http://kunstler.com/clusterfuck-nation/collapse-goes-kinetic/
When Collapse Goes Kinetic
I suppose many who think about the prospect of economic collapse imagine something like a Death Star implosion that simply obliterates the normal doings of daily life overnight, leaving everybody in a short, nasty, brutish, Hobbesian free-for-all that dumps the survivors in a replay of the Stone Age — without the consolation of golden ages yet to come that we had the first time around.
The collapse of our techno-industrial set-up has actually been going on for some time, insidiously and corrosively, without shattering the scaffolds of seeming normality, just stealthily undermining them. I’d date the onset of it to about 2005 when the world unknowingly crossed an invisible border into the terra incognito of peak oil, by which, of course, I mean oil that societies could no longer afford to pull out of the ground. It’s one thing to have an abundance of really cheap energy, like oil was in 1955. But when the supply starts to get sketchy, and what’s left can only be obtained at an economic loss, the system goes quietly insane.
In the event, popular beliefs and behavior have turned really strange. We do things that are patently self-destructive, rationalize them with doctrines and policies that don’t add up, and then garnish them with wishful fantasies that offer hypothetical happy endings to plot lines that do not really tend in a rosy direction. The techno-narcissistic nonsense reverberating through the echo-chambers of business, media, and government aims to furnish that nostrum called “hope” to a nation that simply won’t admit darker outcomes to the terrible limits facing humanity.
Thus, we have the Tesla saga of electric motoring to save the day for our vaunted way of life (i.e. the landscape as demolition derby), the absurd proposals to colonize distant, arid, frigid, and airless Mars as a cure for ruining this watery blue planet ideally suited for our life-form, and the inane “singularity” narratives that propose to replace grubby material human life with a crypto-gnostic data cloud of never-ending cosmic orgasm. The psychological desperation is obvious. Apparently, there are moments in history when flying up your own butt-hole is the most comforting available option.
I expect the collapse to pick up more momentum as we turn the corner around summer. The system that we have most willfully abused and perverted is finance. This monster that so many observers call “capitalism” is just a set of methods for managing surplus wealth — the catch being that nothing nearly this complex has ever been seen before in history and is a pure product of the 200-year-long industrial orgy driven by fossil fuels. That is, the world never before accumulated so much surplus wealth in such a short span of time. We commonly refer to this dynamic as “growth.” When that growth, as expressed in modern GDP terms, slowed dramatically after 2005, we launched an array of clever mechanisms to keep faking it for a while. Racking up immense debt was our way of faking it. If you can’t cover your costs in the present, just borrow from the future. Unfortunately, that works only as as long as there’s some reasonable expectation that debt can be paid back. We’re so far beyond that now, it’s not funny. And that realization alone will destroy the bond markets and anything related to and dependent on their operations to function.
This is a broad outline to the coming end of the Trump miracle economy. It was the after effects of the previous debt blowup — the phony-baloney mortgage bond market in 2008 — that mortally wounded the American middle class and put Donald Trump in the White House. His base is correct to feel swindled. That is exactly what happened to them, and the beat goes on now with securitized sub-prime auto loans. Throw in the horrific burdens of unpayable and non-dischargable college loans that will ruin millions of lives and pricey health insurance with $5000 deductibles and you have a recipe for a complete loss of faith in the system.
The next debt blowup will be the end of Mr. Trump’s improbable credibility. It may also be the beginning of serious difficulty in being able to get many of the goods of daily life, because the producers of things will be very unsure of getting paid on delivery of just about anything. A freeze up of short-term lending would quickly lead to empty WalMart shelves and “no gas” signs at the filling stations. That’s when collapse finally goes kinetic, and becomes something more than just bad feelings and inane ideas.
Wednesday, July 18, 2018
SC168-12
http://kunstler.com/clusterfuck-nation/summer-tough-love/
Summer of Tough Love
The golden Colossus of Trump looms over the national scene this summer like one of Jeff Koons’s giant, shiny, balloon-puppy sculptures — a monumental expression of semiotic vacancy. At the apogee of Trumpdom, everything’s coming up covfefe. The stock market is 5000 points ahead since 1/20/17. Little Rocket Man is America’s bitch. We’re showing those gibbering Asian hordes and European café layabouts a thing or two about fair trade. Electric cars are almost here to save the day. And soon, American youth will be time-warping around the solar system in the new US Space Corps!
Enjoy it while you can. Events are converging ominously this summer in the direction of unwinding expectations and serial train wrecks of finance and politics. Mr. Trump has made hubris simple by bragging on the supposed triumphs of “his” economy. When it blows up, he’ll own that, too, and the second half of 2018 liable to be a debris-field of shattered national economies, zombie corporations, and floundering institutions.
A new supreme court justice will be the very apex of Trump triumphalism, but whoever the pick is will goad the Democratic “progressives” to new depths of antagonism, so expect more street-fighting by the black-masked Antifa forces during the senate confirmation debate. Some sort of martial law will be invoked by a governor, or perhaps even the president himself. Initially that would amount to little more than curfews, but they’ll be ignored, and then the fun will really begin. Think: national guard troops and angry clashes. The tone will be low, and sinking fast.
If Antifa acts up the way I anticipate, it will drag the Democratic Party closer to extinction. The party celebrated a week ago over the rise of Evita Peron wannabe, Alexandria Ocasio-Cortez. Her youth and glamour intersect with her socialism, a doctrine that caused more human deaths in the 20th century than all the religious wars of the previous centuries. What’s not to like about it?
The blowup of the bond and stock markets later this year will put to a gloomy rest the ludicrous notion that America has been enjoying a great economic boom. It’s actually been an engineered hallucination, thanks to the global monetary authorities applying the magic of limitless credit to a bad habit of credulous speculation. The central banks have launched a program of so-called “quantitative tightening (QT)” — an idiotic phrase meant to counterpoise the equally fatuous “quantitative easing (QE),” PhD economist-speak for grotesque interference in the bond markets — that will choke down the credit supply at exactly the moment that governments and giant corporations need new loans to pay the interest on old loans. The trajectory there is obvious.
The big question, of course — hardly ever asked in the public arena — is what that will do to currencies, i.e., money. It can really only go two ways: either make money very scarce, in which case a lot of people and enterprises go broke, or, if the monetary authorities respond to the predicament by enabling a return to bottomless credit issuance, the money will become worthless — they’ll be plenty of it, but it won’t buy much. Such a turn of events will make an already-unhinged nation fly apart.
Lurking in the background of all this are several other consequential movements, trends, and troubles. One is the fate of the European Union. The quarrel over migrants from the Middle East and Africa will not be resolved happily. Germany and France will not succeed in bullying countries like Austria, Hungary, and Poland into absorbing more of these strangers. The more the EU pushes, the more they will feed nationalist sentiment in these places. And of course all the Big Dawgs of the EU are already stuck with millions of newcomers they foolishly invited the past several years, and all the problems they brought with them.
Another plot-line deep in this summer’s story is the movement of oil markets. Recently, the trend has been for rapidly rising oil prices. As they approach the “magic” $75-a-barrel mark, you can be sure they will squash economic activity — which is already being hammered by the uncertainty unleashed by trade-and-tariff shenanigans. If the oil price heads back over $100/barrel you can just forget about maintaining the business status quo — and even at that price the shale oil companies won’t make a red cent. Of course, they’ll also have a tough time getting new loans, which is the only thing that kept their operations going for the past ten years.
Oh, yes, there is also that Hieronymus Bosch Garden of Earthly Delights known as the Mueller Investigation, with its dreary outposts in the executive suite of the FBI, and all the tangled mysteries entailed there. Mr. Mueller will come up with someone to indict on something, even if it’s ninety-seven ham sandwiches. I suspect Mr. Trump will manage to dump Attorney General Jeff Sessions and Deputy AG Rod Rosenstein. And then the pardons will fly, like so many winged demons flapping from the mouth of Hades. Constitutional crisis may be too mild a word for what ensues.
By holiday time in early winter, much will clarified about the actual direction of the country. By then, the “Walk Away” movement may even include the obdurate shills at CNN and The New York Times, and the Intellectual-Yet-Idiots on the college campuses. And the Golden Golem of Greatness will lie upended in the swamp that he just didn’t try hard enough to drain.
Summer of Tough Love
The golden Colossus of Trump looms over the national scene this summer like one of Jeff Koons’s giant, shiny, balloon-puppy sculptures — a monumental expression of semiotic vacancy. At the apogee of Trumpdom, everything’s coming up covfefe. The stock market is 5000 points ahead since 1/20/17. Little Rocket Man is America’s bitch. We’re showing those gibbering Asian hordes and European café layabouts a thing or two about fair trade. Electric cars are almost here to save the day. And soon, American youth will be time-warping around the solar system in the new US Space Corps!
Enjoy it while you can. Events are converging ominously this summer in the direction of unwinding expectations and serial train wrecks of finance and politics. Mr. Trump has made hubris simple by bragging on the supposed triumphs of “his” economy. When it blows up, he’ll own that, too, and the second half of 2018 liable to be a debris-field of shattered national economies, zombie corporations, and floundering institutions.
A new supreme court justice will be the very apex of Trump triumphalism, but whoever the pick is will goad the Democratic “progressives” to new depths of antagonism, so expect more street-fighting by the black-masked Antifa forces during the senate confirmation debate. Some sort of martial law will be invoked by a governor, or perhaps even the president himself. Initially that would amount to little more than curfews, but they’ll be ignored, and then the fun will really begin. Think: national guard troops and angry clashes. The tone will be low, and sinking fast.
If Antifa acts up the way I anticipate, it will drag the Democratic Party closer to extinction. The party celebrated a week ago over the rise of Evita Peron wannabe, Alexandria Ocasio-Cortez. Her youth and glamour intersect with her socialism, a doctrine that caused more human deaths in the 20th century than all the religious wars of the previous centuries. What’s not to like about it?
The blowup of the bond and stock markets later this year will put to a gloomy rest the ludicrous notion that America has been enjoying a great economic boom. It’s actually been an engineered hallucination, thanks to the global monetary authorities applying the magic of limitless credit to a bad habit of credulous speculation. The central banks have launched a program of so-called “quantitative tightening (QT)” — an idiotic phrase meant to counterpoise the equally fatuous “quantitative easing (QE),” PhD economist-speak for grotesque interference in the bond markets — that will choke down the credit supply at exactly the moment that governments and giant corporations need new loans to pay the interest on old loans. The trajectory there is obvious.
The big question, of course — hardly ever asked in the public arena — is what that will do to currencies, i.e., money. It can really only go two ways: either make money very scarce, in which case a lot of people and enterprises go broke, or, if the monetary authorities respond to the predicament by enabling a return to bottomless credit issuance, the money will become worthless — they’ll be plenty of it, but it won’t buy much. Such a turn of events will make an already-unhinged nation fly apart.
Lurking in the background of all this are several other consequential movements, trends, and troubles. One is the fate of the European Union. The quarrel over migrants from the Middle East and Africa will not be resolved happily. Germany and France will not succeed in bullying countries like Austria, Hungary, and Poland into absorbing more of these strangers. The more the EU pushes, the more they will feed nationalist sentiment in these places. And of course all the Big Dawgs of the EU are already stuck with millions of newcomers they foolishly invited the past several years, and all the problems they brought with them.
Another plot-line deep in this summer’s story is the movement of oil markets. Recently, the trend has been for rapidly rising oil prices. As they approach the “magic” $75-a-barrel mark, you can be sure they will squash economic activity — which is already being hammered by the uncertainty unleashed by trade-and-tariff shenanigans. If the oil price heads back over $100/barrel you can just forget about maintaining the business status quo — and even at that price the shale oil companies won’t make a red cent. Of course, they’ll also have a tough time getting new loans, which is the only thing that kept their operations going for the past ten years.
Oh, yes, there is also that Hieronymus Bosch Garden of Earthly Delights known as the Mueller Investigation, with its dreary outposts in the executive suite of the FBI, and all the tangled mysteries entailed there. Mr. Mueller will come up with someone to indict on something, even if it’s ninety-seven ham sandwiches. I suspect Mr. Trump will manage to dump Attorney General Jeff Sessions and Deputy AG Rod Rosenstein. And then the pardons will fly, like so many winged demons flapping from the mouth of Hades. Constitutional crisis may be too mild a word for what ensues.
By holiday time in early winter, much will clarified about the actual direction of the country. By then, the “Walk Away” movement may even include the obdurate shills at CNN and The New York Times, and the Intellectual-Yet-Idiots on the college campuses. And the Golden Golem of Greatness will lie upended in the swamp that he just didn’t try hard enough to drain.
SC168-11
http://kunstler.com/clusterfuck-nation/a-turn-for-the-worse/
A Turn for the Worse
The Democratic Party has steered itself into an exquisitely neurotic predicament at a peculiar moment of history. Senator Bernie Sanders set the tone for the shift to full-throated socialism, and the primary election win of 28-year-old Alexandria Ocasio-Cortez in a New York congressional district seems to have ratified it. She promised voters free college tuition, single-payer health care, and free housing. Ah, to live in such a utopia!
One can actually understand why New Yorkers especially would fall for that agenda of promises. When I was a child there in the 1950s and 60s, New York was a mostly middle-class city. City College of New York, with a really distinguished faculty, was free. That’s right, stone free. Much of that middle-class was educated there, including most of my high school teachers. In the 1950s and 60s, it cost a few hundred dollars to have a baby in the hospital, and less than that to receive three stitches in the ER. Back then, New York real estate was mostly rental housing and not subject to the deformations of wandering global capital.
You can’t overstate how fortunate this country was after the Second World War. The mid-twentieth century was the apex of American industrial wealth. We produced real goods and lived in extraordinary comfort. Now, of course that has all turned around, the industry is mostly bygone, the magnificent energy supply is getting sketchy, and all that’s left is a false-front financialized economy based on swindling and accounting fraud. Medicine and health care have become unabashed rackets, and good luck finding a place to live for less than half of your monthly income.
Things have changed, as Bob Dylan once noted in song, and the times they are a ‘changing once again. This is probably the worst time in recent history to go full-bore socialist. Look, it’s as simple as this: the 20th century saw the greatest rise of global GDP ever. The prospect of that is what drove the various socialisms of the period — the belief that there would be evermore material wealth and that a lot of it had to be fairly redistributed to the workers who brought it into being. You can debate the finer socio-ethical points of that — and indeed that’s what much of politics consisted of throughout the industrialized world — but the stunning bonanza of wealth compelled it.
That is the world we are moving out of right now, despite the fantasies of Elon Musk and the many techno pied pipers like him. GDP growth has stalled, the implacable trend is toward contraction, and the wizards of financial hocus-pocus are running out of tricks for pretending that they create anything of value. In short: there’s no there there. All that’s left are IOUs for loans that will never be paid back — and that kind of loan (especially in the form of a bond) doesn’t have any value.
So, the Democratic Party has embarked on a crusade to redistribute the wealth of the nation at the exact moment when the “wealth” is turning out to be gone. Good luck with that.
A perhaps more high-toned and fine-tuned version of this program is the new scheme called “universal basic income” (UBI). A Silicon Valley zillionaire named Andrew Yang has launched a 2020 presidential bid based on this UBI. You can listen to his pitch in this excellent discussion with Sam Harris here. Yang is obviously sincere. He proposes to give every citizen around $1,000 a month whether they have a job or not. You can mount any number of arguments about how this might incentivize behavior for better or worse, but if something like that were ramped up, I assure you it could only be done with a debased currency on track toward oblivion. The wealth is no longer there and the representation of it in “money” will be obviously false.
Don’t get too worked-up, either, over the Big Story that robots will soon be doing all the jobs lately done by humans in America. That fantasy of the next economy is actually already dead-on-arrival due to the energy predicament that virtually no one in the public arena is paying any attention to. The century-long oil bonanza is winding down again. The oil companies know it. They’re not spending any money on exploration, meaning they won’t replace the energy we’re currently burning up with new supply. To make matters more interesting, the alt-energy industries will not survive the demise of oil. You have no idea how this dilemma will shove the life our nation into something like a new medieval age. And don’t be surprised if it comes complete with a new feudalism — which is just a way of describing a deeply local economy, if you can make one at all.
The Democratic Party’s return to socialist nostrums could not happen at a less propitious moment. It’s one thing to spend other people’s money during an age of steadily rising GDP, and another thing when GDP is collapsing. It might even prove to be a winning strategy in a few elections. But that depends on how delusional the voters remain.
A Turn for the Worse
The Democratic Party has steered itself into an exquisitely neurotic predicament at a peculiar moment of history. Senator Bernie Sanders set the tone for the shift to full-throated socialism, and the primary election win of 28-year-old Alexandria Ocasio-Cortez in a New York congressional district seems to have ratified it. She promised voters free college tuition, single-payer health care, and free housing. Ah, to live in such a utopia!
One can actually understand why New Yorkers especially would fall for that agenda of promises. When I was a child there in the 1950s and 60s, New York was a mostly middle-class city. City College of New York, with a really distinguished faculty, was free. That’s right, stone free. Much of that middle-class was educated there, including most of my high school teachers. In the 1950s and 60s, it cost a few hundred dollars to have a baby in the hospital, and less than that to receive three stitches in the ER. Back then, New York real estate was mostly rental housing and not subject to the deformations of wandering global capital.
You can’t overstate how fortunate this country was after the Second World War. The mid-twentieth century was the apex of American industrial wealth. We produced real goods and lived in extraordinary comfort. Now, of course that has all turned around, the industry is mostly bygone, the magnificent energy supply is getting sketchy, and all that’s left is a false-front financialized economy based on swindling and accounting fraud. Medicine and health care have become unabashed rackets, and good luck finding a place to live for less than half of your monthly income.
Things have changed, as Bob Dylan once noted in song, and the times they are a ‘changing once again. This is probably the worst time in recent history to go full-bore socialist. Look, it’s as simple as this: the 20th century saw the greatest rise of global GDP ever. The prospect of that is what drove the various socialisms of the period — the belief that there would be evermore material wealth and that a lot of it had to be fairly redistributed to the workers who brought it into being. You can debate the finer socio-ethical points of that — and indeed that’s what much of politics consisted of throughout the industrialized world — but the stunning bonanza of wealth compelled it.
That is the world we are moving out of right now, despite the fantasies of Elon Musk and the many techno pied pipers like him. GDP growth has stalled, the implacable trend is toward contraction, and the wizards of financial hocus-pocus are running out of tricks for pretending that they create anything of value. In short: there’s no there there. All that’s left are IOUs for loans that will never be paid back — and that kind of loan (especially in the form of a bond) doesn’t have any value.
So, the Democratic Party has embarked on a crusade to redistribute the wealth of the nation at the exact moment when the “wealth” is turning out to be gone. Good luck with that.
A perhaps more high-toned and fine-tuned version of this program is the new scheme called “universal basic income” (UBI). A Silicon Valley zillionaire named Andrew Yang has launched a 2020 presidential bid based on this UBI. You can listen to his pitch in this excellent discussion with Sam Harris here. Yang is obviously sincere. He proposes to give every citizen around $1,000 a month whether they have a job or not. You can mount any number of arguments about how this might incentivize behavior for better or worse, but if something like that were ramped up, I assure you it could only be done with a debased currency on track toward oblivion. The wealth is no longer there and the representation of it in “money” will be obviously false.
Don’t get too worked-up, either, over the Big Story that robots will soon be doing all the jobs lately done by humans in America. That fantasy of the next economy is actually already dead-on-arrival due to the energy predicament that virtually no one in the public arena is paying any attention to. The century-long oil bonanza is winding down again. The oil companies know it. They’re not spending any money on exploration, meaning they won’t replace the energy we’re currently burning up with new supply. To make matters more interesting, the alt-energy industries will not survive the demise of oil. You have no idea how this dilemma will shove the life our nation into something like a new medieval age. And don’t be surprised if it comes complete with a new feudalism — which is just a way of describing a deeply local economy, if you can make one at all.
The Democratic Party’s return to socialist nostrums could not happen at a less propitious moment. It’s one thing to spend other people’s money during an age of steadily rising GDP, and another thing when GDP is collapsing. It might even prove to be a winning strategy in a few elections. But that depends on how delusional the voters remain.
SC168-10
http://www.informationclearinghouse.info/49872.htm
Russiagate: A CIA Concocted Hoax
No Russian interference in America’s political process occurred in 2016, earlier, or is being cooked up for the nation’s November midterm elections.
Trump knows it and said so in Helsinki. When asked if he holds Russia accountable for anything, he said:
“I hold both countries responsible (for dismal bilateral relations). I think that the United States has been foolish. I think we’ve all been foolish…And I think we’re all to blame.”
Regarding election meddling, he said: “There was no collusion at all. Everybody knows it. And people are being brought out to the fore. So far that I know, virtually none of it related to the campaign. And they’re going to have to try really hard to find somebody that did relate to the campaign.”
“My people came to me and some others…(T)hey think it’s Russia…President Putin…said it’s not Russia. I will say this: I dont see any reason why it would be.”
“…President Putin was extremely strong and powerful in his denial today.”
Trump is wrong about most things, not this. No evidence, nothing, proves Russian meddling in the US political process.
If it existed, it would have been revealed long ago. It never was and never will be because there’s nothing credible to reveal, Big Lies alone.
Trump’s above remarks were in Helsinki. In response to a raging Russophobic firestorm of criticism back home, he backtracked from his above comments, saying he misspoke in Helsinki.
He accepts the intelligence community’s claim about Russian US election meddling – knowing it didn’t occur.
Russiagate was cooked up by Obama’s thuggish Russophobic CIA director John Brennan, media scoundrels keeping the Big Lie alive.
DNC/John Podesta emails were leaked, not hacked – an indisputable fact media scoundrels suppress to their disgrace.
Former UK ambassador to Uzbekistan Craig Murray earlier explained that “(t)he source of these emails and leaks has nothing to do with Russia at all,” adding:
“I discovered what the source was when I attended the Sam Adam’s whistleblower award in Washington.”
“The source of these emails (came) from within official circles in Washington DC. You should look to Washington, not to Moscow.”
“WikiLeaks has never published any material received from the Russian government or from any proxy of the Russian government. It’s simply a completely untrue claim designed to divert attention from the content of the material” and its true source.
The Big Lie alone matters when it’s the official narrative. The Russian meddling hoax and mythical Kremlin threat to US security are central to maintaining adversarial relations with America’s key invented enemy.
Its fake enemy is vital to unjustifiably justifying the nation’s global empire of bases, its outrageous amount of military spending, its belligerence toward all sovereign independent states, its endless wars of aggression, its scorn for world peace and stability, its neoliberal harshness to pay for it all, along with transferring the nation’s wealth from ordinary people to its privileged class.
America’s deeply corrupted political process is far too debauched to fix, rigged to serve wealth, power and privilege exclusively, at war on humanity at home and abroad.
It’s a tyrannical plutocracy and oligarchy, a police state, not a democracy, a cesspool of criminality, inequity and injustice, run by sinister dark forces – monied interests and bipartisan self-serving political scoundrels, wicked beyond redemption, threatening humanity’s survival.
Today is the most perilous time in world history. What’s going on should terrify everyone everywhere.
Washington’s rage for global dominance, its military madness, its unparalleled recklessness threatens world peace, stability, and survival.
Russiagate: A CIA Concocted Hoax
No Russian interference in America’s political process occurred in 2016, earlier, or is being cooked up for the nation’s November midterm elections.
Trump knows it and said so in Helsinki. When asked if he holds Russia accountable for anything, he said:
“I hold both countries responsible (for dismal bilateral relations). I think that the United States has been foolish. I think we’ve all been foolish…And I think we’re all to blame.”
Regarding election meddling, he said: “There was no collusion at all. Everybody knows it. And people are being brought out to the fore. So far that I know, virtually none of it related to the campaign. And they’re going to have to try really hard to find somebody that did relate to the campaign.”
“My people came to me and some others…(T)hey think it’s Russia…President Putin…said it’s not Russia. I will say this: I dont see any reason why it would be.”
“…President Putin was extremely strong and powerful in his denial today.”
Trump is wrong about most things, not this. No evidence, nothing, proves Russian meddling in the US political process.
If it existed, it would have been revealed long ago. It never was and never will be because there’s nothing credible to reveal, Big Lies alone.
Trump’s above remarks were in Helsinki. In response to a raging Russophobic firestorm of criticism back home, he backtracked from his above comments, saying he misspoke in Helsinki.
He accepts the intelligence community’s claim about Russian US election meddling – knowing it didn’t occur.
Russiagate was cooked up by Obama’s thuggish Russophobic CIA director John Brennan, media scoundrels keeping the Big Lie alive.
DNC/John Podesta emails were leaked, not hacked – an indisputable fact media scoundrels suppress to their disgrace.
Former UK ambassador to Uzbekistan Craig Murray earlier explained that “(t)he source of these emails and leaks has nothing to do with Russia at all,” adding:
“I discovered what the source was when I attended the Sam Adam’s whistleblower award in Washington.”
“The source of these emails (came) from within official circles in Washington DC. You should look to Washington, not to Moscow.”
“WikiLeaks has never published any material received from the Russian government or from any proxy of the Russian government. It’s simply a completely untrue claim designed to divert attention from the content of the material” and its true source.
The Big Lie alone matters when it’s the official narrative. The Russian meddling hoax and mythical Kremlin threat to US security are central to maintaining adversarial relations with America’s key invented enemy.
Its fake enemy is vital to unjustifiably justifying the nation’s global empire of bases, its outrageous amount of military spending, its belligerence toward all sovereign independent states, its endless wars of aggression, its scorn for world peace and stability, its neoliberal harshness to pay for it all, along with transferring the nation’s wealth from ordinary people to its privileged class.
America’s deeply corrupted political process is far too debauched to fix, rigged to serve wealth, power and privilege exclusively, at war on humanity at home and abroad.
It’s a tyrannical plutocracy and oligarchy, a police state, not a democracy, a cesspool of criminality, inequity and injustice, run by sinister dark forces – monied interests and bipartisan self-serving political scoundrels, wicked beyond redemption, threatening humanity’s survival.
Today is the most perilous time in world history. What’s going on should terrify everyone everywhere.
Washington’s rage for global dominance, its military madness, its unparalleled recklessness threatens world peace, stability, and survival.
Tuesday, July 17, 2018
SC168-9
https://www.oftwominds.com/blog.html
Our Institutions Are Failing
The mainstream media and its well-paid army of "authorities" / pundits would have us believe the decline in our collective trust in our institutions is the result of fake news, i.e. false narratives and data presented as factual.
If only we could rid ourselves of fake news, all would be well, as our institutions are working just fine.
This mainstream narrative is itself false: our institutions are failing, and the cause isn't fake news or Russian hacking--the cause is insider plundering and collusion, aided and abetted by a decline in transparency and accountability and the institutionalization of incompetence.
In other words, the citizenry's trust in institutions is declining because the failure of institutions is undeniably the fabric of everyday life in America.
When was the last time you heard the top management of a university system take responsibility for the unprecedented rise in the cost of tuition and textbooks? The short answer is "never." The insiders benefiting from the higher-education cartel's relentless exploitation of students and their families act as if the soaring costs are akin to cosmic radiation, a force of nature that they are powerless to control.
The same can be said of every other cartel plundering the nation: healthcare (i.e. sickcare, because profits swell from managing chronic illness, not from advancing health); the Big Pharma cartel; the military-industrial complex; banking; student loans; the governance-lobbying cartels; the war-on-drugs gulag, the FBI and so on in an endless profusion of insiders whose self-serving plunder and gross incompetence rarely generates consequences (such as being fired or indicted) due to an absence of accountability and transparency.
Incompetence has been institutionalized, and is now the accepted norm. Schools fail, municipal agencies fail, oversight agencies fail, state agencies fail, and the public feels powerless to effect any systemic change.
Changing the elected officials who are the citizens' representatives does nothing to rid the system of incompetence or enforce accountability and transparency; the insider elites have wired the system to avoid responsibility and maintain their institutionalized skims regardless of who is in elected office.
Budgets never decline, they only expand. The system is organized to punish frugality and reward incompetence, sweetheart contracts, overtime, and ever higher public spending.
Calls to trim waste are met by gestures of powerlessness: rising costs and institutional failure are presented as the equivalent of gravity: we can't change the system, it's unstoppable.
The general public has largely lost the experience of public-sector/institutional competence and accountability. As a result, resignation is now the response. So the public dutifully waits in line for hours to renew a drivers license, despite having made an appointment online, to take one common example in California, which likes to pat itself on the back as the tech / progressive capital of the galaxy, if not the universe.
How is it "progressive" to rob the working stiffs who pay all the taxes hours of their life for something that should be routine and quick? Where's the Big Data and high tech when it actually counts? If citizens had a choice to renew their drivers license at (say) Amazon or the DMV, do you reckon Amazon might not make everyone cool their heels for hours?
The list of gross institutional incompetence is truly endless in America: Universities that can't offer enough classes so students can graduate from college in four years (oops, you have to pay another rip-off tuition fee for another semester to get those last few classes you need for your worthless diploma); finance departments that can't track payments (so here's your bogus late fees that will take hours to challenge), and on and on.
As for sickcare--how about the evidence-free embrace of synthetic heroin as a "safe" and "non-addictive" pain treatment? Skeptics were bulldozed or marginalized, because there was simply too much money to be made by jumping on the Oxy et al. bandwagon.
As Scientific American reported in its June 2018 issue, "Powerful drug-marketing efforts had somehow swamped science." When a large study was finally done comparing the effectiveness of opioid and non-opioid drugs, "The results, published in March, were eye-opening. Patients given alternative drugs did just as well as those taking opioids in terms of how much pain interfered with their everyday life. In fact they reported slightly less pain and had fewer side effects."
Yes, many transactions are more complex now than they were 30 years ago. 30 years ago it took less than a day to obtain a building permit for an entire house in the rural county I lived in. Now it takes 3 to 4 months in the same county to get a permit, which must now be stamped by a licensed architect or engineer (at great expense, of course).
OK, we get it-- things are more complex now. But how does a one-day process balloon into a 100-day process at best? We can understand a one-day process becoming a 3 day process, but did the complexity really rise 100-fold?
I think we all know the answer is "no." The vast majority of the wasted time, effort and cost is the result of unaccountable insider incompetence enabled by a complete lack of accountability and transparency.
Conscientious public servants and institutional insiders are thwarted by incompetent managers, lazy co-workers and institutional bloat designed to increase costs and inefficiencies because higher budgets and inefficiencies boost payrolls and thus power. Organizations within the failing institutions are loathe to surrender their gravy trains, so they resist any change, even those which might have saved the institution from its inevitable collapse.
Our institutional failure reminds me of the phantom legions of Rome's final days. Legions existed in the bureaucracy, and payrolls were sent to the pay masters, but the Legions were mere fictions--there were no soldiers, and no fighting force; there were only a few insiders skimming their take, confident that accountability and transparency had been irrevocably lost.
Systems fail one institution at a time. No wonder the super-wealthy are building bunkers.
Our Institutions Are Failing
The mainstream media and its well-paid army of "authorities" / pundits would have us believe the decline in our collective trust in our institutions is the result of fake news, i.e. false narratives and data presented as factual.
If only we could rid ourselves of fake news, all would be well, as our institutions are working just fine.
This mainstream narrative is itself false: our institutions are failing, and the cause isn't fake news or Russian hacking--the cause is insider plundering and collusion, aided and abetted by a decline in transparency and accountability and the institutionalization of incompetence.
In other words, the citizenry's trust in institutions is declining because the failure of institutions is undeniably the fabric of everyday life in America.
When was the last time you heard the top management of a university system take responsibility for the unprecedented rise in the cost of tuition and textbooks? The short answer is "never." The insiders benefiting from the higher-education cartel's relentless exploitation of students and their families act as if the soaring costs are akin to cosmic radiation, a force of nature that they are powerless to control.
The same can be said of every other cartel plundering the nation: healthcare (i.e. sickcare, because profits swell from managing chronic illness, not from advancing health); the Big Pharma cartel; the military-industrial complex; banking; student loans; the governance-lobbying cartels; the war-on-drugs gulag, the FBI and so on in an endless profusion of insiders whose self-serving plunder and gross incompetence rarely generates consequences (such as being fired or indicted) due to an absence of accountability and transparency.
Incompetence has been institutionalized, and is now the accepted norm. Schools fail, municipal agencies fail, oversight agencies fail, state agencies fail, and the public feels powerless to effect any systemic change.
Changing the elected officials who are the citizens' representatives does nothing to rid the system of incompetence or enforce accountability and transparency; the insider elites have wired the system to avoid responsibility and maintain their institutionalized skims regardless of who is in elected office.
Budgets never decline, they only expand. The system is organized to punish frugality and reward incompetence, sweetheart contracts, overtime, and ever higher public spending.
Calls to trim waste are met by gestures of powerlessness: rising costs and institutional failure are presented as the equivalent of gravity: we can't change the system, it's unstoppable.
The general public has largely lost the experience of public-sector/institutional competence and accountability. As a result, resignation is now the response. So the public dutifully waits in line for hours to renew a drivers license, despite having made an appointment online, to take one common example in California, which likes to pat itself on the back as the tech / progressive capital of the galaxy, if not the universe.
How is it "progressive" to rob the working stiffs who pay all the taxes hours of their life for something that should be routine and quick? Where's the Big Data and high tech when it actually counts? If citizens had a choice to renew their drivers license at (say) Amazon or the DMV, do you reckon Amazon might not make everyone cool their heels for hours?
The list of gross institutional incompetence is truly endless in America: Universities that can't offer enough classes so students can graduate from college in four years (oops, you have to pay another rip-off tuition fee for another semester to get those last few classes you need for your worthless diploma); finance departments that can't track payments (so here's your bogus late fees that will take hours to challenge), and on and on.
As for sickcare--how about the evidence-free embrace of synthetic heroin as a "safe" and "non-addictive" pain treatment? Skeptics were bulldozed or marginalized, because there was simply too much money to be made by jumping on the Oxy et al. bandwagon.
As Scientific American reported in its June 2018 issue, "Powerful drug-marketing efforts had somehow swamped science." When a large study was finally done comparing the effectiveness of opioid and non-opioid drugs, "The results, published in March, were eye-opening. Patients given alternative drugs did just as well as those taking opioids in terms of how much pain interfered with their everyday life. In fact they reported slightly less pain and had fewer side effects."
Yes, many transactions are more complex now than they were 30 years ago. 30 years ago it took less than a day to obtain a building permit for an entire house in the rural county I lived in. Now it takes 3 to 4 months in the same county to get a permit, which must now be stamped by a licensed architect or engineer (at great expense, of course).
OK, we get it-- things are more complex now. But how does a one-day process balloon into a 100-day process at best? We can understand a one-day process becoming a 3 day process, but did the complexity really rise 100-fold?
I think we all know the answer is "no." The vast majority of the wasted time, effort and cost is the result of unaccountable insider incompetence enabled by a complete lack of accountability and transparency.
Conscientious public servants and institutional insiders are thwarted by incompetent managers, lazy co-workers and institutional bloat designed to increase costs and inefficiencies because higher budgets and inefficiencies boost payrolls and thus power. Organizations within the failing institutions are loathe to surrender their gravy trains, so they resist any change, even those which might have saved the institution from its inevitable collapse.
Our institutional failure reminds me of the phantom legions of Rome's final days. Legions existed in the bureaucracy, and payrolls were sent to the pay masters, but the Legions were mere fictions--there were no soldiers, and no fighting force; there were only a few insiders skimming their take, confident that accountability and transparency had been irrevocably lost.
Systems fail one institution at a time. No wonder the super-wealthy are building bunkers.
Monday, July 16, 2018
SC168-8
https://www.peakprosperity.com/blog/114161/why-coming-oil-crunch-will-shock-world
Why The Coming Oil Crunch Will Shock The World
And why we need a new energy strategy -- fast
My years working in corporate strategy taught me that every strategic framework, no matter how complex (some I worked on were hundreds of pages long), boils down to just two things:
Where do you want to go? (Vision)
How are you going to get there? (Resources)
Vision is the easier one by far. You just dream up a grand idea about where you want the company to be at some target future date. Yes, there’s work in assuring that everybody on the management team truly shares and believes in the vision, but that’s a pretty stratightforward sales job for the CEO.
By the way, this same process applies at the individual level, too, for anyone who wants to achieve a major goal by some point in the future. The easy part of the strategy is deciding you want to be thinner, healthier, richer, or more famous.
But the much harder part, for companies and individuals alike, is figuring out 'How to get there'. There are always fewer resources than one would prefer.
Corporate strategists always wish for more employees to implement the vision, with better training with better skills. Budgets and useful data are always scarcer than desired, as well.
Similar constraints apply to us individuals. Who couldn't use more motivation, time and money to pursue their goals?
Put together, the right Vision coupled to a reasonably mapped set of Resources can deliver amazing results. Think of the Apollo Moon missions. You have to know where you're going and how you're going to get there to succeed. That’s pretty straightforward, right?
So, it should be little surprise that the opposite, a lack of Vision and/or Resources, leads to underperformance -- and, eventually, decline. Think Kodak or Xerox. Or third-generation family wealth that has dwindled away to nothing. In a changing world, refusing to change with it is a losing strategy.
A great strategy aligns people’s interests and motivations with the available resources. More importantly, it provides a meaningful framework for action, one that gives a sense of purpose that will motivate everyone through difficult or trying times.
The grand goal of defeating the Nazis provided sufficient motivation for people to buy war bonds, scrimp on consumption, plant victory gardens, and go without nylon. A large part of our national resources were dedicated to the larger strategy of winning the war. Because of the strategy everyone shared, practically nobody complained of this repurposing as a 'time of sacrifice’ or as an imposed burden.
Given the right framework and the means to achieve it, people will literally crawl through mud in freezing temperatures -- and find it deeply satisfying. But given zero context or insufficient resources, people quickly become demoralized or rebellious (just observe how quickly most folks get royally pissed off at having to sit on the tarmac for a few extra minutes before their airplane takes off.)
Strategy matters. A lot.
A Nation Adrift, A World In Denial
Here's why I'm harping so much on strategy: the US is operating without a viable one.
We neither have a compelling Vision of where we want to go, nor any sense of the Resources required to change with the many transitions underway around us.
The current ‘strategy' (if we can be so generous as to call it that), is nothing more than "business-as-usual" (BAU).
The US is assuming it is always going to have more cars and trucks on the road this year than last year, more goods sold, a larger economy, more jobs, and the world’s most powerful military. That’s the BAU model. And it has largely worked for the past century.
But it can't work going forward. And the longer we pursue it, the more of our future prosperity we ruin.
Why? Because the future of everything is dependent on energy. More specifically: net energy.
Having a powerful military consumes a tremendous annual quantity of energy. The US military eats up 100 million barrels of oil each year. By itself, America's Department of Defense is the 34th largest consumer of oil in the world.
In total, the US consumes over 7 billion barrels of oil each year. And that represents only 37% of the nearly 100 quadrillion of BTUs of America's annual energy consumption (the rest coming from natural gas, coal, and other sources). For comparisons sake, the rest of the world consumes another 450 quadrillion BTUs.
And world energy demand just keeps on insatiably growing year over year. The (notoriously conservative) EIA predicts it will jump by 28% over the next two decades.
Will our energy production be able to keep up? As I've been warning for years, it will be very challenged to do so -- or, to do so at prices anywhere near as low as today's.
Putting Our Plight Into Concrete Terms
Putting those staggering figures aside for a moment, let's focus on one -- just one! -- of the crises ahead of us when it comes to our future energy needs.
The nations of the world have made the truly regrettable decision to build so much of their infrastructure using concrete reinforced with steel (re-bar, mesh, etc.). As I've explained in detail in previous articles, because the steel rusts over time, the concrete is busy being destroyed from the inside out -- something we can detect easily enough by the cracks and spalling (sheets flaking off) so readily apparent on every bridge that’s more than a couple of decades old.
This has created a ticking time bomb. The world's crumbling concrete buildings, bridges and roadways will have to be entirely replaced in just 40 to 100 years of their original construction dates. Where will all of the energy come from for that?
Also, note that China has poured more steel-reinforced concrete over just the past few years than the US did in the entire 20th century(!). All of this, too, will need to be replaced later this century.
Given that the sand required for all of the world's *current* concrete projects is now in very short supply, where all the sand will come from for all that future concrete and cement work? Who ever thought we could run out of sand?
But such are the unpleasant surprises that crop up during the late stages when running an exponential economic paradigm (i.e., "Growth forever!").
Fooling Oursevles
And it certainly doesn't help that we're remaining willfully blind to our situation.
It’s probably safe to say that the majority of the population in the US is confident that the "shale revolution" has assured America's energy security for a long time to come. Heck, the governor of Texas recently tweeted this to the world:
This is wrong on so many levels.
Yes, Texas produces oil and natural gas. But the US is still a net oil importer to the tune of about 3 million barrels per day. The US is not independent with respect to oil. And it won’t be until it produces another 3 million barrels per day (and that's making the generous assumption that consumption remains flat).
Further, to claim that the US will NEVER AGAIN depend on foreign oil is beyond bizarre. As I've been explaining for years, shale fields deplete and decline ferociously. Even the hyper-bullish EIA thinks that the shale fields will peak out in 2025 (I think earlier) and then go into permanent decline.
In my world, NEVER AGAIN is a lot farther out into the future than 2025. But Mr. Abbott has apparently ingested one too many petroleum sales pitches and received a terribly inaccurate impression about the true state of the US' energy predicament.
Much more likely is that US shale production does not EVER exceed US consumption before peaking out. So it would be more accurate to tweet the US is now and will ALWAYS AND FOREVER be dependent on foreign oil.
Finally, even if the US were a net oil exporter (highly unlikely), we’d still be tied to the world price for oil. Should foreign cartels decide to limit production and spike the price, that would still effect the US. So we still wouldn't be "independent" of their influence.
But sadly, Mr. Abbott speaks for the nation in that tweet. We're "swimming in energy" and need not have any worries. The drum of our chest-thumping will scare them away.
In other word:, there’s no strategy beyond BAU.
There's no acknowledgement of the challenges we face in the coming decades, of declining net energy per capita. Of greater competition between the developed and developing nations for the remaining BTUs.
There's no compelling Vision to marshal the public towards what fits the realities of the future. We could, and should, be working on solutions for entering a "post-growth" era with grace. Or at a minimum, aggressively using today's Resources to create a new energy infrastructure that plans for the inevitable decline of fossil fuels.
We could be doing so much better than this.
Getting Our Priorities Straight
What if we started by embracing these three facts?
Fossil fuels have provided a supernova of surplus energy. One that has enabled literally everything and everyone you see around you to spring into existence.
Fossil fuels are a very recent discovery for humans (barely 150-years-old). Half of our consumption of them has happened in just the last 25 years alone (due to exponentially increasing use).
Fossil fuels will not last forever. They are finite and will someday peak and then decline, representing a once-in-a-species bonanza never to be repeated.
It's beyond dispute that fossil fuels are 4/5ths of the current total global energy mix, that our use and dependence on them has grown exponentially over time, and that they are a non-renewable resource.
Among the fossil fuels, oil is, by far, the most critically-important to sustaining both our current level of technology and the human population. It's how we move virtually everything from point A to point B and it’s a critical element for food production and distribution. It also remains absolutely essential to the manufacture and installation of alt-energy systems, like wind and solar.
Given the three facts above, it only makes sense that a responsible global society should have a credible and very publicly-stated energy strategy providing a road map for weaning itself from fossil fuels before they become prohibitively expensive/scarce.
But since we don't have one, the alternative path we're taking is to sleepwalk into the future with no plan for feeding 9 billion people or re-building a crumbled global infrastructure -- let alone facing the additional challenges of running out of critical minerals, dealing with destroyed ecosystems, and being unable to field the necessary fuel and economic complexity to install a brand-new energy infrastructure measuring in the hundreds of quadrillions of BTUs. This BAU path will be marked by the three D’s: despair, demoralization, and death. (Is it any wonder that young people aren't as inspired by BAU as their parents' generation?)
So if instead we want a future that’s prosperous, regenerative and abundant, then we have to begin doing things very differently from BAU. And fast. (The best time to have started on this was decades ago.)
For example, if we decide we want electric transportation powered by wind and solar to be anything more than a meaningless tiny percentage of the total BTU mix, then we’re going to have to use a lot of fossil fuels to make that happen. It takes an enormous amount of fossil fuels to manufacture, install, maintain and repair/replace every single alt-energy component.
The question then becomes: Where do we want to be when that future arrives? If we want to have livable cities and towns with nearby greenbelts and an alt-energy infrastructure delivering clean energy sustainably forever into the future, then an enormous amount of planning and building is going to be required to get anywhere near close to that.
It all comes back to strategy. We need a compelling Vision of this future to inspire society, and then dedicate the appropriate Resources to make it happen.
With an appropriate energy strategy that matches reality, we can engineer a reasonably bright future. Without one, we’ll just pursue BAU until it literally destroys us as well as the ecosystems we depend on.
A New Energy Strategy
So here’s one way to go about doing that.
First, identify all the energy demands that absolutely have to happen just to maintain systemic integrity. The DoD has needs, the current fleets of emergency vehicles and school busses have needs, as does maintaining the existing stock of bridges, roads, and buildings. This exercise will reveal to all that simply maintaining 'the way things are' is extraordinarily energy-expensive. But it has to be done if we want to avoid economic collapse and massive joblessness. It also bears mentioning that the energy required to keep things going is energy that cannot be dedicated to building the new future. It’s a sunk-cost of prior decisions.
Second, make a credible list of energy needs for building the future we want. How many solar panels will that be? How many wind farms? How many miles of electrified train track? How many fully-electric vehicles will have to be built? How many charging stations with the nationwide road system need? What sorts of improvements and modifications to existing cities and towns will have to be made? This is the Vision. It answers the question Where are we going?
Of course, these sorts of new activities and building projects will be very energy expensive. If we want them to happen, then we have to consciously budget an appropriate amount of energy to accomplish the Vision.
Next, develop the very best possible estimate of total economically recoverable fossil fuels. Do this by finally measuring the full-cycle energy returned on energy invested (EROEI) for the remaining deposits. After all, we’re going to build out the future with the surplus energy extraced, not the gross (surplus = Total BTUs extracted - BTUs expended during extraction). This estimate will represent the total principal balance of our national energy bank account.
Last, calculate if there will be any energy left over. If so, save it for future generations. They'll have their own sets of needs and desires that we can't possibly know today. (Sadly, I'm willing to wager that there won’t be any excess fossil energy to pass along).
A Sample Scenario
By way of example, suppose that the US undergoes a thorough, exhaustive, peer-reviewed and thoroughly debated examination of all known remaining fossil fuel resources – coal, natural gas and oil – using the very best and well-funded EROEI methodologies (yet to be developed, by the way). If we arbitrarily say that there are “100 units” of net energy left, we might discover this:
25 units will be required to simply maintain the economic system so it doesn’t crash and can support the build-out of the new Vision for the future.
60 units will be required to build that future out.
15 units are not yet assigned. We might decide to leave those to future generations because that would be conscientious and prudent. Or perhaps we discover that they shouldn’t be burned because of the environmental impact.
Results such as these yield important insights.
First, we’d understand that if we accidentally burned through, say, 45 units blindly pursuing BAU, that would steal 25 units from building out the future we want.
Next, we'd realize better that our chances of manifesting the Vision are improved by limiting the amount we spend on maintenance. That insight would help to spur better decisions around conservation and efficiencies -- such as not driving 6,000 pound private SUV/Truck vehicles to transport a single passenger to a desk job, or building homes with inadequate insulation to save a few thousand dollars on the front end of a 100-year capital investment.
Finally, we’d appreciate how our energy resources are finite and limited, and that how we choose to utilize them is quite possibly the single most important decision society can possibly make. Leaving the fate of our precious energy resources to the short-term interests of the markets and politicians would suddenly look too risky and nonsensical. We'd agitate for greater stewardship of them.
Were I in charge, the most well-funded institution in the land would be the Energy Institute. Our very best and brightest minds would be heavily incentivized to work there, applying their considerable gifts at science and mathematics towards matching our energy resources with our shared national goals. Gone would be the days of our top talent working for Wall Street and private money funds to move electronic abstractions of wealth hither and yon, skimming money while creating absolutely nothing of lasting value for their country or the world.
The Coming Oil Crunch Will Shock The World
However, we both know that no such strategic energy plan is forthcoming. There’s no strategy in the US (or Japan or Europe or China, or anywhere) that aligns finite resources with a well-defined, sustainable vision of the future.
BAU rules the roost.
It’s so powerfully embedded that Ford Motor Company recently decided to scrap selling sedans and small cars in America. It will only manufacture SUVs, trucks and commercial vehicles. You know when Ford will no longer make cars, they've got to have really chugged the shale oil Kool-Aid to make that decision.
Concrete is still poured with steel rebar every day. New homes and commercial buildings are built with expected lifetimes of only several decades and little attention to insulation. And the Federal Reserve focuses with manic precision on assuring that the credit markets continue to grow exponentially.
Each of these and a million other activities consumes finite, irreplaceable energy at the expense of a sustainable future. At some point, perhaps already passed us, that goal becomes no longer possible.
My point is we don’t know where that line in the sand is. We haven’t done the work, made the plans, and performed the necessary visioning to know one way or the other.
But what we can be sure of is that BAU is headed in the wrong direction and it has no long term future. One way or the other, endless growth on a finite planet will run its course and end. The only remaining question left to answer is: How painful will the reckoning be?
None of us know what will finally break the largest and most destructive credit cycle ever unleashed on the world (thanks central banks!) but we all know that The Everything Bubble has a bitter end. All self-destructive delusions do.
Our analysis concludes that the hard-stop for this credit bubble is resource-based. And I predict it will be a sudden spike in the price of oil that will be the pin that the central bank enabled bubbles absolutely cannot grow beyond.
They will encounter this pin and burst.
There will be plenty of time for tears and regrets then. But right now? You need to get ready.
In Part 2: How The Coming Oil Shock Will Impact Absolutely Everything we go deep into the data showing why a global oil supply shortfall is unavoidable by or before 2020. That's less than two years away.
If gas prices at today's $70/barrel price bother you, you ain't seen nothing yet. The spike in oil's price that will result from the coming crunch will shock the world.
As an increase in the price of oil feeds into the cost of everything, it acts like an interest rate increase in terms of depressing economic growth. If we haven't already entered one yet, this coming shock will absolutely throw the global economy into recession. And if we're already in one when it hits, heaven help us.
....
" there’s no strategy beyond BAU ", even if humans as a whole had the will for a " new strategy ", which they don't, lack of the energy and resources to make such a change makes the prospect impossible, wishful thinking.
Why The Coming Oil Crunch Will Shock The World
And why we need a new energy strategy -- fast
My years working in corporate strategy taught me that every strategic framework, no matter how complex (some I worked on were hundreds of pages long), boils down to just two things:
Where do you want to go? (Vision)
How are you going to get there? (Resources)
Vision is the easier one by far. You just dream up a grand idea about where you want the company to be at some target future date. Yes, there’s work in assuring that everybody on the management team truly shares and believes in the vision, but that’s a pretty stratightforward sales job for the CEO.
By the way, this same process applies at the individual level, too, for anyone who wants to achieve a major goal by some point in the future. The easy part of the strategy is deciding you want to be thinner, healthier, richer, or more famous.
But the much harder part, for companies and individuals alike, is figuring out 'How to get there'. There are always fewer resources than one would prefer.
Corporate strategists always wish for more employees to implement the vision, with better training with better skills. Budgets and useful data are always scarcer than desired, as well.
Similar constraints apply to us individuals. Who couldn't use more motivation, time and money to pursue their goals?
Put together, the right Vision coupled to a reasonably mapped set of Resources can deliver amazing results. Think of the Apollo Moon missions. You have to know where you're going and how you're going to get there to succeed. That’s pretty straightforward, right?
So, it should be little surprise that the opposite, a lack of Vision and/or Resources, leads to underperformance -- and, eventually, decline. Think Kodak or Xerox. Or third-generation family wealth that has dwindled away to nothing. In a changing world, refusing to change with it is a losing strategy.
A great strategy aligns people’s interests and motivations with the available resources. More importantly, it provides a meaningful framework for action, one that gives a sense of purpose that will motivate everyone through difficult or trying times.
The grand goal of defeating the Nazis provided sufficient motivation for people to buy war bonds, scrimp on consumption, plant victory gardens, and go without nylon. A large part of our national resources were dedicated to the larger strategy of winning the war. Because of the strategy everyone shared, practically nobody complained of this repurposing as a 'time of sacrifice’ or as an imposed burden.
Given the right framework and the means to achieve it, people will literally crawl through mud in freezing temperatures -- and find it deeply satisfying. But given zero context or insufficient resources, people quickly become demoralized or rebellious (just observe how quickly most folks get royally pissed off at having to sit on the tarmac for a few extra minutes before their airplane takes off.)
Strategy matters. A lot.
A Nation Adrift, A World In Denial
Here's why I'm harping so much on strategy: the US is operating without a viable one.
We neither have a compelling Vision of where we want to go, nor any sense of the Resources required to change with the many transitions underway around us.
The current ‘strategy' (if we can be so generous as to call it that), is nothing more than "business-as-usual" (BAU).
The US is assuming it is always going to have more cars and trucks on the road this year than last year, more goods sold, a larger economy, more jobs, and the world’s most powerful military. That’s the BAU model. And it has largely worked for the past century.
But it can't work going forward. And the longer we pursue it, the more of our future prosperity we ruin.
Why? Because the future of everything is dependent on energy. More specifically: net energy.
Having a powerful military consumes a tremendous annual quantity of energy. The US military eats up 100 million barrels of oil each year. By itself, America's Department of Defense is the 34th largest consumer of oil in the world.
In total, the US consumes over 7 billion barrels of oil each year. And that represents only 37% of the nearly 100 quadrillion of BTUs of America's annual energy consumption (the rest coming from natural gas, coal, and other sources). For comparisons sake, the rest of the world consumes another 450 quadrillion BTUs.
And world energy demand just keeps on insatiably growing year over year. The (notoriously conservative) EIA predicts it will jump by 28% over the next two decades.
Will our energy production be able to keep up? As I've been warning for years, it will be very challenged to do so -- or, to do so at prices anywhere near as low as today's.
Putting Our Plight Into Concrete Terms
Putting those staggering figures aside for a moment, let's focus on one -- just one! -- of the crises ahead of us when it comes to our future energy needs.
The nations of the world have made the truly regrettable decision to build so much of their infrastructure using concrete reinforced with steel (re-bar, mesh, etc.). As I've explained in detail in previous articles, because the steel rusts over time, the concrete is busy being destroyed from the inside out -- something we can detect easily enough by the cracks and spalling (sheets flaking off) so readily apparent on every bridge that’s more than a couple of decades old.
This has created a ticking time bomb. The world's crumbling concrete buildings, bridges and roadways will have to be entirely replaced in just 40 to 100 years of their original construction dates. Where will all of the energy come from for that?
Also, note that China has poured more steel-reinforced concrete over just the past few years than the US did in the entire 20th century(!). All of this, too, will need to be replaced later this century.
Given that the sand required for all of the world's *current* concrete projects is now in very short supply, where all the sand will come from for all that future concrete and cement work? Who ever thought we could run out of sand?
But such are the unpleasant surprises that crop up during the late stages when running an exponential economic paradigm (i.e., "Growth forever!").
Fooling Oursevles
And it certainly doesn't help that we're remaining willfully blind to our situation.
It’s probably safe to say that the majority of the population in the US is confident that the "shale revolution" has assured America's energy security for a long time to come. Heck, the governor of Texas recently tweeted this to the world:
This is wrong on so many levels.
Yes, Texas produces oil and natural gas. But the US is still a net oil importer to the tune of about 3 million barrels per day. The US is not independent with respect to oil. And it won’t be until it produces another 3 million barrels per day (and that's making the generous assumption that consumption remains flat).
Further, to claim that the US will NEVER AGAIN depend on foreign oil is beyond bizarre. As I've been explaining for years, shale fields deplete and decline ferociously. Even the hyper-bullish EIA thinks that the shale fields will peak out in 2025 (I think earlier) and then go into permanent decline.
In my world, NEVER AGAIN is a lot farther out into the future than 2025. But Mr. Abbott has apparently ingested one too many petroleum sales pitches and received a terribly inaccurate impression about the true state of the US' energy predicament.
Much more likely is that US shale production does not EVER exceed US consumption before peaking out. So it would be more accurate to tweet the US is now and will ALWAYS AND FOREVER be dependent on foreign oil.
Finally, even if the US were a net oil exporter (highly unlikely), we’d still be tied to the world price for oil. Should foreign cartels decide to limit production and spike the price, that would still effect the US. So we still wouldn't be "independent" of their influence.
But sadly, Mr. Abbott speaks for the nation in that tweet. We're "swimming in energy" and need not have any worries. The drum of our chest-thumping will scare them away.
In other word:, there’s no strategy beyond BAU.
There's no acknowledgement of the challenges we face in the coming decades, of declining net energy per capita. Of greater competition between the developed and developing nations for the remaining BTUs.
There's no compelling Vision to marshal the public towards what fits the realities of the future. We could, and should, be working on solutions for entering a "post-growth" era with grace. Or at a minimum, aggressively using today's Resources to create a new energy infrastructure that plans for the inevitable decline of fossil fuels.
We could be doing so much better than this.
Getting Our Priorities Straight
What if we started by embracing these three facts?
Fossil fuels have provided a supernova of surplus energy. One that has enabled literally everything and everyone you see around you to spring into existence.
Fossil fuels are a very recent discovery for humans (barely 150-years-old). Half of our consumption of them has happened in just the last 25 years alone (due to exponentially increasing use).
Fossil fuels will not last forever. They are finite and will someday peak and then decline, representing a once-in-a-species bonanza never to be repeated.
It's beyond dispute that fossil fuels are 4/5ths of the current total global energy mix, that our use and dependence on them has grown exponentially over time, and that they are a non-renewable resource.
Among the fossil fuels, oil is, by far, the most critically-important to sustaining both our current level of technology and the human population. It's how we move virtually everything from point A to point B and it’s a critical element for food production and distribution. It also remains absolutely essential to the manufacture and installation of alt-energy systems, like wind and solar.
Given the three facts above, it only makes sense that a responsible global society should have a credible and very publicly-stated energy strategy providing a road map for weaning itself from fossil fuels before they become prohibitively expensive/scarce.
But since we don't have one, the alternative path we're taking is to sleepwalk into the future with no plan for feeding 9 billion people or re-building a crumbled global infrastructure -- let alone facing the additional challenges of running out of critical minerals, dealing with destroyed ecosystems, and being unable to field the necessary fuel and economic complexity to install a brand-new energy infrastructure measuring in the hundreds of quadrillions of BTUs. This BAU path will be marked by the three D’s: despair, demoralization, and death. (Is it any wonder that young people aren't as inspired by BAU as their parents' generation?)
So if instead we want a future that’s prosperous, regenerative and abundant, then we have to begin doing things very differently from BAU. And fast. (The best time to have started on this was decades ago.)
For example, if we decide we want electric transportation powered by wind and solar to be anything more than a meaningless tiny percentage of the total BTU mix, then we’re going to have to use a lot of fossil fuels to make that happen. It takes an enormous amount of fossil fuels to manufacture, install, maintain and repair/replace every single alt-energy component.
The question then becomes: Where do we want to be when that future arrives? If we want to have livable cities and towns with nearby greenbelts and an alt-energy infrastructure delivering clean energy sustainably forever into the future, then an enormous amount of planning and building is going to be required to get anywhere near close to that.
It all comes back to strategy. We need a compelling Vision of this future to inspire society, and then dedicate the appropriate Resources to make it happen.
With an appropriate energy strategy that matches reality, we can engineer a reasonably bright future. Without one, we’ll just pursue BAU until it literally destroys us as well as the ecosystems we depend on.
A New Energy Strategy
So here’s one way to go about doing that.
First, identify all the energy demands that absolutely have to happen just to maintain systemic integrity. The DoD has needs, the current fleets of emergency vehicles and school busses have needs, as does maintaining the existing stock of bridges, roads, and buildings. This exercise will reveal to all that simply maintaining 'the way things are' is extraordinarily energy-expensive. But it has to be done if we want to avoid economic collapse and massive joblessness. It also bears mentioning that the energy required to keep things going is energy that cannot be dedicated to building the new future. It’s a sunk-cost of prior decisions.
Second, make a credible list of energy needs for building the future we want. How many solar panels will that be? How many wind farms? How many miles of electrified train track? How many fully-electric vehicles will have to be built? How many charging stations with the nationwide road system need? What sorts of improvements and modifications to existing cities and towns will have to be made? This is the Vision. It answers the question Where are we going?
Of course, these sorts of new activities and building projects will be very energy expensive. If we want them to happen, then we have to consciously budget an appropriate amount of energy to accomplish the Vision.
Next, develop the very best possible estimate of total economically recoverable fossil fuels. Do this by finally measuring the full-cycle energy returned on energy invested (EROEI) for the remaining deposits. After all, we’re going to build out the future with the surplus energy extraced, not the gross (surplus = Total BTUs extracted - BTUs expended during extraction). This estimate will represent the total principal balance of our national energy bank account.
Last, calculate if there will be any energy left over. If so, save it for future generations. They'll have their own sets of needs and desires that we can't possibly know today. (Sadly, I'm willing to wager that there won’t be any excess fossil energy to pass along).
A Sample Scenario
By way of example, suppose that the US undergoes a thorough, exhaustive, peer-reviewed and thoroughly debated examination of all known remaining fossil fuel resources – coal, natural gas and oil – using the very best and well-funded EROEI methodologies (yet to be developed, by the way). If we arbitrarily say that there are “100 units” of net energy left, we might discover this:
25 units will be required to simply maintain the economic system so it doesn’t crash and can support the build-out of the new Vision for the future.
60 units will be required to build that future out.
15 units are not yet assigned. We might decide to leave those to future generations because that would be conscientious and prudent. Or perhaps we discover that they shouldn’t be burned because of the environmental impact.
Results such as these yield important insights.
First, we’d understand that if we accidentally burned through, say, 45 units blindly pursuing BAU, that would steal 25 units from building out the future we want.
Next, we'd realize better that our chances of manifesting the Vision are improved by limiting the amount we spend on maintenance. That insight would help to spur better decisions around conservation and efficiencies -- such as not driving 6,000 pound private SUV/Truck vehicles to transport a single passenger to a desk job, or building homes with inadequate insulation to save a few thousand dollars on the front end of a 100-year capital investment.
Finally, we’d appreciate how our energy resources are finite and limited, and that how we choose to utilize them is quite possibly the single most important decision society can possibly make. Leaving the fate of our precious energy resources to the short-term interests of the markets and politicians would suddenly look too risky and nonsensical. We'd agitate for greater stewardship of them.
Were I in charge, the most well-funded institution in the land would be the Energy Institute. Our very best and brightest minds would be heavily incentivized to work there, applying their considerable gifts at science and mathematics towards matching our energy resources with our shared national goals. Gone would be the days of our top talent working for Wall Street and private money funds to move electronic abstractions of wealth hither and yon, skimming money while creating absolutely nothing of lasting value for their country or the world.
The Coming Oil Crunch Will Shock The World
However, we both know that no such strategic energy plan is forthcoming. There’s no strategy in the US (or Japan or Europe or China, or anywhere) that aligns finite resources with a well-defined, sustainable vision of the future.
BAU rules the roost.
It’s so powerfully embedded that Ford Motor Company recently decided to scrap selling sedans and small cars in America. It will only manufacture SUVs, trucks and commercial vehicles. You know when Ford will no longer make cars, they've got to have really chugged the shale oil Kool-Aid to make that decision.
Concrete is still poured with steel rebar every day. New homes and commercial buildings are built with expected lifetimes of only several decades and little attention to insulation. And the Federal Reserve focuses with manic precision on assuring that the credit markets continue to grow exponentially.
Each of these and a million other activities consumes finite, irreplaceable energy at the expense of a sustainable future. At some point, perhaps already passed us, that goal becomes no longer possible.
My point is we don’t know where that line in the sand is. We haven’t done the work, made the plans, and performed the necessary visioning to know one way or the other.
But what we can be sure of is that BAU is headed in the wrong direction and it has no long term future. One way or the other, endless growth on a finite planet will run its course and end. The only remaining question left to answer is: How painful will the reckoning be?
None of us know what will finally break the largest and most destructive credit cycle ever unleashed on the world (thanks central banks!) but we all know that The Everything Bubble has a bitter end. All self-destructive delusions do.
Our analysis concludes that the hard-stop for this credit bubble is resource-based. And I predict it will be a sudden spike in the price of oil that will be the pin that the central bank enabled bubbles absolutely cannot grow beyond.
They will encounter this pin and burst.
There will be plenty of time for tears and regrets then. But right now? You need to get ready.
In Part 2: How The Coming Oil Shock Will Impact Absolutely Everything we go deep into the data showing why a global oil supply shortfall is unavoidable by or before 2020. That's less than two years away.
If gas prices at today's $70/barrel price bother you, you ain't seen nothing yet. The spike in oil's price that will result from the coming crunch will shock the world.
As an increase in the price of oil feeds into the cost of everything, it acts like an interest rate increase in terms of depressing economic growth. If we haven't already entered one yet, this coming shock will absolutely throw the global economy into recession. And if we're already in one when it hits, heaven help us.
....
" there’s no strategy beyond BAU ", even if humans as a whole had the will for a " new strategy ", which they don't, lack of the energy and resources to make such a change makes the prospect impossible, wishful thinking.
Sunday, July 15, 2018
SC168-7
https://www.truthdig.com/articles/america-the-failed-state/
America the Failed State
Our “corporate coup d’état in slow motion,” as the writer John Ralston Saul calls it, has opened a Pandora’s box of evils that is transforming America into a failed state. The “unholy trinity of corruption, impunity and violence,” he said, can no longer be checked. The ruling elites abjectly serve corporate power to exploit and impoverish the citizenry. Democratic institutions, including the courts, are mechanisms of corporate repression. Financial fraud and corporate crime are carried out with impunity. The decay is exacerbated by the state’s indiscriminate use of violence abroad and at home, where rogue law enforcement agencies harass and arrest citizens and the undocumented and often kill the unarmed. A depressed and enraged population, trapped by chronic unemployment and underemployment, is overdosing on opioids and beset by rising suicide rates. It engages in acts of nihilistic violence, including mass shootings. Hate groups proliferate. The savagery, mayhem and grotesque distortions familiar to those on the outer reaches of empire increasingly characterize American existence. And presiding over it all is the American version of Ubu Roi, playwright Alfred Jarry’s gluttonous, idiotic, vulgar, narcissistic and infantile king, who turned politics into burlesque.
“Congress works through corruption,” Saul, the author of books such as “Voltaire’s Bastards: The Dictatorship of Reason in the West” and “The Collapse of Globalism and the Reinvention of the World,” said when we spoke in Toronto. “I look at Congress and I see the British Parliament in the late 18th century, the rotten boroughs. Did they have elections? Yes. Were the elections exciting? Yes. They were extremely exciting.”
Rotten boroughs were the 19th-century version of gerrymandering. The British oligarchs created electoral maps through which depopulated boroughs—50 of them had fewer than 50 voters—were easily dominated by the rich to maintain control of the House of Commons. In the United States, our ruling class has done much the same, creating districts where incumbents, who often run unchallenged, return to Congress election after election. Only about 40 of the 435 seats in the House of Representatives are actually contested. And given the composition of the Supreme Court, especially with Donald Trump poised to install another justice, it will get worse.
The corruption of the British system was amended in what Saul called “a wave upwards.” The 1832 Reform Act abolished a practice in which oligarchs, such as Charles Howard, the 11th Duke of Norfolk, controlled the election results in 11 boroughs. The opening up of the British parliamentary system took nearly a century. In the United States, Saul said, the destruction of democracy is part of “a wave downwards.”
The two political parties are one party—the corporate party. They do not debate substantive issues. They each support the expansion of imperial wars, the bloated military budget, the dictates of global capitalism, the bailing out of Wall Street, punishing austerity measures, assaulting basic civil liberties through wholesale government surveillance and the abolition of due process, and an electoral process that has cemented into place a system of legalized bribery. They battle over cultural tropes such as abortion, gay rights and prayer in schools. We elect politicians based on how we are made to feel about them by the public relations industry. Politics is anti-politics.
The Republican Party built its political base in these culture wars around Christian fascists, nativists and white supremacists. The Democratic Party built its base around those who supported workers’ rights, multiculturalism, diversity and gender equality. The base of each party was used and manipulated by elites. The Republican Party elites had no intention of banning abortion or turning America into a “Christian nation.” The Democratic Party elites had no intention of protecting workers from predatory corporatism. Everyone was sold out. The ascendancy of a populist right, dominated by racists and bigots, is the inevitable product of the corporate coup d’état, Saul said. He warned we should not be complacent because of President Trump’s imbecility. Trump is immensely dangerous. “The insipid,” Thomas Mann wrote in “The Magic Mountain,” “is not synonymous with the harmless.”
“How could a civilization devoted to structure, expertise and answers evolve into other than a coalition of professional groups?” Saul asked in “Voltaire’s Bastards.” “How, then, could the individual citizen not be seen as a serious impediment to getting on with business? This has been obscured by the proposition of painfully simplified abstract notions which are divorced from any social reality and presented as values.”
“The rational elites, obsessed by structure, have become increasingly authoritarian in a modern, administrative way,” he wrote in another section of the book. “The citizens feel insulted and isolated. They look for someone to throw stones on their behalf. Any old stone will do. The cruder the better to crush the self-assurance of the obscure men and their obscure methods. The New Right, with its parody of democratic values, has been a crude but devastating stone with which to punish the modern elites.”
All despotic regimes, Saul said, carry out their final battle for control by contending against public officials and government bureaucrats, the so-called deep state, which views the rise to power of demagogues and their sleazy enablers with alarm. These traditional courtiers, often cynical, ambitious, amoral and subservient to corporate power, nevertheless engage in the decorum and language of democracy. A few with a conscience win minor skirmishes to slow the rise of tyranny. Despots see these courtiers and democratic institutions, no matter how anemic, as a threat. This explains the assaults on the State Department, the Justice Department, the Environmental Protection Agency, the Department of Education and the courts. Despots use their appointees to undermine and destroy these institutions, mocking their existence and questioning the loyalty of the professionals who staff them. The reviled and neutered public employee surrenders or walks away in despair. Last year, the entire senior level of management officials resigned at the State Department. Resignations continue to bleed the diplomatic core, as they do at other agencies and departments, and last week included James D. Melville Jr., the U.S. ambassador to Estonia, and Susan Thornton, the nominee to be assistant secretary for East Asian affairs.
“For the President to say the EU was ‘set up to take advantage of the United States, to attack our piggy bank,’ or that ‘NATO is as bad as NAFTA’ is not only factually wrong, but proves to me that it’s time to go,” Melville said in the post that announced his resignation.
Once a process of deconstruction is complete, the system calcifies into tyranny. There remain no internal mechanisms, even in name, to carry out reform. This corrosive process is being played out daily in Trump’s Twitter rages, lies, smears and the barrage of insults he levels against public servants, including some of his own appointees, such as Attorney General Jeff Sessions, as well as institutions such as the FBI.
Witnessing this, Saul berates the American press too, which he said willingly plays its part in the charade for ratings and advertising dollars.
“Trump gives these astonishingly Mussolini-ish press conferences,” he said. “He says to the press, ‘Shut up. Stop!’ The press screams at him like a mob, a bunch of cattle. How can they be taken seriously? It is like the end of the Roman Republic. Important political leaders from the Senate, along with their rivals, would move around Rome with 50 people to protect them. Scenes, exactly like Trump’s interactions with the press, defined the end of the Roman Republic. Nobody knew what was going on. There was no dignity. You can’t have a democracy without a level of respect and dignity. You only have chaos. This chaos eventually leads to a call for autocratic order. Trump benefits from the confusion, even though he resembles a cartoonish figure out of a funny novel, a character from Jean Genet’s ‘The Balcony,’ although without the self-awareness.”
Trump’s decision to launch a trade war—Canada will impose punitive measures on $12.63 billion worth of imported American goods in response—is an example of the damage a despot who has little understanding of the economy, politics, international relations or law can do. These self-inflicted wounds, Saul warned, see despots intensify attacks on the demonized and the vulnerable, such as Muslims and the undocumented. Despots frantically scapegoat others for their mess, often inciting violence among their supporters to placate an inchoate rage.
“I’ve always opposed trade deals not because I oppose trade,” Saul said, “or because I thought they were about getting a fair balance in the trade, but because the trade deals were about something else. They were about deregulation. They were about handing power to corporations and banks. They weren’t about trade. Trump has again and again attacked the Canadian dairy system. Nobody has stopped to ask him, ‘Why are you opposing this instead of adopting it for yourself?’ A lot of American dairy farmers would like to have the Canadian system.”
“The free market approach to agriculture produces a surplus that drives prices down and destroys the income of farmers,” Saul said. “There are two ways of responding to this. One of them is subsidizing. Europe, following the old social democratic approach, subsidizes their agricultural sector. This drives down the income of farmers, so [the governments] subsidize [agriculture] more. They have enormous surpluses. Periodically, they’re throwing millions of tomatoes on the streets.”
“The United States claims it embraces the free market, but it does the same thing as the Europeans,” Saul said. “It too heavily subsidizes the agricultural industry. This leads to American dairy farmers producing too much milk. This economic argument says the way to win is to mass-produce cheap goods. This is the Walmart argument. You’re not selling your milk or cheese for enough to make a living. The end result is, even though you subsidize them, the farmers go bankrupt. They commit suicide. You have terrible unhappiness in the [U.S.] dairy community.”
“We have a very efficient management system in Canada that keeps the prices up, not so high that working-class people can’t buy milk and cheese, but it keeps the prices up high enough that farmers can make a proper living,” Saul said. “Because farmers can make a proper living they’re not committing suicide. What Trump is saying to Canadians is that they should give up a system that works so Canadian farmers can commit suicide with American farmers.”
“The problem with the Western world is surplus production,” Saul said. “We’re in surplus production in almost every area. But there is a terrible distribution system where people around the globe suffer and die from starvation. This is a distribution problem, not a production problem.”
Saul said the imposition of tariffs and the crude insults Trump uses against American allies—he called Canadian Prime Minister Justin Trudeau “dishonest and weak”—are rapidly destroying America’s clout and standing in the global hierarchy. This behavior is having very negative political, economic and social consequences for the United States.
“The whole world, the Western world in particular, invested enormously in the idea that the United States is the leader,” Saul said. “The idea that the United States is to be admired. What’s sad about it is Americans take it for granted that the world loves them. They’ve never analyzed the responsibilities that come with being the leader. It’s what you expect from a good parent. You act in a certain way. People want to identify with the United States. It’s been that way since the Second World War. All this is being thrown away. Like or dislike Obama, he rebuilt a great part of the world’s admiration for the United States. I know what his failures were. But I also know his strengths. He was a president who was capable of acting and talking like the intelligent, civilized American that everyone wants to admire.”
“But there’s always a shadow to the bright tower,” Saul went on. “Trump’s feeding that shadow. ‘Americans are stupid. Americans are corrupt. Americans are not educated. Americans can’t be trusted.’ The whole list. The longer the chaos goes on, the worse it gets.”
The collapse of the legislative and executive branches of government has now been accompanied by the collapse of the judiciary. The loss of an independent judiciary, Saul warned, is especially ominous.
“The biggest problem in the United States is a very powerful and deeply corrupted Supreme Court,” Saul said. “This will set patterns for decades. It will be hard to undo the evil being put into place.”
Saul despaired, at the same time, over the Trump administration’s attack on public education, which he called “the most fundamental service of government when it comes to a democracy.”
“What holds democracy up?” Saul asked. “What makes democracy work? Public education is number one. A well-educated citizen. [Secretary of Education] Betsy DeVos is undoing that. There is a special place for her in hell.”
U.S. trading partners and allies such as Canada and European states will, he said, reduce their dependence on the American market. The traditional strategic and political ties to Washington will be steadily weakened. And when the next financial crash comes, and Saul expects one to come, the United States will be bereft of partners when it needs them most.
“If you treat your closest allies as a threat, who is going to stand with you?” he asked.
America the Failed State
Our “corporate coup d’état in slow motion,” as the writer John Ralston Saul calls it, has opened a Pandora’s box of evils that is transforming America into a failed state. The “unholy trinity of corruption, impunity and violence,” he said, can no longer be checked. The ruling elites abjectly serve corporate power to exploit and impoverish the citizenry. Democratic institutions, including the courts, are mechanisms of corporate repression. Financial fraud and corporate crime are carried out with impunity. The decay is exacerbated by the state’s indiscriminate use of violence abroad and at home, where rogue law enforcement agencies harass and arrest citizens and the undocumented and often kill the unarmed. A depressed and enraged population, trapped by chronic unemployment and underemployment, is overdosing on opioids and beset by rising suicide rates. It engages in acts of nihilistic violence, including mass shootings. Hate groups proliferate. The savagery, mayhem and grotesque distortions familiar to those on the outer reaches of empire increasingly characterize American existence. And presiding over it all is the American version of Ubu Roi, playwright Alfred Jarry’s gluttonous, idiotic, vulgar, narcissistic and infantile king, who turned politics into burlesque.
“Congress works through corruption,” Saul, the author of books such as “Voltaire’s Bastards: The Dictatorship of Reason in the West” and “The Collapse of Globalism and the Reinvention of the World,” said when we spoke in Toronto. “I look at Congress and I see the British Parliament in the late 18th century, the rotten boroughs. Did they have elections? Yes. Were the elections exciting? Yes. They were extremely exciting.”
Rotten boroughs were the 19th-century version of gerrymandering. The British oligarchs created electoral maps through which depopulated boroughs—50 of them had fewer than 50 voters—were easily dominated by the rich to maintain control of the House of Commons. In the United States, our ruling class has done much the same, creating districts where incumbents, who often run unchallenged, return to Congress election after election. Only about 40 of the 435 seats in the House of Representatives are actually contested. And given the composition of the Supreme Court, especially with Donald Trump poised to install another justice, it will get worse.
The corruption of the British system was amended in what Saul called “a wave upwards.” The 1832 Reform Act abolished a practice in which oligarchs, such as Charles Howard, the 11th Duke of Norfolk, controlled the election results in 11 boroughs. The opening up of the British parliamentary system took nearly a century. In the United States, Saul said, the destruction of democracy is part of “a wave downwards.”
The two political parties are one party—the corporate party. They do not debate substantive issues. They each support the expansion of imperial wars, the bloated military budget, the dictates of global capitalism, the bailing out of Wall Street, punishing austerity measures, assaulting basic civil liberties through wholesale government surveillance and the abolition of due process, and an electoral process that has cemented into place a system of legalized bribery. They battle over cultural tropes such as abortion, gay rights and prayer in schools. We elect politicians based on how we are made to feel about them by the public relations industry. Politics is anti-politics.
The Republican Party built its political base in these culture wars around Christian fascists, nativists and white supremacists. The Democratic Party built its base around those who supported workers’ rights, multiculturalism, diversity and gender equality. The base of each party was used and manipulated by elites. The Republican Party elites had no intention of banning abortion or turning America into a “Christian nation.” The Democratic Party elites had no intention of protecting workers from predatory corporatism. Everyone was sold out. The ascendancy of a populist right, dominated by racists and bigots, is the inevitable product of the corporate coup d’état, Saul said. He warned we should not be complacent because of President Trump’s imbecility. Trump is immensely dangerous. “The insipid,” Thomas Mann wrote in “The Magic Mountain,” “is not synonymous with the harmless.”
“How could a civilization devoted to structure, expertise and answers evolve into other than a coalition of professional groups?” Saul asked in “Voltaire’s Bastards.” “How, then, could the individual citizen not be seen as a serious impediment to getting on with business? This has been obscured by the proposition of painfully simplified abstract notions which are divorced from any social reality and presented as values.”
“The rational elites, obsessed by structure, have become increasingly authoritarian in a modern, administrative way,” he wrote in another section of the book. “The citizens feel insulted and isolated. They look for someone to throw stones on their behalf. Any old stone will do. The cruder the better to crush the self-assurance of the obscure men and their obscure methods. The New Right, with its parody of democratic values, has been a crude but devastating stone with which to punish the modern elites.”
All despotic regimes, Saul said, carry out their final battle for control by contending against public officials and government bureaucrats, the so-called deep state, which views the rise to power of demagogues and their sleazy enablers with alarm. These traditional courtiers, often cynical, ambitious, amoral and subservient to corporate power, nevertheless engage in the decorum and language of democracy. A few with a conscience win minor skirmishes to slow the rise of tyranny. Despots see these courtiers and democratic institutions, no matter how anemic, as a threat. This explains the assaults on the State Department, the Justice Department, the Environmental Protection Agency, the Department of Education and the courts. Despots use their appointees to undermine and destroy these institutions, mocking their existence and questioning the loyalty of the professionals who staff them. The reviled and neutered public employee surrenders or walks away in despair. Last year, the entire senior level of management officials resigned at the State Department. Resignations continue to bleed the diplomatic core, as they do at other agencies and departments, and last week included James D. Melville Jr., the U.S. ambassador to Estonia, and Susan Thornton, the nominee to be assistant secretary for East Asian affairs.
“For the President to say the EU was ‘set up to take advantage of the United States, to attack our piggy bank,’ or that ‘NATO is as bad as NAFTA’ is not only factually wrong, but proves to me that it’s time to go,” Melville said in the post that announced his resignation.
Once a process of deconstruction is complete, the system calcifies into tyranny. There remain no internal mechanisms, even in name, to carry out reform. This corrosive process is being played out daily in Trump’s Twitter rages, lies, smears and the barrage of insults he levels against public servants, including some of his own appointees, such as Attorney General Jeff Sessions, as well as institutions such as the FBI.
Witnessing this, Saul berates the American press too, which he said willingly plays its part in the charade for ratings and advertising dollars.
“Trump gives these astonishingly Mussolini-ish press conferences,” he said. “He says to the press, ‘Shut up. Stop!’ The press screams at him like a mob, a bunch of cattle. How can they be taken seriously? It is like the end of the Roman Republic. Important political leaders from the Senate, along with their rivals, would move around Rome with 50 people to protect them. Scenes, exactly like Trump’s interactions with the press, defined the end of the Roman Republic. Nobody knew what was going on. There was no dignity. You can’t have a democracy without a level of respect and dignity. You only have chaos. This chaos eventually leads to a call for autocratic order. Trump benefits from the confusion, even though he resembles a cartoonish figure out of a funny novel, a character from Jean Genet’s ‘The Balcony,’ although without the self-awareness.”
Trump’s decision to launch a trade war—Canada will impose punitive measures on $12.63 billion worth of imported American goods in response—is an example of the damage a despot who has little understanding of the economy, politics, international relations or law can do. These self-inflicted wounds, Saul warned, see despots intensify attacks on the demonized and the vulnerable, such as Muslims and the undocumented. Despots frantically scapegoat others for their mess, often inciting violence among their supporters to placate an inchoate rage.
“I’ve always opposed trade deals not because I oppose trade,” Saul said, “or because I thought they were about getting a fair balance in the trade, but because the trade deals were about something else. They were about deregulation. They were about handing power to corporations and banks. They weren’t about trade. Trump has again and again attacked the Canadian dairy system. Nobody has stopped to ask him, ‘Why are you opposing this instead of adopting it for yourself?’ A lot of American dairy farmers would like to have the Canadian system.”
“The free market approach to agriculture produces a surplus that drives prices down and destroys the income of farmers,” Saul said. “There are two ways of responding to this. One of them is subsidizing. Europe, following the old social democratic approach, subsidizes their agricultural sector. This drives down the income of farmers, so [the governments] subsidize [agriculture] more. They have enormous surpluses. Periodically, they’re throwing millions of tomatoes on the streets.”
“The United States claims it embraces the free market, but it does the same thing as the Europeans,” Saul said. “It too heavily subsidizes the agricultural industry. This leads to American dairy farmers producing too much milk. This economic argument says the way to win is to mass-produce cheap goods. This is the Walmart argument. You’re not selling your milk or cheese for enough to make a living. The end result is, even though you subsidize them, the farmers go bankrupt. They commit suicide. You have terrible unhappiness in the [U.S.] dairy community.”
“We have a very efficient management system in Canada that keeps the prices up, not so high that working-class people can’t buy milk and cheese, but it keeps the prices up high enough that farmers can make a proper living,” Saul said. “Because farmers can make a proper living they’re not committing suicide. What Trump is saying to Canadians is that they should give up a system that works so Canadian farmers can commit suicide with American farmers.”
“The problem with the Western world is surplus production,” Saul said. “We’re in surplus production in almost every area. But there is a terrible distribution system where people around the globe suffer and die from starvation. This is a distribution problem, not a production problem.”
Saul said the imposition of tariffs and the crude insults Trump uses against American allies—he called Canadian Prime Minister Justin Trudeau “dishonest and weak”—are rapidly destroying America’s clout and standing in the global hierarchy. This behavior is having very negative political, economic and social consequences for the United States.
“The whole world, the Western world in particular, invested enormously in the idea that the United States is the leader,” Saul said. “The idea that the United States is to be admired. What’s sad about it is Americans take it for granted that the world loves them. They’ve never analyzed the responsibilities that come with being the leader. It’s what you expect from a good parent. You act in a certain way. People want to identify with the United States. It’s been that way since the Second World War. All this is being thrown away. Like or dislike Obama, he rebuilt a great part of the world’s admiration for the United States. I know what his failures were. But I also know his strengths. He was a president who was capable of acting and talking like the intelligent, civilized American that everyone wants to admire.”
“But there’s always a shadow to the bright tower,” Saul went on. “Trump’s feeding that shadow. ‘Americans are stupid. Americans are corrupt. Americans are not educated. Americans can’t be trusted.’ The whole list. The longer the chaos goes on, the worse it gets.”
The collapse of the legislative and executive branches of government has now been accompanied by the collapse of the judiciary. The loss of an independent judiciary, Saul warned, is especially ominous.
“The biggest problem in the United States is a very powerful and deeply corrupted Supreme Court,” Saul said. “This will set patterns for decades. It will be hard to undo the evil being put into place.”
Saul despaired, at the same time, over the Trump administration’s attack on public education, which he called “the most fundamental service of government when it comes to a democracy.”
“What holds democracy up?” Saul asked. “What makes democracy work? Public education is number one. A well-educated citizen. [Secretary of Education] Betsy DeVos is undoing that. There is a special place for her in hell.”
U.S. trading partners and allies such as Canada and European states will, he said, reduce their dependence on the American market. The traditional strategic and political ties to Washington will be steadily weakened. And when the next financial crash comes, and Saul expects one to come, the United States will be bereft of partners when it needs them most.
“If you treat your closest allies as a threat, who is going to stand with you?” he asked.
Subscribe to:
Posts (Atom)
