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Good articles: http://www.efoodsdirect.com/
Good prices on tasty food:
http://www.efoodsdirect.com/products.html
When camping in the crater or elsewhere "Mountain House" won the taste tests hands down. Just add hot water...
Note they also have seeds...
Did a little DD these guys seem to have good prices...if you find better please post...
Gerald Celente on The Alex Jones Show 20-Apr-09
Celente Calls for "Revolution" as the Only Solution
http://yonkerstribune.typepad.com/yonkers_tribune/2009/04/celente-calls-for-revolution-as-the-only-solution.html
CELENTE_Gerald Kingston NY -- Taxed to death, angry at government bailouts, outraged by Wall Street greed, and bitterly resentful of a system that rewards the undeserving rich, the American public is ready to revolt.
"The Tea Parties and Tax Protests sprouting across the nation, which we had predicted, are harbingers of revolution," said Gerald Celente, Director of The Trends Research Institute. "But they are not enough. Much stronger and directed action is required. Our call for 'Revolution' will galvanize the people, destroy the corrupt ruling systems, and produce a prosperous and more just nation."
The Revolution Celente proposes is unique in concept and bold in execution. It is about a lot more than just "taxation without representation."
"Nothing short of total repudiation of our entrenched systems can rescue America," said Celente. "We are under the control of a two-headed, one party political system. Wall Street controls our financial lives; the media manipulates our minds. These systems cannot be changed from within. There is no alternative. Without a revolution, these institutions will bankrupt the country, keep fighting failed wars, start new ones, and hold us in perpetual intellectual subjugation."
The country is restless, and ripe for radical reform. There is no doubt protests will proliferate and intensify. In response, the government will call out the troops and bring in the police. They will use the Patriot Act to silence, detain, harass, persecute and prosecute groups and individuals exercising their Constitutional rights.
But Celente's Revolution need not degenerate into violence or open warfare.
"Intellectual Revolution"
"I am calling for an 'Intellectual Revolution'. I ask American citizens to free their minds from the tyranny of 'Dumb Think.' This is a revolution about thinking - not manning the barricades. It's about brain power - not brute force."
For society to survive and grow, it must wake up and grow up. Americans must acknowledge what their opinions are based on, who they listen to ... and why.
What are America's prime information sources? CNN, "The most trusted name in news"? Fox, "Fair and balanced"?
CNBC, "First in Business Worldwide"? The New York Times, "All the news that's fit to print"?
Who do the people listen to? A closed circuit of familiar faces guaranteed to take predictable positions. Authorities on nothing, yet pronouncing upon everything; a cadre of media aristocrats, pretending they're the people's voice.
Bill O'Reilly, Steven Colbert, Rush Limbaugh, Keith Olbermann, Sean Hannity, Jon Stewart, Chris Matthews, Jim Cramer, Joe Scarborough, Anderson Cooper, Bill Maher.
TV tough guys, broadcast big mouths and Beltway blowhards have now been joined by featherweight comics throwing powder puff punches at sitting targets.
This new addition to the critical debate is celebrated by the world's leading financial newspaper:
Wall Street Riveted by Comedy Clash
Financial Times, 13 March 2009
"A showdown between a comedian who has become one of America's most challenging commentators and a news commentator known for his comedic antics has shown the brightest spotlight on the media's market coverage since the financial crisis began.
On Thursday night, two cable television celebrities squared off as Jon Stewart, host of The Daily Show ... on Comedy Central ... confronted Jim Cramer ... star of CNBC's Mad Money programme."
Without a hint of irony, FT bestows the title of highest American intellectual common denominator upon a clown. A pencil throwing, screaming, wryly grimacing professional comedian has become "... one of America's most challenging commentators"?
"Wall Street riveted by comedy clash"? "The brightest spotlight on the media's market coverage"?
With the world financial markets in collapse, this rivets Wall Street? Nearly two years into the worst financial crisis since the Great Depression, this shines as "the brightest spotlight"?
From Wall Street, comedy moves to the White House. President Obama made history using comic Jay Leno's Tonight Show as a platform to peddle his policies.
World shaping decisions are packaged in sound bites and pitched by the nation's Showman-in-Chief. There is no time or place for debate or discussion. It's all entertainment.
"The 'Intellectual Revolution' must be waged on the battlefield of the mind," said Celente. "Americans are doomed unless they kick the junk news habit, deprogram themselves from celebrity worship, refuse to blindly follow political leaders and question all ideological dogmas ... especially their own.
"For the revolution to succeed, people must repudiate the one-headed, two party system, and learn to think for themselves," said Celente.
While the corporate-owned mainstream media and the government still control the broad avenues of news and information, only willing and lazy minds need be held hostage to it. The Internet world is awash in data, facts, analyses and opinions (independent and mainstream) for all to access and assess.
Think for Yourself. The "Intellectual Revolution” has begun.
Trend Call-to-Action:
What can you do? Participating in an April 15th tax protest may be your cup of tea. Pester your politicians. Make your voice heard, your discontent felt and your solutions known. Band with others who share similar objectives and common goals.
Learn more about The Trends Research Institute, or call 1-845-331-3500. © MMIX The Trends Research Institute®
thg,
keep up the faith and good works.
- fuge
http://groups.yahoo.com/group/thelongemergency/messages
Collapse of 2009...Gerald Celente on Civil Unrest, Ghost Malls, and Another American Revolution
Tighter Credit Prompts Concern About Food Supply
http://online.wsj.com/article/SB123841055734869353.html
By PATRICK BARTA
BANGKOK -- Tighter credit amid the global financial crisis could make it harder for farmers to expand production, increasing chances for a repeat of last year's soaring food prices, the head of the United Nations' food agency warned.
Speaking to reporters at a biennial U.N. food-policy conference in Bangkok, Jacques Diouf, director general of the U.N.'s Food and Agriculture Organization, said the number of undernourished people world-wide continues to rise, despite a recent decline in food prices.
[Easing Prices chart]
He also called on leaders to put agricultural investments on the agenda at this week's Group of 20 summit in London as a way of helping alleviate pain in the developing world from the global economic slowdown.
"We're saying this [situation] is very dangerous -- not only is there a food crisis here, it is being worsened by the financial crisis," Mr. Diouf said.
In 2007 and 2008, prices of corn, rice, and other grains rocketed higher amid a perfect storm of tight supplies, market speculation, and rising demand for crops in developing countries and for use in biofuels. The price spikes made it harder for people to afford basic foodstuffs, triggering violent protests in some developing countries and leading many economists to call for substantial new spending on farm production.
Prices have fallen by a third or more since then, and some analysts have warned of a possible glut of rice or other commodities as economic growth slows.
But grains prices are still 27% higher than in 2005, Mr. Diouf said, and global stocks remain low. Moreover, the number of people with insufficient food continues to climb. He said it's possible the tally of undernourished people in the world will surpass one billion, from 963 million in 2007, as the full brunt of higher food prices filters through.
A number of countries have stepped up rural spending over the past year, including China, which is making agricultural investments a key element of its economic stimulus initiatives.
But food-policy specialists fear any gains from such stimulus efforts could be offset by reduced credit from the private sector, making it harder for farmers to maintain output. The FAO is projecting global cereals production to decline this year due to smaller plantings and adverse weather, leaving 32 countries -- including Bangladesh, Haiti and Zimbabwe -- in need of foreign assistance.
Although governments are spending more, the global credit crunch "will constrain expansion of agriculture in the developing world this year," said Joachim von Braun, director of the International Food Policy Research Institute in Washington, in a recent interview. "We consider this to be a very precarious situation."
Mr. Diouf said the credit crunch hurts food-challenged countries in at least two ways: by making it harder for them to raise money to buy imported crops, and by raising the cost of loans to small farmers.
With less credit available, farmers could be forced to hold back on planting or borrow from black-market lenders, saddling them with high-interest debts that could constrain their output for years.
Write to Patrick Barta at patrick.barta@wsj.com
The 4 Things You Need
By Alyce Lomax
March 25, 2009
http://www.fool.com/investing/general/2009/03/25/the-4-things-you-need.aspx
In the last couple of weeks, I've had a lot of serious questions about the direction of the U.S. economy and actions being taken to "fix" it, and let's just say I'm concerned. I'm worried that the U.S. government might be well on its way to become increasingly insolvent, and I've argued for some rethinking of the Obama administration's economic policies for fear their current direction will wreak additional havoc on our economy.
There are some scary possibilities afoot.
Economic deterioration
Consumer spending is 70% of the U.S. gross domestic product; the fact that for years (decades, even) it's been growing at an overheated rate due to increasingly easy credit and risky debt (and of course, this also relates to the housing bubble, homes as "ATMs" and the big bust) meant our current economic correction was always destined to be a whopper.
Don't get me wrong, allowing the economy to correct on its own would have been painful -- but for all who have asked what my solution to the economic crisis would be, well, as you probably guessed, I've been in the do-nothing camp the whole time when it comes to Bailout Nation. That may sound crazy to many people, but the government's repeated interventions are exacerbating the situation. Good money is being thrown after bad in bailing out failing (or failed) enterprises like AIG (NYSE: AIG), Bank of America (NYSE: BAC), Citigroup (NYSE: C), and General Motors (NYSE: GM). In case you haven't noticed, these aren't one-time rescues -- they're beginning to look an awful lot like bottomless money pits.
That means there's less capital for actual healthy companies. Welcome to the zombie economy, folks, and that devours the healthy. Meanwhile, the government's deficit-ridden spending plans give plenty of reason to be skeptical in these precarious times.
The specter of worthless currency
Word that the Federal Reserve is firing up the printing presses heightens my anxiety. Google "Weimar Republic" to get an idea of what might be in store. And of course, Zimbabwe is a modern-day testimony to hyperinflation. (Here's a great article that explores the question as to whether we're on the road to being like deflationary Japan or hyperinflationary Zimbabwe.) Last but not least, Iceland is a timely example of an actual national-level economic collapse in the here and now.
And if you think people are scared or unhappy now, imagine how they will feel if they're paying, say, 40% more for staples like milk and bread.
I know I'm not the only one out there entertaining the notion that things could get far, far worse before they get better. Several of the bloggers in our Motley Fool CAPS community recognize the dangerous precipice we may be teetering on. (Here are two recent posts that hit on some of these themes: Gun Craze and Haven't Seen the Bottom.) While I can only hope that things won't get so dire, I am of the opinion that dismissing such concerns out of hand is a mistake. I'm sure many lost or faded civilizations over the course of history had citizens utter something along the lines of, "It could never happen here."
Those four things ...
It's not out of the realm of imagination that social unrest could occur in some urban and industrialized areas if joblessness and general outrage become bad enough, and of course, add in the possibility of hyperinflation, and things could get nasty.
I'm certainly not hoping everybody's going to go cuckoo for Cocoa Puffs, as panic does none of us any good; however, we could be one flippant "Let them eat cake"-type remark away from "viva la revolution!," or maybe just some run-of-the-mill semi-apocalyptic social mayhem.
With that in mind, here are four things people need to insure they have at all times:
Food: Most of us know that having stores of canned goods and bottled water never hurts. That goes for the possibility of natural disasters as well as less natural events. We might all want to think about upping the ante of what we have stocked up, just in case, including necessary medicines.
Shelter: Your home is your castle. Moats aren't exactly in these days, but it might be a good time to think about upgrading locks and security systems. Some might even want to consider relocating to less populated areas, or even have an RV.
Transportation: Keeping your car well maintained isn't a bad idea, either, with a half a tank of gas at all times just in case. It's also a good idea to have bottled water, blankets, and non-perishable snacks in the trunk. There's always the possibility that you might have to flee and there won't be time to stop at ExxonMobil (NYSE: XOM) for a fill-up and a snack.
Security: All you have to do is glance at the stock charts for Smith & Wesson (NYSE: SWHC) or Sturm, Ruger (NYSE: RGR) to see something's up; in fact, in the first couple months of this year, there was a 26% rise in the number of Americans who bought guns. Some gun purchasing is probably related to fears the current administration will pass more stringent gun control laws, but very recent spikes make me wonder if many people are packing heat because they believe they may have to defend themselves and their property or even hunt for food.
It's better to be safe than sorry
Believe it or not, I am still not outright rejecting the idea of investing right now; that may be testament to how I believe in bravery in the face of scary times (or it could simply mean I have some sort of cognitive dissonance disorder that might require medication). However, I do believe that there are opportunities in hard times, although the trick is identifying them.
Of course, those with the stomach for investing should be very careful, looking for survivor companies with little or no debt and strong businesses that will withstand forces that could knock a ton of weak companies out of the running.
Most important, though, your own well-being is first and foremost, which underlines why those four things above are things to consider. And as always, nobody should invest money they actually need for near-term expenses. Things are so ugly right now, I think now more than ever long-term investing can't be defined as a year or two.
I hope my dire fears don't come to pass, and then I will be able to just laugh about how imaginative and paranoid I can be; I also believe tough times can prove what we are all made of, and allow for ample opportunities to help our neighbors and invent and create new things despite adversity. On the other hand, I think it's important to contemplate worst-case scenarios and do a little contingency planning.
As the old saying goes, it's better to be safe than sorry.
Read up on some related Foolishness:
The government's making war on private capital.
Is $10.2 trillion a mere drop in the bucket?
Japan today, Zimbabwe tomorrow?
World Depression: Regional Wars and the Decline of the US Empire
David Axelrod and Rahm Emanuel
http://atheonews.blogspot.com/2009/03/world-depression-regional-wars-and.html
By James Petras
Mar 26, 2009
Introduction
All the idols of capitalism over the past three decades crashed. The assumptions and presumptions, paradigm and prognosis of indefinite progress under liberal free market capitalism have been tested and have failed. We are living the end of an entire epoch: Experts everywhere witness the collapse of the US and world financial system, the absence of credit for trade and the lack of financing for investment. A world depression, in which upward of a quarter of the world’s labor force will be unemployed, is looming. The biggest decline in trade in recent world history – down 40% year to year – defines the future. The imminent bankruptcies of the biggest manufacturing companies in the capitalist world haunt Western political leaders. The ‘market’ as a mechanism for allocating resources and the government of the US as the ‘leader’ of the global economy have been discredited. (Financial Times, March 9, 2009) All the assumptions about ‘self-stabilizing markets’ are demonstrably false and outmoded. The rejection of public intervention in the market and the advocacy of supply-side economics have been discredited even in the eyes of their practitioners. Even official circles recognize that ‘inequality of income’ contributed to the onset of the economic crash and should be corrected. Planning, public ownership, nationalization are on the agenda while socialist alternatives have become almost respectable.
With the onset of the depression, all the shibboleths of the past decade are discarded: As export-oriented growth strategies fail, import substitution policies emerge. As the world economy ‘de-globalizes’ and capital is ‘repatriated’ to save near bankrupt head offices – national ownership is proposed. As trillions of dollars/Euros/yen in assets are destroyed and devalued, massive layoffs extend unemployment everywhere. Fear, anxiety and uncertainty stalk the offices of state, financial directorships, the office suites the factories, and the streets…
We enter a time of upheaval, when the foundations of the world political and economic order are deeply fractured, to the point that no one can imagine any restoration of the political-economic order of the recent past. The future promises economic chaos, political upheavals and mass impoverishment. Once again, the specter of socialism hovers over the ruins of the former giants of finance. As free market capital collapses, its ideological advocates jump ship, abandon their line and verse of the virtues of the market and sing a new chorus: the State as Savior of the System - a dubious proposition, whose only outcome will be to prolong the pillage of the public treasury and postpone the death agony of capitalism as we have known it.
Theory of Capital Crisis: The Demise of the Economic Expert
The failed economic policies of political and economic leaders are rooted in the operation of markets – capitalism. To avoid a critique of the capitalist system, writers are blaming the leaders and financial experts for their incompetence, ‘greed’ and individual defects.
Psychobabble has replaced reasoned analysis of structures, material forces and objective reality, which drive, motivate and provide incentives to investors, policy makers and bankers. When capitalist economies collapse, the gods drive the politicians and editorial columnists crazy, depriving them of any capacity to reason about objective processes and sending them into the wilderness of subjective speculation.
Instead of examining the opportunity structures created by enormous surplus capital and the real existing profit margins, which in drive capitalists into financial activity, we are told it was ‘the failure of leadership’. Instead of examining the power and influence of the capitalist class over the state, in particular the selection of economic policy-makers and regulators who would maximize their profits, we are told there was a ‘lack of understanding’ or ‘willful ignorance of what markets need’. Instead of looking at the real social classes and class relations – specifically the historically existing capitalist classes operating in real existing markets - the psycho-babblers posit an abstract ‘market’ populated by imaginary (‘rational’) capitalists. Instead of examining how rising profits, expanding markets, cheap credit, docile labor, and control over state policies and budgets, create ‘investor confidence’, and, in their absence, destroy ‘confidence’, the psychobabblers claim that the ‘loss of confidence’ is a cause for the economic debacle. The objective problem of loss of specific conditions, which produce profits, as leading to the crisis, is turned into a ‘perception’ of this loss.
Confidence, faith, hope, trust in capitalist economies derive from economic relations and structures which produce profits. These psychological states are derivative from successful outcomes: Economic transactions, investments and market shares that raise value, multiply present and future gains. When investments go sour, firms lose money, enterprises go bankrupt, and those prejudiced ‘lose confidence’ in the owners and brokers. When entire economic sectors severely prejudice the entire class of investors, depositors and borrowers, there is a loss of ‘systemic confidence.’
Psychobabble is the last resort of capitalist ideologues, academics, experts and financial page editorialists. Unwilling to face the breakdown of real existing capitalist markets, they write and resort to vague utopias such as ‘proper markets’ distorted by ‘certain mindsets’. In other words, to save their failed ideology based on capitalist markets, they invent a moral ideal the ‘proper capitalist mind and market’, divorced from real behavior, economic imperatives and contradictions embedded in class warfare.
The inadequate and shoddy economic arguments, which pervade the writing of capitalist ideologues parallels the bankruptcy of the social system in which they are embedded. The intellectual and moral failures of the capitalist class and their political followers are not personal defects; they reflect the economic failure of the capitalist market.
The crash of the US financial system is symptomatic of a deeper and more profound collapse of the capitalist system that has its roots in the dynamic development of capitalism in the previous three decades. In its broadest terms, the current world depression results from the classic formulation outlined by Karl Marx over 150 years ago: the contradiction between the development of the forces and relations of production.
Contrary to the theorists who argue that ‘finance’ and ‘post-industrial’ capitalism have ‘destroyed’ or de-industrialized the world economy and put in its place a kind of “casino” or speculative capital, in fact, we have witnessed the most spectacular long-term growth of industrial capital employing more industrial and salaried workers than ever in history. Driven by rising rates of profit, large scale and long-term investments have been the motor force for the penetration by industrial and related capital of the most remote underdeveloped regions of the world. New and old capitalist countries spawned enormous economic empires, breaking down political and cultural barriers to incorporating and exploiting billions of new and old workers in a relentless process. As competition from the newly industrialized countries intensified, and as the rising mass of profits exceeded the capacity to reinvest them most profitably in the older capitalist centers, masses of capital migrated to Asia, Latin America, Eastern Europe, and to a lesser degree, into the Middle East, Southern Africa.
Huge surplus profits spilled over into services, including finance, real estate, insurance, large-scale real estate and urban lands.
The dynamic growth of capitalism’s technological innovations found expression in greater social and political power – dwarfing the organization of labor, limiting its bargaining power and multiplying its profits. With the growth of world markets, workers were seen merely as ‘costs of production’ not as final consumers. Wages stagnated; social benefits were limited, curtailed or shifted onto workers. Under conditions of dynamic capitalist growth, the state and state policy became their absolute instrument: restrictions, controls, regulation were weakened. What was dubbed “neo-liberalism” opened new areas for investment of surplus profits: public enterprises, land, resources and banks were privatized.
As competition intensified, as new industrial powers emerged in Asia, US capital increasingly invested in financial activity. Within the financial circuits it elaborated a whole series of financial instruments, which drew on the growing wealth and profits from the productive sectors.
US capital did not ‘de-industrialize’ – it relocated to China, Korea and other centers of growth, not because of “falling profits” but because of surplus profits and greater profits overseas.
Capital’s opening in China provided hundreds of millions of workers with jobs subject to the most brutal exploitation at subsistence wages, no social benefits, little or no organized social power. A new class of Asian capitalist collaborators, nurtured and facilitated by Asian state capitalism, increased the enormous volume of profits. Rates of investments reached dizzying proportions, given the vast inequalities between income/property owning class and wageworkers. Huge surpluses accrued but internal demand was sharply constrained. Exports, export growth and overseas consumers became the driving force of the Asian economies. US and European manufacturers invested in Asia to export back to their home markets – shifting the structure of internal capital toward commerce and finance. Diminished wages paid to the workers led to a vast expansion in credit. Financial activity grew in proportion to the entrance of commodities from the dynamic, newly industrialized countries. Industrial profits were re-invested in financial services. Profits and liquidity grew in proportion to the relative decline in real value generated by the shift from industrial to financial/commercial capital.
Super profits from world production, trade, finances and the recycling of overseas earnings back to the US through both state and private financial circuits created enormous liquidity. It was far beyond the historical capacity of the US and European economies to absorb such profits in productive sectors.
The dynamic and voracious exploitation of the huge surplus labor forces in China, India, and elsewhere and the absolute pillage and transfer of hundreds of billions from ex-communist Russia and ‘neo-liberalized’ Latin America filled the coffers of new and old financial institutions.
Over-exploitation of labor in Asia, and the over-accumulation of financial liquidity in the US led to the magnification of the paper economy and what liberal economist later called “global disequilibrium” between savers/industrial investors/ exporters (in Asia) and consumers/financiers/importers(in the US). Huge trade surpluses in the East were papered over by the purchase of US T-notes. The US economy was precariously backed by an increasingly inflated paper economy.
The expansion of the financial sector resulted from the high rates of return, taking advantage of the ‘liberalized’ economy imposed by the power of diversified investment capital in previous decades. The internationalization of capital, its dynamic growth and the enormous growth of trade outran the stagnant wages, declining social payments, the huge surplus labor force. Temporarily, capital sought to bolster its profits via inflated real estate based on expanded credit, highly leveraged debt and outright massive fraudulent ‘financial instruments’ (invisible assets without value). The collapse of the paper economy exposed the overdeveloped financial system and forced its demise. The loss of finance, credit and markets, reverberated to all the export-oriented industrial manufacturing powers. The lack of social consumption, the weakness of the internal market and the huge inequalities denied the industrial countries any compensatory markets to stabilize or limit their fall into recession and depression. The dynamic growth of the productive forces based on the over-exploitation of labor, led to the overdevelopment of the financial circuits, which set in motion the process of ‘feeding off’ industry and subordinating and undermining the accumulation process to highly speculative capital.
Cheap labor, the source of profits, investment, trade and export growth on a world scale, could no longer sustain both the pillage by finance capital and provide a market for the dynamic industrial sector. What was erroneously dubbed a financial crisis or even more narrowly a “mortgage” or housing crisis, was merely the “trigger” for the collapse of the overdeveloped financial sector. The financial sector, which grew out of the dynamic expansion of ‘productive’ capitalism, later ‘rebounded’ against it. The historic links and global ties between industry and financial capital led inevitably to a systemic capitalist crisis, embedded in the contradiction between impoverished labor and concentrated capital.
The current world depression is a product of the ‘over-accumulation’ process of the capitalist system in which the crash of the financial system was the ‘detonator’ but not the structural determinant. This is demonstrated by the fact that industrial Japan and Germany experienced a bigger fall in exports, investments and growth than ‘financial’ US and England.
The capitalist system in crisis destroys capital in order to ‘purge itself’ of the least efficient, least competitive and most indebted enterprises and sectors, in order to re-concentrate capital and reconstruct the powers of accumulation – political conditions permitting. The re-composition of capital grows out of the pillage of state resources – so-called bailouts and other massive transfers from the public treasury (read ‘taxpayers’), which results from the savage reduction of social transfers (read ‘public services’) and the cheapening of labor through firings, massive unemployment, wage, pension and health reductions and the general reduction of living standards in order to increase the rate of profit.
The World Depression: Class Analysis
The aggregate economic indicators of the rise and fall of the world capitalist system are of limited value in understanding the causes, trajectory and impact of the world depression. At best, they describe the economic carnage; at worst, they obfuscate the leading (ruling) social classes, with their complex networks and transformations, which directed the expansion and economic collapse and the wage and salaried (working) classes, which produced the wealth to fuel the expansive phase and now pay the cost of the economic collapse.
It is a well-known truism that those who caused the crisis are also the greatest beneficiaries of government largesse. The crude and simple everyday observations that the ruling class ‘made’ the crisis and the working class ‘pays’ the cost, at a minimum, is a recognition of the utility of class analyses in deciphering the social reality behind the aggregate economic data. Following the recession of the early 1970s, the Western industrial capitalist class secured financing to launch a period of extensive and deep growth covering the entire globe. German, Japanese and Southeast Asian capitalists flourished, competed and collaborated with their US counterpart. Throughout this period the social power, organization and political influence of the working class witnessed a relative and absolute decline in their share of material income. Technological innovations, including the re-organization of work, compensated for wage increases by reducing the ‘mass of workers’ and in, particular, their capacity to pressure the prerogatives of management. The capitalist strategic position in production was strengthened: they were able to exercise near absolute control over the location and movements of capital.
The established capitalist powers – especially in England and the US -- with large accumulations of capital and facing increasing competition from the fully recovered German and Japanese capitalists, sought to expand their rates of return by moving capital investments into finance and services. At first, this move was linked and directed towards promoting the sale of their manufactured products by providing credit and financing toward the purchases of automobiles or ‘white goods’. Less dynamic industrial capitalists relocated their assembly plants to low-wage regions and countries. The results were that industrial capitalists took on more the appearance of ‘financiers’ in the US even as they retained their industrial character in the operation of their overseas manufacturing subsidiaries and satellite suppliers. Both overseas manufacturing and local financial returns swelled the aggregate profits of the capitalist class. While capital accumulation expanded in the ‘home country’, domestic wages and social costs were under pressure as capitalists imposed the costs of competition on the backs of wage earners via the collaboration of the trade unions in the US and social democratic political parties in Europe. Wage constraints, tying wages to productivity in an asymmetrical way and labor-capital pacts increased profits. US workers were ‘compensated’ by the cheap consumer imports produced by the low-wage labor force in the newly industrializing countries and access to easy credit at home.
The Western pillage of the former-USSR, with the collaboration of gangster-oligarchs, led to the massive flow of looted capital into Western banks throughout the 1990s. The Chinese transition to capitalism in the 1980s, which accelerated in the 1990s, expanded the accumulation of industrial profits via the intensive exploitation of tens of millions of wageworkers employed at subsistence levels. While the trillion-dollar pillage of Russia and the entire former Soviet Union bloated the West European and US financial sector, the massive growth of billions of dollars in illegal transfers and money laundering toward US and UK banks added to the overdevelopment of the financial sector. The rise in oil prices and ‘rents’ among ‘rentier’ capitalists added a vast new source of financial profits and liquidity. Pillage, rents, and contraband capital provided a vast accumulation of financial wealth disconnected from industrial production. On the other hand, the rapid industrialization of China and other Asian countries provided a vast market for German and Japanese high-end manufacturers: they supplied the high quality machines and technology to the Chinese and Vietnamese factories.
US capitalists did not ‘de-industrialize’ – the country did. By relocating production overseas and importing finished products and focusing on credit and financing, the US capitalist class and its members became diversified and multi-sectoral. They multiplied their profits and intensified the accumulation of capital.
On the other hand, workers were subject to multiple forms of exploitation: wages stagnated, creditors squeezed interest, and the conversion from high wage/high skill manufacturing jobs to lower-paid service jobs steadily reduced living standards.
The basic process leading up to the breakdown was clearly present: the dynamic growth of western capitalist wealth was based, in part, on the brutal pillage of the USSR and Latin America, which profoundly lowered living standards throughout the 1990s. The intensified and savage exploitation of hundreds of millions of low-paid Chinese, Mexican, Indonesian and Indochinese workers, and the forced exodus of former peasants as migrant laborers to manufacturing centers led to high rates of accumulation.
The relative decline of wages in the US and Western Europe also added to the accumulation of capital. The German, Chinese, Japanese, Latin American and Eastern European emphasis on export-driven growth added to the mounting ‘imbalance’ or contradiction between concentrated capitalist wealth and ownership and the growing mass of low-paid workers. Inequalities on a world scale grew geometrically. The dynamic accumulation process exceeded the capacity of the highly polarized capitalist system to absorb capital in productive activity at existing high rates of profit. This led to the large scale and multiform growth of speculator capital inflating prices and investing in real estate, commodities, hedge funds, securities, debt-financing, mergers and acquisitions -- all divorced from real value-producing activity. The industrial boom and the class constraints imposed on workers wages undermined domestic demand and intensified competition in world markets.
Speculator-financial activity with massive liquidity offered a ‘short-term solution’: profits based on debt financing. Competition among lenders fueled the availability of cheap credit. Real estate speculation was extended into the working class, as wage and salaried workers, without personal savings or assets, took advantage of their access to easy loans to join the speculator-induced frenzy - based on an ideology of irreversible rising home values. The inevitable collapse reverberated throughout the system – detonated at the bottom of the speculative chain. From the latest entrants to the real estate sub-prime mortgage holders, the crisis moved up the ladder affecting the biggest banks and corporations, who engaged in leveraged buyouts and acquisitions. All ‘sectors’, which had ‘diversified’ from manufacturing to finance, trade and commodities speculation, were downgraded. The entire panoply of capitalists faced bankruptcy. German, Japanese and Chinese industrial exporters who exploited labor witnessed the collapse of their export markets.
The ‘bursting’ financial bubble was the product of the ‘over-accumulation’ of industrial capital and the pillage of wealth on a world scale. Over-accumulation is rooted in the most fundamental capitalist relation: the contradictions between private ownership and social production, the simultaneous concentration of capital and sharp decline of living standards.
Capitalist Crisis: A Class Analysis
Indicators of the deepening depression in 2009 are found everywhere:
Bankruptcies rose by 14% in 2008 and are set to rise another 20% in 2009 (Financial Times, Feb. 25, 2009; p27).
The write-down of the Western big banks is running at 1 Trillion dollars and growing (according to the Institute for International Financing, the banking groups Washington lobby). (Financial Times , March 10, 2009 p.9).
And according to the Financial Times (ibid) the losses arising from banks having to mark their investments down to market prices stand at 3 Trillion dollars – equivalent to a year’s worth of British economic production. In the same report, the Asian Development Bank is quoted as having estimated that financial assets worldwide have fallen by more than $50 trillion – a figure of the same order as annual global output. For 2009, the US will run a budget deficit of 12.3% of gross domestic product…giant fiscal deficits…that will ultimately ruin public finances.
The world markets have been in a vertical fall:
The TOPIX has fallen from 1800 in mid-2007 to 700 in early 2009;
Standard and Poor from 1380 in early 2008 to below 700 in 2009;
FTSE 100 from 6600 to 3600 in early 2009;
Hang Seng from 32,000 in early 2008 to 13,000 at the start of 2009 (Financial Times, Feb 25, 2009; p27).
In the fourth quarter of 2008, GDP shrank at annualized rate of 20.8% in South Korea, 12.7% in Japan, 8.2% in Germany, 2.9% in the UK and 3.8% in the US (FT, Feb.25, 2009; p9).
The Dow Jones Industrial Average has declined from 14,164 in October 2007 to 6500 in March 2009.
Year on year declines in industrial output were 21% in Japan, 19% in South Korea, 12% in Germany, 10% in the US, and 9% in the UK (Financial Times, Feb.25, 2009; p.9.)
Net private capital flows to less developed capitalist countries from the imperial countries were predicted to shrink by 82% and credit flows by $30 billion USD (Financial Times, Feb. 25, 2009; p9).
The US economy declined by 6.2% in the last three months of 2008 and fell further in the first quarter of 2009 as a result of a sharp decline in exports (23.6%) and consumer spending (4.3%) in the final quarter of 2008 (British Broadcasting Corporation, Feb. 27, 2009).
With over 600,000 workers losing their jobs monthly in the first three months of 2009, and many more on short hours and scheduled for axing throughout 2009, real and disguised unemployment may reach 25% by the end of the year. All of the signs point to a deep and prolonged depression:
Automobile sales of General Motors, Chrysler and Ford were down nearly 50% year to year (2007-2008). The first quarter of 2009 saw a further decline of 50%.
Foreign markets are drying up as the depression spreads overseas.
In the US domestic market, durable goods sales are declining by 22% (BBC, Feb. 27, 2009).
Residential investments fell by 23.6% and business investment was down 19.1%, led by a 27.8% drop in equipment and software.
The rising tide of depression is driven by private business led disinvestment. Rising business inventories, declining investment, bankruptcies, foreclosures, insolvent banks, massive accumulative losses, restricted access to credit, falling asset values and a 20% reduction in household wealth (over 3 trillion dollars) are cause and consequence of the depression. As a result of collapse of the industrial, mining, real estate and trade sectors, there are at least $2.2 trillion USD of “toxic” (defaulting) bank debt worldwide, far beyond the bailout funds allocated by the White House in October 2008 and February and March 2009.
The depression is diminishing the worldwide economic presence of imperial countries and undermining the foreign capital-financed export strategies of Latin American, Eastern European, Asian and African regions.
Among almost all conventional economists, pundits, investment advisors and various and sundry experts and economic historians, there is a common faith that “in the long-run”, the stock market will recover, the recession will end and the government will withdraw from the economy. Fixed on notions of past cyclical patterns, historical ‘trends’, these analysts lose sight of the present realities which have no precedent: the world nature of the economic depression, the unprecedented speed of the fall, and the levels of debt incurred by governments to sustain insolvent banks and industries and the unprecedented public deficits, which will drain resources for many generations to come.
The academic prophets of ‘long-term developments” arbitrarily select trend markers from the past, which were established on the basis of a political-economic context radically different from today. The idle chatter of ‘post crisis’ economists overlooks the open-ended and constantly shifting parameters therefore missing the true ‘trend markers’ of the current depression. As one analyst noted, “any starting conditions we select in the historical data cannot replicate the starting conditions at any other moment because the preceding events in the two cases are never identical” (Financial Times, Feb. 26, 2009; p24). The current US depression takes place in the context of a de-industrialized economy, an insolvent financial system, record fiscal deficits, record trade deficits, unprecedented public debt, multi-trillion dollar foreign debt and well over $800 billion dollars committed in military expenditures for several ongoing wars and occupations. All of these variables defy the contexts in which previous depressions occurred. Nothing in previous contexts leading up to a crisis of capitalism resembles the present situation. The present configuration of economic, political and social structures of capitalism include astronomical levels of state pillage of the public treasury in order to prop up insolvent banks and factories, involving unprecedented transfers of income from wage and salaried taxpayers to non-productive ‘rent earners’ and to failed industrial capitalists, dividend collectors and creditors. The rate and levels of appropriation and reduction of savings, pensions and health plans, all without any compensation, has led to the most rapid and widespread reduction of living standards and mass impoverishment in recent US history.
Never in the history of capitalism has a deep economic crisis occurred without any alternative socialist movement, party or state present to pose an alternative. Never have states and regimes been under such absolute control by the capitalist class -- especially in the allocation of public resources. Never in the history of an economic depression has so much of government expenditures been so one-sidedly directed towards compensating a failed capitalist class with so little going to wage and salaried workers.
The Obama regime’s economic appointments and policies clearly reflect the total control by the capitalist class over state expenditures and economic planning.
Obama and the Capitalist Crisis: A Class Analysis
The programs put forth by the US and West Europeans and other capitalist regions do not even begin to recognize the structural bases of the depression.
First, Obama is allocating $1 trillion dollars to buy worthless bank assets and over 40% of his $787 billion stimulus package to insolvent banks and tax breaks, rather than to the productive sector, in order to save stock and bond holders, while over 600,000 workers lose their jobs monthly.
Secondly, the Obama regime is channeling over $800 billion dollars to fund the wars in Iraq and Afghanistan to sustain military-driven empire building. This constitutes a massive transfer of public funds from the civilian economy to the military sector forcing tens of thousands of unemployed young people to enlist in the military (Boston Globe, March 1, 2009).
Thirdly, Obama’s commission to oversee the “restructuring” of the US auto industry has backed their plans to close scores of factories, eliminate company-financed health plans for retirees and force tens of thousands of workers to accept brutal reductions in employee health care and pensions. The entire burden for returning the privately owned auto industry to profits is placed on the shoulders of the wage, salaried and retired workers, and the US taxpayers.
The entire economic strategy of the Obama regime is to save the bondholders by pouring endless trillions of dollars into insolvent corporations and buying the worthless debts and failed assets of financial enterprises. At the same time his regime avoids any direct state investments in publicly owned productive enterprises, which would provide employment for the 10 million unemployed workers. While Obama’s budget allocates over 40% to military expenditures and debt payments, 1 out of every 10 Americans have been evicted from their homes, the number of Americans without jobs is rising to double digits, and the number of Americans on ‘food stamps’ to provide basic food needs is rising by the millions throughout 2009.
Obama’s ‘job creation’ scheme channels billions toward the privately owned telecommunication, construction, environmental and energy corporations, where the bulk of the government funds go to senior management and staff and provide profits to stock holders, while a lesser part will go to wage workers. Moreover, the bulk of the unemployed workers in the manufacturing and service areas are not remotely employable in the ‘recipient’ sectors. Only a fraction of the ‘stimulus package’ will be allocated in 2009. Its purpose and impact will be to sustain the income of the financial and industrial ruling class and to postpone their long-overdue demise. Its effect will be to heighten the socioeconomic inequalities between the ruling class and the wage and salaried workers. The tax increases on the rich are incremental, while the massive debts resulting from the fiscal deficits are imposed on present and future wage and salaried taxpayers.
Obama’s wholehearted embrace and promotion of military-driven empire building even in the midst of record-breaking budget deficits, huge trade deficits and an advancing depression defines a militarist without peer in modern history. Despite promises to the contrary, the military budget for 2009-2010 exceeds the Bush Administration by at least 4%. The numbers of US military forces will increase by several hundred thousands. The number of US troops in Iraq will remain close to its peak and increase by tens of thousands in Afghanistan, at least through 2009 (despite promises to the contrary). US-based miliary air and ground attacks in Pakistan have multiplied geometrically. Obama’s top foreign policy appointees in the State Department, Pentagon, Treasury and the National Security Council, especially in any capacity involving the Middle East, are predominantly militarist Zionists with a long history of advocacy of war against Iran and with close ties with the Israeli high command.
In summary, the highest priorities of the Obama regime are evidenced by his allocation of financial and material resources, his appointments of top economic and foreign policy-makers and in terms of which classes benefit and which lose under his administration. Obama’s policies demonstrate that his regime is totally committed to saving the capitalist class and the US empire. To do so, he is willing to sacrifice the most basic immediate needs and future interests, as well as the living standards, of the vast majority of working and home-owning Americans who are most directly affected by the domestic economic depression. Obama has increased the scope of military-driven empire building and enhanced the power position of the pro-Israeli warmongers in his administration. Obama’s ‘economic recovery’ and military escalation strategies are financially and fiscally incompatible; the cost of one undermines the impact of the other and leaves a tremendous hole in any efforts to counteract the collapse of social services, rising home foreclosures, business bankruptcies and massive layoffs.
The horizontal transfers of public wealth from the Obama governing elite to the economic ruling class does not “trickle down” into jobs, credit and social services. Attempting to turn insolvent banks into credit-lending, profitable enterprises is an oxymoron. The central dilemma for Obama is how to create conditions to restore profitability to the failed sectors of the existing US economy.
There are several fundamental problems with his strategy:
First, the US economic structure, which once generated employment, profits and growth, no longer exists. It has been dismantled in the course of diverting capital overseas and into financial instruments and other non-productive economic sectors.
Second, the Obama ‘stimulus’ policies reinforce the financial stranglehold over the economy by channeling great resources to that sector instead of ‘rebalancing’ the economy toward the productive sector. Even within the ‘productive sector’ state resources are directed toward subsiding capitalist elites who have demonstrated their incapacity to generate sustained employment, foster market competitiveness and innovate in line with consumer preferences and interests.
Third, the Obama economic strategy of ‘top-down’ recovery squanders most of its impact in subsidizing failed capitalists instead of raising working class income by doubling the minimum wage and unemployment benefits, which is the only real basis for increasing demand and stimulating economic recovery. Given the declining living standards resulting from domestic decay and the expansion of military-driven empire, both embedded in the institutional foundation of the state, there are no chances for the kind of structural transformation that can reverse the ‘top-down’, empire-absorbing policies promoted by the Obama regime.
Recovery from the deepening depression does not reside in running a multi-trillion dollar printing operation, which only creates conditions for hyperinflation and the debasement of the dollar. The root cause is the over-accumulation of capital resulting from over-exploitation of labor, leading to rising rates of profit and the collapse of demand. The vast disparity between capital expansion and decline of worker consumption set the stage for the financial bubble.
The ‘rebalancing’ of the economy means creating demand (not from an utterly prostrate private productive sector or an insolvent financial system) via direct state ownership and long-term, large-scale investment in the production of goods and social services. The entire speculative ‘superstructure’, which grew to enormous proportions by feeding off of the value created by labor, multiplied itself in a myriad of ‘paper instruments’ divorced from any use value. The entire paper economy needs to be dismantled in order to free the productive forces from the shackles and constraints of unproductive capitalists and their entourage. A vast re-training program needs to be established to convert stockbrokers into engineers and productive workers. The reconstruction of the domestic market and the invention and the application of innovations to raise productivity require the massive dismantling of the worldwide empire. Costly and unproductive military bases, the essential elements for military-driven empire building, should be closed and replaced by overseas trade networks, markets, and economic transactions linked to producers operating out of their home markets. Reversing domestic decay requires the end of empire and the construction of a democratic socialist republic. Fundamental to the dismantling of empire is the end of political alliances with overseas militarist powers, in particular with the state of Israel and uprooting its entire domestic power configuration, which undermine efforts to create an open democratic society serving the interests of the American people.
Regional Impact of the Global Crisis
The worldwide depression has both common and different causes, affected by the interconnections between economies and specific socio-economic structures. At the most general-global level the rising rate of profits and the over-accumulation of capital leading to the financial-real estate-speculative frenzy and crash affected most countries either directly or indirectly. At the same time, while all regional economies suffered the consequences of the onset of the depression, regions were situated in the world economy differently and subsequently the effects varied substantially.
Latin America
Brazil with its free market policies in disarray and huge class divisions undermining any domestic recovery, its high velocity fall in exports and industrial production is heading toward a deep recession despite the boasts and claims of Wall Street and the White House favorite, President Lula da Silva.
In January 2009, industrial production fell 17.2% year to year. Gross domestic product contracted 3.6% in the last quarter of 2008 (Financial Times, March 11, 2009). All indications are that negative growth will persist and deepen during the rest of 2009. Foreign direct investment and export markets, the driving forces of past growth are in sharp retrenchment. Lula’s privatization policies have led to extensive foreign takeover of the financial sector, which has transmitted the crises from the US and EU. His ‘globalization’ policies increase Brazil’s vulnerability to the collapse of foreign trade.
Capital flows are strongly negative. Hundreds of thousands of workers lost their jobs between December 2008 and April 2009. The 5 million impoverished landless rural workers and the 10 million families living on a one dollar a day food-basket handout from the government are excluded from effective domestic demand as are the tens of millions of minimum wage workers living on $250 dollars a month. The purchasing power of highly indebted family farmers is no substitute for shrinking external demand. All sectors, rural and urban, of the capitalist class are freezing new investments as private credit evaporates, overseas investors flee and local consumer spending declines in the face of the deepening recession. Lula’s claims of ‘decoupling’ and his growth projections of 4% are seen as ‘seeding illusions’ to cover up the onset of a severe economic recession. Lula’s blind support for globalization and the ‘free market’ is a central determinant of Brazil’s deepening recession.
Brazil descent into negative GDP is the pattern throughout the region. Argentina is headed for minus 2% growth, Mexico –minus 3% and Chile 0% or less. Central America and the Caribbean, which are highly ‘integrated’ with the US and world economy are experiencing the full force of the world depression in skyrocketing unemployment resulting from the collapse of tourism, declining demand for primary commodities and a serious drop in remittances from overseas workers. There will be a sharp rise in extreme poverty, crime and a potential for popular social upheavals against the incumbent right and center-left governments.
The spread of imperial capital throughout the world, dubbed ‘globalization’ by its defenders (and imperialism by its critics), led to the rapid spread of the financial crisis and breakdown among those countries most closely linked to the US and European financial circuits. Globalization tied Latin American economies to world markets, at the expense of domestic markets, and increased their vulnerability to the vertical fall in demand, prices and credit witnessed today. Globalization, which earlier promoted the inflow of capital, now, with the onset of the depression, facilitates massive capital outflow. US, which is absorbing 70% of the world’s savings in its desperate effort to borrow and finance its monstrous trade and budget deficits, has squeezed out its Latin American trading partners from the global credit market.
The depression demonstrates with crystal clarity the pitfalls of imperial-centered globalization and the stark absence of any remedies for its collaborators in Latin America. The disintegration of the imperial-centered global economy is evident amidst rising protectionism and billions of dollars in state subsidies to prop up the imperial states’ own capitalists in the banking, insurance, real estate and manufacturing sectors. The world depression not only reveals the intrinsic fault lines of the globalized economy, but ensures its ultimate demise into a multiplicity of competing units: nations, each depending on their own treasuries and state sectors to pull them out of the deepening depression at the expense of their former partners. The world depression is spurring the return of the nation-state, as ‘de-globalization’ accelerates.
Parallel and intimately related to the demise of the world market is the rise of the capitalist state as the center-piece for salvaging the national treasury and exacting an exorbitant tribute from the pension, health and wage funds of billions of workers, pensioners and tax-payers. Growing ‘state capitalism’ in times of capitalist collapse only emerges to ‘save the capitalist system from capitalist failures’ as its promoters argue. In order to do so it exploits the collective wealth of the entire people. ‘Nationalization’ or ‘statification’ of insolvent banks and industries is the culmination of predator capitalism. Instead of individual enterprises or even sectoral exploitation of wage and salaried workers, it is the capitalist state that preys on the entire class of the producers of wealth.
Latin America’s options revolve around recognizing and accepting that globalization is dead, that only under popular democratic control can nationalization serve to generate wealth and create employment, instead of serving to channel and redistribute resources upward and outward to the failed, bankrupt capitalist class.
Eastern Europe and the ex-communist countries
The conversion from communism to capitalism in Eastern Europe followed a process of privatization, in many cases based on widespread pillage, the illegal seizures of public resources and the precipitous fall in domestic living standards and production during the first half of the 1990’s. Taking advantage of cheap labor, easy access to lucrative opportunities in all economic sectors, Western European and US capitalists took control of the manufacturing, mining, financial and communication sectors. At the same time as the barriers between East and West fell, there was a massive flow of skilled workers to Western Europe. The economic recovery and subsequent growth in Eastern Europe and the ex-communist countries was based on its dependency on the expansion of investment and credit from Western capitalism:
The relocation of manufacturing, the influx of speculative capital in finance and real estate, the access to expanding Western markets and especially debt financing of consumer expenditures spurred Eastern growth.
As a consequence, the region has been hit from two sides during the economic crisis:
A collapse engendered by unsustainable internal speculation and the impact of its dependency on a depressed Western Europe for capital, credit and markets. The capitalist economies of the Baltic States, Eastern Europe and Russia collapsed rapidly. As Western European credit markets shriveled and large-scale multi-national disinvestment set in, the local currencies were devalued and overseas markets disappeared. The entire pattern of ‘dependent development’ rooted in the disarticulation of local markets and inflows of capital undermined local efforts to counter the collapse. Their only choice was to seek massive infusions of financial aid from the IMF and banks on onerous terms, which limited options for any national fiscal stimulus plans.
The regions linkages with world markets, based on subordinate-dependent relations with Western capitalists, meant that first they lacked the internal markets and capital to cushion the fall and, secondly, that the drying up of external flows would deepen and extend the depression. From the Baltic to the Balkan states, from Eastern Europe to Russia the full force of the depression has led to large-scale, long-term unemployment, widespread bankruptcies of local satellite and subsidiary industries, services and banks. Popular movements have emerged calling into question the free market policies of governments, and, in some cases, rejecting the export-dependent capitalist model.
Asia: The End of the Illusions of De-coupling and Autonomous Growth
The Great Depression of 2009 has adversely affected every economy in Asia, dependent on the international, financial and commodity markets. Even the most dynamic countries, like Japan, China, India, South Korea, Taiwan and Vietnam have not escaped the consequences of drastic declines in trade, employment, investment and living standards. Two decades of dynamic expansion, high growth and rising profit margins, based on export markets and intense exploitation of labor, led to the over-accumulation of capital. Many Asian and Western pundits argued for a ‘new world order’, led and directed by the emerging Asian economic powers, especially China, where power would be increasingly based on their ‘regional autonomy’. In reality, China’s dynamic industrial growth was deeply embedded in a world commodity chain in which advanced industrial countries, like Germany, Japan, Taiwan and South Korea, provided precision tools, machinery and parts to China for assembly and subsequent export to US, European and Asian markets. ‘Decoupling’ was a myth.
Export-driven growth was fueled by savage exploitation of labor, the dismantling of vast areas of social services (namely free health care, pensions, subsidized food and lodging and education) and the vast concentration of wealth in a tiny elite of newly rich billionaires (Economic and Political Weekly – Mumbai, December 27, 2008 page 27-102). China and the rest of Asia’s growth was based on the contradiction between the dynamic expansion of the forces of production and the increasing polarization of the class relations of production. The high rates of profit led to the over-accumulation of capital – high rates of investment – leading into huge budget and trade surpluses, which spilled over into the financial sectors, overseas expansion (or money-laundering) and real estate speculation.
Asia’s economic edifice was precariously situated on the backs of hundreds of millions of laborers with virtually no consumer power and an increasing dependence on overseas export markets. The world crisis especially deflated the export markets, exposing the Asian economies’ vulnerabilities and causing a massive fall in trade, production and massive growth in unemployment. China and the other Asian countries’ efforts to counteract the collapse of the export markets by massive injections of public capital to stimulate financial liquidity and infrastructure development has been insufficient to stem the growth of unemployment and the bankruptcy of millions of export-linked enterprises.
The Asian capitalist class and its government elite are entirely incapable of ‘restructuring’ the economy and social structure toward substituting domestic demand as the external market collapses. To do so would mean several profound transformations in the class structure. These include the shift from investments based on high profitability toward low margin productive and social services for the hundreds of millions of low-income workers and peasants. It would require the transfer of capital from private real estate, stock markets and overseas bond purchases (like US Treasury Notes) to finance universal health care, education and pensions and the restoration of land to productive use rather than to dispossession and real estate speculation.
The entire dynamic growth of Asia, built around capital concentration, high profits and low wages, is trying to survive based on deepening the impoverishment of labor via massive firing of workers, huge reverse flows of migrant labor back to the devastated countryside and the growth of the surplus labor force. The expulsion of labor, the usual capitalist solution, merely re-located and intensifies the contradiction – heightening the conflict between urban-based industrial/finance capital and hundreds of millions of impoverished, unemployed and underemployed workers and peasants. The state’s injections of capital to stimulate the economy passes through the ‘filter’ of regional state elites and the capitalist class, which absorbs and uses the bulk of this capital to buttress faltering enterprises – with negligible impact on the mass of unemployed workers.
Private ownership and capitalist control over the state precludes the kind of social transformation, which can restart growth by expanding the domestic economy.
China’s ‘engine of growth-in-reverse’ has, by necessity, undermined its trading partners who depend on industrial and raw material exports to China. The collapse of demand from its Euro-American markets undermines the entire architecture of China’s export industries. The savage exploitation of labor and the power of China’s new bourgeoisie ensure that there are limited possibilities for any revival of domestic demand from the ‘interior’.
China’s economic recovery is dependent on a new socialist transformation, which makes mass domestic demand the real engine of growth.
The Middle East: Depression and Regional Wars
The key to the crisis and breakdown of the Middle East is rooted in the imperial-Zionist regional wars and the collapse of commodity prices.
The oil producing countries accumulated vast ‘rents’, which they re-cycled into large-scale finance, real estate and military purchases in and out of the region. Profits concentrated in the hands of billionaire absolutist rulers led to highly polarized class relationships: super-wealthy rentiers and low-paid immigrant laborers limited the size and scope of the domestic markets. To break out of the crisis of over-accumulation and falling profits, the ruling elites adopted two strategies that temporarily avoided the crisis: Dependence on large-scale export of capital to rent, interest and dividend-yielding sites throughout the world – first to the US and Europe and later to Asia and Africa. The second strategy was to recycle profits into pharaonic real estate, tourist and banking centers in the Gulf States…leading to an enormous real estate bubble.
The collapse of the Middle East ‘rentier (or non-productive) oligarchies’ was detonated by the frenzied commodity oil boom, between 2004-2008, which heightened the process of over-accumulation – and the over-extension of debt and labor importation. The result was the onset of a regional economic crisis, in which budget and trade surpluses are replaced by mounting deficits. At no point did the Middle East economies diversify from their foundation based on ‘rents’ and create a diversified economy centered on production and the creation of a dynamic mass-based regional market. The rentier ruling classes face a growing mass of unemployed immigrant and domestic workers, the massive flight of thousands of expatriate European financiers, real estate professionals and other non-productive hangers-on.
No longer the beneficiaries of the petro-dollar boom – as prices, profits and rents collapsed - and no longer the powerful bankers and holders of debt, the Gulf Arab ruling class has few external and internal resources and outlets to project a ‘recovery program.’
Worse still, in the midst of this emerging economic collapse, the militarist state of Israel serves as a regional destabilizing force projecting its power and colonial ambitions throughout the region. Through one of world history’s most unique configuration of power, the economically insignificant state of Israel, operating through the activity of several tens of thousands of strategically-placed, highly organized, disciplined and ideologically committed loyalists in the Diaspora, control key levels of political power in the US government.
Obama, The Zionist Power Configuration and the Middle East
In the worst economic crisis since the 1930’s ‘Great Depression’ and facing a $1.7 Trillion Dollar budget deficit and over 8.1 million unemployed workers in March 2009 (BBC News, March 6, 2009), numbers, which are expected to double by the end of the year, the Obama Administration has increased the open and hidden military expenditures to $800 billion-plus dollars, a 4% increase over the previous war-mongering regime of George W. Bush. The key target of US military expansion is the Middle East and South Asia, with a population that includes hundreds of millions of mostly Muslims, who are pro-Palestinian, oppose the colonial policies of Israel and the current US military occupation of Muslim countries in the region. The driving force behind US militarism in the Middle East is found in the Zionist/Jewish officials and advisers occupying strategic government positions. They are aided and encouraged by a multiplicity of major American Jewish political action and ‘civic’ organizations, an army of editors, academics, publishers, journalists and propagandists embedded in all the mass media who systematically promote the interests of the state of Israel.
A careful analysis of the Obama regime demonstrates the high level of Zionist penetration and provides an empirical basis for understanding US military escalation in the Middle East, despite the catastrophic condition of the domestic economy. Fighting Israel’s crusades against the Muslims takes precedence over the mass impoverishment of the US population. Nothing speaks to the overweening stranglehold of the Zionist Power Configuration (ZPC) than their ability to escalate a war agenda in the Middle East over the needs of 350 million Americans, the bankruptcy of its 500 Blue Chip corporations and its 5 leading banks, not to mention the over 50 million working Americans without access to health care.
Israel/Zionist Power Configuration and Regional Wars
The Israeli-Zionist stranglehold over Obama’s foreign policy, especially with regard to Middle East issues affecting Israel’s hegemonic ambitions, is evident in the run-up to his taking office and in the first months of power. An empirical survey of major Israeli positions and actions and the Obama regime’s response demonstrates the power of the US Zionist power configuration:
Israel’s savage invasion of Gaza, slaughtering well over a thousand civilians, mostly women and children and destroying a large proportion of the civilian infrastructure, as well as the brutal starvation blockade of the entire imprisoned population of over 1.5 million and the US response is a case in point. Obama’s regime and the entire Democratic Party leadership wholeheartedly endorsed the ongoing slaughter and refused to hold the military and civilian leadership of Israel to a minimal level of responsibility for its crimes. It refused to call for an end to the murderous Israeli land and sea blockade, which prevented the entry of basic foodstuffs, like rice, and critical items for any reconstruction. The Israeli leadership arrogantly dismissed US Secretary of State Clinton’s suggestion for a minor easing up of the blockade, without the least response from Obama. Israel’s continued military attacks on the people of Gaza have been supported by the Obama-Clinton-Gates regime.
Israel’s expansion of its illegal settlements in the occupied West Bank and the massive expropriation of homes and property in Arab East Jerusalem, as well as the ongoing destruction of Palestinian homes is another case. The US has merely reiterated its position for a ‘two-state’ solution.’ Clinton’s earlier very mild questioning of the expansion of colonial settlements in Israeli-occupied land met with the same dismissal from the Jewish State with no consequences to US-Israeli relation.
Israel condemned the international anti-racist conference in Durban, South Africa because of its critique of Israeli-Zionism as a brutal form of racism. When a sector of the Obama regime proposed sending an American delegation to the preparatory meeting to discuss the agenda, the ZPC immediately mobilized its activists and Obama capitulated. The US and several other European states withdrew their participants and condemned the Durban meeting as ‘anti-Semitic’, all parroting the Israeli position.
Israel and its American followers insisted that Obama appoint leading Zionists as his closest advisers and policymakers in strategic positions dealing with US negotiations with Syria and Iran, to ensure that the Israeli state’s own position was pursued. To this end they scuppered the announced appointment of retired Marine General Anthony Zinni because of his known independence from Israeli dictates.
The grotesque casting aside of General Zinni and the Administration’s appointment of Israel’s most ‘loyal’ US-Middle East agent, Dennis Ross, as US ‘negotiator’ with Iran, means that the Israeli war agenda of blockading and attacking Iran will dominate any decisions. Ross, also know as ‘Israel’s lawyer’ is highly distrusted by the governments of the Middle East and Iran because of his past position as a blatant partisan of Israel under the previous Clinton administration.
Even the fact that Ross had been working for an Israeli think-tank directed and funded by the Israeli government, and which made him an un-declared agent of the Jewish state, did not deter his appointment. Among the group of Zionists who inhabit the foreign polity apparatus of the Obama regime, Secretary of State Clinton has appointed Jeffery Feltman, Acting Secretary of State for Near East Affairs and Daniel Shapiro of the White House’s National Security Council to head up negotiations with Syria (BBC News, March 7, 2009).
Appointments of Zionists to top negotiating positions will ensure that very few moves necessary for reciprocal exchanges and concessions, which might conflict with Israel’s hegemonic regional ambitions, will ever happen under Obama. The Obama regime’s appointment of prominent pro-Israel Zionists and well known non-Jewish Israel-Firsters to all major policy and analysis positions, with the fleeting exception of Charles Freeman to head the National Intelligence Council (see below) – guarantees that US-Middle East policy will continue to be formulated in Tel Aviv.
Israeli policy in the Middle East has two vectors:
a. leverage its agents leading the 51 Major Jewish American Organizations to shape US policy toward militarily destroying Israel’s adversaries (like Iran), providing diplomatic and propaganda cover and military aid in its invasions and attacks on Syria, Lebanon and occupied Palestine (Gaza/West Bank), authoring and pursuing economic sanctions – amounting to deliberate acts of war – against Israel’s targets including Iran, Hamas, Hezbollah, Sudan and Somalia.
b. Dividing and conquering its adversaries via negotiations and diplomatic feints. In recent years, Israel, with US backing, has successfully split the Lebanese (the Beirut elite versus Hezbollah), Palestinians (PLO/PA versus Hamas), Iraqi (Kurds versus Arabs), Sudanese (Darfur secessionists versus Khartoum) and, not least of all, in the US (Israel-Firster elites versus the American people).
Unable to precipitate an American air strike against Iran or its collaboration with an Israeli first-strike, the Israeli government, directly and via its US supporters, has promoted a new policy, which involves a break-up of the Syria-Iran alliance. The Obama-Clinton regime, following Israel’s lead, has proceeded to talks with Damascus. The purpose of the US negotiators is to offer greater diplomatic recognition and economic concessions to Syria, in exchange for a Syrian break with Iran, Hezbollah and Hamas. To ensure that Israeli interests would be defended and no territorial concession (like Israel’s illegal colonial occupation of Syrian territory in the Golan Heights) would be addressed, the Obama regime appointed two prominent US Zionists, Feltman and Shapiro, to conduct the US ‘negotiations’. The Syrian diplomatic gambit, intermittently pursued ‘covertly’ by Israel, and now taken up by its US protégé, Secretary Clinton, has thus far failed – because of Israel’s unwillingness to make any territorial concessions in the face of its colonial settlers’ political power and its inability to open Western trade and investment opportunities. The Obama regime will pursue Israel’s goals of ‘neutralizing’ Syria as a political base of support for Hamas leaders and a logistical link between Iran and Hezbollah in Southern Lebanon.
The centerpiece for the most sustained large-scale political, mass media and military campaign, involving all the major Jewish organizations, Zionist lobbies, front groups, legislators and top official in the government has been and continues to be the weakening and destruction of Iran. The opposition to the Zionist power configuration’s confrontational policy is located in sectors of the government – including the intelligence services, the US military, career officials in the State Department and many former top officials. The Zionists have succeeded beyond their wildest dreams. The right-wing Zionist David Frum, (who wrote the most bellicose speeches for the former President Bush and included Iran as a leading member of the ‘Axis of Evil’), and fanatical Zionist Treasury official Stuart Levey have been and continue to be in the forefront of those enforcing and extending the economic sanctions and secondary boycotts against Iranian banking, trading and investment. Every aspect of US policy and legislation pertaining to Iran is closely overseen and often formulated by the Jewish pro-Israel lobby. As a result, efforts by US policy makers seeking to reach agreements with Iran on matters of strategic interest have been sabotaged exclusively by the Israel Firsters. The following is a case in point.
a. Right after September 11, 2001, Iran supported the US attack on the Taliban and played an important role in stabilizing the eastern half of Afghanistan, especially Herat; it supported the overthrow of Saddam Hussein, even as it opposed any long-term US military occupation of Iraq. Influential Zionist agents, inside and outside the Bush regime, rejected and effectively blocked any consideration in Washington of Iran’s offer for a mutual-security agreement. Despite statements from elements in the US military high command recognizing Iran’s critical role in facilitating the US invasions of Afghanistan and Iraq, there was not a single reciprocal concession offered to Iran.
Instead, the entire Zionist ‘State’ within the US State launched a series of punitive measures, echoing Israeli hostility to Iran, including the setting up and training of cross-border death squads to murder Iranian officials on both the Iraqi and Afghan-Pakistani borders. Israel called for harsh sanctions: the AIPAC authored legislation for severe sanctions and their puppets in the Congress co-signed and secured Congressional approval.
Zionists in the Treasury implemented the measures and Israel-First officials in the US State Department pressured European governments to do the same. The Israeli regime, through its worldwide network launched a successful campaign against Iran’s entirely legal and closely monitored nuclear energy program. The hysterical Zionist propaganda campaign was pursued with an intensity, which surpassed even its earlier aggressive blitz against Iraq. The entire Jewish-Zionist apparatus was hell bent on putting the US on a path toward another Middle East war by conflating Iran’s long-stated opposition to Israeli colonial massacres against the Palestinians and Lebanese with a threat to the very survival of the Jewish state and the security of US against an Iranian nuclear attack.
b. Sixteen US intelligence agencies published a report in November 2007 - the National Intelligence Estimate on Iran, which carefully and systematically refuted Israeli and Zionist charges against Iran’s nuclear power program. The report completely dismissed any allegation of ongoing, let alone advanced, Iranian nuclear weapon development. In response to the ‘heresy’ of the US intelligence establishment, the Zionist power configuration went into overdrive and, by the time of Obama’s election, had managed to convince the incoming administration into accepting Israeli fabrications on Iran’s ‘nuclear threat’ and created their own ‘revised’ National Intelligence Estimate (NIE) to fit their policy goals.
c. The Obama regime, facing an unsuccessful counter insurgency war in Afghanistan has, once again had to turn to Iran for support. To ensure that no meaningful negotiations involving reciprocal concessions take place, the lobby secured the appointment of pro-Israel fanatic Dennis Ross to head the team. In the summer of 2007, Ross co-authored an extraordinary ‘policy’ report on Iran, which advocated the harshest sanctions, including a total naval blockade, escalating into a land and air embargo and inevitable military attack. Under Zionist tutelage Obama extended severe economic sanctions against Iran on February 2009, ensuring that his highly publicized offer in March 2009 to open a new chapter in US-Iranian relations would not be taken seriously by Tehran (Financial Times, March 23, 2009). Whatever takes place (if anything) pro-forma between the US and Iran will automatically be conveyed, filtered, censored and subject for final Israeli approval.
Israel and its US policymakers and Congressional followers have been at the cutting edge of ferocious anti-Muslim and anti-Arab propaganda, ‘diplomacy’ and military aggression. The Obama regime reflects their pervasive influence. Despite the failed war in Afghanistan and increasing mass opposition in the region, despite a catastrophic domestic crisis, Obama has increased the military budget, increased the number of US troops (without any European support), and extended the war into Pakistani territory, with daily bombing of anti-US/ Pashtun villages in Pakistan. The ZPC and its Congressional delegation of fellow-travelers have blindsided millions of American citizens, especially Democrats, who voted for Obama as a ‘peace candidate’, and now face a prolonged large-scale presence of US troops in Iraq, an escalation in Afghanistan, US bombing inside Pakistan and US warships, aircraft carriers and nuclear submarines off the coast of Iran. Zionist power over-rode the entire US National Intelligence apparatus and the American voters on the issue of Iran and promises even greater confrontations with Dennis Ross in charge.
Israel is forcibly evicting thousands of Palestinians, generations-long residents, from Jerusalem in their drive to ‘Judanize’, ethnically cleanse and annex the entire city, contrary to the demands of the European Union, world opinion, international law and any ‘two-state solution’ proposed by every US President, including Obama, in the last three decades (The Guardian (London), March 7, 2009). Jewish wrecking crews were actively bulldozing the homes of Palestinian families while Secretary of State Hilary Clinton pledged unconditional support for Israel and, in passing, commented that ethnic cleansing and evictions were ‘not helpful’ (ibid). Obama/Clinton blatantly ignore the strong objections made by the leaders of Muslim and Christian religious congregations, representing many hundreds of millions of faithful. The major American Jewish organizations and the entire Congressional Zionist leadership, including the uber-Israel Firster Senator Joseph Lieberman, enthusiastically back the Obama regime’s endorsement of Israeli ethnic cleansing (Boston Globe, March 9, 2009).
Seeking total control over all possible or potential appointees who can enhance Israel’s positions, the Zionist Power Configuration successfully launched a massive, slanderous national campaign to block the appointment of veteran US diplomatic and intelligence official, Charles Freeman, one of the few non-Zionist (or Gentile, for that matter) to the position of head of the National Intelligence Council.
From the first moment that Zionist ‘insiders’ leaked the proposed appointment of Freeman, the ZPC launched a frontal attack: scurrilous articles were written attacking Freeman, a veteran officer who served successive US Administrations dating back to Richard Nixon, which were published in the major newspapers and magazines and broadcast by the main TV and radio programs. AIPAC approached its stable of Zionist Congress-people led by Congressman Eric Cantor to round up the usual herd of elected shills beholden to Zionist campaign financing. Ten US Representatives demanded that the Director of National Intelligence Inspector General, “Fully investigate Mr. Freeman’s past relationship with the Kingdom of Saudi Arabia and look into the contributors to the Middle East Policy Council (a Washington think-tank headed by Freeman)” (Financial Times (London), March 7, 2009 p. 3).
The entire Republican leadership led by the House ‘whip’ Cantor carried the ball for the ZPC in trashing Freeman and his supporters, who they also demanded be punished for their endorsement. Obama, faced with the Zionist onslaught, crumbled without even a whimper. “The White House made no comment.”(ibid) Zionist Power worked through both political parties. “Steve Israel (appropriately named!), a Democrat on the House Select Intelligence Oversight Panel, wrote to Mr. Maguire (the Inspector General) about the seemingly prejudicial public statements made by the proposed NIC Chairman (Charles Freeman)” (Financial Times, ibid). The ‘prejudicial public statement’ in question was Freeman’s criticism of Israel’s savage bombing of Lebanon during the summer of 2007 and their unending repression of Palestinians under their occupation.
Not a single area of government, not a single appointment, escapes the censorious eye of the Jewish pro-Israeli power structure in the US and its stable of compliant non-Jewish members of Congress. The Zionist success in purging Freeman from the appointment to head the National Intelligence Council is an effort to avoid a repeat of the major intelligence setback their anti-Iran propaganda in 2007. Back then, sixteen US intelligence agencies published their National Intelligence Estimate on Iran’s nuclear weapons program, completely undermining Israeli and US-ZPC claims that Iran was producing weapon-grade nuclear material and was ‘months’ away from producing a nuclear weapon. The NIE forced the ZPC to launch a furious assault on the findings and the professional intelligence agencies in order to sustain Israel’s campaign to push the US into a war with Iran.
The central purpose of the Zionist-led Congressional campaign against Freeman was to use the ‘investigation’ to harass and undermine his independent, professional expertise and advocacy of an ‘even-handed’ approach to the Middle East. By labeling him as pro-Arab, pro-Hamas (with the implication of links to terrorism) they forced the withdrawal of his appointment in favor of an official willing to manipulate intelligence to fit Israeli objectives.
The Culture of Calumny and the Degradation of Democratic Values
The ZPC’s successful blacklisting and purge of Charles Freeman from his appointment as chairman of the National Intelligence Council illustrates the stranglehold that it has on all appointments within the US Government. The Freeman purge reveals the ZPC tactics and methods, its web of power among different branches of government and their links with the leading Zionist Jewish American organization. The purge highlights the fact that loyalty to the state of Israel has become a condition for holding any significant office in the US government and that, conversely, any candidate for high office, no matter what their qualifications, who has criticized Israeli policy, is automatically banished. The application of the loyalty oath to Israel, which occurred in the purge of Charles Freeman, is a clear act of intimidation directed against the entire US political class: Criticize Israel, in any context, and write off your career forever! The purge of Freeman has vast present and future consequences for US politics, public debate and democratic freedom in America.
As is almost always the case when any issue or political appointment of interest to the state of Israel arises in the US, AIPAC seizes the initiative. In the case of the Freeman Purge, once the Director of National Intelligence, Dennis Blair, announced his appointment of Charles Freeman, AIPAC circulated a ‘dossier’ of lies, slanders and fabrications about the man and his positions, centered on his criticism of specific Israeli actions, namely their brutality in Gaza and Lebanon and their violations of human rights. The Zionist-Jewish onslaught was led by (none-other-than) Steve Rosen, the long-time AIPAC hatchet man and indicted felon, currently on trial for espionage – handing over classified US documents related to Iran policy to Israeli government agents.
Under AIPAC’s promotion, a tsunami of articles and commentaries attacking Freeman appeared in the major media, painting him as an ‘Arab tool’, ‘anti-Israel’ and worse. Parallel to the media campaign, the leading Jewish-Zionist Senators Schumer and Leiberman and Representative Cantor launched a virulent campaign in Congress, even though his nomination did not require Congressional approval. Schumer ensured White House complicity in the purge through direct communication with White House Chief of Staff and fellow Zionist Rahm Emmanuel who likely passed on the ‘line’ to fellow Zionist Axelrod, Obama’s chief adviser. Not a single official in the entire Obama regime at any time voiced a single word in support of Blair’s appointment of Freeman nor refute the lies and character assassination harangues by the likes of Lieberman, Schumer and their fellow travelers. Where the Obama regime was not openly complicit, the Zionist purge machinery cowed it into silent acquiescence.
The deep and insidious authoritarian and partisan character of the Zionist congressional leadership evident in the purge of Charles Freeman is consistent with Schumer and Lieberman’s support for Michael Hayden as Obama’s CIA Director, the key agent in implementing Bush’s illegal domestic espionage program and their support for the ultra-Zionist Michael Mukasey as Bush’s Attorney General, who condoned the use by American agents of water-torture on ‘suspects’.
What is striking about the Zionist-led Congressional purge of Freeman is the fact that its leaders openly stated that they killed his nomination in order to stifle any criticism of Israeli policy. New York Senator Schumer said:
“Charles Freeman was the wrong guy for this position. His statements against Israel were way over the top and severely out of step with the administration. I repeatedly urged the White House to reject him and I am glad they (sic) did the right thing.” (quoted by Glen Greenwald in “Charles Freeman Fails the Loyalty Test”, March 10, 2009)
The power and arrogance of the ZPC is such that Schumer openly boasted on how he brought the Director of National Intelligence, Dennis Blair to capitulate and force the resignation of his own appointee. In his widely published withdrawal statement, Freeman eloquently described the destructive power and operations of the Zionist Power Configuration:
“The libels on me and their easily traceable e-mail trails show conclusively that there is a powerful lobby determined to prevent any view other than its own from being aired.
“The tactics of the Israel lobby plumb the depths of dishonor and indecency and include character assassination, selective misquotation, the willful distortion of the record, the fabrication of falsehoods, and an utter disregard for the truth.
“The aim of this lobby is control of the policy process through the exercise of a veto over the appointment of people who dispute the wisdom of its views, the substitution of political correctness for analysis, and the exclusion of any and all options for decision by Americans and our government other than those that it favors.” ( quoted in Aljazeera, March 10, 2009)
By purging Freeman, the ZPC is in a position to influence future US intelligence directors and ensure that their reports do not contradict Israeli ‘intelligence’, especially its fabrications about Iran’s nuclear program. Schumer, Lieberman, AIPAC and the Presidents of the Major American Jewish Organizations have gained another vital lever of power in forcing US policy into a military confrontation with Iran in line with the dictates of Israel.
The power of the ZPC over the Obama regime has major consequences for US foreign policy, especially war policy in the Middle East and throughout the world where countries, regions, movements and people reject Israel’s militarist-colonialist state and racist Zionist ideology. The same politicians who ‘stand with Israel’ are also the ones who follow the line of military confrontation with Iran unless it capitulates to Israeli-US ultimatums to surrender their nuclear-energy policies and links to anti-colonial Muslim/Arab and other independent movements and governments.
‘Negotiations’ with Iran, Syria and Palestine, as proposed by Obama and with his Zionist appointees and the conditions, which they demand, are non-starters: They become automatic set-ups for resorting to a military confrontation, escalation of sanctions and for condoning Israeli land grabbing. The result is the Obama regime’s continued massive military build-up and expenditure in a time of catastrophic economic recession. The apparent irrationality of diverting scarce economic resources toward endless wars and military confrontations in which no US security interests are at stake can only be explained by the militarist interest of the state of Israel and the power of its US supporters to impose its definition of ‘security’ on the US government.
To empirically test our hypothesis about the scope and depth of the influence of the Zionist Power Configuration and its ability to subordinate Obama Administration’s policies to Israeli interest, we have examined 10 important issue areas. We stated Israeli positions and actions, particularly on vital issues of war and peace affecting US interests, key appointments and strategic relations. We have found that in almost all issue areas, the Israeli position was translated into US policy. This high level correlation in turn was explained by the intense activity of the Zionist Power Configuration and the high level of penetration of pro-Israeli functionaries of all relevant policy-making positions and their veto power over appointments exercised by the ZPC and its Congressional leaders.
The Zionist Power configuration
The Jewish Zionist Power Configuration (ZPC) openly organized and masterminded the withdrawal of veteran diplomat, Charles Freeman, from the leadership of the President’s National Intelligence Council. It is one of Israel’s biggest victories in its effort to control US foreign policy in the Middle East. The NIC is a worldwide apparatus, made up of 16 intelligence agencies with 100,000 employees and a $50 billion dollar budget. It is the ‘brains’ and ‘hands’ collecting the most confidential and important information used to analyze and formulate US policy and in running the clandestine operations of the entire US global empire. By their brazen purge of the top choice of Obama’s Intelligence Chief Admiral Blair, the ZPC has announced to the entire US political establishment, its allies and enemies, that the next appointment must have their vetting and approval, which means loyalty to Israeli policies.
Together with their dominant presence in the Executive branch, including the White House and the President’s closest advisers, their public display of total dominance over both houses of the legislature and their growing penetration into the civilian-military command in the Pentagon, their effective takeover of the top intelligence positions closes the circle of Zionist control, or better – stranglehold, over the entire US state. The result is the subordination of US national interests and policies to the militarist aims of Israel, including support for Israeli conquests and hegemony in the Middle East and elsewhere.
Zionists in Power
The ‘coincidence’ or correlation between Israel’s illegal, militarist policies and the Obama regime’s approval and compliance, even when it involves sacrificing electoral promises, national economic and security interests and world public opinion, can in large part be explained by the appointment of veteran Israel Firsters to decisive foreign policy and advisory positions. At the very center of the Obama regimes, in the most influential policy-making position is David Axelrod, Senior Adviser to the president, who was recently described in the New York Times as: “carrying more weight than most anyone else on the president’s payroll…There are few words that come across the president’s lips that have not been blessed Mr. Axelrod. He reviews every speech, studies every major policy position and works…to prepare responses to the crisis of the day.” (New York Times, March 9, 2009).
Axelrod’s longtime friend and fellow Zionist, the White House Chief of Staff, Israeli-American Rahm Emanuel, meet every morning to coordinate their agendas for the White House. The Zionist duet, the pizza-munching, herbal tea drinking Rasputins from Chicago, are the most direct and influential political Zionists ensuring the primacy of Israel’s interests in setting US-Middle East policy – from starving Gaza to attacking Iran.
No doubt, Axelrod and Emmanuel had their ‘input’ on the Obama-Clinton appointment of fellow-Zionist Jeffery Feltman and Daniel Shapiro as chief negotiators with Syria (BBC, March 7, 2009). Their agenda, Israel’s priorities, are certain to preclude any comprehensive settlement. The Zionist White House duet was strikingly silent, as their fellow Zionists skewered Charles Freeman’s appointment to lead Obama’s National Intelligence Council and ignored Israel’s humiliation of Secretary of State Clinton during her visit to Israel when the Jewish state bulldozed the homes of Palestinian families in Arab East Jerusalem on the very day of her arrival, repudiating Obama’s ‘two-state’ solution.
With the advise and consent of Zionist chief economic adviser, Lawrence Summers, the Obama regime appointed fellow Zionist and ex-Clintonite crony David Cohen to the top job of monitoring ‘terrorist financing’ (Financial Times, March 9, 2009 p.2). Cohen will be in a position to pursue several crucial tasks for the Israeli state, including persecuting any and all Muslim charities and Palestinian humanitarian organizations and pressuring US and overseas financial, export and investment funds to disinvest from Arab and Muslim countries critical of Israel. He can be expected to aggressively pressure European and Asian banks and exporters to cease trade and investment with Iran. While on paper a ‘secondary appointment’, in reality Cohen will play a key role in promoting the hard-line Israeli-Zionist economic sanctions against Iran and maintaining the blockade on Gaza.
The head of Obama’s nuclear non-proliferation agency is Gary Samore, who clearly established his Israel-First credentials in a speech in Israel on December 18, 2008 when he declared that he favored bombing Iran if it failed to shut down its uranium enrichment program – a program, which is legal under the International Non-Proliferation Treaty (Financial Times, February 24, 2009 p. 9). On February 24, 2009 the Obama regime appointed Dennis Ross as special adviser to Hilary Clinton for the Gulf Region. Ross in one of Israel’s top operatives in the Washington political establishment with long-term working relations with Israeli and US policy institutes linked to Israeli military, intelligence and foreign policy establishment. In November 2008, Ross signed off on a document advocating a military assault on Iran. Ross, as President Clinton’s envoy to the Israel-Palestine negotiations, contributed to the break down by embracing Israel’s non-negotiable positions and vilifying Yassar Arafat as the ‘stumbling block’.
The Zionist power configuration dominate all the key foreign policy committees in Congress, either directly through Jewish Zionists or elected representative who are in tow via financial contributions or threats of electoral retaliation and mass media smear campaigns. In the first weeks in office, the Zionist political machine has successfully blocked initiatives by some Obama advisers to attend the Durban anti-racism conference, and has deflected criticism of Israel’s starvation blockade against Gaza by two Congressmen who visited Gaza to view the destruction themselves. The ZPC has slandered and forced the withdrawal of Charles Freeman’s nomination as chief of the Intelligence Advisory Committee. It has openly endorsed Israel’s massive land grab in the West Bank and East Jerusalem. The Obama regime, in line with Israel, has effectively buried any pretence of peace negotiations with the Palestinians by shifting focus to a ‘regional settlement/negotiations’, in which Zionist envoys are directed to pressure Syria, Lebanon and Iran to isolate all Palestinian leaders who opposed Israel’s annexation of their land and expulsion of people.
The ZPC’s deep and extensive penetration of the Obama regime represents the greatest national security threat by a foreign-directed power since the founding of the American Republic. The scope and destructive consequences will be further detailed in the text (see: “Israel Asserting Middle East Supremacy: From Gaza to Tehran”).
The ZPC’s power is manifested in the judicial branch and best illustrated in the spy trial of two prominent leaders of AIPAC - the principle pro-Israel ‘lobby’. Steve Rosen and Keith Weissman. Both were arrested and indicted after they admittedly took classified US documents relating to US policy toward Iran and handed them over to an Israeli Mossad Intelligence operative assigned to the Israeli Embassy in Washington DC. The Federal Judge in the case, T.S. Ellis has made several rulings in favor of the spies – strengthening their contention that the act of handing classified documents to a foreign power is a ‘common practice’ in Washington and not espionage. The ZPC has been successful in mobilizing its entire mass media apparatus, Congressional followers and a broad swath of Jewish and Gentile progressives in defense of Rosen and Weissman in the name of ‘freedom of expression’ –perversely equating the stealing of classified official US documents relating to security matters and secretly passing them to an agent of a foreign government with investigative journalism’s use of government sources.
The numerous FBI arrests and quiet deportations of scores of Israeli spies without charge or trials, and the frequent complaint of former US officials that ‘orders from above’ blocked their prosecution attests to the power of highly placed Zionists or authorities under their control in securing impunity to Israeli-Jewish operative committing illegal and hostile acts against the security and economic interest of the United States. The presence of so many Zionists in positions of power in the Obama regime ensures that Israeli espionage operations in the US may now be suspended because Israel can obtain any documents or deliberations directly from officials in the Obama Administration. Even better Israelis can co-author some White House and US intelligence position papers themselves!
Zionists in power, means that the US empire will continue to energetically and aggressively pursue military confrontations and regional wars in the Middle East at the behest of Israel. At no point has the Zionist-dominated White House or Congress questioned the exorbitant costs of serving Israeli interests – even in the midst of a major economic depression. Virtually the entire major media establishment and all 51 Major American Jewish Organizations, which are pressing for blockades, sanctions and preemptive war against Iran, are free to ignore the tremendous loss and suffering that this diversion of billions of US tax dollars from domestic investment to wars for Israel has caused to the American people. Zionist control over White House Middle East policy ensures that the US will be mired in endless wars in the Persian Gulf and South Asia because Israel has an open-ended military agenda encompassing the entire region and an army of agents willing and able to impose this agenda on the American government.
© Copyright 2008 by AxisofLogic.com
G20 warned unrest will sweep globe
Crunch 'will cost developing world £520bn'
* Heather Stewart and Larry Elliott
* The Observer, Sunday 22 March 2009
http://www.guardian.co.uk/business/2009/mar/22/g20-global-economy
Ngozi Okonjo-Iweala, managing director of the World Bank
Ngozi Okonjo-Iweala, managing director of the World Bank. Photograph: John MacDougall/AFP
A wave of social and political unrest could sweep through the world's poorest countries if G20 leaders fail to come to their aid, the World Bank warns today, as new research says the credit crunch will cost developing countries $750bn (£520bn) in lost output and drive millions more into poverty.
Ngozi Okonjo-Iweala, managing director of the World Bank, is urging G20 leaders to use the London summit in less than a fortnight's time to help protect the developing world against the worst effects of the financial crisis.
"We have to look at the impact of this on low income countries. Otherwise, without wanting to sound alarmist, social unrest and political crisis could be the result. It's in the self-interest of everyone to prevent that," she told the Observer
Her stark warning came as a new report from the Overseas Development Institute (ODI) said the collapse of the global economy would cost 90 million lives, lead to an increase to nearly a billion in the number of people going hungry and cost developing countries $750bn in lost growth.
"Tens of millions of people will be forced back below the poverty line. There will be irreversible effects on the very poorest," said Simon Maxwell, the ODI's director.
The ODI is calling for an extra $50bn in aid for Africa, and urging G20 countries to set aside a "significant proportion" of the cash they are spending on fiscal packages, to help build up the infrastructure in poor countries, and lift people above the breadline.
"When they sit down around the table at the G20, there will be plenty for the leaders to disagree about. This should not be one of those things, but it might well be," Maxwell said.
The ODI also said the G20 should not set unrealistic expectations about resuscitating the stalled Doha round of international trade talks, and should instead make a firm promise to avoid tit-for-tat protectionism.
Okonjo-Iweala said hundreds of thousands of workers were losing their jobs across the developing world, where social safety nets are almost non-existent, and called for more resources for the World Bank's "vulnerability fund," which helps cash-strapped governments to make direct welfare payments. "There is a credit crunch in many of these countries: foreign direct investment has dried up," she said.
Gordon Brown will fly to Brazil this week to try and win the support of President Lula for his agenda of co-ordinated fiscal stimulus, free trade, and a boost to overseas aid budgets.
Downing Street wants to secure a doubling in the resources of the International Monetary Fund, so it can bail out the worst-affected countries; and a promise of new loans to help facilitate cross-border trade.
With budgets tight at home, and noisy demands for help from domestic constituencies, however, Brown is concerned many countries are failing even to live up to the promises on aid they made at the Gleneagles G8 meeting in 2005. In Italy, Silvio Berlusconi has slashed aid spending in the face of a fiscal crisis.
What do "We the People" do in the event of the collapse of the United States Government?
How do “We the People” plan ahead for the failure of the United States Government(trademark)?
1.Defend the Constitution of the United States of America from all enemies foreign and domestic.
2.Imprison all those who pushed the Bailout/TARP through the Congress using the unconstitutional process of Senate introduction of a spending bill since original bill was not passed by the House of Representatives.
3.Penalize all those who voted for this bill and consider charges of treason for those who, after censure, continue to disregard their oath to defend the United States from all enemies foreign and domestic.
4.Confiscate all profits made by members of Congress who benefited from the enactment or prevention of legislation becoming law from which their vote determined the outcome of said legislation.
5.Freeze all trading on Wall Street. Cancel all payouts for any and all derivatives products and other items traded that are not direct investments in legitimate businesses.
Abolish the Federal Reserve and freeze all assets of the Federal Reserve, all past and present board members, all member banks, and all past and present board members of member banks.
6.Use all afore mentioned confiscated and frozen assets as collateral for the debts of the United States Government(trademark).
7.Develop a Constitutionally sound currency for all trading with in the boarders of the United States of America which is:
* Coined and controlled by Congress.
* Not based on debt, but based on the productive capacity of the citizens of the United States of America.
8.Establish a unit of international trade that is based on an internationally agreed monetary unit backed by real assets such as precious metals, minerals, gem stones, and/or other natural resource. This unit shall not be controlled by one central banking institution or an institution governed by a consortium of nations.
9.Return to a Rule of Law in which the United States of America uphold all treaties in which it is a signatory.
10.Establish a means of electing governmental representatives that is fair, transparent, and not under the influence of special interests or the will of financiers.
http://whatreallyhappened.com/forum/22196
The above proves that America really is the land of dreams and dreamers...
CLUE: Sarkozy under pressure as 'millions' take to streets
By James Mackenzie, Reuters
http://www.independent.co.uk/news/world/europe/sarkozy-under-pressure-as-millions-take-to-streets-1648608.html
Thursday, 19 March 2009
A huge crowd of protesters march in Paris
Pascal Le Segretain/Getty Images
A huge crowd of protesters march in Paris
* © Photos More pictures
As many as three million people took to the streets across France today to protest against President Nicolas Sarkozy's handling of the economic crisis and demand more help for struggling workers.
The protests, which polls show are backed by three quarters of the French public, reflect growing disillusion with Sarkozy's pledges of reform as the crisis has thrown tens of thousands out of work and left millions more worried about their jobs.
Bright spring sunshine helped the turnout and the total reported by union organisers surpassed the 2.5 million seen on an earlier day of protest on Jan. 29.
Streets in central Paris were packed with protesters waving anti-Sarkozy placards and chanting slogans, with badges reading "Get lost you little jerk!", the now infamous comment made by Sarkozy to a protestor at an agriculture show, much in evidence.
"There are more and more workers who feel they are not responsible for this crisis but that they are the main victims of it," said Bernard Thibault, head of the CGT, one of the eight trade unions organising the strikes.
More than 2 million people are out of work in France and despite an easing in inflation, even many with a job struggle with the high cost of living.
A large public sector payroll and a relatively generous welfare state has kept French people better protected than many in other countries but there has been deep public anger at plant closures and stories of corporate excess.
Sarkozy, elected in 2007 on a pledge to shake up the French economy, has seen his approval ratings plunge as he has poured billions into bailing out banks and carmakers but rejected union demands for higher pay and tax hikes for the rich.
"People are in the streets and they are suffering, there are more and more people out of work and something has to be done," said Sylvie Daenenck, marching in Paris. "We shouldn't just be giving money to the bosses."
The CGT said 3 million people had joined the protests, with hundreds of thousands at the main rally in Paris and tens of thousands taking part in marches in provincial towns and cities. Police, however, put the Paris total at just 85,000.
Sarkozy's room for manoeuvre has been limited by the dire state of French public finances, which have been drastically strained by the need to prop up the fragile financial sector.
But a series of disputes, ranging from strikes by university staff to unruly protests by workers at a tyre plant in northern France, have underlined a worsening climate of discontent that the government fears could escalate.
Workers at the Continental tyre factory pelted managers with eggs at the protest this week and the government and business leaders have been acutely aware of the danger of unrest spilling over into the kind of violence seen in the urban riots of 2005.
Transport, energy and some government offices were all affected and unions said there was also strong participation by workers from the private sector, although there was no general shutdown of the economy. Most businesses and public services functioned at close to normal levels.
The unions have presented a long list of demands, including a boost for the lower salaried, more measures to protect employment, a tax hike for high earners and a halt to job cuts planned in the public sector.
The government has introduced a 26 billion euro ($36 billion) stimulus plan aimed at business investment, and after the Jan. 29 strike Sarkozy offered 2.65 billion euros of additional aid to help vulnerable households weather the storm.
But there is little prospect of an improvement in the situation, with many analysts predicting the economy will contract by 2 percent this year and unemployment will jump 25 percent to almost 10 percent.
The French have a history of dealing with their governments when they get too cozy with the bankers...
Preparing for Civil Unrest in America
Legislation to Establish Internment Camps on US Military Bases
http://www.globalresearch.ca/PrintArticle.php?articleId=12793
By Michel Chossudovsky
Global Research, March 18, 2009
The Economic and Social Crisis
The financial meltdown has unleashed a latent and emergent social crisis across the United States.
What is at stake is the fraudulent confiscation of lifelong savings and pension funds, the appropriation of tax revenues to finance the trillion dollar "bank bailouts", which ultimately serve to line the pockets of the richest people in America.
This economic crisis is in large part the result of financial manipulation and outright fraud to the detriment of entire populations, leading to a renewed wave of corporate bankruptcies, mass unemployment and poverty.
The criminalization of the global financial system, characterized by a "Shadow Banking" network has resulted in the centralization of bank power and an unprecedented concentration of private wealth.
Obama's "economic stimulus" package and budget proposals contribute to a further process of concentration and centralization of bank power, the cumulative effects of which will eventually resul in large scale corporate, bankruptcies, a new wave of foreclosures not to mention fiscal collapse and the downfall of State social programs. (For further details see Michel Chossudovsky, America's Fiscal Collapse, Global Research, March 2, 2009).
The cumulative decline of real economic activity backlashes on employment and wages, which in turn leads to a collapse in purchaisng power. The proposed "solution" under the Obama administration contributes to exacerbating rather than alleviating social inequalities and the process of wealth concentration.
The Protest Movement
When people across America, whose lives have been shattered and destroyed, come to realize the true face of the global "free market" system, the legitimacy of Wall Street, the Federal Reserve and the US administration will be challenged.
A latent protest movement directed against the seat of economic and political power is unfolding.
How this process will occur is hard to predict. All sectors of American society are potentially affected: wage earners, small, medium and even large businesses, farmers, professionals, federal, State and municipal employees, students, teachers, health workers, and unemployed. Protests will initially emerge from these various sectors. There is, however, at this stage, no organized national resistance movement directed against the administration's economic and financial agenda.
Obama's populist rhetoric conceals the true nature of macro-economic policy. Acting on behalf of Wall Street, the administration's economic package, which includes close to a trillion dollar "aid" package for the financial services industry, coupled with massive austerity measures, contributes to precipitating America into a bottomless crisis.
"Orwellian Solution" to the Great Depression: Curbing Civil Unrest
At this particular juncture, there is no economic recovery program in sight. The Washington-Wall Street consensus prevails. There are no policies, no alternatives formulated from within the political and economic system. .
What is the way out? How will the US government face an impending social catastrophe?
The solution is to curb social unrest. The chosen avenue, inherited from the outgoing Bush administration is the reinforcement of the Homeland Security apparatus and the militarization of civilian State institutions.
The outgoing administration has laid the groundwork. Various pieces of "anti-terrorist" legislation (including the Patriot Acts) and presidential directives have been put in place since 2001, largely using the pretext of the "Global War on Terrorism."
Homeland Security's Internment Camps
Directly related to the issue of curbing social unrest, cohesive system of detention camps is also envisaged, under the jurisdiction of the Department of Homeland Security and the Pentagon.
A bill entitled the National Emergency Centers Establishment Act (HR 645) was introduced in the US Congress in January. It calls for the establishment of six national emergency centers in major regions in the US to be located on existing military installations. http://www.govtrack.us/congress/billtext.xpd?bill=h111-645
The stated purpose of the "national emergency centers" is to provide "temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster." In actuality, what we are dealing with are FEMA internment camps. HR 645 states that the camps can be used to "meet other appropriate needs, as determined by the Secretary of Homeland Security."
There has been virtually no press coverage of HR 645.
These "civilian facilities" on US military bases are to be established in cooperation with the US Military. Modeled on Guantanamo, what we are dealing with is the militarization of FEMA internment facilities.
Once a person is arrested and interned in a FEMA camp located on a military base, that person would in all likelihood, under a national emergency, fall under the de facto jurisdiction of the Military: civilian justice and law enforcement including habeas corpus would no longer apply.
HR 645 bears a direct relationship to the economic crisis and the likelihood of mass protests across America. It constitutes a further move to militarize civilian law enforcement, repealing the Posse Comitatus Act.
In the words of Rep. Ron Paul:
"...the fusion centers, militarized police, surveillance cameras and a domestic military command is not enough... Even though we know that detention facilities are already in place, they now want to legalize the construction of FEMA camps on military installations using the ever popular excuse that the facilities are for the purposes of a national emergency. With the phony debt-based economy getting worse and worse by the day, the possibility of civil unrest is becoming a greater threat to the establishment. One need only look at Iceland, Greece and other nations for what might happen in the United States next." (Daily Paul, September 2008, emphasis added)
The proposed internment camps should be seen in relation to the broader process of militarization of civilian institutions. The construction of internment camps predates the introduction of HR 645 (Establishment of Emergency Centers) in January 2009. There are, according to various (unconfirmed) reports, some 800 FEMA prison camps in different regions of the U.S. Moreover, since the 1980s, the US military has developed "tactics, techniques and procedures" to suppress civilian dissent, to be used in the eventuality of mass protests (United States Army Field Manual 19-15 under Operation Garden Plot, entitled "Civil Disturbances" was issued in 1985)
In early 2006, tax revenues were allocated to building modern internment camp facilities. In January 2006, Kellogg Brown and Roots, which at the time was a subsidiary of Halliburton, received a $385 million contract from the Department of Homeland Security's Immigration and Customs Enforcement (ICE):
"The contract, which is effective immediately [January 2006], provides for establishing temporary detention and processing capabilities to augment existing ICE Detention and Removal Operations (DRO) Program facilities in the event of an emergency influx of immigrants into the U.S., or to support the rapid development of new programs...
The contract may also provide migrant detention support to other U.S. Government organizations in the event of an immigration emergency, as well as the development of a plan to react to a national emergency, such as a natural disaster. (KBR, 24 January 2006, emphasis added)
The stated objectives of U.S. Immigration and Customs Enforcement (ICE) are to:
"protect national security and uphold public safety by targeting criminal networks and terrorist organizations that seek to exploit vulnerabilities in our immigration system, in our financial networks, along our border, at federal facilities and elsewhere in order to do harm to the United States. The end result is a safer, more secure America" (ICE homepage)
The US media is mum on the issue of the internment camps on US soil. While casually acknowledging the multimillion dollar contract granted to Halliburton's subsidiary, the news reports largely focused their attention on possible "cost overruns" (similar to those which occurred with KBR in Iraq).
What is the political intent and purpose of these camps? The potential use of these internment facilities to detain American citizens under a martial law situation are not an object of media debate or discussion.
Combat Units Assigned to the Homeland
In the last months of the Bush administration, prior to the November 2008 presidential elections, the Department of Defense ordered the recall of the 3rd Infantry’s 1st Brigade Combat Team from Iraq. The relocation of a combat unit from the war theater to domestic front is an integral part of the Homeland Security agenda. The BCT was assigned to assist in law enforcement activities within the US.
The BCT combat unit was attached to US Army North, the Army's component of US Northern Command (USNORTHCOM). The 1st BCT and other combat units would be called upon to perform specific military functions in the case of civil unrest:
The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.(
(See Gina Cavallaro, Brigade homeland tours start Oct. 1, Army Times, September 8, 2008).
Under the proposed withdrawal of US forces from Iraq under the Obama administration, one expects that other combat units will be brought home from the war theater and reassigned in the United States.
The evolving national security scenario is characterized by a mesh of civilian and military institutions:
-Army combat units working with civilian law enforcement, with the stated mission to curb "social unrest".
- the establishment of new internment camps under civilian jurisdiction located on US military facilities.
The FEMA internment camps are part of the Continuity of Government (COG), which would be put in place in the case of martial law.
The internment camps are intended to "protect the government" against its citizens, by locking up protesters as well as political activists who might challenge the legitimacy of the Administration's national security, economic or military agenda.
Spying on Americans: The Big Brother Data Bank
Related to the issue of internment and mass protests, how will data on American citizens be collected?
How will individuals across America be categorized?
What are the criteria of the Department of Homeland Security?
In a 2004 report of the Homeland Security Council entitled Planning Scenarios, pertaining to the defense of the Homeland, the following categories of potential "conspirators" were identified:
"foreign [Islamic] terrorists" ,
"domestic radical groups", [antiwar and civil rights groups]
"state sponsored adversaries" ["rogue states", "unstable nations"]
"disgruntled employees" [labor and union activists].
In June of last year, the Bush administration issued a National Security Presidential Directive (NSPD 59- HSPD 24) entitled Biometrics for Identification and Screening to Enhance National Security (For Further details see Michel Chossudovsky, "Big Brother" Presidential Directive: "Biometrics for Identification and Screening to Enhance National Security", Global Research, June 2008)
Adopted without public debate or Congressional approval, its relevant procedures are far-reaching. They are related to the issue of civil unrest. They are also part of the logic behind the establishment of FEMA internment camps under HR 645. .
NSPD 59 (Biometrics for Identification and Screening to Enhance National Security) goes far beyond the narrow issue of biometric identification, it recommends the collection and storage of "associated biographic" information, meaning information on the private lives of US citizens, in minute detail, all of which will be "accomplished within the law":
"The contextual data that accompanies biometric data includes information on date and place of birth, citizenship, current address and address history, current employment and employment history, current phone numbers and phone number history, use of government services and tax filings. Other contextual data may include bank account and credit card histories, plus criminal database records on a local, state and federal level. The database also could include legal judgments or other public records documenting involvement in legal disputes, child custody records and marriage or divorce records."(See Jerome Corsi, June 2008)
The directive uses 9/11 and the "Global War on Terrorism" as an all encompassing justification to wage a witch hunt against dissenting citizens, establishing at the same time an atmosphere of fear and intimidation across the land.
It also calls for the integration of various data banks as well as inter-agency cooperation in the sharing of information, with a view to eventually centralizing the information on American citizens.
In a carefully worded text, NSPD 59 "establishes a framework" to enable the Federal government and its various police and intelligence agencies to:
"use mutually compatible methods and procedures in the collection, storage, use, analysis, and sharing of biometric and associated biographic and contextual information of individuals in a lawful and appropriate manner, while respecting their information privacy and other legal rights under United States law."
The NSPD 59 Directive recommends: "actions and associated timelines for enhancing the existing terrorist-oriented identification and screening processes by expanding the use of biometrics".
The procedures under NSPD 59 are consistent with an earlier June 2005 decision which consisted in creating a "domestic spy service", under the auspices of the FBI. (For further details see Michel Chossudovsky, Bush Administration creates "Secret State Police", June 30, 2005)
Working hand in glove with Homeland Security (DHS), the proposed "domestic intelligence department" would combine FBI counterterrorism, intelligence and espionage operations into a single service.
The new department operating under the auspices of the FBI would have the authority to "seize the property of people deemed to be helping the spread of WMD": They would be able to "spy on people in America suspected of terrorism or having critical intelligence information, even if they are not suspected of committing a crime." (NBC Tonight, 29 June 2005).
ANNEX
Text of H.R. 645: National Emergency Centers Establishment Act
This version: Introduced in House.
This is the original text of the bill as it was written by its sponsor and submitted to the House for consideration. This is the latest version of the bill available on this website.
[SOURCE: http://www.govtrack.us/congress/billtext.xpd?bill=h111-645]
HR 645 IH
111th CONGRESS
1st Session
H. R. 645
To direct the Secretary of Homeland Security to establish national emergency centers on military installations.
IN THE HOUSE OF REPRESENTATIVES
January 22, 2009
Mr. HASTINGS of Florida introduced the following bill; which was referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
--------------------------------------------------------------------------------
A BILL
To direct the Secretary of Homeland Security to establish national emergency centers on military installations.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘National Emergency Centers Establishment Act’.
SEC. 2. ESTABLISHMENT OF NATIONAL EMERGENCY CENTERS.
(a) In General- In accordance with the requirements of this Act, the Secretary of Homeland Security shall establish not fewer than 6 national emergency centers on military installations.
(b) Purpose of National Emergency Centers- The purpose of a national emergency center shall be to use existing infrastructure--
(1) to provide temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster;
(2) to provide centralized locations for the purposes of training and ensuring the coordination of Federal, State, and local first responders;
(3) to provide centralized locations to improve the coordination of preparedness, response, and recovery efforts of government, private, and not-for-profit entities and faith-based organizations; and
(4) to meet other appropriate needs, as determined by the Secretary of Homeland Security.
SEC. 3. DESIGNATION OF MILITARY INSTALLATIONS AS NATIONAL EMERGENCY CENTERS.
(a) In General- Not later than 60 days after the date of the enactment of this Act, the Secretary of Homeland Security, in consultation with the Secretary of Defense, shall designate not fewer than 6 military installations as sites for the establishment of national emergency centers.
(b) Minimum Requirements- A site designated as a national emergency center shall be--
(1) capable of meeting for an extended period of time the housing, health, transportation, education, public works, humanitarian and other transition needs of a large number of individuals affected by an emergency or major disaster;
(2) environmentally safe and shall not pose a health risk to individuals who may use the center;
(3) capable of being scaled up or down to accommodate major disaster preparedness and response drills, operations, and procedures;
(4) capable of housing existing permanent structures necessary to meet training and first responders coordination requirements during nondisaster periods;
(5) capable of hosting the infrastructure necessary to rapidly adjust to temporary housing, medical, and humanitarian assistance needs;
(6) required to consist of a complete operations command center, including 2 state-of-the art command and control centers that will comprise a 24/7 operations watch center as follows:
(A) one of the command and control centers shall be in full ready mode; and
(B) the other shall be used daily for training; and
(7) easily accessible at all times and be able to facilitate handicapped and medical facilities, including during an emergency or major disaster.
(c) Location of National Emergency Centers- There shall be established not fewer than one national emergency center in each of the following areas:
(1) The area consisting of Federal Emergency Management Agency Regions I, II, and III.
(2) The area consisting of Federal Emergency Management Agency Region IV.
(3) The area consisting of Federal Emergency Management Agency Regions V and VII.
(4) The area consisting of Federal Emergency Management Agency Region VI.
(5) The area consisting of Federal Emergency Management Agency Regions VIII and X.
(6) The area consisting of Federal Emergency Management Agency Region IX.
(d) Preference for Designation of Closed Military Installations- Wherever possible, the Secretary of Homeland Security, in consultation with the Secretary of Defense, shall designate a closed military installation as a site for a national emergency center. If the Secretaries of Homeland Security and Defense jointly determine that there is not a sufficient number of closed military installations that meet the requirements of subsections (b) and (c), the Secretaries shall jointly designate portions of existing military installations other than closed military installations as national emergency centers.
(e) Transfer of Control of Closed Military Installations- If a closed military installation is designated as a national emergency center, not later than 180 days after the date of designation, the Secretary of Defense shall transfer to the Secretary of Homeland Security administrative jurisdiction over such closed military installation.
(f) Cooperative Agreement for Joint Use of Existing Military Installations- If an existing military installation other than a closed military installation is designated as a national emergency center, not later than 180 days after the date of designation, the Secretary of Homeland Security and the Secretary of Defense shall enter into a cooperative agreement to provide for the establishment of the national emergency center.
(g) Reports-
(1) PRELIMINARY REPORT- Not later than 90 days after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--
(A) an outline of the reasons why the site was selected;
(B) an outline of the need to construct, repair, or update any existing infrastructure at the site;
(C) an outline of the need to conduct any necessary environmental clean-up at the site;
(D) an outline of preliminary plans for the transfer of control of the site from the Secretary of Defense to the Secretary of Homeland Security, if necessary under subsection (e); and
(E) an outline of preliminary plans for entering into a cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f).
(2) UPDATE REPORT- Not later than 120 days after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--
(A) an update on the information contained in the report as required by paragraph (1);
(B) an outline of the progress made toward the transfer of control of the site, if necessary under subsection (e);
(C) an outline of the progress made toward entering a cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f); and
(D) recommendations regarding any authorizations and appropriations that may be necessary to provide for the establishment of a national emergency center at the site.
(3) FINAL REPORT- Not later than 1 year after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--
(A) finalized information detailing the transfer of control of the site, if necessary under subsection (e);
(B) the finalized cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f); and
(C) any additional information pertinent to the establishment of a national emergency center at the site.
(4) ADDITIONAL REPORTS- The Secretary of Homeland Security, acting jointly with the Secretary of Defense, may submit to Congress additional reports as necessary to provide updates on steps being taken to meet the requirements of this Act.
SEC. 4. LIMITATIONS ON STATUTORY CONSTRUCTION.
This Act does not affect--
(1) the authority of the Federal Government to provide emergency or major disaster assistance or to implement any disaster mitigation and response program, including any program authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); or
(2) the authority of a State or local government to respond to an emergency.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated $180,000,000 for each of fiscal years 2009 and 2010 to carry out this Act. Such funds shall remain available until expended.
SEC. 6. DEFINITIONS.
In this Act, the following definitions apply:
(1) CLOSED MILITARY INSTALLATION- The term ‘closed military installation’ means a military installation, or portion thereof, approved for closure or realignment under the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note) that meet all, or 2 out of the 3 following requirements:
(A) Is located in close proximity to a transportation corridor.
(B) Is located in a State with a high level or threat of disaster related activities.
(C) Is located near a major metropolitan center.
(2) EMERGENCY- The term ‘emergency’ has the meaning given such term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).
(3) MAJOR DISASTER- The term ‘major disaster’ has the meaning given such term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).
(4) MILITARY INSTALLATION- The term ‘military installation’ has the meaning given such term in section 2910 of the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note).
AMERICA'S "WAR ON TERRORISM"
by Michel Chossudovsky
CLICK TO ORDER
America's "War on Terrorism"
In this new and expanded edition of Michel Chossudovsky's 2002 best seller, the author blows away the smokescreen put up by the mainstream media, that 9/11 was an attack on America by "Islamic terrorists". Through meticulous research, the author uncovers a military-intelligence ploy behind the September 11 attacks, and the cover-up and complicity of key members of the Bush Administration.
The expanded edition, which includes twelve new chapters focuses on the use of 9/11 as a pretext for the invasion and illegal occupation of Iraq, the militarisation of justice and law enforcement and the repeal of democracy.
According to Chossudovsky, the "war on terrorism" is a complete fabrication based on the illusion that one man, Osama bin Laden, outwitted the $40 billion-a-year American intelligence apparatus. The "war on terrorism" is a war of conquest. Globalisation is the final march to the "New World Order", dominated by Wall Street and the U.S. military-industrial complex.
September 11, 2001 provides a justification for waging a war without borders. Washington's agenda consists in extending the frontiers of the American Empire to facilitate complete U.S. corporate control, while installing within America the institutions of the Homeland Security State.
Chossudovsky peels back layers of rhetoric to reveal a complex web of deceit aimed at luring the American people and the rest of the world into accepting a military solution which threatens the future of humanity.
The last chapter includes an analysis of the London 7/7 Bomb Attacks.
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Civil Unrest in America?
by José Miguel Alonso Trabanco
Global Research, March 9, 2009
http://www.globalresearch.ca/index.php?context=viewArticle&code=ALO20090309&articleId=12619
The Repression of Social Unrest. Source: BPK: Prussia Picture Archive
Eurasia is currently experiencing serious problems derived from financial and economic difficulties such as unemployment, GDP negative growth, currency depreciation, overall economic slowdown and so on. Several members of both the European Union and NATO (Poland, Hungary, Iceland come to mind) are already dealing with a considerable deal of domestic discontent. Some States from the Former Soviet Union (notably Ukraine, Belarus and the Central Asian Republics) and even Russia itself are facing similar problems. Even Chinese government officials acknowledge protests in the Chinese mainland, as pointed out by Professor Michael Klare, which means that East Asia is by no means an exception. As we shall see, financial and economic conditions are equally grave in the American hemisphere, if not more so.
Zbigniew Brzezinski, former National Security Advisor and early supporter of Barack Obama's presidential campaign, has warned that civil unrest on American soil is a possibility that should not be dismissed. Brzezinski explains that "[the United States is] going to have millions and millions of unemployed, people really facing dire straits. And we’re going to be having that for some period of time before things hopefully improve. And at the same time there is public awareness of this extraordinary wealth that was transferred to a few individuals at levels without historical precedent in America..." Brzezinski concludes with this noteworthy remark "...hell, there could be even riots".
The aforementioned means that the upper echelons of the American political elite have realized that the current financial and economic turmoil is much worse than what many experts had foreseen, and that things could really spiral out of control if the present situation deteriorates even further. Indeed, optimistic signs are nowhere to be found. Quite the contrary.
The full magnitude of the financial tsunami is clearly reflected in a piece written by Barry Ritholtz, who states that the bailout plan promoted by former US Secretary of the Treasury Henry "Hank" Paulson amounts to a sum of money that is superior to the Louisiana Purchase, the New Deal, the Marshall Plan, the Apollo Lunar Project, the Korean War, the Vietnam War, the invasion of Iraq and other large government expenditures - combined (!). This illustrates that America's top policymakers (both Democratic and Republican) hold serious concerns about the health of the American financial system and the American economy.
Lehman Brothers' bankruptcy (the largest in American history) was merely the tip of the iceberg and economic and financial conditions have dramatically worsened ever since. On January 22 2009, the Christian Science Monitor published that the four largest U.S. banks "have lost half of their value since January 2." Moreover, in the period from summer 2008 to March 2009, the Dow Jones Industrial Average index has decreased more than 50%. Furthermore, during February 2009 alone, more than 651 000 jobs were lost in the US, whose unemployment rate has now reached 8.1 %, the highest in 26 years. Also, some US car manufacturers (such as Ford, General Motors and Chrysler), once the pride of America's industry, are practically on life support.
Steve Lohr, from the New York Times, writes that "Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking." Indeed, there were only two investment banks left: Morgan Stanley and Goldman Sachs and their condition is not exactly solid because they have managed to survive by becoming ordinary commercial banks. The Guardian reproduces an assessment by Bill Isaac, an experienced financial expert; he claims that the transformation of both Morgan Stanley and Goldman Sachs is "a shame because this country [the US] was built, in part, on risk-taking by Goldman and Morgan and by a whole bunch of firms before them." Karl West, from the Daily Mail mentions that financial specialists warn that mammoth bank Citigroup "could collapse".
All of the above indicates that the much-feared financial meltdown is no longer a distant and remote possibility because in fact it is already taking place. However, this chaos might trigger some very serious and preoccupying consequences. In order to have a clear understanding of these implications, it is vital to take into account some reports that were not given the proper amount of attention they deserved when they were first published.
Professor Michel Chossudovsky observed that the US Army 3rd Infantry's 1st Brigade Combat Team returned from Iraq some months ago. That information is extremely disturbing because such military unit "may be called upon to help with civil unrest and crowd control", according to official sources. Now, what scenario could possibly require the operational deployment of said units on American soil? Professor Chossudovsky puts forward an intriguing hypothesis that must be borne in mind. He argues that "Civil unrest resulting from from the financial meltdown is a distinct possibility, given the broad impacts of financial collapse on lifelong savings, pension funds, homeownership, etc".
Shortly afterwards, the Centre for Research on Globalization website posted an article written by Wayne Madsen. Mr. Madsen claims that a highly confidential official report has been circulating among senior members of the US Congress and their top advisors. The report has been allegedly nicknamed as the "C & R document". The author stipulates that those letters stand for none other than "conflict" and "revolution" because those scenarios are supposedly regarded by America's policymakers as plausible consequences triggered by a financial meltdown. According to Mr. Madsen, the content of the document reveals that severe financial chaos could spark a major war if Washington refuses to honor its foreign debt and/or massive riots in US cities if the American population does not accept a considerable tax increase.
For decades, overall political stability in the US was taken for granted. However, as it has been pointed out, even senior American statesmen are taking into consideration that financial volatility could fuel a wave of discontent which could easily reach troubling proportions. It seems that America itself is not immune from "regime-threatening instability" as the Pentagon and the American intelligence community terms it. It is likely that American government officials have not dismissed the worst-case scenario. Indeed it looks like they have been preparing accordingly.
Therefore, as has been scrutinized here, once one proceeds to connect the dots a very dark picture begins to emerge, to say the least. An all-encompassing cloud of uncertainty prevents us from formulating an accurate forecast regarding what developments will occur and how they will unfold during the next few months, let alone years. The only thing that can be taken for granted and that one can be sure of is that the unthinkable has now become thinkable.
José Miguel Alonso Trabanco is an independent writer based in Mexico specialising in geopoltical and military affairs. He has a degree in International Relations from the Monterrey Institute of Technology and Higher Studies, Mexico City. His focus is on contemporary and historic geopolitics, the world's balance of power, the international system's architecture and the emergence of new powers.
José Miguel Alonso Trabanco is a frequent contributor to Global Research. Global Research Articles by José Miguel Alonso Trabanco
Huge ‘Tent City’ Forming Outside Sacramento
http://www.casavaria.com/cafesentido/2009/03/09/1622/huge-tent-city-forming-outside-sacramento/
Economic Recovery, Economy-US, In the Loop, Mortgage & Credit Crisis, Politics-US, US news
9 March 2009 :: J.E. Robertson
An array of reports show some 1,200 people living in a growing tent city outside the California capital Sacramento, as more and more people are left homeless by the housing crisis. The UK’s Daily Mail on Friday detailed the community, noting echoes of the Depression era. There are an estimated 2,000 people living in such communities around Sacramento, with foreclosure and jobless rates skyrocketing.
Smaller tent cities had been reported in Los Angeles and New Orleans over the last year, but a new photo essay, published by MSBNC, highlights both the magnitude of the Sacramento tent city and its comparison to Depression-era tent cities that emerged as homelessness became a pervasive national crisis.
The news is jolting to many who are worried that the spreading foreclosure crisis and collapse in real estate values, in combination with a faltering job market, could push families with “underwater” mortgages into homelessness. California is one of the wealthiest states and one of the world’s largest economies, and pressure for serious efforts to combat the economic crisis is mounting.
The president’s American Recovery and Reinvestment plan (ARRA) is just now beginning to be set in motion, and most of the stimulus effect will not be felt for months. The state of California, already extremely hard hit by the energy crisis relating to alleged price-fixing schemes by a series of power companies, a situation which likely ended the tenure of Gov. Gray Davis, has also been hard hit by the collapse of the Madoff hedge fund, which stripped the state pension fund of massive long-term value.
The state is in a serious state of fiscal crisis, facing unprecedented budget deficits, the fixing of which has been the focus of much of the state government’s activity in recent months, with the Republican governor Arnold Schwarzennegger locked in a fight against his own party. Fixing the employment and housing crises will rquire serious efforts to fix these fiscal problems as well.
MSNBC reports that 20 to 50 people per week are joining the shantytown community, positioned along the same bend in the American River where “transplanted Tennesseans” who had sought work far from home during the crushing worst of the Great Depression. Photos from 1936 show the community then in comparison to its 2009 reincarnation.
With just 500,000 residents, Sacramento now finds nearly one-half of one percent of its population living in such communities, as unemployment there hit 10.4 percent in January. Police patrol the area and aid workers deliver food and clothes, according to reports.
The Daily Mail tells the story of a couple in their fifties who both lost their jobs in quick succession and have been unable to find work since or remain in their home:
With homeless shelters full in Sacramento, they had little choice but to use what savings they had left to buy a tent.
The couple admit they have yet to tell their grown-up children about their hand-to-mouth existence.
Tena said: “I have a 35-year-old son, and he doesn’t know. I call him, about once a month and on holidays, to let him know that I’m well and healthy.”
“He would love me anyway, but I don’t want to worry him,” she said. There are likely many families with similar issues, as California loses 80,000 jobs per month in this worsening crisis. Pres. Obama’s plan to stop foreclosures would allow up to 9 million people to avoid foreclosure by way of aggressive restructuring of home mortgage loans.
Inconvenient truths: Don't believe the greenwash
They had me at "cute animals will have to die..."
http://www.independent.co.uk/environment/green-living/inconvenient-truths-dont-believe-the-greenwash-1635867.html
The Groundwork Has Already Been Laid for Martial Law
By John W. Whitehead
3/4/2009
http://www.rutherford.org/articles_db/commentary.asp?record_id=581
During his two terms in office, George W. Bush stepped outside the boundaries of the Constitution and assembled an amazing toolbox of powers that greatly increased the authority of the Executive branch and the reach of the federal government.
Bush expanded presidential power to, among other things, allow government agents to secretly open the private mail of American citizens; authorize government agents to secretly, and illegally, listen in on the phone calls of American citizens and read our e-mails; assume control of the federal government following a "catastrophic event"; and declare martial law.
Thus, the groundwork was laid for an imperial presidency and a potentially totalitarian government--a state of affairs that has not ended with Barack Obama's ascension to the Oval Office, despite hopes to the contrary that President Obama would fully restore the balance between government and its citizens to a pre-Bush status quo. As Charlie Savage reports in the New York Times, "Signs suggest that the administration's changes may turn out to be less sweeping than many had hoped or feared--prompting growing worry among civil liberties groups and a sense of vindication among supporters of Bush-era policies."
The fact is that the problem is bigger than Obama or any individual who occupies the White House. Indeed, once the government assumes expansive powers and crosses certain constitutional lines, it's almost impossible to pull back.
Just consider some of the lines that have already been crossed.
The local police have, in many regards, already evolved into de facto extensions of the military. Dressed like Darth Vader look-alikes, the police have opted for the SWAT-team dress formally adopted by the federal agencies. Congressional legislation allows the U.S. military, by way of the Pentagon, to train civilian police. The Pentagon has also provided local police with military equipment such as M-16 rifles, bayonets, boats, vehicles, surveillance equipment, chemical suits and flak jackets, among other items. Thus, they are armed to the teeth.
We already have a federal police force comprised of Secret Service agents who are authorized to "carry firearms; make arrests without a warrant for any offense against the United States committed in their presence." A recent incident demonstrates the increased and immediate involvement of federal agents in local matters with the assistance of local police. Chip Harrison, a construction worker in Oklahoma, was pulled over by local police because of an anti-Obama sign proclaiming "Abort Obama, not the unborn" in his pickup truck window. The sign was confiscated by local police, and Harrison was informed that the sign could be considered a threat to the president. The local police contacted the Secret Service, who, within a matter of hours, came to Harrison's home and investigated the matter. So much for the freedom of expression.
According to the Army Times, we now have at least 20,000 U.S. military troops deployed within our borders to "help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack." I am not alone in believing that we are just one incident--be it a terrorist attack, a major financial blowout or a widespread natural disaster--away from martial law being declared in this country. And once that happens, the Constitution and Bill of Rights will be suspended and what government officials believe and do, no matter how arbitrary, will become law.
Our methods of communication are already being monitored--and, in some instances, shut down, abetted by the telecommunications giants, which act as extensions of the government. Thus, not only does the government have the ability to open and read our mail, it can also listen in on our phone calls and jam our cell phone calls. As the Washington Post reports, federal authorities already have the ability to jam cell phones and other wireless devices. Unbeknownst to the nearly two million people who attended the Obama Inauguration festivities, federal authorities jammed cell phone signals at specific locations. Such disruptions simply appear to be a dropped call or lost signal. Of course, such jamming could be conducted on a more extensive basis nationwide. This would prevent citizens from being able to communicate with one another or make appeals to their government representatives. Although jamming is technically illegal for state and local agencies, Sen. Joe Lieberman (I-Conn.) plans to introduce legislation to allow local police to "selectively" jam cell phones.
We already live in a surveillance state. There was a time when people could flee when the government got out of control. Now, with our every movement monitored by cameras on sidewalks, streets, ATMs, and in shops, offices, schools and parks, there truly is nowhere to hide. Moreover, equipped with high-powered satellites and massive databases, the government can track us using our cell phones, cars, credit cards, driver's licenses and passports.
For those who have been paying attention, such as former war correspondent Chris Hedges in his Truthdig article, "Bad News From America's Top Spy," it's clear that the groundwork for a seamless transition into martial law under a totalitarian state of government has been laid. And local law enforcement, which has already been serving as a de facto military force, will be the key to maintaining martial law under a police state. Given the interconnectedness of our federal, state and local agencies, you can be sure that all of this will happen quickly.
All that is needed is another threat to national security--a so-called "catastrophic event." Under the Bush administration, the danger was terrorism. Under the Obama administration, the economy is being posed as the greatest threat to national security.
This danger was made clear in a U.S. Army War College report issued last fall. As Hedges reports, "The military must be prepared, the document warned, for a 'violent, strategic dislocation inside the United States,' which could be provoked by 'unforeseen economic collapse,' 'purposeful domestic resistance,' 'pervasive public health emergencies' or 'loss of functioning political and legal order.' The 'widespread civil violence,' the document said, 'would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.'"
What does all this mean for you and me, the average citizen? When and if martial law is declared, freedom, as we have known it, will be obsolete. And don't expect much in the way of warning or help from the corporate media. As the war in Iraq showed, they are all too willing to be co-opted by the military for the sake of access and ratings. And there will be many Americans who won't know what's happening. They'll be too busy watching the latest entertainment spectacle and trying to guess the next American Idol.
Thankfully, we have not yet reached the point of no hope. But it must be acknowledged that the average American simply does not have the ability to withstand a totalitarian government.
Right now, all we can do is sound the alarm. Become educated. Form local citizens groups in your community. Educate your neighbors on their rights and inform them about the grave possibilities we face in the event of a government-declared emergency. Keep in almost near-constant contact with your representatives in Congress and voice your discontent. Most of all, stay informed and exercise your right to redress your grievances with the government while you still can.
As abolitionist Wendell Phillips once proclaimed:
Eternal vigilance is the price of liberty--power is ever stealing from the many to the few.... The hand entrusted with power becomes ... the necessary enemy of the people. Only by continual oversight can the democrat in office be prevented from hardening into a despot.
Social Collapse Best Practices
http://cluborlov.blogspot.com/2009/02/social-collapse-best-practices.html
The following talk was given on February 13, 2009, at Cowell Theatre in Fort Mason Center, San Francisco, to an audience of 550 people. Audio of the talk is available here. Video of the talk is available here.
Good evening, ladies and gentlemen. Thank you for showing up. It's certainly nice to travel all the way across the North American continent and have a few people come to see you, even if the occasion isn't a happy one. You are here to listen to me talk about social collapse and the various ways we can avoid screwing that up along with everything else that's gone wrong. I know it's a lot to ask of you, because why wouldn't you instead want to go and eat, drink, and be merry? Well, perhaps there will still be time left for that after my talk.
I would like to thank the Long Now Foundation for inviting me, and I feel very honored to appear in the same venue as many serious, professional people, such as Michael Pollan, who will be here in May, or some of the previous speakers, such as Nassim Taleb, or Brian Eno – some of my favorite people, really. I am just a tourist. I flew over here to give this talk and to take in the sights, and then I'll fly back to Boston and go back to my day job. Well, I am also a blogger. And I also wrote a book. But then everyone has a book, or so it would seem.
You might ask yourself, then, Why on earth did he get invited to speak here tonight? It seems that I am enjoying my moment in the limelight, because I am one of the very few people who several years ago unequivocally predicted the demise of the United States as a global superpower. The idea that the USA will go the way of the USSR seemed preposterous at the time. It doesn't seem so preposterous any more. I take it some of you are still hedging your bets. How is that hedge fund doing, by the way?
I think I prefer remaining just a tourist, because I have learned from experience – luckily, from other people's experience – that being a superpower collapse predictor is not a good career choice. I learned that by observing what happened to the people who successfully predicted the collapse of the USSR. Do you know who Andrei Amalrik is? See, my point exactly. He successfully predicted the collapse of the USSR. He was off by just half a decade. That was another valuable lesson for me, which is why I will not give you an exact date when USA will turn into FUSA ("F" is for "Former"). But even if someone could choreograph the whole event, it still wouldn't make for much of a career, because once it all starts falling apart, people have far more important things to attend to than marveling at the wonderful predictive abilities of some Cassandra-like person.
I hope that I have made it clear that I am not here in any sort of professional capacity. I consider what I am doing a kind of community service. So, if you don't like my talk, don't worry about me. There are plenty of other things I can do. But I would like my insights to be of help during these difficult and confusing times, for altruistic reasons, mostly, although not entirely. This is because when times get really bad, as they did when the Soviet Union collapsed, lots of people just completely lose it. Men, especially. Successful, middle-aged men, breadwinners, bastions of society, turn out to be especially vulnerable. And when they just completely lose it, they become very tedious company. My hope is that some amount of preparation, psychological and otherwise, can make them a lot less fragile, and a bit more useful, and generally less of a burden.
Women seem much more able to cope. Perhaps it is because they have less of their ego invested in the whole dubious enterprise, or perhaps their sense of personal responsibility is tied to those around them and not some nebulous grand enterprise. In any case, the women always seem far more able to just put on their gardening gloves and go do something useful, while the men tend to sit around groaning about the Empire, or the Republic, or whatever it is that they lost. And when they do that, they become very tedious company. And so, without a bit of mental preparation, the men are all liable to end up very lonely and very drunk. So that's my little intervention.
If there is one thing that I would like to claim as my own, it is the comparative theory of superpower collapse. For now, it remains just a theory, although it is currently being quite thoroughly tested. The theory states that the United States and the Soviet Union will have collapsed for the same reasons, namely: a severe and chronic shortfall in the production of crude oil (that magic addictive elixir of industrial economies), a severe and worsening foreign trade deficit, a runaway military budget, and ballooning foreign debt. I call this particular list of ingredients "The Superpower Collapse Soup." Other factors, such as the inability to provide an acceptable quality of life for its citizens, or a systemically corrupt political system incapable of reform, are certainly not helpful, but they do not automatically lead to collapse, because they do not put the country on a collision course with reality. Please don't be too concerned, though, because, as I mentioned, this is just a theory. My theory.
I've been working on this theory since about 1995, when it occurred to me that the US is retracing the same trajectory as the USSR. As so often is the case, having this realization was largely a matter of being in the right place at the right time. The two most important methods of solving problems are: 1. by knowing the solution ahead of time, and 2. by guessing it correctly. I learned this in engineering school – from a certain professor. I am not that good at guesswork, but I do sometimes know the answer ahead of time.
I was very well positioned to have this realization because I grew up straddling the two worlds – the USSR and the US. I grew up in Russia, and moved to the US when I was twelve, and so I am fluent in Russian, and I understand Russian history and Russian culture the way only a native Russian can. But I went through high school and university in the US .I had careers in several industries here, I traveled widely around the country, and so I also have a very good understanding of the US with all of its quirks and idiosyncrasies. I traveled back to Russia in 1989, when things there still seemed more or less in line with the Soviet norm, and again in 1990, when the economy was at a standstill, and big changes were clearly on the way. I went back there 3 more times in the 1990s, and observed the various stages of Soviet collapse first-hand.
By the mid-1990s I started to see Soviet/American Superpowerdom as a sort of disease that strives for world dominance but in effect eviscerates its host country, eventually leaving behind an empty shell: an impoverished population, an economy in ruins, a legacy of social problems, and a tremendous burden of debt. The symmetries between the two global superpowers were then already too numerous to mention, and they have been growing more obvious ever since.
The superpower symmetries may be of interest to policy wonks and history buffs and various skeptics, but they tell us nothing that would be useful in our daily lives. It is the asymmetries, the differences between the two superpowers, that I believe to be most instructive. When the Soviet system went away, many people lost their jobs, everyone lost their savings, wages and pensions were held back for months, their value was wiped out by hyperinflation, there shortages of food, gasoline, medicine, consumer goods, there was a large increase in crime and violence, and yet Russian society did not collapse. Somehow, the Russians found ways to muddle through. How was that possible? It turns out that many aspects of the Soviet system were paradoxically resilient in the face of system-wide collapse, many institutions continued to function, and the living arrangement was such that people did not lose access to food, shelter or transportation, and could survive even without an income. The Soviet economic system failed to thrive, and the Communist experiment at constructing a worker's paradise on earth was, in the end, a failure. But as a side effect it inadvertently achieved a high level of collapse-preparedness. In comparison, the American system could produce significantly better results, for time, but at the cost of creating and perpetuating a living arrangement that is very fragile, and not at all capable of holding together through the inevitable crash. Even after the Soviet economy evaporated and the government largely shut down, Russians still had plenty left for them to work with. And so there is a wealth of useful information and insight that we can extract from the Russian experience, which we can then turn around and put to good use in helping us improvise a new living arrangement here in the United States – one that is more likely to be survivable.
The mid-1990s did not seem to me as the right time to voice such ideas. The United States was celebrating its so-called Cold War victory, getting over its Vietnam syndrome by bombing Iraq back to the Stone Age, and the foreign policy wonks coined the term "hyperpower" and were jabbering on about full-spectrum dominance. All sorts of silly things were happening. Professor Fukuyama told us that history had ended, and so we were building a brave new world where the Chinese made things out of plastic for us, the Indians provided customer support when these Chinese-made things broke, and we paid for it all just by flipping houses, pretending that they were worth a lot of money whereas they are really just useless bits of ticky-tacky. Alan Greenspan chided us about "irrational exuberance" while consistently low-balling interest rates. It was the "Goldilocks economy" – not to hot, not too cold. Remember that? And now it turns out that it was actually more of a "Tinker-bell" economy, because the last five or so years of economic growth was more or less a hallucination, based on various debt pyramids, the "whole house of cards" as President Bush once referred to it during one of his lucid moments. And now we can look back on all of that with a funny, queasy feeling, or we can look forward and feel nothing but vertigo.
While all of these silly things were going on, I thought it best to keep my comparative theory of superpower collapse to myself. During that time, I was watching the action in the oil industry, because I understood that oil imports are the Achilles' heel of the US economy. In the mid-1990s the all-time peak in global oil production was scheduled for the turn of the century. But then a lot of things happened that delayed it by at least half a decade. Perhaps you’ve noticed this too, there is a sort of refrain here: people who try to predict big historical shifts always turn to be off by about half a decade. Unsuccessful predictions, on the other hand are always spot on as far as timing: the world as we know it failed to end precisely at midnight on January 1, 2000. Perhaps there is a physical principal involved: information spreads at the speed of light, while ignorance is instantaneous at all points in the known universe. So please make a mental note: whenever it seems to you that I am making a specific prediction as to when I think something is likely to happen, just silently add “plus or minus half a decade.”
In any case, about half a decade ago, I finally thought that the time was ripe, and, as it has turned out, I wasn’t too far off. In June of 2005 I published an article on the subject, titled "Post-Soviet Lessons for a Post-American Century," which was quite popular, even to the extent that I got paid for it. It is available at various places on the Internet. A little while later I formalized my thinking somewhat into the "Collapse Gap" concept, which I presented at a conference in Manhattan in April of 2006. The slide show from that presentation, titled "Closing the Collapse Gap," was posted on the Internet and has been downloaded a few million times since then. Then, in January of 2008, when it became apparent to me that financial collapse was well underway, and that other stages of collapse were to follow, I published a short article titled “The Five Stages of Collapse,” which I later expanded into a talk I gave at a conference in Michigan in October of 2008. Finally, at the end of 2008, I announced on my blog that I am getting out of the prognosticating business. I have made enough predictions, they all seem very well on track (give or take half a decade, please remember that), collapse is well underway, and now I am just an observer.
But this talk is about something else, something other than making dire predictions and then acting all smug when they come true. You see, there is nothing more useless than predictions, once they have come true. It’s like looking at last year’s amazingly successful stock picks: what are you going to do about them this year? What we need are examples of things that have been shown to work in the strange, unfamiliar, post-collapse environment that we are all likely to have to confront. Stuart Brand proposed the title for the talk – “Social Collapse Best Practices” – and I thought that it was an excellent idea. Although the term “best practices” has been diluted over time to sometimes mean little more than “good ideas,” initially it stood for the process of abstracting useful techniques from examples of what has worked in the past and applying them to new situations, in order to control risk and to increase the chances of securing a positive outcome. It’s a way of skipping a lot of trial and error and deliberation and experimentation, and to just go with what works.
In organizations, especially large organizations, “best practices” also offer a good way to avoid painful episodes of watching colleagues trying to “think outside the box” whenever they are confronted with a new problem. If your colleagues were any good at thinking outside the box, they probably wouldn’t feel so compelled to spend their whole working lives sitting in a box keeping an office chair warm. If they were any good at thinking outside the box, they would have by now thought of a way to escape from that box. So perhaps what would make them feel happy and productive again is if someone came along and gave them a different box inside of which to think – a box better suited to the post-collapse environment.
Here is the key insight: you might think that when collapse happens, nothing works. That’s just not the case. The old ways of doing things don’t work any more, the old assumptions are all invalidated, conventional goals and measures of success become irrelevant. But a different set of goals, techniques, and measures of success can be brought to bear immediately, and the sooner the better. But enough generalities, let’s go through some specifics. We’ll start with some generalities, and, as you will see, it will all become very, very specific rather quickly.
Here is another key insight: there are very few things that are positives or negatives per se. Just about everything is a matter of context. Now, it just so happens that most things that are positives prior to collapse turn out to be negatives once collapse occurs, and vice versa. For instance, prior to collapse having high inventory in a business is bad, because the businesses have to store it and finance it, so they try to have just-in-time inventory. After collapse, high inventory turns out to be very useful, because they can barter it for the things they need, and they can’t easily get more because they don’t have any credit. Prior to collapse, it’s good for a business to have the right level of staffing and an efficient organization. After collapse, what you want is a gigantic, sluggish bureaucracy that can’t unwind operations or lay people off fast enough through sheer bureaucratic foot-dragging. Prior to collapse, what you want is an effective retail segment and good customer service. After collapse, you regret not having an unreliable retail segment, with shortages and long bread lines, because then people would have been forced to learn to shift for themselves instead of standing around waiting for somebody to come and feed them.
If you notice, none of these things that I mentioned have any bearing on what is commonly understood as “economic health.” Prior to collapse, the overall macroeconomic positive is an expanding economy. After collapse, economic contraction is a given, and the overall macroeconomic positive becomes something of an imponderable, so we are forced to listen to a lot of nonsense. The situation is either slightly better than expected or slightly worse than expected. We are always either months or years away from economic recovery. Business as usual will resume sooner or later, because some television bobble-head said so.
But let’s take it apart. Starting from the very general, what are the current macroeconomic objectives, if you listen to the hot air coming out of Washington at the moment? First: growth, of course! Getting the economy going. We learned nothing from the last huge spike in commodity prices, so let’s just try it again. That calls for economic stimulus, a.k.a. printing money. Let’s see how high the prices go up this time. Maybe this time around we will achieve hyperinflation. Second: Stabilizing financial institutions: getting banks lending – that’s important too. You see, we are just not in enough debt yet, that’s our problem. We need more debt, and quickly! Third: jobs! We need to create jobs. Low-wage jobs, of course, to replace all the high-wage manufacturing jobs we’ve been shedding for decades now, and replacing them with low-wage service sector jobs, mainly ones without any job security or benefits. Right now, a lot of people could slow down the rate at which they are sinking further into debt if they quit their jobs. That is, their job is a net loss for them as individuals as well as for the economy as a whole. But, of course, we need much more of that, and quickly!
So that’s what we have now. The ship is on the rocks, water is rising, and the captain is shouting “Full steam ahead! We are sailing to Afghanistan!” Do you listen to Ahab up on the bridge, or do you desert your post in the engine room and go help deploy the lifeboats? If you thought that the previous episode of uncontrolled debt expansion, globalized Ponzi schemes, and economic hollowing-out was silly, then I predict that you will find this next episode of feckless grasping at macroeconomic straws even sillier. Except that it won’t be funny: what is crashing now is our life support system: all the systems and institutions that are keeping us alive. And so I don’t recommend passively standing around and watching the show – unless you happen to have a death wish.
Right now the Washington economic stimulus team is putting on their Scuba gear and diving down to the engine room to try to invent a way to get a diesel engine to run on seawater. They spoke of change, but in reality they are terrified of change and want to cling with all their might to the status quo. But this game will soon be over, and they don’t have any idea what to do next.
So, what is there for them to do? Forget “growth,” forget “jobs,” forget “financial stability.” What should their realistic new objectives be? Well, here they are: food, shelter, transportation, and security. Their task is to find a way to provide all of these necessities on an emergency basis, in absence of a functioning economy, with commerce at a standstill, with little or no access to imports, and to make them available to a population that is largely penniless. If successful, society will remain largely intact, and will be able to begin a slow and painful process of cultural transition, and eventually develop a new economy, a gradually de-industrializing economy, at a much lower level of resource expenditure, characterized by a quite a lot of austerity and even poverty, but in conditions that are safe, decent, and dignified. If unsuccessful, society will be gradually destroyed in a series of convulsions that will leave a defunct nation composed of many wretched little fiefdoms. Given its largely depleted resource base, a dysfunctional, collapsing infrastructure, and its history of unresolved social conflicts, the territory of the Former United States will undergo a process of steady degeneration punctuated by natural and man-made cataclysms.
Food. Shelter. Transportation. Security. When it comes to supplying these survival necessities, the Soviet example offers many valuable lessons. As I already mentioned, in a collapse many economic negatives become positives, and vice versa. Let us consider each one of these in turn.
The Soviet agricultural sector was plagued by consistent underperformance. In many ways, this was the legacy of the disastrous collectivization experiment carried out in the 1930s, which destroyed many of the more prosperous farming households and herded people into collective farms. Collectivization undermined the ancient village-based agricultural traditions that had made pre-revolutionary Russia a well-fed place that was also the breadbasket of Western Europe. A great deal of further damage was caused by the introduction of industrial agriculture. The heavy farm machinery alternately compacted and tore up the topsoil while dosing it with chemicals, depleting it and killing the biota. Eventually, the Soviet government had to turn to importing grain from countries hostile to its interests – United States and Canada – and eventually expanded this to include other foodstuffs. The USSR experienced a permanent shortage of meat and other high-protein foods, and much of the imported grain was used to raise livestock to try to address this problem.
Although it was generally possible to survive on the foods available at the government stores, the resulting diet would have been rather poor, and so people tried to supplement it with food they gathered, raised, or caught, or purchased at farmers’ markets. Kitchen gardens were always common, and, once the economy collapsed, a lot of families took to growing food in earnest. The kitchen gardens, by themselves, were never sufficient, but they made a huge difference.
The year 1990 was particularly tough when it came to trying to score something edible. I remember one particular joke from that period. Black humor has always been one of Russia’s main psychological coping mechanisms. A man walks into a food store, goes to the meat counter, and he sees that it is completely empty. So he asks the butcher: “Don’t you have any fish?” And the butcher answers: “No, here is where we don’t have any meat. Fish is what they don’t have over at the seafood counter.”
Poor though it was, the Soviet food distribution system never collapsed completely. In particular, the deliveries of bread continued even during the worst of times, partly because has always been such an important part of the Russian diet, and partly because access to bread symbolized the pact between the people and the Communist government, enshrined in oft-repeated revolutionary slogans. Also, it is important to remember that in Russia most people have lived within walking distance of food shops, and used public transportation to get out to their kitchen gardens, which were often located in the countryside immediately surrounding the relatively dense, compact cities. This combination of factors made for some lean times, but very little malnutrition and no starvation.
In the United States, the agricultural system is heavily industrialized, and relies on inputs such as diesel, chemical fertilizers and pesticides, and, perhaps most importantly, financing. In the current financial climate, the farmers’ access to financing is not at all assured. This agricultural system is efficient, but only if you regard fossil fuel energy as free. In fact, it is a way to transform fossil fuel energy into food with a bit of help from sunlight, to the tune of 10 calories of fossil fuel energy being embodied in each calorie that is consumed as food. The food distribution system makes heavy use of refrigerated diesel trucks, transforming food over hundreds of miles to resupply supermarkets. The food pipeline is long and thin, and it takes only a couple of days of interruptions for supermarket shelves to be stripped bare. Many people live in places that are not within walking distance of stores, not served by public transportation, and will be cut off from food sources once they are no longer able to drive.
Besides the supermarket chains, much of the nation’s nutrition needs are being met by an assortment of fast food joints and convenience stores. In fact, in many of the less fashionable parts of cities and towns, fast food and convenience store food is all that is available. In the near future, this trend is likely to extend to the more prosperous parts of town and the suburbs.
Fast food outfits such as McDonalds have more ways to cut costs, and so may prove a bit more resilient in the face of economic collapse than supermarket chains, but they are no substitute for food security, because they too depend industrial agribusiness. Their food inputs, such as high-fructose corn syrup, genetically modified potatoes, various soy-based fillers, factory-farmed beef, pork and chicken, and so forth, are derived from oil, two-thirds of which is imported, as well as fertilizer made from natural gas. They may be able to stay in business longer, supplying food-that-isn’t-really-food, but eventually they will run out of inputs along with the rest of the supply chain. Before they do, they may for a time sell burgers that aren’t really burgers, like the bread that wasn’t really bread that the Soviet government distributed in Leningrad during the Nazi blockade. It was mostly sawdust, with a bit of rye flour added for flavor.
Can we think of any ways to avoid this dismal scenario? The Russian example may give us a clue. Many Russian families could gauge how fast the economy was crashing, and, based on that, decide how many rows of potatoes to plant. Could we perhaps do something similar? There is already a healthy gardening movement in the United States; can it be scaled up? The trick is to make small patches of farmland available for non-mechanical cultivation by individuals and families, in increments as small as 1000 square feet. The ideal spots would be fertile bits of land with access to rivers and streams for irrigation. Provisions would have to be made for campsites and for transportation, allowing people to undertake seasonal migrations out to the land to grow food during the growing season, and haul the produce back to the population centers after taking in the harvest.
An even simpler approach has been successfully used in Cuba: converting urban parking lots and other empty bits of land to raised-bed agriculture. Instead of continually trucking in vegetables and other food, it is much easier to truck in soil, compost, and mulch just once a season. Raised highways can be closed to traffic (since there is unlikely to be much traffic in any case) and used to catch rainwater for irrigation. Rooftops and balconies can be used for hothouses, henhouses, and a variety of other agricultural uses.
How difficult would this be to organize? Well, Cubans were actually helped by their government, but the Russians managed to do it in more or less in spite of the Soviet bureaucrats, and so we might be able to do it in spite of the American ones. The government could theoretically head up such an effort, purely hypothetically speaking, of course, because I see no evidence that such an effort is being considered. For our fearless national leaders, such initiatives are too low-level: if they stimulate the economy and get the banks lending again, the potatoes will simply grow themselves. All they need to do is print some more money, right?
Moving on to shelter. Again, let’s look at how the Russians managed to muddle through. In the Soviet Union, people did not own their place of residence. Everyone was assigned a place to live, which was recorded in a person’s internal passport. People could not be dislodged from their place of residence for as long as they drew oxygen. Since most people in Russia live in cities, the place of residence was usually an apartment, or a room in a communal apartment, with shared bathroom and kitchen. There was a permanent housing shortage, and so people often doubled up, with three generations living together. The apartments were often crowded, sometimes bordering on squalid. If people wanted to move, they had to find somebody else who wanted to move, who would want to exchange rooms or apartments with them. There were always long waiting lists for apartments, and children often grew up, got married, and had children before receiving a place of their own.
These all seem like negatives, but consider the flip side of all this: the high population density made this living arrangement quite affordable. With several generations living together, families were on hand to help each other. Grandparents provided day care, freeing up their children’s time to do other things. The apartment buildings were always built near public transportation, so they did not have to rely on private cars to get around. Apartment buildings are relatively cheap to heat, and municipal services easy to provide and maintain because of the short runs of pipe and cable. Perhaps most importantly, after the economy collapsed, people lost their savings, many people lost their jobs, even those that still had jobs often did not get paid for months, and when they were the value of their wages was destroyed by hyperinflation, but there were no foreclosures, no evictions, municipal services such as heat, water, and sometimes even hot water continued to be provided, and everyone had their families close by. Also, because it was so difficult to relocate, people generally stayed in one place for generations, and so they tended to know all the people around them. After the economic collapse, there was a large spike in the crime rate, which made it very helpful to be surrounded by people who weren’t strangers, and who could keep an eye on things. Lastly, in an interesting twist, the Soviet housing arrangement delivered an amazing final windfall: in the 1990s all of these apartments were privatized, and the people who lived in them suddenly became owners of some very valuable real estate, free and clear.
Switching back to the situation in the US: in recent months, many people here have reconciled themselves to the idea that their house is not an ATM machine, nor is it a nest egg. They already know that they will not be able to comfortably retire by selling it, or get rich by fixing it up and flipping it, and quite a few people have acquiesced to the fact that real estate prices are going to continue heading lower. The question is, How much lower? A lot of people still think that there must be a lower limit, a “realistic” price. This thought is connected to the notion that housing is a necessity. After all, everybody needs a place to live.
Well, it is certainly true that some sort of shelter is a necessity, be it an apartment, or a dorm room, a bunk in a barrack, a boat, a camper, or a tent, a teepee, a wigwam, a shipping container... The list is virtually endless. But there is no reason at all to think that a suburban single-family house is in any sense a requirement. It is little more than a cultural preference, and a very shortsighted one at that. Most suburban houses are expensive to heat and cool, inaccessible by public transportation, expensive to hook up to public utilities because of the long runs of pipe and cable, and require a great deal of additional public expenditure on road, bridge and highway maintenance, school buses, traffic enforcement, and other nonsense. They often take up what was once valuable agricultural land. They promote a car-centric culture that is destructive of urban environments, causing a proliferation of dead downtowns. Many families that live in suburban houses can no longer afford to live in them, and expect others to bail them out.
As this living arrangement becomes unaffordable for all concerned, it will also become unlivable. Municipalities and public utilities will not have the funds to lavish on sewer, water, electricity, road and bridge repair, and police. Without cheap and plentiful gasoline, natural gas, and heating oil, many suburban dwellings will become both inaccessible and unlivable. The inevitable result will be a mass migration of suburban refugees toward the more survivable, more densely settled towns and cities. The luckier ones will find friends or family to stay with; for the rest, it would be very helpful to improvise some solution.
One obvious answer is to repurpose the ever-plentiful vacant office buildings for residential use. Converting offices to dormitories is quite straightforward. Many of them already have kitchens and bathrooms, plenty of partitions and other furniture, and all they are really missing is beds. Putting in beds is just not that difficult. The new, subsistence economy is unlikely to generate the large surpluses that are necessary for sustaining the current large population of office plankton. The businesses that once occupied these offices are not coming back, so we might as well find new and better uses for them.
Another category of real estate that is likely to go unused and that can be repurposed for new communities is college campuses. The American 4-year college is an institution of dubious merit. It exists because American public schools fail to teach in 12 years what Russian public schools manage to teach in 8. As fewer and fewer people become able to afford college, which is likely to happen, because meager career prospects after graduation will make them bad risks for student loans, perhaps this will provide the impetus to do something about the public education system. One idea would be to scrap it, then start small, but eventually build something a bit more on par with world standards.
College campuses make perfect community centers: there are dormitories for newcomers, fraternities and sororities for the more settled residents, and plenty of grand public buildings that can be put to a variety of uses. A college campus normally contains the usual wasteland of mowed turf that can be repurposed to grow food, or, at the very least, hay, and to graze cattle. Perhaps some enlightened administrators, trustees and faculty members will fall upon this idea once they see admissions flat-lining and endowments dropping to zero, without any need for government involvement. So here we have a ray of hope, don’t we.
Moving on to transportation. Here, we need to make sure that people don’t get stranded in places that are not survivable. Then we have to provide for seasonal migrations to places where people can grow, catch, or gather their own food, and then back to places where they can survive the winter without freezing to death or going stir-crazy from cabin fever. Lastly, some amount of freight will have to be moved, to transport food to population centers, as well as enough coal and firewood to keep the pipes from freezing in the remaining habitable dwellings.
All of this is going to be a bit of a challenge, because it all hinges on the availability of transportation fuels, and it seems very probable that transportation fuels will be both too expensive and in short supply before too long. From about 2005 and until the middle of 2008 the global oil has been holding steady, unable to grow materially beyond a level that has been characterized as a “bumpy plateau.” An all-time record was set in 2005, and then, after a period of record-high oil prices, again only in 2008. Then, as the financial collapse gathered speed, oil and other commodity prices crashed, along with oil production. More recently, the oil markets have come to rest on an altogether different “bumpy plateau”: the oil prices are bumping along at around $40 a barrel and can’t seem to go any lower. It would appear that oil production costs have risen to a point where it does not make economic sense to sell oil at below this price.
Now, $40 a barrel is a good price for US consumers at the moment, but there is hyperinflation on the horizon, thanks to the money-printing extravaganza currently underway in Washington, and $40 could easily become $400 and then $4000 a barrel, swiftly pricing US consumers out of the international oil market. On top of that, exporting countries would balk at the idea of trading their oil for an increasingly worthless currency, and would start insisting on payment in kind – in some sort of tangible export commodity, which the US, in its current economic state, would be hard-pressed to provide in any great quantity. Domestic oil production is in permanent decline, and can provide only about a third of current needs. This is still quite a lot of oil, but it will be very difficult to avoid the knock-on effects of widespread oil shortages. There will be widespread hoarding, quite a lot of gasoline will simply evaporate into the atmosphere, vented from various jerricans and improvised storage containers, the rest will disappear into the black market, and much fuel will be wasted driving around looking for someone willing to part with a bit of gas that’s needed for some small but critical mission.
I am quite familiar with this scenario, because I happened to be in Russia during a time of gasoline shortages. On one occasion, I found out by word of mouth that a certain gas station was open and distributing 10 liters apiece. I brought along my uncle’s wife, who at the time was 8 months pregnant, and we tried use her huge belly to convince the gas station attendant to give us an extra 10 liters with which to drive her to the hospital when the time came. No dice. The pat answer was: “Everybody is 8 months pregnant!” How can you argue with that logic? So 10 liters was it for us too, belly or no belly.
So, what can we do to get our little critical missions accomplished in spite of chronic fuel shortages? The most obvious idea, of course, is to not use any fuel. Bicycles, and cargo bikes in particular, are an excellent adaptation. Sailboats are a good idea too: not only do they hold large amounts of cargo, but they can cover huge distances, all without the use of fossil fuels. Of course, they are restricted to the coastlines and the navigable waterways. They will be hampered by the lack of dredging due to the inevitable budget shortfalls, and by bridges that refuse to open, again, due to lack of maintenance funds, but here ancient maritime techniques and improvisations can be brought to bear to solve such problems, all very low-tech and reasonably priced.
Of course, cars and trucks will not disappear entirely. Here, again, some reasonable adaptations can be brought to bear. In my book, I advocated banning the sale of new cars, as was done in the US during World War II. The benefits are numerous. First, older cars are overall more energy-efficient than new cars, because the massive amount of energy that went into manufacturing them is more highly amortized. Second, large energy savings accrue from the shutdown of an entire industry devoted to designing, building, marketing, and financing new cars. Third, older cars require more maintenance, reinvigorating the local economy at the expense of mainly foreign car manufacturers, and helping reduce the trade deficit. Fourth, this will create a shortage of cars, translating automatically into fewer, shorter car trips, higher passenger occupancy per trip, and more bicycling and use of public transportation, saving even more energy. Lastly, this would allow the car to be made obsolete on the about the same time scale as the oil industry that made it possible. We will run out of cars just as we run out of gas.
Here we are, only a year or so later, and I am most heartened to see that the US auto industry has taken my advice and is in the process of shutting down. On the other hand, the government’s actions continue to disappoint. Instead of trying to solve problems, they would rather continue to create boondoggles. The latest one is the idea of subsidizing the sales of new cars. The idea of making cars more efficient by making more efficient cars is sheer folly. I can take any pick-up truck and increase its fuel efficiency one or two thousand percent just by breaking a few laws. First, you pack about a dozen people into the bed, standing shoulder to shoulder like sardines. Second, you drive about 25 mph, down the highway, because going any faster would waste fuel and wouldn’t be safe with so many people in the back. And there you are, per passenger fuel efficiency increased by a factor of 20 or so. I believe the Mexicans have done extensive research in this area, with excellent results.
Another excellent idea pioneered in Cuba is making it illegal not to pick up hitchhikers. Cars with vacant seats are flagged down and matched up with people who need a lift. Yet another idea: since passenger rail service is in such a sad shape, and since it is unlikely that funds will be found to improve it, why not bring back the venerable institution of riding the rails by requiring rail freight companies to provide a few empty box cars for the hobos. The energy cost of the additional weight is negligible, the hobos don’t require stops because they can jump on and off, and only a couple of cars per train would ever be needed, because hobos are almost infinitely compressible, and can even ride on the roof if needed. One final transportation idea: start breeding donkeys. Horses are finicky and expensive, but donkeys can be very cost-effective and make good pack animals. My grandfather had a donkey while he was living in Tashkent in Central Asia during World War II. There was nothing much for the donkey to eat, but, as a member of the Communist Party, my grandfather had a subscription to Pravda, the Communist Party newspaper, and so that’s what the donkey ate. Apparently, donkeys can digest any kind of cellulose, even when it’s loaded with communist propaganda. If I had a donkey, I would feed it the Wall Street Journal.
And so we come to the subject of security. Post-collapse Russia suffered from a serious crime wave. Ethnic mafias ran rampant, veterans who served in Afghanistan went into business for themselves, there were numerous contract killings, muggings, murders went unsolved left and right, and, in general, the place just wasn’t safe. Russians living in the US would hear that I am heading back there for a visit, and would give me a wide-eyed stare: how could I think of doing such a thing. I came through unscathed, somehow. I made a lot of interesting observations along the way.
One interesting observation is that once collapse occurs it becomes possible to rent a policeman, either for a special occasion, or generally just to follow someone around. It is even possible to hire a soldier or two, armed with AK-47s, to help you run various errands. Not only is it possible to do such things, it’s often a very good idea, especially if you happen to have something valuable that you don’t want to part with. If you can’t afford their services, then you should try to be friends with them, and to be helpful to them in various ways. Although their demands might seem exorbitant at times, it is still a good idea to do all you can to keep them on your side. For instance, they might at some point insist that you and your family move out to the garage so that they can live in your house. This may be upsetting at first, but then is it really such a good idea for you to live in a big house all by yourselves, with so many armed men running around. It may make sense to station some of them right in your house, so that they have a base of operations from which to maintain a watch and patrol the neighborhood.
A couple of years ago I half-jokingly proposed a political solution to collapse mitigation, and formulated a platform for the so-called Collapse Party. I published it with the caveat that I didn’t think there was much of a chance of my proposals becoming part of the national agenda. Much to my surprise, I turned out to be wrong. For instance, I proposed that we stop making new cars, and, lo and behold, the auto industry shuts down. I also proposed that we start granting amnesties to prisoners, because the US has the world’s largest prison population, and will not be able to afford to keep so many people locked up. It is better to release prisoners gradually, over time, rather than in a single large general amnesty, the way Saddam Hussein did it right before the US invaded. And, lo and behold, many states are starting to implement my proposal. It looks like California in particular will be forced to release some 60 thousand of the 170 thousand people it keeps locked up. That is a good start. I also proposed that we dismantle all overseas military bases (there are over a thousand of them) and repatriate all the troops. And it looks like that is starting to happen as well, except for the currently planned little side-trip to Afghanistan. I also proposed a Biblical jubilee – forgiveness of all debts, public and private. Let’s give that one… half a decade?
But if we look just at the changes that are already occurring, just the simple, predictable lack of funds, as the federal government and the state governments all go broke, will transform American society in rather predictable ways. As municipalities run out of money, police protection will evaporate. But the police still have to eat, and will find ways to use their skills to good use on a freelance basis. Similarly, as military bases around the world are shut down, soldiers will return to a country that will be unable to reintegrate them into civilian life. Paroled prisoners will find themselves in much the same predicament.
And so we will have former soldiers, former police, and former prisoners: a big happy family, with a few bad apples and some violent tendencies. The end result will be a country awash with various categories of armed men, most of them unemployed, and many of them borderline psychotic. The police in the United States are a troubled group. Many of them lose all touch with people who are not "on the force" and most of them develop an us-versus-them mentality. The soldiers returning from a tour of duty often suffer from post-traumatic stress disorder. The paroled prisoners suffer from a variety of psychological ailments as well. All of them will sooner or later realize that their problems are not medical but rather political. This will make it impossible for society to continue to exercise control over them. All of them will be making good use of their weapons training and other professional skills to acquire whatever they need to survive. And the really important point to remember is that they will do these things whether or not anyone thinks it legal for them to do be doing them.
I said it before and I will say it again: very few things are good or bad per se; everything has to be considered within a context. And, in a post-collapse context, not having to worry whether or not something is legal may be a very good thing. In the midst of a collapse, we will not have time to deliberate, legislate, interpret, set precedents and so on. Having to worry about pleasing a complex and expensive legal system is the last thing we should have to worry about.
Some legal impediments are really small and trivial, but they can be quite annoying nevertheless. A homeowners’ association might, say, want give you a ticket or seek a court order against you for not mowing your lawn, or for keeping livestock in your garage, or for that nice windmill you erected on a hill that you don’t own, without first getting a building permit, or some municipal busy-body might try to get you arrested for demolishing a certain derelict bridge because it was interfering with boat traffic – you know, little things like that. Well, if the association is aware that you have a large number of well armed, mentally unstable friends, some of whom still wear military and police uniforms, for old time’s sake, then they probably won’t give you that ticket or seek that court order.
Or suppose you have a great new invention that you want to make and distribute, a new agricultural implement. It's a sort of flail studded with sharp blades. It has a hundred and one uses and is highly cost-effective, and reasonably safe provided you don’t lose your head while using it, although people have taken to calling the “flying guillotine.” You think that this is an acceptable risk, but you are concerned about the issues of consumer safety and liability insurance and possibly even criminal liability. Once again, it is very helpful to have a large number of influential, physically impressive, mildly psychotic friends who, whenever some legal matter comes up, can just can go and see the lawyers, have a friendly chat, demonstrate the proper use of the flying guillotine, and generally do whatever they have to do to settle the matter amicably, without any money changing hands, and without signing any legal documents.
Or, say, the government starts being difficult about moving things and people in and out of the country, or it wants to take too much of a cut from commercial transactions. Or perhaps your state or your town decides to conduct its own foreign policy, and the federal government sees it fit to interfere. Then it may turn out to be a good thing if someone else has the firepower to bring the government, or what remains of it, to its senses, and convince it to be reasonable and to play nice.
Or perhaps you want to start a community health clinic, so that you can provide some relief to people who wouldn’t otherwise have any health care. You don’t dare call yourself a doctor, because these people are suspicious of doctors, because doctors were always trying to rob them of their life’s savings. But suppose you have some medical training that you got in, say, Cuba, and you are quite able to handle a Caesarean or an appendectomy, to suture wounds, to treat infections, to set bones and so on. You also want to be able to distribute opiates that your friends in Afghanistan periodically send you, to ease the pain of hard post-collapse life. Well, going through the various licensing boards and getting the certifications and the permits and the malpractice insurance is all completely unnecessary, provided you can surround yourself with a lot of well-armed, well-trained, mentally unstable friends.
Food. Shelter. Transportation. Security. Security is very important. Maintaining order and public safety requires discipline, and maintaining discipline, for a lot of people, requires the threat of force. This means that people must be ready to come to each other’s defense, take responsibility for each other, and do what’s right. Right now, security is provided by a number of bloated, bureaucratic, ineffectual institutions, which inspire more anger and despondency than discipline, and dispense not so much violence as ill treatment. That is why we have the world’s highest prison population. They are supposedly there to protect people from each other, but in reality their mission is not even to provide security; it is to safeguard property, and those who own it. Once these institutions run out of resources, there will be a period of upheaval, but in the end people will be forced to learn to deal with each other face to face, and Justice will once again become a personal virtue rather than a federal department.
I’ve covered what I think are basics, based on what I saw work and what I think might work reasonably well here. I assume that a lot of you are thinking that this is all quite far into the future, if in fact it ever gets that bad. You should certainly feel free to think that way. The danger there is that you will miss the opportunity to adapt to the new reality ahead of time, and then you will get trapped. As I see it, there is a choice to be made: you can accept the failure of the system now and change your course accordingly, or you can decide that you must try to stay the course, and then you will probably have to accept your own individual failure later.
So how do you prepare? Lately, I’ve been hearing from a lot of high-powered, successful people about their various high-powered, successful associates. Usually, the story goes something like this: “My a. financial advisor, b. investment banker, or c. commanding officer has recently a. put all his money in gold, b. bought a log cabin up in the mountains, or c. built a bunker under his house stocked with six months of food and water. Is this normal?” And I tell them, yes, of course, that’s perfectly harmless. He’s just having a mid-collapse crisis. But that’s not really preparation. That’s just someone being colorful in an offbeat, countercultural sort of way.
So, how do you prepare, really? Let’s go through a list of questions that people typically ask me, and I will try to briefly respond to each of them.
OK, first question: How about all these financial boondoggles? What on earth is going on? People are losing their jobs left and right, and if we calculate unemployment the same way it was done during the Great Depression, instead of looking at the cooked numbers the government is trying to feed us now, then we are heading toward 20% unemployment. And is there any reason to think it’ll stop there? Do you happen to believe that prosperity is around the corner? Not only jobs and housing equity, but retirement savings are also evaporating. The federal government is broke, state governments are broke, some more than others, and the best they can do is print money, which will quickly lose value. So, how can we get the basics if we don’t have any money? How is that done? Good question.
As I briefly mentioned, the basics are food, shelter, transportation, and security. Shelter poses a particularly interesting problem at the moment. It is still very much overpriced, with many people paying mortgages and rents that they can no longer afford while numerous properties stand vacant. The solution, of course, is to cut your losses and stop paying. But then you might soon have to relocate. That is OK, because, as I mentioned, there is no shortage of vacant properties around. Finding a good place to live will become less and less of a problem as people stop paying their rents and mortgages and get foreclosed or evicted, because the number of vacant properties will only increase. The best course of action is to become a property caretaker, legitimately occupying a vacant property rent-free, and keeping an eye on things for the owner. What if you can’t find a position as a property caretaker? Well, then you might have to become a squatter, maintain a list of other vacant properties that you can go to next, and keep your camping gear handy just in case. If you do get tossed out, chances are, the people who tossed you out will then think about hiring a property caretaker, to keep the squatters out. And what do you do if you become property caretaker? Well, you take care of the property, but you also look out for all the squatters, because they are the reason you have a legitimate place to live. A squatter in hand is worth three absentee landlords in the bush. The absentee landlord might eventually cut his losses and go away, but your squatter friends will remain as your neighbors. Having some neighbors is so much better than living in a ghost town.
What if you still have a job? How do you prepare then? The obvious answer is, be prepared to quit or to be laid off or fired at any moment. It really doesn’t matter which one of these it turns out to be; the point is to sustain zero psychological damage in the process. Get your burn rate to as close to zero as you can, by spending as little money as possible, so than when the job goes away, not much has to change. While at work, do as little as possible, because all this economic activity is just a terrible burden on the environment. Just gently ride it down to a stop and jump off.
If you still have a job, or if you still have some savings, what do you do with all the money? The obvious answer is, build up inventory. The money will be worthless, but a box of bronze nails will still be a box of bronze nails. Buy and stockpile useful stuff, especially stuff that can be used to create various kinds of alternative systems for growing food, providing shelter, and providing transportation. If you don’t own a patch of dirt free and clear where you can stockpile stuff, then you can rent a storage container, pay it a few years forward, and just sit on it until reality kicks in again and there is something useful for you to do with it. Some of you may be frightened by the future I just described, and rightly so. There is nothing any of us can do to change the path we are on: it is a huge system with tremendous inertia, and trying to change its path is like trying to change the path of a hurricane. What we can do is prepare ourselves, and each other, mostly by changing our expectations, our preferences, and scaling down our needs. It may mean that you will miss out on some last, uncertain bit of enjoyment. On the other hand, by refashioning yourself into someone who might stand a better chance of adapting to the new circumstances, you will be able to give to yourself, and to others, a great deal of hope that would otherwise not exist.
Economic Crisis = USA Riots
http://ampedstatus.com/economic-crisis-usa-riots
Fear of Obama drives gun stocks higher
Go for hypertext to stock charts...click on the one year charts...I like CAB...RGR looks overbought what a run up, and good ol' SWHC is in a general uptrend...gun stocks make sense going forward...
http://blogs.moneycentral.msn.com/topstocks/archive/2009/02/25/fear-of-obama-drives-gun-stocks-higher.aspx
Posted Feb 25 2009, 02:02 PM by Anthony Mirhaydari
Rising concern over increased regulation from the Obama White House has gun buffs stocking up on the latest tactical rifles and pistols. This helps the fortunes of gun makers Smith & Wesson (SWHC) and Ruger (RGR) as well as specialty retailer Cabela's (CAB), which specializes in firearms and hunting gear.
Ruger reported Tuesday that gun sales increased 81% in the fourth quarter on new products and "robust firearms demand." Its order backlog now stands at $48 million. Smith & Wesson plans to double revenue within the next three years and reported increased sales from "speculation on the outcome of the presidential election." Cabela's reported that same-store sales rose 2.2% over the holiday election season -- a time of great distress for other retailers.
With that kind of performance, it's not surprising investors are flocking to these names. Over the last week, while the S&P 500 is down 2%, Smith & Wesson is up 56%, Cabela's has gained 35%, and Rugers added 44%.
Based on my conversation with Wedbush Morgan analyst Rommel Dionisio, much of the sales increase has been in self-defense firearms like military-type semi-automatics or pistols. Sales of traditional bolt-action hunting rifles and shotguns remain steady. Cabela's spokesman Joe Arterburn notes that many of these customers are first-time buyers who "have never had a handgun in their home but believe now ... is a good time to buy them." In other words, people aren't looking to hunt deer; they're worried about other people.
The question, of course, is whether this performance will continue or will end up being a brief, post-election buying binge. According to the FBI, background checks on potential gun buyers increased 29% last month over the same period in 2007. Although Obama has always played down the gun rights issue, many seize on his off-the-cuff remarks last year that people "cling to guns and religion" during times of economic stress. For the record, he has tried to soothe jumpy nerves: "I believe in common sense gun safety law, and I believe in the second amendment. And so, lawful gun owners have nothing to fear."
Nevertheless, as the economic picture darkens, it's more than possible people will stop fearing our new president and start worrying about a Mad Max-like apocalyptic scenario. Just look the huge increase in the popularity of physical gold. Sales of the popular American Eagle gold coin are up four-fold while commodity investors are increasingly opting for physical delivery of gold bullion instead of settling futures contracts in cash. Bankers are reporting that more clients are hoarding gold in their vaults.
Sure, this is crazy. But remember that humans aren't rational and that fear is the strongest of all emotions. Forget traditional defensive sectors like utilities and healthcare. Go with guns and gold.
Update: Attorney General Eric Holder told reporters Wednesday that President Obama would like to "reinstitute the ban on the sale of assault weapons" that expired in 2004 under the Bush administration. Holder said the ban would not only be a "positive move" by the United States, but would help reduce the trafficking of guns to the drug cartels in Mexico. It looks like the gun boom is far from over.
Image credit: jeroen020
Disclosure: The author does not own or control shares in any of the companies mentioned.
Anthony Mirhaydari is a contributor to the Strategic Advantage investment newsletter. He can be contacted at anthony.mirhaydari@live.com. Feel free to comment below.
Related reading:
Beginning of the end for falling home prices?
The shrinking of American retail
Forget gold. It's time to invest in platinum
Why Eastern Europe's meltdown matters
'There will be blood'
Harvard economic historian Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends
http://www.theglobeandmail.com/servlet/story/RTGAM.20090223.wferguson0223/BNStory/crashandrecovery/home
HEATHER SCOFFIELD
Globe and Mail Update
February 23, 2009 at 6:45 PM EST
Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.
The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.
Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.
The Buy America penchant pushed by the U.S. Congress in passing the recent stimulus bill was only the tip of the iceberg.
Abu Dhabi buying Nova Chemicals at bargain-basement prices on Monday is a sign of things to come, with financial power quickly being transferred over to the world's creditors – namely sovereign wealth funds – and away from the world's debtors.
And much of today's mess is the fault of central bankers who targeted consumer-price inflation but purposefully turned a blind eye to asset inflation.
The Laurence A. Tisch professor of history at Harvard University, and author of The Ascent of Money, A Financial History of the World, sat down with The Globe and Mail's economics reporter, Heather Scoffield.
Heather Scoffield: Canadian leaders frequently argue that Canada is in better financial shape than elsewhere in the world, and therefore should fare better during this crisis. Do you agree?
Niall Ferguson: Canada is [considered] a winner because its banks are less leveraged, bank regulation here has been tighter, because its housing market hasn't been in a bubble quite the same way. It's tempting to conclude from that ... that Canada will be less hard hit in the crisis than the United States. But that is unfortunately wrong. Because this is a very unfair crisis. The epicentre is the United States, but the rest of the world, and particularly America's trading partners, will get hit harder than the U.S.”
“It suggests virtue is its own reward. You don't get any reward beyond the self-satisfaction of having been virtuous. This is a crisis of globalization. Therefore, the more an economy depends on the global system, the harder it hurts. Canada is not finding the worst. Asian economies are going to be really slammed this year. But it's an unfair world. The U.S. won't be as badly affected as most countries.”
Heather Scoffield: Is the U.S. able to escape with less pain because it has more resources to throw at its problems?
Niall Ferguson: “Partly because they can throw so much at it, and they can do it at a lower cost than anybody else, because the U.S. retains the safe-haven status, which makes the world so unfair. Here is the world's biggest economy, which gave us subprime mortgages, rampant securitization, the collateralized debt obligation, Lehmann Brothers, Merrill Lynch. It is, in a sense, the fons et origo of this crisis. And yet, because it retains safe-haven status, in a global crisis, investors want to increase their exposure to the U.S. Hence, the dollar rally. Hence 10-year Treasuries down below 3 per cent yields. It's almost paradoxical that an American crisis ... reinforces the status of the United States as a safe haven.”
Heather Scoffield: Surely that safe-haven status would be revoked if China loses faith in the U.S. ability to finance its debt?
Niall Ferguson: As you know, Chimerica – the fusion of China and America – is one of my big ideas. It's really the key to how the global financial system works, and has been now for about a decade. At the end of The Ascent of Money, I speculate about whether or not that relationship will survive. If it breaks down, then all bets are off, for the U.S. and indeed for Asia. I think that's really the key point. Both sides stand to lose from a breakdown of Chimerica, which is why both sides are affirming a commitment to it.”
“It's very interesting that the Chinese in the last week were saying such soothing things around the [Secretary of State Hillary] Clinton visit. This was only days after Treasury Secretary Tim Geithner used the dreaded ‘m' word – currency manipulation.
Heather Scoffield: Why would the U.S. administration poke a stick in China's eye like that?
Niall Ferguson: “You obviously have to recognize that Democrats have been more hawkish on China for some time, than the Republicans ... But I think Tim Geithner is smart enough to know that this is a very dangerous game to play and I would be very surprised if you heard that word again pass his lips.”
Heather Scoffield: Did the Clinton visit improve the China-U.S. relationship?
Niall Ferguson: It looks like it....The line is very clear from China. They've consistently made their position clear. They want the status quo. They do not want this thing to break down. They were kind of appalled when Geithner said the ‘m' word. And they took full advantage of Hillary Clinton's visit to smooth ruffled feathers and restate their commitment. It's a very good bilateral relation. That bilateral will is important here. The Chinese believe in Chimerica maybe even more than Americans do.
“They have nowhere else to go. They have no other strategy that they can adopt in time to cushion the blow. Their exports are contracting at a terrifying speed. They want at all costs to avoid any kind of big shift in policy. They want to keep, as far as possible, the U.S. importing Chinese goods. They want to keep currencies stable. They are still buying dollars … At least officially, Chimerica is intact. But I stress ‘officially' because there's considerable public disquiet.”
“This is a crisis of globalizaiton that is destroying global trade. This poses the biggest challenge that the Chinese administration has faced since they embarked on reforms 30 years ago.
Heather Scoffield: Will globalization survive this crisis?
Niall Ferguson: It's a question that's well worth asking. Because when you look at the way trade has collapsed in the world in the last quarter of 2008 – countries like Taiwan saw their exports fall 45 per cent – that is a depression-style contraction, and we're in quite early stages of the game at this point. This is before the shock has really played out politically. Before protectionist slogans have really established themselves in the public debate. Buy America is the beginning of something I think we'll see a lot more of. So I think there's a real danger that globalization could unravel.
Part of the point I've been making for years is that it's a fragile system. It broke down once before. The last time we globalized the world economy this way, pre-1914, it only took a war to cause the whole thing to come crashing down. Now we're showing that we can do it without a war. You can cause globalization to disintegrate just by inflating a housing bubble, bursting it, and watching the financial chain reaction unfold.”
Heather Scoffield: Is a violent resolution to this crisis inevitable?
Niall Ferguson: “There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable. The question is whether the general destabilization, the return of, if you like, political risk, ultimately leads to something really big in the realm of geopolitics. That seems a less certain outcome. We've already talked about why China and the United States are in an embrace they don't dare end. If Russia is looking for trouble the way Mr. Putin seems to be, I still have some doubt as to whether it can really make this trouble, because of the weakness of the Russian economy. It's hard to imagine Russia invading Ukraine without weakening its economic plight. They're desperately trying to prevent the ruble from falling off a cliff. They're spending all their reserves to prop it up. It's hardly going to help if they do another Georgia.”
“I was more struck Putin's bluster than his potential to bite, when he spoke at Davos. But he made a really good point, which I keep coming back to. In his speech, he said crises like this will encourage governments to engage in foreign policy aggression. I don't think he was talking about himself, but he might have been. It's true, one of the things historically that we see, and also when we go back to 30s, but also to the depressions 1870s and 19980s, weak regimes will often resort to a more aggressive foreign policy, to try to bolster their position. It's legitimacy that you can gain without economic disparity – playing the nationalist card. I wouldn't be surprised to see some of that in the year ahead.
It's just that I don't see it producing anything comparable with 1914 or 1939. It's kind of hard to envisage a world war. Even when most pessimistic, I struggle to see how that would work, because the U.S., for all its difficulties in the financial world, is so overwhelmingly dominant in the military world.”
Heather Scoffield: You speak about the crisis being in its early days, but most policy makers and the International Monetary Fund are predicting a quick end to it. Where do you differ with them?
Niall Ferguson: “I do think they're wrong. I think the IMF has been consistently wrong in its projections year after year. Most projections are wrong, because they're based on models that don't really correspond to the real world. If anything good comes of crisis, I hope it will be to discredit these ridiculous models that people rely on, and a return to something more like a historical understanding about the way the world works.”
“I mean most of these models, including, I'm told, the one that policy makers here use, don't really have enough data to be illuminating … You're going to end up assuming that this recession is going to end up like other recessions, and the other recessions didn't last that long, so this one won't last so long. But of course this isn't a recession. This is something really quite different in character from anything we've experienced in the postwar era. That's why these projections give positive numbers for 2010. That's the default setting. And it just seems to me ostrich-like, to bury one's head in the sand and assume this has to end this year because, well, that's what recessions do.
“It's obvious, surely we know by now, that this is something quite different. It's a crisis of excessive debt, the deleveraging process has barely begun, the U.S. consumers are not going to suddenly bounce back and hit the shopping malls just because they get a tax cut. The savings rate is going to continue to rise. These processes have tremendous momentum that quite clearly differentiates them from anything that we've seen, including the early 80s, including 73, 74, 75. Those big crises, the ones that we have lived through, were bad. But seems certain to be deeper, and more protracted.”
Heather Scoffield: Forecasters say they can adjust their projections as things change, but households, companies and governments are basing their decisions today on what the experts tell them to expect in the future. So how should decisions be made if the forecasts are wrong?
Niall Ferguson: “One possibility is that they don't believe these numbers either. They feel that it's good for morale. The truth about the crisis is that it is in large measure psychological. We're not dealing here with mathematics. We're not dealing here with human beings as calculating machines. We're dealing with real people whose emotions influence their individual decisions, and the swing from greed to fear is a very spectacular thing when it happens on this scale.
“One possibility is that policy makers are lying in order to encourage people and prevent depression from become a self-fulfilling psychological conditions. That's why it's called a depression … Maybe they don't really believe this, but they're saying it in order to cheer people up, and if they're sufficiently consistent, perhaps people will start to believe it, and then it will magically happen.”
“The other way of looking at that is to say every time a politician uses a word like ‘catastrophe' or ‘depression' to pressurize legislators into passing a stimulus package, for example, the signal goes out to the public that this is bad. And it gets worse. That's one of the interesting things that both President Bush and President Obama have done. Bush used that wonderful phrase, “this sucker's going down.” Obama talks about catastrophe at the critical moment when he wanted Congress to pass the package. It reminds me of a wonderful headline that the Onion had last year, in about October. The headline was, Bush calls for panic. I love it because it completely called the situation. There he was calling for panic ... to make people come out of denial. I've been talking a while about this being the Great Repression. It took ages, ages, for people to realize this thing had fallen apart.
“August, 2007, was when this crisis began. And if you were really watching the markets carefully, April is when it began, when the various hedge funds started to hemorrhage. The stock markets carried on until October of that year. And in many ways, consumer behaviour in the U.S. did not change until the third quarter of 2008. So there was a massive denial problem. It was like Wile E. Coyote running off a cliff, and they'd run off a cliff and they didn't look down so they didn't start falling. As soon as people realized it was bad, the behaviour switched. Now, people have to try to unscare them before this thing becomes a self-perpetuating downward spiral. I think that's why you have to say ‘growth will return in 2010' with your fingers crossed behind your back.”
Heather Scoffield: Will property ownership continue to be central to our economy's functioning?
Niall Ferguson: Property ownership is something that our societies, particularly English-speaking societies, seem to be drawn towards. The notion that the majority of people should own their own homes dated from the 30s. It didn't really become a reality until the 50s. We've sort of pushed the home ownership rate up to what seems to be its maximum, and beyond. It will clearly come down. The lesson of the subprime crisis is that you shouldn't give mortgages to people who can't afford them. Duh …
I don't think we're going to see a radical shift back to the rental society of the pre-Second World War era. That sort of exists in Germany. Germany has had none of this. German households are less indebted now than they were 20 years ago. The property ownership rate, if anything, has been completely stable. Why the English-speaking world has this fixation is kind of interesting and hard to explain. That Englishman home-is-his-castle mentality. We privilege this asset class. And in the U.S., the tax code privileges this asset class to take out mortgages and invest in property. I think that's a mistake. I'd like to see us at least achieve fiscal neutrality, so that different kinds of investments are treated the same. But even if we do that, Canada doesn't have mortgage interest relief, and the home ownership rate is the same as the U.S.”
Heather Scoffield: Abu Dhabi has just bought Nova Chemical because the company couldn't get credit. Is this the way of the future?
Niall Ferguson: “There are some fantastic investment opportunities that pretty soon are going to start attracting buyers. The returns on the super-safe, highly-liquid U.S. Treasury portfolios are next to nothing. The potential returns from buying distressed assets or from buying companies that can't roll over their debt, are double digit. So any individual institution liquid enough and not leveraged can start playing this game, and will play this game. This is going to be the beginning of a whole new investment strategy in which companies that can't roll their debt over end up being sold at bargain basement prices, or broken up and their assets sold at bargain-basement prices, in very, very large numbers. And it doesn't take a lot of imagination to see that the buyers will be sovereign wealth funds or other entities in surplus countries. The world divides in two, the debtors and the creditors. The debtors … (U.S., Europe) ... are going to have to sell of their assets. Call it the global foreclosure. They're going to be selling their assets cheaply to those who have the surpluses. This is not going to be like the Chinese buying Blackstone at the top of the market.
“It's revenge of the sovereign wealth funds. They got burned. And this time, no more Mr. Nice Guy.”
Heather Scoffield: Does the fixing of one bubble create another?
Niall Ferguson: “We kind of have had a bubble in the sense that we've seen such a rally in U.S. government bonds. It's tempting to say that will burst and we'll see yields go back up. Because, you know, $2-trillion worth of debt is going to hit the market this year, maybe more. Supply is exploding just when demand is contracting. You don't need to be a Nobel laureate to see that that has to impact on the price. The difference is there is this thing called the Fed that can step in and start buying the stuff if the foreign demand fades. So it's not completely guaranteed that we'll see bonds sell off in price.
“There is still this inertia that prevents the dollar from falling off a cliff, that keeps the Treasury market from falling off a cliff. That's really important to bear in mind. I don't think we'll see a bubble distressed assets, because I think the price of these assets has started to fall. Anybody who comes into the market now is essentially paying a premium. There will be better bargains in the middle of this year, and maybe even better bargains later on. If I were in the market to buy distressed assets, I would wait, I would wait a bit longer until they're really desperate. And it might even be better to wait until they're bankrupt.”
Heather Scoffield: You've written that many financial crises are the result of excesses due to a belief that governments will bail out the financial sector. Do we need to get rid of this moral hazard through tighter regulations?
Niall Ferguson: “In the Ascent of Money, I argue that you can't really have a bubble if you don't have a monetary authority that has been excessively generous. From John Law in 1719 to Alan Greenspan in the late 90s, there's always a banker, there's always a central banker making credit too readily available. The second thing is, though, that regulation may not prevent that.”
“Monetary policy evolved in a peculiar way in the 1990s towards de facto or de jure targeting of inflation, an increasingly narrow concept of inflation – core CPI. I thought it was a mistake at the time because it seemed to me crazy to ignore asset prices. Why differentiate? What's the difference between pricing a loaf and pricing a house? Why do we care about one and not the other? In fact, we should probably care more about the price of a house than the price of a loaf, certainly in developed societies. I think there was a flaw in the theory there, that essentially you could call the Jackson Hole consensus. When the central bankers got together at Jackson Hole, the view that emerged from the debate in the late 90s was, we shouldn't really pay attention to asset prices in the setting of monetary policy.”
Heather Scoffield: And more regulation?
Niall Ferguson: “European banks are far more leveraged than American banks. I don't see Europe as offering up any particularly good model in any respect. In fact, I think Europe's prospects could get a whole lot worse this year, to the extent that it could be very, very hard indeed to keep the Euro zone together. I think it will be possible because the costs of leaving will be so high.
“There will be howling anguish, all kinds of pain, conflict between Germans and the others. It's going to get very uncomfortable indeed. No, I wouldn't look to Europe for inspiration. You could, I guess, look at Spain...
“I definitely think some type of tighter regulation of banking capital adequacy is needed. Basel I and Basel II have not worked. In many ways, they're the great failures. I think Canada's somewhat straightforward, mechanical definition looks like one the rest of the world should be adopting.”
Heather Scoffield: You mentioned that the Buy America tendencies of Congress are probably only the beginning of protectionism. What do you mean by that?
Niall Ferguson: “No administration with Larry Summers in the White House is going to be a protectionist administration. Here's a man whose commitment to free trade and free capital movements nobody doubts. And I don't see the President following through to renegotiate NAFTA or the things he said in the past. But one of the things that I find troubling about the administration is the degree to which is has ceded power to Congress. It's almost like it's a parliamentary system.”
[I was in Washington last week for the passage of the stimulus package]. “I felt a strange sense of familiarity in the air. Usually Washington feels totally alien to me. It was just like being in Westminster, where power was in the legislature. And the key issue was whether the upper house and the lower house could make a deal. The president wasn't even in town. If you give Congress that kind of power – basically Congress wrote the deal – then you're half way to a British or Canadian system in which the legislature makes the decisions. And the legislature is much more likely to make protectionist decisions. After all, these are pretty much the same people who put all those anti-China bills into the works in the last session of Congress … So I'm a little nervous about how this will play out in the next one or two years … After all, this is the land of permanent election campaigning. Congressmen are saying to themselves, ‘ how am I going to campaign? I don't want to lose my job. What's my line going to be?' It's going to be very tempting to say ‘American jobs for American workers.' It's a pretty good slogan. It worked well in Britain.”
“That's out there. There's a lot of populist disgruntlement, and it's going to get bigger.”
Heather Scoffield: We've discussed many possible nasty outcomes to this crisis. Is there a way out?
Niall Ferguson: “We've discussed two reasons to non-suicidal. I'm trying to stay cheerful. One is that Chimerica is holding up. The Chinese don't seem to want to get divorced from their American spouse.”
“The other is that this isn't leading to World War Three or Four, depending on how many world wars you think there have been. There will be instability, but I don't see that instability producing something as huge as the 20th century conflicts. But it's hard to see a simple and quick macroeconomic happy ending. That I really struggle to visualize.
But the good news is only as good as this: the United States, which is Canada's biggest trading partner, is not going to suffer as badly as many other economies around the world. And that means that from Canada's point of view, it's not standing right on top of the biggest fault lines in the global system. The biggest fault lines in the global system are in Asia. They may also be in Eastern Europe. That's where things are going to be really unpredictable.”
“The two great zones of conflict in the 20th century were central and eastern Europe, and a critical part of northeast Asia – Manchuria, Korea. It makes me a little nervous that those are also places that are going to take a very heavy share of the pain. But we're looking at a Great Recession, not a Great Depression. We may be looking at a Lost Decade.
There was a time when if you said the United States was going to suffer a lost decade like Japan did in the 1990s, everybody would have said you were a mad pessimist. That begins to look like quite a good scenario. And I think it's a realistic scenario.
One of the facts is if you subtract mortgage equity withdrawal from the Bush years, the real underlying rate of growth of the U.S. economy was 1 per cent. So much of the consumption has been fuelled by mortgage equity withdrawal. So that seems like a reasonable growth rate for 10 years. … We just don't have an improvement of standard of living of the sort we're grown used to. And indeed if you have a more equitable redistribution through the tax system, which Obama is committed to, it might actually be no discernible downside for middle America and lower-class Americans. So many of the benefits of the boom went to the elites. If you have a lost decade plus redistribution, it may not be that dramatic a change for many, many people. People just have to get over the fact that their wealth wasn't worth what they thought it was in 2006. Whether it's their stock market portfolio or their housing. If we simply go back to where we were, in 2005, that's surely not the worst thing that could happen to us.”
The Paranoid Style in American Politics
By Richard Hofstadter†
Harper’s Magazine, November 1964, pp. 77-86.
http://karws.gso.uri.edu/jfk/conspiracy_theory/the_paranoid_mentality/the_paranoid_style.html
It had been around a long time before the Radical Right discovered it—and its targets have ranged from “the international bankers” to Masons, Jesuits, and munitions makers.
American politics has often been an arena for angry minds. In recent years we have seen angry minds at work mainly among extreme right-wingers, who have now demonstrated in the Goldwater movement how much political leverage can be got out of the animosities and passions of a small minority. But behind this I believe there is a style of mind that is far from new and that is not necessarily right-wind. I call it the paranoid style simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness, and conspiratorial fantasy that I have in mind. In using the expression “paranoid style” I am not speaking in a clinical sense, but borrowing a clinical term for other purposes. I have neither the competence nor the desire to classify any figures of the past or present as certifiable lunatics., In fact, the idea of the paranoid style as a force in politics would have little contemporary relevance or historical value if it were applied only to men with profoundly disturbed minds. It is the use of paranoid modes of expression by more or less normal people that makes the phenomenon significant.
Of course this term is pejorative, and it is meant to be; the paranoid style has a greater affinity for bad causes than good. But nothing really prevents a sound program or demand from being advocated in the paranoid style. Style has more to do with the way in which ideas are believed than with the truth or falsity of their content. I am interested here in getting at our political psychology through our political rhetoric. The paranoid style is an old and recurrent phenomenon in our public life which has been frequently linked with movements of suspicious discontent.
Here is Senator McCarthy, speaking in June 1951 about the parlous situation of the United States:
How can we account for our present situation unless we believe that men high in this government are concerting to deliver us to disaster? This must be the product of a great conspiracy on a scale so immense as to dwarf any previous such venture in the history of man. A conspiracy of infamy so black that, which it is finally exposed, its principals shall be forever deserving of the maledictions of all honest men.…What can be made of this unbroken series of decisions and acts contributing to the strategy of defeat? They cannot be attributed to incompetence.…The laws of probability would dictate that part of…[the] decisions would serve the country’s interest.
Now turn back fifty years to a manifesto signed in 1895 by a number of leaders of the Populist party:
As early as 1865-66 a conspiracy was entered into between the gold gamblers of Europe and America.…For nearly thirty years these conspirators have kept the people quarreling over less important matters while they have pursued with unrelenting zeal their one central purpose.…Every device of treachery, every resource of statecraft, and every artifice known to the secret cabals of the international gold ring are being used to deal a blow to the prosperity of the people and the financial and commercial independence of the country.
Next, a Texas newspaper article of 1855:
…It is a notorious fact that the Monarchs of Europe and the Pope of Rome are at this very moment plotting our destruction and threatening the extinction of our political, civil, and religious institutions. We have the best reasons for believing that corruption has found its way into our Executive Chamber, and that our Executive head is tainted with the infectious venom of Catholicism.…The Pope has recently sent his ambassador of state to this country on a secret commission, the effect of which is an extraordinary boldness of the Catholic church throughout the United States.…These minions of the Pope are boldly insulting our Senators; reprimanding our Statesmen; propagating the adulterous union of Church and State; abusing with foul calumny all governments but Catholic, and spewing out the bitterest execrations on all Protestantism. The Catholics in the United States receive from abroad more than $200,000 annually for the propagation of their creed. Add to this the vast revenues collected here.…
These quotations give the keynote of the style. In the history of the United States one find it, for example, in the anti-Masonic movement, the nativist and anti-Catholic movement, in certain spokesmen of abolitionism who regarded the United States as being in the grip of a slaveholders’ conspiracy, in many alarmists about the Mormons, in some Greenback and Populist writers who constructed a great conspiracy of international bankers, in the exposure of a munitions makers’ conspiracy of World War I, in the popular left-wing press, in the contemporary American right wing, and on both sides of the race controversy today, among White Citizens’ Councils and Black Muslims. I do not propose to try to trace the variations of the paranoid style that can be found in all these movements, but will confine myself to a few leading episodes in our past history in which the style emerged in full and archetypal splendor.
Illuminism and Masonry
I begin with a particularly revealing episode—the panic that broke out in some quarters at the end of the eighteenth century over the allegedly subversive activities of the Bavarian Illuminati. This panic was a part of the general reaction to the French Revolution. In the United States it was heightened by the response of certain men, mostly in New England and among the established clergy, to the rise of Jeffersonian democracy. Illuminism had been started in 1776 by Adam Weishaupt, a professor of law at the University of Ingolstadt. Its teachings today seem to be no more than another version of Enlightenment rationalism, spiced with the anticlerical atmosphere of eighteenth-century Bavaria. It was a somewhat naïve and utopian movement which aspired ultimately to bring the human race under the rules of reason. Its humanitarian rationalism appears to have acquired a fairly wide influence in Masonic lodges.
Americans first learned of Illumism in 1797, from a volume published in Edinburgh (later reprinted in New York) under the title, Proofs of a Conspiracy Against All the Religions and Governments of Europe, Carried on in the Secret Meetings of Free Masons, Illuminati, and Reading Societies. Its author was a well-known Scottish scientist, John Robison, who had himself been a somewhat casual adherent of Masonry in Britain, but whose imagination had been inflamed by what he considered to be the far less innocent Masonic movement on the Continent. Robison seems to have made his work as factual as he could, but when he came to estimating the moral character and the political influence of Illuminism, he made the characteristic paranoid leap into fantasy. The association, he thought, was formed “for the express purpose of rooting out all religious establishments, and overturning all the existing governments of europe.” It had become “one great and wicked project fermenting and working all over Europe.” And to it he attributed a central role in bringing about the French Revolution. He saw it as a libertine, anti-Christian movement, given to the corruption of women, the cultivation of sensual pleasures, and the violation of property rights. Its members had plans for making a tea that caused abortion—a secret substance that “blinds or kills when spurted in the face,” and a device that sounds like a stench bomb—a “method for filling a bedchamber with pestilential vapours.”
These notions were quick to make themselves felt in America. In May 1798, a minister of the Massachusetts Congregational establishment in Boston, Jedidiah Morse, delivered a timely sermon to the young country, which was then sharply divided between Jeffersonians and Federalists, Francophiles and Anglomen. Having read Robison, Morse was convinced of a Jacobinical plot touched off by Illuminism, and that the country should be rallied to defend itself. His warnings were heeded throughout New England wherever Federalists brooded about the rising tide of religious infidelity or Jeffersonian democracy. Timothy Dwight, the president of Yale, followed Morse’s sermon with a Fourth-of-July discourse on The Duty of Americans in the Present Crisis, in which he held forth against the Antichrist in his own glowing rhetoric. Soon the pulpits of New England were ringing with denunciations of the Illuminati, as though the country were swarming with them.
The anti-Masonic movement of the late 1820s and the 1830s took up and extended the obsession with conspiracy. At first, this movement may seem to be no more than an extension or repetition of the anti-Masonic theme sounded in the outcry against the Bavarian Illuminati. But whereas the panic of the 1790s was confined mainly to New England and linked to an ultraconservative point of view, the later anti-Masonic movement affected many parts of the northern United States, and was intimately linked with popular democracy and rural egalitarianism. Although anti-Masonry happened to be anti-Jacksonian (Jackson was a Mason), it manifested the same animus against the closure of opportunity for the common man and against aristocratic institutions that one finds in the Jacksonian crusade against the Bank of the United States.
The anti-Masonic movement was a product not merely of natural enthusiasm but also of the vicissitudes of party politics. It was joined and used by a great many men who did not fully share its original anti-Masonic feelings. It attracted the support of several reputable statement who had only mild sympathy with its fundamental bias, but who as politicians could not afford to ignore it. Still, it was a folk movement of considerable power, and the rural enthusiasts who provided its real impetus believed in it wholeheartedly.
As a secret society, Masonry was considered to be a standing conspiracy against republican government. It was held to be particularly liable to treason—for example, Aaron Burr’s famous conspiracy was alleged to have been conducted by Masons. Masonry was accused of constituting a separate system of loyalty, a separate imperium within the framework of federal and state governments, which was inconsistent with loyalty to them. Quite plausibly it was argued that the Masons had set up a jurisdiction of their own, with their own obligations and punishments, liable to enforcement even by the penalty of death. So basic was the conflict felt to be between secrecy and democracy that other, more innocent societies such as Phi Beta Kappa came under attack.
Since Masons were pledged to come to each other’s aid under circumstances of distress, and to extend fraternal indulgence at all times, is was held that the order nullified the enforcement of regular law. Masonic constables, sheriffs, juries, and judges must all be in league with Masonic criminals and fugitives. The press was believed to have been so “muzzled” by Masonic editors and proprietors that news of Masonic malfeasance could be suppressed. At a moment when almost every alleged citadel of privilege in America was under democratic assault, Masonry was attacked as a fraternity of the privileged, closing business opportunities and nearly monopolizing political offices.
Certain elements of truth and reality there may have been in these views of Masonry. What must be emphasized here, however, is the apocalyptic and absolutistic framework in which this hostility was commonly expressed. Anti-Masons were not content simply to say that secret societies were rather a bad idea. The author of the standard exposition of anti-Masonry declared that Freemasonry was “not only the most abominable but also the most dangerous institution that ever was imposed on man.…It may truly be said to be hell’s master piece.”
The Jesuit Threat
Fear of a Masonic plot had hardly been quieted when the rumors arose of a Catholic plot against American values. One meets here again the same frame of mind, but a different villain. The anti-Catholic movement converged with a growing nativism, and while they were not identical, together they cut such a wide swath in American life that they were bound to embrace many moderates to whom the paranoid style, in its full glory, did not appeal. Moreover, we need not dismiss out of hand as totally parochial or mean-spirited the desire of Yankee Americans to maintain an ethnically and religiously homogeneous society nor the particular Protestant commitments to individualism and freedom that were brought into play. But the movement had a large paranoid infusion, and the most influential anti-Catholic militants certainly had a strong affinity for the paranoid style.
Two books which appeared in 1835 described the new danger to the ?American way of life and may be taken as expressions of the anti-Catholic mentality. One, Foreign Conspiracies against the Liberties of the United States, was from the hand of the celebrated painter and inventor of the telegraph, S.F.B. Morse. “A conspiracy exists,” Morse proclaimed , and “its plans are already in operation…we are attacked in a vulnerable quarter which cannot be defended by our ships, our forts, or our armies.” The main source of the conspiracy Morse found in Metternich’s government: “Austria is now acting in this country. She has devised a grand scheme. She has organized a great plan for doing something here.…She has her Jesuit missionaries traveling through the land; she has supplied them with money, and has furnished a fountain for a regular supply.” Were the plot successful, Morse said, some scion of the House of Hapsburg would soon be installed as Emperor of the United States.
“It is an ascertained fact,” wrote another Protestant militant,
that Jesuits are prowling about all parts of the United States in every possible disguise, expressly to ascertain the advantageous situations and modes to disseminate Popery. A minister of the Gospel from Ohio has informed us that he discovered one carrying on his devices in his congregation; and he says that the western country swarms with them under the name of puppet show men, dancing masters, music teachers, peddlers of images and ornaments, barrel organ players, and similar practitioners.
Lyman Beecher, the elder of a famous family and the father of Harriet Beecher Stowe, wrote in the same year his Plea for the West, in which he considered the possibility that the Christian millennium might come in the American states. Everything depended, in his judgment, upon what influences dominated the great West, where the future of the country lay. There Protestantism was engaged in a life-or-death struggle with Catholicism. “Whatever we do, it must be done quickly.…” A great tide of immigration, hostile to free institutions, was sweeping in upon the country, subsidized and sent by “the potentates of Europe,” multiplying tumult and violence, filling jails, crowding poorhouses, quadrupling taxation, and sending increasing thousands of voters to “lay their inexperienced hand upon the helm of our power.”
****************
The Paranoid Style in Action
The John Birch Society is attempting to suppress a television series about the United Nations by means of a mass letter-writing campaign to the sponsor,…The Xerox Corporation. The corporation, however, intends to go ahead with the programs.…
The July issue of the John Birch Society Bulletin…said an “avalanche of mail ought to convince them of the unwisdom of their proposed action—just as United Air Lines was persuaded to back down and take the U.N. insignia off their planes.” (A United Air Lines spokesman confirmed that the U.N. emblem was removed from its planes, following “considerable public reaction against it.”)
Birch official John Rousselot said, ”We hate to see a corporation of this country promote the U.N. when we know that it is an instrument of the Soviet Communist conspiracy.”
—San Francisco Chronicle, July 31, 1964
****************
Anti-Catholicism has always been the pornography of the Puritan. Whereas the anti-Masons had envisaged drinking bouts and had entertained themselves with sado-masochistic fantasies about the actual enforcement of grisly Masonic oaths,* the anti-Catholics invented an immense lore about libertine priests, the confessional as an opportunity for seduction, licentious convents and monasteries. Probably the most widely read contemporary book in the United States before Uncle Tom’s Cabin was a work supposedly written by one Maria Monk, entitled Awful Disclosures, which appeared in 1836. The author, who purported to have escaped from the Hotel Dieu nunnery in Montreal after five years there as novice and nun, reported her convent life in elaborate and circumstantial detail. She reported having been told by the Mother Superior that she must “obey the priests in all things”; to her “utter astonishment and horror,” she soon found what the nature of such obedience was. Infants born of convent liaisons were baptized and then killed, she said, so that they might ascend at once to heaven. Her book, hotly attacked and defended , continued to be read and believed even after her mother gave testimony that Maria had been somewhat addled ever since childhood after she had rammed a pencil into her head. Maria died in prison in 1849, after having been arrested in a brothel as a pickpocket.
Anti-Catholicism, like anti-Masonry, mixed its fortunes with American party politics, and it became an enduring factor in American politics. The American Protective Association of the 1890s revived it with ideological variations more suitable to the times—the depression of 1893, for example, was alleged to be an international creation of the Catholics who began it by starting a run on the banks. Some spokesmen of the movement circulated a bogus encyclical attributed to Leo XIII instructing American Catholics on a certain date in 1893 to exterminate all heretics, and a great many anti-Catholics daily expected a nationwide uprising. The myth of an impending Catholic war of mutilation and extermination of heretics persisted into the twentieth century.
Why They Feel Dispossessed
If, after our historically discontinuous examples of the paranoid style, we now take the long jump to the contemporary right wing, we find some rather important differences from the nineteenth-century movements. The spokesmen of those earlier movements felt that they stood for causes and personal types that were still in possession of their country—that they were fending off threats to a still established way of life. But the modern right wing, as Daniel Bell has put it, feels dispossessed: America has been largely taken away from them and their kind, though they are determined to try to repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high.
Important changes may also be traced to the effects of the mass media. The villains of the modern right are much more vivid than those of their paranoid predecessors, much better known to the public; the literature of the paranoid style is by the same token richer and more circumstantial in personal description and personal invective. For the vaguely delineated villains of the anti-Masons, for the obscure and disguised Jesuit agents, the little-known papal delegates of the anti-Catholics, for the shadowy international bankers of the monetary conspiracies, we may now substitute eminent public figures like Presidents Roosevelt, Truman, and Eisenhower., secretaries of State like Marshall, Acheson, and Dulles, Justices of the Supreme Court like Frankfurter and Warren, and the whole battery of lesser but still famous and vivid alleged conspirators headed by Alger Hiss.
Events since 1939 have given the contemporary right-wing paranoid a vast theatre for his imagination, full of rich and proliferating detail, replete with realistic cues and undeniable proofs of the validity of his suspicions. The theatre of action is now the entire world, and he can draw not only on the events of World War II, but also on those of the Korean War and the Cold War. Any historian of warfare knows it is in good part a comedy of errors and a museum of incompetence; but if for every error and every act of incompetence one can substitute an act of treason, many points of fascinating interpretation are open to the paranoid imagination. In the end, the real mystery, for one who reads the primary works of paranoid scholarship, is not how the United States has been brought to its present dangerous position but how it has managed to survive at all.
The basic elements of contemporary right-wing thought can be reduced to three: First, there has been the now-familiar sustained conspiracy, running over more than a generation, and reaching its climax in Roosevelt’s New Deal, to undermine free capitalism, to bring the economy under the direction of the federal government, and to pave the way for socialism or communism. A great many right-wingers would agree with Frank Chodorov, the author of The Income Tax: The Root of All Evil, that this campaign began with the passage of the income-tax amendment to the Constitution in 1913.
The second contention is that top government officialdom has been so infiltrated by Communists that American policy, at least since the days leading up to Pearl Harbor, has been dominated by men who were shrewdly and consistently selling out American national interests.
Finally, the country is infused with a network of Communist agents, just as in the old days it was infiltrated by Jesuit agents, so that the whole apparatus of education, religion, the press, and the mass media is engaged in a common effort to paralyze the resistance of loyal Americans.
Perhaps the most representative document of the McCarthyist phase was a long indictment of Secretary of State George C. Marshall, delivered in 1951 in the Senate by senator McCarthy, and later published in a somewhat different form. McCarthy pictured Marshall was the focal figure in a betrayal of American interests stretching in time from the strategic plans for World War II to the formulation of the Marshall Plan. Marshal was associated with practically every American failure or defeat, McCarthy insisted, and none of this was either accident or incompetence. There was a “baffling pattern” of Marshall’s interventions in the war, which always conduced to the well-being of the Kremlin. The sharp decline in America’s relative strength from 1945 to 1951 did not “just happen”; it was “brought about, step by step, by will and intention,” the consequence not of mistakes but of a treasonous conspiracy, “a conspiracy on a scale so immense as to dwarf any previous such venture in the history of man.”
Today, the mantle of McCarthy has fallen on a retired candy manufacturer, Robert H. Welch, Jr., who is less strategically placed and has a much smaller but better organized following than the Senator. A few years ago Welch proclaimed that “Communist influences are now in almost complete control of our government”—note the care and scrupulousness of that “almost.” He has offered a full scale interpretation of our recent history n which Communists figure at every turn: They started a run on American banks in 1933 that forced their closure; they contrived the recognition of the Soviet Union by the United States in the same year, just in time to save the Soviets from economic collapse; they have stirred up the fuss over segregation in the South; they have taken over the Supreme Court and made it “one of the most important agencies of Communism.”
Close attention to history wins for Mr. Welch an insight into affairs that is given to few of us. “For many reasons and after a lot of study,” he wrote some years ago, “I personally believe [John Foster] Dulles to be a Communist agent.” The job of Professor Arthur F. Burns as head of Eisenhower’s Council of Economic Advisors was “merely a cover-up for Burns’s liaison work between Eisenhower and some of his Communist bosses.” Eisenhower’s brother Milton was “actually [his] superior and boss within the Communist party.” As for Eisenhower himself, Welch characterized him, in words that have made the candy manufacturer famous, as “a dedicated, conscious agent of the Communist conspiracy”—a conclusion, he added, “based on an accumulation of detailed evidence so extensive and so palpable that it seems to put this conviction beyond any reasonable doubt.”
Emulating the Enemy
The paranoid spokesman sees the fate of conspiracy in apocalyptic terms—he traffics in the birth and death of whole worlds, whole political orders, whole systems of human values. He is always manning the barricades of civilization. He constantly lives at a turning point. Like religious millenialists he expresses the anxiety of those who are living through the last days and he is sometimes disposed to set a date fort the apocalypse. (“Time is running out,” said Welch in 1951. “Evidence is piling up on many sides and from many sources that October 1952 is the fatal month when Stalin will attack.”)
As a member of the avant-garde who is capable of perceiving the conspiracy before it is fully obvious to an as yet unaroused public, the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician. Since what is at stake is always a conflict between absolute good and absolute evil, what is necessary is not compromise but the will to fight things out to a finish. Since the enemy is thought of as being totally evil and totally unappeasable, he must be totally eliminated—if not from the world, at least from the theatre of operations to which the paranoid directs his attention. This demand for total triumph leads to the formulation of hopelessly unrealistic goals, and since these goals are not even remotely attainable, failure constantly heightens the paranoid’s sense of frustration. Even partial success leaves him with the same feeling of powerlessness with which he began, and this in turn only strengthens his awareness of the vast and terrifying quality of the enemy he opposes.
The enemy is clearly delineated: he is a perfect model of malice, a kind of amoral superman—sinister, ubiquitous, powerful, cruel, sensual, luxury-loving. Unlike the rest of us, the enemy is not caught in the toils of the vast mechanism of history, himself a victim of his past, his desires, his limitations. He wills, indeed he manufactures, the mechanism of history, or tries to deflect the normal course of history in an evil way. He makes crises, starts runs on banks, causes depressions, manufactures disasters, and then enjoys and profits from the misery he has produced. The paranoid’s interpretation of history is distinctly personal: decisive events are not taken as part of the stream of history, but as the consequences of someone’s will. Very often the enemy is held to possess some especially effective source of power: he controls the press; he has unlimited funds; he has a new secret for influencing the mind (brainwashing); he has a special technique for seduction (the Catholic confessional).
It is hard to resist the conclusion that this enemy is on many counts the projection of the self; both the ideal and the unacceptable aspects of the self are attributed to him. The enemy may be the cosmopolitan intellectual, but the paranoid will outdo him in the apparatus of scholarship, even of pedantry. Secret organizations set up to combat secret organizations give the same flattery. The Ku Klux Klan imitated Catholicism to the point of donning priestly vestments, developing an elaborate ritual and an equally elaborate hierarchy. The John Birch Society emulates Communist cells and quasi-secret operation through “front” groups, and preaches a ruthless prosecution of the ideological war along lines very similar to those it finds in the Communist enemy.* Spokesmen of the various fundamentalist anti-Communist “crusades” openly express their admiration for the dedication and discipline the Communist cause calls forth.
On the other hand, the sexual freedom often attributed to the enemy, his lack of moral inhibition, his possession of especially effective techniques for fulfilling his desires, give exponents of the paranoid style an opportunity to project and express unacknowledgeable aspects of their own psychological concerns. Catholics and Mormons—later, Negroes and Jews—have lent themselves to a preoccupation with illicit sex. Very often the fantasies of true believers reveal strong sadomasochistic outlets, vividly expressed, for example, in the delight of anti-Masons with the cruelty of Masonic punishments.
Renegades and Pedants
A special significance attaches to the figure of the renegade from the enemy cause. The anti-Masonic movement seemed at times to be the creation of ex-Masons; certainly the highest significance was attributed to their revelations, and every word they said was believed. Anti-Catholicism used the runaway nun and the apostate priest; the place of ex-Communists in the avant-garde anti-Communist movements of our time is well known. In some part, the special authority accorded the renegade derives from the obsession with secrecy so characteristics of such movements: the renegade is the man or woman who has been in the Arcanum, and brings forth with him or her the final verification of suspicions which might otherwise have been doubted by a skeptical world. But I think there is a deeper eschatological significance that attaches to the person of the renegade: in the spiritual wrestling match between good and evil which is the paranoid’s archetypal model of the world, the renegade is living proof that all the conversions are not made by the wrong side. He brings with him the promise of redemption and victory.
A final characteristic of the paranoid style is related to the quality of its pedantry. One of the impressive things about paranoid literature is the contrast between its fantasied conclusions and the almost touching concern with factuality it invariably shows. It produces heroic strivings for evidence to prove that the unbelievable is the only thing that can be believed. Of course, there are highbrow, lowbrow, and middlebrow paranoids, as there are likely to be in any political tendency. But respectable paranoid literature not only starts from certain moral commitments that can indeed be justified but also carefully and all but obsessively accumulates :evidence.” The difference between this “evidence” and that commonly employed by others is that it seems less a means of entering into normal political controversy than a means of warding off the profane intrusion of the secular political world. The paranoid seems to have little expectation of actually convincing a hostile world, but he can accumulate evidence in order to protect his cherished convictions from it.
Paranoid writing begins with certain broad defensible judgments. There was something to be said for the anti-Masons. After all, a secret society composed of influential men bound by special obligations could conceivable pose some kind of threat to the civil order in which they were suspended. There was also something to be said for the Protestant principles of individuality and freedom, as well as for the nativist desire to develop in North America a homogeneous civilization. Again, in our time an actual laxity in security allowed some Communists to find a place in governmental circles, and innumerable decisions of World War II and the Cold War could be faulted.
The higher paranoid scholarship is nothing if not coherent—in fact the paranoid mind is far more coherent than the real world. It is nothing if not scholarly in technique. McCarthy’s 96-page pamphlet, McCarthyism, contains no less than 313 footnote references, and Mr. Welch’s incredible assault on Eisenhower, The Politician, has one hundred pages of bibliography and notes. The entire right-wing movement of our time is a parade of experts, study groups, monographs, footnotes, and bibliographies. Sometimes the right-wing striving for scholarly depth and an inclusive world view has startling consequences: Mr. Welch, for example, has charged that the popularity of Arnold Toynbee’s historical work is the consequence of a plot on the part of Fabians, “Labour party bosses in England,” and various members of the Anglo-American “liberal establishment” to overshadow the much more truthful and illuminating work of Oswald Spengler.
The Double Sufferer
The paranoid style is not confined to our own country and time; it is an international phenomenon. Studying the millennial sects of Europe from the eleventh to the sixteenth century, Norman Cohn believed he found a persistent psychic complex that corresponds broadly with what I have been considering—a style made up of certain preoccupations and fantasies: “the megalomaniac view of oneself as the Elect, wholly good, abominably persecuted, yet assured of ultimate triumph; the attribution of gigantic and demonic powers to the adversary; the refusal to accept the ineluctable limitations and imperfections of human existence, such as transience, dissention, conflict, fallibility whether intellectual or moral; the obsession with inerrable prophecies…systematized misinterpretations, always gross and often grotesque.”
This glimpse across a long span of time emboldens me to make the conjecture—it is no more than that—that a mentality disposed to see the world in this way may be a persistent psychic phenomenon, more or less constantly affecting a modest minority of the population. But certain religious traditions, certain social structures and national inheritances, certain historical catastrophes or frustrations may be conducive to the release of such psychic energies, and to situations in which they can more readily be built into mass movements or political parties. In American experience ethnic and religious conflict have plainly been a major focus for militant and suspicious minds of this sort, but class conflicts also can mobilize such energies. Perhaps the central situation conducive to the diffusion of the paranoid tendency is a confrontation of opposed interests which are (or are felt to be) totally irreconcilable, and thus by nature not susceptible to the normal political processes of bargain and compromise. The situation becomes worse when the representatives of a particular social interest—perhaps because of the very unrealistic and unrealizable nature of its demands—are shut out of the political process. Having no access to political bargaining or the making of decisions, they find their original conception that the world of power is sinister and malicious fully confirmed. They see only the consequences of power—and this through distorting lenses—and have no chance to observe its actual machinery. A distinguished historian has said that one of the most valuable things about history is that it teaches us how things do not happen. It is precisely this kind of awareness that the paranoid fails to develop. He has a special resistance of his own, of course, to developing such awareness, but circumstances often deprive him of exposure to events that might enlighten him—and in any case he resists enlightenment.
We are all sufferers from history, but the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well.
† Richard Hofstadter is DeWitt Clinton Professor of American History at Columbia University. His latest book, “Anti-intellectualism in American Life,” was awarded the Pulitzer Prize for General Nonfiction earlier this year. This essay is adapted from the Herbert Spencer Lecture delivered at Oxford University in November 1963.
* Many anti-Masons had been fascinated by the penalties involved if Masons failed to live up to their obligations. My own favorite is the oath attributed to a royal archmason who invited “having my skull smote off and my brains exposed to the scorching rays of the sun.”
* In his recent book, How to Win an Election, Stephen C. Shadegg cites a statement attributed to Mao Tse-tung: “Give me just two or three men in a village and I will take the village.” Shadegg comments: “ In the Goldwater campaigns of 1952 and 1958 and in all other campaigns where I have served as consultant I have followed the advice of Mao Tse-tung.” “I would suggest,” writes senator Goldwater in Why Not Victory? “that we analyze and copy the strategy of the enemy; theirs has worked and ours has not.
Yes we are raging - against a Government that spies on its citizens while ignoring the crimes of greedy bankers
More handwriting on the wall...
http://www.dailymail.co.uk/debate/article-1152876/JAMES-SLACK-Yes-raging--Government-spies-citizens-ignoring-crimes-greedy-bankers.html
By James Slack, Home Affairs Editor
Last updated at 11:16 AM on 24th February 2009
Today one of Britain's most senior police officers with responsibility for public order raises the spectre of a 'summer of rage', with victims of the increasingly bitter recession taking to the streets in possibly violent protest.
Superintendent David Hartshorn, who heads the Metropolitan police's public order branch, warned that law-abiding middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.
Protests against economic conditions
Thousands of workers demonstrated in Dublin on Saturday. Police fear the worsening economic situation will lead to mass street protests in the UK
Many will consider such a scenario unlikely, or point out this has not been the 'British way' over the past two decades.
Violent protests take place in Europe - in recent weeks Greek farmers have blocked roads over falling agricultural prices, a million workers in France took to the streets to demand greater protection for their jobs and wages and Icelandic demonstrators have clashed with police in Reykjavik - but not here.
But can we really be so sure? The public's rage with the banks and the Government is growing by the day.
More...
* MELANIE PHILLIPS: The odious BNP is only gaining ground because voters feel so utterly betrayed
* CHARLOTTE LESLIE: I have seen the rising pulse of anger in suburban streets
* PETER HITCHENS: My meeting with BNP leader Nick Griffin - and why his creepy party worry me so profoundly
* Police fear mass protests and a 'summer of rage' in response to economic crisis
Thousands are losing their jobs through no fault of their own because bankers who made millions during the good times are calling in the loans which their employers need to stay afloat.
Homes are being repossessed across the country, but not the penthouse flats and country piles of bank bosses who thought nothing of taking home vast seven-figure bonuses, and consider £1 million a year a modest income.
Economic protests
Protesters expressed anger at being made to pay for the folly of those who caused the financial collapse
The innocent are being punished while the guilty continue to lead affluent lives.
As Ken Macdonald, the former Director of Public Prosecutions says today: 'If you mug someone in the street and you are caught, the chances are that you will go to prison. In recent years, mugging someone out of their savings or their pension would probably earn you a yacht.'
Add to this a second issue highlighted by Sir Ken: the march of the surveillance state.
Ministers have been spending their time focussing on eroding our most treasured individual freedoms, while doing little or nothing to curb criminal behaviour by the banks.
The DNA database containing the samples of hundreds of thousands of entirely innocent people...the largest number of CCTV cameras in the world...anti-terrorist powers being deployed against dog foulers...restrictions on telling religious jokes...
All of these intrusive, liberty-sapping polices were developed while the banks were blowing billions on reckless sub-prime lending.
How much better a place Britain would be today if Labour had focussed on regulating the banks and getting a grip on the shambolic, toothless Financial Services Authority, rather than building a surveillance state.
That the public is being watched by Big Brother at every turn is deeply alarming. That the innocent were being tracked going about their every day lives while a blind eye was being turned to a financial sector apparently hell-bent on destruction is unforgivable.
Thus, the idea of the 'summer of rage' may not be as far-fetched as it first appears.
Superintendent Hartshorn talks of the banks, particularly those that still pay large bonuses despite receiving billions in taxpayer money, becoming 'viable targets'. Likewise, the headquarters of multinational companies and other financial institutions in the City which are being blamed for the financial crisis.
It is to their eternal shame that our banks should find themselves in such a position, and that Labour - while eroding the civil liberties Britain has fought so hard to defend over the centuries - was prepared to sit back and allow it to happen.
More...
* MELANIE PHILLIPS: The odious BNP is only gaining ground because voters feel so utterly betrayed
* CHARLOTTE LESLIE: I have seen the rising pulse of anger in suburban streets
* PETER HITCHENS: My meeting with BNP leader Nick Griffin - and why his creepy party worry me so profoundly
* Police fear mass protests and a 'summer of rage' in response to economic crisis
Abandon hope: Live sustainably just because it's the right thing to do
http://www.physorg.com/news154342339.html
February 20th, 2009 in Space & Earth science / Environment
Do you "hope" that everyone will see the light and start living more sustainably to save the environment? If so, you may be doing more harm than good.
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So say an environmental scientist and an environmental ethicist in a provocative essay in the March 2009 issue of the international journal, The Ecologist. John Vucetich, assistant professor of animal ecology at Michigan Technological University, and Michael Nelson, associate professor of environmental ethics at Michigan State University, challenge the widespread belief that hope can motivate people to solve overwhelming social and environmental problems.
"Is hope a placebo, a distraction, merely sowing the seeds of disillusionment?" they ask, in an opinion piece titled "Abandon Hope." The authors, co-founders and directors of the Conservation Ethics Group, an of environmental ethics consultancy, examine the proper role of hope in environmentalism. They suggest that hope's alternative is not hopelessness or despair, but rather the inherent virtue of "doing the right thing."
For decades, say Vucetich and Nelson, we have been hammered by the ceaseless thunder of messages predicting imminent environmental cataclysm: global climate change, air and water pollution, destruction of wildlife habitat, holes in the ozone. The response of environmentalists—from Al Gore to Jane Goodall—to this persistent message of hopelessness has focused on the need to remain hopeful.
But hope may actually be counter-productive, Vucetich and Nelson suggest. "I have little reason to live sustainably if the only reason to do so is to hope for a sustainable future, because every other message I receive suggests that disaster is guaranteed," they explain.
People are hearing radically contradictory messages:
• Scientists present evidence that profound environmental disaster is imminent.
• It is urgent to live up to an extremely high standard of sustainable living.
• The reason to live sustainably is that doing so gives hope for averting disaster.
• Yet disaster is inevitable.
"Given a predisposition to mistrust authorities, such contradictions justifiably elicit mistrust," say Vucetich and Nelson.
If hope for averting environmental disaster is not the right reason to live sustainably, what is? The scholars say we must provide people with reasons to live sustainably that are rational and effective, based on virtues rather than consequences. That means equating sustainable living not with hope for a better future, but with basic virtues such as sharing and caring, virtues that we recognize as good in themselves and fundamentally the right way to live in the present, they explain.
One advantage to such an approach is that it can motivate even people who do not believe that we are on the brink of environmental disaster, Vucetich and Nelson point out. It also clarifies the connection between environmental and social problems, a connection many people fail to grasp.
"Instead of hope, we need to provide young people with reasons to live sustainably that are rational and effective," they say. "We need to lift up examples of sustainable living motivated by virtue more than by a dubious belief that such actions will avert environmental disaster."
Source: Michigan Technological University
Thriving in the Age of Collapse
by Dmitry Orlov
A while ago Matt Savinar proposed that I write an article that specifically addresses the situations and concerns of some of the visitors to his Web site. He was also kind enough to provide me with three profiles, each of which is a composite of many people. One profile is of a young professional, another is of a middle-aged couple, and a third is of a high school student. My task was to adapt my knowledge of the circumstances in which people in Russia found themselves after the Soviet economy collapsed to the needs of diverse people in the United States. This I have tried to do. Keep in mind, however, that these are not real people, and that although I sometimes offer them detailed advice on subjects such as education, law, finance, and medicine, I do not practice any of these professions, and what I express here is mere opinion.
My premise is that the U.S. economy is going to collapse, that this process has already begun, and will run its course over a decade or more, with ups and downs here and there, but a consistent overall downward direction. I neither prognosticate nor wish for such an outcome; I just happen to see it as very likely. Furthermore, I do not see it as altogether bad. There are some terrible aspects to the current state of affairs, and some wonderful aspects to the post-collapse environment. For example, the air will be much cleaner, there will be no traffic jams, and people will have plenty of time to devote to their children and to people within their immediate community. Wildlife will rebound. Local culture will make a comeback. People will get plenty of exercise walking around, carrying things, and performing manual labor. They will eat smaller and healthier diets. I could go on and on, but that is not the point.
Since such a scenario might seem outlandish to some people, I would like to sketch out why I find it entirely plausible. There is an ever-increasing amount of mainstream media attention being paid to the looming energy crisis. At this point, very few people still argue that there is not a problem with the energy supply, immediately for natural gas, eventually for oil. There is also a viewpoint, which is ever more closely and persuasively argued, that what we have to look forward to is a permanent energy shortfall, which will cause economic and societal dislocations that will be monumental in scope, and will transform the patterns of everyday life. The current, consumer-friendly economy would be no more, replaced with a subsistence economy characterized by a good deal of privation and austerity.
This viewpoint is usually served up under the rubric of “Peak Oil” - the all-time global peak in the rate of extraction of conventional crude oil. The connection between the inability to goose up oil production beyond some already icecap-melting number, and the immediate trotting out of the four horsemen of the apocalypse, is not immediately obvious. But apparently the U.S. economy is a sort of pyramid scheme, based on nothing more than faith in its growth potential, and can only continue to exist while it continues to expand, by sucking in ever more resources, particularly energy. Even a small energy shortage is enough to undermine it. So Peak Oil is hardly the problem – it is the foolish notion that infinite economic growth on a finite planet is possible. Collapse can be triggered when any one of many other physical limits is exceeded - drinkable water, breathable air, arable land, and so on – and so the limit to sustained oil production is only one of many physical limits to growth.
I do not feel the need to argue for the inevitability of a permanent energy crisis, not only because others have already done so quite persuasively, but also because it involves arguing with people who do little more than shout slogans. The slogans that are heard most often range from the simplistic “There is plenty of oil!” to the ideologically hidebound “The free market will provide!” to the somewhat more nuanced but technologically implausible “Technology will provide!” to the perennially hopeful but unrealistic “Other sources of energy will be found!” There is even the refreshingly irrational “People have said that oil would run out before, and they were wrong!” repeated endlessly by Daniel Yergin, an oil historian who believes that history repeats itself endlessly, even the history of nonrenewable resource extraction. Facile notions of this sort will remain popular for some time yet, but I feel that it is already quite safe to start ignoring them.
It bears pointing out that most of us would prefer to remain blissfully unaware of any and all such arguments and notions, perhaps choosing to concern ourselves with topics less likely to depress our libido. Awareness of topics of global import is certainly not compulsory, and may not even be beneficial. Why worry about disasters we can do nothing to avert? Why not just enjoy our day in the sun, come what may? Also, large groups of people can be dangerous when panicked, and so I do not wish to panic them.
As for the few of us who are concerned, my message to you is a cheerful one, because I believe that you can still exercise some measure of control over your destiny. So, if you want some help thinking things through with a positive attitude, read on. If not, do not concern yourself unduly. Instead of reading this, you could lift your spirits by going for a drive, or going shopping, or taking a nap. Rest assured that these are all good things for you to do, the nap especially. Rather than you being menaced by some issue of global importance, any number of other unpleasant eventualities could bring about your untimely demise, on which you should likewise refrain from dwelling morbidly. Your participation in this program is optional.
The first step in this program is admitting that what is looming on your horizon is economic collapse – that the economy, as you are used to thinking about it, will cease to serve your needs. You will not hear about it on the evening news, and there will be no signs in shop windows that read “Out of business due to economic collapse.” The traditional array of experts will be on hand, claiming that prosperity is just around the corner, and offering this or that short-term fix, which, for all we know, might even work for a little while.
An economy collapses one person, one family, one community at a time. First, the dreams evaporate: the future starts looking worse than the present, and ever more uncertain. Then people are forced to withstand ever greater indignities and privations, which they tend to accept as their personal failings. The resulting stress causes them to experience a variety of physical and psychological symptoms. Our pride, our habits and expectations, and our unwillingness to adapt, can kill us faster than any physical hardship. But eventually something has to give, and even if life does not get any easier, one morning we wake up, and not only has life all around us been transformed out of all recognition, but everyone we encounter recognizes that times have changed. And we realize that none of this is about us personally, and feel better.
I feel qualified to write on this subject because I had the opportunity to observe an economic collapse firsthand. I did some of my growing up in the Soviet Union, and the rest in the United States. I have visited Russia repeatedly, on personal trips and on business, during the years of Perestroika, the ensuing collapse, and the lean years of the 1990s. I feel equally at home, or, on occasion, lost, in both places. Unlike most Russian émigrés who witnessed the collapse, I was fascinated rather than traumatized by my experiences there, and have not tried to blot them out of my memory, as many of them have. Also unlike most émigrés, I know quite a lot about the United States, its society and its economy, see its fateful weaknesses, and care about what happens here. When peering apprehensively into the unknown, it is useful to have as your guide someone who has already been there. Since no such guide is available, you will have to make do with someone who has been someplace vaguely similar.
Transportation
The main use of oil in the United States is for transportation. Once the crisis gets underway, there will be much less transportation available, of goods as well as of people, at any price, exacerbated by the lack of public transportation infrastructure. The U.S. Gross Domestic Product turns out to be almost strictly proportional the number of vehicle miles traveled, and this implies that large reductions in the availability of transportation will translate into similar-sized reductions in the size of the economy overall. A few years on, roads and bridges will start falling into disrepair, making travel slow and difficult even when enough fuel for the trip can be found. People will be forced to stay put most of the time, perhaps making seasonal migrations, and to make use of what they have available in the immediate vicinity.
To see what that will be like for you, all you have to do is to give up driving; not cut down on driving, but sell your car, and refuse to ride in one on a regular basis. If this forces you relocate, or to switch jobs or careers, you should probably do so now. You will be forced to do so, when everyone else tries to do it at the same time. I sold my car a few years ago, and my life got better, not worse. Now I work within bicycling distance from home. I am physically fit because I ride for at least an hour a day, and I am saving more money than I was before because I do not have the expense of keeping a car. If you have children that ride the school bus to school, assume that the school bus will not run any more. You might be able to work out a home schooling arrangement, or find another school closer to home that the kids can walk or bicycle to.
Food and Clothing
Consumer society, as it currently exists in the United States, is propped up by the still relatively cheap and accessible energy, and by the fact that the Chinese, and other nations, are still willing to dispense goods to us on credit. This credit is secured by the promise of future economic growth in the United States, which is already being whittled down by the high energy prices. Thus, the energy crisis will in due course translate into a consumer goods crisis.
Therefore, as part of your exercise, assume that every supermarket and big box store is out of business, driven bankrupt by the high cost (and low availability) of diesel, electricity, and natural gas. Shop only at the local farmer's markets, small neighborhood groceries, and thrift stores. Buy as few new things as possible: trash-pick what you can, and repair items instead of replacing them. Learn to grow or gather at least some of your food. If you do not wish to go strictly vegetarian, raising chickens and rabbits is not so hard. To buy staples such as rice, travel into town and buy them in bulk from small immigrant-owned groceries – you can be sure that these will be around even after the supermarkets are gone.
Shelter
If your lease or mortgage requires you to have a full-time job in order to afford it, find a way to change your living situation to one that you can keep even when there is no more work. If you can cash out your equity and buy a place that is smaller, but that you can own free and clear, do so.
Pay particular attention to how difficult a place will be to heat; do not assume that heating oil, natural gas, or large quantities of firewood will be available or affordable. Also, pay very close attention to the neighbors. Are they people you know and trust? Will they help you? Do not assume that there will be police protection or emergency services. If you live in an area with a history of ethnic strife, how sure are you that you will be able to find a common language and make peace with everyone there, even people whose culture and background are vastly different from yours?
Know where to escape to in case your primary residence becomes unlivable, either permanently or for a time. Your arrangements might be as simple as a friend's couch, or a campsite that you rent by the season, or some land where you know you can camp, or an unused farm, ranging all the way to an alternative residence somewhere else in the world that you can relocate to.
Medicine
If you have or foresee significant ongoing medical needs, staying in the United States will pose a unique set of problems; you might even consider seeking refuge in one of the many countries that provide free basic and emergency medical care to their entire population. The United States is a very special case in having made basic medicine into a profit-making industry rather than a social service. The medical system here has become a parasite, bloated and ineffectual. The doctors are saddled with unreasonable regulations and financial liabilities.
When it comes to medicine, almost any country in the world will be better than one that is full-up with unemployed medical specialists, insurance consultants, and medical billing experts. In Belize, which is quite a poor country, I received prompt and excellent free emergency medical care from a Cuban medic. In the U.S., in similar circumstances, I had to wait 8 hours at an emergency room, then was seen for five minutes by a sleep-deprived intern who scribbled out a prescription for something that is available without a prescription almost everywhere else in the world. Then there ensued a paper battle between the hospital and the insurance company, lasting for many months, over whether the hospital could charge for a doctor's visit on top of the emergency room visit. Apparently, in U.S. emergency rooms, doctors are optional.
There are specific steps you may be able to take to avoid having to depend on the medical system. Do whatever you can to be in good health, by getting enough sleep and exercise, and by avoiding unnecessary stress. Avoid processed food and junk food. If you do not feel well, get plenty of rest, instead of medicating yourself and attempting to keep to your schedule. Unless your life is in danger, try to do without maintenance regimens of prescription drugs, keeping in mind what will happen when you lose access to them. Be sure to have a living will that allows your family to have control of your medical care. Look for alternative medicines for symptomatic relief of minor complaints.
Money
For several decades now, the U.S. Dollar has been able to keep its value in the face of ever larger trade and fiscal imbalances largely because it is the currency most of the world uses when buying oil. Other nations are forced to export products to the United States because this is the only way for them to gather the dollars they need to purchase oil. This has produced a continuous windfall for the U.S. Treasury. This state of affairs is coming to an end: as more and more oil-producing nations find alternative ways of doing business with their customers, trading oil for Euros, or for food, the U.S. Dollar erodes in value. As the Dollar drops in value, the price of an ever-increasing list of essential imports goes up, driving up inflation. At some point, inflation will start to feed on itself, and will give rise to hyperinflation.
If your immediate thought is, “Hyperinflation in the U.S.? Impossible!” then you are not alone. A lot of people have trouble thinking about the possibility of hyperinflation, economists among them. Hyperinflation, they say, requires the government to emit vast amounts of money, which, being a good, prudent government, it simply will not do. But this government is drowning in red ink, and will do what desperate governments have always done: opt for inflating its debt away rather than defaulting on it, to retain at least some spending ability in the face of a collapsing tax base and dried-up foreign credit. The people at the Fed do have to be kept fed, after all.
Alan Greenspan, Chairman of the Fed, has voiced the viewpoint that since oil expenditure is such a small percentage of the overall economy, increased oil prices will have little effect on it, and, of course, he is right. I am, however, still a bit concerned about lower overall quantities of oil, regardless of the price, because these would result in less economic activity. What I would like Mr. Greenspan to reassure me on is, How is a small national economy going to be able to support a big national debt? By the way, I have an idea: print some money.
Others who doubt the inevitability of hyperinflation point to the weakness of trade unions, and say that workers in the U.S. are too badly organized to bargain collectively and secure cost of living adjustments that would propel the economy along an inflationary spiral. These people seem to feel that the workers will somehow continue to be able to work even as their entire paycheck disappears as they buy gasoline for their daily commute. They remind me of the proverbial farmer who trained his horse to stop eating, and almost succeeded, but unfortunately the horse died first. Those who have work that needs to be done will have to make it physically possible for someone to do it.
There are also plenty of people in this country – the ones who are closer the top of the economic food chain, or just feel like they are – who will pay themselves whatever they require, giving themselves, and those upon whose loyalty they must depend, any cost of living adjustment they deem necessary. They will continue doing so until they are bankrupt. Because wealth is distributed so unevenly, these people make a disproportionately large difference.
Lastly, there is a large group of people who feel that such matters are for economists to decide. But decide for yourself: in March of 1999, The Economist magazine ran an article entitled “Drowning in Oil.” In December of the same year, it was compelled to publish a retraction. Economists are starting to look a bit ridiculous, as their predictive abilities are repeatedly shown to be quite feeble. Moreover, the whole discipline of economics is starting to become irrelevant, because its main concern is with characterizing a system – the fossil fuel-based growth economy – which is starting to collapse.
Perhaps the difficulty in reconciling oneself to such a possibility stems from history and culture, not economics. Unlike the Russians or the Germans, whose historical memory includes one or more episodes of hyperinflation, it is hard for Americans to imagine living in a time when their paper money is not worth its weight in toilet paper. But such conditions have been known to occur. Savings boil off into the ether. People who still receive paychecks or retirement checks cash them immediately, and do their best to buy the things they need to survive as quickly as they can, before the prices go up again.
There are some steps you can take to prepare yourself for life without money. For a time, you might not have an income at all, or an income so meager it will not be enough for even one meal a day, so find out just how little money you need to stay active and healthy. Learn to rely on family, friends, and acquaintances. Find out what you can take from them, and what you have to offer in return.
Perhaps most importantly, assume that your retirement income, whether government or private, will in due course become quite close to zero, and make some other arrangements for your old age. If you have children, start buttering them up now – you will need their help to survive in your dotage. If you do not have children, then think about having some, or adopting one or two. If you do not have or want children, then be sure to have some good friends who are younger than you.
For each economic arrangement involving money, try to come up with an alternative arrangement that does not involve money. For example, if you pay a baby-sitter, try to find a baby-sitter who is willing to work in exchange for lessons. If you pay rent, find a caretaker situation where you pay with your labor. If you pay for food, start growing your own food.
As you are learning to live with less and less money, you will inevitably find that the money system works to your disadvantage. If you have debt, it becomes harder and harder to make the payments. If you own property, it becomes harder and harder to afford the taxes. The money system takes a bite out of everything you do. But this is true only if your economic relationships are monetized – if they have monetary value and involve the exchange of money. As you try to reduce your dependence on the money economy, you will need to invent ways to demonetize your life, and that of the people around you.
Savings and personal property can be transformed into the stock in trade of human relationships, which then give rise to reciprocal flows of gifts and favors – efficient, private, and customized to personal needs. This requires a completely different mindset from that cultivated by the consumer society, which strives to standardize and reduce everything, including human relationships, to a client-server paradigm, in which money flows in one direction, while products and services flow in the opposite direction. Customer A gets the same thing as customer B, for the same price.
This is very inefficient from a personal perspective. Resources are squandered on new products whereas reused ones can work just as well. Everyone is forced to make do with mediocre, off-the-shelf products that are designed for planned obsolescence and do not suit them as well as one crafted to suit their specific needs. A commodity product can be manufactured on the opposite side of the planet, whereas a custom one is likely to be made locally, providing work for you and the people in your community. But this is also very efficient, from the point of view of extracting profits and concentrating wealth while depleting natural resources and destroying the environment. However, this is not the sort of efficiency you should be concerned with: it is not in your interest.
This, then, is the correct stance vis à vis the money economy. You should appear to have no money or significant possessions. But you should have access to resources, such as food, clothing, medicine, places to stay and work, and even money. What you do with your money is up to you. For example, you can simply misplace it, the way squirrels do with nuts and acorns. Or you can convert it into communal property of one sort or another. You should avoid getting paid, but you should accept gifts, and, of course, give gifts in return. You should never work for money, but always donate your time and effort charitably. You should have a minimum of personal possessions, but plenty to share with others. Developing such a stance is hard, but, once you do, life actually gets better. Moreover, by adopting such a stance, you become collapse-proof.
Law
The American justice system favors the educated, the corporations, and the rich, and takes unfair advantage of the uneducated, the private citizen, and the poor. It would seem that almost any legal entanglement can be resolved through the judicious application of money, while almost any tussle with the law can result in financial penalties and even imprisonment for those who are forced to rely on public defenders.
Many people naïvely believe that a criminal is someone who commits a criminal act. This is not true, at least not in the American system of justice. Here, a criminal is someone who has been accused of committing a criminal act, tried for it, and found guilty. Whether or not that person has in fact committed the act is immaterial: witnesses may lie, evidence can be fabricated, juries can be manipulated. A person who has committed a criminal act but has not been tried for it, or has been tried and exonerated, is not a criminal, and for anyone to call him a criminal is libelous.
It therefore follows that, within the American justice system, committing a crime and getting away with it is substantially identical to not committing a crime at all. Wealthy clients have lawyers who are constantly testing and, whenever possible, expanding the bounds of legality. Corporations have entire armies of lawyers, and can almost always win against individuals. Furthermore, corporations use their political influence to promote the use of binding arbitration, which favors them, as the way to resolve disputes.
This state of affairs makes it hopelessly naïve for anyone to confuse legality with morality, ethics, or justice. You should always behave in a legal manner, but this will not necessarily save you from going to jail. In what manner you choose to behave legally is between you and your conscience, God, or lawyer, if you happen to have one, and may or may not have anything to do with obeying laws. Legality is a property of the justice system, while justice is an ancient virtue. This distinction is lost on very few people: most people possess a sense of justice, and, separate from it, an understanding of what is legal, and what they they can get away with.
The U.S. legal system, as it stands, is a luxury, not a necessity. It is good to those who can afford it, and bad for those who cannot. As ever-increasing numbers of people find that they cannot pay what it takes to secure a good outcome for themselves, they will start to see it not as a system of justice, but as a tool of oppression, and will learn to avoid it rather than to look to it for help. As oppression becomes the norm, at some point the pretense to serving justice will be dispensed with in favor of a much simpler, efficient, streamlined system of social control, perhaps one based on martial law.
People have been known to get along quite happily without written law, lawyers, courts, or jails. Societies always evolve an idea of what is forbidden, and find ways to punish those who transgress. In the absence of an official system of justice, people generally become much more careful around each other, because running afoul of someone may lead to a duel or give rise to a vendetta, and because, in the absence of jails, punishments tend become draconian, coming to include dispossession, banishment, and even death, which are all intended to deter and to neutralize rather than to punish. When disputes do arise, lay mediators or councils may be appealed to, to help resolve them.
The transition to a lower-energy system of jurisprudence will no doubt be quite tumultuous, but there is something we can be sure of: many laws will become unenforceable at its very outset. This development, given our definition of what is criminal, will de facto decriminalize many types of behavior, opening new, relatively safe avenues of legal behavior for multitudes of people, creating new opportunities for the wise, and further tempting the evil and the foolish.
As a safety precaution, you might want to distance yourself from the legal system, and, to the extent that this is possible, find your own justice. As an exercise, examine each of your relationships that is based on a contract, lease, deed, license, promissory note, or other legal instrument, and look for ways to replace it with relationships that are based on trust, mutual respect, and common interest. Think of ways to make these relationships work within the context of friendships and familial ties.
To protect yourself from getting savaged by the justice system as it degenerates into oppression, try to weave a thick web of informal interdependency all around you, where any conflict or disagreement can be extinguished by drawing in more and more interested parties, all of them eager to resolve it peaceably, and none of them willing to let it escalate beyond their midst. Struggle for impartiality when attempting to mediate disputes, and be guided by your wisdom and your sense of justice rather than by laws, rules, or precedents, which offer poor guidance in changing times.
Thriving in the Age of Collapse, Part II:
What Can Young Professionals and Aging Baby Boomers do to Prepare for America's Collapse?
By Dmitry Orlov
(Editor's Note: Part I of this article is available here. Dmitry Orlov lived through the collapse of the Soviet Union. In this installment he offers his advice on how young professionals ("yuppies") and aging baby boomers can prepare for America's collapse. -Matt)
Yuppies
The first personal profile I will consider is of "Chris", a professional in his twenties, who lives in a large urban area in the Pacific Northwest. Chris earns some $60,000 to $90,000 a year, contributes to his employer's 401-k program, and carries massive student debt. Thankfully, he is in good health. Among his many marketable skills, none are directly applicable to an energy-scarce environment. He is a fantastic bore at parties, compulsively attempting to hold forth on the subject of resource depletion and economic collapse, and, needless to say, his parents, friends, and fiancée do not wish to hear any more about it, but love him just the same. Being uncertain of the future, he rents. Chris is a regular North American workaholic, working 50 to 60 hours a week. Chris had never given politics, oil, or the looming economic collapse much thought, until somebody handed him a copy of Mike Ruppert's book, but now he is a true believer.
As a young professional, Chris may be able to continue in his current profession, or shift to another one, to avoid dead-end career paths, and to position himself in one of the professions that is sure to see substantial growth. Clearly, many professions do not hold much promise. For example, the demand for lawyers, plastic surgeons, psychiatrists, and financial advisers will drop, because ever fewer middle-class people will require or be able to afford their services. Likewise, jobs in sales and marketing are likely to dwindle. Other professions, such as repossession, auctioneers, and undertakers, will still be very much in demand, for a time. Whether or not Chris decides to switch professions, he should choose something lucrative, work hard for a while, save up money, and get out. There is no sense in diving into these murky waters except to make a bundle, or in exposing his wealth if he manages to accumulate any. Endlessly running on a treadmill, as so many people do today, will no longer be a viable option.
Serve Your Country
If Chris finds that he needs to switch professions, and wants to remain within the official economy, then he may decide to transition into the area of government contracting, availing himself of the ample opportunities presented by official corruption, graft, and politically sanctioned organized crime, which are sure to continue seeing substantial growth. There will be a great deal of government inventory of all sorts – from very expensive weapons systems to very expensive toilet seats – to be sold off, sometimes at a substantial profit. If Chris has the flair for international deal-making, then finding foreign buyers for liquidated U.S. government assets might be something he could ease his way into.
Although government work may be steady work for a time, it also involves following rules and regulations (or at least pretending to), toeing the line, turning a blind eye, and playing the politics. Also, it rarely provides the satisfaction of getting something useful accomplished. Unless Chris manages to position himself close to the top of the food chain, where billions in public money regularly go missing with hardly any questions asked, it is also not going to be particularly lucrative. Profiting from government corruption is a high-stakes game, with only the extremely well-connected admitted to the table.
If Chris feels that playing Catch-22 is not his style and decides against working for the government, another excellent growth area, right in the middle of the newly emerging food chain, is security. As the populace becomes increasingly distressed economically, all items of value will need to be kept out of view, or carefully guarded, preferably both. The first requirement in any middling-to-large transaction will be to provide security. An organization that can provide security in an unstable environment is thus well-positioned to branch out into a multitude of other services: warehousing, logistics, transportation, finance, and legal services.
Business Redux
Last but not least, Chris can avail himself of a role in the burgeoning cash economy, which will grow to encompass an ever greater list of products and services. Currently, unreported, cash-based activities in the U.S. fall into a number of distinct categories that encompass traditional crime. I do not recommend any of these niches, since they are already fully occupied, and a shrinking economy will make for a highly competitive environment. For the sake of completeness: there will always be gambling, prostitution, graft, and murder for hire. Another large category is illegal drugs and guns. Yet another revolves around smuggling people across borders, as well as providing them with cash-based employment once they arrive. Yet another is money-laundering, by moving cash through front businesses and into bank accounts. All of these are likely to see substantial growth, with the possible exception of money laundering: as the official economy becomes deemphasized, cash stockpiles are more likely to be traded for gold and other valuable commodities than to be entrusted to shaky financial institutions.
But there will be plenty of new niches opening up for Chris to choose among. Currently, the cash economy mostly involves services and products that cannot be obtained legally. In the future, it will expand to encompass necessities that are no longer available or affordable through official channels. The list will eventually grow to include transportation, food, security, shelter, and medicine. Thus, in trying to think about business trends of the future, Chris should first expand his definition of business. Conversely, in thinking about the future legal climate, he should reason from the point of view of what will be enforceable, and, if so, to whose financial benefit, because unenforceable or unprofitable legal strictures will be eagerly overlooked, as the entire legal framework falls into disuse.
House Calls
Black market medicine promises to be particularly interesting, although perhaps not particularly lucrative. The cash economy will inevitably come to include pharmaceuticals, which in the U.S. are overpriced and often not available over the counter, but which can be manufactured in underground laboratories, or purchased elsewhere in the world and imported in bulk. In addition, every year there are more and more people for whom Western medicine does not work, or works badly, and who are learning to avail themselves of the pharmacopeia of traditional medicine. Although there are some exotic ingredients used in traditional medicine, many medicinal herbs can be grown in most places, do not require complex cultivation, and are, in fact, weeds. Once Western medicine and the pharmaceutical industry on which it depends enter a period of decline, it is likely that acceptance of traditional medicine will increase.
If black market pharmaceuticals may be somewhat lucrative, then what about black market medical practice? At some point it will come to include office visits, and even surgery, at first administered as “free care,” but if one wants a follow-up visit, then it would involve a “gift.” Currently, doctors in the U.S. are sandwiched between layers of lawyers, insurance companies, pharmaceutical companies, and hospital administrators, all of whom require a profit in order to exist. Once there is no profit to be made by anyone, only the doctors will remain, because they (and nurses) are the only ones who are indispensable to the practice of medicine. They will once again start making house calls, and work for whatever they can get: a bit of cash, or even for food, or simply because they care about their patients and want to be helpful and respected. They would be well advised to become competent herbalists before their pharmaceutical supply dries up.
Quitting While Ahead
There will be plenty of professional opportunities for Chris to continue to make a good living, although he may have to switch professions in order to take advantage of them. In spite of this, Chris should not bet his life on his ability to find a place in the new economy, and should also make sure that he can sustain himself directly. It will be an uncertain environment, fraught with dangers and complications, and Chris should be prepared to make a hasty exit if circumstances turn against him.
Chris is in a good position to marshal his resources and make preparations for a soft landing for himself, and possibly for his family and friends as well. It is likely that he will meet new people and make new friends as he makes his preparations, and it may be that these new friendships will be more conducive to achieving this goal than his current ones.
Given his high income, Chris can quickly save up a considerable sum of money by living frugally. To achieve a high savings rate, he can downgrade his car to an old beater or give up driving altogether, move into a low-rent, ethnically and racially mixed neighborhood, avoid buying new things, trash-picking and buying used stuff instead, shed unnecessary possessions, avoid buying prepared or packaged food and only buy food fresh or in bulk, and avoid going out (entertaining friends at home, or visiting them, works just as well). With these measures in place, there is no reason why his personal saving rate should be anywhere below 75% of his net earnings.
By using some of his savings, and by cashing out his retirement accounts, Chris can put together a sizable sum with which to purchase some arable land with access to water, which he can own free and clear, and on which he can build a homestead. He should retain a reserve, preferably in gold, to be able to pay property taxes far into the future. He is young and in good health, and can learn the many new skills he will need to survive. He should learn and practice these skills before he needs to rely on them for survival: once he has built his homestead, he should try a “dry run,” spending an entire summer on his land, improving it, and growing food. This experience will teach him what he will need to stockpile, and what other preparations he will need to make.
The longer Chris waits to start making these preparations, the less effective they will be, because the purchasing power of his savings is likely to decrease over time due to inflation. If he waits until after the onset of financial meltdown to make his move, he may forfeit his savings altogether, and be unable to make any preparations. He would then find himself in the same sinking boat as everyone else, stuck where he is, or wherever the government evacuates him, dependent on dwindling government assistance and meager charity for survival.
Obstacles
Chris's biggest liability is his student debt. Student loans tend to be guaranteed by the federal government, which is not subject to the same legal limitations as other creditors. The government can ignore bankruptcy laws and homestead exemptions, and can seize any property. While fixed-rate loans are likely to be rendered irrelevant by inflation, variable-rate loans should be taken seriously. If it is not possible to pay them off, then his other option is to make plans to render himself indigent. This is not trivial, but quite possible to arrange. Since a post-collapse economy generally relies on unreported cash and barter transactions rather than reported, taxed ones, Chris should be able to live out his days in peace, flying under the radar.
Chris's biggest hindrance in making effective preparations is lack of time. It is impossible to carry out the necessary research, arrangements, and exercises while working 50-60 hours a week. There are many people in his situation, forced to concentrate on a career path that requires an inordinate level of effort, because it is predicated on perpetual career advancement rather than on making one's money quickly and getting out. But with just a change of mindset, Chris can become far more creative than the average workaholic in maximizing his short-term earnings while minimizing his effort. The effort should be allocated towards getting jobs that pay the most but require the least effort, and towards finding creative ways to avoid time-consuming tasks. With this new approach, Chris should be able to work no more than 35 hours a week, at a comparable level of compensation.
Just as it is usually better to quit than to be fired, it is better to drop out voluntarily, in stages, than to wait for one's career to end due to lack of prospects for continued employment. In a business climate where most companies' crystal balls are far from clear, it is much easer to secure temporary employment than a permanent position. Contract work may not appeal to somebody who is looking forward to a long and prosperous career, but it may be very well-suited to somebody who realizes that the entire economy is circling the drain.
I believe that lack of understanding from Chris's parents, friends, or significant other is not a serious problem. It is often hard to decide just how much effort to invest in trying to enlighten any given person, but a good rule of thumb is to only offer answers to those who ask questions. The answers should consist almost exclusively of references to the most authoritative sources of information available, rather than heated expressions of personal opinion. These may give rise to more detailed questions, and perhaps even some guarded admissions of doubt. Whether or not the people around him understand what is happening, they are sure to be most grateful if, when the time comes, Chris knows what to do, while everyone around is flailing about helplessly. On the other hand, if Chris expends effort on working his loved ones into a paroxysm of despair while remaining unprepared, he will not remain popular with them for very long.
The Middle Age
Next we consider the case of “Mike” and “Mary,” who are aging baby boomers. Their combined income is around $100,000 a year. Mary has worked as a teacher for most of her life, and expects to start receiving her pension soon. Mike has worked a succession of office jobs for most of his life, and is also nearing retirement. They have a mortgage on a suburban home, and own two cars. They had planned on paying it all off over the next decade or so, and living out their golden years just as they are. They have three children: two are out of college and on their own, one is in college, nearing graduation. Mike or Mary are in fairly good health, but both have minor medical conditions that require monitoring and small amounts of medication. Mary has some gardening skills. Mike is a bit of a handyman, and can fix things around the house.
They have known that this crisis was coming since the 1970s, but did not think it would come this fast, nor did they think that it would be so severe. They found out about it by reading James Kunstler's article in Rolling Stone, then doing some research on the Internet. None of their children has shown more than a passing interest in these issues.
Old Age in Turbulent Times
The older we get, the more ossified we tend to become in our ways of thought, our habits, and our expectations. We may be unhappy with many things about our world, but, as we age, our ability to embrace change decreases, until we find ourselves resigned to live out our days with the devil we know. Some old people are quite functional when they are within their element, but put them in an unfamiliar environment, and they become disoriented, unsure of themselves, slow to adapt, and deeply distressed.
When confronted with cataclysmic, irrevocable change, some old people rebel in a peculiar fashion. For many years after the Soviet collapse, one could see a certain type of old person in the streets: miserable, dispossessed, and protesting. Often they carried with them portraits of Lenin and Stalin, held high for all to see: these were the devils they knew. Perhaps in future years we will see baby boomers on the streets of U.S. cities, begging for food while displaying their treasured portrait of Ronald Reagan as if it were holy relic, or a lucky charm, hoping against all hope for a return to a former national greatness, stoically withstanding ridicule from everyone around them.
Even in less extreme cases, in disrupted, crisis-ridden times, older people run a huge risk of becoming alienated from younger people, on whom they depend for survival. Being fixed in their ideas of right and wrong, they tend to prejudge young people, who must survive in a world where the old rules and notions no longer apply. In a futile attempt to hold on to what they see as moral high ground, they make themselves into objects of pity at best, and indifference at worst.
The Human Life-cycle
Cheap energy and the short-term bloom of humanity it has fueled have given rise to some social arrangements that are not destined to survive the onset of permanent energy scarcity. One of these is the notion that a few young people will anonymously contribute a large part of their income for the welfare of many old people they have never met or even heard of.
In the days in which most of human history has transpired, parents took care of their children as their topmost priority in life. As with many other species, it was their biological imperative to do so; beyond that, most of them were conscious of the fact that if their children did not survive, neither would they: their genes, their memories, their culture, or anything about them would be erased by time. The care of children could be entrusted to family members, but never to complete strangers. The education of children took place largely in the home, through storytelling, shared labor, and through rites of passage. The elderly, and especially the grandparents, took an active part in rearing and educating children. It was they who watched and attended to young children throughout the day, and who inculcated in them much of the ancestral wisdom – the stories, the myths, and the practical knowledge – through ceaseless, tiresome repetition.
At the trailing edge of the fossil fuel age, where we find ourselves, prosperous society looks quite different. Both parents work dismal jobs, mostly away from home, in order to keep themselves out of bankruptcy. Those who prosper most attend to their careers with far greater attention than to their children, abandoning them to the care of strangers for the better part of most days. The grandparents live elsewhere, enjoying their golden years, the fruits of their labors encapsulated in some properties, some investments, and a merciful central government that has promised to at least keep them alive even if all else fails. They are living on artificial life support that is about to be shut off.
Once the joy-ride ends, human society will revert to norm, but many will suffer, and many lives will be cut short. The elderly will get a dose of their own toxic medicine. Adult children will take care of their helpless parents only inasmuch as their parents had taken care of them when they were young and helpless. Were they placed in day-care, sent off to a boarding school, or encouraged to join the military? Well then, institutional care for the elderly must be the perfect solution! (And no use complaining; when their children were three years old and complained, did they listen to them?) Were they made to work for their allowance, to learn the spirit of free enterprise at a young age? Well then, how do their parents expect to earn their keep when they are eighty? Shape up or ship out! These words will not necessarily be said out loud; but they will be felt, and lived.
What will make matters worse is that most of the children are humans-”lite” – deprived of the stories, the myths, and the trials that human children have been put through for the past few million years, minus a bizarre century or two – and so are gravely ill-equipped for life outside the artificial life support system. They are an industrial product: almost from birth, they are placed in an entirely artificial social context, where they are evaluated, classified, and shoved through a series of institutions, to be readied for a lifetime of service in a system whose feedstock is a commodity human product: Grade A human, marketable skills up-to-date, properly credentialed. Even if their parents and grandparents were intact and able to impart wisdom, their children had not been programmed to process that sort of information.
Forever Young?
When we are young, it is easy to embrace change, to adapt, to leave our past behind; not necessarily so as we get older. When it comes to flexibility and adaptability, there is a broad spectrum of older people. There are ones that seem relatively young, but are hardened and calloused on the inside. They simply want to have what's theirs, and to be left alone. There are others that seem old and crusty, but have really been waiting all their lives for that time when they have to rise to the occasion, shake off the shackles that society has placed them in, and become amazingly alive. Yet others will simply do whatever is necessary, because that is what they have always done, for as long as they can remember; and then one day they will stop, and become like children. Yet others fall into despair, or act normal but convert their psychological shock at the changed circumstances into mysterious illnesses.
Some older people I know are like giant warehouses of knowledge – richer than the biggest library. Others hold their secrets well, looking for one or two young persons they can teach, who will deliver them one generation further. Still others simply have a rhythm to their lives that can go on forever – if you learn it, you will be able to pass it on. But plenty of others are simply dead weight: organic matter kept alive artificially. An oil-based life support system that has allowed them to be fruitful and multiply is now allowing them to persist, for a time. One more day is one more day, like fungus growing on a tree stump.
Who knows what any of this means for Mike and Mary, our two aging baby boomers with an income in the $100,000 per year range and a dream of living out their retirement in their suburban home? The fact that they are concerned about something they have read on a Web site is not significant: there are lots of alarming, and alarmist, Web sites. The fact that they have known that oil was going to run out some day since the 1970s is also not that significant: quite a few people have known that for just as long, and have not done a thing about it. The fact that their children are not the least bit interested in these matters is to be expected. Even if their motto is “do as we say, not as we do,” why should anyone expect their children to follow it? Least important is the fact that at their ripe age they are showing concern over something that has been unfolding over most of their lifetimes, and will continue unfolding, sometimes gradually, sometimes suddenly.
Out of Retirement
Mike and Mary should brace themselves for some bad news. The first piece of bad news is that their retirement is going to be canceled. Their investments and savings will be devalued, and the value of their equity in their suburban house will be negligible. They will probably continue to receive checks from the government, but it will not be enough to live on. The second piece of bad news is that there will not be any actual official paid work available to them to make up the shortfall. Nor is it likely that there will be any official recognition of their plight, or public attempts to remedy the situation, or effective political organizations for people in their predicament. This may come as a shock to a generation used to being a political force to be reckoned with.
A Byzantine system of accounting has already been put in place for forging inflation and unemployment statistics. Cost of living adjustments are always kept at about half the level of actual inflation. The term “unemployed” has been redefined to mean “eligible to receive temporary unemployment benefits.” As inflation starts to pick up, retirees on fixed incomes will gradually be driven destitute.
A Sad Alternative
If Mike's and Mary's plan is to live out their golden years in a suburban house, driving to and fro, then they clearly do not have a plan, and will gradually lose control of their lives. Almost immediately, their house will become too expensive to heat. Next, it will become impossible for them to continue driving, due to gasoline rationing and shortages. Next, electricity will be cut off. For a time, they may continue to be supplied with food by some community-based service.
At some point, if they are lucky, they will be evacuated to some hastily organized compound – most likely a dormitory or a barrack with cots and a television set in the corner, which is mostly off due to lack of electricity, and plenty of blank walls to stare at. There will be a dining hall, where they will receive their daily portions of tea and gruel.
Perhaps one of their children will come to their rescue. But it is more than likely that their own circumstances will be quite difficult, and that they will have little ability to provide for their parents, especially if none of them have made any preparations for doing so. Or perhaps they will be quite capable of providing for their parents but will not want to.
A Happier Alternative
So Mike and Mary need a plan. But who are they, and would it not be presumptuous of me to attempt to contrive a plan for them, not knowing who they are? Nevertheless, let me venture a guess or two. Is there something unique and amazing, lurking behind that vinyl-clad suburban façade and those tinted SUV windows? Even if there is not, here are some fairly basic ideas that spring to mind.
Maybe Mary's spirit has not been broken over decades spent teaching in the soulless U.S. public school system. Maybe she is ready to open her own school, in her own living room, for neighborhood kids of all ages, one that teaches something more valuable than how to pass government-mandated standardized tests. Maybe she could recruit some younger trainee teachers, who need not have the worthless degree in Education? Retired American schoolteachers are known for doing that sort of thing in other third world countries, so why not in this one?
And what about Mike and his decades of accumulated business and managerial acumen in striking deals, negotiating and enforcing contracts, and inspecting financial statements? He could, for instance, put his skills to good use in pushing through mixed use zoning, so that people in his community could open shops in their basements and garages. When the public water supply becomes contaminated, disrupted, or too expensive, perhaps Mike could help negotiate utility easements for the gathering of rainwater. He could organize rent strikes against absentee landlords, forcing them to sell to people within the community. He could help convert the school bus fleet to full-time use, serving the entire community throughout they day, rather than just children, twice a day.
The best that Mike and Mary can hope to achieve is to cluster their children around them, all living in close proximity, although preferably not in the same house. Too close is almost as bad as too far away; next door, or on the same street, is optimal. The bigger the extended household Mike and Mary are able to form, the better their chances of living comfortably. It makes little difference whether their children are aware of these preparations ahead of time. If Mike and Mary are able to offer support and practical advice to their children when the economy turns sour and their children's lives start to fall apart, they will probably accept the favor, and will later want to return it.
Suburbia Forever
Am I being overly optimistic about the promise of a reformed American suburbia? Some people are ready to declare suburbia to be at an end. But then I know that Americans are very much driven to hyperbole, always willing to put an end to something certifiably unstoppable (war, AIDS, cancer, poverty, global warming), usually by making a small charitable donation, by wearing a colorful plastic bracelet, or by going for a walk, a run, or a bicycle ride. Below the charming, childlike confidence and optimism of such ventures lurks a culturally ingrained inability to grasp something basic: not all problems are solvable.
And thus I discern an element of wishful thinking in the idea that suburbia is going to conveniently disappear, and that everyone who lives there will simply go and live someplace else. A cabin in the woods, perhaps? Or a picturesque desert island? How about a space colony? Nor do I find it plausible that half the U.S. population will lay down and die shortly after they discover that some of their cars no longer run or that their kitchen appliances no longer work. And so I find it safe to think that most of the existing infestations of Suburbia americans are ineradicable, but that the evolutionary pressure of a chronic energy shortage will force them to evolve into something much less energy-intensive. Whether, in each case, that something will turn out to be absolutely horrible, or quite pleasant, will depend on many things.
For instance, a suburb with many big lawns and golf courses could pass a series of enlightened ordinances such as “No grass shall be cut until it has gone to seed, and shall only be used for forage or fodder.” Then they could all keep ponies, ride them to the market, and live happily ever after. No, it is not quite that easy, but I am convinced that the biggest obstacle is bad habits – like keeping the grass clipped really short and putting the clippings into garbage bags to be hauled away in garbage trucks. It should not take any brilliant new inventions or high-priced initiatives to make suburbia survivable. All that is needed is for people to stop doing a lot of nonsensical things and start doing a few commonsense ones. Even if they resist, circumstances will inevitably nudge them in the right direction.
Should Mike and Mary decide to move or to stay? Do they know, and like, their neighbors? Do they think that their current community will hold together? Do they have faith in their ability to adapt? Is their suburb a place where their children will want to live? If answers to any of these questions is “no”, then they have very little to lose by moving.
If they decide to move, they could move to a small town and strive towards self-sufficiency by doing some gardening, maybe even raise some livestock. Their children may decide to join them there, once they run out of other options, which they will if they do not prepare. Or they could move to a city (one of the few compact, livable ones) – and hope that they will be taken care of there.
Finally, they could decide to leave the country altogether, but for this they would need to have quite an adventurous spirit. There are plenty of stable, if not prosperous, places on this planet, that are far less dependent on the international energy and financial markets than the U.S., and where the cataclysms that will shake the U.S. will barely register.
Thriving in the Age of Collapse, Part III:
What Can Young People do to Prepare for America's Collapse?
By Dmitry Orlov
(Editor's Note: This is the third installment of a three-installment series. Part I and Part II. Dmitry Orlov lived through the collapse of the Soviet Union. In this installment he offers his advice on how young people can prepare for America's collapse. If after reading this you want to discuss it I've started a thread over at the LATOC forum -Matt)
Youth
The final profile we will consider is of “Steve,” who is 18 years old. He found out about Peak Oil after one of his on-line video game buddies sent him some links to Web sites, which he found deeply shocking. Now he is totally freaked out. Is he about to get drafted and sent off to fight for oil in the Middle East? How is he going to survive in a collapsing society? He works a part-time job and lives with his parents, who take his fears to be the folly of youth, and assume that he will be going to college, earning a respectable degree, and entering the workforce (while going into debt at the same time).
Let us suppose that Steve's parents are correct: there will be no economic collapse any time soon. Steve will go off to college, earn a degree in accounting, get married, take out a mortgage on a suburban home, and have children. Now, if Steve's parents are reasonably well-informed, can they believe that there is more than another forty years' worth of nonrenewable resources left at their current level of production, never mind the need for sustained economic growth? As they watch the endless parade of record-setting freak weather events, with fifty-year records being broken not every fifty years, but every one or two, can they believe that none of these, together or separately, will upset Steve's well-laid plans? Even if they feel certain that they will live out their own lives in peace, why should they want Steve to work hard to perpetuate a state of affairs that they know will not last for the duration of his lifetime? Is it not the tiniest bit unethical of them to try to push their son in such a risky direction? And is it not the tiniest bit incumbent upon them to try to propose something better?
A Web of Lies
One of Steve's most severe and painful realizations, if he is lucky enough to have it, will be that he has been lied to all his life, more or less continuously, by his parents, his minders at school, and even, to some extent, his own peers. If he does not have this realization, then he will be doomed to see all that happens to him as the result his personal failings: his weakness, lack of talent, inability to fit in, or bad luck. Even if he does have this realization, he will find it difficult to live his life accordingly, because those who lack this realization, and deem themselves successful, will try to denigrate him as a misfit or a loser.
One part of the lie is that America is the best and getting better – land of possibility and so forth – and that he can achieve his dream, whatever it is, by being diligent, hard-working, and a team player. Of course, his dream must be an American dream – just like everyone else's, and involve a house in the suburbs, a couple of cars in the driveway, a couple of kids, maybe a cat and a dog, and lots of money in retirement accounts.
The other part of the lie is that Steve can live such a life and be free. He would be free - to make false choices. For breakfast Steve will have... stuff from a cardboard box with commercial art on it, excellent choice, Sir, well done! And in order to get around, he will have... a disposable vinyl-upholstered sheet metal box on four rubber wheels that burns gasoline, very wise, Sir, very wise! By choosing a prepackaged life, Steve himself would become a prepackaged product, a social appliance designed for planned obsolescence, whose useful life will be determined by the availability of the fossil fuels on which it operates.
That these are lies is plain for all to see: with each next generation, people are being forced to work harder and to go deeper into debt to maintain this suburban, middle-class lifestyle. About a third of them experience severe psychological problems. Also about a third of them do not believe that they will be able to afford to retire. The majority of them believe that they are not doing as well as their parents did.
And thus we have a three-tier generationally stratified middle-class society. At the top, we have a whole lot of happy, prosperous, self-assured old people, living it large, not willing for a moment to admit their complicity in impoverishing their children and grandchildren. In the middle we have a smaller number of their adult children, running themselves ragged, forced to delude themselves that everything is under control, just to keep up their spirits. And then there are even fewer young people like Steve, just coming of age, and, one would think, justifiably angry with the hand they have been dealt. Few of them are up to the Herculean task that has been set in front of them.
Escape Plans
This society still has plenty to offer to a young person, provided that the young person is clever enough to know how to take advantage of it. All of this advice falls into the category of “If everyone did this, society would fall apart.” Clearly, this advice is for people like Steve, and does not apply to societies, empires, or civilizations. It has been thoroughly tested right here in the U.S., and has a track record of successfully dodging society's best efforts at enslavement.
First of all, it is probably a bad idea to go straight to college. It is best to avoid getting sucked into that pipeline, which starts around the middle of senior year and ends with post-graduate indentured servitude of one sort or another. Apply to a couple of schools, strictly pro forma, to avoid suspicion. Having a high school diploma is important; the grades and test scores are somewhat important. Demonstrated excellence at one or two things is more valuable than a good average. Most important is learning the differences between your talents, you interests, and your expectations.
At this point in the game, gaining basic money-making skills is far more important, especially in the trades, such as landscaping, interior restoration, carpentry, house painting, floor sanding, mechanical repair work, and so on, because these are all jobs that can be done for cash. Avoid dangerous trades, such as roofing, abatement, and, in general, anything that involves toxic chemicals or dangerous machinery. Having some business skills is important too – knowing how to deal with bosses and customers and how to supervise people. The best approach is to work a series of short jobs – shorter than a year, learning a trade and moving on immediately, and always be on the lookout for special, unofficial projects. Think of regular employment as good cover, but not as the main source of income – and therefore best kept to part-time. Always job-hunting, switching and learning new jobs, will help keep your mind sharp. But be sure to read as well, and challenge yourself by reading difficult books – this will help you when you decide to go back to school.
Once you graduate, immediately become financially independent from your parents. Move out, and work on developing a good roommate situation. Go for the cheapest rent you can find by talking directly to landlords and offering to take care of security and maintenance. Pick your roommates carefully and try to get a cohesive group together, so that you can rely on each other. Do not accept money or other sorts of financial help from your parents. Do everything you have to so that if and when you decide to go to school, and file financial aid forms, you are not their dependent, and they are not expected to pay your college tuition or living expenses. If your parents require an explanation, it is that you care about them: you do not believe that their retirement will be enough to live on, and the money that would be swallowed up by tuition will help. If you have a system worked out for living frugally and making a bit of cash, on paper you can look penniless, which is perfect, because schools will confiscate all the money that you disclose to them. Be sure to always disclose just enough to avoid suspicion, and brush up on the laws to make sure it's all legal.
Higher What?
When thinking about attending a college or a university, it is important to understand what these institutions actually are. They are often called “institutions of higher learning,” but the learning is quite incidental to their two most important missions: research (government or industrial) and something known as “credentialing:” the granting of degrees. In many ways, it is a sort of extended hazing ritual, where the aspirant is required to jump through a series of blazing hoops before being granted access to a professional realm. An important sideline is sports, and some schools are virtual beefcake outlets, with nary a forehead in the crowd disfigured by a sentient impulse.
Excellent teaching does happen, but more or less by accident. Professors are recruited and retained based on their publications and awards (to lend prestige to the school) and their ability to attract grant money. Much of the teaching is done not by the professors themselves, but by graduate student teaching assistants, adjuncts, and various other academic minions.
The human mind learns best through repetition and through applying knowledge, but college curricula are structured so as to avoid repetition, with each course designed as a stand-alone unit. Most of the learning takes the form of cramming for tests, and what is tested is not knowledge but short-term memory. By the time students graduate, they have forgotten most of what they have been taught, but with perfectly honed cramming skills, ready to brute-force their way through any further superficial tests of their “knowledge” or “competence,” to join the swelling ranks of America's credentialed amateurs.
There is supposed to be a huge difference between the best colleges and universities and the rest. The ones considered best are mostly private, although few state schools find themselves included among them. What is taught is generally the same throughout, and the quality of the teaching is quite random. The best schools are thought to offer better chances for finding good jobs after graduation, but this is debatable.
For some students, the more prestigious schools offer a certain charmed quality: no matter how much they drink and how badly they do, they cannot flunk out. An echelon of tutors is summoned to guide their every mediocre step, all the way through graduation. These are the children of the elite, whose attendance at these institutions is more a matter of tradition than anything else. It makes no difference whether they learn anything or not: for their breed, the pedigree counts for a lot more than the obedience training. I have run across a few of these zombies with Ivy League diplomas, childish handwritings, speech peppered with nonsense syllables, and an attitude that never stops begging for a slap.
The Optimal School
This being the lay of the land, what is a young person like Steve to do? The prestige offered by the best schools would be wasted on a desolate job market, while the inevitable pile of student loans would be a millstone around his neck. And yet there is no better place to learn than a university.
I recommend that Steve choose a school not based on reputation or prestige, but word of mouth and financial advantages. The best school is the one that offers the best financial aid package, where he knows some people in the fields of study in which he is interested, which offers cheap off-campus living, and where he can find jobs to make money on the side. Steve should keep his earnings off the books whenever possible, or the school will confiscate them. The school will force him to take out some loans, so he should save enough money at the same time to cover them. He should try to find employment right at the school, because such jobs often provide a tuition waiver.
State schools have an advantage: not only are they cheaper, but a lot of the students come from the vicinity rather than from far away. When Steve makes some friends among them, they will help him gain entry into the local community. Ideally, this is also an area where he will want to continue living once he is done with school, among his new friends. Deciding to settle wherever he finds a job is not a good plan; it is much better for him to know how to find work wherever he decides to settle.
Fields of Mud
When choosing a field of study, it is important to keep in mind that there are disciplines that will abide and remain perennially valuable, while others are fluff. The sciences – Physics, Chemistry, Biology, Zoology, Botany, Geology – will serve you well. Mathematics, Philosophy, Astronomy, and a foreign language or two will make you a better person. Literature and History are invaluable, but rarely taught well; if you cannot find a truly inspired teacher, teach yourself – by reading and writing, which are the only two activities these two disciplines require.
Then there are the pseudo-sciences: Psychology, Sociology, Political Science, and Economics. They disguise themselves as sciences by employing experimental techniques and statistical analysis, and, in the case of Economics, a funky sort of math, but they are fluff, and are clearly marked with an expiration date. The distinction is quite crisp: for any subject, pick up a textbook older than fifty years. If it is a real discipline, there will be some recent discoveries and technological developments missing from it (a few elementary particles, DNA) but the rest will still look valid. If it is a fake subject, a fair percentage of it will look a bit iffy, with a smattering of stark raving nonsense.
Lastly, there are the conduits to the professions: Law, Medicine, and Engineering. They have little to do with getting an education, and everything to do with learning a trade, and, of course “credentialing.” In each case, the hazing is extreme.
The legal profession is already a bit overstocked, and, law being a luxury product, it seems unlikely that these graduates will be able to pay down their copious student loans in the new economy. Already many of them lack the option of becoming public defenders or taking on pro bono cases because of their huge financial burdens.
I have already said enough about medicine; but if Steve wants to be a doctor, there are some medical schools around the world that graduate real doctors, rather than technocrats who practice “defensive medicine” and shuffle paper half their day. After the extended sleep deprivation experiment they are put through as interns, they get to live in stately homes, fly to pharmaceutical company junkets, and play a lot of golf. That may change.
I am partial to engineering, having put myself through its rigors. It sometimes creates what I feel is a good sort of person – a bit stunted in some ways, strangely passionate about inanimate objects, but capable at many things and generally trustworthy. If Steve has exhibited the telltale tendencies – such as completely dismantling and reassembling various gadgets, and making them work perfectly again afterward – and if he looks forward to four years of scribbling out formulas under intense pressure, then engineering may be for him. Whether he will be able to earn a living by engineering is unknowable, but then engineers can usually find plenty of other things to do.
The Piece of Paper
It is often hard to tell ahead of time, but for a lot of people graduating may be quite pointless, while dropping out at an opportune moment may be quite advantageous. I know plenty of people who never graduated; they have been my bosses, my colleagues, and my employees. They often have an original perspective, along with an unusual depth of knowledge. Some of the best-educated people I have ever met have been dropouts: the self-educated poet Joseph Brodsky, for instance, who won a Nobel Prize in Literature, dropped out of grade school aged fifteen.
It is best not announce your intention to never graduate, but behave accordingly. While others are busy checking off boxes on their little curriculum planning sheets and suffering through pointless required courses with mediocre instructors, you can find out what you want to learn and who you want to learn it from, and take your time to learn it well. Do not rush: if you feel that you have not absorbed all the material to your satisfaction, you can always request an incomplete and repeat the entire course free of charge. If a good project comes along, take it, take a leave of absence from school, then go back and study some more. Keep telling everyone that you intend to go back and get your degree. I know people in their late 40s who are still in good standing, always threatening to come back and finish their degree: people find them quite charming.
Do not worry too much about grades; it will make very little difference what grades you received, but it will matter a lot whether you have learned what you had set out to learn. If you are on a scholarship, then by all means maintain the average that is required of you in order to continue receiving it. Think of the grade you get as the grade you give to the professor: if the professor is excellent, then you should try to repay her with some excellence of your own.
Earth, Revisited
The last, and possibly the most formative part of your education is for you to go and see the world beyond the borders of the U.S. Learn a language, then go and backpack through countries where you can speak it. Spanish – properly the second national language – is about the easiest language you can learn, and it unlocks a huge world, which starts right within the borders of the U.S., and which offers a great richness of spirit, along with a level-headed perspective on all this gringo madness that you will have to learn to escape from.
You are at an age when parts of who you are – your outlook on life, your personality, your habits and your tastes – are still forming. There is no better way to gain a fresh perspective on the world – and on yourself – than to put yourself into an unfamiliar situation: new place, new culture, a different language. Who knows what you will find? It could be a new place to live, an acquired taste for leading a nomadic existence, or it could be a new peace of mind, a sense of self-sufficiency, or a unique perspective on life.
Fact or Opinion?
What will you do? No-one wants to take difficult steps, make their lives more difficult, or withstand privations of any sort, based on mere opinion; people want facts. What I have written here most definitely straddles the fuzzy line between opinion and fact. I have consciously avoided quoting authorities because I want to emphasize that this line really is fuzzy, and that no authority can help you make it less so. Some of what I wrote here may resonate with you, and so you would tend to consider it closer to fact than it really is. Other things I wrote here you might disagree with, and consider them just my opinion. Be that as it may; as far as your life is concerned, it is your opinion that matters, not mine.
The line between fact and opinion is always moving, sometimes imperceptibly slowly – the way an entire country sinks further and further into debt, and sometimes very fast – the way several million people suddenly lose electricity for a few weeks. It is like a shoreline on a map – quite factual, and fixed, except for the odd storm surge. If you remain dry, the shoreline shift is mere opinion; if you are forced to spend some time underwater, it is more like a fact. When will you decide it time to move to higher ground? When you find yourself underwater, and have to swim there? And what if you move to higher ground while you are still dry, and find that it is rocky and barren?
It is human nature to want to postpone making unpleasant decisions until the last moment, and we can do so with impunity, provided we leave enough options open for us to choose from. Every day that we live contentedly within the status quo, we restrict our options further and further, by making ourselves increasingly dependent on more and more systems over which we have no control, and on which we cannot rely. But there are also small, conscious steps we can take that break some of these dependencies, and create new options for ourselves. If we take enough such steps, then when the time arrives for a major, life-changing decision, we will be ready.
Yuppies
The first personal profile I will consider is of "Chris", a professional in his twenties, who lives in a large urban area in the Pacific Northwest. Chris earns some $60,000 to $90,000 a year, contributes to his employer's 401-k program, and carries massive student debt. Thankfully, he is in good health. Among his many marketable skills, none are directly applicable to an energy-scarce environment. He is a fantastic bore at parties, compulsively attempting to hold forth on the subject of resource depletion and economic collapse, and, needless to say, his parents, friends, and fiancée do not wish to hear any more about it, but love him just the same. Being uncertain of the future, he rents. Chris is a regular North American workaholic, working 50 to 60 hours a week. Chris had never given politics, oil, or the looming economic collapse much thought, until somebody handed him a copy of Mike Ruppert's book, but now he is a true believer.
As a young professional, Chris may be able to continue in his current profession, or shift to another one, to avoid dead-end career paths, and to position himself in one of the professions that is sure to see substantial growth. Clearly, many professions do not hold much promise. For example, the demand for lawyers, plastic surgeons, psychiatrists, and financial advisers will drop, because ever fewer middle-class people will require or be able to afford their services. Likewise, jobs in sales and marketing are likely to dwindle. Other professions, such as repossession, auctioneers, and undertakers, will still be very much in demand, for a time. Whether or not Chris decides to switch professions, he should choose something lucrative, work hard for a while, save up money, and get out. There is no sense in diving into these murky waters except to make a bundle, or in exposing his wealth if he manages to accumulate any. Endlessly running on a treadmill, as so many people do today, will no longer be a viable option.
Serve Your Country
If Chris finds that he needs to switch professions, and wants to remain within the official economy, then he may decide to transition into the area of government contracting, availing himself of the ample opportunities presented by official corruption, graft, and politically sanctioned organized crime, which are sure to continue seeing substantial growth. There will be a great deal of government inventory of all sorts – from very expensive weapons systems to very expensive toilet seats – to be sold off, sometimes at a substantial profit. If Chris has the flair for international deal-making, then finding foreign buyers for liquidated U.S. government assets might be something he could ease his way into.
Although government work may be steady work for a time, it also involves following rules and regulations (or at least pretending to), toeing the line, turning a blind eye, and playing the politics. Also, it rarely provides the satisfaction of getting something useful accomplished. Unless Chris manages to position himself close to the top of the food chain, where billions in public money regularly go missing with hardly any questions asked, it is also not going to be particularly lucrative. Profiting from government corruption is a high-stakes game, with only the extremely well-connected admitted to the table.
If Chris feels that playing Catch-22 is not his style and decides against working for the government, another excellent growth area, right in the middle of the newly emerging food chain, is security. As the populace becomes increasingly distressed economically, all items of value will need to be kept out of view, or carefully guarded, preferably both. The first requirement in any middling-to-large transaction will be to provide security. An organization that can provide security in an unstable environment is thus well-positioned to branch out into a multitude of other services: warehousing, logistics, transportation, finance, and legal services.
Business Redux
Last but not least, Chris can avail himself of a role in the burgeoning cash economy, which will grow to encompass an ever greater list of products and services. Currently, unreported, cash-based activities in the U.S. fall into a number of distinct categories that encompass traditional crime. I do not recommend any of these niches, since they are already fully occupied, and a shrinking economy will make for a highly competitive environment. For the sake of completeness: there will always be gambling, prostitution, graft, and murder for hire. Another large category is illegal drugs and guns. Yet another revolves around smuggling people across borders, as well as providing them with cash-based employment once they arrive. Yet another is money-laundering, by moving cash through front businesses and into bank accounts. All of these are likely to see substantial growth, with the possible exception of money laundering: as the official economy becomes deemphasized, cash stockpiles are more likely to be traded for gold and other valuable commodities than to be entrusted to shaky financial institutions.
But there will be plenty of new niches opening up for Chris to choose among. Currently, the cash economy mostly involves services and products that cannot be obtained legally. In the future, it will expand to encompass necessities that are no longer available or affordable through official channels. The list will eventually grow to include transportation, food, security, shelter, and medicine. Thus, in trying to think about business trends of the future, Chris should first expand his definition of business. Conversely, in thinking about the future legal climate, he should reason from the point of view of what will be enforceable, and, if so, to whose financial benefit, because unenforceable or unprofitable legal strictures will be eagerly overlooked, as the entire legal framework falls into disuse.
House Calls
Black market medicine promises to be particularly interesting, although perhaps not particularly lucrative. The cash economy will inevitably come to include pharmaceuticals, which in the U.S. are overpriced and often not available over the counter, but which can be manufactured in underground laboratories, or purchased elsewhere in the world and imported in bulk. In addition, every year there are more and more people for whom Western medicine does not work, or works badly, and who are learning to avail themselves of the pharmacopeia of traditional medicine. Although there are some exotic ingredients used in traditional medicine, many medicinal herbs can be grown in most places, do not require complex cultivation, and are, in fact, weeds. Once Western medicine and the pharmaceutical industry on which it depends enter a period of decline, it is likely that acceptance of traditional medicine will increase.
If black market pharmaceuticals may be somewhat lucrative, then what about black market medical practice? At some point it will come to include office visits, and even surgery, at first administered as “free care,” but if one wants a follow-up visit, then it would involve a “gift.” Currently, doctors in the U.S. are sandwiched between layers of lawyers, insurance companies, pharmaceutical companies, and hospital administrators, all of whom require a profit in order to exist. Once there is no profit to be made by anyone, only the doctors will remain, because they (and nurses) are the only ones who are indispensable to the practice of medicine. They will once again start making house calls, and work for whatever they can get: a bit of cash, or even for food, or simply because they care about their patients and want to be helpful and respected. They would be well advised to become competent herbalists before their pharmaceutical supply dries up.
Quitting While Ahead
There will be plenty of professional opportunities for Chris to continue to make a good living, although he may have to switch professions in order to take advantage of them. In spite of this, Chris should not bet his life on his ability to find a place in the new economy, and should also make sure that he can sustain himself directly. It will be an uncertain environment, fraught with dangers and complications, and Chris should be prepared to make a hasty exit if circumstances turn against him.
Chris is in a good position to marshal his resources and make preparations for a soft landing for himself, and possibly for his family and friends as well. It is likely that he will meet new people and make new friends as he makes his preparations, and it may be that these new friendships will be more conducive to achieving this goal than his current ones.
Given his high income, Chris can quickly save up a considerable sum of money by living frugally. To achieve a high savings rate, he can downgrade his car to an old beater or give up driving altogether, move into a low-rent, ethnically and racially mixed neighborhood, avoid buying new things, trash-picking and buying used stuff instead, shed unnecessary possessions, avoid buying prepared or packaged food and only buy food fresh or in bulk, and avoid going out (entertaining friends at home, or visiting them, works just as well). With these measures in place, there is no reason why his personal saving rate should be anywhere below 75% of his net earnings.
By using some of his savings, and by cashing out his retirement accounts, Chris can put together a sizable sum with which to purchase some arable land with access to water, which he can own free and clear, and on which he can build a homestead. He should retain a reserve, preferably in gold, to be able to pay property taxes far into the future. He is young and in good health, and can learn the many new skills he will need to survive. He should learn and practice these skills before he needs to rely on them for survival: once he has built his homestead, he should try a “dry run,” spending an entire summer on his land, improving it, and growing food. This experience will teach him what he will need to stockpile, and what other preparations he will need to make.
The longer Chris waits to start making these preparations, the less effective they will be, because the purchasing power of his savings is likely to decrease over time due to inflation. If he waits until after the onset of financial meltdown to make his move, he may forfeit his savings altogether, and be unable to make any preparations. He would then find himself in the same sinking boat as everyone else, stuck where he is, or wherever the government evacuates him, dependent on dwindling government assistance and meager charity for survival.
Obstacles
Chris's biggest liability is his student debt. Student loans tend to be guaranteed by the federal government, which is not subject to the same legal limitations as other creditors. The government can ignore bankruptcy laws and homestead exemptions, and can seize any property. While fixed-rate loans are likely to be rendered irrelevant by inflation, variable-rate loans should be taken seriously. If it is not possible to pay them off, then his other option is to make plans to render himself indigent. This is not trivial, but quite possible to arrange. Since a post-collapse economy generally relies on unreported cash and barter transactions rather than reported, taxed ones, Chris should be able to live out his days in peace, flying under the radar.
Chris's biggest hindrance in making effective preparations is lack of time. It is impossible to carry out the necessary research, arrangements, and exercises while working 50-60 hours a week. There are many people in his situation, forced to concentrate on a career path that requires an inordinate level of effort, because it is predicated on perpetual career advancement rather than on making one's money quickly and getting out. But with just a change of mindset, Chris can become far more creative than the average workaholic in maximizing his short-term earnings while minimizing his effort. The effort should be allocated towards getting jobs that pay the most but require the least effort, and towards finding creative ways to avoid time-consuming tasks. With this new approach, Chris should be able to work no more than 35 hours a week, at a comparable level of compensation.
Just as it is usually better to quit than to be fired, it is better to drop out voluntarily, in stages, than to wait for one's career to end due to lack of prospects for continued employment. In a business climate where most companies' crystal balls are far from clear, it is much easer to secure temporary employment than a permanent position. Contract work may not appeal to somebody who is looking forward to a long and prosperous career, but it may be very well-suited to somebody who realizes that the entire economy is circling the drain.
I believe that lack of understanding from Chris's parents, friends, or significant other is not a serious problem. It is often hard to decide just how much effort to invest in trying to enlighten any given person, but a good rule of thumb is to only offer answers to those who ask questions. The answers should consist almost exclusively of references to the most authoritative sources of information available, rather than heated expressions of personal opinion. These may give rise to more detailed questions, and perhaps even some guarded admissions of doubt. Whether or not the people around him understand what is happening, they are sure to be most grateful if, when the time comes, Chris knows what to do, while everyone around is flailing about helplessly. On the other hand, if Chris expends effort on working his loved ones into a paroxysm of despair while remaining unprepared, he will not remain popular with them for very long.
The Middle Age
Next we consider the case of “Mike” and “Mary,” who are aging baby boomers. Their combined income is around $100,000 a year. Mary has worked as a teacher for most of her life, and expects to start receiving her pension soon. Mike has worked a succession of office jobs for most of his life, and is also nearing retirement. They have a mortgage on a suburban home, and own two cars. They had planned on paying it all off over the next decade or so, and living out their golden years just as they are. They have three children: two are out of college and on their own, one is in college, nearing graduation. Mike or Mary are in fairly good health, but both have minor medical conditions that require monitoring and small amounts of medication. Mary has some gardening skills. Mike is a bit of a handyman, and can fix things around the house.
They have known that this crisis was coming since the 1970s, but did not think it would come this fast, nor did they think that it would be so severe. They found out about it by reading James Kunstler's article in Rolling Stone, then doing some research on the Internet. None of their children has shown more than a passing interest in these issues.
Old Age in Turbulent Times
The older we get, the more ossified we tend to become in our ways of thought, our habits, and our expectations. We may be unhappy with many things about our world, but, as we age, our ability to embrace change decreases, until we find ourselves resigned to live out our days with the devil we know. Some old people are quite functional when they are within their element, but put them in an unfamiliar environment, and they become disoriented, unsure of themselves, slow to adapt, and deeply distressed.
When confronted with cataclysmic, irrevocable change, some old people rebel in a peculiar fashion. For many years after the Soviet collapse, one could see a certain type of old person in the streets: miserable, dispossessed, and protesting. Often they carried with them portraits of Lenin and Stalin, held high for all to see: these were the devils they knew. Perhaps in future years we will see baby boomers on the streets of U.S. cities, begging for food while displaying their treasured portrait of Ronald Reagan as if it were holy relic, or a lucky charm, hoping against all hope for a return to a former national greatness, stoically withstanding ridicule from everyone around them.
Even in less extreme cases, in disrupted, crisis-ridden times, older people run a huge risk of becoming alienated from younger people, on whom they depend for survival. Being fixed in their ideas of right and wrong, they tend to prejudge young people, who must survive in a world where the old rules and notions no longer apply. In a futile attempt to hold on to what they see as moral high ground, they make themselves into objects of pity at best, and indifference at worst.
The Human Life-cycle
Cheap energy and the short-term bloom of humanity it has fueled have given rise to some social arrangements that are not destined to survive the onset of permanent energy scarcity. One of these is the notion that a few young people will anonymously contribute a large part of their income for the welfare of many old people they have never met or even heard of.
In the days in which most of human history has transpired, parents took care of their children as their topmost priority in life. As with many other species, it was their biological imperative to do so; beyond that, most of them were conscious of the fact that if their children did not survive, neither would they: their genes, their memories, their culture, or anything about them would be erased by time. The care of children could be entrusted to family members, but never to complete strangers. The education of children took place largely in the home, through storytelling, shared labor, and through rites of passage. The elderly, and especially the grandparents, took an active part in rearing and educating children. It was they who watched and attended to young children throughout the day, and who inculcated in them much of the ancestral wisdom – the stories, the myths, and the practical knowledge – through ceaseless, tiresome repetition.
At the trailing edge of the fossil fuel age, where we find ourselves, prosperous society looks quite different. Both parents work dismal jobs, mostly away from home, in order to keep themselves out of bankruptcy. Those who prosper most attend to their careers with far greater attention than to their children, abandoning them to the care of strangers for the better part of most days. The grandparents live elsewhere, enjoying their golden years, the fruits of their labors encapsulated in some properties, some investments, and a merciful central government that has promised to at least keep them alive even if all else fails. They are living on artificial life support that is about to be shut off.
Once the joy-ride ends, human society will revert to norm, but many will suffer, and many lives will be cut short. The elderly will get a dose of their own toxic medicine. Adult children will take care of their helpless parents only inasmuch as their parents had taken care of them when they were young and helpless. Were they placed in day-care, sent off to a boarding school, or encouraged to join the military? Well then, institutional care for the elderly must be the perfect solution! (And no use complaining; when their children were three years old and complained, did they listen to them?) Were they made to work for their allowance, to learn the spirit of free enterprise at a young age? Well then, how do their parents expect to earn their keep when they are eighty? Shape up or ship out! These words will not necessarily be said out loud; but they will be felt, and lived.
What will make matters worse is that most of the children are humans-”lite” – deprived of the stories, the myths, and the trials that human children have been put through for the past few million years, minus a bizarre century or two – and so are gravely ill-equipped for life outside the artificial life support system. They are an industrial product: almost from birth, they are placed in an entirely artificial social context, where they are evaluated, classified, and shoved through a series of institutions, to be readied for a lifetime of service in a system whose feedstock is a commodity human product: Grade A human, marketable skills up-to-date, properly credentialed. Even if their parents and grandparents were intact and able to impart wisdom, their children had not been programmed to process that sort of information.
Forever Young?
When we are young, it is easy to embrace change, to adapt, to leave our past behind; not necessarily so as we get older. When it comes to flexibility and adaptability, there is a broad spectrum of older people. There are ones that seem relatively young, but are hardened and calloused on the inside. They simply want to have what's theirs, and to be left alone. There are others that seem old and crusty, but have really been waiting all their lives for that time when they have to rise to the occasion, shake off the shackles that society has placed them in, and become amazingly alive. Yet others will simply do whatever is necessary, because that is what they have always done, for as long as they can remember; and then one day they will stop, and become like children. Yet others fall into despair, or act normal but convert their psychological shock at the changed circumstances into mysterious illnesses.
Some older people I know are like giant warehouses of knowledge – richer than the biggest library. Others hold their secrets well, looking for one or two young persons they can teach, who will deliver them one generation further. Still others simply have a rhythm to their lives that can go on forever – if you learn it, you will be able to pass it on. But plenty of others are simply dead weight: organic matter kept alive artificially. An oil-based life support system that has allowed them to be fruitful and multiply is now allowing them to persist, for a time. One more day is one more day, like fungus growing on a tree stump.
Who knows what any of this means for Mike and Mary, our two aging baby boomers with an income in the $100,000 per year range and a dream of living out their retirement in their suburban home? The fact that they are concerned about something they have read on a Web site is not significant: there are lots of alarming, and alarmist, Web sites. The fact that they have known that oil was going to run out some day since the 1970s is also not that significant: quite a few people have known that for just as long, and have not done a thing about it. The fact that their children are not the least bit interested in these matters is to be expected. Even if their motto is “do as we say, not as we do,” why should anyone expect their children to follow it? Least important is the fact that at their ripe age they are showing concern over something that has been unfolding over most of their lifetimes, and will continue unfolding, sometimes gradually, sometimes suddenly.
Out of Retirement
Mike and Mary should brace themselves for some bad news. The first piece of bad news is that their retirement is going to be canceled. Their investments and savings will be devalued, and the value of their equity in their suburban house will be negligible. They will probably continue to receive checks from the government, but it will not be enough to live on. The second piece of bad news is that there will not be any actual official paid work available to them to make up the shortfall. Nor is it likely that there will be any official recognition of their plight, or public attempts to remedy the situation, or effective political organizations for people in their predicament. This may come as a shock to a generation used to being a political force to be reckoned with.
A Byzantine system of accounting has already been put in place for forging inflation and unemployment statistics. Cost of living adjustments are always kept at about half the level of actual inflation. The term “unemployed” has been redefined to mean “eligible to receive temporary unemployment benefits.” As inflation starts to pick up, retirees on fixed incomes will gradually be driven destitute.
A Sad Alternative
If Mike's and Mary's plan is to live out their golden years in a suburban house, driving to and fro, then they clearly do not have a plan, and will gradually lose control of their lives. Almost immediately, their house will become too expensive to heat. Next, it will become impossible for them to continue driving, due to gasoline rationing and shortages. Next, electricity will be cut off. For a time, they may continue to be supplied with food by some community-based service.
At some point, if they are lucky, they will be evacuated to some hastily organized compound – most likely a dormitory or a barrack with cots and a television set in the corner, which is mostly off due to lack of electricity, and plenty of blank walls to stare at. There will be a dining hall, where they will receive their daily portions of tea and gruel.
Perhaps one of their children will come to their rescue. But it is more than likely that their own circumstances will be quite difficult, and that they will have little ability to provide for their parents, especially if none of them have made any preparations for doing so. Or perhaps they will be quite capable of providing for their parents but will not want to.
A Happier Alternative
So Mike and Mary need a plan. But who are they, and would it not be presumptuous of me to attempt to contrive a plan for them, not knowing who they are? Nevertheless, let me venture a guess or two. Is there something unique and amazing, lurking behind that vinyl-clad suburban façade and those tinted SUV windows? Even if there is not, here are some fairly basic ideas that spring to mind.
Maybe Mary's spirit has not been broken over decades spent teaching in the soulless U.S. public school system. Maybe she is ready to open her own school, in her own living room, for neighborhood kids of all ages, one that teaches something more valuable than how to pass government-mandated standardized tests. Maybe she could recruit some younger trainee teachers, who need not have the worthless degree in Education? Retired American schoolteachers are known for doing that sort of thing in other third world countries, so why not in this one?
And what about Mike and his decades of accumulated business and managerial acumen in striking deals, negotiating and enforcing contracts, and inspecting financial statements? He could, for instance, put his skills to good use in pushing through mixed use zoning, so that people in his community could open shops in their basements and garages. When the public water supply becomes contaminated, disrupted, or too expensive, perhaps Mike could help negotiate utility easements for the gathering of rainwater. He could organize rent strikes against absentee landlords, forcing them to sell to people within the community. He could help convert the school bus fleet to full-time use, serving the entire community throughout they day, rather than just children, twice a day.
The best that Mike and Mary can hope to achieve is to cluster their children around them, all living in close proximity, although preferably not in the same house. Too close is almost as bad as too far away; next door, or on the same street, is optimal. The bigger the extended household Mike and Mary are able to form, the better their chances of living comfortably. It makes little difference whether their children are aware of these preparations ahead of time. If Mike and Mary are able to offer support and practical advice to their children when the economy turns sour and their children's lives start to fall apart, they will probably accept the favor, and will later want to return it.
Suburbia Forever
Am I being overly optimistic about the promise of a reformed American suburbia? Some people are ready to declare suburbia to be at an end. But then I know that Americans are very much driven to hyperbole, always willing to put an end to something certifiably unstoppable (war, AIDS, cancer, poverty, global warming), usually by making a small charitable donation, by wearing a colorful plastic bracelet, or by going for a walk, a run, or a bicycle ride. Below the charming, childlike confidence and optimism of such ventures lurks a culturally ingrained inability to grasp something basic: not all problems are solvable.
And thus I discern an element of wishful thinking in the idea that suburbia is going to conveniently disappear, and that everyone who lives there will simply go and live someplace else. A cabin in the woods, perhaps? Or a picturesque desert island? How about a space colony? Nor do I find it plausible that half the U.S. population will lay down and die shortly after they discover that some of their cars no longer run or that their kitchen appliances no longer work. And so I find it safe to think that most of the existing infestations of Suburbia americans are ineradicable, but that the evolutionary pressure of a chronic energy shortage will force them to evolve into something much less energy-intensive. Whether, in each case, that something will turn out to be absolutely horrible, or quite pleasant, will depend on many things.
For instance, a suburb with many big lawns and golf courses could pass a series of enlightened ordinances such as “No grass shall be cut until it has gone to seed, and shall only be used for forage or fodder.” Then they could all keep ponies, ride them to the market, and live happily ever after. No, it is not quite that easy, but I am convinced that the biggest obstacle is bad habits – like keeping the grass clipped really short and putting the clippings into garbage bags to be hauled away in garbage trucks. It should not take any brilliant new inventions or high-priced initiatives to make suburbia survivable. All that is needed is for people to stop doing a lot of nonsensical things and start doing a few commonsense ones. Even if they resist, circumstances will inevitably nudge them in the right direction.
Should Mike and Mary decide to move or to stay? Do they know, and like, their neighbors? Do they think that their current community will hold together? Do they have faith in their ability to adapt? Is their suburb a place where their children will want to live? If answers to any of these questions is “no”, then they have very little to lose by moving.
If they decide to move, they could move to a small town and strive towards self-sufficiency by doing some gardening, maybe even raise some livestock. Their children may decide to join them there, once they run out of other options, which they will if they do not prepare. Or they could move to a city (one of the few compact, livable ones) – and hope that they will be taken care of there.
Finally, they could decide to leave the country altogether, but for this they would need to have quite an adventurous spirit. There are plenty of stable, if not prosperous, places on this planet, that are far less dependent on the international energy and financial markets than the U.S., and where the cataclysms that will shake the U.S. will barely register.
Youth
The final profile we will consider is of “Steve,” who is 18 years old. He found out about Peak Oil after one of his on-line video game buddies sent him some links to Web sites, which he found deeply shocking. Now he is totally freaked out. Is he about to get drafted and sent off to fight for oil in the Middle East? How is he going to survive in a collapsing society? He works a part-time job and lives with his parents, who take his fears to be the folly of youth, and assume that he will be going to college, earning a respectable degree, and entering the workforce (while going into debt at the same time).
Let us suppose that Steve's parents are correct: there will be no economic collapse any time soon. Steve will go off to college, earn a degree in accounting, get married, take out a mortgage on a suburban home, and have children. Now, if Steve's parents are reasonably well-informed, can they believe that there is more than another forty years' worth of nonrenewable resources left at their current level of production, never mind the need for sustained economic growth? As they watch the endless parade of record-setting freak weather events, with fifty-year records being broken not every fifty years, but every one or two, can they believe that none of these, together or separately, will upset Steve's well-laid plans? Even if they feel certain that they will live out their own lives in peace, why should they want Steve to work hard to perpetuate a state of affairs that they know will not last for the duration of his lifetime? Is it not the tiniest bit unethical of them to try to push their son in such a risky direction? And is it not the tiniest bit incumbent upon them to try to propose something better?
A Web of Lies
One of Steve's most severe and painful realizations, if he is lucky enough to have it, will be that he has been lied to all his life, more or less continuously, by his parents, his minders at school, and even, to some extent, his own peers. If he does not have this realization, then he will be doomed to see all that happens to him as the result his personal failings: his weakness, lack of talent, inability to fit in, or bad luck. Even if he does have this realization, he will find it difficult to live his life accordingly, because those who lack this realization, and deem themselves successful, will try to denigrate him as a misfit or a loser.
One part of the lie is that America is the best and getting better – land of possibility and so forth – and that he can achieve his dream, whatever it is, by being diligent, hard-working, and a team player. Of course, his dream must be an American dream – just like everyone else's, and involve a house in the suburbs, a couple of cars in the driveway, a couple of kids, maybe a cat and a dog, and lots of money in retirement accounts.
The other part of the lie is that Steve can live such a life and be free. He would be free - to make false choices. For breakfast Steve will have... stuff from a cardboard box with commercial art on it, excellent choice, Sir, well done! And in order to get around, he will have... a disposable vinyl-upholstered sheet metal box on four rubber wheels that burns gasoline, very wise, Sir, very wise! By choosing a prepackaged life, Steve himself would become a prepackaged product, a social appliance designed for planned obsolescence, whose useful life will be determined by the availability of the fossil fuels on which it operates.
That these are lies is plain for all to see: with each next generation, people are being forced to work harder and to go deeper into debt to maintain this suburban, middle-class lifestyle. About a third of them experience severe psychological problems. Also about a third of them do not believe that they will be able to afford to retire. The majority of them believe that they are not doing as well as their parents did.
And thus we have a three-tier generationally stratified middle-class society. At the top, we have a whole lot of happy, prosperous, self-assured old people, living it large, not willing for a moment to admit their complicity in impoverishing their children and grandchildren. In the middle we have a smaller number of their adult children, running themselves ragged, forced to delude themselves that everything is under control, just to keep up their spirits. And then there are even fewer young people like Steve, just coming of age, and, one would think, justifiably angry with the hand they have been dealt. Few of them are up to the Herculean task that has been set in front of them.
Escape Plans
This society still has plenty to offer to a young person, provided that the young person is clever enough to know how to take advantage of it. All of this advice falls into the category of “If everyone did this, society would fall apart.” Clearly, this advice is for people like Steve, and does not apply to societies, empires, or civilizations. It has been thoroughly tested right here in the U.S., and has a track record of successfully dodging society's best efforts at enslavement.
First of all, it is probably a bad idea to go straight to college. It is best to avoid getting sucked into that pipeline, which starts around the middle of senior year and ends with post-graduate indentured servitude of one sort or another. Apply to a couple of schools, strictly pro forma, to avoid suspicion. Having a high school diploma is important; the grades and test scores are somewhat important. Demonstrated excellence at one or two things is more valuable than a good average. Most important is learning the differences between your talents, you interests, and your expectations.
At this point in the game, gaining basic money-making skills is far more important, especially in the trades, such as landscaping, interior restoration, carpentry, house painting, floor sanding, mechanical repair work, and so on, because these are all jobs that can be done for cash. Avoid dangerous trades, such as roofing, abatement, and, in general, anything that involves toxic chemicals or dangerous machinery. Having some business skills is important too – knowing how to deal with bosses and customers and how to supervise people. The best approach is to work a series of short jobs – shorter than a year, learning a trade and moving on immediately, and always be on the lookout for special, unofficial projects. Think of regular employment as good cover, but not as the main source of income – and therefore best kept to part-time. Always job-hunting, switching and learning new jobs, will help keep your mind sharp. But be sure to read as well, and challenge yourself by reading difficult books – this will help you when you decide to go back to school.
Once you graduate, immediately become financially independent from your parents. Move out, and work on developing a good roommate situation. Go for the cheapest rent you can find by talking directly to landlords and offering to take care of security and maintenance. Pick your roommates carefully and try to get a cohesive group together, so that you can rely on each other. Do not accept money or other sorts of financial help from your parents. Do everything you have to so that if and when you decide to go to school, and file financial aid forms, you are not their dependent, and they are not expected to pay your college tuition or living expenses. If your parents require an explanation, it is that you care about them: you do not believe that their retirement will be enough to live on, and the money that would be swallowed up by tuition will help. If you have a system worked out for living frugally and making a bit of cash, on paper you can look penniless, which is perfect, because schools will confiscate all the money that you disclose to them. Be sure to always disclose just enough to avoid suspicion, and brush up on the laws to make sure it's all legal.
Higher What?
When thinking about attending a college or a university, it is important to understand what these institutions actually are. They are often called “institutions of higher learning,” but the learning is quite incidental to their two most important missions: research (government or industrial) and something known as “credentialing:” the granting of degrees. In many ways, it is a sort of extended hazing ritual, where the aspirant is required to jump through a series of blazing hoops before being granted access to a professional realm. An important sideline is sports, and some schools are virtual beefcake outlets, with nary a forehead in the crowd disfigured by a sentient impulse.
Excellent teaching does happen, but more or less by accident. Professors are recruited and retained based on their publications and awards (to lend prestige to the school) and their ability to attract grant money. Much of the teaching is done not by the professors themselves, but by graduate student teaching assistants, adjuncts, and various other academic minions.
The human mind learns best through repetition and through applying knowledge, but college curricula are structured so as to avoid repetition, with each course designed as a stand-alone unit. Most of the learning takes the form of cramming for tests, and what is tested is not knowledge but short-term memory. By the time students graduate, they have forgotten most of what they have been taught, but with perfectly honed cramming skills, ready to brute-force their way through any further superficial tests of their “knowledge” or “competence,” to join the swelling ranks of America's credentialed amateurs.
There is supposed to be a huge difference between the best colleges and universities and the rest. The ones considered best are mostly private, although few state schools find themselves included among them. What is taught is generally the same throughout, and the quality of the teaching is quite random. The best schools are thought to offer better chances for finding good jobs after graduation, but this is debatable.
For some students, the more prestigious schools offer a certain charmed quality: no matter how much they drink and how badly they do, they cannot flunk out. An echelon of tutors is summoned to guide their every mediocre step, all the way through graduation. These are the children of the elite, whose attendance at these institutions is more a matter of tradition than anything else. It makes no difference whether they learn anything or not: for their breed, the pedigree counts for a lot more than the obedience training. I have run across a few of these zombies with Ivy League diplomas, childish handwritings, speech peppered with nonsense syllables, and an attitude that never stops begging for a slap.
The Optimal School
This being the lay of the land, what is a young person like Steve to do? The prestige offered by the best schools would be wasted on a desolate job market, while the inevitable pile of student loans would be a millstone around his neck. And yet there is no better place to learn than a university.
I recommend that Steve choose a school not based on reputation or prestige, but word of mouth and financial advantages. The best school is the one that offers the best financial aid package, where he knows some people in the fields of study in which he is interested, which offers cheap off-campus living, and where he can find jobs to make money on the side. Steve should keep his earnings off the books whenever possible, or the school will confiscate them. The school will force him to take out some loans, so he should save enough money at the same time to cover them. He should try to find employment right at the school, because such jobs often provide a tuition waiver.
State schools have an advantage: not only are they cheaper, but a lot of the students come from the vicinity rather than from far away. When Steve makes some friends among them, they will help him gain entry into the local community. Ideally, this is also an area where he will want to continue living once he is done with school, among his new friends. Deciding to settle wherever he finds a job is not a good plan; it is much better for him to know how to find work wherever he decides to settle.
Fields of Mud
When choosing a field of study, it is important to keep in mind that there are disciplines that will abide and remain perennially valuable, while others are fluff. The sciences – Physics, Chemistry, Biology, Zoology, Botany, Geology – will serve you well. Mathematics, Philosophy, Astronomy, and a foreign language or two will make you a better person. Literature and History are invaluable, but rarely taught well; if you cannot find a truly inspired teacher, teach yourself – by reading and writing, which are the only two activities these two disciplines require.
Then there are the pseudo-sciences: Psychology, Sociology, Political Science, and Economics. They disguise themselves as sciences by employing experimental techniques and statistical analysis, and, in the case of Economics, a funky sort of math, but they are fluff, and are clearly marked with an expiration date. The distinction is quite crisp: for any subject, pick up a textbook older than fifty years. If it is a real discipline, there will be some recent discoveries and technological developments missing from it (a few elementary particles, DNA) but the rest will still look valid. If it is a fake subject, a fair percentage of it will look a bit iffy, with a smattering of stark raving nonsense.
Lastly, there are the conduits to the professions: Law, Medicine, and Engineering. They have little to do with getting an education, and everything to do with learning a trade, and, of course “credentialing.” In each case, the hazing is extreme.
The legal profession is already a bit overstocked, and, law being a luxury product, it seems unlikely that these graduates will be able to pay down their copious student loans in the new economy. Already many of them lack the option of becoming public defenders or taking on pro bono cases because of their huge financial burdens.
I have already said enough about medicine; but if Steve wants to be a doctor, there are some medical schools around the world that graduate real doctors, rather than technocrats who practice “defensive medicine” and shuffle paper half their day. After the extended sleep deprivation experiment they are put through as interns, they get to live in stately homes, fly to pharmaceutical company junkets, and play a lot of golf. That may change.
I am partial to engineering, having put myself through its rigors. It sometimes creates what I feel is a good sort of person – a bit stunted in some ways, strangely passionate about inanimate objects, but capable at many things and generally trustworthy. If Steve has exhibited the telltale tendencies – such as completely dismantling and reassembling various gadgets, and making them work perfectly again afterward – and if he looks forward to four years of scribbling out formulas under intense pressure, then engineering may be for him. Whether he will be able to earn a living by engineering is unknowable, but then engineers can usually find plenty of other things to do.
The Piece of Paper
It is often hard to tell ahead of time, but for a lot of people graduating may be quite pointless, while dropping out at an opportune moment may be quite advantageous. I know plenty of people who never graduated; they have been my bosses, my colleagues, and my employees. They often have an original perspective, along with an unusual depth of knowledge. Some of the best-educated people I have ever met have been dropouts: the self-educated poet Joseph Brodsky, for instance, who won a Nobel Prize in Literature, dropped out of grade school aged fifteen.
It is best not announce your intention to never graduate, but behave accordingly. While others are busy checking off boxes on their little curriculum planning sheets and suffering through pointless required courses with mediocre instructors, you can find out what you want to learn and who you want to learn it from, and take your time to learn it well. Do not rush: if you feel that you have not absorbed all the material to your satisfaction, you can always request an incomplete and repeat the entire course free of charge. If a good project comes along, take it, take a leave of absence from school, then go back and study some more. Keep telling everyone that you intend to go back and get your degree. I know people in their late 40s who are still in good standing, always threatening to come back and finish their degree: people find them quite charming.
Do not worry too much about grades; it will make very little difference what grades you received, but it will matter a lot whether you have learned what you had set out to learn. If you are on a scholarship, then by all means maintain the average that is required of you in order to continue receiving it. Think of the grade you get as the grade you give to the professor: if the professor is excellent, then you should try to repay her with some excellence of your own.
Earth, Revisited
The last, and possibly the most formative part of your education is for you to go and see the world beyond the borders of the U.S. Learn a language, then go and backpack through countries where you can speak it. Spanish – properly the second national language – is about the easiest language you can learn, and it unlocks a huge world, which starts right within the borders of the U.S., and which offers a great richness of spirit, along with a level-headed perspective on all this gringo madness that you will have to learn to escape from.
You are at an age when parts of who you are – your outlook on life, your personality, your habits and your tastes – are still forming. There is no better way to gain a fresh perspective on the world – and on yourself – than to put yourself into an unfamiliar situation: new place, new culture, a different language. Who knows what you will find? It could be a new place to live, an acquired taste for leading a nomadic existence, or it could be a new peace of mind, a sense of self-sufficiency, or a unique perspective on life.
Fact or Opinion?
What will you do? No-one wants to take difficult steps, make their lives more difficult, or withstand privations of any sort, based on mere opinion; people want facts. What I have written here most definitely straddles the fuzzy line between opinion and fact. I have consciously avoided quoting authorities because I want to emphasize that this line really is fuzzy, and that no authority can help you make it less so. Some of what I wrote here may resonate with you, and so you would tend to consider it closer to fact than it really is. Other things I wrote here you might disagree with, and consider them just my opinion. Be that as it may; as far as your life is concerned, it is your opinion that matters, not mine.
The line between fact and opinion is always moving, sometimes imperceptibly slowly – the way an entire country sinks further and further into debt, and sometimes very fast – the way several million people suddenly lose electricity for a few weeks. It is like a shoreline on a map – quite factual, and fixed, except for the odd storm surge. If you remain dry, the shoreline shift is mere opinion; if you are forced to spend some time underwater, it is more like a fact. When will you decide it time to move to higher ground? When you find yourself underwater, and have to swim there? And what if you move to higher ground while you are still dry, and find that it is rocky and barren?
It is human nature to want to postpone making unpleasant decisions until the last moment, and we can do so with impunity, provided we leave enough options open for us to choose from. Every day that we live contentedly within the status quo, we restrict our options further and further, by making ourselves increasingly dependent on more and more systems over which we have no control, and on which we cannot rely. But there are also small, conscious steps we can take that break some of these dependencies, and create new options for ourselves. If we take enough such steps, then when the time arrives for a major, life-changing decision, we will be ready.
© 2005 Dmitry Orlov
http://docs.google.com/View?docid=dtxqwqr_19gjjvp8
Global Economic Collapse ! World Wide Riots !!!!!
Get Ready for Mass Retail Closings
http://finance.yahoo.com/tech-ticker/article/187534/Get-Ready-for-Mass-Retail-Closings?tickers=sks,^gspc,jwn,tif,zlc
Lost jobs, mass poverty: United States threatened by riots and social unrests
http://www.lifegen.de/newsip/shownews.php4?getnews=2009-02-16-2411&pc=s02
The global financial crisis could lead to an economic meltdown - and to instable democratic structures in the western world. Because governments spend more billions than they possess, the outcome will probably be a massive inflation connected with millions of lost jobs - or even the total collapse. That's why President Barack Obama needed an astronomic 3B-stimulus. But the Big Bailout will probably end as Big Bang: With no changes on the more-growth-more-capital-more financial market power mentality there will be no escape from the crisis. A global monetary reform seems to be the last exit from chaos and before social unrests will inevitably start. Are the US awaiting the next revolution? by Vlad Dan Georgescu and Marita Vollborn
Since the existence of America's economy, private consumers have been the backbone of economics. More growth, more money to expend. Quiet simple, for decades. But America's greedy financial system led to a global crisis, threatening democracies in Europe - and maybe even in the US. Governments falling in Island may be unimportant for the rest of the world, while millions of people protesting and burning barricades in France are alarming signs of the democratic erosion.
Barack Obama now starts the fight against the great depression - but many of the crucial statistics the President's men own are to old to be used. The US Census Bureau intends to survey the nation’s spending habits, by this delivering fresh data to the President. In January 2009, U.S. Census Bureau field representatives started collecting information about how much Americans spend for groceries, clothing, transportation, housing, health care and other items from a sample of households across the country.
The Consumer Expenditure (CE) Survey program consists of two parts:
* The Interview Survey - Throughout the year, about 43,000 households will be interviewed once every three months over five calendar quarters to obtain data on relatively large expenditures and also for those expenditures that occur on a regular basis (such as rent and utilities).
* The Diary Survey - During the year, another 9,200 households will keep two consecutive one-week diaries of smaller, more frequent purchases that may be difficult for respondents to recall later (such as a fast-food purchase at a drive-through window, a soda or candy bar from a vending machine, or a carton of eggs from the supermarket).
The U.S. Bureau of Labor Statistics then calculates and publishes integrated data from the two surveys — providing a snapshot of our nation’s economy and spending habits. Government economists use the survey results to update a “market basket” of goods and services for the Consumer Price Index, our nation’s most widely used measure of inflation.
Before the CE interviews begin, households will receive a letter from the Census Bureau director informing them of their selection to participate in the survey. Census Bureau field representatives will visit these households to conduct the interview. The field representative must display an official photo identification before proceeding with the interview. Federal law ensures survey respondents’ personal information and answers are kept confidential.
The average annual amount spend for housing for the United States is $16,684, which means a percentage of total expenditures as high as 33.9.
Unfortunatelly, this is not everything the President has to know. "As of February 5, 2009, the total U.S. federal debt was $10.71 trillion, or about $37,703 per capita", explains WIKIPEDIA. The October 2008 bailout bill (H.R.1424) raised the U.S. debt ceiling (i.e. limit on how much money may be borrowed at one time) from $10 trillion to $11.3 trillion. Of this amount, debt held by the public was roughly $6.4 trillion. In 2007, the public debt was 36.8 percent of GDP, with a total debt of 65.5 percent of GDP. And even the CIA Factbook ranked the total percentage as 23rd in the world. In other words: Sooner or later, the United States are going to follow Argentina: A monetary reform would cut the national debt, but also the assets.
Social and financial crisis may lead also to comeback of European terrorism
Things are getting more complicated, not only in the US. A dangerous comeback of German terrorism could be under way - that is what the authors and publishers Marita Vollborn and Vlad D. Georgescu are predicting in their book "Brennpunkt Deutschland". According to the book, which appeared as brochure edition in February 2009 and is predicting social unrests in Europe, state guards in Germany have been observing a burgeoning of militant activities and even signs of extremely violent extremism for years. The cut of social services and the emergence of the NPD were visible at the same level as the return of the armed Left - and appear to be a possible scenario for the future. "The current financial crisis could initiate the rising of the extremistic scene, because, seen from their perspective, government support measures for fianancial institutions are a provocation considering unemployment and Hartz IV", Georgescu fears.
The entire Federal Republic may be in danger, as the book authors write: "Apart from the rise of the extreme right state officials also witnessed the powerful comeback of the militant Left since the beginning of the new millennium. The question of whether violence should be a legitimate means of eliminating the existing system is being solved: The militant groups opted for it after more than ten years of discussion - and continue to enforce their targets back to the armed struggle. "
After the end of the Red Army Faction (RAF) by the media as well as no longer perceived new generation of left Autonomous scene acting in comparison to their predecessors as a loose network - a logistical finesse, which in this country long before the idea of network Al Qaeda has been implemented . "The operating units of the militant Left usually consist of two groups; in this way can be annoying Section 129a of the Penal Code in the case of an arrest. Under the Act, there is a terrorist organization is build up from at least three offenders, "explained Vollborn and Georgescu.
Stop of the the Stock Exchancge
For the United States, such perspectives in Germany are desastrous because the social system in Europe is like heaven compared to the American one. In other words: If social decline in Europe poses such risks - what about the US? And what has to be done? First of all, America will have to reshape it's financial markets, and this means: abrogate them. Sound crazy? Not at all, considering the fact the implosion started from Wall Street, leaving millions of people homeless or jobless. There seems to be no national benefits resulting from companies abusing their financial power - and ignoring the social responsability they own.
You don't have to know what Karl Marx wrote. You don't even have to be a socialist. But you should learn what can happen if millions of people lose everything and get lost: The Russian Revolution from 1917 is the best example.
European background: Regional unemployment rates varied widely across the EU27 in 2007, from 2.1% in the region of Zeeland in the Netherlands, to 25.2% in Réunion, a French Overseas Department. Of the 263 NUTS 2 regions of the EU27 for which data are available, 28 had an unemployment rate of 3.5% or less in 2007, half the average for the EU27. They included eight regions in the Netherlands, seven in Italy, five in the United Kingdom, three each in the Czech Republic and Austria and two regions in Belgium. At the other extreme, 14 regions had a rate of 14.2% or higher, double that of the EU27: five regions in Germany, four in France (all of the Overseas Departments), two each in Spain and Slovakia and one region in Belgium. The data on regional unemployment, compiled on the basis of the EU Labour Force Survey, are taken from a report published by Eurostat. This report contains further analysis of unemployment rates in the EU regions.
MORE TO READ:
Barack Obama, Flu Pandemic, Great Depression - stay alert with our forecasts
Hirnaufnahme aus dem neuen Jülicher 4-Tesla-MRT. Foto: Forschungszentrum JülichThe global scientific community expects the next influenza flu pandemic, but when will it come? President Barack Obama tries to save the global economy - but will he manage it? Read our news to stay alert: The special interest online-magazine LifeGen.de reaches more then 90.000 unique users coming from 146 countries worldwide. The magazine is read by the scientific community, by members of political institutions and by major public media. LifeGen.de was founded in 2001 an is considered to be one of Europe’s most important lifescience Online-Magazines. More then 7100 articles can be found at the German Business Information (GENIOS). We predict social, economic and scientific developments. We anticipated the financial crisis, and did forecast many events (even Barack Obama's election) by using Google as a leading searching tool, and our brains as interpreting machines. Our content is read, appreciated and used among many others by US State Officials. (Foto: 4-Tesla MRT. Forschungszentrum Jülich, Germany)
We offer our content for reading mostly for free to the web community and every article at no cost for universities and schools who desire an access to our site-database. We believe in analytic thinking, the freedom of information and the power of the web – and therefore are looking for a long term grant for expanding and developing our site to a full non-profit information base to the public.
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2% Default and the Fed Becomes Insolvent
The end of the fiat money, fractional reserve banking experiment is inching ever closer...
Since the Fed is buying what the market doesn't want, you can be certain the default rate will exceed 2%.
[ snip ]
But what new assets is the Fed acquiring? The Fed has already started buying the debts of Fannie Mae, Freddie Mae, and the Federal Home Loan Banks. It has also bought mortgage-backed securities issued by Fannie Mae, Ginnie Mae, and Freddie Mac. Bernanke is also considering buying other securities backed by consumer loans, credit card loans, or student loans. Long-term government debt is also on the list of assets that the Fed might buy.
In the analysis of the Fed balance sheet and the condition of the dollar, another detail is extremely important. The equity ratio in the Fed balance has fallen from about 4.5 to 2%.
This figure implies an increase of the Fed's leverage from 22 to 50. As we have seen there are large new positions of dubious quality on the Federal Reserve balance sheet. More specifically, should only 2% of the Fed's assets go into default — or if there is a loss in value of 2% — the Fed becomes insolvent.
[ snip ]
http://benbittrolff.blogspot.com/
Already on the Cards
Under normal circumstances, most economies experience some minimal level of unemployment.
Even when growth is powering ahead, there are some people who don't have jobs, either because their personal circumstances have suddenly changed or because of naturally occurring fluctuations like the business birth-death cycle.
However, when enough people find themselves without jobs and are increasingly worried about future prospects, that can be the catalyst for rising social instability.
In "Job Losses Pose a Threat to Stability Worldwide," the New York Times reveals that such a development is already on the cards.
http://www.economicroadmap.com/
Job Losses Pose a Threat to Stability Worldwide
By NELSON D. SCHWARTZ
There's a fun graphic on this page showing an understated unemployment figure for the USA...
http://www.nytimes.com/2009/02/15/business/15global.html?_r=2
PARIS — From lawyers in Paris to factory workers in China and bodyguards in Colombia, the ranks of the jobless are swelling rapidly across the globe.
Worldwide job losses from the recession that started in the United States in December 2007 could hit a staggering 50 million by the end of 2009, according to the International Labor Organization, a United Nations agency. The slowdown has already claimed 3.6 million American jobs.
High unemployment rates, especially among young workers, have led to protests in countries as varied as Latvia, Chile, Greece, Bulgaria and Iceland and contributed to strikes in Britain and France.
Last month, the government of Iceland, whose economy is expected to contract 10 percent this year, collapsed and the prime minister moved up national elections after weeks of protests by Icelanders angered by soaring unemployment and rising prices.
Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.
“Nearly everybody has been caught by surprise at the speed in which unemployment is increasing, and are groping for a response,” said Nicolas Véron, a fellow at Bruegel, a research center in Brussels that focuses on Europe’s role in the global economy.
In emerging economies like those in Eastern Europe, there are fears that growing joblessness might encourage a move away from free-market, pro-Western policies, while in developed countries unemployment could bolster efforts to protect local industries at the expense of global trade.
Indeed, some European stimulus packages, as well as one passed Friday in the United States, include protections for domestic companies, increasing the likelihood of protectionist trade battles.
Protectionist measures were an intense matter of discussion as finance ministers from the Group of 7 economies met this weekend in Rome.
While the number of jobs in the United States has been falling since the end of 2007, the pace of layoffs in Europe, Asia and the developing world has caught up only recently as companies that resisted deep cuts in the past follow the lead of their American counterparts.
The International Monetary Fund expects that by the end of the year, global economic growth will reach its lowest point since the Depression, according to Charles Collyns, deputy director of the fund’s research department. The fund said that growth had come to “a virtual halt,” with developed economies expected to shrink by 2 percent in 2009.
“This is the worst we’ve had since 1929,” said Laurent Wauquiez, France’s employment minister. “The thing that is new is that it is global, and we are always talking about that. It is in every country, and it makes the whole difference.”
In Asia, any smugness at having escaped losses on American subprime debt has been erased by growing despair over a plunge in sales among major exporters. On Thursday, Pioneer of Japan said it would abandon the flat-screen television business and cut 10,000 jobs worldwide in response to sagging demand for consumer electronics.
Millions of migrant workers in mainland China are searching for jobs but finding that factories are shutting down. Though not as large as the disturbances in Greece or the Baltics, there have been dozens of protests at individual factories in China and Indonesia where workers were laid off with little or no notice.
The breadth of the problem is also becoming apparent in Taiwan, where exports were down 42.9 percent last month, compared with a year ago, the steepest plunge in Asia.
Chang Yung-yun, a 57-year-old restaurant kitchen worker, was laid off when her employer closed in mid-November. Her son, an engineer, has been put on unpaid vacation for weeks, a tactic that has become common in Taiwan.
“The greatest fear for our people is losing jobs,” Taiwan’s president, Ma Ying-jeou, said in an interview.
Calls for protectionism have resonated among a fearful public. In Britain, refinery and power plant employees walked off the job last month to protest the use of workers from Italy and Portugal at a construction project on the coast. Some held up signs highlighting Prime Minister Gordon Brown’s earlier promise of “British jobs for British workers.”
Unemployment in Britain is expected to rise to 9.5 percent by the middle of 2010, from 6.3 percent now, according to Peter Dixon, an economist with Commerzbank in London. Germany’s jobless rate could rise to 10.5 percent from 7.8 percent, he added.
In France last week, President Nicolas Sarkozy agreed to supply low-interest loans of 3 billion euros, or $3.86 billion, each to PSA Peugeot Citroën and Renault in exchange for an agreement not to lay off French workers.
To a greater extent than in past European downturns, highly trained white-collar workers are pounding the pavement, too. Naomi Runquist-Ohayon, a trademark lawyer, has been looking for work in Paris since the beginning of the year, after losing her job in December.
“This is a new experience for me,” said Ms. Runquist-Ohayon, 39, a Swedish native who has lived in Paris and London and speaks fluent English, French, Swedish and Italian. “In London, I never had to really look. Recruiters or headhunters would call me or I would call them. It’s not so easy now.”
Half a world away in Colombia, Jaime Galeano, 40, is in a similar predicament. As a bodyguard in a country notorious for drug-related violence and kidnappings, Mr. Galeano thought his profession was immune until he lost his job last year.
“The conditions for finding a job are terrible,” he said. What is more, his age is now an impediment, with a ministry informing him that only applicants under the age of 32 would be considered for new positions.
“After turning 35, a person is worth nothing,” Mr. Galeano said.
Even India, whose startling rise to the forefront of the global economy was portrayed in the hit movie “Slumdog Millionaire,” has hit a wall. About 500,000 people lost jobs between October and December 2008, according to one recent analysis.
In New Delhi, Tarun Lamba lost the first real job he ever had about a month ago, when he was laid off as a sales manager. Mr. Lamba, 24, said he knew bad news was coming because it had been weeks since he had written a truck loan. If he has to, he said, he could join his father’s business, selling clothes. But he hopes it will not come to that.
“The cycle has to keep running,” he said. “We had a boom period one year ago, now we are in a recession, and after some time the boom will come again.”
Many newer workers, especially those in countries that moved from communism to capitalism in the 1990s, have known only boom times since then. For them, the shift is especially jarring, a main reason for the violence that exploded recently in countries like Latvia, a former Soviet republic.
“For the young generation, aged 20 to 24, this is the first time we’ve had this,” said Valdis Zatlers, Latvia’s president.
The ripples from the slowdown in Europe, North America and Asia are also being felt in Africa as migrant workers abroad lose their jobs and find themselves unable to send money home.
Since his last temporary job as a metalworker in Paris ended three months ago, Ignace Abdul has halted the monthly 200 euro payments he had been sending to his wife and three children back in Senegal. “Between 2004 and 2008, I worked nonstop,” Mr. Abdul, 30, said in an interview in a bleak Paris unemployment office. “Right now, there is nothing.”
Reporting was contributed by Keith Bradsher from Taipei, Taiwan; Heather Timmons from New Delhi; Simon Romero and Jenny Carolina González from Bogota, Colombia; and Maïa de la Baume from Paris.
Why is it so hot? And what's with the hand basket?
Popular Rage Grows as Global Crisis Worsens
Pretty soon things "fall down, go boom..."
By SPIEGEL Staff
As the global economic crisis deepens, tempers around the world are getting shorter. French and British trade unions are organizing strikes, Putin is sending troops into the streets and Beijing is trying to buy itself calm.
A rally against car import duties in Krasnoyarsk, Russia: Citizens around the world are protesting against their governments' handling of the economic crisis.
REUTERS
A rally against car import duties in Krasnoyarsk, Russia: Citizens around the world are protesting against their governments' handling of the economic crisis.
In the cabinet of French President's Nicolas Sarkozy, there was talk of a "Black Thursday," and from Sarkozy's perspective, that was exactly what Jan. 29, 2009 turned out to be. Schools were closed, and so were railroads, banks and stock markets. Theaters, radio stations and even ski lifts were shut down temporarily. Trash receptacles were set on fire in Paris once again, and a crowd gathered on the city's famed Place de l'Opéra to sing the "Internationale," the anthem of revolution.
The global financial crisis has already reached France, bringing business failures, mass layoffs for some workers and reduced working hours for others. On that infamous Thursday, it drove up to 2.5 million people into the streets, in cities from Marseilles to Brest and Bordeaux. The situation was not like in May 1968, when France was in a state of emergency. Nevertheless, the country's unions called the demonstrations "historic," characterizing them as the most important protest movement to date against the current French president.
Paris is not the only place plagued by unrest. Across the English Channel in Britain, workers protested at a refinery near Immingham in Lincolnshire, triggering solidarity strikes in 19 other locations in the United Kingdom. The demonstrations became a symbol for the fears of the British lower classes, because the country -- according to the International Monetary Fund -- faces the worst downturn among all highly developed economies. Prime Minister Gordon Brown's approval rating is following the decline of the British pound.
In Russia, dismal labor statistics have driven Communists and anti-government protestors into the streets from Pskov to Volgograd in recent days, and in Moscow members of the left-wing opposition even ventured onto Red Square. They ripped up pictures of Prime Minister Vladimir Putin, until police arrested and removed them.
In China, workers returned from festivities marking the spring festival to hear shocking news from their own government. Beijing announced that about 20 million migrant workers -- more than the combined populations of Denmark, Sweden and Norway -- would likely become unemployed in the coming months. The fast pace of economic growth that has lent legitimacy to the Communist Party's hold on power until now has slowed considerably. According to a government spokesman, 2009 will be the "most difficult" year since the turn of the millennium.
About 50 million jobs could be lost worldwide in the next 11 months and more than 200 million people could drift into total poverty, warns the International Trade Union Confederation (ITUC). Guy Ryder, the group's general secretary, believes that these changes represent a "social time bomb," and that the resulting instability could become "extremely hazardous to democracy" in some countries.
In the West, the crisis could cost heads of state their jobs, as was recently the case with the prime minister of Iceland. But what does it mean for the giant countries in the East? Could the regime in Beijing falter as the country faces its greatest challenge since the beginning of market reforms? Are the Russian people terminating their political moratorium with the government, because prices are rising while the ruble falls, or could the middle class even be about to rebel?
Cabinets in London, Moscow, Beijing and Paris have been overcome by a sense of helplessness. Self-confessed workaholic Gordon Brown is trying to cope with calamity by taking constant countermeasures, while Putin sends his police officers into the street and Beijing distributes gifts to the poorest of the poor. French President Sarkozy, on the other hand, remained silent for a full seven days after the first major, large-scale demonstration.
The French president, who usually seizes every possible opportunity to grab the limelight, waited an entire week before finally reacting to nationwide strikes. Last Thursday evening, on instructions from the Elysée Palace, 90 minutes of broadcast time was made available for a television interview, and Sarkozy quickly switched into propaganda offensive mode on multiple TV and radio stations. The gist of his message was that there would be no change in direction, and that the government would continue to emphasize reforms.
In light of what he dubbed a "crisis of brutal proportions," the president knowingly pointed to "hardships" and "worries" and massaged the soul of the nation with therapeutic platitudes. But that was the extent of it, because Sarkozy knows that the Jan. 29 demonstrations did not reach critical mass by a long shot. The motley alliance of protesting professors, nurses, steel workers and students lacked a shared list of economic and political demands. Their banners made a case for wage increases, purchasing power parity or the repeal of tax reforms for the rich. At the same time, however, the protests revealed a deep-seated malaise that penetrates deeply into the conservative electorate of the governing UMP. The overwhelming majority of the French are plagued by fears of unemployment, lower incomes and shrinking savings.
The galloping decline in the economy has further damaged the president's standing. Now that his approval rating has dropped to only 39 percent, Sarkozy is very much on edge. After being booed by angry citizens during a visit to the normally tranquil town of Saint-Lô, the president reacted by imposing a disciplinary transfer on the town's prefect and chief of police.
Two-thirds of the French believe that their government -- despite the €26 billion ($34 billion) economic stimulus package, which even includes plans to renovate churches, government ministries and prisons -- is not engaging in effective crisis management.
Politically speaking, the man in charge at the Elysée Palace will remain unchallenged until 2012. Sarkozy has a solid majority in both the National Assembly and the Senate. The Communists have shrunk to the point of insignificance, and the Socialists are crippled by internecine feuds. This week, however, the alliance of trade unions is discussing new battleground tactics, and it knows that it can depend on the support of the majority of French people.
"The sympathy for the strike movement highlights the ever-deepening rift between the French and their president," warns political scientist and opinion researcher Stéphane Rozès. "We are on the brink of a new epoch, one that will be marked by growing political instability."
'The Fight Goes On'
British Prime Minister Gordon Brown's popularity is falling even faster than Sarkozy's. Despite a temporary boost last fall, when Brown showed leadership strength at home and internationally with his plan to recapitalize the banks, fewer and fewer Britons are now confident that the man at 10 Downing Street has the right recipe for the crisis.
According to recent polls, the opposition Tories have further widened their lead to a comfortable 10 to 12 percent, while only one in three Britons would vote for Labour today. The drop in the approval ratings of Brown and Chancellor of the Exchequer Alistair Darling is especially dramatic on issues of economic competence, where the pair lost a full 12 percentage points within only a month.
These are disconcerting numbers, especially for Brown's Labour party, which almost kicked the prime minister out of office last summer. Coming to grips with the public's growing anger will be one of the prime minister's most important tasks. Although Brown's smart, academic analyses against protectionism are impressive to listeners in places like Davos, the premier is increasingly alienating concerned traditional voters like the folks in Lincolnshire.
In better times, for example, the strike in front of the Lincolnshire refinery would have elicited nothing but a shrug from most British workers. The operator of the plant, the French energy company Total, had wanted to use 300 skilled workers from Italy and Portugal, provided by an Italian subcontractor, for a construction project. According to the unions, the workers were being paid less than they should have been, which Total denied.
After days of unruly strikes, the parties reached an agreement last Wednesday, in which Total agreed to provide 102 additional jobs for British workers. It was a courtesy gesture by the company to preserve the peace. Under the current law, there was nothing illegal about temporarily employing the Italian and Portuguese workers.
The 102 additional jobs are the price the company paid for social peace, but whether it will last is more than questionable. "We may have won the battle, but the fight goes on," says Shaune Clarkson of the GMB union. No one knows whether the message has reached Brown in London, where more and more observers believe that the prime minister lost touch with the public long ago.
Buying Patience
If anyone has a receptive ear for angry grumbling in the streets, it is governments like those in Beijing and Moscow. Both China and Russia experienced serious crises in the 1990s, when their old communist, state-owned enterprises were shut down. In China, 50 million people became unemployed within a short space of time, and in Russia the economic crash almost cost President Boris Yeltsin his reelection in 1996. But both regimes persevered, because both the Chinese and the Russians, after long years of communist planned economies, were undemanding. But in the wake of the economic boom of recent years and the growing prosperity of large segments of the middle class, those days are over.
Ironically, in the year in which the Chinese Communist Party plans to celebrate the 60th anniversary of its rule with a great deal of pomp, the country, for the first time in a long while, will not be able to boast impressive economic statistics. The economy grew by only 6.8 percent in the last quarter. To keep high-school and university graduates employed, China must increase its manufacturing production or the services it provides by about 8 percent annually.
No one truly believes that Communist Party leader Hu Jintao or Premier Wen Jiabao could suffer the fate of former Indonesian President Suharto, who was swept away by the 1998 Asian economic crisis after ruling the country for more than 30 years. Nevertheless, "Chinese society will likely be confronted with more conflicts and clashes in 2009, which will test the abilities of the party and government even further," warned the government-owned magazine Outlook.
Preventing unrest is the order of the day, and to that end Beijing has approved an economic stimulus package worth €460 billion ($598 billion). A portion of the money is to be spent on better social insurance programs, so that people will save less and consume more. A plan to raise the minimum wage has been postponed. Nevertheless, local governments handed out so-called "red envelopes," each containing 100 to 150 yuan (€11-17 or $14-22), to the poorest of the poor during the spring festival so they can buy food.
In addition, Beijing came up with an unusual program. As of Feb. 1, farmers are receiving a cash rebate from the government equivalent to 13 percent of the purchase price when they buy television sets, washing machines, motorcycles or refrigerators. The Communist Party hopes the program will increase consumption -- but also that it will buy it patience and sympathy.
The party is especially concerned about migrant workers, who are losing their jobs at a breathtaking rate. There is hardly any one left in their native villages for farming. The tenseness of the situation is palpable in China's so-called "job markets," such as the one in Canton's Huadu district. Last week, on a side street wedged between factories, shops and apartment buildings, hundreds of men and women jostled up to tables at several leather factories that make bags for the domestic, Russian and American markets. Jobs were available -- for a 10-hour day and without employment contracts.
Nevertheless, the mood in Canton still seems relaxed. And yet no one can predict how long the public's confidence will last. Those who, despite all efforts, can no longer afford the tuition to send their children to school or their parents to the doctor may eventually lose patience with the authorities. In recent weeks, several protests in front of factory gates have turned violent, with police vehicles going up in flames and workers ransacking party offices.
The party is especially concerned about students, who have rarely dared to take to the streets since the 1989 Tiananmen Square massacre. But this could change when their dreams of enjoying a successful career in return for the hard work of their student years threaten to evaporate.
Of the roughly 5.6 million Chinese who graduated from universities and technical colleges in 2008, about a million are still without work. This year, the number of graduates entering the job market will be even higher, at 6.1 million. "If you are worried, you can rest assured that I am even more worried," Premier Wen told a group of students.
Strong Steps
These are not the kinds of words Russians hear from their prime minister. Since the fall, when Putin was still publicly denying that the world financial crisis posed a threat to Russia, Moscow has primarily been preparing itself for one thing: to keep its own people in check if worse comes to worst.
The rulers' fear of the ruled has plagued every Russian government since the days of the czars. It suddenly reappeared when Yevgeny Gontmacher, a respected social economist, published his essay "Novocherkassk 2009," in which he warned against uprisings in the provinces. The essay alluded to the riots that broke out in the southern Russian industrial city of Novocherkassk in June 1962, following price increases. Five thousand angry workers took to the streets, and the police and army were ordered to shoot the protestors. More than 20 people died, and seven ringleaders were executed.
The mere mention of this long-suppressed drama was enough for the authorities to threaten to withdraw the license of the liberal business magazine Vedomosti, which had published Gontmacher's article. The magazine was accused of "incitement to extremism" -- and this despite the fact that the author had held an important post under Putin.
But in taking this approach, the Kremlin merely confirmed Gontmacher's core thesis, namely that the Putin system, which increasingly emphasized central control and repression of political foes already during times of economic growth, is incapable of responding flexibly in a serious crisis. Indeed, the government reacted in panic immediately after the first demonstrations by angry merchants in Vladivostok, who were incensed over an increase in import duties for Western used cars, by portraying the protestors as the victims of foreign intelligence services.
Pavel Verstov, a member of Putin's United Russia party until recently, can also attest to the Kremlin's helplessness. Verstov, a local journalist, had reported on suicides at the largest steel mill in Magnitogorsk, an industrial city in the Ural Mountains region. Four workers had killed themselves because they could no longer repay their debts. Hundreds of thousands of Russians are now under similar pressure, after having taken out euro or dollar loans from banks to buy houses or cars. But now that the ruble has lost 47 percent of its value against the dollar since last September, the borrowers' salaries are no longer sufficient to service their debt.
Verstov was expelled from the government party. A local party official branded him as a "troublemaker" and declared: "the security forces will take strong steps to thwart all attempts to destabilize society." He called upon his fellow party members to stand behind President Dmitry Medvedev and Prime Minister Vladimir Putin.
The two men are still strong in the polls, with Putin's approval rating at 83 percent. However, polls conducted by the public opinion research institute Levada Center show that confidence in the government is vanishing almost as quickly as the country's financial reserves. While only 27 percent believed that the country is moving "in a wrong direction" in October 2008, that number had already risen by half by the end of December. Almost one in two citizens fears that "the government cannot effectively combat inflation and salary losses."
To bolster the banks, the ruble and heavily indebted major companies, the government has already spent a third of its once formidable foreign currency reserves. After a still-respectable economic growth figure of 5.6 percent in 2008, German Gref, a former economics minister who now heads the country's largest bank, now expects three years of recession and stagnation. "The government does not have a plan to cope with the crisis," says Gref.
In this situation, it is not Garry Kasparov, the leader of the extra-parliamentary opposition, who poses a threat to the Moscow power elite, because the former world chess champion has far more supporters in the West than in Russia. And Communist Party leader Gennady Zyuganov, for his part, has made his peace with the powers that be.
The real threat comes from another direction. The Kremlin fears that members of the middle class, loyal Putin supporters, will withdraw their support if the prosperity of recent years vanishes. In December alone, disposable income sank by 11.6 percent, and 5.8 million people are already officially unemployed. Arkady Dvorkovich, economic advisor to President Medvedev, believes that the unofficial figure is closer to 20 million.
So far, few have protested in Putin's giant realm. But the fact that there have already been open calls for Putin to resign -- as in Vladivostok -- shows how quickly supposedly stable power can be eroded.
A respected Moscow political scientist points to a dangerous disaffection between the "ruling elite" and the passive majority, warning that there are no longer any functioning relations between the country's rulers and its population, television excluded. In times like these, he says, this could prove to be devastating -- and it could ruin the Putin system.
THOMAS HÜETLIN, ANDREAS LORENZ, CHRISTIAN NEEF,
MATTHIAS SCHEPP, STEFAN SIMONS
Translated from the German by Christopher Sultan
URL:
* http://www.spiegel.de/international/world/0,1518,606721,00.html
As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.
In Moscow, Igor Panarin's Forecasts Are All the Rage; America 'Disintegrates' in 2010
By ANDREW OSBORN
MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.
[Prof. Panarin]
Igor Panarin
In recent weeks, he's been interviewed as much as twice a day about his predictions. "It's a record," says Prof. Panarin. "But I think the attention is going to grow even stronger."
Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.
But it's his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin's views also fit neatly with the Kremlin's narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.
A polite and cheerful man with a buzz cut, Mr. Panarin insists he does not dislike Americans. But he warns that the outlook for them is dire.
"There's a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we're talking reasonably, it's not the best scenario -- for Russia." Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.
Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces -- with Alaska reverting to Russian control.
In addition to increasing coverage in state media, which are tightly controlled by the Kremlin, Mr. Panarin's ideas are now being widely discussed among local experts. He presented his theory at a recent roundtable discussion at the Foreign Ministry. The country's top international relations school has hosted him as a keynote speaker. During an appearance on the state TV channel Rossiya, the station cut between his comments and TV footage of lines at soup kitchens and crowds of homeless people in the U.S. The professor has also been featured on the Kremlin's English-language propaganda channel, Russia Today.
Mr. Panarin's apocalyptic vision "reflects a very pronounced degree of anti-Americanism in Russia today," says Vladimir Pozner, a prominent TV journalist in Russia. "It's much stronger than it was in the Soviet Union."
Mr. Pozner and other Russian commentators and experts on the U.S. dismiss Mr. Panarin's predictions. "Crazy ideas are not usually discussed by serious people," says Sergei Rogov, director of the government-run Institute for U.S. and Canadian Studies, who thinks Mr. Panarin's theories don't hold water.
Mr. Panarin's résumé includes many years in the Soviet KGB, an experience shared by other top Russian officials. His office, in downtown Moscow, shows his national pride, with pennants on the wall bearing the emblem of the FSB, the KGB's successor agency. It is also full of statuettes of eagles; a double-headed eagle was the symbol of czarist Russia.
The professor says he began his career in the KGB in 1976. In post-Soviet Russia, he got a doctorate in political science, studied U.S. economics, and worked for FAPSI, then the Russian equivalent of the U.S. National Security Agency. He says he did strategy forecasts for then-President Boris Yeltsin, adding that the details are "classified."
In September 1998, he attended a conference in Linz, Austria, devoted to information warfare, the use of data to get an edge over a rival. It was there, in front of 400 fellow delegates, that he first presented his theory about the collapse of the U.S. in 2010.
"When I pushed the button on my computer and the map of the United States disintegrated, hundreds of people cried out in surprise," he remembers. He says most in the audience were skeptical. "They didn't believe me."
At the end of the presentation, he says many delegates asked him to autograph copies of the map showing a dismembered U.S.
He based the forecast on classified data supplied to him by FAPSI analysts, he says. He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S. When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union. Social unrest up to and including a civil war will follow. The U.S. will then split along ethnic lines, and foreign powers will move in.
California will form the nucleus of what he calls "The Californian Republic," and will be part of China or under Chinese influence. Texas will be the heart of "The Texas Republic," a cluster of states that will go to Mexico or fall under Mexican influence. Washington, D.C., and New York will be part of an "Atlantic America" that may join the European Union. Canada will grab a group of Northern states Prof. Panarin calls "The Central North American Republic." Hawaii, he suggests, will be a protectorate of Japan or China, and Alaska will be subsumed into Russia.
"It would be reasonable for Russia to lay claim to Alaska; it was part of the Russian Empire for a long time." A framed satellite image of the Bering Strait that separates Alaska from Russia like a thread hangs from his office wall. "It's not there for no reason," he says with a sly grin.
Interest in his forecast revived this fall when he published an article in Izvestia, one of Russia's biggest national dailies. In it, he reiterated his theory, called U.S. foreign debt "a pyramid scheme," and predicted China and Russia would usurp Washington's role as a global financial regulator.
Americans hope President-elect Barack Obama "can work miracles," he wrote. "But when spring comes, it will be clear that there are no miracles."
The article prompted a question about the White House's reaction to Prof. Panarin's forecast at a December news conference. "I'll have to decline to comment," spokeswoman Dana Perino said amid much laughter.
For Prof. Panarin, Ms. Perino's response was significant. "The way the answer was phrased was an indication that my views are being listened to very carefully," he says.
The professor says he's convinced that people are taking his theory more seriously. People like him have forecast similar cataclysms before, he says, and been right. He cites French political scientist Emmanuel Todd. Mr. Todd is famous for having rightly forecast the demise of the Soviet Union -- 15 years beforehand. "When he forecast the collapse of the Soviet Union in 1976, people laughed at him," says Prof. Panarin.
NONSENSE.
Rioting Greeks, angry Germans and why the euro may well collapse
http://www.dailymail.co.uk/debate/article-1128262/MARY-ELLEN-SYNON-Rioting-Greeks-angry-Germans--Euro-collapse.html
World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come
http://www.timesonline.co.uk/tol/news/world/europe/article5559773.ece?print=yes&randnum=1232640914919
Our third global political column explores the start of an age of rebellion over the financial crisis - beginning in Iceland
Protesters rally during a weekly demonstration against the country's financial situation in Reykjavik
(Halldor Kolbeins/AFP/Getty Images)
Icelanders vented their fury at the political class's handling of the financial crisis by staging angry protests in Reykjavik
Image :1 of 2
Roger Boyes
Icelanders all but stormed their Parliament last night. It was the first session of the chamber after what might appear to be an unusually long Christmas break.
Ordinary islanders were determined to vent their fury at the way that the political class had allowed the country to slip towards bankruptcy. The building was splattered with paint and yoghurt, the crowd yelled and banged pans, fired rockets at the windows and lit a bonfire in front of the main door. Riot police moved in.
Now in the grand sweep of the current crisis, a riot on a piece of volcanic rock in the north Atlantic may not seem to add up to much. But it is a sign of things to come: a new age of rebellion.
The financial meltdown has become part of the real economy and is now beginning to shape real politics. More and more citizens on the edge of the global crisis are taking to the streets. Bulgaria has been gripped this month by its worst riots since 1997 when street power helped to topple a Socialist government. Now Socialists are at the helm again and are having to fend off popular protests about government incompetence and corruption.
In Latvia – where growth has been in double-digit figures for years – anger is bubbling over at official mismanagement. GDP is expected to contract by 5 per cent this year; salaries will be cut; unemployment will rise. Last week, in a country where demonstrators usually just sing and then go home, 10,000 people besieged parliament.
Iceland, Bulgaria, Latvia: these are not natural protest cultures. Something is going amiss.
The LSE economist Robert Wade – addressing a protest meeting in Reykjavik’s cinema – recently warned that the world was approaching a new tipping point. Starting from March-May 2009, we can expect large-scale civil unrest, he said. “It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds of millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse not better; and that it has escaped the control of public authorities, national and international.”
Ukraine could be the next to go. The gas pricing deal agreed with Moscow could propel the country towards a serious financial crisis. Russia, too, is looking wobbly. A riot in Vladivostok may have been an omen for things to come. What will happen when the wider economic crisis translates into higher food prices? Or if Gazprom has no choice but to increase domestic gas prices?
Governments have so far managed to deflect attention from their role in the crash, their slipshod monitoring, by declaring themselves to be indispensible to the solution. This may save the skins of politicians in wealthier countries who can credibly and expensively try to prop up banks and sickly industries. But it does not work in countries that are heavily indebted, with bloated and exposed financial sectors. There, the irate crowds are already beginning to demand: why hasn’t a single politician resigned? What has happened to ministerial responsibility? Who will investigate government failure?
Good questions, it seems to me, in these unquiet times.
U.S. Mint Actions Discourage Gold Ownership
by: Michael Zielinski January 23, 2009 | about stocks: GLD
Michael Zielinski
Other countries are making gold available at their frickin post offices...
http://seekingalpha.com/article/116070-u-s-mint-actions-discourage-gold-ownership
Over the past several months, the United States Mint has announced a series of actions and policy changes that make it more difficult for the average individual to buy gold. There have always been plausible or semi-plausible explanations, but the consequence of each action has been to limit or discourage gold ownership.
The recent actions of the United States Mint in relation to gold are presented below. I have also included the US Mint’s explanation for each situation, taken from official memorandums or press releases.
August 2008: The US Mint suspends sales of Gold Eagle bullion coins. Sales resume two weeks later on a rationed basis.
On August 14, 2008, the US Mint announced that they were suspending sales of American Gold Eagle bullion coins. The suspension was in place until August 25, 2008, when sales resumed under an allocation program. The program divides available gold coins into two pools. The first pool is divided equally among all authorized bullion purchasers. The second pool is allocated based on past sales performance.
When gold coin rationing (termed “allocation”) was introduced, it was presented as a temporary measure. More than four months later, gold coin rationing continues. There has been no indication when authorized bullion purchasers will be able to order unrestricted quantities of gold bullion coins.
US Mint explanation:
The unprecedented demand for American Eagle gold one-ounce bullion coins necessitates our allocating these coins among the authorized purchasers on a weekly basis until we are able to meet demand.
September 2008: The US Mint suspends sales of Gold Buffalo bullion coins. Sales resume more than one month later, but only to clear remaining inventory.
On September 25, 2008, the US Mint announced the sales suspension of 24 karat American Gold Buffalo bullion coins. Sales did not resume until November 2, 2008 when the US Mint was able to offer only its remaining limited inventory on an allocated basis.
US Mint explanation:
Demand has exceeded supply for American Buffalo 24-Karat Gold One-Ounce Bullion Coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins.
October 6, 2008: The US Mint announces that production will be halted for all but one gold bullion coin option.
Production was immediately halted for one-half ounce and one-quarter ounce American Gold Eagle bullion coins. Production of one tenth-ounce gold bullion coins was halted following depletion of the remaining blank supplies. Production of one ounce Gold Buffalo bullion coins was also halted following depletion of the remaining blank supplies.
These coins represent the US Mint’s only fractional gold bullion coin offerings and the US Mint’s only 24 karat gold bullion offering. The production halt seemed to be a temporary measure that would impact 2008 dated coins. The production halt has continued into 2009. There has been no indication when production will resume.
US Mint explanation:
The United States Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the United States Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins.
November 10, 2008: The US Mint announces the discontinuation of numerous gold and platinum numismatic products.
The discontinuation of 22 different gold and platinum numismatic products was included as a broader measure to refocus the US Mint’s line of products for coin collectors. Discontinued gold coin products included fractional uncirculated Gold Buffalo coins, one ounce uncirculated Gold Buffalo coins, fractional proof Gold Buffalo coins, and fractional uncirculated Gold Eagle coins.
Although the US Mint has constantly referred to the “unprecedented demand” for gold, they deemed their gold numismatic products to be “unpopular.” Following the discontinuation announcement, sales of the 2008-dated versions of the discontinued coins surged and all numismatic Gold Buffalo and platinum coin offerings sold out in less than a month.
US Mint explanation:
We are responding to the collector community which has spoken loudly and clearly. Customers have told us there are just too many products. We agree, and it’s time the United States Mint trims down and concentrates on the products our customers love most.
November 24, 2008: The US Mint announces the delayed release of all but one 2009 gold bullion coin option.
This delayed release served to prolong the previously announced production halts for fractional gold bullion coins and the 24 karat Gold Buffalo bullion coins. As noted previously, the production halt continues with no indication of when it might end.
The single 2009 gold bullion offering from the US Mint continues to be subject to rationing. As noted previously, there has been no indication of when the rationing will end.
US Mint statement:
The quantities of blanks that we have been able to acquire from our suppliers continue to be very limited, while demand for bullion coins remains high. As a result, it is necessary for the United States Mint to delay the launch of other bullion coins until later in 2009. We will continue to monitor the situation and keep you informed as additional information becomes available.
January 6, 2009: The US Mint establishes a new pricing policy for gold and platinum numismatic products.
The new US Mint pricing policy adjusts the prices for gold and platinum numismatic products as often as weekly based on the average London AM Fix gold price. The prices for coins are based on a published table which seems to impute higher premiums than the old pricing system.
In the past, prices were established at the start of sales and remained fixed unless there was a significant move in the price of the underlying precious metal. At times gold numismatic products could be purchased for premiums as low as 10%. Under the new policy, prices are adjusted weekly to preserve permanently high premiums. Current premiums run 30% or more depending on the product.
US Mint explanation:
Transparency, agility, and customer service are the catalysts for our new pricing method. The volatile precious metals market prompted our customers to suggest that we re-vamp our process, and we listened.
Conclusion?
The series of incremental changes outlined above has resulted in the following situation:
* Production was halted for all of the US Mint’s fractional gold bullion and 24 karat gold bullion offerings several months ago. There has been no indication when production might resume.
* The only 2009 gold bullion coin available from the US Mint is the one ounce American Gold Eagle. Sales of this single bullion coin offering remain subject to rationing.
* The US Mint’s gold numismatic offerings for 2009 have been significantly reduced from the prior year. The remaining product offerings will be priced at prohibitively high premiums under a newly established pricing policy.
Whether or not it was the US Mint’s intention, every significant action they have taken since August has either limited gold availability, eliminated gold product options, or increased the cost of acquiring gold. Has it all just been a consequence of surging global demand for gold, supply chain mismanagement, and bad timing for policy decisions? Or is there something else going on here?
[AGENDA?]
Thank you to APMEX for confirming the status of the US Mint’s 2009 gold bullion coins for this post.
Global Violence, Gold: But Not Yet
Go for that charts:
http://benbittrolff.blogspot.com/2009/01/global-violence-gold-but-not-yet.html
Writing on wall...Americans have guns the blue line and even te green line are mighty thin...
In Angry Jobless Indians: Social Contracts I warned of the pending social unrest that will sweep the globe as the economic situation continues to deteriorate:
“10 million unemployed you men make for a 'volatile' political environment in the world's largest, messiest democracy where an election goes well if only a few small bombs go off.
Other major export economies are in just as much trouble. In China: “The figures are horrifying.” I wrote:
“The social contract is that the government creates widespread economic prosperity. In return, the plebs won’t make trouble for the ruling patricians. They also won’t demand political liberty. Export jobs in China are disappearing as fast as in India and the social contract is about to be severely stressed.”
In Hyperinflation Then Global War I discussed the book The War of the World by Nial Ferguson:
“Ferguson develops a theory to explain the brutal violence of the 20th century. He postulates that ethnic unrest is prone to break out during periods of economic volatility and uncertainty. Severe economic distress has the tendency to suddenly unravel even advanced processes of ethnic assimilation which then rapidly escalate into full-scale conflict. The catalyst for catastrophe is always the decline of great economic and political powers and more importantly the emergence of new powers.”
Protests are popping up all over the world now. They’re small and they’re being ‘managed’. However, the global economy will continue to deteriorate and somewhere some government will fail under the stress. If the governments that fall are in an ethnically homogenous country, any transition will be fairly uneventful. If the governments that fall are in an ethnically diverse country, expect trouble.
The trade is to go long violence and short tranquility some how. Despite my deflationary stance, gold springs to mind… but not quite yet.
Gold is still making lower highs and the down trend holds. Watch the $900 level and watch the news. Real geopolitical developments will occur quickly.
FACTBOX-European governments face protests over economy: “Protests against governments and banks have increased in some European countries as the global economy has deteriorated.
Here are details of some of the protests around Europe:
* ICELAND:
-- Police used teargas against anti-government protesters when a demonstration outside parliament turned violent on Thursday.
-- The parliament building has become the focus of anger against Prime Minister Geir Haarde's coalition government's handling of the financial crisis. Demonstrators have called for the prime minister and other senior officials to resign and his limousine was pelted with eggs by demonstrators on Wednesday.
* BULGARIA:
-- Hundreds of Bulgarians demanded economic and social reforms in the face of a global slowdown on Wednesday in a second week of anti-government protests.
-- Students, teachers, green activists, doctors and public servants took part in the rally in front of parliament in Sofia, calling on the Socialist-led government to take action or step down. Many shouted "Mafia" and "Resign".
-- Last week hundreds of protesters clashed with police, smashed windows and damaged cars in Sofia when a rally against corruption and slow reforms in the face of the economic crisis turned into a riot.
* GREECE:
-- High youth unemployment was a main driver for unrest in Greece, initially sparked by the police shooting of a youth in an Athens suburb. General unemployment runs just above the EU average at 7.4 percent but the figure is 21.2 percent for the 15-24 age group and 10.5 percent for those aged 25-34. The protest forced a government reshuffle.
* LATVIA:
-- Last week, a 10,000-strong protest in Latvia descended into a riot, some protesters trying to storm parliament before going on the rampage. Government steps to cut wages, as part of an austerity plan to win international aid, have angered people.
* LITHUANIA:
-- Police fired teargas last week to disperse demonstrators who pelted parliament with stones in protest at government cuts in social spending to offset an economic slowdown. Police said 80 people were detained and 20 injured during the violence.
-- Prime Minister Andrius Kubilius, who was only sworn in in December, said the violence would not stop an austerity plan launched after a slide in output and revenues.
24 Things That Are About To Go Extinct
http://scoutmagazine.ca/2009/01/03/24-things-about-to-go-extinct/
January 3, 2009 by Andrew Morrison
Filed under Andrew Morrison, News & Opinion
Leave a comment
An interesting email came my way from a friend in Tofino this morning. I assume it’s one of those viral things meant to be passed on from inbox to inbox, but rather than forward it I thought I’d just post it. It’s called “24 Things About To Become Extinct In America”. Read on:
Yellow Pages
This year will be pivotal for the global Yellow Pages industry. Much like newspapers, print Yellow Pages will continue to bleed dollars to their various digital counterparts, from Internet Yellow Pages(IYPs), to local search engines and combination search/listing services like Reach Local and Yodle Factors like an acceleration of the print ‘fade rate’ and the looming recession will contribute to the onslaught. One research firm predicts the falloff in usage of newspapers and print Yellow Pages could even reach 10% this year — much higher than the 2%-3% fade rate seen in past years.
Classified Ads
The Internet has made so many things obsolete that newspaper classified ads might sound like just another trivial item on a long list. But this is one of those harbingers of the future that could signal the end of civilization as we know it. The argument is that if newspaper classifieds are replaced by free online listings at sites like Craigslist.org and Google Base, then newspapers are not far behind them.
Movie Rental Stores
While Netflix is looking up at the moment, Blockbuster keeps closing store locations by the hundreds. It still has about 6,000 left across the world, but those keep dwindling and the stock is down considerably in 2008, especially since the company gave up a quest of Circuit City. Movie Gallery, which owned the Hollywood Video brand, closed up shop earlier this year. Countless small video chains and mom-and-pop stores have given up the ghost already.
Dial-up Internet Access
Dial-up connections have fallen from 40% in 2001 to 10% in 2008. The combination of an infrastructure to accommodate affordable high speed Internet connections and the disappearing home phone have all but pounded the final nail in the coffin of dial-up Internet access.
Phone Landlines
According to a survey from the National Center for Health Statistics, at the end of 2007, nearly one in six homes was cell-only and, of those homes that had landlines, one in eight only received calls on their cells.
Chesapeake Bay Blue Crabs
Maryland’s icon, the blue crab, has been fading away in Chesapeake Bay. Last year Maryland saw the lowest harvest (22 million pounds) since 1945. Just four decades ago the bay produced 96 million pounds. The population is down 70% since 1990, when they first did a formal count. There are only about 120 million crabs in the bay and they think they need 200 million for a sustainable population. Over-fishing, pollution, invasive species and global warming get the blame.
VCRs
For the better part of three decades, the VCR was a best-seller and staple in every American household until being completely decimated by the DVD, and now the Digital Video Recorder (DVR). In fact, the only remnants of the VHS age at your local Wal-Mart or Radio Shack are blank VHS tapes these days. Pre-recorded VHS tapes are largely gone and VHS decks are practically nowhere to be found. They served us so well.
Ash Trees
In the late 1990s, a pretty, iridescent green species of beetle, now known as the emerald ash borer, hitched a ride to North America with ash wood products imported from eastern Asia. In less than a decade, its larvae have killed millions of trees in the Midwest, and continue to spread. They’ve killed more than 30 million ash trees in south-eastern Michigan alone, with tens of millions more lost in Ohio and Indiana. More than 7.5 billion ash trees are currently at risk.
Ham Radio
Amateur radio operators enjoy personal (and often worldwide) wireless communications with each other and are able to support their communities with emergency and disaster communications if necessary, while increasing their personal knowledge of electronics and radio theory. However, proliferation of the Internet and its popularity among youth has caused the decline of amateur radio. In the past five years alone, the number of people holding active ham radio licenses has dropped by 50,000, even though Morse Code is no longer a requirement.
The Swimming Hole
Thanks to our litigious society, swimming holes are becoming a thing of the past. ‘20/20′ reports that swimming hole owners, like Robert Every in High Falls, NY, are shutting them down out of worry that if someone gets hurt they’ll sue. And that’s exactly what happened in Seattle. The city of Bellingham was sued by Katie Hofstetter who was paralyzed in a fall at a popular swimming hole in Whatcom Falls Park. As injuries occur and lawsuits follow, expect more swimming holes to post ‘Keep out!’ signs.
Answering Machines
The increasing disappearance of answering machines is directly tied to No 20 our list — the decline of landlines. According to USA Today, the number of homes that only use cell phones jumped 159% between 2004 and 2007. It has been particularly bad in New York; since 2000, landline usage has dropped 55%. It’s logical that as cell phones rise, many of them replacing traditional landlines, that there will be fewer answering machines.
Cameras That Use Film
It doesn’t require a statistician to prove the rapid disappearance of the film camera in America. Just look to companies like Nikon, the professional’s choice for quality camera equipment. In 2006, it announced that it would stop making film cameras, pointing to the shrinking market — only 3% of its sales in 2005, compared to 75% of sales from digital cameras and equipment.
Incandescent Bulbs
Before a few years ago, the standard 60-watt (or, yikes,100-watt) bulb was the mainstay of every U.S. home. With the green movement and all-things-sustainable-energy crowd, the Compact Fluorescent Light bulb(CFL) is largely replacing the older, Edison-era incandescent bulb. The EPA reports that 2007 sales for Energy Star CFLs nearly doubled from 2006, and these sales accounted for approximately 20 percent of the U.S. light bulb market. And according to USA Today, a new energy bill plans to phase out incandescent bulbs in the next four to 12 years.
Stand-Alone Bowling Alleys
BowlingBalls.us claims there are still 60 million Americans who bowl at least once a year, but many are not bowling in stand-alone bowling alleys. Today most new bowling alleys are part of facilities for all types or recreation including laser tag, go-karts, bumper cars, video game arcades, climbing walls and glow miniature golf. Bowling lanes also have been added to many non-traditional venues such as adult communities, hotels and resorts, and gambling casinos.
The Milkman
According to the U.S. Department of Agriculture, in 1950, over half of the milk delivered was to the home in quart bottles, by 1963, it was about a third and by 2001, it represented only 0.4% percent. Nowadays most milk is sold through supermarkets in gallon jugs. The steady decline in home-delivered milk is blamed, of course, on the rise of the supermarket, better home refrigeration and longer-lasting milk. Although some milkmen still make the rounds in pockets of the U.S., they are certainly a dying breed.
Hand-Written Letters
In 2006, the Radicati Group estimated that, worldwide, 183 billion e-mails were sent each day. Two million each second. By November of 2007, an estimated 3.3 billion Earthlings owned cell phones, and 80% of the world’s population had access to cell phone coverage. In 2004, half-a-trillion text messages were sent, and the number has no doubt increased exponentially since then. So where amongst this gorge of gabble is there room for the elegant, polite hand-written letter?
Wild Horses
It is estimated that 100 years ago, as many as two million horses were roaming free within the United States. In 2001, National Geographic News estimated that the wild horse population had decreased to about 50,000 head. Currently, the National Wild Horse and Burro Advisory Board states that there are 32,000 free roaming horses in ten Western states, with half of them residing in Nevada. The Bureau of Land Management is seeking to reduce the total number of free range horses to 27,000, possibly by selective euthanasia. (Let’s hear it for our own Sable Island ponies in Nova Scotia!)
Personal Cheques
According to an American Bankers Assoc. report, a net 23% of consumers plan to decrease their use of cheques over the next two years, while a net 14% plan to increase their use of PIN debit. Bill payment remains the last stronghold of paper-based payments — for the time being. Cheques continue to be the most commonly used bill payment method, with 71%of consumers paying at least one recurring bill per month by writing a cheque. However, on a bill-by-bill basis, cheques account for only 49% of consumers’ recurring bill payments (down from 72% in 2001 and 60% in 2003).
Drive-in Theaters
During the peak in 1958, there were more than 4,000 drive-in theatres in this country, but in 2007 only 405 drive-ins were still operating. Exactly zero new drive-ins have been built since 2005. Only one reopened in 2005 and five reopened in 2006, so there isn’t much of a movement toward reviving the closed ones.
Mumps & Measles
Despite what’s been in the news lately, the measles and mumps actually, truly are disappearing from the United States. In 1964, 212,000 cases of mumps were reported in the U.S. By 1983, this figure had dropped to 3,000, thanks to a vigorous vaccination program. Prior to the introduction of the measles vaccine, approximately half a million cases of measles were reported in the U.S. annually, resulting in 450 deaths. In 2005, only 66 cases were recorded.
Honey Bees
Perhaps nothing on our list of disappearing America is so dire; plummeting so enormously; and so necessary to the survival of our food supply as the honey bee. Very scary. ‘Colony Collapse Disorder,’ or CCD, has spread throughout the U.S. and Europe over the past few years, wiping out 50% to 90% of the colonies of many beekeepers — and along with it, their livelihood.
News Magazines and TV News
While the TV evening newscasts haven’t gone anywhere over the last several decades, their audiences have. In 1984, in a story about the diminishing returns of the evening news, the New York Times reported that all three network evening-news programs combined had only 40.9 million viewers. Fast forward to 2008, and what they have today is half that.
Analog TV
According to the Consumer Electronics Association, 85% of homes in the U.S. get their television programming through cable or satellite providers. For the remaining 15% — or 13 million individuals — who are using rabbit ears or a large outdoor antenna to get their local stations, change is in the air. If you are one of these people you’ll need to get a new TV or a converter box in order to get the new stations which will only be broadcast in digital.
The Family Farm
Since the 1930s, the number of family farms has been declining rapidly. According to the USDA, 5.3 million farms dotted the nation in 1950, but this number had declined to 2.1 million by the 2003 farm census (data from the 2007 census hasn’t yet been published). Ninety-one percent of the U.S. farms are small family farms.
The Unavoidable Face Of Hyperinflation
Posted: Jan 14 2009
By: Jim Sinclair
Post Edited: January 14, 2009 at 1:32 am
http://jsmineset.com/index.php/2009/01/14/the-unavoidable-face-of-hyperinflation/
Unavoidable, inevitable NOT SAME as eminent.
Dear CIGAs,
CIGA Erik shows in chart form the face of unavoidable hyperinflation - a currency event.
It is horrifying what the Fed and Treasury injected in percentage terms. A true measure of comparison can be seen in the 3 months of 2008 when the Fed accomplished more than in the 7 years from 1929 to 1937.
This is beyond all reason, having its own new and terrible consequences well in excess of the consequences of the 1929 and 1932 breaks.
Markets have been run now for years by algorithms, manipulators and seeded interests that are like summer thunderstorms. They are loud and scary, but quite short term and in the end quite meaningless and non-productive.
The dollar cannot and will not remain strong, nor can a planetary Weimar experience now be avoided.
Click chart to enlarge in PDF format
Zimbabwe introduces $50 billion note
http://www.cnn.com/2009/WORLD/africa/01/10/zimbawe.currency/index.html
Iran Warns Of Bilderberg Plot To Plunge World Into Total Chaos
http://www.tribulation2008.com/sf12-19-08.txt
By: Sorcha Faal, and as reported to her Western Subscribers
Iran's official news agency IRNA is warning today of a Global plot
hatched by a 'secret society of Freemasons' known as the Bilderberg
Group to plunge our World into 'total chaos' in order to destroy all
religions and independent Nations in order to establish a planetary wide
single system of government.
According to the articles published by Iranian reporter Amir Taheri on
this plot, "The alleged conspiracy was finalized at a secret meeting of
the group in June 1999 in Caesar Park Hotel in the Portuguese resort of
Penha Longa."
Taheri further states about this Bilderberg Group: "Strictly speaking,
there is no such thing as the Bilderberg Group or Masonic lodge. What we
have is an annual private meeting of influential individuals, mostly
from Europe and the United States, designed to generate free discussions
on a range of issues without a pre-set agenda and according to the
so-called Chatam House rules under which there are no reports of the
proceedings and none of the participants could be quoted by name.
The first meeting was held at Hotel de Bilderberg near Arnhem in Holland
in 1954 at the invitation of Prince Bernhard, the husband of the then
Queen Juliana. The number of guests was fixed at 130 and initially only
limited to politicians, academics and business people from member
countries of the North Atlantic Treaty Organization (NATO). Later, the
meeting extended its reach and started inviting personalities from all
over the world, according to which countries happened to be in the news.
The invitations were designed to include two representatives from each
country, one liberal and one conservative.
Over the past half a century, almost anybody who was somebody in
international business or politics has made at least one appearance at
the group's annual meetings. Thus, if this were a gathering of
conspirators we would have to assume that virtually the whole of the
global leadership elite consists of Masonic plotters. Last June, for
example, Senators Hillary Clinton and Barack Obama both attended the
Bilderberg meeting along with more than 60 other political figures from
across the globe."
American dissident researchers writing about the Bilderberg Group
further warn that this organization is, in fact, a 'shadow government'
having great power over all of the World's governments and that its
meetings are banned by US propaganda media organs from reporting on them
to their citizens.
Russian intelligence reports on the Bilderberg Group state that it is
one of the six German Nazi based 'Illuminati' governed organizations
that comprise what is loosely referred to as the Round Table that seeks
total Western control over our entire Earth and its resources and has
been directly responsible for both World War's I and II, and which have
left over 500 million dead in the past 80 years alone.
In our December 12th report titled "Council On Foreign Relations Warns
Of United States Collapse By Summer, 2009", we had reported on one of
the other members of this Round Table wherein Russian Foreign Ministry
sources had warned about these groups agenda for our World and which
includes:
Global manipulation of the prices of oil, natural gas, zinc, iron ore,
nickel, copper, platinum, gold, corn, wheat and rice to 'stratospheric
heights' to be immediately followed by their, likewise, engineered
collapse.
Manipulation of the Global economy through the flooding into financial
systems of 'unlimited' credit to be immediately followed by an
engineered contraction of the money supply thereby collapsing the entire
World's banking system to leave the West's powerful Central Banks as the
sole survivors, and defacto owners of the West's industrial output.
Dissolution of the North American and European Nation States which are
then to be 'reformed' into 'Global Trading Blocs' centrally governed by
unelected emissaries to a new 'One World' governing body.
The 'forced destruction' of all other Nation States on Earth, to
include, Russia, China, the Middle East, South and Central America and
Africa, whereupon they too will be able to become a part of the 'new'
One World ruling structure.
The forced relocation of the Earth's entire population into urban
'environments', with the United States, Canada and Mexico to be the
first Nations to implement this policy among its citizens, by 'force' if
necessary.
Though there are growing signs that the American people are beginning to
awaken from their decade's long slumber which has seen their freedoms
and economic power stolen from them by these insidious power blocs, it
may be 'too little' and 'too late' for them to reverse their
catastrophic plunge into the abyss, and as we can read as reported by
the World Tribune News Service in their report titled "Doomsday: U.S.
report warns of 'strategic shock' leading to massive unrest", and which
says:
"The United States could be sleep-walking into its next crisis, a
military report said.
The report by the U.S. Army War College's Strategic Institute, said that
a defense community paralyzed by conventional thinking could be
unprepared to help the United States cope with a series of unexpected
crises that would rival the Al Qaida strikes in 2001, termed a
"strategic shock."
"Widespread civil violence inside the United States would force the
defense establishment to reorient priorities in extremis to defend basic
domestic order and human security," the report, authored by [Ret.] Lt.
Col. Nathan Freir, said."
Reports from the United States are showing that their War Leaders are
heeding these warnings as the US Military is preparing to unleash upon
its citizens another 11,500 American Troops that they say will protect
their Nation upon their new President's inauguration.
Being lost upon these American people, however, is that the Military
Forces they will soon be confronting are not there to protect them, but
are instead being deployed to protect the ruling American elite classes
who have robbed their people of their entire wealth and intend to leave
them as nothing more than economic slaves and prisoners in their vast
urban concentration camps and vast prison network which has made them
the most jailed people our World has ever known.
What is feared most by these American War Leaders is that their citizens
will awaken to the plans being made for their slavery like the peoples
in Greece who are now violently engaged against these Western monsters
in order to free their Nation from its planned destruction.
Russian Military Experts state in their reports that unlike Europe, the
Middle East or the Eastern Nations of the World, the American people are
not expected to rise up in mass against their planned destruction as
their physical and mental states have been nearly totally destroyed by
the forced drugging of them through their genetically modified foods,
fluoridated water and psychotropic medical supplies, all of which are
based upon eliminating these peoples as serious threats as they have
become the most obese, most depressed and most mind controlled human
beings our World has ever seen.
As astonishing as it is to believe, it is nevertheless true that the
American people remain the only peoples on our entire Earth who still do
not know that microwave prepared foods have all of their nutrients
destroyed leading to obesity and diabetes, that the Aspartame ingredient
contained in all of their diet foods and drinks to 'control' their
obesity is outlawed in nearly every other Nation on Earth as it is
nothing more than a poison, and that the violent video games they buy
for their children have all been funded by their Military to overcome in
these young minds the strongest human taboo there is..killing another
human being.
But, to the greatest danger of all facing these people is their belief
that warnings such as this one are the 'conspiracy', instead of their
knowing that the truest, and darkest, conspiracies are those of their
own government and propaganda media organs who continue to tell these
deluded people not to listen to anyone other than them as they lead
these poor souls into the pits of their final destruction.
© December 19, 2008 EU and US all rights reserved.
http://www.whatdoesitmean.com/index1179.htm
--
Sorcha Faal
sorchafaal@fastmail.fm
MELE KALIKIMAKA e HAU'OLI MAKAHIKI HOU!
Protectionist dominoes are beginning to tumble across the world
The riots have begun. Civil protest is breaking out in cities across Russia, China, and beyond.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3870089/Protectionist-dominoes-are-beginning-to-tumble-across-the-world.html
By Ambrose Evans-Pritchard
Last Updated: 11:37AM GMT 21 Dec 2008
Greece has been in turmoil for 11 days. The mood seems to have turned "pre-insurrectionary" in parts of Athens - to borrow from the Marxist handbook.
This is a foretaste of what the world may face as the "crisis of capitalism" - another Marxist phase making a comeback - starts to turn two hundred million lives upside down.
We are advancing to the political stage of this global train wreck. Regimes are being tested. Those relying on perma-boom to mask a lack of democratic or ancestral legitimacy may try to gain time by the usual methods: trade barriers, saber-rattling, and barbed wire.
Dominique Strauss-Kahn, the head of the International Monetary Fund, is worried enough to ditch a half-century of IMF orthodoxy, calling for a fiscal boost worth 2pc of world GDP to "prevent global depression".
"If we are not able to do that, then social unrest may happen in many countries, including advanced economies. We are facing an unprecedented decline in output. All around the planet, the people have reacted with feelings going from surprise to anger, and from anger to fear," he said.
Russia has begun to shut down trade as it adjusts to the shock of Urals oil below $40 a barrel. It has imposed import tariffs of 30pc on cars, 15pc on farm kit, and 95pc on poultry (above quota levels). "It is possible during the financial crisis to support domestic producers by raising customs duties," said Premier Vladimir Putin.
Russia is not alone. India and Vietnam have imposed steel tariffs. Indonesia is resorting to special "licences" to choke off imports.
The Kremlin is alarmed by a 13pc fall in industrial output over the last five months. There have been street protests in Moscow, St Petersburg, Kaliningrad, Vladivostok and Barnaul. Police crushed "Dissent Marchers" holding copies of Russia's constitution above their heads in Moscow's Triumfalnaya Square.
"Russia has not seen anything like these nationwide protests before," said Boris Kagarlitsky from Moscow's Globalization Institute.
The Duma is widening the treason law to catch most forms of political dissent, and unwelcome forms of journalism. Jury trials for state crimes are to be abolished.
Yevgeny Kiseloyov at the Moscow Times said it feels eerily like December 1 1934 when Stalin unveiled his "Enemies of the People" law, kicking off the Great Terror.
The omens are not good in China either. Taxis are being bugged by state police. The great unknown is how Beijing will respond as its state-directed export strategy hits a brick wall, leaving exposed a vast eyesore of concrete and excess plant.
Exports fell 2.2pc in November. Toy, textile, footwear, and furniture plants are being closed across Guangdong, now the riot hub of South China. Some 40m Chinese workers are expected to lose their jobs. Party officials have warned of "mass-scale social turmoil".
The Politburo is giving mixed signals. We don't yet know how much of the country's plan to boost domestic demand through a $586bn stimulus package is real, and how much is a wish-list sent to party bosses in the hinterland without funding.
Shortly after President Hu Jintao said China is "losing competitive edge in the world market", we saw a move towards export subsidies for the steel industry and a dip in the yuan peg - even though China already has the world's biggest reserves ($2 trillion) and the biggest trade surplus ($40bn a month).
So is the Communist Party mulling a 1930s "beggar-thy-neighbour" strategy of devaluation to export its way out of trouble? Such raw mercantilism can only draw a sharp retort from Washington and Brussels in this climate.
"During a global slowdown, you can't have countries trying to take advantage of others by manipulating their currencies," said Frank Vargo from the US National Association of Manufacturers.
It is a view shared entirely by President-elect Barack Obama. "China must change its currency practices. Because it pegs its currency at an artificially low rate, China is running massive current account surpluses. This is not good for American firms and workers, not good for the world," he said in October. The new intake of radical Democrats on Capitol Hill will hold him to it.
There has been much talk lately of America's Smoot-Hawley Tariff Act, which set off the protectionist dominoes in 1930. It is usually invoked by free traders to make the wrong point. The relevant message of Smoot-Hawley is that America was then the big exporter, playing the China role. By resorting to tariffs, it set off retaliation, and was the biggest victim of its own folly.
Britain and the Dominions retreated into Imperial Preference. Other countries joined. This became the "growth bloc" of the 1930s, free from the deflation constraints of the Gold Standard. High tariffs stopped the stimulus leaking out.
It was a successful strategy - given the awful alternatives - and was the key reason why Britain's economy contracted by just 5pc during the Depression, against 15pc for France, and 30pc for the US.
Could we see such a closed "growth bloc" emerging now, this time led by the US, entailing a massive rupture of world's trading system? Perhaps.
This crisis has already brought us a monetary revolution as interest rates approach zero across the G10. It may overturn the "New World Order" as well, unless we move with great care in grim months ahead. This is where events turn dangerous.
The last great era of globalisation peaked just before 1914. You know the rest of the story.
Ariz. police say they are prepared as War College warns military must prep for unrest; IMF warns of economic riots
Phoenix Business Journal - by Mike Sunnucks
http://phoenix.bizjournals.com/phoenix/stories/2008/12/15/daily34.html
A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks.
“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” said the War College report.
The study says economic collapse, terrorism and loss of legal order are among possible domestic shocks that might require military action within the U.S.
International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment.
U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.
State and local police in Arizona say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason.
“The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue,” said Phoenix Police spokesman Andy Hill.
“We have well established plans in place for such civil unrest,” said Scottsdale Police spokesman Mark Clark.
Clark, Hill and other local police officials said the region did plenty of planning and emergency management training for the Super Bowl in February in Glendale.
“We’re prepared,” said Maricopa County Sheriff Deputy Chief Dave Trombi citing his office’s past dealings with immigration marches and major events.
Super Bowl security efforts included personnel and resources from the U.S. Department of Homeland Security and U.S. military’s Northern Command, which coordinated with Arizona officials. The Northern Command was created after 9/11 to have troops and Defense Department resources ready to respond to security problems, terrorism and natural disasters.
Northern Command spokesman Michael Kucharek and Arizona Army National Guard Major. Paul Aguirre said they are not aware of any new planning for domestic situations related to the economy.
Nick Dranias, director of constitutional government at the libertarian Goldwater Institute, said a declaration of marital law would be an extraordinary event and give military control over civilian authorities and institutions. Dranias said the Posse Comitatus Act restricts the U.S. military’s role in domestic law enforcement. But he points to a 1994 U.S. Defense Department Directive (DODD 3025) he says allows military commanders to take emergency actions in domestic situations to save lives, prevent suffering or mitigate great property damage.
Dranias said such an emergency declaration could worsen the economic situation and doubts extreme measures will been taken. “I don’t think it’s likely. But it’s not impossible,” he said.
The economy is in recession. Consumer spending is down, foreclosures are up and a host of businesses are laying off workers and struggling with tight credit and the troubled housing and financial markets. The U.S. Federal Reserve Bank and U.S. Treasury Department have pumped more than $8.5 trillion into the economy via equity purchases of bank stocks, liquidity infusions, Wall Street and bank bailouts and taxpayer rebates. U.S. automakers are seeking more than $14 billion in federal loans with fears they could fall into bankruptcy without a bailout. The U.S. housing and subprime lending-induced recession also has hit economies in Europe, Japan and China.
Gov. Janet Napolitano’s office declined comment on emergency planning and possible civil unrest. Napolitano is president-elect Barack Obama’s pick for secretary of Homeland Security, an agency that oversees airport security, disaster response, border security, customs and anti-terrorism efforts.
As governor, Napolitano sent National Guard troops to Palo Verde Nuclear Generating Station in 2003 in response to terrorism threats.
Glendale Police spokesman Jim Toomey said the West Valley suburb developed new emergency plans with the approach of Y2K computer changeovers leading up to the year 2000 and police have updated those plans several times including after 9/11. Toomey said strategies to deal with public unrest usually involve deploying personnel and equipment to deal with specific incidents while still providing usual services.
Ithaca, New York is Printing Its Own Money and Promoting Community Economic Development
http://www.organicconsumers.org/articles/article_16171.cfm
* By Le Grace Benson
The Ithaca Times (Ithaca, NY), December 17, 2008
Straight to the Source
Your article about Ithaca HOURS in the December 5-9 issue stimulated my thoughts about that longest lasting of local currencies. You ask, "Has the HOUR passed?" I'd like to suggest that its time has arrived.
The prototypic local currency of the modern era circulated in Wörgl, Austria for little over a year, 1932-1933, before the town government succumbed to pressures from the Austrian central Bank and the growing regional pro-German National Socialist party. The dates are those of the depth of the global depression, a phenomenon we often hear mentioned these days. The mayor of Wörgl backed the currency, called "labor certificates," with Austrian schillings. For a year the citizens could use the certificates to pay their taxes and to buy groceries, clothing, fuel and shelter. Companies paid wages in this scrip and the government was able to keep schools open and employ a substantial number of workers for infrastructure projects such as roads and bridges. The town was one of the few in Austria that avoided economic collapse in the year before the national government shut it down.
Times are different now but memories of the unstable economy of the 1930's haunt us. We worry over the enormous debt we owe personally as individuals and collectively as local, state and national governments. Many are concerned about the flight of local capital into pockets far away, some of them invisible to public view, and none of them with Ithaca's particular interests as a priority. We lose sleep over the shrinking or even disappearing value of our savings and pensions, and whether costs for electricity, fuel and health will soon outstrip our ability to buy them. We fear that we may not be able to send our kids to college for the education needed not only by them personally, but for the county, state and nation. More and more of us are seriously anxious about costs to our environment. Some of us are old enough to have seen the dustbowl and the Mississippi floods of the 1930's and think that maybe there were hard links between a failing economy and a failing environment.
Tompkins County residents are among the most environmentally active people in the country, with exemplary, cost-saving and composting and recycling efforts. House prices are stable here (as anyone recalling the most recent property tax assessment knows), with at least one real estate firm opening up an additional office. Our unemployment and underemployment figures are the envy of some of our upstate neighbors. There is a thriving, increasing production and marketing of local food and wines. Local chefs are imaginatively taking advantage of this. The bumper sticker that suggests that we (Ithaca in particular) are on "an island surrounded by reality" is now brag instead of a jibe. However, the so-called "real" economy surrounding our more stable one does affect us and is likely to have more serious consequences in the immediate future.
Our local currency, Ithaca HOURS, exchangeable in a twenty-mile radius, has had some positive effects locally. Interestingly, it is responsible for what could be called "media tourism" with a steady stream of radio, TV and print journalism crews coming here to do stories on this economic curiosity, as you mention in your story. According to Glynis Hart's quotation of HOURS President Steve Burke, this is on the increase, even as the membership is on the decrease. The HOURS program has also attracted field trips by officials of government and non-government institutions from Canada, France, Germany, Italy, Japan (many) and the UK. In turn, HOURS officers and board members have traveled to each of these places and to conferences on local economies in the United States to give invited presentations. Three doctoral dissertations, one for the University of Paris, one for a university in Japan and one for the Department of Anthropology at Emory University discuss various aspects of this community currency. The Cornell University program selected two HOURS members, one in 1998-1999 and one in 2003-2004 as Civic Fellows. A grant from the Ben and Jerry Foundation enabled the organization to have an executive administrator for a year, and it was during this subvention that the HOURS directory, its outreach and its membership reached its highest point.
A major difference between Ithaca HOURS, its sibling, Berkshires in Massachusetts cited in the Hart article, and the several local currencies and time banks in Japan, Germany and Italy is that the HOURS cycle of time/currency is anchored solely and entirely in its membership, although it benefits the larger community and the environment. Local financial institutions guarantee Berkshares; the municipal government backed the labor currency of Wörgl; prefecture and provincial governments support efforts in Japan and Italy with financial guarantees and/or provision of offices, computers and personnel; and a major foundation provides on-going financial subvention for local exchange coupons and time-shares in Germany. The Wörgl government could gather fees and taxes to support the local currency.
HOURS Inc. takes no fees and by fundamental policy charges no interest on loans. It thus has no marginal income. Getting necessary administrative tasks fulfilled depends entirely upon volunteers and sometimes with personnel who take HOURS as full pay. Its guarantee is anchored in the labor of the participants in the circulation, and, unlike dollars that can be saved in a bank or even hoarded in that old sock we hear of, HOURS have value as an exchange currency only when they are in circulation. This person-to-person transaction is a strong point from the standpoint of social solidarity and of the establishment of trust. A mark of this trust is that no-interest loans granted by HOURS have a rate of repayment of an estimated 98%, far higher than that of most financial institutions in ordinary times and astoundingly better than in the situation facing us today. Steve Burke points out that HOURS exchanges for goods and services necessarily entail a face-to-face engagement with other members of the community. This is significant, as visitors from other localities are quick to observe.
Less easy to observe directly is the leverage effect of HOURS on the local economy. That is, in addition to the direct circulation there are additional benefits that show up externally. This technical analysis was the subject of one of the dissertation studies of HOURS done by a Japanese doctoral student studying for a year in the Cornell University Department of Planning. He was able to show net positive effects. A French study indicated that the interest free loans, with the currency spent in the local community and the value-added remaining in the community also had strong net positive effects.
A weak point, as is analyzed by international scholars of local economies and exchange methods, is that HOURS currency is tied to the dollar and thus is what is known as a "fiat" currency. That is, as long as there is faith in the dollar, HOURS is equally fungible. But the dollar, as some are now loudly lamenting, is now unanchored in any hard standard such as gold. HOURS as originally conceived by Paul Glover and his colleagues, were tied to local labor, with an estimation that an average hour of labor in this locality was "worth" $10.00. One HOUR thus became fungible with 10 US dollars. This remains the rate of exchange, while we know that the average wage is double that (average wage in the county is about $20.00) and a living wage in Tompkins County is more than double that amount. As the dollar declines in value so does the HOUR.
A strong point, sometimes overlooked in currency discussions, is that the emphasis on the circulation of local goods and service implicit in local currency circulation is a positive environmental gain. Just to cite two related examples, there is a significant reduction in the environmental burden from long distance transport. The shorter distance and time foodstuffs travel farm-to-table the higher the nutritional value. Both these gains have additional positive side effects.
Tompkins County must import the preponderance of its inputs for retail businesses and services, for agricultural products and even nursery and forestry products. Sometimes these must come from far outside. We have few raw materials here and no significant amount of primary building materials. We have little manufacturing that produces goods for local use. For many income-producing efforts, the largest and sometimes only local element is labor. Labor we do have, not only in good supply, but also with a high proportion of that labor highly skilled. Our carpenters, cabinetmakers, masons, electricians and painters - all our builders - are an important local skill resource. Many of them work on projects that require exceptional training and experience. We also have underpaid and under-employed labor forces that might see a net gain for themselves and for all of us when we succeed in integrating our local currency as an active component in household budgets. At least one study done with HOURS in collaboration with Cooperative Extension provides a starting point for identifying the issues to be solved and the ways to move forward. This does not have to entail getting the big-box global stores to accept HOURS.
Two decades of HOURS as a concept and as an organization in and with this community, and as a subject of study and influence for communities all over the world yields a wealth of information and experience. In this moment a great changes taking place and severe stresses on the economy all the way from kitchen tables to international corporate board rooms and the cabinets of world rulers, HOURS is uniquely positioned to engage in an energetic effort to make a strong positive contribution right here locally.
Le Grace Benson
Former Ithaca Hours Board Member
Top Trends Of 2009
By Gerald Celente
12-18-8
http://www.rense.com/general84/topt.htm
KINGSTON, NY -- Exactly one year ago, The Trends Research Institute alerted you to an impending economic crisis we named, the "Panic of '08." Last year we wrote:"In 2008, Americans will wake up to the worst economic times that anyone alive has ever seen. And they won't know what hit them. "
Our forecast was right on target. Few others saw the Panic coming. As former Treasury Secretary Robert Rubin declared (November 29, 2008,) "Nobody was prepared for this."
Mr. Rubin's statement was incorrect. We were prepared, and we prepared our Trends Journal ® subscribers.
Now, in our "Top Trends of 2009," we forecast "The Collapse of '09," which in turn will spiral into the "Greatest Depression" the worst economic conditions America has ever experienced.
That's not all. Beyond economics, 2009 will be a tumultuous year. Trends foreboding and trends promising:
The Collapse of '09: Markets will tumble and major businesses will fail.
The Greatest Depression: Worse than the1930's Depression. Why?
Revolution: What will be the spark that ignites it? Who will fire the shot heard around the world?
Obamarama: High hopes, broken promises: Some victories, major failures.
Economic Slim-Fast: Like it or not, Americans will go on a spending diet and food diet.
Bush Gardens: Lawns out, Edible Landscaping in. Why Bush Gardens?
Whole Health Healing: 2009 marks a year of "attitude change" for the on-trend health aware.
Little People Squeeze: Politicians will put the financial squeeze on the already squeezed.
Regenerative Medicine: The time is ripe for stem cells to come out of the laboratory and into the clinic.
That's Entertainment. Lifting spirits and drinking them will be big business and major pastimes during the Greatest Depression.
College Crash: Following the equity market meltdown, the real estate bust and the retail unraveling, comes the college crash.
Cheri Van Deusen
The Trends Research Institute
CvanDeusen@trendsresearch.com
www.trendsresearch.com
I Have Seen The Writing On The Wall
By Jon Nadler Printer Friendly Version
Dec 19 2008 9:44AM
http://www.kitco.com/ind/nadler/dec192008A.html
Good Morning,
Friday was the euro's turn to take an uppercut from the dollar and stagger in the ring, as forecasts of a 10% decline against the dollar over the next 90 days were issued by UBS. The BoJ reduced call rates to 0.10% but traders felt it will have little impact, and they remain divided on the effectiveness and likelihood of direct intervention to curb the yen's rise. A near half-trillion dollar stimulus package is nearing a launch in economically beleaguered Japan. A major retreat in crude oil to near $33.50 per barrel was the other major headline early this morning. Oil producers have started to wag cartel-ish like fingers at the world, warning that low prices imply future scarcity. The greenback's 1.40 point boost on the index brought it to just above the 81 level and set the stage for a second day of sharp declines in gold and silver.
Thus, gold bullion suffered its worst drop in three weeks as the dollar's surge diverted would-be buyers and emboldened profit-takers. Poor physical demand in key markets is obviously still playing a pivotal role in gold's short-term fortunes. We reported on Dubai's 80% slump yesterday. Today we note that gold buyers in India are patiently sitting on the sidelines, awaiting an opportunity to buy the metal at near $790 or lower once again. So much for high premia as being a reliable indicator of coming price increases. India does love gold. At a price. Just not this one. Conditions will remain volatile as trading thins out before the holidays. The onus remains on the bulls to prove that the December move has not been a false breakout.
New York spot gold trading opened near $832 per ounce, showing a 2.32% near-$20 loss from last night's close as traders lopped more points off of the overbought relative strength numbers seen earlier in the week. Lows overnight were recorded at $829.20 per ounce. Dazzled by gold's 20% December surge, perma-bull analysts once again pulled out the obituary columns looking for a brief notice on a Mr. Greenback. Silver broke support at $10.82 and fell 27 cents to open at $10.69 per ounce. Platinum dropped $5 to $848 and palladium shed $2 to $174. US automakers might receive some bridge loans to keep them on life support until March, but the outlook remains as dark as ever. The White House now allows for the 'orderly' bankruptcy scenario as a palatable option.
As the world churns amid its worst economic crisis since the last global war, something else is stirring as well, and it is the one factor which ought to be near the top of the worry list of leaders everywhere. Social unrest is beginning to manifest itself at a time when people - especially young people - feel that their future prospects are cloudy-to-bleak. Anger against those they see as feathering their own nests while leaving them without a nest to call their own, has sparked rage in Europe's youth. Bloomberg's Celestine Bohlen reports on the disturbing syndrome and its spreading trend:
"Firebombs and breaking glass, tear gas and burning cars. The images from Greece this month were enough to put the fear of youth into the hearts of European leaders. That dread was palpable in France when President Nicolas Sarkozy abruptly delayed for one year a plan to overhaul France’s high schools, after students from Bordeaux to Brittany took to the streets in protest.
Those demonstrations haven’t turned violent yet. But French history, and the example of Greece, suggests they might. At least that is what people like Laurent Fabius, a Socialist Party leader, are saying on French radio.
“What we see in Greece is not out of the realm of possibility in France,” Fabius said on Europe 1. “When you have such an economic depression, such social despair, all it takes is a match.”
An editorial in the daily newspaper Liberation said the decision to delay the education law -- which would change schedules and academic requirements for the last three years of lycee, or high school -- was purely defensive. “One senses among the team in power a hesitation, a dread of riots, a fear of explosion,” wrote Didier Pourquery on Dec. 16.
The rapid rise in unemployment among people under age 25, particularly in southern Europe, is one concern. In Spain, for instance, youth unemployment shot up from 18.4 percent in August 2007 to 28.1 percent in October 2008. The average jobless rate for young people in Italy, Greece and France is well above the average for the European Union, according to Eurostat, the Luxembourg-agency that collects EU statistics.
‘Going Nowhere’
“All these events have at their core a sense among youth that their lives are not going anywhere, and they have nothing to lose,” said Ken Dubin, a visiting associate professor at University Carlos III in Madrid. But economics alone doesn’t explain the restlessness in universities and high schools. Students, after all, have no jobs to lose.
Experts speak of another worry, which is the seemingly anachronistic resurgence of vague radical movements, loosely called anarchist, which hark back to the destructive ideology of Mikhail Bakunin, the 19th-century Russian revolutionary, and to the rebellious rhetoric of the 1960s and 1970s.
Some of it isn’t that threatening, such as recurring play of the 1979 song, “Another Brick in the Wall,” by Pink Floyd, on Athens’ Alpha radio during the week-long protests. “We don’t need no education/ We don’t need no thought control/ No dark sarcasm in the classroom,” goes the angry refrain.
Behind the Slogans
But the violence wasn’t far behind the slogans. By the third day of rioting, the estimated damage in Athens and Thessaloniki, Greece’s two biggest cities, was more than 1 billion euros ($1.3 billion). The riots in Greece began as spontaneous protests to the killing of 15-year-old student by police in Athens on Dec. 6, after a group of youths started stoning a police car. It spread to university centers around the country, quickly morphing into a wider contest between young people and the police and by extension, the government.
Greece has a history of violent demonstrations that dates back to the colonels’ junta in the 1970s. The National Technical University in Athens, known as the Polytechnic, has been off- limits to police in homage to the events of Nov. 17, 1973, when the government sent a tank crashing though the university gates, igniting a popular uprising. Now the Polytechnic is again occupied by protestors, who have built barricades from broken marble and paving stones, and stockpiled Molotov cocktails and other weapons.
Clear Message
The role of these so-called anarchists in the week-long protests is still not clear. But their message -- loaded with anti-capitalist, anti-government and anti-globalization themes - -is unmistakable. Also clear is their bent for violence.
“What they provide is a template that others with less ideological commitment, can use,” said Stathis N. Kalyvas, a political science professor at Yale University. “If you have a demonstration where 10 of them start throwing stones, soon the 500 others following them will join in.”
France isn’t the only country nervously watching the events in Greece. Students in Italy and Spain have also staged protests against proposed changes to schools and universities recently. In Madrid, Barcelona and Sevilla, they took over administration offices this month in opposition to changes mandated by the EU that would link higher education to marketable job skills.
In Italy, hundreds of thousands of angry teachers, students and parents mobbed Rome on Oct. 30 to protest an overhaul of the education system, in what was described as the largest student demonstration since 1968.
Turning Ugly
Each country brings its own issues, and history, to these demonstrations; like Greece, France has a tradition of street protests turning ugly. In October 2005, youths in Paris’s suburban and largely Muslim ghettoes, went on a rampage, causing 160 million euros in damage, after two teenagers were killed as they were being chased by police. In 2006, university students staged demonstrations that dissipated into random violence, as hundreds of thousands protested a proposed law that would create flexible work contracts for young people. The government eventually withdrew the legislation.
This year’s “lycee” protests also carried hints of escalating violence. A high school principals’ association in the Bouches-du-Rhone region warned on Dec. 5 of “an unheard-of aggression and near-impossibility of dialogue” with protesting students. Philippe Guittet, head of the association, told the Le Monde newspaper that he suspected the protests were propelled by “militant forces” working behind the scenes. France chose to defuse the situation by withdrawing the contested schools legislation. In Greece, the government, eager to restore calm, has decided for now to cede the Polytechnic to the protestors.
That might buy peace for now, but it won’t necessarily soothe the anger."
Never underestimate angry youth. Charismatic leaders of the extremist type have a knack for channeling malleable young souls on fire. This concludes today's public service announcement.
Today's focus will remain on the dollar, just as yesterday. A sagging Dow in the face of auto sector uncertainties and warnings from Weyerhauser might not help matters either, as far as risk-taking goes. A 'defensive' play at this juncture might just be sitting on the sidelines and watching others lose money.
Good Day.
Jon Nadler
Senior Analyst
Kitco Bullion Dealers Montreal
Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012
Trend forecaster, renowned for being accurate in the past, says that America will cease to be a developed nation within 4 years, crisis will be "worse than the great depression"
http://www.propagandamatrix.com/articles/november2008/111308_celente_predicts.htm
Paul Joseph Watson
Propaganda Matrix
Thursday, November 13, 2008
StumbleUpon
The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions - all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.
Gerald Celente, the CEO of Trends Research Institute, is renowned for his accuracy in predicting future world and economic events, which will send a chill down your spine considering what he told Fox News this week.
Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.
"We're going to see the end of the retail Christmas....we're going to see a fundamental shift take place....putting food on the table is going to be more important that putting gifts under the Christmas tree," said Celente, adding that the situation would be "worse than the great depression".
"America's going to go through a transition the likes of which no one is prepared for," said Celente, noting that people's refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.
Watch the clip.
Celente, who successfully predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as "The Panic of 2008," adding that "giants (would) tumble to their deaths," which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others. He also said that the dollar would eventually be devalued by as much as 90 per cent.
The consequence of what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.
The prospect of revolution was a concept echoed by a British Ministry of Defence report last year, which predicted that within 30 years, the growing gap between the super rich and the middle class, along with an urban underclass threatening social order would mean, "The world's middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest," and that, "The middle classes could become a revolutionary class."
In a separate recent interview, Celente went further on the subject of revolution in America.
"There will be a revolution in this country," he said. "It’s not going to come yet, but it’s going to come down the line and we’re going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen."
"The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop."
"It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more."
"We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to. It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs – over-the-counter drugs, or crystal meth or whatever it might be. So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension."
The George Washington blog has compiled a list of quotes attesting to Celente's accuracy as a trend forecaster.
"When CNN wants to know about the Top Trends, we ask Gerald Celente."
— CNN Headline News
"A network of 25 experts whose range of specialties would rival many university faculties."
— The Economist
"Gerald Celente has a knack for getting the zeitgeist right."
— USA Today
"There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about."
- CNBC
"Those who take their predictions seriously ... consider the Trends Research Institute."
— The Wall Street Journal
"Gerald Celente is always ahead of the curve on trends and uncannily on the mark ... he's one of the most accurate forecasters around."
— The Atlanta Journal-Constitution
"Mr. Celente tracks the world’s social, economic and business trends for corporate clients."
— The New York Times
"Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority."
— 48 Hours, CBS News
"Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing."
— The Detroit News
"Gerald Celente forecast the 1987 stock market crash, ‘green marketing,’ and the boom in gourmet coffees."
— Chicago Tribune
"The Trends Research Institute is the Standard and Poors of Popular Culture."
— The Los Angeles Times
"If Nostradamus were alive today, he'd have a hard time keeping up with Gerald Celente."
— New York Post
So there you have it - hardly a nutjob conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now. Storable food and gold are two good places to make a start.
Doomsday: U.S. report warns of 'strategic shock' leading to massive unrest
http://www.worldtribune.com/worldtribune/WTARC/2008/ss_military0790_12_15.asp
WASHINGTON — The United States could be sleep-walking into its next crisis, a military report said.
The report by the U.S. Army War College's Strategic Institute, said that a defense community paralyzed by conventional thinking could be unprepared to help the United States cope with a series of unexpected crises that would rival the Al Qaida strikes in 2001, termed a "strategic shock."
The report cited the prospect of the collapse of a nuclear state leading to massive unrest in the United States, Middle East Newsline reported.
"Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security," the report, authored by [Ret.] Lt. Col. Nathan Freir, said.
"Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters are all paths to disruptive domestic shock."
Titled "Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development," the report warned that the U.S. military and intelligence community remain mired in the past as well as the need to accommodate government policy. Freier, a former Pentagon official, said that despite the Al Qaida surprise in 2001 U.S. defense strategy and planning remain trapped by "excessive convention."
"The current administration confronted a game-changing 'strategic shock' inside its first eight months in office," the report said. "The next administration would be well-advised to expect the same during the course of its first term. Indeed, the odds are very high against any of the challenges routinely at the top of the traditional defense agenda triggering the next watershed inside DoD [Department of Defense]."
The report cited the collapse of what Freier termed "a large capable state that results in a nuclear civil war." Such a prospect could lead to uncontrolled weapons of mass destruction proliferation as well as a nuclear war.
The report cited the prospect of a breakdown of order in the United States. Freier said the Pentagon could be suddenly forced to recall troops from abroad to fight domestic unrest.
"An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home," the report said.
The report said the United States could also come under pressure from a hostile state with control over insurgency groups. The hostile state could force American decision-makers into a desperate response.
"The United States might also consider the prospect that hostile state and/or nonstate actors might individually or in concert combine hybrid methods effectively to resist U.S. influence in a nonmilitary manner," the report said. "This is clearly an emerging trend."
"The aforementioned are admittedly extreme," the report said. "They are not, however, implausible or fantastical."
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A Collection of articles and posts that prepare the gentle reader for the disruption that comes.
Pure Ugly Ahead. May as well make the best of it.
"When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic." ~ Dresden James
"Men think in herds, go mad in herds, but recover their senses one by one." ~ Charles Mackay
There will never be a really free and enlightened State until the State comes to recognize the individual as a higher and independent power, from which all its own power and authority are derived, and treats him accordingly. ~ Henry David Thoreau
OF COURSE:
http://www.loompanics.com/
http://www.canningpantry.com/
This is must a read site, has a bit of everything:
http://www.endtimesreport.com/
You can spend days reading it. The other thing you can do to prepare is "spend a week with the Amish"....
100 Items to Disappear First
1. Generators (Good ones cost dearly. Gas storage, risky. Noisy...target of thieves; maintenance etc.)
2. Water Filters/Purifiers
3. Portable Toilets
4. Seasoned Firewood. Wood takes about 6 - 12 months to become dried, for home uses.
5. Lamp Oil, Wicks, Lamps (First Choice: Buy CLEAR oil. If scarce, stockpile ANY!)
6. Coleman Fuel. Impossible to stockpile too much.
7. Guns, Ammunition, Pepper Spray, Knives, Clubs, Bats & Slingshots.
8. Hand-can openers, & hand egg beaters, whisks.
9. Honey/Syrups/white, brown sugar
10. Rice - Beans - Wheat
11. Vegetable Oil (for cooking) Without it food burns/must be boiled etc.,)
12. Charcoal, Lighter Fluid (Will become scarce suddenly)
13. Water Containers (Urgent Item to obtain.) Any size. Small: HARD CLEAR PLASTIC ONLY - note - food grade if for drinking.
16. Propane Cylinders (Urgent: Definite shortages will occur.
17. Survival Guide Book.
18. Mantles: Aladdin, Coleman, etc. (Without this item, longer-term lighting is difficult.)
19. Baby Supplies: Diapers/formula. ointments/aspirin, etc.
20. Washboards, Mop Bucket w/wringer (for Laundry)
21. Cookstoves (Propane, Coleman & Kerosene)
22. Vitamins
23. Propane Cylinder Handle-Holder (Urgent: Small canister use is dangerous without this item)
24. Feminine Hygiene/Haircare/Skin products.
25. Thermal underwear (Tops & Bottoms)
26. Bow saws, axes and hatchets, Wedges (also, honing oil)
27. Aluminum Foil Reg. & Heavy Duty (Great Cooking and Barter Item)
28. Gasoline Containers (Plastic & Metal)
29. Garbage Bags (Impossible To Have Too Many).
30. Toilet Paper, Kleenex, Paper Towels
31. Milk - Powdered & Condensed (Shake Liquid every 3 to 4 months)
32. Garden Seeds (Non-Hybrid) (A MUST)
33. Clothes pins/line/hangers (A MUST)
34. Coleman's Pump Repair Kit
35. Tuna Fish (in oil)
36. Fire Extinguishers (or..large box of Baking Soda in every room)
37. First aid kits
38. Batteries (all sizes...buy furthest-out for Expiration Dates)
39. Garlic, spices & vinegar, baking supplies
40. Big Dogs (and plenty of dog food)
41. Flour, yeast & salt
42. Matches. {"Strike Anywhere" preferred.) Boxed, wooden matches will go first
43. Writing paper/pads/pencils, solar calculators
44. Insulated ice chests (good for keeping items from freezing in Wintertime.)
45. Workboots, belts, Levis & durable shirts
46. Flashlights/LIGHTSTICKS & torches, "No. 76 Dietz" Lanterns
47. Journals, Diaries & Scrapbooks (jot down ideas, feelings, experience; Historic Times)
48. Garbage cans Plastic (great for storage, water, transporting - if with wheels)
49. Men's Hygiene: Shampoo, Toothbrush/paste, Mouthwash/floss, nail clippers, etc
50. Cast iron cookware (sturdy, efficient)
51. Fishing supplies/tools
52. Mosquito coils/repellent, sprays/creams
53. Duct Tape
54. Tarps/stakes/twine/nails/rope/spikes
55. Candles
56. Laundry Detergent (liquid)
57. Backpacks, Duffel Bags
58. Garden tools & supplies
59. Scissors, fabrics & sewing supplies
60. Canned Fruits, Veggies, Soups, stews, etc.
61. Bleach (plain, NOT scented: 4 to 6% sodium hypochlorite)
62. Canning supplies, (Jars/lids/wax)
63. Knives & Sharpening tools: files, stones, steel
64. Bicycles...Tires/tubes/pumps/chains, etc
65. Sleeping Bags & blankets/pillows/mats
66. Carbon Monoxide Alarm (battery powered)
67. Board Games, Cards, Dice
68. d-con Rat poison, MOUSE PRUFE II, Roach Killer
69. Mousetraps, Ant traps & cockroach magnets
70. Paper plates/cups/utensils (stock up, folks)
71. Baby wipes, oils, waterless & Antibacterial soap (saves a lot of water)
72. Rain gear, rubberized boots, etc.
73. Shaving supplies (razors & creams, talc, after shave)
74. Hand pumps & siphons (for water and for fuels)
75. Soysauce, vinegar, bullions/gravy/soupbase
76. Reading glasses
77. Chocolate/Cocoa/Tang/Punch (water enhancers)
78. "Survival-in-a-Can"
79. Woolen clothing, scarves/ear-muffs/mittens
80. Boy Scout Handbook, / also Leaders Catalog
81. Roll-on Window Insulation Kit (MANCO)
82. Graham crackers, saltines, pretzels, Trail mix/Jerky
83. Popcorn, Peanut Butter, Nuts
84. Socks, Underwear, T-shirts, etc. (extras)
85. Lumber (all types)
86. Wagons & carts (for transport to and from)
87. Cots & Inflatable mattress's
88. Gloves: Work/warming/gardening, etc.
89. Lantern Hangers
90. Screen Patches, glue, nails, screws,, nuts & bolts
91. Teas
92. Coffee
93. Cigarettes
94. Wine/Liquors (for bribes, medicinal, etc,)
95. Paraffin wax
96. Glue, nails, nuts, bolts, screws, etc.
97. Chewing gum/candies
98. Atomizers (for cooling/bathing)
99. Hats & cotton neckerchiefs
100. Goats/chickens
From a Sarajevo War Survivor:
Experiencing horrible things that can happen in a war - death of parents and
friends, hunger and malnutrition, endless freezing cold, fear, sniper attacks.
1. Stockpiling helps. but you never no how long trouble will last, so locate
near renewable food sources.
2. Living near a well with a manual pump is like being in Eden.
3. After awhile, even gold can lose its luster. But there is no luxury in war
quite like toilet paper. Its surplus value is greater than gold's.
4. If you had to go without one utility, lose electricity - it's the easiest to
do without (unless you're in a very nice climate with no need for heat.)
5. Canned foods are awesome, especially if their contents are tasty without
heating. One of the best things to stockpile is canned gravy - it makes a lot of
the dry unappetizing things you find to eat in war somewhat edible. Only needs
enough heat to "warm", not to cook. It's cheap too, especially if you buy it in
bulk.
6. Bring some books - escapist ones like romance or mysteries become more
valuable as the war continues. Sure, it's great to have a lot of survival
guides, but you'll figure most of that out on your own anyway - trust me, you'll
have a lot of time on your hands.
7. The feeling that you're human can fade pretty fast. I can't tell you how many
people I knew who would have traded a much needed meal for just a little bit of
toothpaste, rouge, soap or cologne. Not much point in fighting if you have to
lose your humanity. These things are morale-builders like nothing else.
8. Slow burning candles and matches, matches, matches
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