http://kunstler.com/clusterfuck-nation/the-elephant-cometh/
The Elephant Cometh
The elephant’s not even in the room, which is why the 2016 election campaign is such a soap opera. The elephant outside the room is named Discontinuity. That’s perhaps an intimidating word, but it is exactly what the USA is in for. It means that a lot of familiar things come to an end, stop, don’t work the way they are supposed to — beginning, manifestly, with the election process now underway in all its unprecedented bizarreness.
One reason it’s difficult to comprehend discontinuity is because so many operations and institutions of daily life in America have insidiously become rackets, meaning that they are kept going only by dishonest means. If we didn’t lie to ourselves about them, they couldn’t continue.
For instance the automobile racket. Without a solid, solvent middle-class, you can’t sell cars. Americans are used to paying for cars on installment loans. If the middle class is so crippled by prior debt and the disappearance of good-paying jobs that they can’t qualify for car loans, well, the answer is to give them loans anyway, on terms that don’t really pencil out — such as 7-year loans at 0 percent interest for used cars (that will be worth next to nothing long before the loan expires).
This will go on until it can’t, which is what discontinuity is all about. The car companies and the banks (with help from government regulators and political cheerleaders) have created this work-around by treating “sub-prime” car loans the same way they treated sub-prime mortgages: they bundle them into larger packages of bonds called collateralized loan obligations. These, in turn, are sold mainly to big pension fund and insurance companies desperate for “yield” (higher interest) on “safe” investments that ostensibly preserve their principal. The “collateral” amounts to the revenue streams of payments that are sure to stop because the payers are by definition not credit-worthy, meaning it was baked in the cake that they would quit making payments — especially when they go “under water” owing ever more money for junkers that have lost all value.
It’s easy to see how that ends in tears for all concerned parties, but we “buy into it” because there seems to be no other way to a) boost the so-called “consumer” economy and b) keep the matrix of car-dependant suburban sprawl in operation. We took what used to be a fairly sound idea during a now-bygone phase of history, and perverted it to avoid making any difficult but necessary changes in a new phase of history.
Health care is now such a blatant, odious, and ruinous racket that it is a little hard to believe that it hasn’t ignited an outright revolution or, at least, a workplace massacre in some insurance company C-suite. It is a well-known fact that most Americans don’t even have $500 to pay for a car repair. How are they supposed to cope with a $5,000 deductible health insurance incident? Answer: they can’t. Their mental health is destroyed in the process of attempting to fix their physical health. Not uncommonly, they have to declare bankruptcy after a routine appendectomy or a visit to the emergency room to set a broken arm. Sometimes, they don’t even bother to go to the doctor, seeing clearly how this plays out. The pharmaceutical industry has, of course, been allowed to convert itself into a simple extortion racket. Got an unusual kind of cancer? We have something that might help. Oh, it costs $43,000 a month….
What kind of a polity allows this cruel and indecent grift to go on? Why, the Obama administration, which allowed the health insurance company lobbyists and their colleagues in Big Pharma to “craft” the Affordable Care Act — the name of which must be the biggest public lie ever floated.
It’s interesting to see how a parallel fraud is playing out in higher ed. I submit the reason that college presidents are not pushing back against the Maoist coercions of the undergraduate social justice warriors is because the marvelous theater of the gender, race, and “privilege” melodrama is a potent distraction from the sad fact that college has turned into a grotesquely top-heavy and high-paying administrative racket offering boutique courses in fake fields (Dartmouth College: WGSS 65.06 Radical Sexuality: Of Color, Wildness, and Fabulosity… Harvard University: WOMGEN 1424: American Fetish) in order to pander to their young customers (students) conditioned to tragic “oppression” sob stories. All in the service of paying huge salaries + perqs to the dynamic executives running these places.
Then there is banking, a.k.a. the financial system, certainly the greatest racket of rackets, since the fumes it’s running on — combinations of ZIRP, QE, and “forward guidance” (happy talk) — is all that there is to maintain the illusion that “money” remains a reliable gauge of value. Finance is the racket that will go down first and hardest, and when it does, all the other rackets currently running will go up in a vapor. That elephant will storm into the room before the political conventions, and when it does, it will usher in the recognition that nothing can go on as before.
Monday, April 18, 2016
Sunday, April 17, 2016
SC135-3
http://www.commondreams.org/news/2016/04/15/hottest-march-record-earth-keeps-hurtling-past-temperature-milestones
Hottest March on Record as Earth Keeps Hurtling Past Temperature Milestones
Data from Japan Meteorological Agency 'is a reminder of how perilously close we now are to permanently crossing into dangerous territory'
Earth is on a roll.
Adding "yet another month to a new mountain chain of extreme global temperature peaks," March 2016 was the warmest since at least 1891, according to the Japan Meteorological Agency (JMA).
Not only that, but, as February did, March broke the previous record by the greatest margin yet seen for any month. Compared to the 20th-century average, March was 1.07°C hotter across the globe, according to the JMA figures, while February was 1.04°C higher.
If April also sets a monthly record—and there's no reason to think it won't—"the Earth will have had an astonishing 12 month string of record-shattering months," writes Andrew Freedman for Mashable.
The JMA's findings are likely to be confirmed by forthcoming reports from the UK Met Office as well as NASA and NOAA, whose satellite data indicates last month was the warmest March in records dating to 1979.
Scientists have pinned the record warmth to a combination of human-caused climate change and this year's strong El Niño event.
Responding to the news, professor Michael Mann, a climate scientist at Penn State University, told the Guardian: "Wow. I continue to be shocked by what we are seeing."
"The [new data] is a reminder of how perilously close we now are to permanently crossing into dangerous territory," Mann said. "It underscores the urgency of reducing global carbon emissions."
Like what you're reading? Donate now!
As Common Dreams reported, last month's NASA data showed that February 2016 was not only the hottest in recorded history, but it soared past all previous records, prompting scientists to describe the announcement as "an ominous milestone in our march toward an ever-warmer planet."
Meanwhile, NOAA said last week that March 2016 was among the warmest on record for the contiguous United States, and that Alaska had seen "its warmest start to the year on record, while 32 states across the West, Great Plains, Midwest and Northeast were much warmer than average" between January and March.
What's more, pointed out NOAA climatologist Deke Arndt in a blog post this week, "If you were alive during March 2016, and I'm betting you were, you witnessed U.S. history."
"One stunning feature from the March 2016 temperature map was just how universally warm the month was," wrote Arndt. "Every one of the 357 climate divisions across the contiguous United States and Alaska ended up—at least—in the 'warmer than normal' category."
Hottest March on Record as Earth Keeps Hurtling Past Temperature Milestones
Data from Japan Meteorological Agency 'is a reminder of how perilously close we now are to permanently crossing into dangerous territory'
Earth is on a roll.
Adding "yet another month to a new mountain chain of extreme global temperature peaks," March 2016 was the warmest since at least 1891, according to the Japan Meteorological Agency (JMA).
Not only that, but, as February did, March broke the previous record by the greatest margin yet seen for any month. Compared to the 20th-century average, March was 1.07°C hotter across the globe, according to the JMA figures, while February was 1.04°C higher.
If April also sets a monthly record—and there's no reason to think it won't—"the Earth will have had an astonishing 12 month string of record-shattering months," writes Andrew Freedman for Mashable.
The JMA's findings are likely to be confirmed by forthcoming reports from the UK Met Office as well as NASA and NOAA, whose satellite data indicates last month was the warmest March in records dating to 1979.
Scientists have pinned the record warmth to a combination of human-caused climate change and this year's strong El Niño event.
Responding to the news, professor Michael Mann, a climate scientist at Penn State University, told the Guardian: "Wow. I continue to be shocked by what we are seeing."
"The [new data] is a reminder of how perilously close we now are to permanently crossing into dangerous territory," Mann said. "It underscores the urgency of reducing global carbon emissions."
Like what you're reading? Donate now!
As Common Dreams reported, last month's NASA data showed that February 2016 was not only the hottest in recorded history, but it soared past all previous records, prompting scientists to describe the announcement as "an ominous milestone in our march toward an ever-warmer planet."
Meanwhile, NOAA said last week that March 2016 was among the warmest on record for the contiguous United States, and that Alaska had seen "its warmest start to the year on record, while 32 states across the West, Great Plains, Midwest and Northeast were much warmer than average" between January and March.
What's more, pointed out NOAA climatologist Deke Arndt in a blog post this week, "If you were alive during March 2016, and I'm betting you were, you witnessed U.S. history."
"One stunning feature from the March 2016 temperature map was just how universally warm the month was," wrote Arndt. "Every one of the 357 climate divisions across the contiguous United States and Alaska ended up—at least—in the 'warmer than normal' category."
Saturday, April 16, 2016
SC135-2
http://www.truthdig.com/report/item/revolution_is_in_the_air_20160416
Revolution Is in the Air
The sustained, daily civil disobedience at the Capitol by demonstrators denouncing the capture of our political system by corporate money is part of one of the largest and most important movements for social justice since the Occupy uprising. Join it.
Six hundred of the protesters have been arrested, and I was among 100 arrested Friday.
The protesters, organized by Democracy Spring, have converged on Washington from across the country. Young. Old. Black. White. Brown. Native American. Asian. Christian. Jew. Muslim. Buddhist. Atheist. From the left. From the right. Some marched for 10 days along a 160-mile route from Philadelphia to Washington.
On Friday, about a dozen protesters who had slipped into a tour group to get into the Capitol used zip ties to bind themselves to each other and to scaffolding inside the rotunda. They remained until they were arrested. In addition, scores of other protesters were taken away by police during the day.
“We the people demand a democracy free from the corrupting influence of big money and voter suppression,” they shouted. “We demand a democracy where every vote is counted and every voice is heard. Democracy Spring!”
The hundreds of arrests this past week have been largely ignored by a corporate media whose lobbyists, along with those of other corporations, are a familiar presence on Capitol Hill. The mass media’s blackout of the largest number of arrests at the Capitol in decades is one of innumerable examples of our corporate coup d’état. And until corporate power is overthrown—and it will be overthrown only from the streets in sustained acts of civil disobedience—the nation will continue to devolve into an authoritarian police state. Corporations will continue to strip us of our remaining rights, carry out the deadly assault on the ecosystem, impoverish workers, make a mockery of our democracy and cannibalize what is left of the country. The system of corporate power is incapable of reform. It must be destroyed.
We will have to do this together. No one will do it for us. And as the numbers in the streets swell—and I will be with the protesters in Washington again on Monday—the corruption of our political system becomes ever more apparent.
It is imperative to protest in Cleveland and Philadelphia during the Republican and Democratic conventions later this year. The building of movements and sustained civil disobedience is far more important than voting. Voting without powerful and organized movements is futile. Voting without profound electoral reform, including banishing corporate money from politics, is useless.
The hope of Democracy Spring organizers is that growing waves of people will be arrested at the Capitol. Monday is expected to draw hundreds of people to a sit-in. While the protests center specifically on four bills before Congress that would expand public financing for federal campaigns, pass a constitutional amendment to overturn the Supreme Court’s Citizens United ruling, end gerrymandering and restore the Voting Rights Act, they also have challenged corporate domination of all aspects of society. The daily marches have focused on themes: labor, racial justice, student debt and (on Saturday) climate justice.
Democracy cannot be sustained if it cannot be seen. Those in power must be made to fear movements that are willing to disrupt the machinery of state. The elites must be kept in check.
The question, as the philosopher Karl Popper pointed out, is not how to get good people to rule. Most people attracted to power, Popper wrote, are at best mediocre and usually venal. The question is how to build movements to stop the powerful from doing sustained damage to the citizenry, the nation and the environment. It is not our job to take power. It is our job to keep power constantly off balance and fearful of overstepping its reach to pillage on behalf of the elites.
This is why, as Ralph Nader points out, our last liberal president was Richard Nixon. Nixon was not a liberal or endowed with a conscience. However, powerful grass-roots movements, including the anti-war movement and labor unions, frightened him and others in power. Nixon in 1974 signed an amendment to the Fair Labor Standards Act that raised wages by more than 40 percent. He created the Environmental Protection Agency and the Occupational Safety and Health Administration. He called for universal health insurance and passed progressive legislation including the Mine and Safety Act, the Clean Air Act and the Clean Water Act—much of it authored by Nader. He pushed through a minimum tax on the wealthy—the alternative minimum tax—and called for a guaranteed minimum income for the poor under the Family Assistance Program. During his administration, for the first time since World War II, spending on social service programs exceeded expenditures on the war machine.
It was the pressure of radical movements and independent parties such as the Progressive Party and the Communist Party that saw Franklin Delano Roosevelt create the New Deal, which delivered a series of social and economic reforms that only the Nixon presidency would rival. Roosevelt warned his fellow oligarchs that they had better part with some of their money to create public works projects, Social Security and some 12 million jobs during the Depression or face the prospect of a revolution in which they would lose everything. Roosevelt later said that one of his greatest achievements was saving capitalism.
The insurgent candidacies of Bernie Sanders and Donald Trump have made it clear to citizens across the political spectrum that money has replaced the vote. Their supporters and other Americans now understand that the elites have gamed the system. They grasp that they have been shut out. And this has engendered the anger and frustration that fuel movements willing to step outside the established boundaries of the political process.
The corrupt institutions of power have, for decades, successfully used empty political theater to create the fiction of democracy. In our managed democracy, usually only corporate-approved candidates—including Barack Obama, who was anointed by the Chicago political machine—are able to get elected to state or national office. It is nearly impossible in our system of inverted totalitarianism to vote against the interests of ExxonMobil, Bank of America, Raytheon or Goldman Sachs. On all of the major structural issues, from the failure to regulate Wall Street to imperial wars and the evisceration of our civil liberties, there has been complete continuity between the Bush and Obama administrations.
The voices of citizens are rising from the streets of Washington and fracking sites in Colorado. They are rising from towns and cities such as Ferguson and Baltimore where police murders are terrorizing poor people of color. They are rising in Los Angeles from underpaid workers and the Dreamers. And these voices will, if we sustain and join them, become a deafening crescendo. They will create the kinds of movements that alone make social and political change possible.
We all have the capacity to refuse to cooperate. We do not have to be complicit in the collective suicide of the species. We can bring democracy into the streets. By joining boycotts, demonstrations, strikes, hunger fasts and popular movements, by carrying out acts of civil disobedience, we ignite our souls, we create another narrative, another way of being, and we expose the dead hand of authority.
The elites are in trouble. They have lost credibility. Neoliberalism and globalization have been unmasked as tools of corporate exploitation. The billions spent on propaganda to maintain the illusion of democracy and the benefits of the “free market” no longer work. The endless wars, which have not made the United States, Europe or the Middle East more secure, are now unmasked as blood-drenched arms markets for a war industry bloated with trillions of taxpayer dollars.
The war industry and the fossil fuel industry, like all corporate systems of exploitation, are at their core systems of death. They assault a planet that needs to swiftly build green infrastructures and egalitarian social systems that make life possible. The battle before us, as anyone who follows climate science understands, is urgent. It is about defeating these systems of death. It is the battle for life. We may lose. These systems are powerful and ruthless. But if we do not resist, we extinguish hope.
Revolution Is in the Air
The sustained, daily civil disobedience at the Capitol by demonstrators denouncing the capture of our political system by corporate money is part of one of the largest and most important movements for social justice since the Occupy uprising. Join it.
Six hundred of the protesters have been arrested, and I was among 100 arrested Friday.
The protesters, organized by Democracy Spring, have converged on Washington from across the country. Young. Old. Black. White. Brown. Native American. Asian. Christian. Jew. Muslim. Buddhist. Atheist. From the left. From the right. Some marched for 10 days along a 160-mile route from Philadelphia to Washington.
On Friday, about a dozen protesters who had slipped into a tour group to get into the Capitol used zip ties to bind themselves to each other and to scaffolding inside the rotunda. They remained until they were arrested. In addition, scores of other protesters were taken away by police during the day.
“We the people demand a democracy free from the corrupting influence of big money and voter suppression,” they shouted. “We demand a democracy where every vote is counted and every voice is heard. Democracy Spring!”
The hundreds of arrests this past week have been largely ignored by a corporate media whose lobbyists, along with those of other corporations, are a familiar presence on Capitol Hill. The mass media’s blackout of the largest number of arrests at the Capitol in decades is one of innumerable examples of our corporate coup d’état. And until corporate power is overthrown—and it will be overthrown only from the streets in sustained acts of civil disobedience—the nation will continue to devolve into an authoritarian police state. Corporations will continue to strip us of our remaining rights, carry out the deadly assault on the ecosystem, impoverish workers, make a mockery of our democracy and cannibalize what is left of the country. The system of corporate power is incapable of reform. It must be destroyed.
We will have to do this together. No one will do it for us. And as the numbers in the streets swell—and I will be with the protesters in Washington again on Monday—the corruption of our political system becomes ever more apparent.
It is imperative to protest in Cleveland and Philadelphia during the Republican and Democratic conventions later this year. The building of movements and sustained civil disobedience is far more important than voting. Voting without powerful and organized movements is futile. Voting without profound electoral reform, including banishing corporate money from politics, is useless.
The hope of Democracy Spring organizers is that growing waves of people will be arrested at the Capitol. Monday is expected to draw hundreds of people to a sit-in. While the protests center specifically on four bills before Congress that would expand public financing for federal campaigns, pass a constitutional amendment to overturn the Supreme Court’s Citizens United ruling, end gerrymandering and restore the Voting Rights Act, they also have challenged corporate domination of all aspects of society. The daily marches have focused on themes: labor, racial justice, student debt and (on Saturday) climate justice.
Democracy cannot be sustained if it cannot be seen. Those in power must be made to fear movements that are willing to disrupt the machinery of state. The elites must be kept in check.
The question, as the philosopher Karl Popper pointed out, is not how to get good people to rule. Most people attracted to power, Popper wrote, are at best mediocre and usually venal. The question is how to build movements to stop the powerful from doing sustained damage to the citizenry, the nation and the environment. It is not our job to take power. It is our job to keep power constantly off balance and fearful of overstepping its reach to pillage on behalf of the elites.
This is why, as Ralph Nader points out, our last liberal president was Richard Nixon. Nixon was not a liberal or endowed with a conscience. However, powerful grass-roots movements, including the anti-war movement and labor unions, frightened him and others in power. Nixon in 1974 signed an amendment to the Fair Labor Standards Act that raised wages by more than 40 percent. He created the Environmental Protection Agency and the Occupational Safety and Health Administration. He called for universal health insurance and passed progressive legislation including the Mine and Safety Act, the Clean Air Act and the Clean Water Act—much of it authored by Nader. He pushed through a minimum tax on the wealthy—the alternative minimum tax—and called for a guaranteed minimum income for the poor under the Family Assistance Program. During his administration, for the first time since World War II, spending on social service programs exceeded expenditures on the war machine.
It was the pressure of radical movements and independent parties such as the Progressive Party and the Communist Party that saw Franklin Delano Roosevelt create the New Deal, which delivered a series of social and economic reforms that only the Nixon presidency would rival. Roosevelt warned his fellow oligarchs that they had better part with some of their money to create public works projects, Social Security and some 12 million jobs during the Depression or face the prospect of a revolution in which they would lose everything. Roosevelt later said that one of his greatest achievements was saving capitalism.
The insurgent candidacies of Bernie Sanders and Donald Trump have made it clear to citizens across the political spectrum that money has replaced the vote. Their supporters and other Americans now understand that the elites have gamed the system. They grasp that they have been shut out. And this has engendered the anger and frustration that fuel movements willing to step outside the established boundaries of the political process.
The corrupt institutions of power have, for decades, successfully used empty political theater to create the fiction of democracy. In our managed democracy, usually only corporate-approved candidates—including Barack Obama, who was anointed by the Chicago political machine—are able to get elected to state or national office. It is nearly impossible in our system of inverted totalitarianism to vote against the interests of ExxonMobil, Bank of America, Raytheon or Goldman Sachs. On all of the major structural issues, from the failure to regulate Wall Street to imperial wars and the evisceration of our civil liberties, there has been complete continuity between the Bush and Obama administrations.
The voices of citizens are rising from the streets of Washington and fracking sites in Colorado. They are rising from towns and cities such as Ferguson and Baltimore where police murders are terrorizing poor people of color. They are rising in Los Angeles from underpaid workers and the Dreamers. And these voices will, if we sustain and join them, become a deafening crescendo. They will create the kinds of movements that alone make social and political change possible.
We all have the capacity to refuse to cooperate. We do not have to be complicit in the collective suicide of the species. We can bring democracy into the streets. By joining boycotts, demonstrations, strikes, hunger fasts and popular movements, by carrying out acts of civil disobedience, we ignite our souls, we create another narrative, another way of being, and we expose the dead hand of authority.
The elites are in trouble. They have lost credibility. Neoliberalism and globalization have been unmasked as tools of corporate exploitation. The billions spent on propaganda to maintain the illusion of democracy and the benefits of the “free market” no longer work. The endless wars, which have not made the United States, Europe or the Middle East more secure, are now unmasked as blood-drenched arms markets for a war industry bloated with trillions of taxpayer dollars.
The war industry and the fossil fuel industry, like all corporate systems of exploitation, are at their core systems of death. They assault a planet that needs to swiftly build green infrastructures and egalitarian social systems that make life possible. The battle before us, as anyone who follows climate science understands, is urgent. It is about defeating these systems of death. It is the battle for life. We may lose. These systems are powerful and ruthless. But if we do not resist, we extinguish hope.
Wednesday, April 13, 2016
SC135-1
http://theeconomiccollapseblog.com/archives/economic-collapse-is-erupting-all-over-the-planet-as-global-leaders-begin-to-panic
Economic Collapse Is Erupting All Over The Planet As Global Leaders Begin To Panic
Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now. For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse. In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.
Let’s start with Brazil. It has the 7th largest economy on the entire planet, and it is already enduring its worst recession in 25 years. In fact, at the end of last year Goldman Sachs said that what was going on down there was actually a “depression“.
But now the crisis in Brazil has escalated significantly.
I want to share with you an excerpt from a recent article entitled “Brazil: Economic collapse worse than feared“. I know, that title sounds like it comes directly from The Economic Collapse Blog, but I didn’t write it.
It actually comes from CNN…
Amid political chaos, Brazil’s economic collapse is worse than its government once believed.
In the midst of rising calls to impeach President Dilma Rousseff, Brazil’s central bank announced Thursday that it now expects the country’s economy to shrink 3.5% this year.
That’s worse than the central bank’s previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America’s largest country — and what many independent economists have suspected.
It is one thing for Michael Snyder to tell you that Brazil is in the midst of “economic collapse”, but it is another thing entirely for CNN to say it.
And of course I have been warning about the crisis down in Brazil for quite some time now. For much more on this, please see my previous article entitled “The Economic Collapse Of South America Is Well Underway“.
Meanwhile, things are actually much worse in Venezuela than they are in Brazil. Food and basic supplies are in short supply, the inflation rate has hit 720 percent, and crime is completely out of control.
The following is from an article in the Independent entitled “Venezuela is on the brink of complete economic collapse“…
The only question now is whether Venezuela’s government or economy will completely collapse first.
The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever.
Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.
Once again we see a very respected mainstream publication using the phrase “economic collapse” to describe what is happening in South America.
You can find some stunning video of the “economic Armageddon” that is taking place in Venezuela right here. I would encourage you to watch that video, because what is happening down there will eventually be happening here.
Meanwhile, over in Europe the collapse of the Italian banking system has entered a disturbing new chapter. Italy’s finance minister has called a meeting in Rome for Monday that will be focusing on a “last resort” bailout plan for the troubled banks…
Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy’s largest financial institutions to agree final details of a “last resort” bailout plan.
Yet on the eve of that gathering, concerns remain as to whether the plan will be sufficient to ringfence the weakest of Italy’s large banks, Monte dei Paschi di Siena, from contagion, according to people involved in the talks.
Italian bank shares have lost almost half their value so far this year amid investor worries over a €360bn pile of non-performing loans — equivalent to about a fifth of GDP. Lenders’ profitability has been hit by a crippling three-year recession.
As Italy descends into financial chaos, the rest of the continent better be paying attention.
Do you remember how hard it was for the rest of Europe to rescue Greece?
Well, Greece has the 44th largest economy on the planet.
Italy has the 8th.
It would be hard to overstate the seriousness of what is going on over in Europe, and it is not just Italy we are talking about. All over the continent major banks are in deep trouble, and the chairman of France’s second largest retail bank recently told reporters that “I am much more worried than I was in 2009“.
And there is very good reason for concern. On Sunday, we learned that a major “bail-in” had just been announced for one of Austria’s most prominent banks. The following comes from Zero Hedge…
And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.
The highlights from the announcement:
Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
a 100% bail-in for all subordinated liabilities,
a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.
The dominoes are starting to fall in Europe, and I would expect even bigger announcements in the weeks and months to come.
Over in Asia, economic chaos is beginning to prevail as well.
In China, the stock market is already down more than 40 percent from the peak, Chinese exports were down 25.4 percent on a year over year basis in February, and Chinese economic numbers overall have not been this poor since the depths of the last global recession.
At the same time, the Japanese economy is really struggling right now. As I wrote about the other day, Japanese GDP has shrunk for two out of the last three quarters, we just saw Japanese industrial production experience the biggest one month decline that we have witnessed since the tsunami of 2011, and business sentiment has fallen to a three year low. The Nikkei has dropped by about 5,000 points from where it was last summer, and some analysts believe that Japanese markets “are being destroyed” due to massive intervention by the Bank of Japan.
Here in the United States, we haven’t been hit quite as hard as the rest of the world just yet, but there are lots of very disturbing warning signs all around us.
At the end of last week, we learned that it is being projected that U.S. GDP will have grown by just 0.1 or 0.2 percent during the first quarter of 2016. And on Monday corporate earnings reporting season begins, and it is expected to be a very, very bad one. The following comes from Business Insider…
We are about to get confirmation that earnings growth for America’s biggest companies was negative in the first quarter, compared to the same period a year ago.
When aluminum giant Alcoa releases its results on Monday, it will mark the unofficial start of the heaviest reporting season for S&P 500 companies.
The final scoreboard is expected to show a 9.1% earnings drop for the quarter, according to FactSet senior earnings analyst John Butters.
If these projections turn out to be accurate, it will be the fourth quarter in a row of earnings declines. This is something that we never see outside of a recession.
And for a whole bunch more numbers which indicate that the U.S. economy is in very serious trouble, please see my previous article entitled “19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago“.
Of course I am just another voice in the crowd when it comes to predicting that the U.S. economy is headed for rough times. For example, just check out what Societe Generale economist Albert Edwards is saying…
A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession.
…the profit recession facing American corporations is going to lead to a collapse in corporate credit.
“Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red”
…
He continued:
Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.
As you can see, it isn’t just one nation or one region of the world that we need to be concerned about.
Economic chaos is erupting literally all over the planet, and global leaders are starting to panic.
Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn’t get the job done. Anyone that believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be okay is simply engaged in wishful thinking.
Economic Collapse Is Erupting All Over The Planet As Global Leaders Begin To Panic
Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now. For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse. In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.
Let’s start with Brazil. It has the 7th largest economy on the entire planet, and it is already enduring its worst recession in 25 years. In fact, at the end of last year Goldman Sachs said that what was going on down there was actually a “depression“.
But now the crisis in Brazil has escalated significantly.
I want to share with you an excerpt from a recent article entitled “Brazil: Economic collapse worse than feared“. I know, that title sounds like it comes directly from The Economic Collapse Blog, but I didn’t write it.
It actually comes from CNN…
Amid political chaos, Brazil’s economic collapse is worse than its government once believed.
In the midst of rising calls to impeach President Dilma Rousseff, Brazil’s central bank announced Thursday that it now expects the country’s economy to shrink 3.5% this year.
That’s worse than the central bank’s previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America’s largest country — and what many independent economists have suspected.
It is one thing for Michael Snyder to tell you that Brazil is in the midst of “economic collapse”, but it is another thing entirely for CNN to say it.
And of course I have been warning about the crisis down in Brazil for quite some time now. For much more on this, please see my previous article entitled “The Economic Collapse Of South America Is Well Underway“.
Meanwhile, things are actually much worse in Venezuela than they are in Brazil. Food and basic supplies are in short supply, the inflation rate has hit 720 percent, and crime is completely out of control.
The following is from an article in the Independent entitled “Venezuela is on the brink of complete economic collapse“…
The only question now is whether Venezuela’s government or economy will completely collapse first.
The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever.
Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.
Once again we see a very respected mainstream publication using the phrase “economic collapse” to describe what is happening in South America.
You can find some stunning video of the “economic Armageddon” that is taking place in Venezuela right here. I would encourage you to watch that video, because what is happening down there will eventually be happening here.
Meanwhile, over in Europe the collapse of the Italian banking system has entered a disturbing new chapter. Italy’s finance minister has called a meeting in Rome for Monday that will be focusing on a “last resort” bailout plan for the troubled banks…
Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy’s largest financial institutions to agree final details of a “last resort” bailout plan.
Yet on the eve of that gathering, concerns remain as to whether the plan will be sufficient to ringfence the weakest of Italy’s large banks, Monte dei Paschi di Siena, from contagion, according to people involved in the talks.
Italian bank shares have lost almost half their value so far this year amid investor worries over a €360bn pile of non-performing loans — equivalent to about a fifth of GDP. Lenders’ profitability has been hit by a crippling three-year recession.
As Italy descends into financial chaos, the rest of the continent better be paying attention.
Do you remember how hard it was for the rest of Europe to rescue Greece?
Well, Greece has the 44th largest economy on the planet.
Italy has the 8th.
It would be hard to overstate the seriousness of what is going on over in Europe, and it is not just Italy we are talking about. All over the continent major banks are in deep trouble, and the chairman of France’s second largest retail bank recently told reporters that “I am much more worried than I was in 2009“.
And there is very good reason for concern. On Sunday, we learned that a major “bail-in” had just been announced for one of Austria’s most prominent banks. The following comes from Zero Hedge…
And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.
The highlights from the announcement:
Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
a 100% bail-in for all subordinated liabilities,
a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.
The dominoes are starting to fall in Europe, and I would expect even bigger announcements in the weeks and months to come.
Over in Asia, economic chaos is beginning to prevail as well.
In China, the stock market is already down more than 40 percent from the peak, Chinese exports were down 25.4 percent on a year over year basis in February, and Chinese economic numbers overall have not been this poor since the depths of the last global recession.
At the same time, the Japanese economy is really struggling right now. As I wrote about the other day, Japanese GDP has shrunk for two out of the last three quarters, we just saw Japanese industrial production experience the biggest one month decline that we have witnessed since the tsunami of 2011, and business sentiment has fallen to a three year low. The Nikkei has dropped by about 5,000 points from where it was last summer, and some analysts believe that Japanese markets “are being destroyed” due to massive intervention by the Bank of Japan.
Here in the United States, we haven’t been hit quite as hard as the rest of the world just yet, but there are lots of very disturbing warning signs all around us.
At the end of last week, we learned that it is being projected that U.S. GDP will have grown by just 0.1 or 0.2 percent during the first quarter of 2016. And on Monday corporate earnings reporting season begins, and it is expected to be a very, very bad one. The following comes from Business Insider…
We are about to get confirmation that earnings growth for America’s biggest companies was negative in the first quarter, compared to the same period a year ago.
When aluminum giant Alcoa releases its results on Monday, it will mark the unofficial start of the heaviest reporting season for S&P 500 companies.
The final scoreboard is expected to show a 9.1% earnings drop for the quarter, according to FactSet senior earnings analyst John Butters.
If these projections turn out to be accurate, it will be the fourth quarter in a row of earnings declines. This is something that we never see outside of a recession.
And for a whole bunch more numbers which indicate that the U.S. economy is in very serious trouble, please see my previous article entitled “19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago“.
Of course I am just another voice in the crowd when it comes to predicting that the U.S. economy is headed for rough times. For example, just check out what Societe Generale economist Albert Edwards is saying…
A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession.
…the profit recession facing American corporations is going to lead to a collapse in corporate credit.
“Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red”
…
He continued:
Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.
As you can see, it isn’t just one nation or one region of the world that we need to be concerned about.
Economic chaos is erupting literally all over the planet, and global leaders are starting to panic.
Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn’t get the job done. Anyone that believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be okay is simply engaged in wishful thinking.
Sunday, April 10, 2016
SC134-15
http://www.truthdig.com/report/item/the_wages_of_sin_20160410
The Wages of Sin
When Plato wrote “The Republic,” his lament for a lost Athenian democracy, he did not believe democracy could be recovered. The classical world, unlike our own, did not see time as linear. Time was cyclical. It inevitably brought decay and eventually death. This true for both individuals and societies. And in his “Republic,” Plato proposed that those who attempted in the future to create the ideal state carry out a series of draconian measures, including banning drama and music, which diverted the citizen from performing civic duties and instilled corruption, and removing children from their parents to provide a proper indoctrination. Plato wanted to slow the process of dissolution. He wanted to stymie change. But that decay and death would come was certain, even in Plato’s ideal state.
History has proved the ancient Greeks correct: All cultures decay and die. Dying cultures, even when they cannot fully articulate their reality, begin to deeply fear change. Change, they find, brings with it increasing dysfunction, misery and suffering. This fear of change soon becomes irrational. It compounds decay and accelerates morbidity. To see modern-day victims of this process, we need only look to white American workers who once had good manufacturing jobs and benefited from the structures of white supremacy.
Those who promise to miraculously roll back time rise up in decaying cultures to hypnotize a bewildered and confused population. Plastic surgeons who provide the illusion of eternal youth, religious leaders who promise a return to a simplified biblical morality, political demagogues who hold out the promise of a renewed greatness, and charlatans offering techniques for self-advancement and success all peddle magical thinking. A desperate population, fearing change, clamors for greater and greater illusion. The forces that ensure collective death—including corporate capitalism, the fossil fuel industry and the animal agriculture industry—are blotted out of consciousness.
When a society laments the past and dreads the future, when it senses the looming presence of death, it falls down a rabbit hole. And as in the case of Alice—who “went on saying to herself, in a dreamy sort of way, ‘Do cats eat bats? Do cats eat bats?’ and sometimes, ‘Do bats eat cats?’ for, you see, as she couldn’t answer either question, it didn’t much matter which way she put it”—language becomes unmoored from experience. Daily discourse, especially public discourse, is, as our presidential campaign illustrates, reduced to childish gibberish.
Jobs are gone. Schools are closed. Neighborhoods and cities are in ruin. Despair and poverty dominate lives. Civil liberties are abolished. War is endless. The society self-medicates. Democracy is a fiction. “Austerity” decisions by government such as the latest slashing of the federal food stamp program, a move that could remove a million people from the rolls, bring more jolts. Shocks like these, as Alvin Toffler wrote, eventually trigger emotional overload; they are “the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.” And, finally, reality is too much to bear and is banished.
Climate change and the looming financial crisis will transform these emotional short circuits into what anthropologists call “crisis cults.” Crisis cults serve up illusions of recovered grandeur and empowerment during times of collapse, anxiety and disempowerment. A mythologized past will magically return. The old social hierarchies and rules will again apply. Prescribed rituals and behaviors, including acts of violence to cleanse the society of evil, will vanquish malevolent forces. These crisis cults—they have arisen in most societies that faced destruction, from Easter Island to Native Americans at the time of the 1890 Ghost Dance—create hermetically sealed tribes. We are already far down this road.
I spent last weekend in the Second Presbyterian Church in Elizabeth, N.J., helping to clear out piles of old books, church records, plastic flowers, worn choir robes and other detritus that were dusty remnants of the white working-class congregation that filled these pews a few decades ago.
Elizabeth was devastated by the 1982 closure of its Singer plant, which had been built in 1873 and at one time had 10,000 workers. The 1,000 or so African-Americans at the plant worked mostly in a foundry that made cast-iron parts for the sewing machines. The work was poorly paid and dangerous. White workers, many of them German, Italian, Irish, Jewish, Polish or Lithuanian immigrants, dominated the safer and better-paid factory floor. The city was built around the sprawling plant. Generations of residents organized their lives and their families on the basis of jobs at the Singer plant or other income that it produced. And then, after a long decline, the factory was gone.
The year Singer closed its flagship factory in Elizabeth there were 2,696 plant shutdowns across the United States, resulting in 1,287,000 job losses. Singer workers in Elizabeth under the age of 55 lost all retirement benefits, even if they had worked for the company for decades. Small businesses in the city that depended on the plant went bankrupt.
In postindustrial cities across America it is now clear, after the passage of years, that the good jobs and stability once provided by factories such as the Singer plant have been lost forever. The pent-up anger and frustration among the white working class have given birth to dark pathologies of hate. The hate is directed against those of different skin color or ethnicity who somehow seem to have heralded the changes that destroyed families and communities.
This sentiment, on display at Donald Trump rallies, will outlive the Trump campaign even should the candidate be, as I expect, deposed by the party elites. It is a very dangerous force. It presages violence against all who appear to have been empowered at the expense of the white working class—African-Americans, Muslims, undocumented workers, homosexuals, feminists, artists and intellectuals—and will feed the rise of a Christianized fascism.
“Generations from the same family worked for Singer,” the Rev. Michael Granzen, the senior minister at the Elizabeth church, said of the white workers who lost their jobs. “They suffered, when the plant was closed, not only economic loss but a loss of identity. They were stripped of their daily work routines. They lost social bonds. They no longer had generational goals. They lost hope in the future. They could no longer count on a steady income, health coverage and a secure retirement. Marriages and neighborhoods were torn apart. There was an increase in domestic violence, drug use, alcoholism and crime.
“Many white blue-collar workers blamed and scapegoated the newer black and Latino workers for the plant closure,” he said. “White racism is largely about this loss of self-worth. It is about the fear of nihilism. It creates a false grandiosity to compensate for a deep insecurity. We see this dynamic being played out in postindustrial cities across the country.”
Most of these former manufacturing hubs have seen whites flee. Hispanics and blacks, living in terrible poverty, now populate decaying neighborhoods there. Sixty percent of Elizabeth’s population today is made up of Latinos, many from Central America.
Elizabeth, like many other cities, has become an internal colony of the poor. It helps provide the bodies that feed the system of mass incarceration. And it, along with other suffering urban centers, has been turned into a toxic dumping ground.
“The environmental hazards multiplied in the years after Singer closed,” Granzen said. “As with other cities experiencing industrial decline in New Jersey—such as Camden, Newark, Trenton and Patterson—white-controlled political structures in the state turned to dumping hazardous and toxic wastes in cities like Elizabeth, which already had their own toxic legacies. The ethos of racial profiling that undermined the worth of nonwhite bodies was reflected in this environmental racism. The lives of nonwhites were seen as of lesser value.”
The insidious forms of institutional racism that define America explode as societal death approaches. They express themselves in displays of racial violence. White vigilante groups, desperate to prevent further change, engage in the same use of indiscriminant lethal force practiced by police against unarmed people of color. The continued failure by government to reintegrate the working class back into the economy, to give people hope, dooms us all.
Plato begins “The Republic” by having Socrates go to the port at Piraeus, the most decadent spot in ancient Athens. It was filled with taverns and brothels. It was home to thieves, prostitutes, soldiers and armed gangs. Egyptian, Median, Germanic, Phoenician and Carthaginian sailors and other foreigners—Athenians lumped them together as barbarians—congregated along the seafront.
The port was also where the Athenian war fleet, made up of black trireme ships with bronze-sheathed rams on the prow, was stationed in rows of military boathouses. These warships helped turn Athens from a democratic city-state into an empire in the 5th century BC. And, as Plato and his pupil Aristotle understood, the building of empire, any empire, extinguishes democracy.
The Greek polis, or city-state, soon to be swallowed up by the Macedonian empire, was the nucleus that—like early New England town halls in the United States—made it possible for an individual to be a political being, to have agency and a voice. Empire requires a centralized, authoritarian government that has no use for the demos. Greek democracy, always a patriarchy, was with the rise of empire extinguished. Corruption and a lust for power defined the new ruling elites. The citizen, as in our system of “inverted totalitarianism,” became irrelevant. As the Athenian general Thucydides noted, the tyranny that Athens imposed on the outer reaches of empire, it eventually imposed on itself. Athens, like the United States centuries later, was hollowed out from the inside by the corrosive force of empire. The brutal tools of control used initially in distant parts of the empire—in our case militarized police, drones, suspension of civil liberties, wholesale surveillance and mass incarceration—migrated back to the homeland. This is how most empires die. They commit suicide.
The loss of civic virtue, Plato wrote, left a population hypnotized by the illusions flickering on the wall of a cave. Such distorted images of reality—our electronic hallucinations are beyond Plato’s imagination—fuel irrational beliefs and desires. They foster a visionless existence. Our images are skillfully manipulated by the elites to keep the population entertained and passive. Those who seek to question the illusions are, Socrates warned, usually attacked and killed by the mob, which does not want its comforting myths punctured. When reality is too painful to bear, a population does not seek freedom or truth; it becomes an accomplice to its own enslavement. Epicureanism, the reduction of life to the pursuit of fleeting individual pleasure, seduces the public. Cynicism rules. Distrust is everywhere. The community breaks down, and, as Plato writes, “all goes wrong when, starved for lack of anything good in their own lives, men turn to public affairs hoping to snatch from thence the happiness they hunger for. They set about fighting for power, and their internecine conflict ruins them and their country.” This collapse creates a dream world “where men live fighting one another about elaborate shadows and quarreling for power, is if that were a great prize. …”
At the end, death arrives as a relief.
We are no more immune to the forces of decay and death than were ancient Athens, ancient Egypt, ancient Rome, the Mayans, the Aztecs, Easter Island, Europe’s feudal society of lords and serfs, and the monarchal empires in early 20th-century Europe. Human nature has not changed. We will react as those before us reacted when they faced collapse. We will be increasingly consumed by illusion. We will seek to stop time, to prevent change, to embrace magical thinking in a desperate effort to return to an idealized past. Many will suffer.
This time, collapse will be planetwide. There will be no new lands to conquer, no new peoples to subjugate, no new natural resources to plunder and exploit. Climate change will teach us a brutal lessen about hubris.
The wages of sin, as Paul writes in his Letter to the Romans, is death—first moral and intellectual death and then physical death. The first, we already are experiencing. It would be reassuring to believe we could as a species avoid the second. But if human history is any guide, we are in for it. And the worse it gets, the more we seek to thwart change through magical thinking, the more our eventual extinction as a species is assured.
The Wages of Sin
When Plato wrote “The Republic,” his lament for a lost Athenian democracy, he did not believe democracy could be recovered. The classical world, unlike our own, did not see time as linear. Time was cyclical. It inevitably brought decay and eventually death. This true for both individuals and societies. And in his “Republic,” Plato proposed that those who attempted in the future to create the ideal state carry out a series of draconian measures, including banning drama and music, which diverted the citizen from performing civic duties and instilled corruption, and removing children from their parents to provide a proper indoctrination. Plato wanted to slow the process of dissolution. He wanted to stymie change. But that decay and death would come was certain, even in Plato’s ideal state.
History has proved the ancient Greeks correct: All cultures decay and die. Dying cultures, even when they cannot fully articulate their reality, begin to deeply fear change. Change, they find, brings with it increasing dysfunction, misery and suffering. This fear of change soon becomes irrational. It compounds decay and accelerates morbidity. To see modern-day victims of this process, we need only look to white American workers who once had good manufacturing jobs and benefited from the structures of white supremacy.
Those who promise to miraculously roll back time rise up in decaying cultures to hypnotize a bewildered and confused population. Plastic surgeons who provide the illusion of eternal youth, religious leaders who promise a return to a simplified biblical morality, political demagogues who hold out the promise of a renewed greatness, and charlatans offering techniques for self-advancement and success all peddle magical thinking. A desperate population, fearing change, clamors for greater and greater illusion. The forces that ensure collective death—including corporate capitalism, the fossil fuel industry and the animal agriculture industry—are blotted out of consciousness.
When a society laments the past and dreads the future, when it senses the looming presence of death, it falls down a rabbit hole. And as in the case of Alice—who “went on saying to herself, in a dreamy sort of way, ‘Do cats eat bats? Do cats eat bats?’ and sometimes, ‘Do bats eat cats?’ for, you see, as she couldn’t answer either question, it didn’t much matter which way she put it”—language becomes unmoored from experience. Daily discourse, especially public discourse, is, as our presidential campaign illustrates, reduced to childish gibberish.
Jobs are gone. Schools are closed. Neighborhoods and cities are in ruin. Despair and poverty dominate lives. Civil liberties are abolished. War is endless. The society self-medicates. Democracy is a fiction. “Austerity” decisions by government such as the latest slashing of the federal food stamp program, a move that could remove a million people from the rolls, bring more jolts. Shocks like these, as Alvin Toffler wrote, eventually trigger emotional overload; they are “the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.” And, finally, reality is too much to bear and is banished.
Climate change and the looming financial crisis will transform these emotional short circuits into what anthropologists call “crisis cults.” Crisis cults serve up illusions of recovered grandeur and empowerment during times of collapse, anxiety and disempowerment. A mythologized past will magically return. The old social hierarchies and rules will again apply. Prescribed rituals and behaviors, including acts of violence to cleanse the society of evil, will vanquish malevolent forces. These crisis cults—they have arisen in most societies that faced destruction, from Easter Island to Native Americans at the time of the 1890 Ghost Dance—create hermetically sealed tribes. We are already far down this road.
I spent last weekend in the Second Presbyterian Church in Elizabeth, N.J., helping to clear out piles of old books, church records, plastic flowers, worn choir robes and other detritus that were dusty remnants of the white working-class congregation that filled these pews a few decades ago.
Elizabeth was devastated by the 1982 closure of its Singer plant, which had been built in 1873 and at one time had 10,000 workers. The 1,000 or so African-Americans at the plant worked mostly in a foundry that made cast-iron parts for the sewing machines. The work was poorly paid and dangerous. White workers, many of them German, Italian, Irish, Jewish, Polish or Lithuanian immigrants, dominated the safer and better-paid factory floor. The city was built around the sprawling plant. Generations of residents organized their lives and their families on the basis of jobs at the Singer plant or other income that it produced. And then, after a long decline, the factory was gone.
The year Singer closed its flagship factory in Elizabeth there were 2,696 plant shutdowns across the United States, resulting in 1,287,000 job losses. Singer workers in Elizabeth under the age of 55 lost all retirement benefits, even if they had worked for the company for decades. Small businesses in the city that depended on the plant went bankrupt.
In postindustrial cities across America it is now clear, after the passage of years, that the good jobs and stability once provided by factories such as the Singer plant have been lost forever. The pent-up anger and frustration among the white working class have given birth to dark pathologies of hate. The hate is directed against those of different skin color or ethnicity who somehow seem to have heralded the changes that destroyed families and communities.
This sentiment, on display at Donald Trump rallies, will outlive the Trump campaign even should the candidate be, as I expect, deposed by the party elites. It is a very dangerous force. It presages violence against all who appear to have been empowered at the expense of the white working class—African-Americans, Muslims, undocumented workers, homosexuals, feminists, artists and intellectuals—and will feed the rise of a Christianized fascism.
“Generations from the same family worked for Singer,” the Rev. Michael Granzen, the senior minister at the Elizabeth church, said of the white workers who lost their jobs. “They suffered, when the plant was closed, not only economic loss but a loss of identity. They were stripped of their daily work routines. They lost social bonds. They no longer had generational goals. They lost hope in the future. They could no longer count on a steady income, health coverage and a secure retirement. Marriages and neighborhoods were torn apart. There was an increase in domestic violence, drug use, alcoholism and crime.
“Many white blue-collar workers blamed and scapegoated the newer black and Latino workers for the plant closure,” he said. “White racism is largely about this loss of self-worth. It is about the fear of nihilism. It creates a false grandiosity to compensate for a deep insecurity. We see this dynamic being played out in postindustrial cities across the country.”
Most of these former manufacturing hubs have seen whites flee. Hispanics and blacks, living in terrible poverty, now populate decaying neighborhoods there. Sixty percent of Elizabeth’s population today is made up of Latinos, many from Central America.
Elizabeth, like many other cities, has become an internal colony of the poor. It helps provide the bodies that feed the system of mass incarceration. And it, along with other suffering urban centers, has been turned into a toxic dumping ground.
“The environmental hazards multiplied in the years after Singer closed,” Granzen said. “As with other cities experiencing industrial decline in New Jersey—such as Camden, Newark, Trenton and Patterson—white-controlled political structures in the state turned to dumping hazardous and toxic wastes in cities like Elizabeth, which already had their own toxic legacies. The ethos of racial profiling that undermined the worth of nonwhite bodies was reflected in this environmental racism. The lives of nonwhites were seen as of lesser value.”
The insidious forms of institutional racism that define America explode as societal death approaches. They express themselves in displays of racial violence. White vigilante groups, desperate to prevent further change, engage in the same use of indiscriminant lethal force practiced by police against unarmed people of color. The continued failure by government to reintegrate the working class back into the economy, to give people hope, dooms us all.
Plato begins “The Republic” by having Socrates go to the port at Piraeus, the most decadent spot in ancient Athens. It was filled with taverns and brothels. It was home to thieves, prostitutes, soldiers and armed gangs. Egyptian, Median, Germanic, Phoenician and Carthaginian sailors and other foreigners—Athenians lumped them together as barbarians—congregated along the seafront.
The port was also where the Athenian war fleet, made up of black trireme ships with bronze-sheathed rams on the prow, was stationed in rows of military boathouses. These warships helped turn Athens from a democratic city-state into an empire in the 5th century BC. And, as Plato and his pupil Aristotle understood, the building of empire, any empire, extinguishes democracy.
The Greek polis, or city-state, soon to be swallowed up by the Macedonian empire, was the nucleus that—like early New England town halls in the United States—made it possible for an individual to be a political being, to have agency and a voice. Empire requires a centralized, authoritarian government that has no use for the demos. Greek democracy, always a patriarchy, was with the rise of empire extinguished. Corruption and a lust for power defined the new ruling elites. The citizen, as in our system of “inverted totalitarianism,” became irrelevant. As the Athenian general Thucydides noted, the tyranny that Athens imposed on the outer reaches of empire, it eventually imposed on itself. Athens, like the United States centuries later, was hollowed out from the inside by the corrosive force of empire. The brutal tools of control used initially in distant parts of the empire—in our case militarized police, drones, suspension of civil liberties, wholesale surveillance and mass incarceration—migrated back to the homeland. This is how most empires die. They commit suicide.
The loss of civic virtue, Plato wrote, left a population hypnotized by the illusions flickering on the wall of a cave. Such distorted images of reality—our electronic hallucinations are beyond Plato’s imagination—fuel irrational beliefs and desires. They foster a visionless existence. Our images are skillfully manipulated by the elites to keep the population entertained and passive. Those who seek to question the illusions are, Socrates warned, usually attacked and killed by the mob, which does not want its comforting myths punctured. When reality is too painful to bear, a population does not seek freedom or truth; it becomes an accomplice to its own enslavement. Epicureanism, the reduction of life to the pursuit of fleeting individual pleasure, seduces the public. Cynicism rules. Distrust is everywhere. The community breaks down, and, as Plato writes, “all goes wrong when, starved for lack of anything good in their own lives, men turn to public affairs hoping to snatch from thence the happiness they hunger for. They set about fighting for power, and their internecine conflict ruins them and their country.” This collapse creates a dream world “where men live fighting one another about elaborate shadows and quarreling for power, is if that were a great prize. …”
At the end, death arrives as a relief.
We are no more immune to the forces of decay and death than were ancient Athens, ancient Egypt, ancient Rome, the Mayans, the Aztecs, Easter Island, Europe’s feudal society of lords and serfs, and the monarchal empires in early 20th-century Europe. Human nature has not changed. We will react as those before us reacted when they faced collapse. We will be increasingly consumed by illusion. We will seek to stop time, to prevent change, to embrace magical thinking in a desperate effort to return to an idealized past. Many will suffer.
This time, collapse will be planetwide. There will be no new lands to conquer, no new peoples to subjugate, no new natural resources to plunder and exploit. Climate change will teach us a brutal lessen about hubris.
The wages of sin, as Paul writes in his Letter to the Romans, is death—first moral and intellectual death and then physical death. The first, we already are experiencing. It would be reassuring to believe we could as a species avoid the second. But if human history is any guide, we are in for it. And the worse it gets, the more we seek to thwart change through magical thinking, the more our eventual extinction as a species is assured.
Saturday, April 9, 2016
SC134-14
http://peakoil.com/publicpolicy/japan-the-canary-in-the-coal-mine
Japan: The Canary in the Coal Mine
One of the epicenters of the global financial crisis that started during the second half of last year is Japan, and it looks like the markets in the land of the rising sun are entering yet another period of great turmoil. The Nikkei was down another 390 points last night, and it is now down more than 1,300 points since a week ago. Why this is so important for U.S. investors is because the Nikkei is often an early warning indicator of where the rest of the global markets are heading. For example, the Nikkei started crashing early last December about a month before U.S. markets started crashing really hard in early January. So the fact that the Nikkei has been falling very rapidly in recent days should be a huge red flag for investors in this country.
I want you to study the chart below very carefully. It shows the performance of the Nikkei over the past 12 months. As you can see, it kind of resembles a giant leaning “W”. You can see the stock crash that started last August, you can see the second wave of the crash that began last December, and now a third leg of the crash is currently forming…
And of course the economic fundamentals in Japan continue to deteriorate as well. GDP growth has been negative for two out of the last three quarters, Japanese industrial production just experienced the largest one month decline that we have seen since the tsunami of 2011, and business sentiment has sunk to a three year low.
The third largest economy on the entire planet is in a comatose state at this point, and Japanese authorities have been throwing everything but the kitchen sink at it in an attempt to revive it. Government stimulus programs have pushed the debt to GDP ratio to 229 percent, and the quantitative easing that the Bank of Japan has been engaged in has made the Federal Reserve look timid by comparison.
But none of those extraordinary measures has been successful in stimulating the Japanese economy, so now the Bank of Japan has been been trying negative interest rates. Unfortunately, these negative rates are also having some unintended consequences. According to the Wall Street Journal, the negative interest rate program is putting additional stress on the Japanese financial sector…
The Bank of Japan started imposing a minus 0.1% rate on some deposits held by commercial banks in February, meaning that those banks now have to pay a small fee when they add to their money parked at the central bank. The financial sector has suffered amid worries that banks can’t pass on negative interest rate to their depositors and therefore will take a hit to their profits.
I would keep a very close eye on the big banks in Japan. It is my conviction that there is a lot more brewing under the surface than we are being told about so far.
In addition, many analysts in Japan are complaining that all of this manipulation by the BOJ is essentially destroying normal market behavior. The following comes from Bloomberg…
Nobuyasu Atago, who also had worked at the BOJ and is now the chief economist at Okasan Securities Co., pointed out that instead of serving as a important source of cash for borrowers, the credit market has become a profit center for dealers looking to buy securities from investors and sell them to the central bank. While the strategy may be lucrative now, financial institutions face the risk of massive losses, he said.
“By making the trade with the BOJ the only source of profit, markets are exposed to unexpected volatility when that trade ends and the BOJ moves toward the exit,” Atago said. “Markets are being destroyed.”
The more global central banks try to “fix things”, the more they make our long-term imbalances even worse.
To me, it makes no sense to have a bunch of unelected, unaccountable central planners constantly monkeying with the financial system. In a true free market system, we would allow market forces to determine the course of events. But of course we don’t have a free market system anymore. Instead, what we have is a heavily socialized system that is greatly manipulated by the central planners.
That is why global financial markets gyrate wildly if Janet Yellen so much as sneezes. They know who holds all the power, and investors are constantly on edge as they wait for the latest pronouncement from our central banking overlords.
At this point, 99 percent of the global population lives in a country with a central bank. Our world is more deeply divided than ever, and yet somehow everyone in the world has agreed to adopt this insidious system.
It sure is quite a coincidence, isn’t it?
Getting back to Japan, things are so bad now that the Japanese government is actually considering giving gift certificates directly to low-income young people. The following originally comes from Bloomberg…
The Japanese government plans to include gift certificates for low-income young people in its fiscal 2016 supplementary budget, Sankei reports, without saying who provided the information.
Recipients would be able to use them for daily necessities.
The government sees gift certificates as more effective in stimulating consumption than cash handouts, which may be deposited.
This is what the end of democracy looks like.
When the government just starts handing out money like candy, you might as well turn out the lights because the party is over.
Since 2008, global central banks have cut interest rates 637 times and they have injected approximately 12.3 trillion dollars into the global financial system through various quantitative easing programs.
Has all of this monkeying around solved our problems?
Of course not.
Instead, our long-term problems have grown progressively worse and now a new financial crisis has begun.
Keep an eye on Japan, and also keep an eye on Europe. Huge problems are bubbling right under the surface, and when they come bursting into the open they will deeply affect the United States as well.
Japan: The Canary in the Coal Mine
One of the epicenters of the global financial crisis that started during the second half of last year is Japan, and it looks like the markets in the land of the rising sun are entering yet another period of great turmoil. The Nikkei was down another 390 points last night, and it is now down more than 1,300 points since a week ago. Why this is so important for U.S. investors is because the Nikkei is often an early warning indicator of where the rest of the global markets are heading. For example, the Nikkei started crashing early last December about a month before U.S. markets started crashing really hard in early January. So the fact that the Nikkei has been falling very rapidly in recent days should be a huge red flag for investors in this country.
I want you to study the chart below very carefully. It shows the performance of the Nikkei over the past 12 months. As you can see, it kind of resembles a giant leaning “W”. You can see the stock crash that started last August, you can see the second wave of the crash that began last December, and now a third leg of the crash is currently forming…
And of course the economic fundamentals in Japan continue to deteriorate as well. GDP growth has been negative for two out of the last three quarters, Japanese industrial production just experienced the largest one month decline that we have seen since the tsunami of 2011, and business sentiment has sunk to a three year low.
The third largest economy on the entire planet is in a comatose state at this point, and Japanese authorities have been throwing everything but the kitchen sink at it in an attempt to revive it. Government stimulus programs have pushed the debt to GDP ratio to 229 percent, and the quantitative easing that the Bank of Japan has been engaged in has made the Federal Reserve look timid by comparison.
But none of those extraordinary measures has been successful in stimulating the Japanese economy, so now the Bank of Japan has been been trying negative interest rates. Unfortunately, these negative rates are also having some unintended consequences. According to the Wall Street Journal, the negative interest rate program is putting additional stress on the Japanese financial sector…
The Bank of Japan started imposing a minus 0.1% rate on some deposits held by commercial banks in February, meaning that those banks now have to pay a small fee when they add to their money parked at the central bank. The financial sector has suffered amid worries that banks can’t pass on negative interest rate to their depositors and therefore will take a hit to their profits.
I would keep a very close eye on the big banks in Japan. It is my conviction that there is a lot more brewing under the surface than we are being told about so far.
In addition, many analysts in Japan are complaining that all of this manipulation by the BOJ is essentially destroying normal market behavior. The following comes from Bloomberg…
Nobuyasu Atago, who also had worked at the BOJ and is now the chief economist at Okasan Securities Co., pointed out that instead of serving as a important source of cash for borrowers, the credit market has become a profit center for dealers looking to buy securities from investors and sell them to the central bank. While the strategy may be lucrative now, financial institutions face the risk of massive losses, he said.
“By making the trade with the BOJ the only source of profit, markets are exposed to unexpected volatility when that trade ends and the BOJ moves toward the exit,” Atago said. “Markets are being destroyed.”
The more global central banks try to “fix things”, the more they make our long-term imbalances even worse.
To me, it makes no sense to have a bunch of unelected, unaccountable central planners constantly monkeying with the financial system. In a true free market system, we would allow market forces to determine the course of events. But of course we don’t have a free market system anymore. Instead, what we have is a heavily socialized system that is greatly manipulated by the central planners.
That is why global financial markets gyrate wildly if Janet Yellen so much as sneezes. They know who holds all the power, and investors are constantly on edge as they wait for the latest pronouncement from our central banking overlords.
At this point, 99 percent of the global population lives in a country with a central bank. Our world is more deeply divided than ever, and yet somehow everyone in the world has agreed to adopt this insidious system.
It sure is quite a coincidence, isn’t it?
Getting back to Japan, things are so bad now that the Japanese government is actually considering giving gift certificates directly to low-income young people. The following originally comes from Bloomberg…
The Japanese government plans to include gift certificates for low-income young people in its fiscal 2016 supplementary budget, Sankei reports, without saying who provided the information.
Recipients would be able to use them for daily necessities.
The government sees gift certificates as more effective in stimulating consumption than cash handouts, which may be deposited.
This is what the end of democracy looks like.
When the government just starts handing out money like candy, you might as well turn out the lights because the party is over.
Since 2008, global central banks have cut interest rates 637 times and they have injected approximately 12.3 trillion dollars into the global financial system through various quantitative easing programs.
Has all of this monkeying around solved our problems?
Of course not.
Instead, our long-term problems have grown progressively worse and now a new financial crisis has begun.
Keep an eye on Japan, and also keep an eye on Europe. Huge problems are bubbling right under the surface, and when they come bursting into the open they will deeply affect the United States as well.
Thursday, April 7, 2016
SC134-13
http://www.globalresearch.ca/the-gig-economy-another-vicious-attack-on-ordinary-working-people-decimating-the-middle-class/5518880
The “Gig Economy”: Another Vicious Attack on Ordinary Working People, Decimating the Middle Class
“Contrary to the rising-tide hypothesis, the rising tide has only lifted the large yachts, while many of the smaller boats have been dashed on the rocks.” -Joseph Stiglitz, economist
American plutocrats and their political lackeys in congress have implemented a plan that’s putting pressure on wages and further decimating the already-battered middle class. By sustaining high levels of unemployment over a long period of time, US elites have “restructured the labor force”, which is a pretentious-sounding expression that means they’ve created a permanent underclass that’s willing to slave-away at demeaning, part-time jobs for mere peanuts without uttering a peep of protest. This metamorphosis of the workforce has taken place mostly in the shadows, concealed behind a thick fog of state propaganda touting the fictitious “recovery”, a recovery in which long-term jobless workers have abandoned all hope of finding gainful full-time employment and resigned themselves to a lifetime of scrambling from one odious task to the next just keep a roof over their heads and the wolves away from the door.
After eight years of applying this coercive ‘starvation strategy’, the plutocrat’s ‘grand plan’ is finally coming into focus. According to economists Lawrence F. Katz and Alan B. Krueger’s new paper titled “The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015″:
“All of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”
“Alternative work arrangements”? You mean there’s been zero growth in ordinary 9 to 5, 40-hour-per-week jobs in the last 10 freaking years???
Indeed, that’s exactly what it means. It also means that Obama’s relentless crowing about the phantom “recovery” is mostly bunkum. There is no recovery. It’s an invention built on the ruined lives of people who have been forced to take all-manner of servile, low-paying, part-time, service-sector jobs just to keep food on the table. That’s Obama’s glorious recovery in a nutshell. Here’s more from the World Socialist web Site:
“All US job growth for the last decade came in “alternative work arrangements”—people working as independent contractors, temps, through contract agencies or on-call—according to a study published Tuesday by Princeton University and the RAND Corporation…
The actual number of contingent full-time workers rose from 14.2 million in February 2005 to 23.6 million in November 2015, an increase of 9.4 million. Since total US employment rose by 9.1 million during this period, the number of workers in conventional, full-time positions actually dropped by nearly 400,000.” (Temps and contractors accounted for all US job growth since 2005, World Socialist Web Site)
Repeat: “The number of workers in conventional, full-time positions actually dropped by nearly 400,000.”
Great. So we’re actually going backwards, is that what they’re trying to say?
Yep. And if you look a little deeper into this topic, you’ll see that things are actually worse than the Princeton report suggests. For example, check this out clip from Bloomberg:
“The differences between Katz’s and Krueger’s 15.8 percent finding and the higher percentages reported in some other recent surveys mainly have to do with definitions. The Government Accountability Office’s April 2015 estimate that 40.4 percent of U.S. workers were in alternative work arrangements included part-time workers as well as some self-employed workers not covered under the BLS’s definition of alternative work. It was also based on a survey conducted in 2010, when the percentage of involuntary part-time workers was still quite elevated in the wake of the recession. The 2015 Freelancing in America survey that deemed 34 percent of U.S. workers to be freelancers included moonlighters who already had other jobs, as well as some small-business owners with employees.” (The Gig Economy Is Powered by Old People, Bloomberg)
Let’s skip the bullsh** about “freelancers” and “moonlighters” and any other cutesy sobriquet for part-time drudgery. What we’re interested in is the GAO’s damning April estimate that “40.4 percent of U.S. workers were in alternative work arrangements.” As far as I’m concerned, that’s where the rubber meets the road.
Bottom line: A large percentage of the working population can’t find ordinary, decent-paying jobs with benefits and retirement because the shithead oligarchs who own this country figured they could use the financial crisis to further dismantle whatever gains labor has made in last century while reducing workers wages to something on a par with a peasant stitching blue jeans in a windowless Hanoi sweatshop. That’s the objective, isn’t it, making sure that everyone everywhere is exploited equally?
You know it is. Obama was ordered to slash fiscal stimulus in 2009 while the corporate honchos curtailed business investment. But, why?
To reduce the amount of money flowing into the real economy while the double-dealing Fed pumped trillions into the financial system so asset-stripping investment banksters and corporate scalawags could net beaucoup profits while working people scraped by on next to nothing. You’ve heard the expression “Strangle the beast”? Well, this is how it works in real-time.
Keep in mind, that according to the nation’s number one economics blog, Calculated Risk, over 578,000 good-paying public sector jobs were lost under Obama, which is a situation that could have been easily avoided by targeting fiscal stimulus at the state and local level. Instead, Obama chose to shrink the size of the stimulus package (The American Recovery and Reinvestment Act of 2009), keep the economy on a ventilator, and shower the country with pink slips, just to prevent strong-enough growth to generate full employment and upward wage pressure. That was his assignment, and that’s what he did. Here’s a little background from an article at Huffington Post by Sam Stein:
“…members of the president’s economic team felt that if they were to properly fill the hole caused by the recession, they would need a bill that priced at $1.8 trillion — $600 billion more than was previously believed to be the high-water mark for the White House.
The $1.8 trillion figure was included in a December 2008 memo authored by Christina Romer (the incoming head of the Council of Economic Advisers) and obtained by Scheiber in the course of researching his book.
“When Romer showed [Larry] Summers her $1.8 trillion figure late in the week before the memo was due, he dismissed it as impractical. So Romer spent the next few days coming up with a reasonable compromise: roughly $1.2 trillion,” Scheiber writes.” (Huffington Post)
Clearly, what Obama and Summers wanted was exactly what they got, a sluggish, underperforming economy that kept unemployment needlessly-high while the Fed transferred trillions to their cockroach friends on Wall Street. (The ARRA was eventually whittled down to a paltry $800 billion, a miserable $100 billion more than the bank bailout fiasco called TARP) The plutocrats raked in record profits while working Americans saw their incomes drop, their wages freeze, and their prospects for upward mobility annihilated. Welcome to Obama’s Amerika. Here’s more from the WSWS:
“The proportion of contingent workers holding multiple jobs has more than quadrupled over the past 10 years, from 7.3 percent in 2005 to 32 percent in 2015. Nearly one-third of people working with no benefits or job security are holding down an additional part-time or full-time job just to make ends meet…
With spending on transportation and food also rising, 2014 became the first year studied by Pew in which median spending on these basic necessities surpassed median income. By 2014, median income had fallen by 13 percent from 2004 levels, while expenditures had increased by 14 percent.” (The social crisis and the US elections, World Socialist Web Site)
Hurrah, for Obama’s recovery! There’s so much work out there, people can work two, three, or even four jobs a day if they want! The only problem is they still can’t make ends meet because the shitty pay won’t even cover their expenses. “The more I work, the poorer I get.” Isn’t that what the PEW report is really saying?
Sure, it is. And yet we’re supposed to believe this is all just a big accident, that the weakest recovery in history is just an honest miscalculation by Ivy League-educated economists and government bean counters who just forgot how the economy works? Is that it; all the economic whizkids and Nobel Prize winning gurus are all just suffering from some odd strain of collective amnesia that prevents them from recommending solutions that actually generate growth, jobs, inflation and –dare I say it–economic recovery?
Baloney. The crappy recovery is all part of the plan, just like it is in Europe, just like it is in Japan, just like it is everywhere the western bank cartel and their globalist colleagues have extended their tentacles to expand their corporate extortionist empire. Let’s not dignify this phenom by calling it a “conspiracy”. It’s not a conspiracy, it’s plain-old shock therapy, the likes of which the neoliberal economists and their miscreant IMF friends have been using for decades. Create a bubble with easy money and low rates. Burst the bubble and precipitate a crisis. Impose excruciating belt-tightening measures that restructure the workforce, privatize public assets and transfers more of the national wealth to the parasites at the top of the foodchain, the mighty one percent. Wash, rinse, repeat. The current crisis in the US follows this exact same pattern. It just looks different this time-around because we’re the ones with the bull’s-eye on our backs.
Is it that different in Japan?
Heck, no. Here’s a clip from Reuters which shows how Japan’s ruling elites are not satisfied with slave wages alone. What they want is to shift more of the cost of government operations onto the backs of the people who can least afford it. Here’s an excerpt:
“part-time, temporary and other non-regular workers who typically make less than half the average pay has jumped 70 percent from 1997 to 19.7 million today — 38 percent of the labor force.”
Abenomics has made life considerably harder for these people due to the higher taxes, soaring prices, and reduced welfare benefits. The data show that Japan’s poverty rate is “the sixth-worst among the 34 OECD countries” while “child poverty in working, single-parent households is by far the worst at over 50 percent, making Japan the only country where having a job does not reduce the poverty rate for that group.” (Japan’s working poor left behind by Abenomics, Reuters)
Is this the next phase of America’s inexorable devolution into Third World poverty and immiseration? Are we about to see our bought-and-paid-for representatives levy more regressive VAT and sales taxes on the workerbees so the glorious “job creators” can continue to move more of their wealth offshore to the Caymans without adding even one lousy dime to the public coffers?
It wouldn’t surprise me at all. From my experience, the uber-rich don’t believe that they should have to contribute anything to a country they already own. It’s a matter of principle. Besides, how did Leona put it: “Only the little people pay taxes.”
Here’s more from Japan Today:
“Casual and part-time employees number nearly 20 million, almost 40% of the current Japanese workforce…
Casualisation is contributing to a less egalitarian society,.. At the moment, millions of young casual workers still live at home, rent-free, with mum and dad, whose generation drove Japan’s post-war boom. Once that generation passes, she adds, underlying poverty will become more evident.” (Temp workers: Helping or hurting Japan’s future? Japan Today)
Sound familiar? A whole generation living in the basement of Pop’s house because they have no job, no future and are loaded to the eyeballs with student debt. The only difference I can see here is the quality of the propaganda. In Japan, they call this ‘alternative work arrangements-phenom’, “casual labor”, whereas in the United States, the media has airbrushed the concept into a cheery-sounding moniker called “the gig economy.”
Nice touch, eh?
In the gig economy, workers aren’t exploited by a ruthless corporate machine that deliberately slows growth to intensify unemployment and put pressure on wages. Oh, no. Workers merely dabble in various occupations like a freewheeling handyman or a carefree musician who makes his living strumming his guitar at the local honkytonk before trundling off to the nearest Best Western for a good night’s sleep.
What utter hogwash. There is no “gig” economy. The ruling elite and their political flunkey friends are waging a vicious class war against people whose only aim is to make a decent living so they can provide for themselves and their families and avoid spending their waning years in a makeshift tent under the freeway overpass.
Is that too much to ask?
The “Gig Economy”: Another Vicious Attack on Ordinary Working People, Decimating the Middle Class
“Contrary to the rising-tide hypothesis, the rising tide has only lifted the large yachts, while many of the smaller boats have been dashed on the rocks.” -Joseph Stiglitz, economist
American plutocrats and their political lackeys in congress have implemented a plan that’s putting pressure on wages and further decimating the already-battered middle class. By sustaining high levels of unemployment over a long period of time, US elites have “restructured the labor force”, which is a pretentious-sounding expression that means they’ve created a permanent underclass that’s willing to slave-away at demeaning, part-time jobs for mere peanuts without uttering a peep of protest. This metamorphosis of the workforce has taken place mostly in the shadows, concealed behind a thick fog of state propaganda touting the fictitious “recovery”, a recovery in which long-term jobless workers have abandoned all hope of finding gainful full-time employment and resigned themselves to a lifetime of scrambling from one odious task to the next just keep a roof over their heads and the wolves away from the door.
After eight years of applying this coercive ‘starvation strategy’, the plutocrat’s ‘grand plan’ is finally coming into focus. According to economists Lawrence F. Katz and Alan B. Krueger’s new paper titled “The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015″:
“All of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”
“Alternative work arrangements”? You mean there’s been zero growth in ordinary 9 to 5, 40-hour-per-week jobs in the last 10 freaking years???
Indeed, that’s exactly what it means. It also means that Obama’s relentless crowing about the phantom “recovery” is mostly bunkum. There is no recovery. It’s an invention built on the ruined lives of people who have been forced to take all-manner of servile, low-paying, part-time, service-sector jobs just to keep food on the table. That’s Obama’s glorious recovery in a nutshell. Here’s more from the World Socialist web Site:
“All US job growth for the last decade came in “alternative work arrangements”—people working as independent contractors, temps, through contract agencies or on-call—according to a study published Tuesday by Princeton University and the RAND Corporation…
The actual number of contingent full-time workers rose from 14.2 million in February 2005 to 23.6 million in November 2015, an increase of 9.4 million. Since total US employment rose by 9.1 million during this period, the number of workers in conventional, full-time positions actually dropped by nearly 400,000.” (Temps and contractors accounted for all US job growth since 2005, World Socialist Web Site)
Repeat: “The number of workers in conventional, full-time positions actually dropped by nearly 400,000.”
Great. So we’re actually going backwards, is that what they’re trying to say?
Yep. And if you look a little deeper into this topic, you’ll see that things are actually worse than the Princeton report suggests. For example, check this out clip from Bloomberg:
“The differences between Katz’s and Krueger’s 15.8 percent finding and the higher percentages reported in some other recent surveys mainly have to do with definitions. The Government Accountability Office’s April 2015 estimate that 40.4 percent of U.S. workers were in alternative work arrangements included part-time workers as well as some self-employed workers not covered under the BLS’s definition of alternative work. It was also based on a survey conducted in 2010, when the percentage of involuntary part-time workers was still quite elevated in the wake of the recession. The 2015 Freelancing in America survey that deemed 34 percent of U.S. workers to be freelancers included moonlighters who already had other jobs, as well as some small-business owners with employees.” (The Gig Economy Is Powered by Old People, Bloomberg)
Let’s skip the bullsh** about “freelancers” and “moonlighters” and any other cutesy sobriquet for part-time drudgery. What we’re interested in is the GAO’s damning April estimate that “40.4 percent of U.S. workers were in alternative work arrangements.” As far as I’m concerned, that’s where the rubber meets the road.
Bottom line: A large percentage of the working population can’t find ordinary, decent-paying jobs with benefits and retirement because the shithead oligarchs who own this country figured they could use the financial crisis to further dismantle whatever gains labor has made in last century while reducing workers wages to something on a par with a peasant stitching blue jeans in a windowless Hanoi sweatshop. That’s the objective, isn’t it, making sure that everyone everywhere is exploited equally?
You know it is. Obama was ordered to slash fiscal stimulus in 2009 while the corporate honchos curtailed business investment. But, why?
To reduce the amount of money flowing into the real economy while the double-dealing Fed pumped trillions into the financial system so asset-stripping investment banksters and corporate scalawags could net beaucoup profits while working people scraped by on next to nothing. You’ve heard the expression “Strangle the beast”? Well, this is how it works in real-time.
Keep in mind, that according to the nation’s number one economics blog, Calculated Risk, over 578,000 good-paying public sector jobs were lost under Obama, which is a situation that could have been easily avoided by targeting fiscal stimulus at the state and local level. Instead, Obama chose to shrink the size of the stimulus package (The American Recovery and Reinvestment Act of 2009), keep the economy on a ventilator, and shower the country with pink slips, just to prevent strong-enough growth to generate full employment and upward wage pressure. That was his assignment, and that’s what he did. Here’s a little background from an article at Huffington Post by Sam Stein:
“…members of the president’s economic team felt that if they were to properly fill the hole caused by the recession, they would need a bill that priced at $1.8 trillion — $600 billion more than was previously believed to be the high-water mark for the White House.
The $1.8 trillion figure was included in a December 2008 memo authored by Christina Romer (the incoming head of the Council of Economic Advisers) and obtained by Scheiber in the course of researching his book.
“When Romer showed [Larry] Summers her $1.8 trillion figure late in the week before the memo was due, he dismissed it as impractical. So Romer spent the next few days coming up with a reasonable compromise: roughly $1.2 trillion,” Scheiber writes.” (Huffington Post)
Clearly, what Obama and Summers wanted was exactly what they got, a sluggish, underperforming economy that kept unemployment needlessly-high while the Fed transferred trillions to their cockroach friends on Wall Street. (The ARRA was eventually whittled down to a paltry $800 billion, a miserable $100 billion more than the bank bailout fiasco called TARP) The plutocrats raked in record profits while working Americans saw their incomes drop, their wages freeze, and their prospects for upward mobility annihilated. Welcome to Obama’s Amerika. Here’s more from the WSWS:
“The proportion of contingent workers holding multiple jobs has more than quadrupled over the past 10 years, from 7.3 percent in 2005 to 32 percent in 2015. Nearly one-third of people working with no benefits or job security are holding down an additional part-time or full-time job just to make ends meet…
With spending on transportation and food also rising, 2014 became the first year studied by Pew in which median spending on these basic necessities surpassed median income. By 2014, median income had fallen by 13 percent from 2004 levels, while expenditures had increased by 14 percent.” (The social crisis and the US elections, World Socialist Web Site)
Hurrah, for Obama’s recovery! There’s so much work out there, people can work two, three, or even four jobs a day if they want! The only problem is they still can’t make ends meet because the shitty pay won’t even cover their expenses. “The more I work, the poorer I get.” Isn’t that what the PEW report is really saying?
Sure, it is. And yet we’re supposed to believe this is all just a big accident, that the weakest recovery in history is just an honest miscalculation by Ivy League-educated economists and government bean counters who just forgot how the economy works? Is that it; all the economic whizkids and Nobel Prize winning gurus are all just suffering from some odd strain of collective amnesia that prevents them from recommending solutions that actually generate growth, jobs, inflation and –dare I say it–economic recovery?
Baloney. The crappy recovery is all part of the plan, just like it is in Europe, just like it is in Japan, just like it is everywhere the western bank cartel and their globalist colleagues have extended their tentacles to expand their corporate extortionist empire. Let’s not dignify this phenom by calling it a “conspiracy”. It’s not a conspiracy, it’s plain-old shock therapy, the likes of which the neoliberal economists and their miscreant IMF friends have been using for decades. Create a bubble with easy money and low rates. Burst the bubble and precipitate a crisis. Impose excruciating belt-tightening measures that restructure the workforce, privatize public assets and transfers more of the national wealth to the parasites at the top of the foodchain, the mighty one percent. Wash, rinse, repeat. The current crisis in the US follows this exact same pattern. It just looks different this time-around because we’re the ones with the bull’s-eye on our backs.
Is it that different in Japan?
Heck, no. Here’s a clip from Reuters which shows how Japan’s ruling elites are not satisfied with slave wages alone. What they want is to shift more of the cost of government operations onto the backs of the people who can least afford it. Here’s an excerpt:
“part-time, temporary and other non-regular workers who typically make less than half the average pay has jumped 70 percent from 1997 to 19.7 million today — 38 percent of the labor force.”
Abenomics has made life considerably harder for these people due to the higher taxes, soaring prices, and reduced welfare benefits. The data show that Japan’s poverty rate is “the sixth-worst among the 34 OECD countries” while “child poverty in working, single-parent households is by far the worst at over 50 percent, making Japan the only country where having a job does not reduce the poverty rate for that group.” (Japan’s working poor left behind by Abenomics, Reuters)
Is this the next phase of America’s inexorable devolution into Third World poverty and immiseration? Are we about to see our bought-and-paid-for representatives levy more regressive VAT and sales taxes on the workerbees so the glorious “job creators” can continue to move more of their wealth offshore to the Caymans without adding even one lousy dime to the public coffers?
It wouldn’t surprise me at all. From my experience, the uber-rich don’t believe that they should have to contribute anything to a country they already own. It’s a matter of principle. Besides, how did Leona put it: “Only the little people pay taxes.”
Here’s more from Japan Today:
“Casual and part-time employees number nearly 20 million, almost 40% of the current Japanese workforce…
Casualisation is contributing to a less egalitarian society,.. At the moment, millions of young casual workers still live at home, rent-free, with mum and dad, whose generation drove Japan’s post-war boom. Once that generation passes, she adds, underlying poverty will become more evident.” (Temp workers: Helping or hurting Japan’s future? Japan Today)
Sound familiar? A whole generation living in the basement of Pop’s house because they have no job, no future and are loaded to the eyeballs with student debt. The only difference I can see here is the quality of the propaganda. In Japan, they call this ‘alternative work arrangements-phenom’, “casual labor”, whereas in the United States, the media has airbrushed the concept into a cheery-sounding moniker called “the gig economy.”
Nice touch, eh?
In the gig economy, workers aren’t exploited by a ruthless corporate machine that deliberately slows growth to intensify unemployment and put pressure on wages. Oh, no. Workers merely dabble in various occupations like a freewheeling handyman or a carefree musician who makes his living strumming his guitar at the local honkytonk before trundling off to the nearest Best Western for a good night’s sleep.
What utter hogwash. There is no “gig” economy. The ruling elite and their political flunkey friends are waging a vicious class war against people whose only aim is to make a decent living so they can provide for themselves and their families and avoid spending their waning years in a makeshift tent under the freeway overpass.
Is that too much to ask?
Friday, April 1, 2016
SC134-12
http://peakoil.com/consumption/could-an-economic-collapse-be-in-our-near-future
Could an Economic Collapse be in Our Near Future?
Climate scientists and others have in the past few years issued a steady stream of analyses showing that without immediate remedial actions, a disastrous future is headed our way. But is it a four-decade-old study that will prove prescient?
That study, issued in the 1972 book The Limits to Growth, forecast that industrial output would decline early in the 21st century, followed quickly by a rise in death rates due to reduced provision of services and food that would lead to a dramatic decline in world population. To be specific, per capita industrial output was forecast to decline “precipitously” starting in about 2015.
Well, here we are. Despite years of stagnation following the worst economic crash since the Great Depression, things have not gotten that bad. At least not yet. Although the original authors of The Limits to Growth, led by Donella Meadows, caution against tying their predictions too tightly to a specific year, the actual trends of the past four decades are not far off from the what was predicted by the study’s models. A recent paper examining the original 1972 study goes so far as to say that the study’s predictions are well on course to being borne out.
That research paper, prepared by a University of Melbourne scientist, Graham Turner, is unambiguously titled “Is Global Collapse Imminent?” As you might guess from the title, Dr. Turner is not terribly optimistic.
He is merely the latest researcher to sound alarm bells. Just last month, a revised paper by 19 climate scientists led by James Hansen demonstrates that continued greenhouse-gas emissions will lead to a sea-level rise of several meters in as few as 50 years, increasingly powerful storms and rapid cooling in Europe. Two other recent papers calculate that humanity has already committed itself to a six-meter rise in sea level and a separate group of 18 scientists demonstrated in their study that Earth is crossing multiple points of no return. All the while, governments cling to the idea that “green capitalism” will magically pull humanity out of the frying pan.
Four decades of ‘business as usual’
At least global warming is acknowledged today, even if the world’s governments prescriptions thus far are woefully inadequate. In 1972, the message of The Limits to Growth was far from welcome and widely ridiculed. Adjusting parameters to test various possibilities, the authors ran a dozen scenarios in a global model of the environment and economy, and found that “overshoot and collapse” was inevitable with continued “business as usual”; that is, without significant changes to economic activity. Needless to say, such changes have not occurred.
In the “business as usual” model, the capital needed to extract harder-to-reach resources becomes sufficiently high that other needs for investment are starved at the same time that resources begin to become depleted. Industrial output would begin to decline about 2015, but pollution would continue to increase and fewer inputs would be available for agriculture, resulting in declining food production. Coupled with declines in services such as health and education due to insufficient capital, the death rate begins to rise in 2020 and world population declines at a rate of about half a billion per decade from 2030. According to Dr. Turner:
“The World3 model simulated a stock of non-renewable as well as renewable resources. The function of renewable resources in World3, such as agricultural land and the trees, could erode as a result of economic activity, but they could also recover their function if deliberate action was taken or harmful activity reduced. The rate of recovery relative to rates of degradation affects when thresholds or limits are exceeded as well as the magnitude of any potential collapse.”
The World3 computer model simulated interactions within and between population, industrial capital, pollution, agricultural systems and non-renewable resources, set up to capture positive and negative feedback loops. Dr. Turner writes that changing parameters merely delays collapse. The current boom in fracking natural gas and the extraction of petroleum products from tar sands weren’t anticipated in the 1970s, but the expansion of new technologies to exploit resources pushes back the collapse “one to two decades” but “when it occurs the speed of decline is even greater.”
Turner collapse chartSo how much stock should we put in a study more than 40 years old? Dr. Turner asserts that actual environmental, economic and population measurements in the intervening years “aligns strongly” to what the Limits to Growth model expected from its “business as usual” run. He writes:
“[T]he observed industrial output per capita illustrates a slowing rate of growth that is consistent with the [business as usual scenario] reaching a peak. In this scenario, the industrial output per capita begins a substantial reversal and decline at about 2015. Observed food per capita is broadly in keeping with the [Limits to Growth business as usual scenario], with food supply increasing only marginally faster than population. Literacy rates show a saturating growth trend, while electricity generation per capita … grows more rapidly and in better agreement with the [Limits to Growth] model.”
Peak oil and difficult economics
Rising energy costs following global peak oil will make much of the remaining stock uneconomical to exploit. This is a critical forcing point in the collapse scenario. And as more energy is required to extract resources that are more difficult to exploit, the net energy from production continues to fall. John Michael Greer, a writer on peak oil, observes that, just as it takes more energy to produce a steel product than it did a century ago due to the lower quality of iron ore today, more energy is required to produce energy today.
Net energy from oil production has vastly shrunken over the years, Mr. Greer writes:
“[T]the sort of shallow wells that built the US oil industry has a net energy of anything up to 200 to 1: in other words, less than a quart out of each 42-gallon barrel of oil goes to paying off the energy cost of extraction, and the rest is pure profit. … As you slide down the grades of hydrocarbon goo, though, that pleasant equation gets replaced by figures considerably less genial. Your average barrel of oil from a conventional US oilfield today has a net energy around 30 to 1. … The surge of new petroleum that hit the oil market just in time to help drive the current crash of oil prices, though, didn’t come from 30-to-1 conventional oil wells. … What produced the surge this time was a mix of tar sands and hydrofractured shales, which are a very, very long way down the goo curve. …
“The real difficulty with the goo you get from tar sands and hydrofractured shales is that you have to put a lot more energy into getting each [barrel of oil equivalent] of energy out of the ground and into usable condition than you do with conventional crude oil. The exact figures are a matter of dispute, and factoring in every energy input is a fiendishly difficult process, but it’s certainly much less than 30 to 1—and credible estimates put the net energy of tar sands and hydrofractured shales well down into single digits. Now ask yourself this: where is the energy that has to be put into the extraction process coming from? The answer, of course, is that it’s coming out of the same global energy supply to which tar sands and hydrofractured shales are supposedly contributing.”
It is that declining energy availability and greater expense that is the tipping point, Dr. Turner argues:
“Contemporary research into the energy required to extract and supply a unit of energy from oil shows that the inputs have increased by almost an order of magnitude. It does not matter how big the resource stock is if it cannot be extracted fast enough or other scarce inputs needed elsewhere in the economy are consumed in the extraction. Oil and gas optimists note that extracting unconventional fuels is only economic above an oil price somewhere in the vicinity of US$70 per barrel. They readily acknowledge that the age of cheap oil is over, without apparently realising that expensive fuels are a sign of constraints on extraction rates and inputs needed. It is these constraints which lead to the collapse in the [Limits to Growth] modelling of the [business as usual] scenario.”
New oil is dirty oil
The current plunge in oil and gas prices will not be permanent. Speculation on why Saudi Arabia, by far the world’s biggest oil exporter, continues to furiously pump out oil as fast as it can despite the collapse in pricing frequently centers on speculation that the Saudis’ pumping costs are lower than elsewhere and thus can sustain low prices while driving out competitors who must operate in the red at such prices.
If this scenario pans out, a shortage of oil will eventually materialize, driving the price up again. But the difficult economics will not have disappeared; all the easy sources of petroleum have long since been tapped. And the sources for the recent boom — tar sands and fracking — are heavy contributors to global warming, another looming danger. The case for catastrophic climate disruption due to global warming is far better understood today than it was in 1972 — and we are already experiencing its effects.
Dr. Turner, noting with understatement that these gigantic global problems “have been met with considerable resistance from powerful societal forces,” concludes:
“A challenging lesson from the [Limits to Growth] scenarios is that global environmental issues are typically intertwined and should not be treated as isolated problems. Another lesson is the importance of taking pre-emptive action well ahead of problems becoming entrenched. Regrettably, the alignment of data trends with the [Limits to Growth] dynamics indicates that the early stages of collapse could occur within a decade, or might even be underway. This suggests, from a rational risk-based perspective, that we have squandered the past decades, and that preparing for a collapsing global system could be even more important than trying to avoid collapse.”
Sobering indeed. Left unsaid (and, as always, there is no criticism intended in noting a research paper not going outside its parameters) is why so little has been done to head off a looming global catastrophe. Free of constraints, it is not difficult to quantify those “powerful societal forces” as the biggest industrialists and financiers in the world capitalist system. As long as we have an economic system that allows private capital to accumulate without limit on a finite planet, and externalize the costs, in a system that requires endless growth, there is no real prospect of making the drastic changes necessary to head off a very painful future.
Just because a study was conducted decades in the past does not mean we can’t learn from it, even with a measure of skepticism toward peak-oil fast-collapse scenarios. If we reach still further back in time, Rosa Luxemburg’s words haunt us still: Socialism or barbarism.
Could an Economic Collapse be in Our Near Future?
Climate scientists and others have in the past few years issued a steady stream of analyses showing that without immediate remedial actions, a disastrous future is headed our way. But is it a four-decade-old study that will prove prescient?
That study, issued in the 1972 book The Limits to Growth, forecast that industrial output would decline early in the 21st century, followed quickly by a rise in death rates due to reduced provision of services and food that would lead to a dramatic decline in world population. To be specific, per capita industrial output was forecast to decline “precipitously” starting in about 2015.
Well, here we are. Despite years of stagnation following the worst economic crash since the Great Depression, things have not gotten that bad. At least not yet. Although the original authors of The Limits to Growth, led by Donella Meadows, caution against tying their predictions too tightly to a specific year, the actual trends of the past four decades are not far off from the what was predicted by the study’s models. A recent paper examining the original 1972 study goes so far as to say that the study’s predictions are well on course to being borne out.
That research paper, prepared by a University of Melbourne scientist, Graham Turner, is unambiguously titled “Is Global Collapse Imminent?” As you might guess from the title, Dr. Turner is not terribly optimistic.
He is merely the latest researcher to sound alarm bells. Just last month, a revised paper by 19 climate scientists led by James Hansen demonstrates that continued greenhouse-gas emissions will lead to a sea-level rise of several meters in as few as 50 years, increasingly powerful storms and rapid cooling in Europe. Two other recent papers calculate that humanity has already committed itself to a six-meter rise in sea level and a separate group of 18 scientists demonstrated in their study that Earth is crossing multiple points of no return. All the while, governments cling to the idea that “green capitalism” will magically pull humanity out of the frying pan.
Four decades of ‘business as usual’
At least global warming is acknowledged today, even if the world’s governments prescriptions thus far are woefully inadequate. In 1972, the message of The Limits to Growth was far from welcome and widely ridiculed. Adjusting parameters to test various possibilities, the authors ran a dozen scenarios in a global model of the environment and economy, and found that “overshoot and collapse” was inevitable with continued “business as usual”; that is, without significant changes to economic activity. Needless to say, such changes have not occurred.
In the “business as usual” model, the capital needed to extract harder-to-reach resources becomes sufficiently high that other needs for investment are starved at the same time that resources begin to become depleted. Industrial output would begin to decline about 2015, but pollution would continue to increase and fewer inputs would be available for agriculture, resulting in declining food production. Coupled with declines in services such as health and education due to insufficient capital, the death rate begins to rise in 2020 and world population declines at a rate of about half a billion per decade from 2030. According to Dr. Turner:
“The World3 model simulated a stock of non-renewable as well as renewable resources. The function of renewable resources in World3, such as agricultural land and the trees, could erode as a result of economic activity, but they could also recover their function if deliberate action was taken or harmful activity reduced. The rate of recovery relative to rates of degradation affects when thresholds or limits are exceeded as well as the magnitude of any potential collapse.”
The World3 computer model simulated interactions within and between population, industrial capital, pollution, agricultural systems and non-renewable resources, set up to capture positive and negative feedback loops. Dr. Turner writes that changing parameters merely delays collapse. The current boom in fracking natural gas and the extraction of petroleum products from tar sands weren’t anticipated in the 1970s, but the expansion of new technologies to exploit resources pushes back the collapse “one to two decades” but “when it occurs the speed of decline is even greater.”
Turner collapse chartSo how much stock should we put in a study more than 40 years old? Dr. Turner asserts that actual environmental, economic and population measurements in the intervening years “aligns strongly” to what the Limits to Growth model expected from its “business as usual” run. He writes:
“[T]he observed industrial output per capita illustrates a slowing rate of growth that is consistent with the [business as usual scenario] reaching a peak. In this scenario, the industrial output per capita begins a substantial reversal and decline at about 2015. Observed food per capita is broadly in keeping with the [Limits to Growth business as usual scenario], with food supply increasing only marginally faster than population. Literacy rates show a saturating growth trend, while electricity generation per capita … grows more rapidly and in better agreement with the [Limits to Growth] model.”
Peak oil and difficult economics
Rising energy costs following global peak oil will make much of the remaining stock uneconomical to exploit. This is a critical forcing point in the collapse scenario. And as more energy is required to extract resources that are more difficult to exploit, the net energy from production continues to fall. John Michael Greer, a writer on peak oil, observes that, just as it takes more energy to produce a steel product than it did a century ago due to the lower quality of iron ore today, more energy is required to produce energy today.
Net energy from oil production has vastly shrunken over the years, Mr. Greer writes:
“[T]the sort of shallow wells that built the US oil industry has a net energy of anything up to 200 to 1: in other words, less than a quart out of each 42-gallon barrel of oil goes to paying off the energy cost of extraction, and the rest is pure profit. … As you slide down the grades of hydrocarbon goo, though, that pleasant equation gets replaced by figures considerably less genial. Your average barrel of oil from a conventional US oilfield today has a net energy around 30 to 1. … The surge of new petroleum that hit the oil market just in time to help drive the current crash of oil prices, though, didn’t come from 30-to-1 conventional oil wells. … What produced the surge this time was a mix of tar sands and hydrofractured shales, which are a very, very long way down the goo curve. …
“The real difficulty with the goo you get from tar sands and hydrofractured shales is that you have to put a lot more energy into getting each [barrel of oil equivalent] of energy out of the ground and into usable condition than you do with conventional crude oil. The exact figures are a matter of dispute, and factoring in every energy input is a fiendishly difficult process, but it’s certainly much less than 30 to 1—and credible estimates put the net energy of tar sands and hydrofractured shales well down into single digits. Now ask yourself this: where is the energy that has to be put into the extraction process coming from? The answer, of course, is that it’s coming out of the same global energy supply to which tar sands and hydrofractured shales are supposedly contributing.”
It is that declining energy availability and greater expense that is the tipping point, Dr. Turner argues:
“Contemporary research into the energy required to extract and supply a unit of energy from oil shows that the inputs have increased by almost an order of magnitude. It does not matter how big the resource stock is if it cannot be extracted fast enough or other scarce inputs needed elsewhere in the economy are consumed in the extraction. Oil and gas optimists note that extracting unconventional fuels is only economic above an oil price somewhere in the vicinity of US$70 per barrel. They readily acknowledge that the age of cheap oil is over, without apparently realising that expensive fuels are a sign of constraints on extraction rates and inputs needed. It is these constraints which lead to the collapse in the [Limits to Growth] modelling of the [business as usual] scenario.”
New oil is dirty oil
The current plunge in oil and gas prices will not be permanent. Speculation on why Saudi Arabia, by far the world’s biggest oil exporter, continues to furiously pump out oil as fast as it can despite the collapse in pricing frequently centers on speculation that the Saudis’ pumping costs are lower than elsewhere and thus can sustain low prices while driving out competitors who must operate in the red at such prices.
If this scenario pans out, a shortage of oil will eventually materialize, driving the price up again. But the difficult economics will not have disappeared; all the easy sources of petroleum have long since been tapped. And the sources for the recent boom — tar sands and fracking — are heavy contributors to global warming, another looming danger. The case for catastrophic climate disruption due to global warming is far better understood today than it was in 1972 — and we are already experiencing its effects.
Dr. Turner, noting with understatement that these gigantic global problems “have been met with considerable resistance from powerful societal forces,” concludes:
“A challenging lesson from the [Limits to Growth] scenarios is that global environmental issues are typically intertwined and should not be treated as isolated problems. Another lesson is the importance of taking pre-emptive action well ahead of problems becoming entrenched. Regrettably, the alignment of data trends with the [Limits to Growth] dynamics indicates that the early stages of collapse could occur within a decade, or might even be underway. This suggests, from a rational risk-based perspective, that we have squandered the past decades, and that preparing for a collapsing global system could be even more important than trying to avoid collapse.”
Sobering indeed. Left unsaid (and, as always, there is no criticism intended in noting a research paper not going outside its parameters) is why so little has been done to head off a looming global catastrophe. Free of constraints, it is not difficult to quantify those “powerful societal forces” as the biggest industrialists and financiers in the world capitalist system. As long as we have an economic system that allows private capital to accumulate without limit on a finite planet, and externalize the costs, in a system that requires endless growth, there is no real prospect of making the drastic changes necessary to head off a very painful future.
Just because a study was conducted decades in the past does not mean we can’t learn from it, even with a measure of skepticism toward peak-oil fast-collapse scenarios. If we reach still further back in time, Rosa Luxemburg’s words haunt us still: Socialism or barbarism.
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