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Why Systems Fail
Why Systems Fail
Since failing systems are incapable of structural reform, collapse is the only way forward.
Systems fail for a wide range of reasons, but I’d like to focus on two that are easy to understand but hard to pin down.
1. Systems are accretions of structures and modifications laid down over time.Each layer adds complexity which is viewed at the time as a solution.
This benefits insiders, as their job security arises from the need to manage the added complexity. The new layer may also benefit an outside constituency that quickly becomes dependent on the new layer for income. (Think defense contractors, consultants, non-profits, etc.)
In short order, insiders and outsiders alike habituate to the higher complexity, and everyone takes it for granted that “this is how things work.” Few people can visualize alternatives, and any alternative that reduces the budget, payroll or power of the existing system is rejected as “unworkable.”
In this set of incentives, the “solution” is always: we need more money. If only we had another $1 million, $1 billion or $1 trillion, we could fix what’s broken.
But increasing the budget can’t fix what’s broken because it doesn’t address the underlying sources of systemic failure.
Those benefiting from the status quo will fight tooth and nail to retain their jobs and benefits, and so deep reform is essentially impossible, as the insiders and constituencies of each layer resist any reform that might diminish their security/income.
As a result, new layers rarely replaces previous layers; the system becomes more and more inefficient and costly as every new layer must find work-arounds and kludgy fixes to function with the legacy layers.
Eventually, the system becomes unaffordable and/or too ineffective to fulfill its mission.
…click on the above link to read the rest of the article…
Nafeez Ahmed: Our Systems Are Failing
Nafeez Ahmed: Our Systems Are Failing
Dr. Nafeez Ahmed is an award winning 15 year investigative journalist, noted international security scholar, best-selling author and film-maker. He authored The Guardian’s Earth Insight blog and has twice won the prestigious Project Censored Award for outstanding investigative journalism.
In his new book Failing States, Collapsing Systems, Nafeez points out, as we often do here at PeakProsperity.com, that everything in our modern society is connected to energy, and that our pursuit of ever more, ever higher growth is finally colliding with planetary limits. Scarcity and strife will be the dominant trends from here, unless we, as a species, start looking for different ways of living better-suited for a finite world:
The most fascinating thing for me is how so much of what we take for granted becomes questionable as a result of the breakdown we’re seeing. When we begin questioning the exponential growth model then we begin questioning the value system driving our material production/consumption. It’s not that it hasn’t produced amazing knowledge of our environment and our place in the universe. It’s not that there haven’t been a huge amount of amazing technological developments, like the internet which has enabled people to be interconnected in ways that they never were able to before. In a way has paved the way for us to be able to think globally in a way that centuries ago would have never happened.
It’s not that everything about this paradigm is bad. It’s just that it has very clearly outlasted its usefulness and is now fundamentally responsible for escalating the biophysical rupture that we see happening and manifesting in so many different ways. What that tells me is that we have to grow up as a species. It’s an evolutionary moment.
…click on the above link to read the rest of the article…
The System Has Failed
The System Has Failed
No wonder we’re devolving into a society of a few privileged haves and a vast populace of marginalized have-nots.
American culture contextualizes failure in individualistic terms: the system didn’t fail–you failed. Never mind the system is set up to fail many (if not most) participants: the cultural narrative is that failure to succeed, failure to get ahead, and failure to fit in all boils down to personal failure: failure to follow the rules, work harder, please your boss, transition to a new career, extricate yourself from dysfunctional situations, and so on.
This narrative of individual failure and redemption is the foundation of thousands of self-help books, seminars, motivational speeches and the ever-present gung-ho rah-rah: you can beat any odds if you work hard enough, get out there and meet the right people, sell yourself, etc. etc.
Pop culture is a schizoid mix of this “dress/socialize/study for success” celebration of individual initiative and an equally zealous embrace of victimhood and self-pity: I made all these ridiculously poor choices because my family was dysfunctional or I was led astray.
No wonder our culture is psychotic. The way to get sympathy (and rationalize poor choices) is to make yourself out as even more of a victim than the rest of the self-justifying crowd.
But the ideal turn-around to self-pity and victimhood is the personal redemption via hard work, discipline, better choices, going back to school, etc.
These inspirational narratives at the heart of American culture serve a useful purpose, but they ignore the other half of the story: our institutions have failed us: they have failed not just the failures but the successful as well. They have failed the nation and every one of its citizens, but this systemic failure is verboten: speaking of systemic failure invites ridicule as a loser who blames the system instead of themselves.
…click on the above link to read the rest of the article…
Why The Status Quo Is Doomed, Part 1
Why The Status Quo Is Doomed, Part 1
The current world-system is as doomed as the Titanic.
We’re like the passengers on the Titanic 10 minutes after the mighty ship struck the iceberg: there is virtually no evidence to those on deck or those snug in their warm cabins that everything they reckoned was safe and secure was doomed to perish.
Only those who witnessed the damage below the waterline and who knew the limitations of the ship’s design grasped that the loss of the ship was inevitable and could not be reversed.
The current world-system (call it whatever you like–cartel-crony neoliberal-state capitalism, etc.) is as doomed as the Titanic, for the same reasons: the design of the system is the source of its failure.
I recently had the opportunity to discuss the inevitable systemic failure of the current arrangement with Chris Martenson of PeakProsperity.com and Cris Sheridan of the Financial Sense Newshour. The podcasts are:
With Chris Martenson: Fixing The Way We Work: Closing the wealth gap with meaningful work (44:54)
With Cris Sheridan: Book Interview: A Radically Beneficial World
Why is the current world-system doomed?
1. Automation will not just continue replacing human labor–the pace of this trend is increasing exponentially.
2. The wishful thinking that technology always creates more jobs than it destroys is, well, wishful thinking: just ask the music industry, which “grew” in the era of digital technology from a $14 billion industry to a $7 billion industry.
3. The wishful thinking that taxing the owners of robots and software will pay for guaranteed income for all: nobody who favors this seems to have done any math. Current corporate profits (which are about to be eviscerated by global recession and the commoditization of goods and services via automation) are around $1.9 trillion annually, while current government (federal, state, local) spending is $6.2 trillion.
…click on the above link to read the rest of the article…
“Bank Failures and Systemic Breakdowns”: Regulator Warns on Autos, Subprime, Commercial Real-Estate…
“Bank Failures and Systemic Breakdowns”: Regulator Warns on Autos, Subprime, Commercial Real-Estate…
If you look at auto sales, which are flirting with all-time highs, and at commercial real-estate prices, which are way beyond all-time highs, and if you look at the loans, including subprime, that make it all happen, you’d think the US economy is in a white-hot economic boom.
But the economy is barely limping along. What’s booming is cheap but iffy debt that for the moment still looks good on the surface. And that is rattling bank regulators.
“We are clearly reaching the point in the cycle where credit risk is moving to the forefront,” explained Thomas Curry, Comptroller of the Currency, in a speech today. The Office of the Comptroller of the Currency (OCC) – one in the triad of federal bank regulators alongside the Fed and the FDIC – is fretting about banks’ exposure to the increasing risks of ballooning auto loans, particularly subprime auto loans, and commercial real-estate loans.
As they did in the run-up to the Financial Crisis, banks are “repackaging” these loans, including subprime loans, into highly-rated asset-backed securities, in face of “strong demand by investors” that are reaching for yield, in an environment where banks “are reaching for loan growth.” After having “already extended credit to their best customers,” they’re now lending to “less creditworthy borrowers, with all of the increased risk that entails.”
But the auto-loan binge is good for everyone. It’s good “for automakers and the economy,” he said. “It’s also good for banks,” whose financing made “this activity possible.” By the end of Q2, auto loans accounted for 10% of all retail credit in OCC-regulated banks, up from 7% in Q2 2011.
Total auto-loan balances outstanding shot up 10.5% in 12 months at the end of the second quarter and hit $1 trillion, according to Equifax. And 23.5% of new loans earlier this year were subprime, up from 22.7% a year ago.
…click on the above link to read the rest of the article…
