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Shall we compare the damage that will be done when all these bubbles pop?

Regardless of one’s own views about bitcoin/cryptocurrency, what is truly remarkable is the asymmetry that is applied to questioning the status quo and bitcoin. As I noted yesterday, everyone seems just fine with throwing away $20 billion in electricity annually in the U.S. alone to keep hundreds of millions of gadgets in stand-by mode, but the electrical consumption of bitcoin is “shocking,” “ridiculous,” etc.

Since the U.S. consumes about 20% of the world’s energy, we can guesstimate the total amount of electricity wasted on stand-by and similar sources of waste is more on the order of $100 billion annually.

What’s shocking and ridiculous is that upwards of $100 billion in electricity is squandered globally annually on stand-by devices and other painfully obvious sources of waste. But this attracts essentially zero concern or commentary. Do you notice any asymmetry in the scrutiny being applied to the status quo and to bitcoin et al.? The status quo– wasteful beyond measure–is just fine: nobody questions the staggering waste built into the status quo, from hundreds of millions of devices consuming electricity but doing no work to hundreds of millions of vehicles idling in traffic for hours each and every day across the globe–nope, the really big issue is bitcoin / blockchain consumption.

Does anyone question how much electricity the vast server farms of Google and Facebook consume in order to serve up adverts and store photos of puppies and kittens? And how about the energy consumed by the NSA and the dozens of National Security agencies that have proliferated over the past 16 years? How much coal gets burned to serve adverts, archive photos of puppies and kittens, and store billions of emails, phone calls to Aunt Sadie, etc. for future analysis?

…click on the above link to read the rest of the article…

The Future Is What We Make of It – Part 1

November 28, 2017

The Future Is What We Make of It – Part 1

Not everything that is faced can be changed. But nothing can be changed until it is faced. … Most of us are about as eager to change as we were to be born, and go through our changes in a similar state of shock.

– James Baldwin

2017 has been a really strange year for me. As tens of millions of my fellow Americans have experienced mental breakdowns following the election of Donald Trump, an unexpected sense of calm has come over me and I can’t remember the last time I was this optimistic about the future.

Importantly, the optimism I feel isn’t the demented, tribal and transient sort that many people experience when their politician of choice wins an election. I strongly disliked both Donald Trump and Hillary Clinton and I refused to support or vote for either. As such, I already knew going into November 2016, that we’d emerge on the other side with a dangerous authoritarian in power, and I mentally prepared myself to push back against whoever won. Although I think Trump is a terrible President and a fake populist, I think his winning the election might serve as the necessary kick in the ass our society needs in order to evolve.

If Hillary Clinton had been elected, she would’ve been given an incredible amount of slack from our depraved corporate media. In fact, the entire first year of her Presidency would’ve been dominated by non-stop slobbering about how amazing it was that the U.S. chose a female leader. This would’ve overshadowed anything she actually did and we’d continue to hear endless platitudes about how exceptional America is from our corrupt, self-proclaimed “elites” via the propaganda press machine. In short, Hillary Clinton would’ve gotten a gigantic pass by the media class which claims to keep the public informed.

…click on the above link to read the rest of the article…

The movement to replace neoliberalism is on the ascendency – where should it go next?

November 27, 2017

Ten years after the crash, the movement to replace neoliberalism is in the ascendency. Well organised campaigns cover everything from the promotion of pluralism in economic curricula to the application of new economic principles in local communities. Academics and campaigners, who prior to the crash were lone voices in the wind, have been joined by a growing chorus of economists and commentators acknowledging that neoliberalism is not working. Importantly, these now include those in mainstream institutions that have become synonymous with the status quo, such as the IMF and OECD. Meanwhile, bottom up movements, surfing a heady mix of social media and dissatisfaction with orthodox economic ideas, are beginning to score political victories across the world.

This is because neoliberalism – the broad set of political-economic ideas and policies which have dominated public life over the last 40 years – has failed, in both theory and in practice. It is in the wake of the global financial crisis that these failures have plumbed new depths. Financial instability looms over economies shackled by insufficient investment. Living standards stagnate and work becomes ever more insecure, shattering the implicit bargain of the entire endeavour. The human costs of this experiment have been enormous, with psychological and non-communicable ill-health becoming the hallmark of a system that cares for little but profit. Inequality, itself linked to ill-health, has grown to levels unseen since the nineteenth century, leading to large power imbalances throughout society. Socio-economic mobility has been further stalled by the erosion of the public realm, from universities to the legal system. Most pressingly, neoliberalism continues to rely on a growth model that is destroying the biophysical preconditions upon which it relies, increasing the chance of collapse in the climate and other natural systems.

…click on the above link to read the rest of the article…

The Problem Isn’t Populism: the Problem Is the Status Quo Has Failed

November 27, 2017

The Problem Isn’t Populism: the Problem Is the Status Quo Has Failed

The top 5% who have benefited so immensely from the consolidation of wealth and power cannot confess the status quo has failed the bottom 95%.

The corporate/billionaires’ media would have us believe that the crisis we face is populism, a code word for every ugly manifestation of fascism known to humanity. By invoking populism as the cause of our distemper, the mainstream media is implicitly suggesting that the problem is “bad people”–those whose own failings manifest in an attraction to fascism. If we can successfully marginalize these troubled troglodytes, then our problem, populism, would go away and the wonderfulness, equality and widespread prosperity of pre-populist America will be restored.

The problem isn’t populism–the problem is the status quo has failed 95% of the populace. Life isn’t wonderful, prosperous and filled with expansive equality except in the Protected Elite of the top 5% of technocrats, corporate executives, tenured academics, bureaucrats, financiers, bankers, lobbyists and wealthy (or soon to be wealthy) politicos.

The bottom 95% need a time machine to recover any semblance of prosperity.They need a time machine that goes back 20 years so they can buy a little bungalow on a postage-stamp lot for $150,000 on the Left and Right Coasts, because now the little bungalows cost $1 million and up.

Housing valuations have become so detached from what people earn that even the top 5% has trouble qualifying for a jumbo mortgage without the help of the Bank of Mom and Dad or the family trust fund.

The bottom 95% need a time machine to return to the days when college tuition and fees were semi-affordable–say, 30 years ago.

The bottom 95% also need a time machine to return to a time when they could afford healthcare insurance without government subsidies–a generation ago, or better yet, two generations ago.

…click on the above link to read the rest of the article…

Which Rotten Fruit Falls First?

October 20, 2017

Which Rotten Fruit Falls First?

I predict the current investigations will widen and take a variety of twists and turns that surprise all those anticipating a tidy, narrowly focused denouement.
The theme this week is The Rot Within.

To those of us who understand the entire status quo is rotten and corrupt to its core, the confidence of each ideological camp that their side will emerge unscathed by investigation is a source of amusement. The fake-progressives (fake because these so-called “progressives” support Imperial over-reach and a status quo whose only possible output is soaring wealth and income inequality) are confident that a “smoking gun” of corruption will deliver their most fervent dream, the impeachment of President Trump, while Trump supporters are equally confident there is no “smoking gun.”

One camp is confident that the wily Clintons and their army of enablers, from former FBI Director Comey on down, will finally be brought to long-evaded justice for their various perfections of corruption and collusion: pay to play, and so on.

Clinton supporters are equally confident that there is no “smoking gun” that will bring down the House of Clinton, and by proxy, the organs of the Democratic Party.

The implicit historical model each camp is anticipating is of course Watergate, which unfolded with a dramatic inevitability that in retrospect almost seems scripted: a minor burglary led to the hubris of cover-up which led to the destruction of the Nixon presidency.

Often overlooked in this history is the key roles played by insider informants (such as Deep Throat) and the wider political demands for greater transparency the scandal triggered.

…click on the above link to read the rest of the article…

The United States of Weinstein: Complicity, Greed and Corruption Is the Status Quo

October 17, 2017

The United States of Weinstein: Complicity, Greed and Corruption Is the Status Quo

If integrity means more than any of these baubles, then prepare to fail.
The theme this week is The Rot Within.

The sordid story of Harvey Weinstein is being presented as an aberration. It is not an aberration; it is merely a high-profile example of how the status quo functions in the USA, a.k.a. The United States of Weinstein, in which complicity, greed and corruption reign supreme in every sector and in every nook and cranny of power.

The dirty secret of America’s status quo is that power and wealth are both extremely concentrated, which means there are gatekeepers who must be bribed, sated or serviced if you want to claw your way up the wealth-power pyramid. Mr. Weinstein’s alleged conduct and payoffs of those he exploited is par for the course in the corridors of power in the USA.

As a gatekeeper in Hollywood, Mr. W. could make or break careers with absurd ease.

Gatekeepers are the key functionaries in a rentier economy in which the few at the top skim the wealth of the many. Want to play in the big leagues of Hollywood, Washington D.C., the Pentagon, or the various HQs of Global Corporate America? You have to pay the Gatekeepers what they demand.

It might be the casting couch or a slice of the profits, or a vote in committee, but the price of admission will always include complicity–silence about the crimes committed and the endemic corruption, and a sacrifice of moral standards. This is the minimal price of “success” in the elite circles of wealth and power in America.

If you doubt this, dig deep into any concentration of power in America and see what you find. Outsiders won’t find anyone willing to talk, of course; that’s how complicity works.

…click on the above link to read the rest of the article…

Our Protected, Predatory Oligarchy: Dirty Secrets, Dirty Lies

October 10, 2017

Our Protected, Predatory Oligarchy: Dirty Secrets, Dirty Lies

If you want to understand why the status quo is unraveling, start by examining the feudal structure of our society, politics and economy.

The revelations coming to light about Hollywood Oligarch Harvey Weinstein perfectly capture the true nature of our status quo: a rotten-to-the-core, predatory, exploitive oligarchy of dirty secrets and dirty lies protected by an army of self-serving sycophants, servile toadies on the make and well-paid legal mercenaries. Predators aren’t an aberration of the Establishment; they are the perfection of the Establishment, which protects abusive, exploitive predator-oligarchs lest the feudal injustices of life in America be revealed for all to see.

The predators reckon their aristocratic status in Hollywood/D.C. grants them a feudal-era droit du seigneur (rights of the lord) to take whatever gratifications they desire from any female who has the grave misfortune to enter their malefic orbit.

Anyone who protests or makes efforts to go public is threatened by the oligarch’s thugs and discredited/smeared by the oligarch’s take-no-prisoners legal mercenaries. (Recall the Clintons’ Crisis Management Team tasked with crushing any Bimbo Eruptions, i.e. any eruptions of the truth about Bill’s well-known-to-insiders predation of the peasantry.)

The dirty secret is that the oh-so-hypocritical power elites of Hollywood and Washington D.C. circle the wagons to protect One of Their Own from being unmasked. The first weapons of choice in this defense are (as noted above) threats from thugs, discrediting the exploited via the oligarchy’s paid goons and lackeys in the mainstream media and dirty lies about what a great and good fellow the oligarch predator is. The last line of defense is a hefty bribe to silence any peasant still standing after the oligarchs’ onslaught of threats, smears and lies.

…click on the above link to read the rest of the article…

2009 – 2016: Was the Eight-Year Experiment in Maintaining the Status Quo a Success or a Failure?

October 1, 2017

2009 – 2016: Was the Eight-Year Experiment in Maintaining the Status Quo a Success or a Failure?

Clearly, the core strategy of maintaining the status quo is to borrow and spend trillions of additional dollars every year.

The Obama presidency was a grand experiment to test this thesis: the status quo of the U.S. is a self-correcting mechanism. Left to its own devices, it will automatically correct any socio-economic-political imbalances, given enough time.

The Grand Strategy of the post-Global Financial Crisis era was simple: maintain the status quo as is. The Obama administration’s major policy initiative, ObamaCare, a.k.a. the Affordable Care Act, was nothing but the formalization of the existing status quo in healthcare, i.e. the taxpayers subsidize private-sector profiteering.

That is the Affordable Care Act in a nutshell. Costs have not declined, the health of Americans can hardly be said to have improved significantly, but garsh, did healthcare sector profits soar. Most importantly, the status quo was maintained: nothing actually changed in the insurance, pharmaceutical or hospital sectors.

The same can be said for every other sector of the economy: nothing really changed, just more of the same. Higher education: nothing changed, just more student loan debt was issued. The defense industry: more of the same. Global War on Terror, a.k.a. The National Security State–more billions sluiced into the shadows.

President Obama was a master of telling everyone what they wanted to hear while changing nothing in the basic structure of the Empire. The Imperial Imperative of destabilizing nations that didn’t meet with Imperial approval continued unchanged. The murder-by-drone campaign expanded, the support of a hopelessly corrupt regime in Afghanistan continued unchanged, and so on.

There were two unstated assumptions in this eight-year experiment:

1. The status quo is perfectly fine and didn’t need changing

2. The self-correcting mechanism of the status quo–the self-serving pursuit of maximizing private gain–naturally yielded up whatever policy tweaks were deemed beneficial/ necessary.

…click on the above link to read the rest of the article…

Stagnation Is Not Just the New Normal–It’s Official Policy

September 29, 2017

Stagnation Is Not Just the New Normal–It’s Official Policy

Japan is a global leader is how to gracefully manage stagnation.

Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.

In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down.

So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.

So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.

Japan is a global leader is how to gracefully manage stagnation. Here’s how Japan is managing to maintain a comfortable secular stagnation:

Japan’s central bank creates a ton of new currency every year, which it uses to buy Japan’s government debt/bonds. This keeps interest rates near-zero, so the cost of government borrowing is kept minimal.

…click on the above link to read the rest of the article…

Loving Our Debt-Serfdom: Our Neofeudal Status Quo

September 21, 2017

Loving Our Debt-Serfdom: Our Neofeudal Status Quo

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy.

I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term:

1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers.

2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations.

3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs.

Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

Both narratives neatly ignore the neofeudal structure which disempowers the workforce in the public sphere and limits the opportunities to build capital outside the control of the state-corporate duopoly.

The book The Inheritance of Rome: Illuminating the Dark Ages 400-1000 shed some light on the transition to a feudal society and economy. While the author is a fine writer, the subject matter doesn’t lend itself to light reading. The transition from the Roman legacy of centralized governance (empire, monarchy, theocracy, etc.) to feudalism (governance by local lords / aristocracy) was complex and uneven, and the author takes pains to describe the process and many variations that arose in a highly fragmented post-Roman Europe.

…click on the above link to read the rest of the article…

The Narrative of Fear and Insecurity

September 5, 2017

The Narrative of Fear and Insecurity

On March 4 1933 FDR in his inaugural address to the American people said,

“…the only thing we have to fear is…fear itself….”

And it’s true. It is fear more than anything else that prevents people from turning away from what has failed them and stays their hand from picking up the tools which would allow them to build what would work better. And precisely because it is true, every politician, banker, judge and general has realised that if they wished to stop change from weakening their grip on power and wealth, then what they need above all else is …more fear.

As FDR went on to say, it is

“…nameless, unreasoning, unjustified terror which paralyzes….”

So if you want to control a people and contain their desire to replace the system which benefits you, with one that benefits them, then you need to feed them fear and the more of it and the more slippery and inscrutable it seems to them, the better.

A looming, shadowy foreign power lurking just beyond the borders is always good. Russia, China, Communists in general, or if they are too far away, then any kind of socialist will do at a pinch. In 1983 Margaret Thatcher famously branded British miners and their union as ‘The enemy within.” Terrorists are a wonderful new fear. They are everywhere, much like Red’s used to be under every bed.

All these are good and have been used, still are used, to good effect. But there is a new fear, one closer to the fear FDR was talking about. And the currency of that fear is Debt. Here is a very short history, in just a few sentences, of how debt became the currency of fear.

…click on the above link to read the rest of the article…

We’re in a Boiling-Point Crisis of Exploitive Elites

June 18, 2017

We’re in a Boiling-Point Crisis of Exploitive Elites

The “fixes” to the stagnation of postwar Capitalism in the 1970s were financialization, globalism, and the sustained expansion of debt–all have run out of steam.

Many of us have written about cycles in the past decade: Kondratieff economic cycles, business/credit cycles, the Strauss–Howe generational theory (an existential national crisis arises every four generations, as described in their book The Fourth Turning), and long-wave cycles of growth and decline, as described in seminal books such as The Great Wave: Price Revolutions and the Rhythm of History and War and Peace and War: The Rise and Fall of Empires.

There is another Rhythm of American History that few recognize: the economic, social and political crises sparked by exploitive Elites. There are two dynamics that drive these crises:

1. The exploitation of commoners by financial/political Elites reaches extremes that create systemic instability as commoners no longer have the means to improve their conditions.

2. The economic mode of production that generated Elite wealth no longer functions, but the Elites cling to the failing system and enforce it with increasingly violent suppression of dissent.

Here are the previous Crises of Exploitive Elites:

1. Slavery, 1850 to 1865. Though the toxins generated by slavery are still with us, the existential political, social and economic crisis arose in the years between 1850 and the end of the Civil War in 1865.

In broad brush, the rise of the American West triggered a political crisis in the U.S. as the southern states realized the non-slave West’s rising political power would doom the fragile balance between the non-slave Northern industrial-economy states and the cotton/agricultural slave-economy South.

It was a trend the South couldn’t possibly win, but the South’s exploitive Elites refused to concede any of their power–and that refusal to adapt tp changing conditions guaranteed the Civil War.

…click on the above link to read the rest of the article…

Debt Has No Consequences? Color Me Skeptical

June 10, 2017

Debt Has No Consequences? Color Me Skeptical

The entire status quo is based on the delusion that rapidly rising debt will never generate any negative consequences.

Here’s a chart of America’s national debt, extended a mere dozen years into the future: the current $20 trillion in debt will double to $40 trillion, and that assumes 1) trillions of dollars in private and local government pensions don’t implode and have to be bailed out by the federal government, a bail-out that will have to be paid by borrowing more money, 2) a recession doesn’t slash federal tax revenues, 3) Universal Basic Income (UBI) doesn’t become policy, adding $1+ trillion in additional borrowing annually–and so on.

Color me skeptical that doubling the debt in 12 years won’t have any negative consequences. Let’s start by noting that federal debt is only the tip of America’s total debt load, which is rising fast in all sectors: federal, state/county/city, corporate and household.

Total government, corporate and household debt soared from $15.5 trillion in 2000 to $41.1 trillion in 2016. (see chart below, courtesy of 720Global). If we extend this expansion another 12 years, we will have a total debt load in the neighborhood of $100 trillion by 2030. And that’s if the “recovery” news is all good.

The consensus is that all this debt will have no negative consequences because 1) interest rates will remain near-zero forever and 2) it’s all “investment”, right? Actually, no; the vast majority of this debt is consumption, not investment, or even worse, it simply services existing debt or funds speculative gambling (stock buybacks, etc.)

Recall that every debt is somebody’s asset. Debt jubilees sound great to debtors, but not so appealing to insurance companies, pension funds, mutual funds, etc. that own the debt and rely on the income from that debt to pay pensioners their pensions, settle insurance claims, etc.

…click on the above link to read the rest of the article…

The Illusion of Progress

March 2, 2017

The Illusion of Progress

This is precisely what you’d expect of a self-serving elite that was desperate to cloak the unhappy reality that the relative few are benefiting immensely at the expense of the many.

The core narrative of politics everywhere is progress, i.e. “moving forward.” If progress isn’t being made, politicos and the system are failing.

In the past, “progressive” movements sought to advance both social and economic opportunities for marginalized groups.

For a variety of reasons, social progress has been decoupled from economic progress.

In broadly disintegrative eras such as the present, the stagnation of economic opportunity is masked by redefining progress in purely social terms: progress is defined as the social advance of a marginalized populace into the mainstream.

When the marginalized populace is comprised of many millions of individuals, social progress and economic progress are mutually reinforcing dynamics: opportunities for social advancement in the mainstream created economic opportunities, and vice versa.

Now that social/economic progress has lifted the major marginalized populaces–ethnic and religious minorities, gays–substantially into the mainstream, those remaining marginalized populaces are modest in size. Estimates of the trans-gender populace, for example, are generally less than 1% of the total population.

The marginalized groups’ advances that are markers for “proof of progress” have decoupled from economic advances. Few if any social-justice promoters of trans-gender rights, for example, claim any economic gains will accompany this social progress.

The reason why social progress has been effectively decoupled from economic progress is that the woeful lack of economic progress for the bottom 90% proves financial progress is now limited to an elite comprised of Oligarchs, Nomenklatura, the Technocrat Class and a relative handful of entrepreneurs.

…click on the above link to read the rest of the article…

How Do We Design a DeGrowth Economy?

February 24, 2017

How Do We Design a DeGrowth Economy?

The conventional objections to DeGrowth boil down to: it isn’t the status quo, so it can’t work. Actually, it’s the status quo that isn’t working.

I’ve written about DeGrowth for many years, including Degrowth, Anti-Consumerism and Peak Consumption (May 9, 2013), Degrowth Solutions: Half-Farmer, Half-X (July 19, 2014) and And the Next Big Thing Is … Degrowth? (April 7, 2014)

These are the basic concepts of Degrowth:

1. Consumerism is psychological/ spiritual junk food (French: malbouffe) that actively reduces well-being (bien-etre) rather than increases it.

2. Better rather than more: well-being is increased by everything that cannot be commoditized by a market economy or financialized by a cartel-state financial machine– friendship, family, community, self-cultivation. The goal of economic and social growth should be better, not more. On a national scale, the cancerous-growth measured by gross domestic product (GDP) should be replaced with gross domestic happiness/ gross national happiness (GNH).

3. A recognition that resources are not infinite, despite claims to the contrary. For one example of many: China Is Plundering the Planet’s Seas (The Atlantic). Indeed, all the evidence suggests that access to cheap energy only speeds up the depletion and despoliation of every other resource.

4. The unsustainability of consumerist “growth” that’s dependent on resource depletion funded by financialization (i.e. the endless expansion of credit and phantom collateral). (This is covered in greater depth in my short book Why Our Status Quo Failed and Is Beyond Reform.)

5. The diminishing returns on private consumption and “bridges to nowhere” (crony-capitalist public consumption).

6. The failure of neoliberal capitalism and communism alike in their pursuit of growth at any cost.

Degrowth is heresy in what John Michael Greer calls the religion of progress (i.e. growth). The faith that growth equals progress is akin to the Cargo Cult of Keynesianism, the notion that expanding debt exponentially to drive diminishing returns of growth is not only necessary but a moral imperative.

…click on the above link to read the rest of the article…

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