployment rate rises from 9.7 percent to over 20 percent. In total, we now have over 30 million U.S. citizens who are unemployed or underemployed. The rarely cited "employment-participation" rate, which reveals the percentage of the population that is currently in the workforce, has now fallen to 64 percent.
Even based on the "official" unemployment rate, just to get back to the unemployment level of 4.6 percent that we had in 2007, we need to create over 10 million new jobs, and most every serious economist will tell you that these jobs are not coming back. In fact, we are still consistently shedding jobs, on just one day, January 27, several companies announced new cuts of more than 60,000 jobs.
Due to the length of this crisis already, millions of Americans are reaching a point where the unemployment benefits they have been living on are coming to an end. More workers have already been out of work longer than at any point since statistics have been recorded, with over six million now unemployed for over six months. A record 20 million Americans qualified for unemployment insurance benefits last year, causing 27 states to run out of funds, with seven more also expected to go into the red within the next few months. In total, 40 state programs are expected to go broke.
Most economists believe the unemployment rate will remain high for the foreseeable future. What will happen when we have millions of laid-off workers without any unemployment benefits to save them?
Working More for Less
The millions struggling to find work are just part of the story. Due to the fact that we now have a record high six people for every one job opening, companies have been able to further increase the workload on their remaining employees. They have been able to increase the amount of hours Americans are working, reduce wages and drastically cut back on benefits. Even though Americans were already the most productive workers in the world before the economic crisis, in the third quarter of 2009, average worker productivity increased by an annualized rate of 9.5 percent, at the same time unit labor cost decreased by 5.2 percent. This has led to record profits for many companies. Of the 220 companies in the S&P 500 who have reported fourth-quarter results thus far, 78 percent of them had "better-than-expected profits" with earnings 17 percent above expectations, "the highest for any quarter since Thomson Reuters began tracking data."
According to the Bureau of Labor Statistics, the national median wage was only $32,390 per year in 2008, and median household income fell by 3.6 percent while the unemployment rate was 5.8 percent. With the unemployment rate now at 10 percent, median income has been falling at a 5 percent rate and is expected to continue its decline. Not surprisingly, Americans' job satisfaction level is now at an all-time low.
There are also a growing number of employed people who, despite having a job, are still living in poverty. There are at least 15 million workers who now fall into this rapidly growing category. $32,390 a year is not going to get you far in today's economy, and half of the country is making less than that. This is why many Americans are now forced to work two jobs to provide for their family to hopefully make ends meet.
A Crime Against Humanity
The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all the immense individual suffering behind them. This is how they "normalize the unthinkable" and make us become passive in the face of such a high causality count.
Behind each of these numbers, is a tremendous amount of misery; the physical toll is only outdone by the severe psychological toll. Anyone who has had to put off medical care, or who couldn't get medical care for one of their family members due to financial circumstances, can tell you about the psychological toll that is on top of the physical suffering. Anyone who has felt the stress of wondering how they were going to get their child's next meal or their own, or the stress of not knowing how they are going to pay the mortgage, rent, electricity or heat bill, let alone the car payment, gas, phone, cable or Internet bill.
There are now well over 150 million Americans who feel stress over these things on a consistent basis. Over 60 percent of Americans now live paycheck to paycheck.
These are all basic things every person should be able to easily afford in a technologically advanced society such as ours. The reason we struggle with these things is because the Economic Elite have robbed us all. This amount of suffering in the United States of America is literally a crime against humanity.
Sunday, February 14, 2010
SC101-11
http://carolynbaker.net/site/content/view/1509/1/
THE ZERO POINT OF SYSTEMIC COLLAPSE
........All traditional standards and beliefs are shattered in a severe economic crisis. The moral order is turned upside down. The honest and industrious are wiped out while the gangsters, profiteers and speculators walk away with millions. The elite will retreat, as Naomi Klein has written in The Shock Doctrine, into gated communities where they will have access to services, food, amenities and security denied to the rest of us. We will begin a period in human history when there will be only masters and serfs. The corporate forces, which will seek to make an alliance with the radical Christian right and other extremists, will use fear, chaos, the rage at the ruling elites and the specter of left-wing dissent and terrorism to impose draconian controls to ruthlessly extinguish opposition movements. And while they do it, they will be waving the American flag, chanting patriotic slogans, promising law and order and clutching the Christian cross. Totalitarianism, George Orwell pointed out, is not so much an age of faith but an age of schizophrenia. “A society becomes totalitarian when its structure becomes flagrantly artificial,” Orwell wrote. “That is when its ruling class has lost its function but succeeds in clinging to power by force or fraud.” Our elites have used fraud. Force is all they have left.
Our mediocre and bankrupt elite is desperately trying to save a system that cannot be saved. More importantly, they are trying to save themselves. All attempts to work within this decayed system and this class of power brokers will prove useless. And resistance must respond to the harsh new reality of a global, capitalist order that will cling to power through ever-mounting forms of brutal and overt repression. Once credit dries up for the average citizen, once massive joblessness creates a permanent and enraged underclass and the cheap manufactured goods that are the opiates of our commodity culture vanish, we will probably evolve into a system that more closely resembles classical totalitarianism. Cruder, more violent forms of repression will have to be employed as the softer mechanisms of control favored by inverted totalitarianism break down.
It is not accidental that the economic crisis will converge with the environmental crisis. In his book The Great Transformation (1944), Karl Polanyi laid out the devastating consequences – the depressions, wars and totalitarianism – that grow out of a so-called self-regulated free market. He grasped that “fascism, like socialism, was rooted in a market society that refused to function.” He warned that a financial system always devolves, without heavy government control, into a Mafia capitalism – and a Mafia political system – which is a good description of our financial and political structure. A self-regulating market, Polanyi wrote, turns human beings and the natural environment into commodities, a situation that ensures the destruction of both society and the natural environment. The free market’s assumption that nature and human beings are objects whose worth is determined by the market allows each to be exploited for profit until exhaustion or collapse. A society that no longer recognizes that nature and human life have a sacred dimension, an intrinsic value beyond monetary value, commits collective suicide. Such societies cannibalize themselves until they die. This is what we are undergoing........
THE ZERO POINT OF SYSTEMIC COLLAPSE
........All traditional standards and beliefs are shattered in a severe economic crisis. The moral order is turned upside down. The honest and industrious are wiped out while the gangsters, profiteers and speculators walk away with millions. The elite will retreat, as Naomi Klein has written in The Shock Doctrine, into gated communities where they will have access to services, food, amenities and security denied to the rest of us. We will begin a period in human history when there will be only masters and serfs. The corporate forces, which will seek to make an alliance with the radical Christian right and other extremists, will use fear, chaos, the rage at the ruling elites and the specter of left-wing dissent and terrorism to impose draconian controls to ruthlessly extinguish opposition movements. And while they do it, they will be waving the American flag, chanting patriotic slogans, promising law and order and clutching the Christian cross. Totalitarianism, George Orwell pointed out, is not so much an age of faith but an age of schizophrenia. “A society becomes totalitarian when its structure becomes flagrantly artificial,” Orwell wrote. “That is when its ruling class has lost its function but succeeds in clinging to power by force or fraud.” Our elites have used fraud. Force is all they have left.
Our mediocre and bankrupt elite is desperately trying to save a system that cannot be saved. More importantly, they are trying to save themselves. All attempts to work within this decayed system and this class of power brokers will prove useless. And resistance must respond to the harsh new reality of a global, capitalist order that will cling to power through ever-mounting forms of brutal and overt repression. Once credit dries up for the average citizen, once massive joblessness creates a permanent and enraged underclass and the cheap manufactured goods that are the opiates of our commodity culture vanish, we will probably evolve into a system that more closely resembles classical totalitarianism. Cruder, more violent forms of repression will have to be employed as the softer mechanisms of control favored by inverted totalitarianism break down.
It is not accidental that the economic crisis will converge with the environmental crisis. In his book The Great Transformation (1944), Karl Polanyi laid out the devastating consequences – the depressions, wars and totalitarianism – that grow out of a so-called self-regulated free market. He grasped that “fascism, like socialism, was rooted in a market society that refused to function.” He warned that a financial system always devolves, without heavy government control, into a Mafia capitalism – and a Mafia political system – which is a good description of our financial and political structure. A self-regulating market, Polanyi wrote, turns human beings and the natural environment into commodities, a situation that ensures the destruction of both society and the natural environment. The free market’s assumption that nature and human beings are objects whose worth is determined by the market allows each to be exploited for profit until exhaustion or collapse. A society that no longer recognizes that nature and human life have a sacred dimension, an intrinsic value beyond monetary value, commits collective suicide. Such societies cannibalize themselves until they die. This is what we are undergoing........
Wednesday, February 10, 2010
SC101-10
http://sinkinglifeboat.blogspot.com/2010/02/there-really-is-only-one-kind-of.html
There really is only one kind of sustainability
The Fallacy of Equivalent Concerns
Despite our best efforts, there are persistent and common misunderstandings about the rudiments of overshoot and sustainability. Four come to mind:
1. The exponential function. Albert Bartlett is right about that. I can't get people alarmed by lets say, a 2-3% annual growth rate. Like the magic of compound interest, your town can double in population in a mere generation at this deceptively incremental pace.
2. Efficiency paradoxes. People don't understand that efficiencies, outside the context of a steady state economy, by making things cheaper only provoke more consumption and growth. (eg. Jevons Paradox, Khazoom-Brooks postulate).
3. Social justice doesn't solve resource shortages . The integrity of the lifeboat is more important than how the passengers treat each other. Food can be shared equitably between passengers, but if there are too many passengers, the boat will sink. The law of gravity doesn't care about social justice, human rights or human political arrangements. Moral laws, whether handed down by Stephen Lewis, Dr. William Rees or Moses, are trumped by bio-physical laws. Socialists, liberals, federal Greens, clergymen and humanitarians simply don't get it. There ain't enough to go around, however justly and efficiently things are managed or distributed. And economists of course, are equally delusional, if not mad for believing that with some technological 'fix' we can 'grow' the limits.
4. Limiting factors. The weakest link in the chain can bring a society to its knees. It can have everything in abundance, but a shortage in just one critical area can prove its undoing. This to me is the source of this current fashion of assigning "sustainability" to a series of sectors thought to enjoy some independence from others. It is this misconception which I find most pernicious.
Buzzwords
Like the word “green”, “sustainable” or “sustainability” has become the buzzword of the millennia. Corporations and governments of the left or right feel compelled to dress up the most ecologically invasive development proposal or economic activity with assurances that it is “sustainable”. Employed as an adjective it coats the unpalatable with the sweet syrup of delectability rendering the bitter pill of upheaval and damage neutral in flavour. Growth not couched in green psychobabble went down like Buckley’s Mixture, but “sustainable growth”, “sustainable tourism” and “sustainable agriculture” on the other hand tastes like sugary cough syrup. Such is the Newspeak of contemporary growthism, the vocabulary of deceit that promises a new kind of capitalism, capitalism in a green velvet glove, business as usual with apparent sensitivity to environmental concerns that will nevertheless satisfy the shareholders.
Trade-offs or the Fallacy of Equivalent Concerns
But even the compromise suggested by oxymoronic terminology does not apparently suffice to satisfy the corporate agenda. As can be witnessed in the tourist industry, economic considerations have achieved a delusional parity in a “holistic” paradigm that sees “environmental” sustainability balanced off against “economic” and “cultural” sustainability. In this three-legged stool model of viability, environmental issues must compete with other “sustainability” concerns on a level playing field with other equally valid objectives so as to achieve the optimal “trade-offs”. This misconception may be termed “The Fallacy of Equivalent Concerns”. It is the assumption that would, if applied to the human physiognomy, rate the heart as an organ of equal importance to every other organ of the body when in fact, as we know, a patient can survive with one lung, or one kidney , or a colonoscopy, or brain impairment, but when his heart stops all of these important but ancillary parts die with the patient. The economy is a subsidiary part of society. It is, as former World Bank economist Herman Daly described it, “a fully owned branch plant of the environment. “ We make our living in an economy, but we live in a biosphere.
Environmental externalisation doesn't change Mother Nature's rules
Case in point. Newfoundland politicians were warned that the cod fishery was not sustainable, but they replied that without the cod fishery, Newfoundland’s economy was not sustainable, so the fishermen of Newfoundland continued to fish. Nature replied that what the economy of Newfoundland required was irrelevant, and so refused to yield more cod. In any such contest, nature’s agenda prevails. Similarly politicians and developers want the city of Phoenix, already at 3 million people, to grow even further. Mother Nature’s City Council, however, has set limits to the volume of water available in aquifers. One day folks in Phoenix, together with 15 million other refugees in America’s south east, will discover that any economy without water is not sustainable. The needs and wants of an economy cannot trespass carrying capacity. Nature imposes boundaries. Without clean air, productive soils, replenished aquifers---without biodiversity services---any economy will collapse. And once the environment is trashed, try milking your “robust” economy for tax revenues to buy another one. Yet that is what corporate and government green wash implies. Former social democratic Premier of British Columbia, Mike Harcourt, crystallized this confusion with a classic line of obsolete reasoning, “To have a healthy environment we need a healthy economy.” He does not seem to understand that the environment was doing quite well before human activity arrived to “manage” it. His underlying assumption seems to be that the environment is an externality, a desirable luxury that we can only “afford” once we have achieved economic “prosperity”. This reasoning is equivalent to saying that yes, while it is desirable that I have a triple bypass operation, I must postpone the operation until I can afford it by continuing to work overtime at my strenuous job.
Environmental passengers
Imagine if the officers on board the sinking Titanic claimed that the cabins on the third deck were sustainable because each had a barrel of water, ten sacks of beans, a compost, renewable energy and a water-tight door. Trouble is, they would not be sustainable 5 miles underwater. Every cabin was rendered unsustainable when the Titanic itself was unsustainable after the collision. Similarly, the space shuttle Challenger could have been said to have a sustainable oxygen supply, a sustainable food supply, a sustainable waste disposal system, and a sustainable crew compartment. But one "O" ring was the limiting factor that made the Challenger unsustainable. All the other "sustainable" aspects on that space ship were rendered unsustainable by the explosion that blew the crew compartment away, eventually crashing it into the sea. Until it hit the water, apart from the loss of air pressure, the crew survived in a 'sustainable' compartment. Our economy and our culture are like that crew compartment. They are completely dependent on the health of the environment. Without the estimated $33 trillion in free biodiversity services, we're toast. Trash the environment if you like but the so-called 'prosperity' you achieve won't buy you a new one.........
There really is only one kind of sustainability
The Fallacy of Equivalent Concerns
Despite our best efforts, there are persistent and common misunderstandings about the rudiments of overshoot and sustainability. Four come to mind:
1. The exponential function. Albert Bartlett is right about that. I can't get people alarmed by lets say, a 2-3% annual growth rate. Like the magic of compound interest, your town can double in population in a mere generation at this deceptively incremental pace.
2. Efficiency paradoxes. People don't understand that efficiencies, outside the context of a steady state economy, by making things cheaper only provoke more consumption and growth. (eg. Jevons Paradox, Khazoom-Brooks postulate).
3. Social justice doesn't solve resource shortages . The integrity of the lifeboat is more important than how the passengers treat each other. Food can be shared equitably between passengers, but if there are too many passengers, the boat will sink. The law of gravity doesn't care about social justice, human rights or human political arrangements. Moral laws, whether handed down by Stephen Lewis, Dr. William Rees or Moses, are trumped by bio-physical laws. Socialists, liberals, federal Greens, clergymen and humanitarians simply don't get it. There ain't enough to go around, however justly and efficiently things are managed or distributed. And economists of course, are equally delusional, if not mad for believing that with some technological 'fix' we can 'grow' the limits.
4. Limiting factors. The weakest link in the chain can bring a society to its knees. It can have everything in abundance, but a shortage in just one critical area can prove its undoing. This to me is the source of this current fashion of assigning "sustainability" to a series of sectors thought to enjoy some independence from others. It is this misconception which I find most pernicious.
Buzzwords
Like the word “green”, “sustainable” or “sustainability” has become the buzzword of the millennia. Corporations and governments of the left or right feel compelled to dress up the most ecologically invasive development proposal or economic activity with assurances that it is “sustainable”. Employed as an adjective it coats the unpalatable with the sweet syrup of delectability rendering the bitter pill of upheaval and damage neutral in flavour. Growth not couched in green psychobabble went down like Buckley’s Mixture, but “sustainable growth”, “sustainable tourism” and “sustainable agriculture” on the other hand tastes like sugary cough syrup. Such is the Newspeak of contemporary growthism, the vocabulary of deceit that promises a new kind of capitalism, capitalism in a green velvet glove, business as usual with apparent sensitivity to environmental concerns that will nevertheless satisfy the shareholders.
Trade-offs or the Fallacy of Equivalent Concerns
But even the compromise suggested by oxymoronic terminology does not apparently suffice to satisfy the corporate agenda. As can be witnessed in the tourist industry, economic considerations have achieved a delusional parity in a “holistic” paradigm that sees “environmental” sustainability balanced off against “economic” and “cultural” sustainability. In this three-legged stool model of viability, environmental issues must compete with other “sustainability” concerns on a level playing field with other equally valid objectives so as to achieve the optimal “trade-offs”. This misconception may be termed “The Fallacy of Equivalent Concerns”. It is the assumption that would, if applied to the human physiognomy, rate the heart as an organ of equal importance to every other organ of the body when in fact, as we know, a patient can survive with one lung, or one kidney , or a colonoscopy, or brain impairment, but when his heart stops all of these important but ancillary parts die with the patient. The economy is a subsidiary part of society. It is, as former World Bank economist Herman Daly described it, “a fully owned branch plant of the environment. “ We make our living in an economy, but we live in a biosphere.
Environmental externalisation doesn't change Mother Nature's rules
Case in point. Newfoundland politicians were warned that the cod fishery was not sustainable, but they replied that without the cod fishery, Newfoundland’s economy was not sustainable, so the fishermen of Newfoundland continued to fish. Nature replied that what the economy of Newfoundland required was irrelevant, and so refused to yield more cod. In any such contest, nature’s agenda prevails. Similarly politicians and developers want the city of Phoenix, already at 3 million people, to grow even further. Mother Nature’s City Council, however, has set limits to the volume of water available in aquifers. One day folks in Phoenix, together with 15 million other refugees in America’s south east, will discover that any economy without water is not sustainable. The needs and wants of an economy cannot trespass carrying capacity. Nature imposes boundaries. Without clean air, productive soils, replenished aquifers---without biodiversity services---any economy will collapse. And once the environment is trashed, try milking your “robust” economy for tax revenues to buy another one. Yet that is what corporate and government green wash implies. Former social democratic Premier of British Columbia, Mike Harcourt, crystallized this confusion with a classic line of obsolete reasoning, “To have a healthy environment we need a healthy economy.” He does not seem to understand that the environment was doing quite well before human activity arrived to “manage” it. His underlying assumption seems to be that the environment is an externality, a desirable luxury that we can only “afford” once we have achieved economic “prosperity”. This reasoning is equivalent to saying that yes, while it is desirable that I have a triple bypass operation, I must postpone the operation until I can afford it by continuing to work overtime at my strenuous job.
Environmental passengers
Imagine if the officers on board the sinking Titanic claimed that the cabins on the third deck were sustainable because each had a barrel of water, ten sacks of beans, a compost, renewable energy and a water-tight door. Trouble is, they would not be sustainable 5 miles underwater. Every cabin was rendered unsustainable when the Titanic itself was unsustainable after the collision. Similarly, the space shuttle Challenger could have been said to have a sustainable oxygen supply, a sustainable food supply, a sustainable waste disposal system, and a sustainable crew compartment. But one "O" ring was the limiting factor that made the Challenger unsustainable. All the other "sustainable" aspects on that space ship were rendered unsustainable by the explosion that blew the crew compartment away, eventually crashing it into the sea. Until it hit the water, apart from the loss of air pressure, the crew survived in a 'sustainable' compartment. Our economy and our culture are like that crew compartment. They are completely dependent on the health of the environment. Without the estimated $33 trillion in free biodiversity services, we're toast. Trash the environment if you like but the so-called 'prosperity' you achieve won't buy you a new one.........
Monday, February 8, 2010
SC101-9
http://www.globalresearch.ca/index.php?context=va&aid=17472
War, Budgets and Blind Ambition
The Limited Minds of the American Elite
The American elite's unbounded, unquestioned, indeed unconscious sense of imperial entitlement and dominance -- based ultimately on war, the threat of war and the profit from war -- is one of the defining characteristics of our age. And if you would like to see a glaring example of this attitude in action, look no further than the front page of Tuesday's New York Times, where one David Sanger gives us his penetrating "news analysis" of the Administration's just-announced $3.8 trillion budget.
Sanger focuses on the huge, continuing deficits that the budget forecasts over the next decade. Completely ignoring the plain truth that his own expert source tell him later in the story -- that "forecasts 10 years out have no credibility" -- Sanger boldly plunges forward to tell us just what it all means. You will not be surprised to hear that the upshot of these big deficits is that neither Obama nor his successors will be able to spend any money on "new domestic initiatives" for years to come. But let's let Sanger, savant and seer, tell it in his own words:
"In a federal budget filled with mind-boggling statistics, two numbers stand out as particularly stunning, for the way they may change American politics and American power.
"The first is the projected deficit in the coming year, nearly 11 percent of the country’s entire economic output. That is not unprecedented: During the Civil War, World War I and World War II, the United States ran soaring deficits, but usually with the expectation that they would come back down once peace was restored and war spending abated.
"But the second number, buried deeper in the budget’s projections, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. …
"For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded."
What is most interesting here, of course, is not Sanger's noodle-scratching over imaginary numbers projected into an unknowable future, but his total and apparently completely unconscious adoption of the mindset of militarist empire. For as he puzzles and puzzles till his puzzler is sore on how in God's name the United States can possibly find any money at all to spend on bettering the lives of its citizens over the next 10 years, it becomes clear that Sanger -- like the rest of our political and media elite -- literally cannot conceive of an end to empire. Our elites and their courtiers literally cannot imagine life without a permanent war for global dominance, fueled by a gargantuan war machine spread across hundreds and hundreds of bases implanted in more than 100 countries.
And so this consideration, this possible outcome, does not figure in Sanger's "analysis" because it cannot: it lies far outside the scope of his consciousness. The only possible alternative he can conceive to the empire's bloody and bankrupting business as usual is some kind of divine intervention, "miraculous growth" or some "miraculous political compromise."
And make no mistake: the "miraculous political compromise" he is talking about has nothing to do with ending or even trimming the empire. A "compromise" on this issue could only be posited if there was some present conflict over it. But both parties are deeply committed to increasing spending on the wars and the war machine.
No, by "compromise" Sanger means some sort of "Grand Bargain" between the parties to cut Social Security and Medicare, along the lines of the "blue-ribbon panel" of entitlement cutters now being pushed by the Obama Administration. The first effort to impose this elitist, unaccountable commission failed in the Senate a few weeks ago -- although the Republicans have proposed such panels before, they didn't like this one because Obama proposed it -- but the idea will keep coming back, and Sanger and the elite will doubtless get their "miracle" of slashing the remaining bits of the safety net to shreds in due time.
These are the only possibilities for deficit-cutting that Sanger can even remotely contemplate: some whiz-bang new gizmo -- or maybe some hot new "financial instruments" cooked up by Wall Street -- that will goose the economy with a bright new bubble ... or else finally telling our old, sick, vulnerable and unfortunate to just crawl off and die already. That's it. That's all that our elite can envision.
Yet the ending of the imperial wars and the dismantling of America's global military empire -- and its global gulag -- would save trillions of dollars in the coming years. Not only from direct military spending, but also from the vastly reduced need for "Homeland security" funding in a world where the United States was no longer invading foreign lands, killing their people, supporting their tyrants -- and inciting revenge and resistance.
This would release a flood of money for any number of "new domestic initiatives," while also giving scope for deep tax cuts across the board. Working people would thrive, the poor, the sick and the vulnerable would be bettered, businesses would grow, opportunity would expand, the care and education of our children would be greatly enhanced, our infrastructure could be repaired and strengthened, our environment better cleansed and cared for. In short, people could keep more of their own money while government spending could be directed toward improving the quality of life of all the nation's citizens.
This is no utopian vision. Many problems, much suffering would remain. But it would be a better society -- more humane, more just, more secure, more peaceful, more prosperous than it is now. Such an alternative is entirely achievable, by ordinary humans; it would require no divine miracles, no god-like heroes to bring it about.
But such a society is precisely what our elites cannot -- or, to be more accurate, will not -- imagine. Because, yes, it would "erode" their "influence" around the world to some extent. Although they would still be comfortable, coddled and privileged, they could no longer merge their individual psyches with the larger entity of a globe-spanning, death-dealing empire -- a connection which, although itself a projection of their own brains, gives them a forever-inflated sense of worth and importance.
And on a more prosaic level, the end of empire would mean an end to the horrendous economic distortion wrought by our war-profiteering industries. Other businesses would inevitably come to the fore, economic activity would be spread more evenly across more sectors. And so, yes, those who have feasted so gluttonously for so long on blood money would not be quite as rich as they are now.
A better world -- not perfect, by no means perfect, but much better -- is entirely possible. We could easily dismantle the empire -- carefully, safely, with deliberation -- over the next ten years. It is a reasonable, moderate, serious option. It would not require violent revolution, or vast social upheaval. But our elites do not want this. They can no longer fathom life without the exercise -- and worship -- of power that empire entails. They will not accept -- or even contemplate -- any alternative to it.
And thus every option and policy we are offered -- whether from right-wing Republicans or "progressive" Democrats, or from "serious" news analysts on "serious" papers -- must fall within these pathetically cramped, constricted mental horizons. Empire -- the imposition of dominion by violence and threat of violence, and the financial and moral corruption this breeds, the example it sets at every level of society -- is the canker in the body politic. Until it is dealt with, there will be no healing, no hope, no change -- just more degradation and disaster all down the line.
War, Budgets and Blind Ambition
The Limited Minds of the American Elite
The American elite's unbounded, unquestioned, indeed unconscious sense of imperial entitlement and dominance -- based ultimately on war, the threat of war and the profit from war -- is one of the defining characteristics of our age. And if you would like to see a glaring example of this attitude in action, look no further than the front page of Tuesday's New York Times, where one David Sanger gives us his penetrating "news analysis" of the Administration's just-announced $3.8 trillion budget.
Sanger focuses on the huge, continuing deficits that the budget forecasts over the next decade. Completely ignoring the plain truth that his own expert source tell him later in the story -- that "forecasts 10 years out have no credibility" -- Sanger boldly plunges forward to tell us just what it all means. You will not be surprised to hear that the upshot of these big deficits is that neither Obama nor his successors will be able to spend any money on "new domestic initiatives" for years to come. But let's let Sanger, savant and seer, tell it in his own words:
"In a federal budget filled with mind-boggling statistics, two numbers stand out as particularly stunning, for the way they may change American politics and American power.
"The first is the projected deficit in the coming year, nearly 11 percent of the country’s entire economic output. That is not unprecedented: During the Civil War, World War I and World War II, the United States ran soaring deficits, but usually with the expectation that they would come back down once peace was restored and war spending abated.
"But the second number, buried deeper in the budget’s projections, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. …
"For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded."
What is most interesting here, of course, is not Sanger's noodle-scratching over imaginary numbers projected into an unknowable future, but his total and apparently completely unconscious adoption of the mindset of militarist empire. For as he puzzles and puzzles till his puzzler is sore on how in God's name the United States can possibly find any money at all to spend on bettering the lives of its citizens over the next 10 years, it becomes clear that Sanger -- like the rest of our political and media elite -- literally cannot conceive of an end to empire. Our elites and their courtiers literally cannot imagine life without a permanent war for global dominance, fueled by a gargantuan war machine spread across hundreds and hundreds of bases implanted in more than 100 countries.
And so this consideration, this possible outcome, does not figure in Sanger's "analysis" because it cannot: it lies far outside the scope of his consciousness. The only possible alternative he can conceive to the empire's bloody and bankrupting business as usual is some kind of divine intervention, "miraculous growth" or some "miraculous political compromise."
And make no mistake: the "miraculous political compromise" he is talking about has nothing to do with ending or even trimming the empire. A "compromise" on this issue could only be posited if there was some present conflict over it. But both parties are deeply committed to increasing spending on the wars and the war machine.
No, by "compromise" Sanger means some sort of "Grand Bargain" between the parties to cut Social Security and Medicare, along the lines of the "blue-ribbon panel" of entitlement cutters now being pushed by the Obama Administration. The first effort to impose this elitist, unaccountable commission failed in the Senate a few weeks ago -- although the Republicans have proposed such panels before, they didn't like this one because Obama proposed it -- but the idea will keep coming back, and Sanger and the elite will doubtless get their "miracle" of slashing the remaining bits of the safety net to shreds in due time.
These are the only possibilities for deficit-cutting that Sanger can even remotely contemplate: some whiz-bang new gizmo -- or maybe some hot new "financial instruments" cooked up by Wall Street -- that will goose the economy with a bright new bubble ... or else finally telling our old, sick, vulnerable and unfortunate to just crawl off and die already. That's it. That's all that our elite can envision.
Yet the ending of the imperial wars and the dismantling of America's global military empire -- and its global gulag -- would save trillions of dollars in the coming years. Not only from direct military spending, but also from the vastly reduced need for "Homeland security" funding in a world where the United States was no longer invading foreign lands, killing their people, supporting their tyrants -- and inciting revenge and resistance.
This would release a flood of money for any number of "new domestic initiatives," while also giving scope for deep tax cuts across the board. Working people would thrive, the poor, the sick and the vulnerable would be bettered, businesses would grow, opportunity would expand, the care and education of our children would be greatly enhanced, our infrastructure could be repaired and strengthened, our environment better cleansed and cared for. In short, people could keep more of their own money while government spending could be directed toward improving the quality of life of all the nation's citizens.
This is no utopian vision. Many problems, much suffering would remain. But it would be a better society -- more humane, more just, more secure, more peaceful, more prosperous than it is now. Such an alternative is entirely achievable, by ordinary humans; it would require no divine miracles, no god-like heroes to bring it about.
But such a society is precisely what our elites cannot -- or, to be more accurate, will not -- imagine. Because, yes, it would "erode" their "influence" around the world to some extent. Although they would still be comfortable, coddled and privileged, they could no longer merge their individual psyches with the larger entity of a globe-spanning, death-dealing empire -- a connection which, although itself a projection of their own brains, gives them a forever-inflated sense of worth and importance.
And on a more prosaic level, the end of empire would mean an end to the horrendous economic distortion wrought by our war-profiteering industries. Other businesses would inevitably come to the fore, economic activity would be spread more evenly across more sectors. And so, yes, those who have feasted so gluttonously for so long on blood money would not be quite as rich as they are now.
A better world -- not perfect, by no means perfect, but much better -- is entirely possible. We could easily dismantle the empire -- carefully, safely, with deliberation -- over the next ten years. It is a reasonable, moderate, serious option. It would not require violent revolution, or vast social upheaval. But our elites do not want this. They can no longer fathom life without the exercise -- and worship -- of power that empire entails. They will not accept -- or even contemplate -- any alternative to it.
And thus every option and policy we are offered -- whether from right-wing Republicans or "progressive" Democrats, or from "serious" news analysts on "serious" papers -- must fall within these pathetically cramped, constricted mental horizons. Empire -- the imposition of dominion by violence and threat of violence, and the financial and moral corruption this breeds, the example it sets at every level of society -- is the canker in the body politic. Until it is dealt with, there will be no healing, no hope, no change -- just more degradation and disaster all down the line.
Saturday, February 6, 2010
SC101-8
http://www.globalresearch.ca/index.php?context=va&aid=17449
Sovereign Debt Fears Signal New Stage of Global Crisis
Stock markets in Europe and Asia fell sharply Friday in the second day of a near-panic selloff fueled by fears that the debt crisis facing weaker European economies will throw the world economy into a “double-dip” recession.......
.......Signs of mounting resistance by the working class in these countries are playing an enormous role in the tremors rippling through the global financial markets. There is a growing sense in governments and board rooms around the world that a major confrontation with the working class is coming, with potentially revolutionary implications.
The banks and the media are demanding that heads of state and parliaments demonstrate the “political will” and “political consensus” necessary to impose historic attacks on the working class. These phrases are euphemisms for a degree of ruthlessness that implies a readiness to employ state repression. However, the financial markets are at once skeptical over the willingness of political leaders to employ the required measures and anxious over the outcome of such a confrontation.......
.......As in every other industrialized country, the American state responded to the financial crash of 2008 by taking on the debts of its banks and essentially bankrupting its treasury in order to preserve the wealth of its financial elite. The Obama administration, no less than the governments of Europe, is demanding that the cost be borne by the general population in the form of sweeping cuts in basic social programs and a reduction in consumption—i.e., a permanent and dramatic decline in working class living standards.
Unlike in previous international financial crises, such as the Asian debt crisis of the 1990s, the United States cannot play the role of lender of last resort. The United States has irretrievably lost its previous position as the dominant world economic power, and its decline is reflected in growing challenges to the role of the dollar as the world reserve and trading currency.
At last month’s World Economic Forum in Davos, French President Nicolas Sarkozy in his keynote speech said he would use his upcoming presidency of the Group of 20 nations to push for a new international monetary system in which the dollar would no longer be the primary reserve currency. And on Wednesday, Moody’s Investors Service warned that the United States faces the loss of its triple-A sovereign credit rating unless Obama moves to slash the federal deficit by carrying out more draconian spending cuts than he has thus far announced.
It is the erosion of US economic power and solvency that lends to the sovereign debt crises in Greece, Portugal and other European countries such an explosive and universal character.
The recent rise in the dollar is the result of a “flight to safety” by investors who fear a collapse in world asset bubbles and consider US Treasury bonds, along with German government debt, to be a temporary haven. In important respects, the short-term reversal in the dollar’s decline is an expression of a deepening of the crisis on world financial markets.
As a number of economists warned last year, the US policy of flooding financial markets with cheap credit on the basis of near-zero interest rates and the electronic equivalent of printing a trillion dollars—designed to prop up the major US banks and enable them to record bumper profits despite double-digit unemployment—fueled a huge wave of speculation on risky assets such as stocks, bonds, commodities and currencies. These economists predicted that a major rise in the value of the dollar would pull the rug out from under this speculation, which was based on the assumption of a continued decline in the dollar, and force a rapid and destabilizing selloff of inflated assets.
It now appears that this collapse in asset bubbles has begun.
Sovereign Debt Fears Signal New Stage of Global Crisis
Stock markets in Europe and Asia fell sharply Friday in the second day of a near-panic selloff fueled by fears that the debt crisis facing weaker European economies will throw the world economy into a “double-dip” recession.......
.......Signs of mounting resistance by the working class in these countries are playing an enormous role in the tremors rippling through the global financial markets. There is a growing sense in governments and board rooms around the world that a major confrontation with the working class is coming, with potentially revolutionary implications.
The banks and the media are demanding that heads of state and parliaments demonstrate the “political will” and “political consensus” necessary to impose historic attacks on the working class. These phrases are euphemisms for a degree of ruthlessness that implies a readiness to employ state repression. However, the financial markets are at once skeptical over the willingness of political leaders to employ the required measures and anxious over the outcome of such a confrontation.......
.......As in every other industrialized country, the American state responded to the financial crash of 2008 by taking on the debts of its banks and essentially bankrupting its treasury in order to preserve the wealth of its financial elite. The Obama administration, no less than the governments of Europe, is demanding that the cost be borne by the general population in the form of sweeping cuts in basic social programs and a reduction in consumption—i.e., a permanent and dramatic decline in working class living standards.
Unlike in previous international financial crises, such as the Asian debt crisis of the 1990s, the United States cannot play the role of lender of last resort. The United States has irretrievably lost its previous position as the dominant world economic power, and its decline is reflected in growing challenges to the role of the dollar as the world reserve and trading currency.
At last month’s World Economic Forum in Davos, French President Nicolas Sarkozy in his keynote speech said he would use his upcoming presidency of the Group of 20 nations to push for a new international monetary system in which the dollar would no longer be the primary reserve currency. And on Wednesday, Moody’s Investors Service warned that the United States faces the loss of its triple-A sovereign credit rating unless Obama moves to slash the federal deficit by carrying out more draconian spending cuts than he has thus far announced.
It is the erosion of US economic power and solvency that lends to the sovereign debt crises in Greece, Portugal and other European countries such an explosive and universal character.
The recent rise in the dollar is the result of a “flight to safety” by investors who fear a collapse in world asset bubbles and consider US Treasury bonds, along with German government debt, to be a temporary haven. In important respects, the short-term reversal in the dollar’s decline is an expression of a deepening of the crisis on world financial markets.
As a number of economists warned last year, the US policy of flooding financial markets with cheap credit on the basis of near-zero interest rates and the electronic equivalent of printing a trillion dollars—designed to prop up the major US banks and enable them to record bumper profits despite double-digit unemployment—fueled a huge wave of speculation on risky assets such as stocks, bonds, commodities and currencies. These economists predicted that a major rise in the value of the dollar would pull the rug out from under this speculation, which was based on the assumption of a continued decline in the dollar, and force a rapid and destabilizing selloff of inflated assets.
It now appears that this collapse in asset bubbles has begun.
Thursday, February 4, 2010
SC101-7
http://thearchdruidreport.blogspot.com/
Endgame
I’ve mentioned more than once in these essays the foreshortening effect that textbook history can have on our understanding of the historical events going on around us. The stark chronologies most of us get fed in school can make it hard to remember that even the most drastic social changes happen over time, amid the fabric of everyday life and a flurry of events that can seem more important at the time.
This becomes especially problematic in times like the present, when apocalyptic prophecy is a central trope in the popular culture that frames a people’s hopes and fears for the future. When the collective imagination becomes obsessed with the dream of a sudden cataclysm that sweeps away the old world overnight and ushers in the new, even relatively rapid social changes can pass by unnoticed. The twilight years of Rome offer a good object lesson; so many people were convinced that the Second Coming might occur at any moment that the collapse of classical civilization went almost unnoticed; only a tiny handful of writers from those years show any recognition that something out of the ordinary was happening at all.
Reflections of this sort have been much on my mind lately, and there’s a reason for that. Scattered among the statistical noise that makes up most of today’s news are data points that suggest to me that business as usual is quietly coming to an end around us, launching us into a new world for which very few of us have made any preparations at all.
Here’s one example. Friends of mine in a couple of midwestern states have mentioned that the steady trickle of refugees from the Chicago slums into their communities has taken a sharp turn up. There’s a long history of dysfunction behind this. Back in 1999, Chicago began tearing down its vast empire of huge high-rise projects, promising to replace them with less ghastly and more widely distributed housing for the poor. Most of the replacements, of course, never got built.
When the waiting list for Section 8 rent subsidies, the only other option available, got long enough to become a public relations problem, the bureaucrats in charge simply closed the list to new applicants; rumors (hotly denied by the Chicago city government) claim that poor families in Chicago were openly advised to move to other states. Whether for that reason or simple economic survival, a fair number of them did.
Fast forward to the middle of 2009. Around then, facing budget deficits second only to California, the state of Illinois quietly stopped paying its social service providers. In theory, the money is still allocated; in practice, it’s been more than six months since Illinois preschools, senior centers, food banks, and the like have received a check from the state for the services they provide, and many of them are on the verge of going broke. Subsidized rent has apparently taken an equivalent hit. Believers in free-market economics have been insisting for years that the end of rent subsidies would let the free market reduce rents to a level that people could afford, but I don’t recommend holding your breath; this is the same free market, remember, that gave the United States some of the world’s worst slums in the late 19th and early 20th centuries.
The actual effects have been instructive. Squeezed between sharply contracting benefits and a sharply contracting job market, many of Chicago’s poor are hitting the road, heading in any direction that offers more options. Forget the survivalist fantasy of violent hordes pouring out of the inner cities to ravage everything in their path; today’s slum residents are instead becoming the Okies of the Great Recession. In the process, part of business as usual in the United States is coming to an end.
Illinois is far from the only state that backed itself into a corner by assuming that rising tax revenues from a bubble economy could be extrapolated indefinitely into the future. 41 US states currently face budget deficits. California has received most of the media attention so far, a good deal of it focused on the political gridlock that has kept the state frozen in crisis for years. Behind the partisan posturing in Sacramento, though, lies a deeper and harsher reality. The state of California is essentially bankrupt; nearly all the mistakes made by the once-wealthy states of the Rust Belt as they slid down the curve of their own decline have been faithfully copied by California as it approaches its destiny as the Rust Belt of the 21st century. I wonder how many local governments in neighboring states have drawn up plans for dealing with the tide of economic refugees once California can no longer pay for its welfare system, and the poor of Los Angeles and other California cities join those of Chicago on the road?
I could go on, but I think the point has been made. State governments are the canaries in our national coal mine; their tax receipts are one of the very few measures of economic activity that aren’t being systematically fiddled by the federal government. The figures coming out of state revenue offices strike a jarring contrast with the handwaving about “green shoots” and an imminent return to prosperity heard from Washington DC and the media. Across the country, every few months, states that have already cut spending drastically to cope with record declines in tax income find that they have to go back and do it all over again, because their revenue – and by inference, the incomes, purchases, business activity, and other economic phenomena that feed into taxes – has dropped even further. Now it’s true that state budgets get hit whenever the economy goes into recession, and keep on hurting even when the recession is supposed to be over, but compared to past examples, the losses clobbering state funding these days are off the scale, and a great many programs that have been fixtures of American public life for as long as most of us have been living are facing the chopping block.
A different reality pertains within the Washington DC beltway. Where states that fail to balance their budgets get their bond ratings cut and, in some cases, are having trouble finding buyers for their debt at less than usurious interest rates, the federal government seems to be able to defy the normal behavior of bond markets with impunity. Despite soaring deficits, not to mention a growing disinclination on the part of foreign governments to keep on financing the same, every new issuance of US treasury bills somehow finds buyers in such abundance that interest rates stay remarkably low. A few weeks ago, Tom Whipple of ASPO became the latest in a tolerably large number of perceptive observers who have pointed out that this makes sense only if the US government is surreptitiously buying its own debt.
The process works something like this. The Federal Reserve, which is not actually a government agency but a consortium of large banks working under a Federal charter, has the statutory right to mint money in the US. These days, that can be done by a few keystrokes on a computer, and another few keystrokes can transfer that money to any bank in the nation. Some of those banks use the money to buy up US treasury bills, probably by way of subsidiaries chartered in the Cayman Islands and the like, and these same off-book subsidiaries then stash the T-bills and keep them off the books. The money thus laundered finally arrives at the US treasury, where it gets spent.
It may be a bit more complex than that. Those huge sums of money voted by Congress to bail out the financial system may well have been diverted into this process – that would certainly explain why the Department of the Treasury and the Federal Reserve Bank of New York have stonewalled every attempt to trace exactly where all that money went. Friendly foreign governments may also have a hand in the process. One way or another, though, those of my readers who remember the financial engineering that got Enron its fifteen minutes of fame may find all this uncomfortably familiar – and it is. The world’s largest economy has become, in effect, the United States of Enron.
Plenty of countries in the past have tried to cover expenses that overshot income by spinning the presses at the local mint. The result is generally hyperinflation, of the sort made famous in the 1920s by Germany and more recently by Zimbabwe. That I know of, though, nobody has tried the experiment with a national economy in a steep deflationary depression, of the sort that has been taking shape in America and elsewhere since the real estate bubble crashed and burned in 2008. In theory, at least in the short term, it might just work; the inflationary pressures caused by printing money wholesale could conceivably cancel out the deflationary pressures of a collapsing bubble and a contracting economy – at least for a while.
The difficulty, of course, is that pumping the money supply fixes the symptoms of economic failure without treating the causes, and in every case I know of, governments that resort to it end up caught on a treadmill that requires ever larger infusions of paper money just to maintain the status quo. Sooner or later, as the amount of currency in circulation outstrips the goods and services available to buy, inflation spins out of control, the currency loses most or all of its value, and the economy grinds to a halt until a new currency can be issued on some sounder basis. In 1920s Germany, they managed this last feat by taking out a mortgage on the entire country, and issued “Rentenmarks” backed by that mortgage. In the wake of the late housing bubble, that seems an unlikely option here, though no doubt some gimmick will be found.
It’s crucial to realize, though, that this move comes at the end of a long historical trajectory. From the early days of the industrial revolution into the early 1970s, the United States possessed the immense economic advantage of sizable reserves of whatever the cutting-edge energy source happened to be. During what Lewis Mumford called the eotechnic era, when waterwheels were the prime mover for industry and canals were the core transportation technology, the United States prospered because it had an abundance of mill sites and internal waterways. During Mumford’s paleotechnic era, when coal and railways replaced water and canal boats, the United States once again found itself blessed with huge coal reserves, and the arrival of the neotechnic era, when petroleum and highways became the new foundation of power, the United States found that nature had supplied it with so much oil that in 1950, it produced more petroleum than all other countries combined.
That trajectory came to an abrupt end in the 1970s, when nuclear power – expected by nearly everyone to be the next step in the sequence – turned out to be hopelessly uneconomical, and renewables proved unable to take up the slack. The neotechnic age, in effect, turned out to have no successor. Since then, for most of the last thirty years, the United States has been trying to stave off the inevitable – the sharp downward readjustment of our national standard of living and international importance following the peak and decline of our petroleum production and the depletion of most of the other natural resources that once undergirded American economic and political power. We’ve tried accelerating drawdown of natural resources; we’ve tried abandoning our national infrastructure, our industries, and our agricultural hinterlands; we’ve tried building ever more baroque systems of financial gimmickry to prop up our decaying economy with wealth from overseas; over the last decade and a half, we’ve resorted to systematically inflating speculative bubbles – and now, with our backs to the wall, we’re printing money as though there’s no tomorrow.
Now it’s possible that the current US administration will be able to pull one more rabbit out of its hat, and find a new gimmick to keep things going for a while longer. I have to confess that this does not look likely to me. Monetizing the national debt, as economists call the attempt to pay a nation’s bills by means of a hyperactive printing press, is a desperation move; it’s hard to imagine any reason that it would have been chosen if there were any other option in sight.
What this means, if I’m right, is that we may have just moved into the endgame of America’s losing battle with the consequences of its own history. For many years now, people in the peak oil scene – and the wider community of those concerned about the future, to be sure – have had, or thought they had, the luxury of ample time to make plans and take action. Every so often books would be written and speeches made claiming that something had to be done right away, while there was still time, but most people took that as the rhetorical flourish it usually was, and went on with their lives in the confident expectation that the crisis was still a long ways off.
We may no longer have that option. If I read the signs correctly, America has finally reached the point where its economy is so deep into overshoot that catabolic collapse is beginning in earnest. If so, a great many of the things most of us in this country have treated as permanent fixtures are likely to go away over the years immediately before us, as the United States transforms itself into a Third World country. The changes involved won’t be sudden, and it seems unlikely that most of them will get much play in the domestic mass media; a decade from now, let’s say, when half the American workforce has no steady work, decaying suburbs have mutated into squalid shantytowns, and domestic insurgencies flare across the south and the mountain West, those who still have access to cable television will no doubt be able to watch talking heads explain how we’re all better off than we were in 2000.
Those of my readers who haven’t already been beggared by the unraveling of what’s left of the economy, and have some hope of keeping a roof over their heads for the foreseeable future, might be well advised to stock their pantries, clear their debts, and get to know their neighbors, if they haven’t taken these sensible steps already. Those of my readers who haven’t taken the time already to learn a practical skill or two, well enough that others might be willing to pay or barter for the results, had better get a move on. Those of my readers who want to see some part of the heritage of the present saved for the future, finally, may want to do something practical about that, and soon. I may be wrong – and to be frank, I hope that I’m wrong – but it looks increasingly to me as though we’re in for a very rough time in the very near future.
Endgame
I’ve mentioned more than once in these essays the foreshortening effect that textbook history can have on our understanding of the historical events going on around us. The stark chronologies most of us get fed in school can make it hard to remember that even the most drastic social changes happen over time, amid the fabric of everyday life and a flurry of events that can seem more important at the time.
This becomes especially problematic in times like the present, when apocalyptic prophecy is a central trope in the popular culture that frames a people’s hopes and fears for the future. When the collective imagination becomes obsessed with the dream of a sudden cataclysm that sweeps away the old world overnight and ushers in the new, even relatively rapid social changes can pass by unnoticed. The twilight years of Rome offer a good object lesson; so many people were convinced that the Second Coming might occur at any moment that the collapse of classical civilization went almost unnoticed; only a tiny handful of writers from those years show any recognition that something out of the ordinary was happening at all.
Reflections of this sort have been much on my mind lately, and there’s a reason for that. Scattered among the statistical noise that makes up most of today’s news are data points that suggest to me that business as usual is quietly coming to an end around us, launching us into a new world for which very few of us have made any preparations at all.
Here’s one example. Friends of mine in a couple of midwestern states have mentioned that the steady trickle of refugees from the Chicago slums into their communities has taken a sharp turn up. There’s a long history of dysfunction behind this. Back in 1999, Chicago began tearing down its vast empire of huge high-rise projects, promising to replace them with less ghastly and more widely distributed housing for the poor. Most of the replacements, of course, never got built.
When the waiting list for Section 8 rent subsidies, the only other option available, got long enough to become a public relations problem, the bureaucrats in charge simply closed the list to new applicants; rumors (hotly denied by the Chicago city government) claim that poor families in Chicago were openly advised to move to other states. Whether for that reason or simple economic survival, a fair number of them did.
Fast forward to the middle of 2009. Around then, facing budget deficits second only to California, the state of Illinois quietly stopped paying its social service providers. In theory, the money is still allocated; in practice, it’s been more than six months since Illinois preschools, senior centers, food banks, and the like have received a check from the state for the services they provide, and many of them are on the verge of going broke. Subsidized rent has apparently taken an equivalent hit. Believers in free-market economics have been insisting for years that the end of rent subsidies would let the free market reduce rents to a level that people could afford, but I don’t recommend holding your breath; this is the same free market, remember, that gave the United States some of the world’s worst slums in the late 19th and early 20th centuries.
The actual effects have been instructive. Squeezed between sharply contracting benefits and a sharply contracting job market, many of Chicago’s poor are hitting the road, heading in any direction that offers more options. Forget the survivalist fantasy of violent hordes pouring out of the inner cities to ravage everything in their path; today’s slum residents are instead becoming the Okies of the Great Recession. In the process, part of business as usual in the United States is coming to an end.
Illinois is far from the only state that backed itself into a corner by assuming that rising tax revenues from a bubble economy could be extrapolated indefinitely into the future. 41 US states currently face budget deficits. California has received most of the media attention so far, a good deal of it focused on the political gridlock that has kept the state frozen in crisis for years. Behind the partisan posturing in Sacramento, though, lies a deeper and harsher reality. The state of California is essentially bankrupt; nearly all the mistakes made by the once-wealthy states of the Rust Belt as they slid down the curve of their own decline have been faithfully copied by California as it approaches its destiny as the Rust Belt of the 21st century. I wonder how many local governments in neighboring states have drawn up plans for dealing with the tide of economic refugees once California can no longer pay for its welfare system, and the poor of Los Angeles and other California cities join those of Chicago on the road?
I could go on, but I think the point has been made. State governments are the canaries in our national coal mine; their tax receipts are one of the very few measures of economic activity that aren’t being systematically fiddled by the federal government. The figures coming out of state revenue offices strike a jarring contrast with the handwaving about “green shoots” and an imminent return to prosperity heard from Washington DC and the media. Across the country, every few months, states that have already cut spending drastically to cope with record declines in tax income find that they have to go back and do it all over again, because their revenue – and by inference, the incomes, purchases, business activity, and other economic phenomena that feed into taxes – has dropped even further. Now it’s true that state budgets get hit whenever the economy goes into recession, and keep on hurting even when the recession is supposed to be over, but compared to past examples, the losses clobbering state funding these days are off the scale, and a great many programs that have been fixtures of American public life for as long as most of us have been living are facing the chopping block.
A different reality pertains within the Washington DC beltway. Where states that fail to balance their budgets get their bond ratings cut and, in some cases, are having trouble finding buyers for their debt at less than usurious interest rates, the federal government seems to be able to defy the normal behavior of bond markets with impunity. Despite soaring deficits, not to mention a growing disinclination on the part of foreign governments to keep on financing the same, every new issuance of US treasury bills somehow finds buyers in such abundance that interest rates stay remarkably low. A few weeks ago, Tom Whipple of ASPO became the latest in a tolerably large number of perceptive observers who have pointed out that this makes sense only if the US government is surreptitiously buying its own debt.
The process works something like this. The Federal Reserve, which is not actually a government agency but a consortium of large banks working under a Federal charter, has the statutory right to mint money in the US. These days, that can be done by a few keystrokes on a computer, and another few keystrokes can transfer that money to any bank in the nation. Some of those banks use the money to buy up US treasury bills, probably by way of subsidiaries chartered in the Cayman Islands and the like, and these same off-book subsidiaries then stash the T-bills and keep them off the books. The money thus laundered finally arrives at the US treasury, where it gets spent.
It may be a bit more complex than that. Those huge sums of money voted by Congress to bail out the financial system may well have been diverted into this process – that would certainly explain why the Department of the Treasury and the Federal Reserve Bank of New York have stonewalled every attempt to trace exactly where all that money went. Friendly foreign governments may also have a hand in the process. One way or another, though, those of my readers who remember the financial engineering that got Enron its fifteen minutes of fame may find all this uncomfortably familiar – and it is. The world’s largest economy has become, in effect, the United States of Enron.
Plenty of countries in the past have tried to cover expenses that overshot income by spinning the presses at the local mint. The result is generally hyperinflation, of the sort made famous in the 1920s by Germany and more recently by Zimbabwe. That I know of, though, nobody has tried the experiment with a national economy in a steep deflationary depression, of the sort that has been taking shape in America and elsewhere since the real estate bubble crashed and burned in 2008. In theory, at least in the short term, it might just work; the inflationary pressures caused by printing money wholesale could conceivably cancel out the deflationary pressures of a collapsing bubble and a contracting economy – at least for a while.
The difficulty, of course, is that pumping the money supply fixes the symptoms of economic failure without treating the causes, and in every case I know of, governments that resort to it end up caught on a treadmill that requires ever larger infusions of paper money just to maintain the status quo. Sooner or later, as the amount of currency in circulation outstrips the goods and services available to buy, inflation spins out of control, the currency loses most or all of its value, and the economy grinds to a halt until a new currency can be issued on some sounder basis. In 1920s Germany, they managed this last feat by taking out a mortgage on the entire country, and issued “Rentenmarks” backed by that mortgage. In the wake of the late housing bubble, that seems an unlikely option here, though no doubt some gimmick will be found.
It’s crucial to realize, though, that this move comes at the end of a long historical trajectory. From the early days of the industrial revolution into the early 1970s, the United States possessed the immense economic advantage of sizable reserves of whatever the cutting-edge energy source happened to be. During what Lewis Mumford called the eotechnic era, when waterwheels were the prime mover for industry and canals were the core transportation technology, the United States prospered because it had an abundance of mill sites and internal waterways. During Mumford’s paleotechnic era, when coal and railways replaced water and canal boats, the United States once again found itself blessed with huge coal reserves, and the arrival of the neotechnic era, when petroleum and highways became the new foundation of power, the United States found that nature had supplied it with so much oil that in 1950, it produced more petroleum than all other countries combined.
That trajectory came to an abrupt end in the 1970s, when nuclear power – expected by nearly everyone to be the next step in the sequence – turned out to be hopelessly uneconomical, and renewables proved unable to take up the slack. The neotechnic age, in effect, turned out to have no successor. Since then, for most of the last thirty years, the United States has been trying to stave off the inevitable – the sharp downward readjustment of our national standard of living and international importance following the peak and decline of our petroleum production and the depletion of most of the other natural resources that once undergirded American economic and political power. We’ve tried accelerating drawdown of natural resources; we’ve tried abandoning our national infrastructure, our industries, and our agricultural hinterlands; we’ve tried building ever more baroque systems of financial gimmickry to prop up our decaying economy with wealth from overseas; over the last decade and a half, we’ve resorted to systematically inflating speculative bubbles – and now, with our backs to the wall, we’re printing money as though there’s no tomorrow.
Now it’s possible that the current US administration will be able to pull one more rabbit out of its hat, and find a new gimmick to keep things going for a while longer. I have to confess that this does not look likely to me. Monetizing the national debt, as economists call the attempt to pay a nation’s bills by means of a hyperactive printing press, is a desperation move; it’s hard to imagine any reason that it would have been chosen if there were any other option in sight.
What this means, if I’m right, is that we may have just moved into the endgame of America’s losing battle with the consequences of its own history. For many years now, people in the peak oil scene – and the wider community of those concerned about the future, to be sure – have had, or thought they had, the luxury of ample time to make plans and take action. Every so often books would be written and speeches made claiming that something had to be done right away, while there was still time, but most people took that as the rhetorical flourish it usually was, and went on with their lives in the confident expectation that the crisis was still a long ways off.
We may no longer have that option. If I read the signs correctly, America has finally reached the point where its economy is so deep into overshoot that catabolic collapse is beginning in earnest. If so, a great many of the things most of us in this country have treated as permanent fixtures are likely to go away over the years immediately before us, as the United States transforms itself into a Third World country. The changes involved won’t be sudden, and it seems unlikely that most of them will get much play in the domestic mass media; a decade from now, let’s say, when half the American workforce has no steady work, decaying suburbs have mutated into squalid shantytowns, and domestic insurgencies flare across the south and the mountain West, those who still have access to cable television will no doubt be able to watch talking heads explain how we’re all better off than we were in 2000.
Those of my readers who haven’t already been beggared by the unraveling of what’s left of the economy, and have some hope of keeping a roof over their heads for the foreseeable future, might be well advised to stock their pantries, clear their debts, and get to know their neighbors, if they haven’t taken these sensible steps already. Those of my readers who haven’t taken the time already to learn a practical skill or two, well enough that others might be willing to pay or barter for the results, had better get a move on. Those of my readers who want to see some part of the heritage of the present saved for the future, finally, may want to do something practical about that, and soon. I may be wrong – and to be frank, I hope that I’m wrong – but it looks increasingly to me as though we’re in for a very rough time in the very near future.
SC101-6
http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02?dist=beforebell
20 reasons Global Debt Time Bomb explodes soon
......1. Federal Budget Deficit Bomb. The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama's 2010 budget, to $14.3 trillion vs. $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America's debt at 84% of GDP will soon pass that toxic 90% trigger point.
2. U.S. Foreign Trade Bomb. Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.
3. Weakening U.S. Dollar as Foreign Reserve Currency Bomb. Fear China and other currencies will replace dollar as main foreign reserves. The dollar's fallen: The main index measuring dollar strength has gone from 120 at the Clinton-to-Bush handoff to below 80 today.
4. Cheap Money Bomb: Credit Ratings Down, Rates Up. Economists at S&P, Fitch and Moody's were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.
5. Global Real Estate Bomb. Dubai Tower, new "world's tallest building" is empty. BusinessWeek warns that China's housing collapse could be worse than America's. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a "ticking time bomb" bloating 25% of bank balance sheets.
6. Peak Oil and the Population Bomb. China and India each need 500 new cities. The United Nations estimates world population exploding 50% from 6 billion to 9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling "America Dream."
7. Social Security Bomb. We have no choice; eventually we must either cut benefits or raise taxes. Politicians hate both, so they'll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.
8. Medicare: A Nuclear Bomb. Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.
9. Health-care Insurance Bomb. Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.
10. State and Local Government Budget Bombs. Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.
11. Underfunded Corporate Pensions Bomb. From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now underfunded. Defaults are guaranteed by taxpayers.
12. Consumer Debt Bomb. Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it -- yes love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.
13. Personal Savings Bomb. Before the 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero. Now it's increasing, slowing retail recovery. Today, government's the big "unsaver."
14. War and Military Defense Deficits. Costs of Iraq and Afghanistan wars -- $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.
15. Homeland Insecurity Bomb. Security at airports, seaports, borders, vulnerable chemical plants all increase budgets.
16. Fed/Treasury Bailout Bombs. Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail Fat-Cat banks to taxpayers.
17. Insatiable Washington Lobbyists Bombs. Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America's new corporate-socialism.
18. Shadow Banking: The Derivatives Bomb. Wall Street wants no regulation of this $670 trillion, high-risk, out-of-control casino that's highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives almost destroyed global economies in 2008-09, finally will by 2012.
19. Dysfunctional Two-Party Political Bomb. Polarized partisanship increasing: Every day both parties show zero interest in cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points, make the other side look bad.
20. The Coming Populous Rebellion Bombs. Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting and a lack of long-term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: "Doing what's right for the common good and country" is just empty political rhetoric......
20 reasons Global Debt Time Bomb explodes soon
......1. Federal Budget Deficit Bomb. The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama's 2010 budget, to $14.3 trillion vs. $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America's debt at 84% of GDP will soon pass that toxic 90% trigger point.
2. U.S. Foreign Trade Bomb. Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.
3. Weakening U.S. Dollar as Foreign Reserve Currency Bomb. Fear China and other currencies will replace dollar as main foreign reserves. The dollar's fallen: The main index measuring dollar strength has gone from 120 at the Clinton-to-Bush handoff to below 80 today.
4. Cheap Money Bomb: Credit Ratings Down, Rates Up. Economists at S&P, Fitch and Moody's were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.
5. Global Real Estate Bomb. Dubai Tower, new "world's tallest building" is empty. BusinessWeek warns that China's housing collapse could be worse than America's. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a "ticking time bomb" bloating 25% of bank balance sheets.
6. Peak Oil and the Population Bomb. China and India each need 500 new cities. The United Nations estimates world population exploding 50% from 6 billion to 9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling "America Dream."
7. Social Security Bomb. We have no choice; eventually we must either cut benefits or raise taxes. Politicians hate both, so they'll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.
8. Medicare: A Nuclear Bomb. Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.
9. Health-care Insurance Bomb. Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.
10. State and Local Government Budget Bombs. Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.
11. Underfunded Corporate Pensions Bomb. From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now underfunded. Defaults are guaranteed by taxpayers.
12. Consumer Debt Bomb. Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it -- yes love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.
13. Personal Savings Bomb. Before the 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero. Now it's increasing, slowing retail recovery. Today, government's the big "unsaver."
14. War and Military Defense Deficits. Costs of Iraq and Afghanistan wars -- $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.
15. Homeland Insecurity Bomb. Security at airports, seaports, borders, vulnerable chemical plants all increase budgets.
16. Fed/Treasury Bailout Bombs. Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail Fat-Cat banks to taxpayers.
17. Insatiable Washington Lobbyists Bombs. Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America's new corporate-socialism.
18. Shadow Banking: The Derivatives Bomb. Wall Street wants no regulation of this $670 trillion, high-risk, out-of-control casino that's highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives almost destroyed global economies in 2008-09, finally will by 2012.
19. Dysfunctional Two-Party Political Bomb. Polarized partisanship increasing: Every day both parties show zero interest in cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points, make the other side look bad.
20. The Coming Populous Rebellion Bombs. Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting and a lack of long-term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: "Doing what's right for the common good and country" is just empty political rhetoric......
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