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Tuesday, November 26, 2013

Gobble Gobble Roil and Wobble.

Facing Extinction with Distinction.

Pictured above is this year's Thanksgiving card. I've been making and printing my own cards for decades now. The original intent was to send a personal card that had something of myself in it as opposed to the soulless products of Howlmark, oops, I mean Hallmark. Howlmark was what I named the production Company that printed them (ie, me). Complete with Logo:

What that entailed in those days was copying them on a color copier, which I had to purchase, because, at that time, Kinko's wouldn't allow their customers, as a result of government diktat, to use their color copiers, and to make a card required more instructions than was really feasible to go over with an impatient and harassed clerk. When I asked what the reason for this was, they told me that the government was afraid of someone using the copiers to make currency, to which, astounded, I queried, "So since when did you become agents of the Treasury Department?"

So I bought a color copier. It's embarrassing to admit it, but I paid $3300.00 for this marvel of technology which I still have in my cellar, as well as a copy of the bill, which I have to look at to ensure myself that it really did cost that much. Of course, today, just one of the color cartridge costs more than the price of a printer, so another piece of operational machinery sits idled replaced by a much cheaper, in every meaning of that word, color printer.

The printer is much more versatile, coming, as you know with a color copier and fax (what's a fax, right?) capability packaged together in one unit. Well, and this is the point of my post, what is now up to three other units, all of them in various states of disrepair. The Xerox printer I won't really count, (but its is still mechanically capable of dot matrix printing), an HP 2000C, which is also in perfect working order, but was no longer supported once I  upgraded to XP (yes that's right, I'm still on XP, but support for that, I've heard, is going away in March/April 2014), another brand, which I don't remember, but it lost one of its functions, so I purchased another HP, as I find their quality pretty good, and they can take the heavy stock paper I use to print the cards on, this one an Office Jet 5780 all-in-one, that I still use for scanning, but the print function is iffy, especially in color. Unless I use it every week or so (and I can go months without needing to print anything) the color cartridges simply dry up and won't print without much travail on my part, so I was grateful when I received the gift of a used, but far superior, machine in the guise of another HP, this one a Photosmart 2610, which, after a couple of years of sporadic holiday printing, has now decided that it won't feed paper anymore, but crumples it up into useless paper jam instead.

The scanning function still works, so now I have 3 scanners (I also had an HP scanner that died, but luckily, by the time it died, every printer pretty much included one for less than the price of the original scanner). Now, the printing function of the 2610 probably still works, but, despite having just paid half the price of the printer for their multi-color print cartridge, (which means you can have a cartridge that has run out of yellow, but has plenty of cyan and red left, but those ink supplies have to be thrown out unused as there's no way to refill just the yellow), I may never know if the printer still actually works, as the cost to have it repaired can easily very quickly cost more than the cost of a new and improved printer.

Now although I am in fact questioning the wisdom of continuing making and sending my own cards, the point of this post isn't that at all. It's instead to highlight the fact that in one of the most recent industries to appear on the industrial landscape, the one that was going to usher in the paperless office, has proven to be an ecological disaster of the highest proportion. Not because of my fecklessness, but because of the business model of said industry. Acceding to the theory that we are a market-oriented society, driven up against the wall by market forces, the decision that HP made in their manufacturing and pricing have directly to do with their, and the industry's as a whole, business models. And number one in that business model, and I speak not from rancor here, but from direct experience, as I was a Computer Engineer as well as peripherals technician, and a Network Support Engineer for almost my entire working career (but I can't, because of the design of said printer, even fix a paper jamming problem now), is the elimination of humans in the peripheral repair equation. In fact, as an AT&T tech, we never even worked on the printers, unless they were band printers; if the customer had a maintenance contract, we swept in swapped out and shipped off their old printer replacing it with a 'new' (ie reworked) one.

This fact, coupled with the necessity of getting the unit cost of the initial purchase price down below the cheap competitors' models, required stealth technology of a different kind. This stealth was of the sort I mentioned above, whereas cartridges cost more than the printer, and then moving further into the evolution of stealth charges, moving all the print cartridges into one, so that the purchase price was not only obscene, but wasted toxic chemicals, unavoidably, which is to say, by design, because you will ALWAYS run out of one color before the other two are gone.

And this is only printers. You know yourself that every electronic device on sale in the Marketplace right now uses the same wasteful toxic-laden business plan to increase sales and lock customers into their products so as to gouge them for future purchases in order to keep their current one in working order. The result of this orgy of production is that the resultant electronic garbage is choking every ecological system on the planet, and, because no company's bottom line need concern itself with e-waste, except as a lame PR ploy, it will never be addressed, except, again, by tacking it on at some point in the future, to the consumers' price, via taxation or other creative avenue. 

Now you can argue that that's fine, but the problem is that, because it's not included in the price, but instead uses stealth procedures by which society eventually pays the cost, it means that the products that are the dirtiest and cause the most toxicity to the environment, as long as they are manufactured in to low-wage, low-regulation country, which thanks to anything-but-free trade, it is, has to be, following the harsh discipline of the market that forces good industries out and amoral, asset-stripping malevolent industries to the top of the ladder of success, are exactly those industries that are the most capable of pushing all of their expenses and clean-up operations onto the State, off of their books, and hidden from view.

But like all of Capitalism's imbroglios, this is never ever a subject of conversation among those who should be the most concerned: government officials. Because they are exactly the same people who those other 'people', called corporations, have paid off to cater to their needs in complete indifference to the needs of anyone else, let alone to the impacts on something as 'abstract' as the planet itself. Yet, somehow, to suggest this, something no one knows more than the most fervent Capitalists, and their paid-off scum, like Groveling Norquisling, is to be branded as some kind of commie pinko ... by those who are fervently literally anti-socialists. It is this dire strait, where we can talk about the destruction of the world with more freedom and less fear than we can talk about the mechanisms by which Capitalism is bringing about that destruction, that we now find ourselves inescapably trapped. The end result will leave us with less than something to have Thanksgiving about. But on we go.

Monday, November 25, 2013

Recovery in progress .... please wait.

While lying on my bed reading D.H. Lawrence's, "The Rainbow", in a position that was more in line with keeping the maximum of light on the page as opposed to comfort, as I feel that as long as natural light is available, it's best to delay putting on the electric, not only because the light, I believe, is easier on the eyes, but because, if the billions of other people in the world practiced just this modicum of discipline, then the tons of CO2 pouring into the atmosphere would be that much reduced, I looked out the window to observe two trees that stood against the darkening sky.

There was a light wind blowing, but from the motion of the taller, wispier-branched tree, you would have thought a gale was blowing. Right next to it the heavy dense stolid branches of a cypress pine barely moved as the scattered delicate twigs of the other tree whip-sawed around in what looked to be a frenzy of excitement.

As I gazed at this strange juxtaposition, it occurred to me that there was an analogy there. Because the stoic tree was a gymnosperm while the lithe, taller tree was an angiosperm. In the gymnosperm family are included both conifers and ginkgoes, both ancient, as the ginkgoes, for example, co-existed with the dinosaurs, whereas the Angiosperms are more recent, and includes all the flowering plants, many of which have not only adapted to the presence of motile animal life, but actively uses it for their propagation and dissemination of their seeds.

What this reminded me of was the opposing forces of liberalism and conservatism. The rock of tradition and ancient ways of doing things being constantly whipped by the winds of change, yet stands solid and firm while the liberality of seed production amongst the angiosperms gives life more divers way of taking advantage of every nook in the environment that is capable of sustaining life.

In this, nature's scenario, there isn't a pitched battle of who wins and then takes all, but a constant ebb and flow as conditions become more set, the old ways settle down into a pattern, as the conditions become more volatile, it is the fleet of foot and the quick to adapt that rule the day.

This is analogous to the economic forces either at the Fed represented by inflation hawks and doves, in the Congress by fiscal liberals and conservatives, or internationally, by German austerity and Keynesian demand-stimulating deficit-spending advocates. All of whom clamor for the same thing: a recovery.

But much of the recovery programs sound just like the similarly named drug and alcohol detox clinics called Recovery Houses, that have become a cottage industry in Southern California's sun-besotted southlands. They even use much of the same lingo and have the same problems with balancing survival of the patient with using measures that are enabling to the bad habits that got them strung out in the first place.

Just as me and other bloggers, journalists, and even  Congressmen can advocate one solution or another, cold turkey , for example, allowing deflation to go its course so as to put an end to the malinvestment that's throwing good dollars after bad, wasting all the productivity of an entire hyper-energy-consuming economy by pouring them into investments that are not only deleterious in the short run, albeit stimulative of a deadened demand (if surrounded be sea water, a thirsty man may drink of it though fully knowing it will eventually kill him), but can only lead to collapse in the long run. Contrarily, Keynesians may be correct that infrastucture investment is vital, but with global warming all but certainly caused by the pouring of millions of tons of CO2 at an accelerating rate into the atmosphere, perhaps taking all the earnings of the future and putting them into road construction and repair, facilitating the very bane that's responsible for the overheating of the troposphere in the first place, isn't the way to recovery, but, as in any addiction, is merely building a road to perdition and leaving no resources left with which to change course. Or, in the language of addiction, enabling that very activity which is killing the patient.

However, what Bernanke has to deal with that his critics don't, is keeping the patient alive. So while the friends of a drug-addicted person may easily counsel the parents to let their child "hit bottom", and that may in fact be the only way for them to turn their life around, the fact of the matter is that that particular cure has been known to kill many of the patients it's used on. So, great! The cure worked, but the patient died. Thus with austerity. We can start anew and have a spanking new economy that responds more directly to demand in the economy to stimulate the formation of businesses that more efficiently respond to that demand, but what if half of the citizenry has dropped dead from starvation or lack of health care in the meantime? We armchair critics need not worry if our ideas would leave half the population toast, but the Bernank does.

So, as it seems, as evidenced by the two trees bearing their loads in the same winds with completely different responses, yet coexisting, we need to address the problem of what caused our economies to fail so massively and to recover so limply. To allow those forces that stand for conservation look into themselves and see that, like the beetle eating its way through the conifer forests of the American West, there is a sickness burrowing at their innards leaving a seemingly strong husk on the outside, but hollowing it out to a diseased center that must be stopped if survival is to be expected.

The thin tree represents those forces for change beating against the staid facade of the cypress, in full knowledge of the rot that's going on within. Those whipping branches remind me of the cry for revolution so glibly being thrown about even as we see the insanity of such a path tear Syria to pieces and spill over into the surrounding countries. Is that really what we want? Have we really reached such a point that the only solution we can come up with is dissolution? Where we think it's more expedient to rave about murdering one another (because that's what revolution means), than talking to one another?

Like the parents of the drug addict, both of the solutions for recovery, whether austerity or permissiveness, threatens to kill the patient because we have decided to impose those solutions onto the sufferer without bothering to delve into the reasons our child (as the economy is a living entity too), succumbed to addiction and drug abuse in the first place. The reason for avoiding such an obvious path is that what such investigation must reveal is that the fault, dear Brutus, lies not with the stars, but with ourselves. We all have pet beliefs and comfie lives we don't wish to see disturbed or inconvenienced, never mind uprooted and destroyed, simply because the decisions we've made over the last generations have been destructive on a scale unknown to any extant form of life on the planet.

But if we don't get serious about confronting our demons, they will consume us, and the resultant hell we are left to live in will be no less horrific simply because it was one of our own making.

Friday, November 22, 2013

It Ain't over Until the Well-FED-Lady's Yellen.

In a post in the CBB on, Doug Noland prints some of the Senate interview of the soon-to-be Fed Chairman, Janet Yellen, who, in my personal opinion, is in turn playing the same part for the Bernanke Fed that he played for the Greedsfan: ushered in right before the periodic collapse takes place so as to allow the Maestro, numero deux, to leave with his reputation remarkably untainted, even though he brought about, once again, the world's biggest financial catastrophe, isolating millions more in job limbo, which means premature deaths by the millions, as in the former USSR, as no job means no home, no health insurance, which means no health care.

But what the heck. At a quarter of a million dollar paycheck, amounting to a cool million for a 4year term, who cares? And that's just the nominal salary, counting none of the perks that jerks in government 'service' serve up to themselves.

One of the terms used in the interview over and over is "Financial Stability". How it is the Fed's job, as it increases its balance sheet using the same concept of SIV's that Enron employed and was later adopted by the same banks who constructed it for the Oil services giant (there's that word service again ... whether it's politics, the military or the banks, whenever you hear that term, just open your wallet and empty it out, because all service providers demand HUGE tips) in the first place, to ensure such stability.

Yellen then states, in literally the same breath that, "Low interest rates (yes those low interest rates promulgated by ...hmmm, oh yeah, the Fed) can induce risky behavior", because, as we all know, stability and risky behavior always go hand in hand. She then assures the panel that the Fed under her, will be especially watchful of the largest institutions, those threatening financial instability the most. She fails to mention that those institutions' size is a function of the Fed and the Federal government that abetted their getting so huge in the first place so as to allow them to compete with the European Banks, even though every European bank is teetering so precariously on the edge of insolvency that the Societe General has brought a claim against a humble (well okay, not so humble, but he shouldn't be: while Janet has proclaimed that as late as 2007 she had nary an inkling of the trouble brewing, Mish,  was giving a blow by blow account of how, when the collapse began, first the monolines (remember them anyone?), the ratings agencies, the banks with the aforementioned SIV's fraudulently held off their books in full view of the Fed who gave this vehicle for misrepresenting the Banks' true value by holding their liabilities in a separate company, Enron-style, so that their bottom line could be elevated, deceiving shareholders, their full blessing), blogger who's been fined 8,000 euros (no euro sign on keyboards), for pointing this out.

"I think it’s important for the Fed, as hard as it is, to attempt to detect asset bubbles when they are forming". But the Fed doesn't have to, there are plenty of people, outside of the Fed, pointing at Fed policy who both saw asset bubbles forming, and, correctly, laid the blame for those asset bubbles forming squarely where it belonged: at  the Fed's doorstep, for the low-interest rate policy that encourages, by their own stated objectives, risky behavior. People take their money out of bank accounts that although they are called Savings account, are as a direct result of Fed policy, losing accounts, as they pay less interest than the real rate of inflation, which, again, as a result of Fed policy, are rising on those items that people HAVE to buy, while decreasing only on those things they'd LIKE to buy, like computers and HDTV's, and game consoles and stupid smart phones.

So, how does JY plan to deal with these TBTF institutions? Which she admits  "has to be among the most important goals of the post-crisis period" (never mind that this is the fifth year and all that the Fed's done so for is encourage even MORE TBTF criminality by working with the administration to use Fannie-Mae, Freddie Mac, the FHA, and the FED itself to arbitrarily and systematically elevate the most commonly owned asset in the country, the Homes of the citizens, beyond their market valuations in order to elevate the US economy above its actual value and allow municipalities, who exist on the property taxes that would plummet if homes were allowed to fall to their true marketplace prices, to stave off bankruptcy. There are at least another 50 Detroits, kept from insolvency simply by the policy of the Fed purchasing MBS that the marketplace won't touch, because, being the instigator and perpetrator of fraud,  albeit with a wink and a nod from the government on all levels, the private sector knows  that the valuations, on which the value of those MBS's are based, are laughably elevated.

But since, as she claims, we are making progress, but, "We have on the drawing boards the possibility of requiring that the largest banking organizations hold additional unsecured debt at the holding company level to make sure that they are capable of resolution.” Wonder what kind of artists they have manning those drawing boards that it's taken more than 5 years and nothing except the further deterioration of the economy and the banking sector has occurred, although the signs of it are TARP'd over by the very Fed that's supposed to be "monitoring the situation".

Finally, on the subject of "the Wealth Effect" that a rising stock market is supposed to have, Yellen has not only the wrong assumption about that effect, but the wrong assumption of what exactly is driving what. This so-called Wealth Effect the Fed has insisted on using as justification for its wrong-headed policies since it fomented the financial crash, is the effect that the Greedsfan Fed was able to work up to a feverish pitch of Irrational Exuberance because the foolish investing public felt richer as the rigged stock market shot ever higher. This was the period when Greedsfan and Cramer were like cheerleaders for one another, while they ignored the fact that the "Wealth Effect" was nothing more than a euphemism for fraud.

But when the Fed can obfuscate their actions, spout high-flying phrases and rabidly drawn conclusions from idiotic assumptions that appear to actually work when the polity is deluded by their legerdemain is one thing. To actively and assiduously try to pull the same trick when the entire audience can see exactly how you're pulling the strings in order to make the market's valuation increasingly divorced from its worth, it's not going to have the same impact. Even those who know that they shouldn't "Fight the Fed" and so move their cash into risky investments, ones that shouldn't be being made, they do so with one foot always ready to hold the door open for them to squeeze out of it before its slams in their face with their money on the other side of it: the very definition of entrenched instability. The exact opposite of Financial Stability, again, not Watched, not MONitored by the Fed but CREATED by the Fed.

Then, like leveraging itself, if you leverage on quicksand, you may be able to look like "The Smartest Men in the Room" for awhile, but when it undergoes liquefaction, every thing falls, so, as the Fed, by counting on a wealth effect to create 'animal spirits,' has been mistaken, in that they assume it works, and  then go on to decide that a nascent recovery is taking place, "a recovery in housing that could drive a broader recovery in the economy". But, in a healthy economy, it is the other way around. If there were a true wealth effect, then there would be job growth and upward pressure on higher income for workers, not for the hoarders known as the rich. Krugman harps over and over again about 'the paradox of thrift", but never cites the paradox of funneling larger and larger proportions of company profits to the rich where it has the exact same effect as his paradox of thrift has: it takes vast sums of money out of the American Economy where it was produced and whose growth needs those profits reinvested in it, but ships it instead, by the boatload, to offshore bank accounts and foreign direct investment, and luxury goods and frat-brat toys, starving the economy that produced it. It's higher wages, not a contrived "Wealth Effect", that then gives people real confidence in their economic position, enough to consider purchasing such a big ticket item as a house.

By assuming the other way around, that you just make people 'feel' like their wealthy while you rob them of everything that gives them real financial stability: Health insurance, good education, and housing that's not jerry-rigged at a nose-bleed levels in order to trap them there when the next crash, (we now all know, you see) comes.

Claiming that we, when even the mere possibility of a tapering of the FED's program for financial instability called  QE:

"saw mortgage interest rates rise in the space of a few months by over a hundred basis points, we had to ask ourselves whether or not that tightening of conditions in a sector where we were seeing a recovery (we were?) we did have to ask ourselves whether or not that could potentially threaten what we were trying to achieve:  an improvement in the labor market ..."

Yellen lays bare the fraud at the heart of the monetary system. When even the whisper of a muting in the Fed's asset purchasing program of enlarging the balance sheet of the Fed by more than a $Trillion, that's $1,200,000,000,000.00 in less than a year, while at the same time the Pentagon comes forward with another $8trillion that has simply gone unaccounted for, one has to ask oneself, where are we? Stealth technology, which we paid for to use on other countries, is working the same way that stealth arming of a fundamentalist Muslim sect of Wahhabism during the Reagan years in order to fight our fight against the Soviet Union in Afghanistan: it is backfiring big time, and just as we blamed the terrorists that we ourselves created for what happened on 9/11 instead of the government goons that put such an odious operation into place in the first place, we are doing the same thing, only now with the entire economy, using the "Stealth Effect" in economics to fool the public into thinking their richer than they are so they can be suckered yet again into putting themselves into debt for decades to pay for an asset whose price has been purposely elevated far above its real worth by a private institution that now has the government by the balls. And the icing on the cake is that you can tell the public they're being lied to right to their faces: That's what the Wealth Effect's stated purpose means, pumping up the stock market so that people will feel wealthier than they are so that they will more readily spend money they haven't earned yet, but that they feel assured they WILL have. Like extend and pretend: they know that you are so stupid you'll never notice that that's a catchy phrase for lying to  your face 'cause that's what you like. It's all over but the Yellen. And that'll commence shortly after the Bernank steps down.

Monday, November 18, 2013

PK Rugman: The Bald Truth about Toupee Economix.

In a post called "Secular Stagnation", PK Rugman states on his blog, "The Nonsense of a Gliberal", where he dumps all the News unfit to Print, that ""unproductive spending is still better than nothing".

Welcome to the New Economy, where cash is  now only completely arbitrary, no longer a store of value, its value will be dictated by the all-powerful market. Supply and demand are no longer the forces that drive the market, but the market itself. In the new world economy, where labor is done by robots and Smart cars are driven by dumbed-down citizens, supply-side economix decides what is built and marketed, and instead of saving, you'll already be in hock to the factory that "They" decided to build to make the supply of whatever "They" decided you need. Because when "unproductive spending is still better than nothing" is a philosophy of one of the most quoted writers of the pseudo-science of ecomonix, then all sanity has left the building. 

Since unproductive spending is what toppled the global economy into the morass of what PK himself calls a permanent slump and intractable world depression, then continued unproductive spending, because it, unsurprisingly,  produces an unproductive economy, propels us further and further away from producing that which any economy is supposed to produce: the goods and services needed by the human beings that are its creators. And the longer it goes on, no one has anything remotely resembling savings, as an ever greater percentage of them get confiscated by the banks and then get poured into PK's unproductive spending trough, where, as any economix wizard worthy of his wand knows, bad money chases out good. 

In fact, stating that savings hurts the economy (note there is always only one, it is "The" economy), PK continues to grovel at Larry's feet in an uncomfortably embarrassing display of professional ass-licking:

"Larry also indirectly states an important corollary: this isn't just true of public spending. Private spending that is wholly or partially wasteful is also a good thing, unless it somehow stores up trouble for the future. That last bit is an important qualification. But suppose that U.S. corporations, which are currently sitting on a huge hoard of cash, were somehow to become convinced that it would be a great idea to fit out all their employees as cyborgs, with Google Glass and smart wristwatches everywhere. And suppose that three years later they realized that there wasn't really much payoff to all that spending. Nonetheless, the resulting investment boom would have given us several years of much higher employment, with no real waste, since the resources employed would otherwise have been idle."

Yeah, good ole pal Larry, the Summer's Eve douchebag of the economix profession, where resources, none more so than human Resources, are just so much fodder to be fed to the maw of "The" economy, cogs to be "fitted out" by their employers, the only real 'people' who matter in all this falderal. Because that 's all it's about. The assumption, together with the completely erroneous one that sovereign debt won't be defaulted on, is that what's good for GM, now Walmart, is good for the country, even though the GM of the country pays wages so unable to support human life it must be subsidized by the government via foodstamps, healthcare and welfare  payments in order for the largest employer in the country's workers to survive to come to work the next day, hasn't been supplanted in the minds of the people or the economic profession. This is the fruit of the corrupt seed of militarism that has taken over the economy. While venomously condemning Keynesian economics, the right just as vociferously, lauds any and all military outlays, which, not being used to create products useful to the citizens whose funds are funneled away from productivity to stimulation without marketplace feedback, amounts to Military Keynesinaism, but is even more pork-ridden and unaccountable than the  unmilitary kind.

How this is harmful is illustrated by the so-called Hummer. We built it and they will come. But whereas PK seems to think that things get built by magic, they don't. To build this monstrosity of a vehicle took such an investment in plant and material that, GM figured, let's see if we can pawn this multi-ton military transport vehicle to the war-mongering public (who, unlike the military, doesn't have taxpayers' pockets to dig into to pay the insurance and fuel costs, so we'll downplay that aspect of it), because then all the R&D costs'll be paid for by the taxpayer, and we skim all the profits for the 'private' sector.

This is an old story, but the difference is that in the old days, GM, because of unions, was forced to provide amenities to its employees, such as, ya know, wages, that then get used to buy other items and stimulate the economy and increases the velocity of money. But with Creditism,Walmart's business model, which is now dominant, simply makes no provision for viable wages. Its very structure demands a work force of replaceable cogs with no resources left over to cover any demands for anything extraneous to their employment (like nasty kids to feed). Because gone are the days when people's cash is able to have a choice of allocation, whether into savings to wait until such time until something actually worth purchasing becomes available, or into items they decide they need or can afford to buy.

Because without unions, or at least without some method of employees to pressure management to share the earnings of the corporation with its workers instead of with the Hoarding community, otherwise know as "The Rich",  those shareholders who do nothing for the company but drain its cash in the forms of dividends, that they pay half the taxes on than the workers whose Labor creates the value the shareholders cash in on, yet gets taxed at twice the rate, the new paradigm of Corporate bosses deciding what you want and presenting it as fait accompli without so much as market research becomes the new normal. Businesses or the Federal Government want it, so we'll build it and then offer it to the hapless consumer, having withdrawn those things he really could use from the shelf.

When that something is a water supply or electricity that pretty much everybody needs and wants, is one thing, but when it's used instead to develop Hummers and HDTV, for example, because that 's what Corporations want (you can read those screens a LOT better, (and Wall St. has banks of them),so much so that, as perhaps you've noticed if you don't have one, the subtitles get smaller and smaller until they become illegible without an HDTV), then the fact that it's decided without input to its TRUE costs (which are invariably hidden: such is how Capitalism works, my friend) forces the supply onto the consumer to buy or save his paltry pay in an account at the bank where it will dwindle, by nature and intent of Feral (sic) Reserve policy, instead pushing you to use credit to pay for it instead.

This is Creditism, not Capitalism. When the Chinese opened their economy to market Forces the West rejoiced, but Communism didn't fall, it became more corrupt and intractable, albeit with some Capitalist trappings. And the same has happened here, as Capitalism hasn't fallen, it's just become more corrupt and intransigent and taken on the Central Planning ways of Communism, which are more in line with the New Supply-side Economic mandates of Creditism which are unresponsive to any forces in the actual economy except the brutish rich and their entrenched bureaucratic acolytes. So now, even liberal economists tell you that savings is Bad (Orwellian enough for you?) and  "unproductive spending is still better than nothing". With such a mindset, the entire nation, indeed the world, follows the logic of the Clothing clerk in "Sunset Boulevard", who, when Gloria Swanson's paramour is shopping for a new coat, asks him in his best unctuous salesman's  voice, "Why not get the Vicuna? As long as the lady is paying anyway". This is the PK logic, so what if all the vicunas will be wiped out, it created employment for a week or two that we can point to and say , "See? Our policies are creating jobs."

In other words PK has simply capitulated and, as Kevin Phillips accused journalists of in a 2002 New York Review of Books critique, instead of comforting the afflicted and afflicting the comfortable, he now comforts the comfortable and afflicts the afflicted: rather than say anything that might anger his Corporate Bosses, he lazily licks their asses and no longer even bothers to ask if they wipe first.

Friday, November 15, 2013

Contradictatorship: Mass delusion

Naked Capitalism printed one of Ilargi's post from "Automatic Earth" doing a bang-up job of parsing it in the process, as only Susan Weber, better known as Yves Smith  (as in Adam and Yves Smith) can. But, I think there's a bit of a contradiction, not so much in what she writes about the post, but of many assumptions supposedly made by economic theory and its pseudo-scientific proponents. Contradictions that are so glaring, buttressed with arguments that are so blatantly erroneous, yet with nary a voice raised to refute them, that it's become obvious that something is going on behind the scenes completely different than that which we argue until we're red in the face about. Like politics itself, the Presidential debates being a perfect sideshow of the case in point (especially the hilarious Republican lineup of losers and boozers and T party schmoozers), economic rants and counter rants shimmer with the same unreality as a desert mirage as they skip around the real problems and discuss absurdities and spout inanities as though they are anything but a distraction so as not to have to make anyone think about the TARP thrown over mankind's most pressing conundrums, obviating any chance of real solutions ever materializing. Which is what they'd have to do, since we, as a species, have decided that their intractable nature make them simply insurmountable.

The use of the word tarp, was of course, not accidental, as it is the perfect metaphor for what I perceive is blatant government obfuscation, yet with enough of a sense of humor mixed with complete and justified disdain for the intelligence of the electorate they supposedly represent, as they wave a red cape to distract the raging bull of public opinion until such a time as is convenient for it to be gored. Acronyms, especially by governments, are not arrived at casually, they are well-thought out and often times use outside agencies to dream them up and sell them to the public. To name a program that is to be used to hide all the bad debt, all the crimes committed in amassing it, and the ballet between government and Corporations that have turned us into the Corpornation that we are today, ruled by Corporate diktat, not the Parliament of Whores we call Congress, shows the depth of cynicism the DC pols have for the BC proles they Lored over.

Part of that lore, as repeated ad nauseum by the Americani fascisti, since Reagan used the phrase "I'm from the Government and I'm here to help" as derision against Washington-style politics so as to become the leader of that government, (as though "I'm from Hollywood and I'm here to help" is so much better) and impel it to deficit-fueled growth and unprecedented Central Bank control over not only the market place, but the very market, as epitomized by Wall St., itself, is that the so-called private sector runs things better than the government. All things.

But in Upton Sinclair's "World's End" series of novels, "O Shepherd", he states the case most succinctly:

"The most elegant and perfectly legal forms of bribery exist wherever business touches government or government touches business, which is why DC's crawling with lobbyists and lawyers representing every form of wholesale greed. Never before in the history of mankind have private interests collected such sums of money from public bodies. Every newspaperman knows what's going on, but simply get in line for their cut."

That statement was written during the Second World War, and the dynamic has only increased since then, gathering an impressive amount of momentum during the reign of Reagan/Bush, and catapulting to astronomical levels during the Bush/Cheney tenure at the Whitehouse, never more so than when they had a Republican Congress to grease the skids of greed and shovel taxpayer dollars by the truckload into corporate coffers with scant attention to what they were getting in return for our cash. All this while bleating to a public besotted with the prospect of filling their own pockets with money-for-nothing, that only an untrammeled, deregulated, self-monitoring private sector can make for lasting prosperity.

So why haven't the media, the politicians, the small businesses put this shibboleth to the sword? Why haven't they screamed from the rooftops to us that Corporations are government- created entities that, far from spurring entrepreneurship, spurn it. Wrapping themselves in the protection that the wealth they amass receives from the very government they supposedly despise for having the nerve to put any restraints whatever on their activities as "private' citizens", or now people, if you will, by diktat of the SCOTUS, they run roughshod over everything decent and anyone with any moral fiber.

If this itself seems a contradiction, giving the cornucopia of development of toys and gadgets and doodahs that have proliferated in the last generation, it would serve you well to look at the source of all that inventiveness: The military spending of the US that started with the development of not only that ultimate of WMD, the Hydrogen Bomb, but the computer, the Internet, as started by the Military development of the Darpanet, the OIL regime needed absolutely for the waging of modern industrial mechanized, flight-enabled warfare, and the personal cell phone, moving communications from a place to a person: the Dick-Tracy-like dream of every government spook.  All of which is secondary to the development of Agribusiness and the green revolution, all enabled via government tax dollars, and all in utter contradiction to the stated philosophy of "free-market" economics. If the US government, a Republican run enterprise for generations now, despite some little input by the Dems, who've more-or-less collapsed into a rearguard action of pretending to protect oh, let's say privacy, for instance, when in reality they've simply become the lapdogs of Republican-promulgated dogma, never refuting the nonsense spewed by an ever-more Militaristic, macho-man, testosterone-fueled paranoiac bureau of braggadocio, for if they believe in the free market so assiduously, of even a fraction of the amount that their venomous rhetoric would have one believe, then why, in the name of God would they allow enormous government outlays be used to support the Farm-belt? If they believe the free market delivers the goods better than any government incentives ever can, why do they insist on having a DOE, or using billions upon billion of the worker's money to fund an oil-depletion allowance? Or create and control the Money supply? or any of a number of other programs that it is not the democrats, but the republicans themselves, the Champions of  FREE MARKETS  and the Superior job it does of providing for people's welfare, why then, when it comes to those things they love the most, the top priority being the Manufacture, sale and procurement of Arms and other instruments of death, do they turn to the government, whose intrusion in the market place they sneer at and deride as counterproductive, to provide them?

The answer is, at least in part, the very nature of Corporate structure. Because any promulgator of Classic Capitalism uses as the justification of Capitalism's ascendancy the price mechanism it provides to keep a balance between supply and demand dynamics: ie, feedback. But what Corporatism destroys is feedback and responsibility. The leaders of Corporations, be they Mozilla, Jamie Dimon, Kenneth Lay, or Corsine are never held responsible for what occurs under their watch. Time and again, while nevertheless raiding the companies they run for huge salary payouts and benefits reeking of lard, have held themselves unaccountable for what goes on in the companies they run. Taking their cue from the Executive branches of Both Richard Nixon And Ronald Reagan, both of whom put the protection of those in the Whitehouse conducting illegal operations under their aegis above the laws of Congress and the good of the American public that they, supposedly Christians in good standing, took an oath of office to protect, Corporate CEO's now consider their duty to be no more than cooking the books, or getting those under them to do so, stripping the company of its assets, and transforming those assets into their own personal fortunes.

And then to War.

That is the end result always of successful capitalistic enterprise. For as a society accumulates wealth, it becomes ostentatious and stimulates envy in its competitors and/or customers. The US response to that has been to build a military so powerful with a presence so pervasive that no other country except a suicidal one would dare attack it, no matter how much richer or how abusive it became (thus providing the the rationale for the logical step to terrorism). Because, at its heart, capitalism is about exploitation; of resources, living or otherwise, that it has nothing to do with providing or nurturing. That is why the US is its biggest cheerleader, because it is built on the resources stripped from an entire continent simply wrested away from its original inhabitants and marketed across the ocean to another one whose means of subsistence had already been stripped bare. Unlike Continental Europe, England was an island nation with nothing but moors and wind-swept heath to provide for its struggling citizens, so they considered America, and especially north America, to be theirs as though by divine mandate, much as Manifest Destiny became the slogan of their descendants.

(Next: The contradiction of The Fed)

Monday, November 4, 2013

6 Degrees of Desperation.

Plumes of Doom

While Sam Carana keeps us informed of the troubling increase in the amount of methane over the Arctic Ocean that have continued at high levels all through the month of October, the World Bank is quoted in the documentary "The Tipping Point", (or "Last Hours" ,the author of the article on the documentary, Gary Houser, is unclear on this point) as issuing a "Vehement Warning" that we are on a course to easily top 5 degrees Celsius warming by the end of the century. Now, this is the same World Bank that employed Larry Summers who, during his tenure, infamously released a memo trumpeting the compelling logic of moving heavily polluting industries to low-wage, no-healthcare economies, ones whose denizens didn't have the ability to regulate industrial emissions, as the economics of caring for a debilitated and repressed population made so much more dollars and sense than one in which citizens were aware of the damage to them and their environment and could gather the political will and legislative ability to enact laws to control it. Employing this policy in China, resulted in the removal of millions of rural peasants who had lived hardscrabble lives of penury to cities where they would then require electricity, cars, and air conditioning.  The rural environment they left behind to become low-wage drones is now incapable of sustaining human life because projects such as the Three Gorges Dam (built with the help of World Bank loans) has destroyed any ability the land once had of providing human sustenance. 

Because of these and similar policies around the globe, human-generated emissions are now pushing as much carbon pollution into the atmosphere as the Siberian volcanoes that caused the Permian extinction that almost wiped out all life on earth. Our solution? Electric cars. However, if every person currently driving were to switch to an electric car tomorrow, the amount of CO2 dumped into the atmosphere from their manufacture and the cost to scrap the current fleet of 3-ton behemoths now clogging the highways would result in an even higher temperature by the end of the century, because the mindset that believes that electric cars solve the problem holds as firmly to the belief of infinite economic expansion on a finite planet as those wheeling around in hummers. If you doubt this, I invite you to look at the response of every OECD country to the economic depression: ramp up auto manufacturing, with the US leading the way with its bailout of its Auto industry and simultaneous dropping of interest rates, resulting in them practically driving the new cars to their customers' doorstep (it was called Cash for clunkers, in which no cash was ever paid, and the cars scrapped were not clunkers). 

That's why, in the Arctic Ocean, those plumes pictured above are of an unprecedented kilometer in breadth, spewing methane, (a gas with heat-trapping potential 23x's that of CO2) right into the atmosphere, without first being oxidized in the surrounding waters, as the Arctic seas are shallow, and the World Bank thinks there's something we can do to stop it?  The 3M's of militarization, mechanization and monetization propelling the modern world in its mad drive to destruction, the only forces capable of stopping the onrush to obliteration, are the very forces whose intractable nature and unassailable "might is right" mentality have driven us to this precipice we now stare at our own doom from. They are not about to alter their course of triumphal conquest and fascist control of the levers of existence that we've so foolishly thrown into their laps. There will be no abatement of the amount of CO2 being pumped into the troposphere, no diminution in the push for more economic growth, larger populations to keep that growth going, requiring more fossil fuels being burned every year, as an ever increasing amount of energy must now be burned simply to get more energy simply to burn in the chemical weapons of mass destruction usually referred to as automobiles.

If this seems outlandish, think about the US, whose stated purpose is to push for Democracy around the world, using the World Bank as its tool, which  increases the amount of fossil fuel burned by any newly liberated populace. Whereas in the US itself, where a mere 5% of the world population burnt thorough 25 percent of the World's resources, has, in the space of a decade, dropped that percentage to 20 percent. This is why the energy boom they boast of has allowed oil imports to decline so dramatically: because it's camouflaged the decrease in the mobility of the average US citizen, reflected in a 1.5% decrease in miles driven since the engineered financial collapse of 2008, which has caused energy demand to shrink for the first time since that other depression, the one we call Great.

Unable to command the resources they so recently did, driving, in the land of the Freeway and drive-in, well, everything - even chapels for crissakes - has somewhat abated in the largest energy user on the planet while, simultaneously the other economies of the globe reel in a Great Recession, otherwise known as a depression, just not a great one, yet the amount of fossil fuels being burned is still increasing, not decreasing. Should the economy of even one of the OECD economies actually show some real, not shenanigan-contrived, growth, that fossil fuel burning would dramatically increase, leaving us in the untalked-of conundrum we've been in since the beginning of the financial crisis: namely, without burning more fossil fuel, not only can Western-style economies not grow, they must, by the very nature of the credit-system upon which they're based, collapse in on themselves as they borrow greater and greater sums of flim-flam money even as more and more people who never even thought about it before, realize that the system upon which we are relying to pay those loans back leads us down the path of self-immolation.

 Where we go from here, even the divergent paths we might take to bring about one outcome as opposed to another, are something only the mind of a Jules Verne or H.G. Wells might conceive. But what the stark reality is looks to be of a nature that we would rather not discuss, which means that in certain circles it has not only been discussed, but plans have been made, and actions have been taken to bring about the circumstances under which those plans might come to fruition. And we can be fairly certain that most of us are not included in those plans. For as sure as it is that should the population of China alone aspire to the standard of living of the United States, we would need the resource equivalence of 5 earths, more and more it looks like we won't even have one. The ruling elite know this. Have known this. Because as it has been true for more than a generation. What do you think they have in mind? What would you do? Perhaps pick off the heaviest users? Those who have claims but are helpless to keep those lawful claims from being reneged on? Yes. The baby-boom generation that rode to prosperity on a wave of fossil fuels is the one targeted to take the hit.

Perhaps that's justice. But it smells an awful lot like betrayal to me. Mostly because of the way we're going about it: denial. Pretending that the pre-2008 atmosphere of scamming every investor who buys fraudulent paper and then watching as they leverage their own borrowings, using the purported value of that paper as collateral, is decidedly not the way to future prosperity, yet it is in doing precisely that that we have hypnotized ourselves into believing our salvation lies. No other plan has been forthcoming, no other rescue mechanism is ever discussed, because, having promulgated a system in which only greed has any force or any credence, any notion of sharing the load, or sharing the responsibility and therefore the fruits of our labor are looked at as suspect.  As they should be. Because the Liberal notions of Government programs of sharing are, like globalization itself, hugely wasteful of resources, and waste on that scale drives Climate Change. So then, What?

 We really need to ask some hard questions, about our political institutions, our economic arrangements, even the structure of the State itself. That is what the economy is telling us, if we would only listen. The mean-spiritedness and rank theories of the RandPaulRyan brand of German-style imposed austerity rankle a polity enamored of government programs and institutionalized welfare. Yet we do ourselves a disservice by simply sneering at them for their pettiness and small-minded simplistic answers, because they're reacting to something the rest of us have chosen to ignore: the very basis of our Democracy, the monetary system itself, which is the mechanism by which the stored value we've worked so hard to amass is transmuted into our future welfare, in the form of pensions and elder-care programs, is broken. And it's broken because of the subterfuge it has decided to engage in to pretend that the promises made in a world comprised of industrial economies running on  $11/bbl oil can be kept in one paying more than $100/bbl oil. They can't. And so the generation to whom those promises were made must be destroyed. This is in the process of happening right now.  We need to go about things in a different way, and to find that way, we need to talk about everything we assiduously ignore. But instead we fritter about and concern ourselves with the trivialities of sports teams and "Breaking Bad" marathons. We Really have to talk here, and we just ... simply ... aren't.