Clusterfuck Nation

Dreams Die Hard

2009-11-09T11:28:27Z

In The Long Emergency (2005, Atlantic Monthly Press), I said that we ought to expect the federal government to become increasingly impotent and ineffectual - that this would be a hallmark of the times. In fact, I said that any enterprise organized at the colossal scale would function poorly in years ahead, whether it was a government, a state university, a national chain retail company, or a giant midwestern farm. It is characteristic of the compressive contraction our society faces that giant hypercomplex systems will wobble and fail. We should expect this.

It's tragic that the avatar of hopefulness himself, Barack Obama, stepped into his role at exactly the moment when this set of conditions was getting traction. It is sure to get worse, and there are going to be a lot of disappointed people out there who will be suffering terrible losses and real pain in daily life. Societies don't do well when the public falls into the broad despair that is the opposite of hope. That's when the long knives and the tribal animosities come out and things get smashed.

Within the context of conventional party politics - the kind that has been baseline "normal" in the USA for a long time - we see this playing out in two factions that are increasingly out-of-touch with reality. The Obama government has made itself hostage to a toxic form of pretense and lying. In order to sustain the wish for "hope" - if not hope itself - the President and his White House advisors along with his cabinet appointments, are pretending that the historical forces of compressive contraction are not underway. They're flat-out lying about the employment figures issued in the government's name. They're willfully ignoring the comprehensive bankruptcy gripping government at all levels. They refuse to bring the law to bear against "the malefactors of great wealth." They appear to not understand the epochal energy scarcity problem the whole world faces, or its implications for industrial economies. Most of all, they persist in promoting the lie that this economy can return to the prior state of reckless debt accumulation (a.k.a "consumerism") that has made us so ridiculous and unhealthy.

The trouble with self-delusion, either in a person or a society, is that reality doesn't care what anybody believes, or what story they put out. Reality doesn't "spin." Reality does not have a self-image problem. Reality does not yield its workings to self-esteem management. These days, Americans don't like reality very much because it won't let them push it around. Reality is an implacable force and the only question for human beings in the face of it is: what will you do? In other words, it's not really possible to manage reality, but you can certainly choose to manage your affairs within reality. We won't do that because it's too difficult. This harsh situation leaves the public increasingly with little more than bad feelings of discouragement and persecution. It's astonishing that all the smart people around the president don't get this.

Reality unfolds emergently, and this ought to interest us. For instance, I have maintained for many years that we are approaching the twilight of the automobile age - and the implications of this for daily life in the USA are pretty large. For a long time, I had assumed that this change of circumstances would proceed from our problems with the oil supply. But reality is sly. It has thrown two new plot twists into the story lately. America's romance with cars may not founder just on the fuel supply question. It now appears that our problems with capital are so severe that far fewer people will be able to borrow money from banks to buy cars at the rate, and in the way, that the system has been organized to depend on. Our problems with capital are also depriving us of the ability to pay to fix the hypercomplex system of county roads, interstate highways, and even city streets that make motoring possible. What will we do?

For now, a cashless government gives out cash-for-clunkers, which is basically a self-esteem building program designed to make the government feel better about itself because it is ostensibly taking 11-miles-per-gallon cars off the road and replacing them with 27-miles-per-gallon cars, thus forestalling scary problems with climate change. It's dumb of course, but the failure of leadership is comprehensive. Even the elite environmentalists at the Aspen Institute are preoccupied with finding new "green" ways to keep all the cars running. They put zero effort into the idea of walkable communities, or restoring the railroad system, which will be the reality-based remedies for the car-dependency problem.

The Republican right wing is, if anything, even more childishly delusional. For Glen Beck and Sarah Palin it comes down to "drill, baby, drill." They know nothing about the geology of oil - they don't even believe that the earth is more than six-thousand years old, meaning they don't believe in geology, period - but they are inflamed with the faith of eight-year-old children that we must have a lot more oil in the ground because this is America and God loves us more than people in other parts of the planet so it must be there. As their disappointment mounts, their childish ideas will turn cruel and sadistic. They'll seek to punish anybody who believes that the earth is more than six thousand years old. The catch is, If they get into power in the election cycles ahead, they'll be impotent and ineffectual even at persecuting their enemies.

In the meantime, American life will just wind down, no matter what we believe. It won't wind down to a complete stop. Its near-term destination is to lower levels of complexity and scale than what we've been used to for a long time. People will be able to drive fewer cars fewer miles. The roads will get worse. They'll be worse in some places than others. There will be fewer jobs to go to and fewer things sold. People who live in communities scaled to the energy and capital realities of the years ahead are liable to be more comfortable. We're surely going to have trouble with money. Households will drown in debt and lose all their savings. Money could be scarce or worthless. Credit will be scarcer.

Both factions of American political life indulge in the fiction of control. History is reality's big brother. It is taking us someplace that we don't want to go, so it will probably have to drag us there kicking and screaming. For starters, both reality and history will probably take us out to some woodshed of the national soul and beat the crap out of us. That could be a salutary thing, since the crap consists of all the lies we tell ourselves. Once we're rid of all that, we may rediscover a few things left inside our collective identity that are worth regarding with real self-respect.

Thinking the Unthinkable

2009-11-02T12:40:33Z

A side-trip to the local mall - where else to buy ammo around here? - evinced an epic struggle for supremacy of the chain stores between the Great Pumpkin and Santa Claus, with both fat-assed icons trying to shove the other out of the primary display sites as if the store aisle were a WWF ring in some grubby forsaken Palookaville far far from the salons of Washington decision-making, which, I guess, this is. This is the kind of place that a Jimmy Stewart character would have called home in 1946; only today it looks like a place taken over by a certain species of space aliens, slovenly in mind as well as body.

Our gods are not happy. Anyway, that third fat-assed icon, the Thanksgiving Turkey, was nowhere in sight, perhaps due to the recognition that there is far more grievance than gratitude 'out here' in the fly-over zone.

America still does everything possible except prepare to become a different America, perhaps even a better America than the current release, and this is unfortunate because history is merciless. History doesn't care if the dog peed on your homework... or you had car trouble this morning... or the tattoo on your neck got infected... or (to take this in another direction), you justified robbing scores of billions of dollars out of the mortgage sector because your too-big-to-fail company came down with the financial equivalent of swine flu and the top executives were hallucinating that they lived in a world with no boundaries of law or common decency.

We're at another one of those weird inflection points of "current events" -- a momentous eddy in the larger stream of history. A good deal of the already-proclaimed return to normality ("normalcy" in WGHarding-speak) depends on something close to a normal holiday shopping season, when so much of the nation's merchandise inventory moves from WalMart to under the Christmas tree. Of course, even if it were to turn out like a year-2005-type credit card binge, the result would surely be a sort of hemorrhagic fever of buyer's remorse afterward. An aerial view of the Heartland long about February 1st would show households blowing up like individual kernels of popcorn at an accelerating rate until the terrain itself was obscured by an evil fluff of financial woe suffocating the poor folks trapped under it.

Over the weekend, the The Huffington Post ran a McClatchy news service story about Godman Sachs's misdeeds around the issuance of mortgage backed securities. The basic idea in it was that GS was aggressively gathering trash mortgages from fly-by-night "originators" all over America to bundle into tradable security paper, which they then pawned off on feckless, inattentive investors (pension funds, foreign banks, etc) seeking miracle returns -- at the same time that GS was buying credit default swap "insurance" by the bale, knowing full well that the collateral backing their own issuance of MBS was of a quality somewhere between dead carp and dog poop. In other words, they were shoveling shit investments out of one window, and betting against the value of them from another window. Thus a picture resolves of GS's "true opinion" of the securities it paddled, and the question arises whether failure to inform the peddled of this opinion constitutes fraud. I certainly think it does.

I've been making substantially the same case in this column for two years now, so it is interesting to see the mainstream media awaken to a story-line that an ambitious nine-year-old could have pulled off the Web over recent months. I also continue to assert that a flurry of bonuses paid out this holiday season by Goldman Sachs and its other amigos at the top of the banking food chain will be greeted by violence - which will be the natural outcome of a society whose government fails to even give the appearance of protecting its citizens from organized crime. How did a sock puppet get appointed head of the US Department of Justice, folks will wonder.

How bad is the situation 'out there' really? In my view, things are veering toward such extreme desperation that the US government might fall under the sway, by extra-electoral means, of an ambitious military officer, or a group of such, sometime in the near future. I'm not promoting a coup d'etat, you understand, but I am raising it as a realistic possibility as elected officials prove utterly unwilling to cope with a mounting crisis of capital and resources. The 'corn-pone Hitler' scenario is still another possibility - Glen Beck and Sarah Palin vying for the hearts and minds of the morons who want 'to keep gubmint out of Medicare!' - but I suspect that there is a growing cadre of concerned officers around the Pentagon who will not brook that fucking nonsense for a Crystal City minute and, what's more, would be very impatient to begin correcting the many fiascos currently blowing the nation apart from within. Remember, today's US military elite is battle-hardened after eight years of war in Asia. No doubt they love their country, as Julius Caesar and Napoleon Bonaparte loved theirs. It may pain them to stand by and watch it dissolve like a castle made of sugar in a winter gale.

I raise this possibility because no one else has, and I think we ought to be aware that all kinds of strange outcomes are possible in a society under severe stress. History is a harsh mistress. For all his 'star quality' and likable personality, President Obama is increasingly perceived as impotent where the real ongoing disasters of public life are concerned, and he has made the tragic choice to appear to be hostage to the bankers who are systematically draining the life-blood from the middle class. Whatever we are seeing on the S & P ticker these days does not register the agony of ordinary people losing everything they worked for and even believed in. In a leadership vacuum, centers don't hold, things come apart, and rough beasts slouch toward Wall Street.

Self-jiving Nation

2009-10-26T11:06:12Z

The scene in the White House these days must be a sort of Opera Bouffe, in which an earnest and rather grave young man moves from one roomful of lesser officials to another in which all agree to pretend that they have prevented the nation from falling into something they call "the abyss." At the end of Act I, a young deputy FDIC commissioner in the Little Mary Sunshine mold gets down on one knee, belts out a show-stopper about the glories of a bright and shining "tomorrow," and the audience goes out for intermission to discover that the city has been burning down around the theater all night.

Out in America-the-Real, Halloween time in this year of 2009 has an interesting "Day of the Locust" flavor. There's more than a whiff of smoke in the air, along with an odor of dead carp wafting out of all the the offices and institutions we depend on to define reality. Like the Hollywood of Nathaniel West's dark 1939 novel, America today seems poised in the gate of some harsh judgment. When the historians look back at this era - especially at the time between January 20th and the holiday season of 2009 - won't they marvel at how well-understood our predicament actually was, by so many parties to it, and the gulf between that comprehension and the story we told ourselves: that we were "recovering."

Like a lot of other observer-interlocutors, I'd like to know what folks imagine we are recovering to. To a renewed orgy of credit-card spending? To yet another round of suburban expansion, with the boys in the yellow hard-hats driving stakes out in the sagebrush for another new thousand-unit pop-up "community?" For a next generation of super-cars built to look like medieval war wagons? That's the "hope" that our officials seem to pretend to offer. It's completely inconsistent with any reality-based trend-lines, by the way.

Perhaps it's time to redefine "hope" in the greater social sense of the word. To me, hope is not synonymous with "wishes fulfilled." In fact, hope should not be about wishing at all. Hope should be based on confidence that the individual or group is reliably competent enough to meet the challenges that circumstances present. Hope is justified when people demonstrate to themselves that they can behave ably and bravely. Hope is not really possible in the face of patent untruthfulness. It is derived from a clear-eyed and courageous view of what is really going on. I don't think that defines any of the behavior in the United States these days. We've become a self-jiving nation intent on playing shell games, running Ponzi schemes, and working Polish blanket tricks on ourselves.

It begins to look now as if the Obama team is determined to run this creaking vessel right over the falls. We could have bravely faced the structural perversities in banking the past year, but we decided not to. So far only a tiny minority of the public - unfortunately the "tea-bagging" race-baiters - have been the only ones to squawk. I look around at my fellow baby-boomer ex-hippie, ex-political radical age-cohorts and I see a sad-ass claque of passive, played-out, defeated dreamers too depressed to form a coherent thought about what's really going on... lost in sentimental fantasies about "world peace," or free heart-transplants-for-everybody as they, the boomers themselves, lurch toward the graveyard.

Obama was not a boomer, not one of "us," so I had expectations that he'd rise above the fog of wishful thinking. But he begins to look more like Millard Fillmore and less like an earlier president from Illinois who got elected on the eve of a terrible national political convulsion. I think about Lincoln a lot these days, about how circumstances shoved him to act when Southern secessionists fired on Fort Sumter barely a month after the new president took the oath of office (which was done in March back then). There was no spinning the news on it, no wiggling away from reality: an organized insurrection led by rogue U.S. military officers fired on their fellow officers... and that was that. The issue, as the saying goes, was joined.

If you think we have been in a crisis of finance and economy for the past year or so, consider that we have also been sunk in a comprehensive crisis of leadership. Nobody in authority is willing to face the truth, state the truth, and offer a reality-based idea about how to meet the truth, This is a leadership failure not just in politics and government, but also in business, in the university faculties, in the editorial and production offices of the news media, and even among a barely-breathing clergy.

Americans look around and see nobody standing up for their interests. Their greatest interest is a vision of a fruitful society that they can help build and be a part of beyond the current wreckage of revolving-debt consumerism. It will have to be a vision based on fewer resources and on new arrangements for daily living. It will have to recognize losses frankly, and enable us to let go of things whose time is over, whether that is Happy Motoring, college-for-everybody, vast industries devoted to vanished leisure, or procedures geared to getting something-for-nothing.

For now, I still see the inflection point as coming by the holiday season, when the masters-of-the-universe on Wall Street will have to publicly post their Christmas bonuses (and as publicly held corporations, they will have to). It is also well within the realm of possibility that a Black Swan the size of Rodan the Flying Reptile will swoop through the stock markets to breath fire on the computer terminals and melt the glorious rally of 09 away. In the meantime, I wonder about that man in the White House, and those ever more comical meetings he attends every day. He must emerge from them spinning like a nine dollar gyroscope. Nobody wants to imagine what happens to him when the spinning stops.

Marching Toward Zombieland

2009-10-19T11:23:06Z

When sober-minded individuals begin to regard an enterprise within a nation as "an enemy of the people" you can bet that some serious blood is going to flow. This is now essentially the situation for the Goldman Sachs company, which last week announced third-quarter earnings of over $3 billion largely derived from converting zero percent loans from taxpayers into zero risk profits off of anything paying more than zero percent in interest, revenue, or dividends.

The "people" across this big country may not have a clue how any of this is done, and there may be much to fault them on from the care-and-feeding of their own bodies to the content of their dreams, but you can't argue with the fact that they are heavily armed to an extreme. And although it may be hard to measure with precision, one might venture to state that they are increasingly pissed off. How else explain popular entertainments like "Zombieland?"

The political part of what has to date appeared to be an economic problem is resolving into a crisis of authority and legitimacy. When those in charge of a nation's livelihood prove to be comprehensively false and dishonest, the economic automatically turns political. Nobody believes the bankers anymore, of course, and nobody believes the interlocutors of the bankers - the Federal Reserve chairman, the Secretary of the Treasury, the heads of the SEC and a dozen other regulatory bodies - and increasingly the charming figure in the White House cannot be believed on these issues of the nation's livelihood.

The questions lately revolve around whether the nation is destroying itself by inflation or deflation - by the willful destruction of the value of our currency to evade the repayment of debt, or by the hapless destruction of households, companies, and governments by default and bankruptcy. It's a fire-or-ice debate. Either way the nation is going down as a viable enterprise. The fiction that we can return to a Crate-and-Barrel credit card orgy has sustained the false of heart and mind for some months now, but even that pleasant reverie will come to an end as the foreclosures mount. Only remember, men living in their cars who have lost nearly everything else will still have guns.

All these tensions beat a path into the holiday season when emotions run high, when blessings are counted and sorrows taste most bitter. So the big question now floating above the sheer data of Goldman Sachs profit announcement is: what kind of year-end bonuses will they dare to pay their executives and minions, and how will the "people" react? It seems to me that conditions are ripening for a bloodbath. The kind of heinous acts that we have feared emanating from foreign "evildoers" since the awful stunt of 9/11/01 are now most likely to come from among our own "people" - a few pounds of Semtex in the lobby of Goldman Sachs's New York headquarters... a few men with market-grade small arms converted to full-automatic outside on the Wall Street sidewalk one evening at holiday time when the suits are leaving work for the day.... It won't take much.

President Obama had better strike first. He's about the only figure left in the whole termite mound who has a shred of even potential credibility left because he still has the power to act. He can instruct the people who work for the executive branch to "claw back" any and all ill-gotten bank bonuses; he can direct the Justice Department to investigate everything from the uses of federal bailouts to grand-scale accounting fraud; he can fire people in high places who have failed to act and lost legitimacy. If he doesn't do these things soon then he's finished, too. In the wake of such a failure things will get fractal fast.

The sense that Wall Street has pulled off a coup d'etat and taken over the machinery of the United States is the most powerful meme out there now, and its power is growing in magnitude every day among all classes of Americans. I can't say how much it reflects reality. Even if it is a result of sheer happenstance - the tragic evolution of an industrial economy into a financial finagling economy - the citizens will still experience it as a stealing of their future. Whatever else one might say about American culture, it is keenly attuned to a sense of heroes and villains. We take great pride in our ability to blow away the bad guys. And life imitates art, as Oscar Wilde observed. If a zombie virus is on the loose in America, the first infections showed up in the zombie banks, among the zombie bankers. Watch out, Lloyd Blankfein! Woody is on his way....

Booby Prize

2009-10-12T09:36:34Z

When that phone call came around six a.m. last week telling President Obama he'd been awarded the Nobel Peace Prize, I had to think he turned to Michelle and said, "Honey, our life together has just gotten more surreal." I was hoping that he would politely refuse it, perhaps making a statement later that morning along the lines: "...since circumstances have placed me in the unfortunate position of prosecuting two wars at the present time, I cannot accept...." It would have introduced a refreshing note of truthfulness among friend and foe alike.

Much of the chatter on the Web about the wars in Iraq and Afghanistan, especially regarding causes and justifications, I regard as childish and silly. I especially follow the political podcasts issued by Slate and The New Yorker Magazine. They are garrulous without being especially astute. They seem to think we're in Afghanistan, for instance, in order to stabilize a central government, presumably a democratically-elected one. I don't think the Pentagon or the State Department give a rat's ass about the Afghan state or how its hard-bitten denizens scratch a living out of the tortured landscape there. Our motive there since the initial whacking of the Taliban government in 2001 has been to use it as the eastern geographic wedge against Iran, with Iraq as the western wedge, making a nice sandwich of Iran between two garrisons of US Wonder Bread. Hold that thought for a moment while I digress.

The debate about Iraq has been equally dumb for the past six years. The Left still thinks it was about the contingent "lies" employed around the "weapons of mass destruction" issue. Their indignation is pegged to their own swallowing of these "lies" at the critical moment of voting to support military action -- that is, they are pissed off at themselves, especially for making people in a foreign land feel bad. I always believed there was a larger motive for invading Iraq: the strategic need to kick the ass of an Arab nation as an answer to the 9/11 attacks -- regardless of whether Iraq instigated 9/ll or not. My view is not a popular one, to put it mildly, especially among my fellow Democrats, but I think it is closer to the truth.

Why poor Iraq? Because Iraq as a geographical entity was best situated as a US Middle East police station between Iran and Saudi Arabia and because Iraq's leader at the time, Mr. Saddam Hussein, was addicted to mischief-making in the region. Finally, because Saddam Hussein was ethnically Arab and the Arab world needed to get the message that knocking down skyscrapers full of American citizens was not okay (again, whether Saddam had any part in 9/11 or not). And, no, the invasion of Afghanistan was not enough because the Afghani people were not ethnically Arabs, so whatever we did there in 2001 did not really count except as a desperate prophylactic measure.) In summary: Iraq was therefore the best candidate for an ass-kicking in the Middle East. I will get to the consequences shortly.

Before I go a step further, I must anticipate the angry mail that will pour in from the 9/ll conspiracy sector -- the people who believe Dick Cheney or GW Bush or both (along with thousands of CIA and Pentagon worker bees) directed the attacks, or secretly placed explosive charges to bring down the buildings, or fired a missile at the Pentagon.... I regard the true believers of this fucking nonsense as hopelessly brain-damaged -- and warn that I will delete your tiresome rehearsals of these scenarios, so don't bother trying to "correct" me.

Many are no doubt wondering what could possibly be of "strategic" value about kicking anybody's ass geopolitically. Let me put it this way: there are varieties of discourse between the different peoples of this planet that occur on a plane above the conventional understanding of diplomatic push-and-pull, especially where acts of war are concerned. These varieties of discourse are not recognized by the current dominant American mentality, which is of the therapeutic type, based on the idea that the behavior of individuals and groups can be modified and even improved if they feel better (especially about themselves). I blame my own generation, the Boomers, for establishing this wishful ethos as the basis for all the policy of our time, foreign, domestic, municipal, classroom, household.... The Millennials, when they out-grow their adolescent angst, will not be so foolish, I guarantee you. And my fellow Boomers will feel it personally as the Millennials cut the funding for their bedpan service.

The strategic value was in sending a message to Radical Islam: the dogs of war are now loose... any further major shenanigans will be opposed violently. Whatever else might be said about the beef between the Radical Islam and the USA, there have been no further acts of war here on the scale of 9/11. Perhaps our adversaries are content that we have committed suicide by securitized debt and they are enjoying the spectacle of watching the American economy slide down history's cloaca maxima. Personally, I think if another violent aggression had been staged by "terrorists" on the 9/11 scale soon after that, our response would have had to be the turning of some Islamic capital cities into ashtrays -- but I venture into the realm of the hypothetically unutterable.

I would argue that to some degree the Iraq War has been a more successful project than many think, if only temporarily and partially. For one thing, it has mostly taken the form of a hazardous occupation, that is, a kind of ugly post-war, rather than a high-attrition "hot" war as normally understood, even by Vietnam standards. But it has been successful in a way that few well-intentioned foreign policy kibbitzers would probably grant: it has allowed the USA to operate a police station in the Middle East for a decade. Why is this necessary or desirable? Because the world depends on a reliable oil supply out of the Middle East and would descend into chaos if that supply was interrupted. This is apart, even, from the USA's desperate need for the 10 percent of our oil that we get from the region. Have we prevented chaos in the Middle East or only provoked it? That will be an interesting question for the next generation of PhD candidates. Maybe postponing it for a decade was the best we might have hoped for under the circumstances, though we did nothing at home to make use of that lull. You might say the US military presence in Iraq and Afghanistan has prevented Iran from assuming hegemonic domination of the Persian Gulf. If you are one of the kibbitzers I cite above, and you are enjoying the ride in your Toyota Prius and the heat in your house, the regular re-supply of your local supermarket, and maybe even the electric juice to your broker's Bloomberg terminal, then you'd better include these amenities in your ruminations over the ongoing geopolitical calculus.

The combination of extreme resource dependency and religious fanaticism is a fatal equation for the Middle East. They are angry, crazy and often savage people who own something we can't live without, and we are overfed buffoons, often savage ourselves, who think we can make them like us -- whether they like it or not. Again, personally, I don't believe the status quo will persist a whole lot longer. The US economy is radically de-complexifying (i.e. crashing). Part of this will be expressed in the bankruptcy of US military capacity -- at least where supporting troops-on-the-ground in foreign lands is concerned, and probably overseas bases, too. The US could get in trouble with other sources of foreign oil (think: Mexico) before anything chokes off the Middle East. But in one way or another, the US will soon become both capital-and-energy-resource-challenged to an extreme, perhaps to the extreme where we can't feed ourselves. Our problems in running the nation as it has been set up to run -- as a colossal demolition derby with sideshows of bargain shopping and infotainment -- are insurmountable if one accepts the majority view that it is "non-negotiable."

Our only hope, really, is a conscious campaign to manage our own process of de-complexifying, before the universe manages it for us, whether we like it or not. One tragic part of this -- among many and for many parties -- is that we did not use the last decade of relative world stability to get that process underway here. Even President Barack Obama is complicit in this failure. For instance, instead of cash-for clunkers, he could have gotten the trains running on time between New York and Chicago. I wonder, is there a prize for leaders who can get their nation's priorities straight.

World War Three Anybody?

2009-10-05T11:39:17Z

When Alan Greenspan predicted three percent economic growth showing up in the reported figures for the third quarter of 2009, did he mean executive compensation packages? Maybe the lesson here is: don't ask a crackhead to predict the future supply of crack. Greenspan's greatest success may be to drive economics into such disrepute that it will be cut loose from the universities and only be taught by mail order or internet subscription from the same outfits that offer PhD's in astrology. That is, before the universities themselves go broke.

The predicament that the USA finds itself will not be "solved" at the scale of operation that we're accustomed to, and we should just stop wasting precious time and dwindling resources in the idle hope that it will be. The failure to recognize this dynamic is the most impressive part of the meltdown. The only thing that the federal government is likely to prove in the process is the ineffectiveness of its actions as applied to any of the raging current problems from the killing burden of hyper-debt to the brushfires of geopolitics. Congress will only make the health care system more complex. Both congress and President Obama will do everything possible to keep housing prices unaffordable -- in a quixotic effort to protect the collateral of the big banks. Capital will continue to vanish in the black hole of default.

Something's got to give in the remaining three months of 2009. My guess is that attention will shift overseas for a while. This will not be due, as many probably think, to a cynical effort by the government to divert attention from the financial fiasco, but because the intrinsic tensions in the Middle East are reaching the snapping point. Iran is being called out on its nuclear program. If, from the start, it had just maintained the need for electric generating power in the face of dwindling fossil fuel reserves, they might have gone unchallenged. As it happened, though, the elected leader of Iran made too many intemperate remarks about wiping other nations off the face of the earth, and this has only prompted the leaders of other nations to take his remarks at face value and presume that Iran's nuclear program was devoted to armaments, not electric power generation.

So, now the USA has picked up the gauntlet. If Iran doesn't act to demonstrate the de-activation of its bomb-making capacity, then the USA will try to impose sanctions depriving Iran of necessary imported supplies. (Iran actually imports gasoline, due to inadequate refineries.) For sanctions to be effective, support will be required by other nations, including Iran's chief gasoline supplier, China. What a delicate calculus this will be! I rather imagine that China would not like to see the Middle East blow up. I'm not so sure about the nations of the Middle East though, or at least major parties in certain nations. The rulers of Saudi Arabia would probably enjoy seeing Iran get into big trouble, since Iran is Saudi Arabia's most active antagonist, working tirelessly to destabilize the Kingdom. Al Qaeda interests dispersed in many nations would certainly cheer any mayhem. The Taliban would love anything that takes the spotlight off them in Afghanistan. The Russians are conflicted between the wish to enhance their own leverage in world affairs and their need to discipline Islamic maniacs along their own borders. Europe is probably scared to death of anything that might threaten their energy lifeline. Pakistan is too tormented to have a position, but its radical Islamist factions are probably on the side of disorder -- as the best remedy for the status quo. If any of that spills over on India, as in the Mumbai bombing, then that flashpoint could turn to conflagration very quickly. We forget about Turkey, which was the hegemonic player in the region for centuries until its swift decline after 1914, but it has potent military capability and very mixed feelings about the the Jihad to ruin the West (since it is partly of the West). And finally there is Israel, the object of Iran's intemperate public statements.

This is a dangerous situation. I'm not so sure that Israel could launch an effective attack on Iran's nuclear infrastructure, but it might try anyway, especially if a US-backed sanctions effort fails to coalesce quickly. I'm not sure Israel would seek permission from the US to do this, though the US would certainly be tasked with defending the shipping lanes in the Persian Gulf. Iran might succeed in sinking more than a couple of US ships-of-the-line with sunburn missles and other toys, and this would lead to the bigger danger of oil supplies being choked off to the rest of the world. The US air response would be impressive, but possibly not effective against hardened targets. The leaders of Iran might exult even if the Iranian people were swept into a maelstrom. I imagine that what followed would be a very extravagant military frenzy amounting to World War Three, with European air forces and navies dragged in, with Hezbollah and Syria striking back at Israel, India and Pakistan possibly incinerating each other, and mayhem galore among the bystanders in Iraq, Egypt, Saudi Arabia, and Afghanistan. There could easily be internal mischief in the UK, France, and Germany from angry immigrant populations, and "sleepers" could work some overdue hoodoo in the USA. I don't know what Turkey would do, but it could be the biggest beneficiary of a bad regional meltdown, providing the only effective governance what remains in the region. China and Japan would probably just gape at the spectacle in wonder and nausea from the sidelines as they saw their energy supplies for years-to-come go up in flames.

The G-20 nations would be crippled as global oil supplies were choked off indefinitely. And if anyone -- Iran, or its friends inside the Kingdom -- managed to pull off a stunt such as blowing up the Ras Tanura oil terminal -- then a darkness will spread across places that were used to being lighted and they will stay dark a long time.

I don't know if any of this will come to pass, but as I said, tensions have reached a breaking point, including the greater tensions of history, which seem to require periodic release no matter how poignant the Pete Seegar songs are. It is perhaps, just another prime symptom of "overshoot," the world's way of shedding some of the toxic organisms that are making it so unhappy -- Gaia in a really bad mood.

If nothing develops along these lines on the geopolitical scene, the USA is still stuck in its predicament of trying desperately to maintain an overscaled living arrangement, with no coherent public discussion of downscaling, re-scaling, or re-arranging things. My guess is that this kind of restructuring only occurs when all other options have been exhausted. The last time the USA found itself in an intractable economic morass, World War Two came along and it made things all better here (after considerable sacrifice for us and catastrophe elsewhere). After World War Two, we ruled the world for a couple of generations. The outcome of World War Three would not be so favorable for us. At the very least, it would leave us attempting to run things on about one-quarter of the oil we're used to. That does not suggest a seamless transition between how we behave now and how the future will require us to behave differently.

The Season of the Witch

2009-09-28T13:52:19Z

In my father's house are many mansions. Surely one of them has a room with no elephants in it....
Not to crunch too many metaphors right here at the top, but a consensus seems to be firming up in the animate jello of the Internet that we have entered the Season of the Witch. An odor of ripeness fills the virtual air -- something between dead carp and apples baking. Whatever else appears to be going on in the upper stories and verdigris-tinged turrets of capital finance -- currency rackets, gold switcheroos, interest rate arbitrage games, concealment of losses under rugs and behind curtains, Chinese fire drills performed by Spanish prisoners, executive three-card-monte set-ups, boardroom work-arounds, accounting quicksteps, Peter-to-Paul-shuffles, check kitings, pigeon drops, Ponzi schemes, hugger-muggers, bezels, shucks, jives, and enough monkeyshines to make Lord Greystroke cry for mercy -- apart, in other words, from business-as-usual, such as it is these days, on Wall Street, there is a rising collective sense of anxious expectation that things are about to shake loose in the sad-ass shell of what remains of our economy. And the most perplexing part is that there hardly seems any safe place to preserve one's savings.

The showmen over at the Financial Sense website, have put on an excellent month-long series of interviews and debate podcasts between leading inflationistas and deflationistas -- Daniel Amerman, Peter Schiff, Robert Prechter, Mark Faber, "Mish" Shedlock, Harry Dent -- and after weeks of sedulous listening I still remain flummoxed as to where to stash the dwindling cash.

Harry Dent was a curious case in point this week. He has made some howlingly wrong calls before (e.g. in 2006, predicting a Dow 40,000 at the conclusion of the post-2001 bubble). Perhaps he missed the crack-up aspect of the most recent boom. He did not foresee the long gruesome meltdown of late 2007 to March 2009, or rather, his timing was off, since he called for the commencement of a new Great Depression in 2010. (And I hasten to insert here that my own timing of events has not been so great either.) Anyway, Dent sees a "winter" of finance and economy looming from here forward, characterized by extreme deflation, based on his view that the amount of private debt going bad (est. $40 trillion) far outweighs government's ability to create new "money" (a few measily trillion) and hence that there is no chance in hell we'll find ourselves in an inflationary situation for some time ahead. The private debt workout has to be completed first.
Most curious, though, was when the interviewer, Jim Puplava, probed Dent about his views on Peak Oil. Dent said he didn't believe in it; that when he was in college in the 1970s (remember the OPEC oil embargo of '73), he learned to disregard any suggestions that we are "running out of oil." He stated this, by the way, as a simple assertion, without any further explanation, and Puplava didn't belabor him with arguments. But it was a weird moment. Of course, it hardly need be said that Peak Oil story has never been about "running out of oil" per se, but rather about declining flows, geopolitical management of flows, and the effects of depletion on industrial economies -- in particular the effect on regular, expected, cyclical "growth" of the type that financial markets utterly depend on to power the trade in investment paper.

It is exceedingly odd that this does not factor into Dent's thinking, because what Peak Oil inescapably does is introduce the very sobering idea of discontinuity -- that is, that the game has changed radically, especially where all our assumptions about continued "growth" are concerned. In that brief exchange on Peak Oil, Dent seemed to take the position that the "winter" part of any historical financial cycle always produced "new technology" that invariably saves the day, putting this seemingly very smart man in the camp of so many techno-cornucopian triumphalists all wishing for the same outcome: that some mythical "they" will "come up with" a set of rescue remedies to keep all the cars circulating on the freeways, and all the WalMarts groaning with swag.

Like so many major league prognosticators, Dent arrives at his ideas by building models of reality, assembling "data" to create charts of trends in prices, interest rates, and especially demographics - what age group of people are buying a lot of what in which stage of their lives. The whole business seems very rational and reasonable except when you realize that it is just another "narrative" -- to borrow one of Nassim Nicholas Taleb's terms -- girded with statistical justification. One can hardly fault it from a strictly procedural point of view -- since, in our culture, conclusions ought to proceed from evidence -- but one can't escape the feeling that it amounts to little more than old-fashioned augury... that someone examining the entrails of a dead chicken, spread over the front page of The Wall Street Journal, might arrive at very similar conclusions. All that said, Dent was an appealingly confident personality on-the-air, the kind of authoritative voice you'd like to believe, if only it were possible.

Prechter was much the same a few weeks earlier, and he, too, foresees a darker American future, based on a different set of models called Elliot Wave principles. His forecasts derive from a picture of "social mood" as much as economic data flows. He, too seems to disregard the Peak Oil story and its implications as the master resource driving growth in industrial economies.

Personally, I am not at all sure that the Peak Oil story, or its associated general resource scarcity story, will shed a whole lot of light on the question of inflation-or-deflation. I say this because I think it is a short way down the road of depletion-and-scarcity before the major complex systems we depend on for daily life become so unstable that general socio-economic collapse ensues. After all, capital finance is only one of these many complex systems -- some other biggies being food production, trade and manufacture, transportation, electric power distribution, infrastructure maintenance, the military, and governance. Inflation-or-deflation will only be symptomatic of larger failures and instabilities in these systems necessary for modern, civilized life.

All of it begs the question not only whether you or I will have two nickels to rub together, or two gold eagles, or a bundle of six month US Treasury bills, or a zillion shares of Apple, or a gainful vocation, or a roof over our heads, or a hot meal at the end of the day, or a safe place to sleep, or a country we can recognize. I've done my share of forecasting, with some episodes of notably bad timing. I don't do it for grandstanding effect but to provide some basis for knowing what to do in the years directly ahead, so we can hope to construct lives worth living. I'm impatient with models, charts, and statistical analysis. Perhaps this is childish. I'd rather tell a story or paint a picture. So, I'm going to spend the rest of the week finishing the last chapter of World Made By Hand Two: The Witch of Hebron while the US economy wanders where it will.

Original Sin

2009-09-21T10:34:51Z

     In our history, the American nation committed obvious sins against select groups of people, and we've paid bitterly for some of that. But now it's our sins against the land itself that threaten to sink the USA as a viable enterprise.
     It's odd, that in his otherwise excellent blow-by-blow account ("Eight Days," in the Sept 21 New Yorker Magazine) of the September 2008 Wall Street meltdown that left Lehman dead, and AIG croaking in a ditch, and the banking system in general functionally crippled, reporter James B. Stewart never got around to really describing the cause of it all -- namely, the on-the-ground material catastrophe of American suburbia.
     It was the worthlessness of the tradable securitized debt associated with all those overpriced (and overvalued) chipboard and vinyl houses, smeared recklessly over the American landscape, that started all the trouble in the first place. And it is our inability to come to grips with that underlying catastrophe that prolongs the resolution of the still-florid banking crisis -- since the federal government is doing everything possible to prop up the failed capital equation of terminal suburbia, and to deny the obsolescence of that version of the American Dream and all the mechanisms for delivering it.
     The suburban project was not a conspiracy by the likes of Robert Moses, Walt Disney, Frank Lloyd Wright, and President Eisenhower to produce a living arrangement with no future. It was the emergent, self-organizing result of special circumstances in a particular time and place: post World War Two America, with an immense supply of cheap oil, cheap land, and the industrial capacity to churn out all the necessary components for a car-dependent development pattern. Suburbia was spawned out of a couple of persistent themes in American cultural history: 1.) that cities and city life were no good; 2.) and that the romance of settling the wilderness could be reenacted, at great profit, in all that space beyond the towns and cities. It would be silly to deny the appeal of this arrangement at its inception. By the end of WW II, city life in the popular imagination was reduced to one potently awful image: Ralph Kramden's apartment in "The Honeymooners" TV show.

     There had to be something better than that. Suburbia was engineered as the antidote to the Kramden's apartment: country-living-for-everybody. The evacuation of the cities to the new outlands proceeded as relentlessly as the landings at Normandy. It wasn't until the program was well underway that the self-destructive essence of it became obvious -- that every new housing subdivision killed the original rural character of the land, with the result that suburban life quickly became a cartoon of country living in a cartoon of a country house in a cartoon of the country. With additional layer-on-layer of, first, the shopping in the form of highway strips, then malls, along with the office "parks," these places elaborated themselves into a kind of cancer-of-the-landscape, a chronic and expensive condition that Americans had no choice but to live with, because of the monumental investments they had already made in it. The discontents it produced lent it to psychological depression and dark humor, just as chronic illness does. But we were stuck with it.
     Meanwhile, all the machinery of culture and politics made it impossible to construct anything differently. The exquisitely fine-tuned planning-and-zoning codes generated by the thousands of town boards mandated a suburban outcome everywhere -- with plenty of help from the DOT traffic engineers, the fire marshals, and the even the mandarins of academia who trained all these professionals. As a natural consequence of all this, the disinvestment in cities -- especially the older cities of the industrial heartland -- continued remorselessly until it seemed as if the Second World War had taken place in St. Louis and Cleveland.
     This mode of behavior persisted through the first, short-lived oil scarcity tremors of the 1970s. It was so completely embedded in the popular imagination that it had become the baseline American identity. The suburban project caught a second wind in the 1990s, when the last great non-OPEC oil fields of the North Sea, Alaska, and Siberia nullified the grip of the Islamic cartel for while, and sent the price of oil down to $11-a-barrel. Ironically, it was during those years that the warnings of "peak oil" first circulated beyond the geology offices, and it was clear to anyone who reflected on the connections that the project of suburbia was doomed.
     It was also ironic, tragically so, that during this same period Wall Street began to seek some new way to make real money beyond stock and bond markets, which didn't seem to produce wealth at all for more than a decade when inflation was factored in. By a fortuitous coincidence, the revolution in computers enabled Wall Street bankers to concoct abstruse new species of tradable paper securities based on bundles of debt that seemed to produce miraculous earnings. It had the added advantage of being inscrutable to both investors and financial regulators. Due diligence became impossible and moral hazard spread like ringworm in a dormitory. The bulk of the securitized debt originated in home mortgages and the larger result was a gigantic racket ramped up between Wall Street and the US government to conceal all the structural weaknesses of a de-industrialized US economy behind a hyperbolic commerce in the very thing that the American public cherished most: their houses, which, understandably, everybody had come to call "homes." Wall Street might as easily have commoditized mother and apple pie - if you could sell each one for half a million dollars.
     The banking fiasco still underway is at once a proxy for the larger failure of the American economy and the greatest fissure in it. Put as simply possible: we can't service our debt, we can't generate more debt, and the notional "capital" we thought we possessed is dissolving into nothingness. The federal government and Wall Street remain committed to supporting all the rackets associated with a suburban sprawl economy that has entered its own zone of remorseless failure. It is failing as a capital investment first, and is secondarily failing as a practical living arrangement. The two failures will continue in a close race toward terminal entropy.
     The dirty secret all along was that by 2005 there was no economy left in the USA beyond the suburban sprawl economy with its so-called "consumer" nexus -- largely devoted to the outfitting of suburbia. More mortgage debt (and credit card and car loan debt) will go bad and the investment paper that represents it will go bad and it will eventually destroy our current system for accumulating, valuing, and deploying wealth. It will not destroy the function of capital -- no matter how many angry intellectuals inveigh against the straw man of capital-ism, as if it were merely a belief system - but it will be a long long time before anything sturdy or credible in the way of banking will be reconstructed out of the wreckage.

Reality Receding

2009-09-14T10:33:23Z

   Now that everybody in the USA, from the janitors in their man-caves to the president addressing congress, has declared the "recession" over, is exactly the moment when what's left of the so-called economy is most likely to implode. If there were still shoeshine boys on Wall Street, they'd be starting their own hedge funds now, and CNBC's Larry Kudlow would be toasting them in the Grill Room of The Four Seasons. What we've seen in the vaunted rally for the last six months is the triumph of wishing over facts, combined with the most arrant market manipulation by floundering banks backstopped by a panicked government -- all pounding sand down a rat-hole of hopeless non-performing debt, while pretending that the machinery of capital finance still grinds on.
   Despite what a few elderly Mr. Naturals may say about abolishing "capitalism," we're not going to have an advanced economy without a coherent banking system, and by advanced economy I mean one in which the lights stay on. By coherent I mean a system that is able to deploy accumulated wealth for productive purposes, in the service of continuing civilization. (And, yes, I know that the followers of Daniel Quinn are not so sure that civilization is worth the trouble, but unless you support the killing-off of about six billion humans right away, things on Earth are not favorably disposed just now for a return to hunting-and-gathering.)
      I would hasten to cut through the fog of despair to reassert -- for the thousandth time -- that a true American perestroika is possible, if the public could overcome the plague of cognitive dissonance sweeping the land and form a consensus for action that comports with reality's agenda. But that is looking less and less likely. Instead, what we see is a rush into delusion, seasoned with grievance and gall. Spectacles like last weekend's march on Washington don't happen for no reason, of course. From where I sit, the uproar can be attributed to comprehensively bad American leadership, a crisis in authority and legitimacy that has left a functional vacuum in every executive office throughout the land -- from the White House to the state houses, to the lairs of the CEOs, to the towers of the deans and department chairs, to the glitzy sets of the nightly news deliverers, to the makeshift quarters of the NGO chiefs. In former times, clueless and impotent leaders stuck their heads in the sand. Nowadays, with pandemic narcissism abroad in the land, the heads are more usually inserted into the aperture that leads into the large bowel....
   But I indulge in diverting objurgation when I should perhaps explain this American perestroika more clearly. The Russian word roughly translates to "restructuring." They flubbed it in 1989 because their system was too ossified and too far gone -- though history and circumstance eventually did it for them. A similar outcome is possible here, too, in which things just have to completely fall apart before emergent reorganization occurs. But you can be sure that if we allow this to happen, an awful lot of things will get smashed along the way, including lives, careers, families, property, and cherished institutions.
      This monster we call the economy is not just an endless series of charts and graphs -- it's how we live, and that has to change, whether we like it or not. Now, it is obviously a huge problem that a majority of Americans don't like the idea. If they were true patriots, instead of overfed cowards and sado-masochists, they'd be inspired by the prospect. But something terrible has happened to our national character since the triumphal glow of World War Two wore off. I just hope that the Palinites and the myrmidons of Glen Beck don't destroy what's left of this country in a WWF-style "revolution." In the best societies, such idiots are marginalized by a kinder and sturdier consensus about justice. In America today, the center is not holding because there is no center.
   American perestroika really boils down to this: we have to rescale the activities of daily life to a level consistent with the mandates of the future, especially the ones having to do with available energy and capital. We have to dismantle things that have no future and rebuild things that will allow daily life to function. We have to say goodbye to big box shopping and rebuild Main Street. More people will be needed to work in farming and fewer in tourism, public relations, gambling, and party planning. We have to make some basic useful products in this country again. We have to systematically decommission suburbia and reactivate our small towns and small cities. We have to prepare for the contraction of our large cities. We have to let the sun set on Happy Motoring and rebuild our trains, transit systems, harbors, and inland waterways. We have to reorganize schooling at a much more modest level. We have to close down most of the overseas military bases we're operating and conclude our wars in Asia. Mostly, we have to recover a national sense of common purpose and common decency. There is obviously a lot of work to do in the list above, which could translate into paychecks and careers -- but not if we direct all our resources into propping up the failing structures of yesterday.
   The most dangerous illusion, of course, is a belief that we can return to a hyped up turbo debt "consumer" economy -- and perhaps the most disappointing thing about Barack Obama, is his incessant cheerleading for a "recovery" to what is already lost and unrecoverable. The man who ran for office on "change" doesn't really have the stomach for it. But, of course, events are in the driver's seat now, not personalities, even charming ones. I'd venture to say that if Mr. Obama thinks he's seen a crisis, and gotten through it, then he ain't seen nothin' yet. We are for sure not returning to the kind of credit orgy that made the last twenty years such a nauseating spectacle -- of which, by the way, the misfeasances and wretched excesses of Wall Street were just one manifestation.
     Some theorists out there say that economy follows mood, not vice-versa, and that the anger and sourness on display around the USA, in events like the weekend Washington march, is a clear sign that tectonic shifts in the structures of everyday life are sure to follow. There are too many truly good and intelligent people in this country, to leave our fate to the Palins and the Glen Becks. But the good people had better man up and start telling the truth with some conviction that the truth matters.

Reality Receding

2009-09-14T10:33:23Z

The Labor Day Blues

2009-09-07T10:55:01Z

    One national moment-of-nausea this Labor Day weekend struck Sunday morning, when CNN's John King led off his 10 a.m. State of the Union show with a valentine to ABC's Diane Sawyer, on her becoming anchor of that network's evening news. (This was the most important news of the week???) The old legacy networks have taken on the role of dishing out reassurance to an anxious and insecure public as job number one, and the subtext of the Sawyer lede was that a Mommy figure would soon be in place to soothe the multitudes even as the nation free-falls into bankruptcy and disorder. This is supposed to be a counterpoint to the chorus of smug, braying rabble-rousers who inflame the crowds on Fox News and MSNBC, and CNBC -- the Glen Becks and Keith Olbermans and Dennis Kneales -- who work the anger regions of the brain.
     The inherent conflicts arise from a nation that simply cannot bring itself to try getting its house in order. Instead of adult leadership, we prefer good parent / bad parent therapy -- a psychodrama of alternating messages of reassurance and punishment that provides distraction from problems and conundrums too horrible to face. One unfortunate result is the evaporating legitimacy of anyone or anything in authority, and that is extremely dangerous at a time like this because it creates the perfect opportunity for the rise of a corn-pone Hitler who will beat a path straight into a national ordeal-by-fire, and make everybody feel better by telling them clearly what to do.
    President Obama rolls out his much-awaited message on health care reform to a joint session of congress this week after a summer of chaotic and often mendacious debate. The system now running is so unjust and ruinous that a citizenry unmedicated by psychotropic drugs would have burned down the insurers by now (and perhaps torched their doctors' BMWs). As a tactical matter, the best Mr. Obama can do about the "public option" is to endorse it while kicking the can down the road, since the stark insolvency of the US treasury obviates any real ability to make it happen.
    But I believe the public would be greatly appeased (and helped!) by legislation that achieved a few simple ends: 1.) clearly and absolutely outlaw insurers canceling policy contracts under any circumstances. 2.) outlaw denial-of-care tactics. 3.) outlaw campaign contributions by lobbyists, period. If Obama can present these items front-and-center, he can then point to congress and tell the nation that they can hold them responsible for their plight. Other urgent health care reforms could be subject to regulation rather than legislation. For example, medical care is not "competitive" in any meaningful sense; people with severe problems and illnesses are not comparable to "consumers" comparison shopping for flat-screen TVs. The truth is, they are hostages to their local hospitals and the specialists they are referred to. The ridiculous prices charged for everything from aspirins to tests to cotton swabs to time occupying a hospital room ought to be subject to review, and procedures can be set up to accomplish this, with severe fines for abusers. Personally, I'd charge the FCC with returning to its policy of banning drug advertising on TV.
    Polls are reporting a steep slide in President Obama's approval ratings, especially among white voters. I doubt that this is about the health care debate, which obviously remains unresolved at the time the polls were taken. I think it is about Mr. Obama's shoveling of huge sums into Wall Street, and the unabated obscene money-grubbing by the executives there -- while millions of ordinary people get thrown out of their houses, lose jobs that they'll never get back, and slip-slide permanently out of the middle class. His relations with Wall Street are destroying his legitimacy. His failure to demonstrably clean house at the Securities and Exchange Commission and other regulators, or to direct the Justice Department to investigate and prosecute misdeeds stemming from the swindles and frauds in securitized debt, make him look like a stooge to the bankers.
    I personally fault the president for putting no effort into the larger necessary tasks of leading a transition away from suburbanization, failing to promote public transit rather than continued car-dependency, not preparing for re-localized farming, and continuing the unaffordable racket of imperial military over-reach in a mode indistinguishable from G. W. Bush.
    Whatever the politics of the moment may be, national attitudes are surely changing. A psychology of hardship is overtaking even the bread-and-circus blandishments of the Cheez Doodle / infotainment / professional sports matrix of idiocy that the sociopathic corporate axis-of-evil operates to take advantage of ordinary human weakness. Soon, the public will lack the resources even for these tawdry comforts, and God knows what they'll turn to for solace then.
    A large part of Mr. Obama's appeal as a candidate last year had to with presenting himself as an intelligent adult -- as opposed to a parent figure (or a crazy old uncle in the case of John McCain). But so far, apart from his personal charm and good looks, his adult persona is that of an actuary -- someone who can read charts, parse figures, and report them down the line for other people to draw conclusions . What he lacks at the moment is the very thing that history might foist on him: a sense that life is tragic and history is merciless and that sometimes we have to do the hard things that times require of us.

End of Summer Blues

2009-08-31T12:30:32Z

In my larval, pre-blogging days, I always faced the back-to-school moment with abject dread. It meant returning to a program of the most severe, mind-numbing regimentation in the ghastly New York City public schools after a summer of idyllic unreality in the New Hampshire woods, where I went to a Lord of the Flies type of summer camp. And so here I am, many decades later, still uneasy as the final page of the August calendar flies away in a hot Santa Ana wind, and a great hellfire closes in on the far eastern reaches of Los Angeles, and the American money system falls into a peculiar limbo, and every fifth person is out of work, or going bankrupt, or glugging down the seawater of default, or being denied coverage by health insurance that he-or-she has already shelled out ten grand for this year, or getting shot in a trailer park.

I was in Los Angeles for a few days last week, as chance had it, marveling at the odd disposition of things there. I've been there many times over the years, but you forget how overwhelmingly weird it is. Altogether the LA metro area has the ambience of a garage the size of Rhode Island where someone happened to leave the engine running. To say that LA is all about cars is kind of like saying the Pacific Ocean is all about water. But one forgets the supernatural scale of the freeways, the tsunamis of vehicles, the cosmic despair of the traffic jams. The vistas of present-day LA make the Blade Runner vision of things look quaint in comparison.

You motor out of the LAX airport - personally, I love the name "LAX" because it so beautifully describes the collective ethos of the place - and you discover quickly that the taxi cab's windows are not that dirty, it's the air itself colored brown like miso soup. Going north on the 405 freeway, you see the looming Moloch of the downtown skyline through the brown miso soup. And you begin to understand why the products of the film industry are so fixated on the theme of machine apocalypse. Downtown LA looks like just such a gigantic machine as the FX crews would dream up, as if a day will come when those gleaming mirrored office towers will pull themselves out of the ground from their roots and begin lumbering, crunch crunch crunch, north toward the Hollywood Hills seeking to exterminate the vile humanity responsible for making the place what it is.

I happened to be camping out briefly in West Hollywood, in a scene-ster hotel where tiny bubbles of show biz mega-success wafted around amidst a background odor of failure, and an impossibly thin line was drawn between being pampered and being asked to go die in the gutter, please. The place is not without a certain decorum. I couldn't help but imagine how lovely Hollywood must have been in, say, 1923, when 92 percent of all the hopeless crapola now on the ground there had not yet been built, when there were no freeways, and fewer cars than currently found in Lincoln, Nebraska, you could go out to the Pacific Ocean on a "Big Red" streetcar, and on a clear day you could see from La Cienga out to Mount Wilson, and the movie "industry" was like a college theater department. What a fabulous giggle it must have all been - apart from poor Fatty Arbuckle - in that romantic desert at the edge of the world.

The whole "Dream Factory" myth has become such an awful cliché, but what remains interesting now is how it utterly infected every other organ, byway, and lost corner of American life, to the degree that the life of this nation became little more than a "narrative," a story-board, a montage of wishes superimposed over the harsher mandates of reality. Hollywood now is a mere cartoon of what Wall Street and Washington have turned into. We're a civilization of fluff now, riding on a river of toxic sludge.

I found Hollywood utterly exhausting. On morning walks down in the buzzard flats below Sunset Boulevard you almost never saw a human being outside the protective carapace of a car. I think I was the only person who ever walked down Melrose Avenue this calendar year. There were a lot of fresh store vacancies in the endless one-story strips, as if the retailers had just packed up and left Dodge under the cover of night. There were obvious, if lame, attempts to pedestrianize the major surface boulevards with fancy crossing pavements, but traffic flowed on them at sixty off the rush hours, and you felt like a marmot in a buffalo stampede out there. For solace, I listened to Bruce Molsky sing "I Ride an Old Paint" on the iPod. The fiddle part is lovely.

The city of Los Angeles, indeed the whole state of California, seems exhausted too. Apocalypse is probably such a rich theme out there precisely because everything about that particular way of life seems to be nearing its end - whether it's the fiscal fiasco or the water supply, or the aerospace economy, or the music industry, or the once-great university system, or the Happy Motoring fantasy of cruising for burgers in what Tom Waits called the dark, warm narcotic American night. I went to the movies there one hot afternoon - Tarantino's latest, Inglourius Basterds, a completely crazy but enjoyable revenge romp against Hitler & Co. - and before the feature, they showed a "trailer" for Roland Emmerich's forthcoming apocalyptathon. 2012, in which virtually every global landmark from the Vatican to the White House is destroyed, and mankind's last hope is John Cusack riding a spaceship to worlds unknown.... If that isn't shooting your wad as a movie-maker, I'm not sure what is. Maybe next time out, Roland will step back and make a movie about a puppy.

I had my fill of apocalypse by the time I left the place, only to find myself back in a real nation really dissolving into a puddle of goo. In the strange new ether of the Web, a consensus grows that we're in for a rocky autumn, as if the signal event will be something like a hurricane of shoes dropping - bank failures galore, repudiation of US debt instruments by America's former patrons, foreclosures to the farthest horizon, jobs and incomes terminated, and all the good intentions of the folks in charge coming to naught in the face of historic forces. We're off to that kind of a start this morning, with the Dow dropping eighty points and the news that Disney Inc has just paid four billion for the rights to the Marvel Comics posse - Spiderman and his homeys. As if America needs more childish fantasy.

Financial Crisis Called Off

2009-08-24T11:49:59Z

Whew, what a relief! Everybody from Ben Bernanke and a Who's Who of banking poobahs schmoozing it up in the heady vapors of Jackson Hole, Wyoming, to the dull scribes at The New York Times, toiling in their MC Escher hall of mirrors, to poor dim James Surowiecki over at The New Yorker, to - wonder of wonders! - the Green Shoots claque at the cable networks, to the assorted quants, grinds, nerds, pimps, factotums, catamites, and cretins in every office from the Bureau of Labor Statistics to the International Monetary Fund - every man-Jack and woman-Jill around the levers of power and opinion weighed in last week with glad tidings that the world's capital finance system survived what turned out to be a mere protracted bout of heartburn and has been reborn as the Miracle Bull economy. Our worries over. If you believe their bullshit. Which I don't.

All this goes to show is how completely the people in charge of things in the USA have lost their minds. They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park "capacity" and Big Box "power centers," restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world - all this while turning Afghanistan into a neighborhood that Beaver Cleaver would be proud to call home.

By the way - and please pardon the rather sharp digression - but does anybody know if they buried Michael Jackson yet? It's only been a couple of months. And, if not, is that the stench now wafting across the purple mountains' majesty from sea-to-shining sea? Isn't it a little indecent to keep the poor fellow waiting? Or is a really surprising comeback secretly planned, with product tie-ins and all?

America loves the word "recovery" as only a catastrophically sick society can. "In recovery" is the new universal mantra of loser individuals and loser nations. Everybody in the USA is in recovery. Even Michael Jackson (he may have given up on somatic activity but, on the plus side, as the Rotarians love to say, he's quit using drugs for once and for all, and the magazines have stopped publishing photos of him taken after 1990, when he turned himself into something out of the Hammer Films catalog).

To sum it all up, the US economy is in recovery. Paul Krugman says that we'll soon realize that Gross Domestic Product (GDP) is growing. He actually said that on the Sunday TV chat circuit. Not to put too fine a point on it, but I would really like to know what you mean by that Paul, you fatuous wanker. Do you mean that the Atlanta homebuilders are going to open up a new suburban frontier down in Twiggs County so that commuters can enjoy driving Chrysler Crossfires a hundred and sixty miles a day to new jobs as flash traders in the Peachtree Plaza? Do you mean that the Home Equity Fairy is going to wade into the sea of foreclosure and save twenty million mortgage holders currently sojourning in the fathomless depths with the anglerfish? Do you mean that all the bales of deliquescing, toxic "assets" hidden in the vaults of Citibank, JP Morgan, Bank of America, et al, (not to mention on the books of every pension fund in the USA, and not a few elsewhere) will magically turn into Little Debbie Snack Cakes on Labor Day weekend? Do you mean that American Express and Master Card are about to declare a Jubilee on accounts in default everywhere? Do you mean that General Motors will produce a car that a.) anyone really wants to buy and b.) that the company can sell at a profit? Are you saying we get a do-over, going back to, say, 1981? Did we win some cosmic lottery that hasn't been announced yet? What's growing in this country besides unemployment, bankruptcy, repossession, liquidation, gun ownership, and suicidal despair? In short, are you out of your mind, Paul Krugman?

The key to the current madness, of course, is this expectation, this wish, really, that all the rackets, games, dodges, scams, and workarounds that American banking, business, and government devised over the past thirty years - to cover up the dismal fact that we produce so little of real value these days - will just magically return to full throttle, like a machine that has spent a few weeks in the repair shop. This is not going to happen, of course. It is permanently and irredeemably broken - this Rube Goldberg contraption of swindles all based on the idea that it's possible to get something for nothing. And more to the point, we're really doing nothing to reconstruct our economy along lines that are consistent with the realities of energy, geopolitics, or resource scarcity. So far, our notions about a "green" economy amount to little more than blowing green smoke up our collective ass. We think we're going to build "green" skyscrapers! We're too dumb to see what a contradiction in terms this is. The architects are completely uninterested in the one thing that really is "green" - traditional urban design - and most particularly the walkable neighborhood. That's just too conventional, not special enough, lacking in star power, not enough of a statement, boring, tedious, so not cutting edge! We blather about high speed rail, but you can't even get from Cleveland to Cincinnati on a regular train - and what's more amazing, nobody is really interested in making this happen. All we really care about is finding some miracle method to keep all the cars running.

What we've been seeing is nothing more than a massive pump-and-dump operation in the stock markets, most of it executed by programmed robot traders, with the trading nut provided by taxpayers current and future. These shenanigans add up to new risks and fragilities so extreme that the next time a grain of sand catches in the exquisite machinery they will sink the USA as a viable enterprise. We will end up discrediting not just capitalism, but also the idea of capital per se, that is, of deployable acquired wealth. As this occurs, of course, events on-the-ground will give new meaning to the term "reality television."

The First Die-off

2009-08-17T00:44:43Z

    Sunday, I got a taste of the oldest established permanent traffic fiasco in America known as Escape From Cape Cod. This is not a regular thing for me. I have no family there and never did. Friends invited us out to an idyllic hidden corner of the place far from the clam bars filled with shrieking babies and other more typical attractions. We arrived in good order at mid-week and had a fine time. Once installed, we didn't get in a car for four days.
    Our strategy was to leave for home in upstate New York at 11 o'clock Sunday morning -- a bright, hot day, as chance would have it -- thinking that the masses would elect to remain a few more hours at Vacation Central pointlessly towing the little ones around in circles on plastic inflatables behind motorboats before returning to the real world with all its foreclosure notices, canceled credit cards, re-po men hiding in the foundation plantings, and other woes of the day. The masses must be more massive these days than I ever imagined. Apparently, you can fill Massachusetts Bay from end-to-end with watercraft and still have enough vacationers left to completely overwhelm the main highway off-Cape, Route 6, where we crawled in first gear all the way from Yarmouth to the Sagamore Bridge.
    One couldn't help thinking, of course, how nice it would be if there was a choo-choo train that ran from Boston down the length of the Cape, but alas there is no more. If any public official had entertained vagrant thoughts of re-starting it in recent decades, the idea was apparently dismissed as a species of heartburn. Clam rolls, in excess, will do that to you. Then again, the rail service from Boston to Albany no longer exists, amazing as it seems, so the whole thought exercise was a waste of time. But it explains why we drove there in the first place.
    Anyway, we broke loose from traffic for a while on the mainland, but the little tie-up on Route 6 proved a mere hors d'oeuvre to the main course where I-495 joined up with the Mass Pike (I-90), and we ramped onto the peristaltic nightmare of a giant throbbing automotive fistula that pulsed 27 miles to I-84 west of Worcester, which drains the entire New England vacation-shed down to the great Moloch of New York City and its teeming outlands. We, fortunately, were well-fueled-up and air cooled in my Toyota Tacoma pickup. But one couldn't help imagining the horrors of those unlucky others who found themselves creeping on empty, in 91-degree heat, riding the clutch the whole way, with bladders expanded to the size of crenshaw melons.
    Once we busted through that monumental clusterfuck, it was a straight run home -- except for a strange interlude at a Mass Pike rest stop, where people who looked like Thanksgiving Day parade balloons clutched armfuls of snack bags in their never-ending quest for fulfillment. I began to think of them -- prompted, I'm sure, by some malicious meme on the Web -- as "the yeast people," enormous one-celled creatures multiplying at an astronomical rate, soon to engulf the planet in a tragic reeking foam of yeast, and dooming the Earth to a fate worse than climate change....
    All this frightful hyperbole is really mere précis to my real point here, for those of you already acquainted with some of the classic "doomer" themes, which is that the first "die-off" of The Long Emergency will not be one of human beings but of our beloved automobiles. Personally, I think the car die-off will come on with stunning rapidity as a combination of factors merge to make these colossal traffic jams staples of nostalgia in decades to come. As usual, the public is clueless about this, gulled by a cretinous news media into the earnest expectation of endless techno-miracles.
    The funniest of these lately are the glad tidings from ("The New" ) General Motors. They came out last week with a laughable hype-fest for their proposed electric car, the "Volt," scheduled to arrive in the showrooms around 2011 (about the same time that all the mortgage-backed-securities sitting in Wall Street's vaults melt into a monumental puddle of radioactive goo). We're told the Volt will get the equivalent of over 200 miles-per-gallon, at less than 25 cents a charge from the plug on your garage wall, blah blah. They estimate that it'll cost about $40,000. Do we detect a little problem right there? Like, the whole adult US population is going to rush out and buy new cars priced the same as today's Mercedes Benz? Good luck with that, GM, especially when money for car loans will be about as easy to get as a royal flush in online poker. And good luck with changing out the battery for ten grand a couple of years down the road, so to speak. And good luck also with your expectation that the roads and bridges will remain drivable in the years ahead, as every municipality, and county, and state slides into bankruptcy and the paving machines sit rusting in the DOT marshaling yards.
    What is wrong with our brains? Are they turning to yeast?
    And even if it were possible to continue torturing ourselves in three-hour traffic jams, is that something we would want to do?
    I'm serenely confident that we're in the twilight of Happy Motoring now. Without debt service there is no auto industry, and we're toast where debt service is concerned. All we can do now is give cars away, or give US citizens free money to buy them -- which we are obviously already doing with "Cash for Clunkers" -- which is additionally hilarious in the same nation that is deeply paranoid about the government giving anybody free health care. What a nation of morons we have become.
    Then, of course, there is the political problem that nobody is thinking about, namely, what happens when a substantial portion of the public is permanently foreclosed from motoring because they've lost jobs and incomes and positions and vocations that they will never get back -- ? Do you think they'll just hike down the breakdown lanes with colorful bundles on their heads like the impoverished folk in other lands? Or will they put all those home arsenals to work? I can't wait to find out.

The Fog of Numbers

2009-08-10T11:28:31Z

There's something happenin' here
What it is ain't exactly clear....
-- Buffalo Springfield

    One of main reasons behind the vast confusion now reigning in the USA, our failure to construct a coherent consensus about what is happening to us (or what to do about it), is our foolish obsession with econometrics -- viewing the world solely through the "lens" of mathematical models. We think that just because we can measure things in numbers, we can make sense of them.
     For decades we measured the health of our economy (and therefore of our society) by the number of "housing starts" recorded month-to-month. For decades, this translated into the number of suburban tract houses being built in the asteroid belts of our towns and cities. When housing starts were up, the simple-minded declared that things were good; when down, bad. What this view failed to consider was that all these suburban houses added up to a living arrangement with no future. That's what we were so busy actually doing. Which is why I refer to this monumentally unwise investment as the greatest misallocation of resources in the history of the world.
     Even this interpretation -- severe as it is -- does not encompass the sheer damage done by the act itself, on-the-ground and to our social and cultural relations. Suburbia destroyed the magnificent American landscape as effectively as it destroyed the social development of children, the worth of public space, the quality of civic life, and each person's ability to really care about the place they called home.
     It's especially ironic that given our preoccupation with numbers, we have arrived at the point where numbers just can't be comprehended anymore. This week, outstanding world derivatives were declared to have reached the 1 quadrillion mark. Commentators lately -- e.g. NPR's "Planet Money" broadcast -- have struggled to explain to listeners exactly what a trillion is in images such as the number of dollar bills stacked up to the planet Venus or the number of seconds that add up to three ice ages plus two warmings. A quadrillion is just off the charts, out of this world, not really subject to reality-based interpretation. You might as well say "infinity." We have flown up our own collective numeric bung-hole.
     The number problems we face are now hopeless. America will never be able to cover its current outstanding debt. We're effectively finished at all three levels: household, corporate, and government. Who, for instance, can really comprehend what to do about the number problems infesting Fannie Mae and the mortgages associated with her? There's really only one way out of this predicament: to get ready for a much lower standard of living and much different daily living arrangements. We can't wrap our minds around this, so the exercise du jour is to play games with numbers to persuade ourselves that we don't have to face reality. We're entertaining ourselves with shell games, musical chairs, Chinese fire drills, Ponzi schemes, and Polish blanket tricks (where, to make your blanket longer, you cut twelve inches off the top and sew it onto the bottom).
     Now that Newsweek Magazine -- along with the mendacious cretins at CNBC -- have declared the "recession" officially over, it's a sure thing that we are entering the zone of greatest danger. Some foul odor rides the late summer wind, as of a rough beast slouching toward the US Treasury. The stock markets have gathered in the critical mass of suckers needed to flush all remaining hope out of the system. The foreign holders of US promissory notes are sharpening their long knives in the humid darkness. The suburban householders are watching sharks swim in their driveways. The REIT executives are getting ready to gargle with Gillette blue blades. The Goldman Sachs bonus babies are trying to imagine the good life in Paraguay or the archepelego of Tristan da Cunha.
     While extremely allergic to paranoid memes and conspiracy theories, I begin to wonder about the impressive volume of World Wide Web chatter about an upcoming bank holiday -- meaning that the US government might find itself constrained to shut down the banking system for a period of time to deal with a rapidly developing emergency that might prompt the public to make a run on reserves. God knows, there are enough black swans crowding the skies these days to blot out the sun. I hesitate to suggest that readers who are able to should consider stealthily withdrawing a month's worth of walking-around money from their accounts.
     The week past, some so-called "conservative" political action groups (read: brownshirts pimped by corporate medical interests) trumped up a few incidents of civil unrest at "town meetings" around the country, ostensibly to counter health care reform ideas. The people behind these capers may be playing with dynamite. It's one thing to yell at a congressman over "single payer" abstractions. It'll be another thing when the dispossessed and repossessed Palin worshippers, Nascar morons, and Jesus Jokers haul the ordnance out of their closets and start tossing Molotov cocktails into the First National Bank of Chiggerville.