Monday, June 29, 2015
Kunstler: Systemic Turmoil, Structural Reform
“The problem with the post-2007 world is that we are not in a cyclical recovery; we are in a structural depression defined as a sustained period of below-trend growth with no end in sight. The U.S. has caught the Japanese disease. Structural depressions are not amenable to monetary solutions, they require structural solutions.”
Can anyone stabilize this bitch? At daybreak, anyway, the Federal Reserve governors were all bagging Z’s in their trundle beds. Maybe after a few pumpkin lattes they’ll jump in and tell their trading shills to BTFD. The soma-like perma-trance among those who follow markets and money matters appears to be ending abruptly with the recognition that sometimes robots and humans alike run shrieking to the exit. A pity when they get to the door and discover it opens onto a cliff-edge. Look out below.
All this trouble with money comes from one meta problem: aggregate industrial growth has ended. It has stopped more in some parts of the world than others, while in the USA it has actually been contracting. The cause is simple: the end of cheap energy, oil in particular. At over $70-a-barrel the price kills economies; under $70-a-barrel the price kills oil production. The bottom line is that, in the broadest sense, the world can no longer count on getting more stuff, except waste, garbage, political unrest, and the other various effects of entropy. From now on, there is only less of everything for a global population that has not stopped growing. The folks on-board are still having sex, of course, which has a certain byproduct.
This dynamic was plain to see a decade ago, but the people who run finance and governments thought it would be a good idea to maintain the appearance of growth via the usufruct mechanisms of central banking: ZIRP, QE, market intervention, and universal accounting fraud. It’s not working so well. Debt was generated in place of the missing growth, and now there is too much of it that can’t be repaid on a coherent schedule. Many nations, parties, and entities are in trouble with debt and the prospective defaults are starting to pile up like SUVs on a fog-bound highway. Greece is just the first one fishtailing into a guard-rail.
The magic moment will come when it becomes obvious that these systemic quandaries have no solution. The system itself is programmed for implosion, in particular and most immediately the banking sector, where most of the untruth and illusion is lodged these days. As it stands exposed, the people are compelled to shake off their faith in what it represents: order, authority, trust. Institutions fail and each failure acts as a black hole, sucking air, light, and even time out of the system.
In the natural course of things, structural reform can occur, but that natural course entails some degree of disorder and loss. If Deutsche Bank or Goldman Sachs founders a lot of people will be living in their cars — a first stop perhaps to not living at all. Sooner or later, though, the survivors will all have to live differently. Structural reform means, for instance, that you can no longer count on getting food the way you were used to getting it. No more 3000-mile Caesar salads and take-out tubs of Kung Po Chicken. That will be very traumatic in the early going. Eventually in the places where it is possible to grow food on a smaller scale, it will be done. Maybe not so much in the Central Valley of California anymore, but in other places: Ohio, Michigan, even New Jersey (“the garden state”). And once grown, it will be sold by means that differ from the supermarket.
Americans think that WalMart and its brethren are here to stay. They’re mistaken. Structural reform means reorganizing many layers of commerce around town centers — Main Streets — while the disintegrating strip malls await the salvage crews. Are we ready for that? Rebuilding local economies would put a lot of people back to work doing real things. All the blabber about “job creation” for the moment is only about increasing the share price of predatory corporations and the bonuses of their mendacious executives. Will the world miss them? Can we still make some things and move them around and put them up for sale? I think so.
Are you disturbed about the pervasive racketeering in health care (so-called) and higher education. Well, those grifts are eating themselves alive. Structural reform probably means far fewer and smaller colleges and far more and smaller local clinics free of the stupendous insurance chicanery that mystifies the public while it swindles them. There will be a lot of useful work for people who want to take care of other people, and certainly fewer MRIs.
Do you fear the end of mass motoring and the suburban infrastructure that it operates in? Maybe your children and their children will be happier in walkable neighborhoods — outlandish as that sounds. There is a hell of lot of rebuilding to do. It may not involve materials like strand-board and vinyl siding, but the newer and smaller buildings will probably last a whole lot longer and look better. And a lot of hands will be needed to do the work.
Will we ever again know banking on the JP Morgan scale? Not on any horizon I can imagine. But there are other ways to establish mediums of exchange, stores of value, and pricing mechanisms. You can be sure that banking will never again occupy 40 percent of gross economic activity in this land.
Today may not be the true event horizon for our diseased status quo, but it is probably, at least, the coming attraction trailer. Try not get puked on.
Sunday, June 28, 2015
Friday, June 26, 2015
The aptly-named Don Lemon.
Monday, June 22, 2015
Saturday, June 20, 2015
Louis Proyect discusses the economics of the movies.
The book was published in 2010 and I plan to read it soon.
1 July update: I picked it up at the library yesterday. The book, by Edward Jay Epstein, is titled The Hollywood Economist: The Hidden Financial Reality Behind the Movies.
Wednesday, June 17, 2015
Monday, June 15, 2015
Kunstler: Enter Jeb and Hil.
Friday, June 12, 2015
Wednesday, June 10, 2015
Rowe on like CNBC in the midst of the Great Recession being like "we got tons of good dirty jobs out there right now." [dim anchors nod]— Matt Bruenig (@MattBruenig) June 9, 2015
Monday, June 08, 2015
Kunstler: Cover Girl
This shoot was about my life and who I am as a person. It’s not about the fanfare….”
— Caitlyn (formerly Bruce) Jenner
It was, perhaps, only coincidental that the shy, elderly, Olympic decathlon champion and Wheaties box icon ended up on the cover of America’s glossiest glossy magazine attended by a squadron of make-up artists, costumers, publicists, drapers, lighting designers, endocrinologists, agents, and managers under the direction of supreme photographic commander Annie Liebowitz. And, perhaps, another coincidence that the E! Network is producing an eight-part reality show (“docu-series”) on the journey of America’s new transgender sweetheart from sweaty, hairy, testosterone-jacked athlete to air-brushed pin-up “girl.” I guess fanfare is sometimes just the unexpected cherry-on-top of life’s big creamy cake.
But doesn’t it all raise the question: why is it so important for the nation’s cultural stage managers to make the case that a life of sexual confusion is the highest-and-best way of being in this world? It’s everywhere. A day does not pass lately when The New York Times fails to run a front-page story about the triumph of transgender life. One easy theory might be that old chestnut about folks out on the “cutting edge” always needing a new way to épater le bourgeois, shock and horrify the middle class (into the recognition of their pathetic, mind-numbing dullness.) Maybe the middle class doesn’t have enough to think about with keeping a step ahead of the re-po man, or being billed $30,000 to give birth in a hospital, or working 70 hours a week.
The best explanation (not mine originally), may be that in a “liminal” moment of history, when great scary trends and events trigger society’s existential dread, all kinds of boundaries dissolve. And sex, being among the humanity’s most compelling drives, fraught with heavy cultural regulation, ends up being the means of expression for our collective anxiety over the dissolution of things. It also happens that America today is at once an exceptionally pornified society and an exceptionally puritanical one. Rome under Caligula did not have the internet, enabling 12-year-olds to spectate on every imaginable sex act. But neither did the witch-obsessed settlers of the Massachusetts Bay Colony have the equivalent of the young woman (Emma Sulkowicz by name) who idiotically lugged a mattress around the Columbia University campus as a combination political protest / senior art project to draw attention to her dubious rape case (which was dismissed by Columbia’s own administrative kangaroo court).
The tension between these forces of extreme prurience and extreme Puritanism must be immense, probably intolerable, especially for the young who, even in the most settled times, are beset by insecurity over their sexual development — of how to grow into a man or a woman in the world. It’s also interesting that we want to talk about “sexuality” all the time — if media chatter can be taken for public “conversation” — but only in highly circumscribed ways. Overstep the conventional thinking du jour, and you invite a tsunami of censorious opprobrium… which I will now proceed to do.
For instance, I would propose the theory that homosexuality is lately promoted as a desirable way of being in the world because it allows those who behave that way to avoid and escape a primary source of tension in human life: the difficult relations between men and women. These tensions inevitably fluoresce in adolescence, and so now the choice is offered to opt out. I’d expect gay opinion to argue that opting into that way of being in the world actually generates greater tensions and torments, and that may indeed be so — but it is often the case with avoidance behavior that it invites unhappy complications.
I would also propose that the Caitlyn (Bruce) Jenner spectacle represents “peak transgender.” Now that the culture stage managers have made the point that the paragon of maleness — a five-sport Olympic champion — can opt late in life to become a simulacrum of femaleness (with strange overtones of sexual availability, but to whom, or to what?), there’s nowhere further to go… we finally come to the actual long-sought edge of the cutting edge and drop off into an abyss.
Or maybe this is all just the result of life’s supreme test: keeping up with the Kardashians. After all those years of slip-sliding in Clinique Anti-blemish solution and L’Oreal True Match, poor Bruce just caved, surrendered, resorted to the tactic that could tempt even the most driven competitor: if you can’t beat ‘em, join ‘em.
All right, now I will step aside and endure all the punishment I have invited for venturing to have some opinions on these matters.
Thursday, June 04, 2015
That crashing disappointment when an actor, director, or musician you admire starts talking about politics.— Thaddeus Russell (@ThaddeusRussell) June 2,
New book by Samuel Alexander, Prosperous Descent: Crisis as Opportunity in an Age of Limits.— Richard Heinberg (@richardheinberg) May 23, 2015
Good Times is still a relevant show, but it became all about J.J. Esther Rolle took a break from the show late in its run but returned for the final season. (I'll watch the John Amos interview later.)
In tomorrow's vote, Gawker's 119 writers may become the first workers at a major new media site to unionize. My Story http://t.co/GqEZkzmtUQ— Steven Greenhouse (@greenhousenyt) June 3, 2015
Wednesday, June 03, 2015
Today, revisiting his Twitter, I saw this tweet which includes the hashtag #Wississippi.
Apparently, #Wississippi is a portmanteau of Mississippi and Wisconsin, meant to imply that Wisconsin is becoming more like Mississippi in governance.
Tuesday, June 02, 2015
Monday, June 01, 2015
If there is a Pulitzer Booby Prize for stupidity, waste no time in awarding it to The New York Times’ Monday feature, The Unrealized Horrors of Population Explosion. The former “newspaper of record” wants us to assume now that the sky’s the limit for human activity on the planet earth. Problemo cancelled. The article and accompanying video was actually prepared by a staff of 23 journalists. Give the Times another award for rounding up so many credentialed idiots for one job.
Apart from just dumping on Stanford U. biologist Paul Ehrlich, author of The Population Bomb (1968), this foolish “crisis report” strenuously overlooks virtually every blossoming fiasco around the world. This must be what comes of viewing the world through your cell phone.
One main contention in the story is that the problem of feeding an exponentially growing population was already solved by the plant scientist Norman Borlaug’s “Green Revolution,” which gave the world hybridized high-yielding grain crops. Wrong. The “Green Revolution” was much more about converting fossil fuels into food. What happens to the hypothetically even larger world population when that’s not possible anymore? And did any of the 23 journalists notice that the world now has enormous additional problems with water depletion and soil degradation? Or that reckless genetic modification is now required to keep the grain production stats up?
No, they didn’t notice because the Times is firmly in the camp of techno-narcissism, the belief that the diminishing returns, unanticipated consequences, and over-investments in technology can be “solved” by layering on more technology — an idea whose first cousin is the wish to solve global over-indebtedness by generating more debt. Anyone seeking to understand why the public conversation about our pressing problems is so dumb, seek no further than this article, which explains it all.
Climate change, for instance, is only mentioned once in passing, as though it was just another trashy celebrity sighted at a “hot” new restaurant in the Meatpacking District. Also left out of the picture are the particulars of peak oil (laughed at regularly by the Times, which proclaimed the US “Saudi America” some time back), [and publishes articles like this one--P.Z.] degradation of the ocean and the stock of creatures that live there, loss of forests, the political instability of whole regions that can’t support exploded populations, and the desperate migrations of people fleeing these desolate zones.
As averred to above, the Times also has no idea about the relation of finance to resources. The banking problems we see all over the world are a direct expression of the limits to growth, specifically the limits to debt creation. We can’t continue to borrow from the future to pay for our comforts and conveniences today because we have no real conviction that these debts can ever be repaid. We certainly wish we could, and the central bankers running the money system would like to pretend that we could by making negligible the cost of borrowing money and engaging in pervasive accounting fraud. But that has only served to cripple the operation of markets and pervert the meaning of interest rates — and, really, as a final result, to destroy any sense of consequence among the people running things everywhere.
The crackup of that financial system will be the signal failure of the collapse of the current economic regime. The financial system is the most fragile of all the systems we depend on (though the others do not lack fragility). This is the reason, by the way, that oil prices are so low, despite the fact that the cost of producing oil has never been higher. The oil customers are going broke even faster than the oil producers. Does anybody doubt that the standard of living in the USA is falling, despite all our cell phone apps?
The basic fact of the matter is that the energy bonanza of the past 200-odd years produced a matrix of complex systems, as well as a hypertrophy in human population. These complex systems — banking, agri-biz, hop-scotching industrialization, global commerce, Eds & Meds, Happy Motoring, commercial aviation, suburbia — have all reached their limits to growth, and those limits are expressing themselves in growing global disorder and universal bankruptcy. Do the authors of The New York Times report think that the oil distribution situation is stable?
There were two terror bombings in Saudi Arabia the past two weeks. Did anyone notice the significance of that? Or that the May 29th incident was against a Shiite mosque, or that the Shia population of Saudi Arabia is concentrated in the eastern province of the kingdom where nearly all of the oil production is concentrated? (Or that the newly failed state of neighboring Yemen is about 40 percent Shiite?) Have any of the 23 genius-level reporters at The New York Times tried to calculate what it would mean to the humming global economy if Arabian oil came off the market for only a few weeks?
Paul Ehrlich was right, just a little off in his timing and in explicating with precision the unanticipated consequences of limitless growth. But isn’t it in the nature of things unanticipated that they generally are not?