Category: Economy

“The mother of all bubbles” and why this election is denying the inevitable

[video link]

At some point in the not-distant future—quite likely, during the next four years—the mushrooming impacts of climate change will rudely demolish the complacent edifice of denial that characterizes current political discourse. At that point, Americans will be asking questions like, “Why haven’t you done anything about this?” or, “Why is God punishing us?”

Send in the scapegoat.

Under the circumstances, picking a favorite in this race is a sucker’s game—even if one of the political parties is in some ways more delusional and opportunistic than the other, and even if one of the candidates seems more intelligent and public-spirited than his opponent. Choosing the better president won’t prevent further economic decline. Nor will blaming the scapegoat-in-chief offer any tangible relief when prosperity doesn’t return. The only way we can make things go better is to acknowledge reality and adapt to it. Since we’re not likely to get much help along those lines from our political leaders, it’s really up to us.

via Scapegoat-in-Chief: The Race for the Oval Office.

Making a difference: knowing you are on the right path


I’m a fan of David Korten, who has an uncanny ability to model economic worldviews very clearly. He has updated Agenda for a New Economy: From Phantom Wealth to Real Wealth, which includes the following sign-posts of difference making behaviors.

5 Ways to Know if You’re Making a Difference :: Excerpt from the 2nd Edition of Agenda for a New Economy by David Korten:

To bring down the institutions of Empire, we must begin to build the rules, relationships, and institutions of a New Economy. These must be lived into being from the bottom up.

So how do you know whether your work is contributing to a big-picture outcome? If you can answer yes to any one of the following five questions, then be assured that it is.

1. Does it help discredit a false cultural story fabricated to legitimize relationships of domination and exploitation and to replace it with a true story describing unrealized possibilities for growing the real wealth of healthy communities?

2. Is it connecting others of the movement’s millions of leaders who didn’t previously know one another, helping them find common cause and build relationships of mutual trust that allow them to speak honestly from their hearts and to know that they can call on one another for support when needed?

3. Is it creating and expanding liberated social spaces in which people experience the freedom and support to experiment with living the creative, cooperative, self-organizing relationships of the new story they seek to bring into the larger culture?

4. Is it providing a public demonstration of the possibilities of a real-wealth economy?

5. Is it mobilizing support for a rule change that will shift the balance of power from the people and institutions of the Wall Street phantom-wealth economy to the people and institutions of living-wealth Main Street economies?

Imitation is more than flattery


The following excerpt is from an excellent essay arguing for the economic virtue of copying. This is worth considering in light of the current anti-piracy mania dictating public policy around intellectual property. There is an ecological dimension to it, too: closed systems die, open systems evolve and prosper. I was thinking about what nature would be like if it were designed by the RIAA: The tree would sue the soil for growing new trees.

The Imitation Economy – The Boston Globe:

“But invaluable though innovation may be, our relentless focus on it may be obscuring the value of its much-maligned relative, imitation. Imitation has always had a faintly disreputable ring to it — presidents do not normally give speeches extolling the virtues of the copycat. But where innovation brings new things into the world, imitation spreads them; where innovators break the old mold, imitators perfect the new one; and while innovators can win big, imitators often win bigger. Indeed, what looks like innovation is often actually artful imitation — tech-savvy observers see Apple’s real genius not in how it creates new technologies (which it rarely does) but in how it synthesizes and packages existing ones.

The last decade has seen an explosion of copying in its various forms. Technology has made it easier to do everything from rip off a song to replicate the design of an engine, and rising powers like China and India are home to burgeoning industries dedicated to creating low-cost alternatives to cutting-edge, brand-name products, whether they’re cars, computers, or drugs. At the same time, researchers in the fields of biology, business, and economics are looking in detail at how and why and when copying works.

What some are finding is that it is a strategy that works much better than we think — whether for businesses, people, or animals competing in the wild. At its best, copying spreads knowledge and speeds the process by which insights and inventions are honed, eliminating dead-end approaches and saving time, effort, and money.”


I’m in the process of developing a malady called “astronautitis” in which I increasingly view the efforts to explore space a failure of imagination to find a way home to Earth. As Loren Eiseley argues in The Invisible Pyramid, the space program is not much different than the pharos trying to achieve immortality with their public works programs of yore. Eiseley goes as far to say that humanity is behaving like a slime mould in which it devours as much as possible before death so that it can shoot spores out into space in order to reproduce.

Anyhow, I like Dmitry Orlov‘s take on economics and observations about collapsing empires (Reinventing Collapse: The Soviet Example and American Prospects). What follows is a snip from his blog in which he discusses in an interview, among other things, the decline of technology as a result of resource depletion, and the fate of space programs.

ClubOrlov: Marketing in a Small Town – Interview No. 3:

DD: Recently on CNN there was a report about the U.S. mission to the moon. The Indians are planning to land there in 2020, the Russians and Americans in 2025, and the Chinese in 2030. I think that the popularity of conspiracy theories about the staging of those events is that we find it hard to imagine that we can not repeat the achievements of three decades ago without a huge effort. Meanwhile, examples similar to the lunar program are starting to occur more and more frequently. Experts say that Russia has lost the ability to produce modern weapons on a large scale for quite trivial reasons, such as lack of sufficiently skilled metalworkers, because the system of training them has collapsed. How justified are we in fearing that we (the world in general, not just Russia) are starting to slip back in time in terms of technology?

DO: In the end, the history of human trips to space will engender new myths: the primitive idols of the future will not be winged, but will sit astride rockets dressed in spacesuits. These trips were only possible thanks to large-scale industrial systems based on the use of fossil hydrocarbons, reserves which have already been exhausted, on average, about half. It will not be possible to exhaust them completely: the technological rollback has already started. It starts long before a particular resource is completely exhausted. To maintain homeostatic equilibrium, an industrial system requires a continuous flow of investment, and in order for this to happen capital must continually be created. If, say, the profitability of a coal mine is inversely proportional to shaft depth, it is enough to get to a depth at which the income is not sufficient to continue to update equipment, and the mine will close, regardless of how much coal there is left in it. But such a rational approach is rarely taken. Rather than make a difficult but timely decision, everyone begins to economize on safety, defer repairs, take on debt and so on. Periodically, the idea comes up that the situation can be improved if only everyone would show more zeal or ingenuity. We certainly all need some level of technology, and we all ought to stop to think hard which technologies can be sustained at a continually decreasing level of extraction of various natural resources. Instantly the thought occurs that aerospace technologies will not make it onto this list.

It takes a fake to know one

The first ad is the latest from Barclay’s Bank which seeks to distinguish itself from the financial fakers. Ironically, though, they seem to have aligned themselves with all the other sci-fi genre films dealing with false realities (such as Dark City, also posted above– see also The Matrix and Truman Show). The troubling thing for Barclay’s is that in all these dystopic scenarios, the only ones who have a grip on reality are the aliens, TV producers and machines with artificial intelligence. I guess this puts Barclay’s in like-minded company.

Sacred spaces of multinational cororpations


Jacqueline Hassink explores sacred spaces of multinational capitalism: boardrooms of banks and corporations, and fitting rooms of haute couture. The above image is from Nestle’s boardroom. What strikes me about it is the far wall, which is the old Mercator map projection originally designed for shipping. In essence it’s a colonial map because of the obvious distortion of land mass that makes Europe and North America far larger than the southern continents.

This is the map most of us are familiar with from school, but it’s probably the least relevant map we could study, except for historical context or as a sample for a kind of thinking. In recent years there have been alternative map makers that have tried to reflect accurate land mass or even turn the world upside down (my favorite) to illustrate that how we map the world is a matter of interpretation. Not surprisingly, Nestle’s boardroom reveals a lot about their colonial subjectivity, one based on what Vandana Shiva calls “monoculture.” Moreover, can you imagine a more sterile, disembodied space for decision making that impacts peoples in far off lands? Imagine the strange rituals practiced in this space of global command and control.

The end of capitalism?

David Harvey is one of my favorite scholars, and if your want a good (and short!) big picture view of the economic philosophy that got us into this mess, you can read Harvey’s Brief History of Neoliberalism. As for Laura Flander‘s interview style, I have always felt her tone to be a bit smug. I don’t think it reflects “our” side very well. Nonetheless, these are some important views you will certainly not hear on Mad Money!

Gloves come off: a rare example of media ethics

The Daily Show takes on CNBC. Thanks Peter!

Reorganizing collapse

A colleague said that Diamond got it wrong. Societies don’t collapse, they reorganize. Many of us have a hard time visualizing what that might look like. Enter Dmitry Orlov, whose books and articles have been predicting American collapse a la the Soviet Union. In a recent talk, he offers some interesting observations and advice. Many of the images he offers sound like science fiction– office buildings converted to dorms, parking lots turned into farms, freeways into water catchment systems. His most useful observation is that when society collapses, it doesn’t cease to function, it just does things differently. We’ll just have to see how that plays out.

Greening the ghetto

Van Jones is one of the most powerful speakers I’ve seen, and a brilliant thinker to boot (with a big heart), so it is with no trepidation that I recommend the following profile from the New Yorker.

I’m currently reading his new book, The Green Collar Economy, which is poignant call for turning the US economy around through the creation of green jobs (the “labor” kind). It’s abut time we made the green movement more colorful.

For more info, go to Green for All.

In the snip below, Jones gives his “street rap” to a group of kids.

The Political Scene: Greening the Ghetto: Reporting & Essays: The New Yorker:

“I love Barack Obama,” he said. “I’d pay money just to shine the brother’s shoes. But I’ll tell you this. Do you hear me? One man is not going to save us. I don’t care who that man is. He’s not going to save us. And, in fact, if you want to be real about this—can y’all take it? I’m going to be real with y’all. Not only is Barack Obama not going to be able to save you—you are going to have to save Barack Obama.”

Jones went on to discuss the crisis on Wall Street, the federal budget deficit—“We’re going broke by the second”—and how annoying it can be to listen to people who use a lot of fancy words. “People who know a lot talk weird,” he said. “So you can spend a lot of time listening to people who are educated, and all you get is frustrated, because what they’re saying doesn’t actually land with you. Well, boohoo. Get over it.”

Who said being a commie was bad?

The Commons:

In a perfect world, wealth–be it money, ideas or access to natural resources–belongs to all of us. But in our decidedly unjust and imperfect world, wealth is increasingly concentrated in the hands of a few. There is be a better way. The notion of The Commons–shared land, resources, or the knowledge passed down through generations–is a common-sense way to allocate our natural, cultural and intellectual riches.

Kunstler’s 2009 predictions

I’ve been reading Jim Kunstler’s Clusterfuck Nation blog for over a year now, and have found most of his predictions to come true. Most of what unravelled this Fall he wrote about last Winter. Thus, it is with little trepidation that I recommend last week’s column, despite the dire news it foretells. Better to be informed with a plan, than to be caught flatfooted. Read on and plant your gardens.

Clusterfuck Nation by Jim Kunstler:

The big theme for 2009 economically will be contraction. The end of the cheap energy era will announce itself as the end of conventional “growth” and the shrinking back of activity, wealth, and populations. Contraction will come as a great shock to a world of conventionally programmed economists. They will toil and sweat to account for it, and they will probably be wrong. Unfortunately, this contraction will do its work in unpleasant ways, driving down standards of living, shearing away hopes and expectations for a particular life of comfort, and introducing disorder to so many of the systems we have depended on for so long. People will starve, lose their homes, lose incomes and status, and lose the security of living in peaceful societies. It will become clear that the Long Emergency is underway.

My hope for the year, at least for my own society, is that we will transition away from being a nation of complacent, distracted, over-fed clowns, to become a purposeful and responsible people willing to put their shoulders to the wheel to get some things done. My motto for the new year: “no more crybabies!”

Poverty (un)consciousness

Blog Action Day 2008 Poverty from Blog Action Day on Vimeo.

In my other life I’m a part-time DIY philosopher. So what follows is a short piece I wrote for Reality Sandwich (based on an earlier one I did for Blog Action Day– see video above) that deals with how think about poverty.

Reality Sandwich | Poverty (Un)Consciousness:

Sufficiency is a spiritual issue. Like the ideology of the capitalist system, are we always aspiring to a better, utopian future rather than being grateful for what we have? This is a core issues for well-being. I once participated in a “prosperity group,” which was a weekly gathering of friends (mostly folks from my yoga class) who wanted to read a “channeled” book, Creating Money, and to do the exercises together (it’s a great book, BTW). I realized rather quickly that most people in the group would never transcend their state of “poverty,” because they were spiritually impoverished. That is, they believed that their lives lacked sufficiency in that moment, and would always be trapped on the treadmill of negative thinking about their present state of being. I don’t mean this in “The Secret” kind of way in which positive thinking is your answer to wealth, but in the sense that we are constantly projecting into the world like a waking dream the innermost challenges at the core of our being. We constantly seek healing, and sometimes we externalize from our inner depths that which cannot be articulated by the egocentric mind.

Scorched earth economic calculous


Click this thumbnail for Calvin’s economics tutorial

Part of the crazy economic math of our system is to externalize costs as much as possible in order to make products affordable to us average Josephines. This means that we often do not pay the true cost of what we buy, such as the price of labor that is exploited from displaced populations, pollution on society, and most of all, the services provided by the environment, such as the energy that we freely exploit without replenishing. Oil is a million year bank account of solar energy deposits that is not easily replenished within the crash and burn cycles of the market. If we were to factor in all these “externalized” costs, our patterns of consumption would surely change.

If the current bailout goes through as planned, Wall St. will raid the US treasury, and hence your pocketbook, because the cost of the bailout is being externalized to the seventh generation, including your grandchildren’s grandchildren. What will this grandiose delusion mean for the environment? I’m not sure yet, but I’m quite certain that if you, the nobel tax paying citizen who grants these corporations the right to do business, is not off limits from the the utter greed of these voracious bankers, imagine how the “treasury” of nature will be viewed, especially considering the need to quickly raise capital to pay off abstract debt. Mow down a forest to shore up capital? No problem.

The crisis of 9-11 created an opportunity to reevaluate our lives and our relationship with the world. For some it changed their reality so as to appreciate life and family more. For others, it solidified their worldview, and further intrenched a militarized feedback system (the snowball effect of war and terrorism) so as to do the opposite of change: it intensified the status quo by intrenching the military industrial complex. Will Capital do the same? Or is the game truly over? I hope there are some sensical people out there who understand that the major theories about economics are failing the same way that the neocon philosophy of empire is crumbling one car bomb at a time.

The ethical imperative of media is to finally deal with the situation for what it is: we are living in a dying empire with all its assumptions expoloding around us. I’m doubtful the Denial Generator will do much to change course, but you can. By example you can change and influence those around you. I hope you will.

Thanks for putting my grandchildren’s grandchildren into debtor’s prison

Capitalists today are singing the praises of Bush’s socialist gift. How ironic.

The 700 billion dollar bank bailout makes me so nauseated I had to create a new category for my blog: “evil.” I don’t normally believe in such a thing, but this is really the final sign that Bush and Co. have stuck Adam Smith’s magic finger into the you-know-what of the seventh generation born after today. The good news is that tax payers will not have the money to pay off this criminal debt anyways, so say goodbye to the Empire. I mean it it. Stick a fork in it now, and then buy some futures to profit on its death.

PS Thank the Great Whatever that there are smart people like Glenn Greenwald who can articulate what is so painfully obvious. Read on and weep.

The complete (though ever-changing) elite consensus over the financial collapse – Glenn Greenwald –

What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism — where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We’ve retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded.

More amazingly, they’re free to walk away without having to disgorge their gains; at worst, they’re just “forced” to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake going forward doesn’t resolve that concern; why should those who so fantastically profited from these schemes they couldn’t support walk away with their gains? This is “redistribution of wealth” and “government takeover of industry” on the grandest scale imaginable — the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That’s all this is; it’s not an “investment” by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren’t.

Greenwald goes onto point out that there is no debate in the press concerning this final kleptocratic theft on behalf of Wall St. I just want to point out the obvious: corporate media is a glorious twinkling denial machine. They are terrified to undermine their foundational reality. Poor suckers, really. I admit, I’m not feeling so compassionate at this moment. So please excuse me as I fall of the Dharma wagon right now and scream out into the universe: WTF!!!!!!!!!!!!!!!

Ack! And now this from the same Greenwald article:

UPDATE: Here is the current draft for the latest plan. It’s elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled “assets”) [Sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [Sec. 10]; and (3) best of all: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency” [Sec. 8].

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.