JHK’s Three-Act Play
Just published at Chris Martenson’s Peak Prosperity website.
That it hasn’t happened yet doesn’t mean you’re wrong….
It’s nerve-wracking to live in the historical moment of an epic turning point, especially when the great groaning garbage barge of late industrial civilization doesn’t turn quickly where you know it must, and you are left feeling naked and ashamed with your dark worldview, your careful preparations for a difficult future, and your scornful or tittering relatives reminding you each day what a ninny you are to worry about the tendings of events.
Persevere. There are worse things in this life than not being right exactly on schedule.
Two simple words explain why more robust signs of an economic collapse have hung fire since the tremors of 2008: inertia and fraud. Never in human history has there been such a matrix of complex systems so vast, dense, weighty, and powerful for running everyday life (nor a larger population engaged in it). That much stuff in motion takes a while to slow down. The embodied energy has kept enough of it running to give the appearance of continuity. For instance, agri-biz still sends its amber waves of grain and tankers of corn-syrup to the Pepsico snack-food factories, and the WalMart trucks still faithfully convey the pallets of Cheetos, Fritos, Funyons, and Tostitos from the Pepsico loading dock to the big box aisles of glory. The freeways still hum with traffic even though oil is pricey at $100 a barrel. The lights stay on. The gabble and blabber of Cable TV continues remorselessly in the background of life. All of that is due to inertia. It gives the superficial impression of the old normal carrying on. Things go on until they can’t, in the immortal words of Herb Stein
The fraud is present in the abuse and misrepresentation of official statistics used as metrics in government policy, in the pervasive accounting chicanery of that same government in its fiscal dealings, as well as in our leading financial institutions and corporations, including control fraud in banking, interest rate rigging, mortgage and title fraud, front-running, naked shorting, re-hypothecation, money laundering, pumping-and-dumping, channel stuffing, the endless innovation of swindles, and, most importantly, the fundamental mispricing of the cost of money, which reverberates through everything else, most particularly real estate, stocks, and bonds. Beyond that, in the shadows of the shadowland known as shadow banking, a liminal realm of secrets and intrigues, only a few are privileged to know what is going on, and you can be sure they only know their end of the trade — while immense sums of ever more abstract “money” slosh through the derivative sewers on their way to oblivion in the ocean of failed trust.
So, don’t feel bad if this colossal armature of folly still stands, and have faith that the blinding light of God’s judgment will eventually shine even unto the watery depths where failed trust has sunk. Sooner or later the relationship between reality and truth re-sets to the calculus of what is actually happening.
Meanwhile, the big questions worth reflecting upon are: What is the shape of the future? How might we conduct ourselves in it and on our way to it; and how will we think and feel about all that? It’s very likely that the journey to where we’re going will be rougher than the actual destination, once we get there. There is a hearty consensus outside the mainstream financial media and the thickets of academia that the models we have been using to understand the economy look more broken each month, and this surely adds to the difficulty of constructing our own mental models for how the everyday world of the years ahead will operate.
Some of the commentators in blogville and elsewhere like to blame capitalism. Capitalism is a phantom adversary. It isn’t an economic system. It isn’t an ideology, really, or a belief system. If the word means anything, it describes the behavior of accumulated surplus wealth in concert with the known laws of physics — the movement of energy through time and space — and the choices we make organizing society in relation to that. The energy is embodied as capital, represented in money for convenience. Interest expresses the cost of money over time and the risks associated with lending it. By the way, interest rates work the same way under all political systems, despite attempts in some societies to criminalize it.
During the high tide of the industrial expansion, when fossil fuels were cheap and we accumulated the greatest wealth surplus ever in history, humanity made some very bad choices, squandering this possibly one-time bonanza. We fought two world wars, and lots of wasteful lesser ones. Russia and its imitators attempted to collectivize wealth under gangster government and only succeeded in impoverishing everyone but the gangsters. America built suburbia and Las Vegas. The one thing that no “modern” culture did was plan for a future when the fossil fuel orgy and the techno-industrial fiesta might wind down, which is exactly the case now. Instead, we opted for the Julian Simon folly of crossing our fingers and hoping that some unnamed band of genius wizard innovators would mitigate the problems of resource scarcity and population overshoot just in time.
The demonizers of capitalism propose to remedy our compound predicament by just getting rid of money. But the idea of a human society without money leaves you either up a baobab tree on the paleolithic savannah, or in some sort of Ray Kurzweil techno-narcissistic masturbation fantasy multiverse with no relation to the organic doings on planet earth. I suspect as long as there are human societies there will be things to exchange that have a quality we call “money,” and as long as that’s the case, some individuals will have more of it than others, and they will lend some of their surplus to others on terms. What most people call capitalism was a model of economy derived from a particular transitory moment in history. It seemed to describe reality, but after a while it didn’t because reality changed and it was, finally, just a model. Nothing lasts forever. Boo-hoo, Karl Marx, J.M Keynes, and Paul Krugman.
What’s cracking up first is the complexity and abstraction of our current money operations, sometimes loosely called the financialized economy. If we blame anything for our problems with money, blame our half-baked attempts to mitigate the wind-down of the techno-industrial cavalcade of progress by issuing ersatz surplus wealth in the form of debt — that is, promises to fork over hypothetical not- yet-accumulated wealth at some future date. There are too many promises now, and too few trustworthy promisors, and poor prospects for generating the volumes of wealth as we did in the recent past.
The hidden (or ignored) truth of this quandary expresses itself inevitably in the degenerate culture of the day, the freak show of pornified criminal avarice that the USA has become. It only shows how demoralizing our recent history has been that the collective national attention is focused on such vulgar stupidities as twerking, or the Kanye-Kardashian porno romance, the doings of the Duck Dynasty, and the partying wolves of Wall Street. By slow increments since about the time John F. Kennedy was shot in the head, we’ve become a land where anything goes and nothing matters. The political blame for that can be distributed equally between Boomer progressives (e.g., inventors of political correctness) and the knuckle-dragging “free-market” conservatives (e.g.,money is free speech). The catch is, some things do matter, for instance whether the human race can continue to be civilized in some fashion when the techno-industrial orgy draws to a close.
In Part 2: How Life Will Change, we sort out the new operating principles that will matter more in the future than the trash heap of current cultural norms. The society that emerges from the post-growth economy will surely require a new moral compass, a set of values based on qualities of behavior and things worth caring about — as opposed to coolness, snobbery, menace, or power, the current lodestars of human aspiration.
Click here to access Part 2 of this report (free executive summary; enrollment required for full access).
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Jim,I like your description of Capitalism.
You addressed inertia in your forecast for this year. I’ll respond now with my response then.
The guy who writes The Hipcrime Vocab blog compiled a list of phenomena that show that the smaller things are adding up. Suburbia is foundering, people are moving back into cities, people are driving less, the average age of cars is increasing, and grad students are giving up on their advanced degrees and taking up farming. You should take a victory lap on those. I reproduced that list over at The Archdruid’s blog on New Years, and his response was that it was “not half bad.”
http://crazyeddiethemotie.blogspot.com/2014/01/a-conversation-with-archdruid-about.html
As for the fraud, in “Like Your Hair’s on Fire,” you thought after viewing “Breaking Bad,” that you had figured out that criminality is part of “who we are.” I responded that it wasn’t just on television that this trait of Americans came through. It was also in the Academy Award nominated films. I followed through with that thought and figured out that crime indeed pays in Hollywood, at least if it’s part of the plot of an award-nominated film.
http://crazyeddiethemotie.blogspot.com/2014/03/crime-and-injustice-among-oscar-nominees.html
The guy in the picture is a dunce, not an American Psychopath. The 1980s resembled an orgy in a lot of economic and political ways:
Bring down the Cold War walls
Peak suburbn cluster
Pepsi vs coke and Doritos vs. lays
Technonarcism is born
Madmax alternate realities based on recycled waste
If someone tells you collapse isn’t happening, it’s due to survivor’s bias. There is a portion of the United States population where people have decent jobs, live in big houses, and go on European vacations. Because these people have been able to survive through their talents, social networks, or sheer dumb luck doesn’t mean that collapse isn’t happening for the larger number of people who haven’t fared as well – or that it won’t catch up with them eventually.
The majority of Americans are no longer Middle Class, most young graduates are trapped in a lifetime of debt, white people aren’t having children, and our civil liberties have been taken away by an out-of-control security state. So, yeah, I’d say collapse is happening. And we should remind ourselves that until about 1988 or so, you could live a decent working class life if you flipped burgers for 40 hours a week – you’d have a 2-room apartment, a used car, health care, and even a family if you wanted. Around 1992, college students started returning home in droves because suddenly, even entry-level professional jobs no longer paid enough to live on. Whole occupations (journalism, social work, education) that were once considered essential to the functioning of our society have been obliterated because they no longer pay enough to attract talent – and as we see in the horrible mis-reporting about Ukraine, our society is paying a HUGE price for letting professions like journalism slide into the abyss. The disappearance of these jobs – while college graduates desperately try to find high-tech jobs which are themselves vanishing overseas – is a symptom of our society’s necrosis.
So why aren’t we living an episode of the Walking Dead yet? In part, because there’s nothing on the scene to offer an alternative to the way we live. We’re in a slow grind to the bottom, but we don’t have a sudden collapse because there’s no Communism or other movement to inspire a revolt. No one is going to light the shopping malls on fire or launch a paramilitary assault on Fidelity headquarters. Such actions are useless. And while we have adversaries overseas, no one in America is going to sign on to radical Islam or Russian nationalism. Despite the shrill prognostications of Liberals that Pentecostals are going to rise up and impose a Puritan-style theocracy, the “Religious Right” instead opted for Joel Olsteen-style self-help gurus.
As long as there is no alternative vision for how society to run – no movement that can attract young, energetic, angry people willing to die to do away with the current system and implement a new one – society will not “collapse.” It will simply fade, each year getting tougher, people become more competitive and willing to back-stab, cheat, sleep with bosses, or do whatever it takes to hold on to good jobs, more people falling out of the Middle Class, more mortality from poor healthcare and suicides, and more fudging of the official statistics, until we turn around one day and see our society has become like Russia in the years following the Soviet Union’s fall. And there will always be wealthy investors living in isolated communities of wealth and affluence who think everything is going great – don’t expect zombies to overwhelm Dover, Massachusetts.
Nice post. Thanks.
yes. and that group buys their gas from shell. here is what shell proposes for the near future on its website:
Mountains
The first scenario, labelled “mountains”, sees a strong role for government and the introduction of firm and far-reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources – making it the largest global energy source by the 2030s – and accelerate carbon capture and storage technology, supporting a cleaner energy system.
Oceans
The second scenario, which we call “oceans”, describes a more prosperous and volatile world. Energy demand surges, due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2070s solar becomes the world’s largest energy source.
notice they propose to countries including Russia and brazil that they should invest in natural gas over the next 15 years and solar over the next 55…when everyone at shell now will be retired.
SHELL asserts:
Generally, the major fast-emerging economies learn from bad examples and take steps to avoid these problems, and are able to conduct reforms and reset political norms without collapse.
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The fraud is present in the abuse and misrepresentation of official statistics used as metrics in government policy. Thanks for sharing.
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