Thursday, April 9, 2009

Strange Days by Jim Kunstler

Strange Days

Even while a wave of reflex nausea washed over America last week, and the unemployment rolls swelled by much more than another half million, the greatest stock market suckers' rally in seventy years pulled in the last of the credulous. These are strange days. The earth is heaving and the buds swelling again -- at least north of the equator, where most of the action is -- and the global economy, which was supposed to be a permanent new add-on to the human condition, is sloughing away in big horrid gobs. But no one in charge of anything can believe it. The banking fiasco has introduced so much noise into the system that world leadership can't think straight.

What they're missing is real simple: peak oil means no more ability to service debt at all levels, personal, corporate, and government. End of story. All the other exertions being performed in opposition to this basic fact-of-life amount to a spastic soft-shoe performed before a smokescreen concealing a world of hurt. If the "quantitative easing" (money creation) and fiscal legerdemain (TARPs, TARFs, et cetera) happen to jack up the "velocity" of the new funny-money, and the world resumes its previous level of oil use, the price of oil would rise again -- this time astronomically because the previous crash of oil prices crushed the development of new oil projects to offset depletion -- and the global economy will crash again. Only the next phase of the disease is liable to move beyond the financial and into the social and political realms. Disorder of various kinds will rule -- toppled governments, civil unrest, international tension and conflict.

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William Black's interview

BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself?

WILLIAM K. BLACK: There's a saying that we took great comfort in. It's actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, "It is not necessary to hope in order to persevere."

Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That's facially nuts. That's our current system.

So stop that current system. We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they've had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker.

Complete Interview

Civilization at the Crossroads by John Meyer


In our last letter we stated that, "American capitalism ended in 1913 and remains "An Unknown Ideal." We also commented that, "A troubling question arises: Has the financial community hijacked government?"

We are going to discuss those issues in an historical and philosophical context. We all today live in a twilight zone where things seemingly are and yet aren't. We must travel down some roads, which are troubling and rather dark. But, it is necessary, because it is today's reality. We can say at the start that you will find the trip unbelievable - I know I did when I first stumbled down this path. Matter of fact, at first I totally dismissed it as absolute insanity and therefore not possible. For, it was inconceivable that the morality of man could descend to such naked malevolence.

To look more deeply into our history is necessary, because almost all that comes from our "intellectual" community, is propaganda and spin. Before we heap cures on a dying patient, first and always diagnose. Diagnosis is the art or act of identifying the disease. All the talk about free markets and capitalism having failed and always what we need is more regulation and intervention are deliberate obfuscations. Naturally, with this propaganda barrage, Socialism keeps "gaining" by default. You have to be on another planet to think that what we have had for the last century is capitalism or free markets.

So - every once in awhile it pays to stand back and locate one's position in reality. Events have gone well beyond the field of economics, finance and politics. Sub rosa forces seem to be spinning us deep into an Orwellian existence. The Founding Fathers created a Constitutional Republic. It was not a democracy. The Founding Fathers were quite outspoken on this. Madison in a passage in The Federalist wrote: "there is nothing to check the inducements to sacrifice the weaker party or an obnoxious individual. Hence it is that such democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths."

The natural and inalienable rights of the individual trumped the majority vote of a mob. The State was to be the servant of the individual. The Declaration of Independence was the culmination of the Enlightenment and Classical Liberalism. The individual and the concept of property rights were elevated to be supreme. The individual was set free from the collective, king or god to pursue his own rational self interests. This noble experiment propelled the United States to a level of achievement, which has never been equaled. Productivity is the essential requirement of life. In fact, life demands it. It is metaphysical. That is, it is biocentric. Life is a constant process of self-sustaining and self generated action. The individual is the creator and to deny or impinge, in any way, on the products of his efforts leads society down the road to slavery. The right to life and by extension his property is the source of all rights.

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