Thursday, February 19, 2009

Think It's Tough All Over? Think Again...

The quote of the day/week/month/year, or whatever, comes to us from the sane and sober nation of Sweden, whose industry minister, who goes by the most wonderful name of Maud Olofsson, in response to the giant bankrupt automaker GM's threat to shut down its Swedish subsidiary, Saab, unless the Swedes fork over massive government aid, as the so-called leaders (who, needless to say, are not worthy of the name) of the Empire of Sorrows have given, without question or mutter of protest (ok, they muttered, but they did it anyway). Here it is:

"When I see that Saab has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use the taxpayers' money in this way. I don't think I was elected to do that." (emphasis Chaos')

A most refreshing take on the let's-throw-money-we-don't-have-at-companies-who-are-insolvent-and-have-no-way-of-returning-to-profitability situation, and Chaos will direct your attention to the fact that, once again, national and regional differences matter. They matter a great deal, and probably more so in times of global economic collapse. The entire idea that elected government officials are charged with acting in the public interest has gradually faded away in the Empire, so that this quote hits one with the force of a firehose.

Tuesday, February 17, 2009

More Disturbing Thoughts...

The economic debacle, the meltdown of laissez-faire capitalism, has reached the attention of those who try to control the uncontrollable, those who believe that force and violence are in fact, the answer to a great many questions, and those who have no understanding of what the terms "strength" and "power" really mean. We speak here, of those in charge of the military-industrial complex in the Empire of Sorrows, and lo and behold, here is a nice piece summarizing what these people are thinking, and we find: local and regional domestic "unrest," which of course must be met with, well, appropriate "measures" to beat it back. Suppression of rights, internment camps, and other rigidities inevitably follow. In other times, perhaps, this kind of outrageousness would remain on the down low, but when the already failed Administration of False Hopes has resorted to urinating away the future earnings of future generations by throwing said funds to the entities and elites who caused this economic meltdown, with scant regard for the vital needs of those who, if not already suffering, are scheduled to begin impoverishment soon, these topics become quite, shall we say, relevant to today's conversation. Read and enjoy...

Wednesday, February 11, 2009

The Thoughts We Cannot Think: Sharon Astyk

Sharon Astyk is a farmer and blogger, eloquent beyond measure, and should be read by all. Her latest piece captures perfectly the dissonance between the business as usual crowd (which, by the by, includes most of us) and the newly emerging way of doing things, which of course will change everyone's life, for better or worse. If you thought reading and thinking about peak oil and then going out into suburban America produced some dissonance, check out the economic scene, where pronouncements from high officials and financial pornography sites like CNBC are contrasted with the realism of, for example, The Automatic Earth.

Tuesday, February 10, 2009

So Long, Farewell, Auf Wiedersehn, Goodbye...

In light of recent economic events, we here at the Edge must regretfully bid goodbye to two of our longtime links, based on irrelevancy.

Andrew Tobias is a longtime author and has had several very helpful financial ideas which has made Chaos slightly more wealthy in the past. The combination of the US presidential election (Tobias is a hardcore Democrat), and the black swan of 2008, the economic debacle, have reduced this poor man to partisan sniping, cheerleading for the current administration, and starry-eyed techno-fantasies a la Ray Kurzweil. Really, there is now very little benefit to reading such a person, unless you like studying it for sociological purposes. Today's column is a perfect example; after months of boundless optimism, he finally capitulates. Adios, Andy...

Scott Burns has had quite a few interesting columns in his many years of writing, in addition to the very useful book or two concerning the profligate growth of Social Security and Medicare. Alas, this person was also apparently blindsided by the current economic crisis, and has little to offer anymore beyond platitudes. "It's only money," true, but not terribly useful, and that pretty well describes his latest few columns, along with an infuriating tendency to equivocate on whether deflation is coming (hint to Scott: it's already here).

Chaos cannot in good conscience recommend these two any longer; they simply have been eclipsed by current events.

Wednesday, February 04, 2009

Yet Another Explanation of the Economic Predicament

As we all know by now, a predicament differs from a problem in that there are no solutions to a predicament, merely responses. To Chaos' mind, the current economic debacle is really in fact just another predicament, in the same way that peak oil and other manifestations of limited planetary resources are all predicaments rather than problems. Viewed in this light, the mighty efforts to solve them are futile to some degree or other, since those proposing them lack the understanding of what is being faced. We do, however, enjoy expanding our understanding of how we got here and what we can expect (or more properly, what not to expect, and here we mean why returning to the past is impossible). To that end, please consider this piece from previously unknown to Chaos blogger Dan Lindorff (quoted in full to relieve readers from clicking a link):

"President Barack Obama and his economic team are being careful to couch all their talk about economic stimulus programs and bank bailout programs in warnings that the economic downturn is serious and that it will take considerable time to bounce back.

I’m reminded of an experience I had with Chinese medicine when I was living in Shanghai back in 1992. I had come down with a nasty case of the flu while teaching journalism at Fudan University on a Fulbright Scholar program. A Chinese colleague suggested I go to the university clinic. When I told him there wasn’t much point since doctors couldn’t do much for the flu besides recommend fluids and bed rest, he said, “That’s Western doctors. You could go to the Chinese medicine doctors at the clinic. They can help you.” I figured, what the hell, and we went. The doctor inquired into the lurid details of my illness—how my bowel movements looked, the color of the mucus in my nose, etc. He didn’t really examine me physically. Then he prescribed an incredible number of pills and teas and sent me home with a huge bag of stuff, and instructions on the regimen for taking them through the course of each day. I followed the directions dutifully, and my colleague came by each day to check on my progress. By the fifth day, when I was still running a fever and feeling terrible, I told him I didn’t think the Chinese medicine was working. He replied confidently, “Chinese medicine takes a long time to work.”

I laughed at this. “Sure,” I said. “But the flu only lasts a week or so, and now, when I get better, you’ll say it was the Chinese medicine, right?”

He smiled and agreed. “Yes. You are right.”

Obviously the Obama administration recognizes that it needs to keep the finger of blame for the current economic collapse squarely pointed at the Bush administration, which is certainly fair in large part (though the Clinton deregulation of the banking industry played a major part in the financial crisis and its enthusiastic promotion of globalization began the massive shift of jobs overseas that has left the nation’s productive capacity hollowed out). But it also seems to recognize that it cannot tell the bitter truth, which is that our national economy will never “bounce back” to where it was in 2007.

America, and individual Americans, have been living profligately for years in an unreal economy, propped up by easy credit which inflated the value of real estate to incredible levels, and which led people to spend way beyond their means. Ordinary middle-class working people have been encouraged to buy obscenely oversized homes at 5% down, or even no down payment. They have been lured into buying cars the size of trucks, one for each driving-aged member of the family (in our town, so many high school kids drive to school that the school ran out of parking spaces and the yellow school buses, largely empty on their runs, are referred to by the students as the “shame train,” an embarrassment to be seen riding). They’ve installed individual back-yard swimming pools, unwilling to share the water with their neighbors in community pools. Boring faux ethnic restaurant franchises of all kinds have befouled the landscape, filling up with families too stressed out to cook, and willing to endure over-salted, over-priced and tasteless cuisine and tacky plastic d├ęcor night after night.

Now this is all crashing down. Property values are in free-fall. Car sales have fallen off a cliff. Joblessness is soaring (At present, it’s approaching an official rate of 8%, but if the methodology used in 1980, before the Reagan administration changed it to hide the depth of that era’s deep recession, were applied, it would be 17% today, or one in six workers).

Eventually, the economic slide will hit bottom and begin its slow climb back, as all recessions do, but there will be no return to the days of $500,000 McMansion developments, three-car garages and a new car every two or three years for both parents plus a car for each highschooler. Not only will banks no longer be able to offer such credit to clients. People, having been burned, will not be willing to borrow so much. Company health care benefits, pension programs or 401(k) matching programs that were slashed during this downturn will not be restored when the economy picks up again.

Over the last 20 years, America has degenerated into a nation of consumers, with 72 percent of Gross Domestic Product (sic) now being accounted for by consumer spending—most of it going for things that are produced overseas and shipped here.

That is not an economic model that is sustainable, and it is a model that has just suffered what is certainly a mortal blow.

What we are now seeing is the beginning of an inevitable downward adjustment in American living standards to conform with our actual place in the world. As a nation of consumers, and not producers, with little to offer to the rest of the world except raw materials, food crops, military hardware and bad films (none of which industries employ many people), we are headed to a recovery that will not feel like a recovery at all. Eventually, productive capacity will be restored, as lowered US wages make it again profitable for some things to be made here at home again, but like people in the 1930s looking back at the Roaring 20s of yore, we are going to look back at the last two decades as some kind of dream.

It would be better if the new administration would be honest about this, because with honesty, we could have a recovery program that would actually address the real critical issues facing the country—the decline of our educational system, the irrationality of official promotion of home ownership that has led to the proliferation not just of suburbs but of exurbs, the over-reliance on the automobile for transportation, the unprecedented waste of resources, the pillaging of the environment, not to mention the decimation of the retirement system and the creation of a vast medical-industrial complex that is sucking the life-blood out of families and businesses alike.

With honesty, we could also confront the other big obstacle to national recovery—the nation’s obsession with militarism and foreign wars. The honest truth is that the US is technically bankrupt and in a state of chronic decline, and yet the nation persists in spending a trillion dollars a year on war and preparations for war, as though America were in mortal danger from foreign enemies.

The truth is that we are not threatened by Communism, by drug lords, or by Muslim Jihadists in any serious way. Rather, we have become our own worst enemy.

The administration could start by telling us all this straight up, but the problem is, most of us probably don’t want to hear it, which explains why we’re not hearing it. It also explains why we’re about to blow another trillion or so dollars on propping up failing banks, funding pointless highway and bridge construction, and blowing up illiterate peasants in remote places like Afghanistan and Pakistan.

Indeed. Nicely said.

Sunday, February 01, 2009

The Cure That Kills: Shopping Shopping Shopping

If you are puzzled about how the US economy suddenly found itself going over a cliff, but are disinclined to read detailed and technical accounts like this one, check out this finely written piece in today's paper of record. Focusing on the outlandish bastion of overconsumption, the Mall of America, where upwards of 5000 couples have gotten married in the last 10 years, this account is a fine exploration of how the downturn, otherwise known as a depression, will force the culture of shopping to end. Truly, the US public's attachment to huge centers of consumerism is over; these people just don't realize it yet. There are few better uses of your time than to peruse this, and ponder the implications...

Change You Can Believe In...Not

Periodic Special Torture Edition:

Item: President Obama preserves the right of the CIA to outsource torture, i.e., the euphemistic "extraordinary rendition," in which agents kidnap "suspected" terrorists, and transport them to countries who are willing and able to torture them at the US' behest. The mangling of the language to accomodate the conduct is notable:

"The role of the CIA's controversial prisoner-transfer program may expand, intelligence experts say." (emphasis Chaos')

Oh, and even better news: the US may "expand" the program. Nice. No, Chaos has no reason to change the belief that the US has become a rogue nation. For more, check out this one, an up close and personal look at the US military's torture school, which of course remains open (the writer of the piece calls for its closing: fat chance).