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Let’s You and Him Fight | KUNSTLER
Let’s You and Him Fight | KUNSTLER.
So, now we are threatening to start World War Three because Russia is trying to control the chaos in a failed state on its border — a state that our own government spooks provoked into failure? The last time I checked, there was a list of countries that the USA had sent troops, armed ships, and aircraft into recently, and for reasons similar to Russia’s in Crimea: the former Yugoslavia, Somalia, Afghanistan, Iraq, Libya, none of them even anywhere close to American soil. I don’t remember Russia threatening confrontations with the USA over these adventures.
The phones at the White House and the congressional offices ought to be ringing off the hook with angry US citizens objecting to the posturing of our elected officials. There ought to be crowds with bobbing placards in Farragut Square reminding the occupant of 1400 Pennsylvania Avenue how ridiculous this makes us look.
The saber-rattlers at The New York Times were sounding like the promoters of a World Wrestling Federation stunt Monday morning when they said in a Page One story:
“The Russian occupation of Crimea has challenged Mr. Obama as has no other international crisis, and at its heart, the advice seemed to pose the same question: Is Mr. Obama tough enough to take on the former K.G.B. colonel in the Kremlin?”
Are they out of their chicken-hawk minds over there? It sounds like a ploy out of the old Eric Berne playbook: Let’s You and Him Fight. What the USA and its European factotums ought to do is mind their own business and stop issuing idle threats. They set the scene for the Ukrainian melt-down by trying to tilt the government their way, financing a pro-Euroland revolt, only to see their sponsored proxy dissidents give way to a claque of armed neo-Nazis, whose first official act was to outlaw the use of the Russian language in a country with millions of long-established Russian-speakers. This is apart, of course, from the fact Ukraine had been until very recently a province of Russia’s former Soviet empire.
Secretary of State John Kerry — a haircut in search of a brain — is winging to Kiev tomorrow to pretend that the USA has a direct interest in what happens there. Since US behavior is so patently hypocritical, it raises the pretty basic question: what are our motives? I don’t think they amount to anything more than international grandstanding — based on the delusion that we have the power and the right to control everything on the planet, which is based, in turn, on our current mood of extreme insecurity as our own ongoing spate of bad choices sets the table for a banquet of consequences.
America can’t even manage its own affairs. We ignore our own gathering energy crisis, telling ourselves the fairy tale that shale oil will allow us to keep driving to WalMart forever. We paper over all of our financial degeneracy and wink at financial criminals. Our infrastructure is falling apart. We’re constructing an edifice of surveillance and social control that would make the late Dr. Joseph Goebbels turn green in his grave with envy while we squander our dwindling political capital on stupid gender confusion battles.
The Russians, on the other hand, have every right to protect their interests along their own border, to protect the persons and property of Russian-speaking Ukrainians who, not long ago, were citizens of a greater Russia, to discourage neo-Nazi activity in their back-yard, and most of all to try to stabilize a region that has little history and experience with independence. They also have to contend with the bankruptcy of Ukraine, which may be the principal cause of its current crack-up. Ukraine is deep in hock to Russia, but also to a network of Western banks, and it remains to be seen whether the failure of these linked obligations will lead to contagion throughout the global financial system. It only takes one additional falling snowflake to push a snow-field into criticality.
Welcome to the era of failed states. We’ve already seen plenty of action around the world and we’re going to see more as resource and capital scarcities drive down standards of living and lower the trust horizon. The world is not going in the direction that Tom Friedman and the globalists thought. Anything organized at the giant scale is now in trouble, nation-states in particular. The USA is not immune to this trend, whatever we imagine about ourselves for now.
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Let’s You and Him Fight | KUNSTLER
Let’s You and Him Fight | KUNSTLER.
So, now we are threatening to start World War Three because Russia is trying to control the chaos in a failed state on its border — a state that our own government spooks provoked into failure? The last time I checked, there was a list of countries that the USA had sent troops, armed ships, and aircraft into recently, and for reasons similar to Russia’s in Crimea: the former Yugoslavia, Somalia, Afghanistan, Iraq, Libya, none of them even anywhere close to American soil. I don’t remember Russia threatening confrontations with the USA over these adventures.
The phones at the White House and the congressional offices ought to be ringing off the hook with angry US citizens objecting to the posturing of our elected officials. There ought to be crowds with bobbing placards in Farragut Square reminding the occupant of 1400 Pennsylvania Avenue how ridiculous this makes us look.
The saber-rattlers at The New York Times were sounding like the promoters of a World Wrestling Federation stunt Monday morning when they said in a Page One story:
“The Russian occupation of Crimea has challenged Mr. Obama as has no other international crisis, and at its heart, the advice seemed to pose the same question: Is Mr. Obama tough enough to take on the former K.G.B. colonel in the Kremlin?”
Are they out of their chicken-hawk minds over there? It sounds like a ploy out of the old Eric Berne playbook: Let’s You and Him Fight. What the USA and its European factotums ought to do is mind their own business and stop issuing idle threats. They set the scene for the Ukrainian melt-down by trying to tilt the government their way, financing a pro-Euroland revolt, only to see their sponsored proxy dissidents give way to a claque of armed neo-Nazis, whose first official act was to outlaw the use of the Russian language in a country with millions of long-established Russian-speakers. This is apart, of course, from the fact Ukraine had been until very recently a province of Russia’s former Soviet empire.
Secretary of State John Kerry — a haircut in search of a brain — is winging to Kiev tomorrow to pretend that the USA has a direct interest in what happens there. Since US behavior is so patently hypocritical, it raises the pretty basic question: what are our motives? I don’t think they amount to anything more than international grandstanding — based on the delusion that we have the power and the right to control everything on the planet, which is based, in turn, on our current mood of extreme insecurity as our own ongoing spate of bad choices sets the table for a banquet of consequences.
America can’t even manage its own affairs. We ignore our own gathering energy crisis, telling ourselves the fairy tale that shale oil will allow us to keep driving to WalMart forever. We paper over all of our financial degeneracy and wink at financial criminals. Our infrastructure is falling apart. We’re constructing an edifice of surveillance and social control that would make the late Dr. Joseph Goebbels turn green in his grave with envy while we squander our dwindling political capital on stupid gender confusion battles.
The Russians, on the other hand, have every right to protect their interests along their own border, to protect the persons and property of Russian-speaking Ukrainians who, not long ago, were citizens of a greater Russia, to discourage neo-Nazi activity in their back-yard, and most of all to try to stabilize a region that has little history and experience with independence. They also have to contend with the bankruptcy of Ukraine, which may be the principal cause of its current crack-up. Ukraine is deep in hock to Russia, but also to a network of Western banks, and it remains to be seen whether the failure of these linked obligations will lead to contagion throughout the global financial system. It only takes one additional falling snowflake to push a snow-field into criticality.
Welcome to the era of failed states. We’ve already seen plenty of action around the world and we’re going to see more as resource and capital scarcities drive down standards of living and lower the trust horizon. The world is not going in the direction that Tom Friedman and the globalists thought. Anything organized at the giant scale is now in trouble, nation-states in particular. The USA is not immune to this trend, whatever we imagine about ourselves for now.
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Savagery for All | KUNSTLER
A glance through the annals of history tells us that the Golden Age of Ukraine occurred just as western Europe was emerging from its long, dark, post-Roman coma around the 10th and 11thcenturies, A.D. After that, it was a kind of polo field for sundry sweeping hordes of mounted hell-bringers: Tatars, Turks, Cossacks, Bulgars, Napoleon’s grand army. In modern times, its population was divided between allegiance to Russia or to the Germanic states of the west. The Russian soviet regime treated it very badly. As many Ukrainians starved to death under Stalin’s “terror famine” of 1932-1933 as Jews and others were killed later in Hitler’s death camps. Stalin went on to try and totally erase Ukraine’s ethnic identity.
The Nazis wanted to go even further: to erase the Slavic population altogether so that the great fertile “breadbasket” of Ukraine could provide lebensraum for German colonizers. Stalin foolishly signed a non-aggression pact with Hitler in 1939 — had he not read Mein Kampf? Less than two years later, Germany turned around and invaded Russia, using Ukraine as doormat and mud-room for a horrific struggle that left Kiev, the capital city of Ukraine, a virtual ashtray, and 28,000 villages destroyed.
Culture, as we know, is resilient. But given that history, one wonders what the current disposition of all these historical tides portends. The few thousand Americans not completely distracted by tweeting the content of their breakfasts or shooting naked selfies or texting behind the wheel — yea, even the gallant minority not mentally colonized by the slave-masters of Silicon Valley — must wonder what the heck happened in the streets of Kiev last week. Or, as Sir Mick Jagger famously said at the deadly Altamont Speedway festival, “Who’s fighting, and what for?” By the way, don’t count the editors of The New York Times among the aforementioned gallant minority of digital idiocy resisters. Today’s front page contained this rich nugget:
KIEV, Ukraine — Ukraine’s acting interior minister issued a warrant on Monday for the arrest of former President Viktor F. Yanukovych, accusing him of mass killing of civilian protesters in demonstrations last week…. Arsen Avakov, the acting official, made the announcement on his official Facebook page Monday.
Perhaps there’s a trend in this: all government information around the world will henceforth be transmitted by Facebook and Mark Zuckerberg will come to lead a New World Order of universal friendship. Remind me to send a friend request to Arsen Avakov and de-friend Victor F. Yanukovych.
I suppose the geopolitical bottom-line in all this is that the Ukrainians must feel more comfortable tilting toward a de-Nazified Germany than submitting to the attentions of a de-sovietized Russia. Both would-be patrons are dangling money before a rather cash-strapped Ukraine, which is faced by bond interest payouts that it can’t possibly come up with, not to mention some scratch to just keep the streetcars running. (Forgive me for pointing out that Ukraine at least has streetcars, unlike the USA, which just has cars on streets.)
Given the International Monetary Fund’s record as the West’s official loan shark, would a Ukraine government be wise to turn there for a handout? Meanwhile, is everybody pretending that the Ukraine is not crisscrossed by a great web of natural gas pipelines? And is it not obvious that the gas flows in one direction: from Russia to Europe. So, how exactly would it benefit western Europe if Ukraine got more cuddly with them? Russia could still shut down the gas valve at the source? If the Europeans had any common sense, you’d think they would just butt out of this struggle and quit dangling money and offers of friendship to a nation whose greatest potential is to be a perpetual battleground in yet another unnecessary dreadful conflict.
Let’s hope the American government is just grandstanding in the background because we have less business in this feud than in the doings of Middle Earth. National Security Advisor Susan Rice was flogging ultimatums around on “Meet the Press” yesterday — some blather about right of the Ukrainian people “to fulfill their aspirations and be democratic and be part of Europe, which they choose to be.”
If anything, the uprising in Kiev last week should remind us that Europe’s history is long and deep in bloodshed and that one particular Ukrainian politician who employs snipers to shoot through the hearts of his adversaries is not the only person or party across that broad region capable of reawakening the hell-bringers. There are quite a few other countries over there that could disintegrate politically in the months ahead, nations faced with insurmountable financial and economic troubles. The USA has enough problems of its own. Maybe it should tweet a message to itself.
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Savagery for All | KUNSTLER
A glance through the annals of history tells us that the Golden Age of Ukraine occurred just as western Europe was emerging from its long, dark, post-Roman coma around the 10th and 11thcenturies, A.D. After that, it was a kind of polo field for sundry sweeping hordes of mounted hell-bringers: Tatars, Turks, Cossacks, Bulgars, Napoleon’s grand army. In modern times, its population was divided between allegiance to Russia or to the Germanic states of the west. The Russian soviet regime treated it very badly. As many Ukrainians starved to death under Stalin’s “terror famine” of 1932-1933 as Jews and others were killed later in Hitler’s death camps. Stalin went on to try and totally erase Ukraine’s ethnic identity.
The Nazis wanted to go even further: to erase the Slavic population altogether so that the great fertile “breadbasket” of Ukraine could provide lebensraum for German colonizers. Stalin foolishly signed a non-aggression pact with Hitler in 1939 — had he not read Mein Kampf? Less than two years later, Germany turned around and invaded Russia, using Ukraine as doormat and mud-room for a horrific struggle that left Kiev, the capital city of Ukraine, a virtual ashtray, and 28,000 villages destroyed.
Culture, as we know, is resilient. But given that history, one wonders what the current disposition of all these historical tides portends. The few thousand Americans not completely distracted by tweeting the content of their breakfasts or shooting naked selfies or texting behind the wheel — yea, even the gallant minority not mentally colonized by the slave-masters of Silicon Valley — must wonder what the heck happened in the streets of Kiev last week. Or, as Sir Mick Jagger famously said at the deadly Altamont Speedway festival, “Who’s fighting, and what for?” By the way, don’t count the editors of The New York Times among the aforementioned gallant minority of digital idiocy resisters. Today’s front page contained this rich nugget:
KIEV, Ukraine — Ukraine’s acting interior minister issued a warrant on Monday for the arrest of former President Viktor F. Yanukovych, accusing him of mass killing of civilian protesters in demonstrations last week…. Arsen Avakov, the acting official, made the announcement on his official Facebook page Monday.
Perhaps there’s a trend in this: all government information around the world will henceforth be transmitted by Facebook and Mark Zuckerberg will come to lead a New World Order of universal friendship. Remind me to send a friend request to Arsen Avakov and de-friend Victor F. Yanukovych.
I suppose the geopolitical bottom-line in all this is that the Ukrainians must feel more comfortable tilting toward a de-Nazified Germany than submitting to the attentions of a de-sovietized Russia. Both would-be patrons are dangling money before a rather cash-strapped Ukraine, which is faced by bond interest payouts that it can’t possibly come up with, not to mention some scratch to just keep the streetcars running. (Forgive me for pointing out that Ukraine at least has streetcars, unlike the USA, which just has cars on streets.)
Given the International Monetary Fund’s record as the West’s official loan shark, would a Ukraine government be wise to turn there for a handout? Meanwhile, is everybody pretending that the Ukraine is not crisscrossed by a great web of natural gas pipelines? And is it not obvious that the gas flows in one direction: from Russia to Europe. So, how exactly would it benefit western Europe if Ukraine got more cuddly with them? Russia could still shut down the gas valve at the source? If the Europeans had any common sense, you’d think they would just butt out of this struggle and quit dangling money and offers of friendship to a nation whose greatest potential is to be a perpetual battleground in yet another unnecessary dreadful conflict.
Let’s hope the American government is just grandstanding in the background because we have less business in this feud than in the doings of Middle Earth. National Security Advisor Susan Rice was flogging ultimatums around on “Meet the Press” yesterday — some blather about right of the Ukrainian people “to fulfill their aspirations and be democratic and be part of Europe, which they choose to be.”
If anything, the uprising in Kiev last week should remind us that Europe’s history is long and deep in bloodshed and that one particular Ukrainian politician who employs snipers to shoot through the hearts of his adversaries is not the only person or party across that broad region capable of reawakening the hell-bringers. There are quite a few other countries over there that could disintegrate politically in the months ahead, nations faced with insurmountable financial and economic troubles. The USA has enough problems of its own. Maybe it should tweet a message to itself.
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Forward Guidance | KUNSTLER
“Guidance” is the new organizing credo of US financial life with Janet Yellen officially installed as the new Wizard of Oz at the Federal Reserve. Guidance refers to periodic cryptic utterances made by the Wizard in staged appearances before congress or in the “minutes” (i.e. transcribed notes) from meetings of the Fed’s Open Market Committee. The cryptic utterances don’t necessarily have any bearing on reality, but are issued with the hope that they will be mistaken for it, especially by managers in the financial markets where assets are priced and traded.
One such infamous moment of guidance was Ben Bernanke’s May 2007 statement saying that percolating sub-prime mortgage problems were “contained.” If that was a signal for anything it was a green light for banks not yet deemed too big to fail to continue constructing swindles called collateralized debt obligations (CDOs), which were bundles of already bundled mortgage backed securities based on janky mortgages for million-dollar houses owned by Las Vegas busboys, and the like, that had no prospect of ever being paid. The banks kept at it sedulously for another year, and then in September of 2008 this stream of combustible financial garbage blew up the banking system. Nobody at the Fed saw it coming, least of all Janet Yellen.
And then the banking system was “rescued” by the “program” (free money bailouts) enacted by congress called TARP, while the Fed set up a carry trade system that would enable the floundering (now) too big to fail banks to convert massive volumes of zero-interest no-risk loans into a dependable revenue flow to “build reserves,” that is, allow them to appear solvent while engaging in new dodges, swindles, and manipulations of markets, currencies and interest rates.
Which brings us very near the present. Fed chairperson Yellen gave a marathon six-hour audience to the House Committee on Financial Services last week. It was so devoid of substance and meaning that the TV network covering it switched the feed a few times to the exciting Olympic event of curling, in which “athletes” wield brooms to induce giant polished stones to glide across a length of ice at a scoring target — that is, an entirely artificial and purposeless activity aimed at producing a trance of contentment among viewers who have nothing better to do in the middle of the day.
Last May’s remarks by then Fed Chairperson Ben Bernanke that the Fed might consider “tapering” its gigantic monthly purchases of US Treasury bonds plus an equal amount of stranded mortgage paper made the markets so nervous that stock indexes had a seizure and the interest rate on the lodestar ten-year treasury bill shot up 150 basis points — into a zone that would cripple the government’s ability to keep its credit revolving. These dire portents prompted Bernanke to take back what he’d said, but then three months later, in the fall, he restated the taper guidance. By then, market watchers and playas were sure that he was just juking them, and anyway they were too busy stuffing their Christmas bonus stockings to take him seriously.
Lo, the taper is still on under Wizard Yellen, for the simple reason that if she backed out of it now, before she officially chaired her first meeting of the Fed governors, her outfit would lose whatever shreds of credibility it still hangs onto. Even with the taper on, it is for now still pumping over half a trillion dollars a year into the banking system. There is some reason to think that it made the markets puke two weeks ago. But then a really bad employment number came out, and in the inverse climate of bad-news-being-good-news for bubble markets, that was construed as a sure sign that the Fed might have to un-taper sometime around late spring with Yellen’s chairpersonship fully established. I suspect they’ll do something else: they’ll continue to taper down purchases of treasuries and mortgage detritus via the direct TBTF bank channel and they’ll establish a new “back door” for shoveling money into the system. Nobody knows what this is yet, and it may be some time even after it starts that the mechanism is discovered. In the meantime, the seeming placidity of the renewed “risk on” mood should be a warning to market cheerleaders. Something’s got to give and I think it will be the US dollar index, which has been in Zombieland since November. The world has never been so ready for a change in direction. Expect no real guidance from your leaders.
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The Smog of Fraud | KUNSTLER
Team Obama pulled a cute one last week nominating Blythe Masters, JP Morgan’s commodity chief, to an advisory committee of the Commodity Futures Trading Commission (CFTC) which supposedly regulates activities on the paper trades in corn, pork bellies, cocoa, coffee, wheat, corn — oh, and gold, too, by the way, in which JP Morgan has been suspected of massive gold (and silver) market manipulations and other misconduct lately. That would include the 2011 MF Global Fiasco in which nearly a billion dollars from “segregated” customer accounts somehow ended up parked over at JP Morgan as a result of bad derivative bets on tanking Eurozone bonds. MF Global, primarily a commodities trading brokerage, was liquidated in 2011. The CFTC never issued referrals for prosecution to the Department of Justice in the matter and, of course, MF Global’s notorious CEO, Jon Corzine remains at large, enjoying caramel flan lattes in the Hamptons to this day. Such are the Teflon transactions of the Obama years: nothing sticks.
There was such a Twitter storm over Blythe Masters that she withdrew from consideration for the committee before the day was out.
JP Morgan is one of the specially privileged “primary dealer” banks said to be systemically indispensible to world finance. Supposedly, if one of them is allowed to flop, the whole global matrix of global debt obligations — and, hence, global money — would dissolve in a misty cloud of broken promises. They are primary dealers to their shadow partner, the Federal Reserve, and their main job in that relationship is buying treasury bonds, bills, and notes from the US government and then “selling” them to the Fed (earning commissions on the sales, of course). The Fed, in turn, “lends” billions of dollars at zero interest back to the primary dealers who then park the “borrowed” money in accounts at the Fed at a higher interest rate. This is, of course, money for nothing, and even small interest rate differentials add up to tidy profits when the volumes on deposit are so massive.
This “carry trade” was started because the primary dealer banks were functionally insolvent after 2008 and needed to build “reserves” up to some level that would putatively render them sound. But that was a sketchy concept anyway since accounting standards had been officially abandoned in 2009 when the Financial Accounting Standards Board (FASB) declared that banks could report the stuff on their books at any value they felt like. In short, the soundness of the biggest banks in the USA could no longer be determined, period. They were beyond accounting as they were beyond the law. At the same time, the banks began the operations of shifting all the janky debt paper, mostly mortgages and derivative instruments (i.e. made-up shit like “CDOs squared”), value unknown, from their vaults to the a vaults of the Federal Reserve, where it resides to this day, rotting away like so much forgotten ground round in the sub-basement of an abandoned warehouse of a bankrupt burger chain.
All of these nearly incomprehensible shenanigans have been going on because debt all over the world can’t be repaid. The world’s economy, as constructed emergently over the decades, can’t function without repayable debt, which is the essence of “credit” — the fundamental trust implicit in banking. You have “credit” because other persons or parties believe in your ability to repay. After a while, this becomes a mere convention in millions of transactions. What’s happened is that the conventions remain in place but the trust is gone. It’s gone in particular among the parties deemed too big to fail.
Everybody knows this now and everybody is trying desperately to work around it, led by the Federal Reserve. Trust is gone and credit is going and debt is sitting between a rock and a hard place with its grubby hands pressed together, praying that it will be forgiven, forgotten, or overlooked a little while longer. By the way, the reason trust and credit are gone is because oil is no longer cheap and world economies can’t grow anymore. They can’t afford to run the day-to-day operations of a techno-industrial society. They can only pretend to afford it. The stock markets are mere scorecards for players who can only lie and cheat now to keep the game going. Somewhere beyond all the legerdemain and fraud, however, there remains a real world that is not going away. We just don’t know what it will look like when the smog of fraud clears.
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Shake me, wake me! | KUNSTLER
Shake me, wake me! | KUNSTLER.
The rot moves from the margins to the center, but the disease moves from the center to the margins. That is what has happened in the realm of money in recent weeks due to the sustained mispricing of the cost of credit by central banks, led by the US Federal Reserve. Along the way, that outfit has managed to misprice just about everything else — stocks, houses, exotic securities, food commodities, precious metals, fine art. Oil is mispriced as well, on the low side, since oil production only gets more expensive and complex these days while it depends more on mispriced borrowed money. That situation will be corrected by scarcity, as oil companies discover that real capital is unavailable. And then the oil will become scarce. The “capital” circulating around the globe now is a squishy, gelatinous substance called “liquidity.” All it does is gum up markets. But eventually things do get unstuck.
Meanwhile, the rot of epic mispricing expresses itself in collapsing currencies and the economies they are supposed to represent: India, Turkey, Argentina, Hungary so far. Italy, Spain, and Greece would be in that club if they had currencies of their own. For now, they just do without driving their cars and burn furniture to stay warm this winter. Automobile use in Italy is back to 1970s levels of annual miles-driven. That’s quite a drop.
Before too long, the people will be out in the streets engaging with the riot police, as in Ukraine. This is long overdue, of course, and probably cannot be explained rationally since extreme changes in public sentiment are subject to murmurations, the same unseen forces that direct flocks of birds and schools of fish that all at once suddenly turn in a new direction without any detectable communication.
Who can otherwise explain the amazing placidity of the sore beset American public, beyond the standard trope about bread, circuses, and superbowls? Last night they were insulted with TV commercials hawking Maserati cars. Behold, you miserable nation of overfed SNAP card swipers, the fruits of wealth and celebrity! Savor your unworthiness while you await the imminent spectacles of the Sochi Olympics and Oscar Night! Things at the margins may yet interrupt the trance at the center. My guess is that true wickedness brews unseen in the hidden, unregulated markets of currency and interest rate swaps.
The big banks are so deep in this derivative ca-ca that eyeballs are turning brown in the upper level executive suites. Notable bankers are even jumping out of windows, hanging themselves in back rooms, and blowing their brains out in roadside ditches. Is it not strange that there are no reports on the contents of their suicide notes, if they troubled to leave one? (And is it not unlikely that they would all exit the scene without a word of explanation?) One of these, William Broeksmit, a risk manager for Deutsche Bank, was reportedly engaged in “unwinding positions” for that that outfit, which holds over $70 trillion in swap paper. For scale, compare that number with Germany’s gross domestic product of about $3.4 trillion and you could get a glimmer of the mischief in motion out there. Did poor Mr. Broeksmit despair of his task?
Physicist Stephen Hawking declared last week that black holes are not exactly what people thought they were. Stuff does leak back out of them. This will soon be proven in the unwinding derivatives trades when most of the putative wealth associated with swaps and such disappears across the event horizon of bad faith, and little dribbles of their prior existence leak back out in bankruptcy proceedings and political upheaval.
The event horizon of bad faith is the exact point where the credulous folk of this modern age, from high to low, discover that their central banks only pretend to be regulating agencies, that they ride a juggernaut of which nobody is really in control. The illusion of control has been the governing myth since the Lehman moment in 2008. We needed desperately to believe that the authorities had our backs. They don’t even have their own fronts.
Is the money world at that threshold right now? One thing seems clear: nobody is able to turn back the plummeting currencies. They go where they will and their failures must be infectious as the greater engine of world trade seizes up. Who will write the letters of credit that make international commerce possible? Who will trust whom? When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?
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Warrior Land | KUNSTLER
Looking around America these days, if you can stand it, the sense of what it means to be a man has become a very shaky business. I was studying one particular tattooed moron, twenty-something, in the gym Saturday. He had on display a full sleeve-job of “tribal” skin décor in that curvy blade-like motif that invokes a general idea of ninja swordplay. Perhaps he really was a dangerous dude, a Navy Seal just back from slitting Taliban throats in Nangarhar. More likely, he was a fork-lift operator in the local Ace Hardware distribution center. He seemed to resent my attention — but then why had he taken so many pains to adorn himself?
Is it not interesting that so many males in America affect to be warriors? What does this tell us about the psychological dimensions of manhood in this country? If I have to guess, I’d venture that many people of the male persuasion hereabouts can’t imagine any other way of being a man — other than as a fine-tuned bringer-of-death, preferably some species of cyborg, with “techno” bells and whistles. This is obvious fodder from the many Transformer and Robocopmovies, the dream of becoming a most excellent killing machine.
This ethos was on hyperwarp display in Sunday’s NFL football playoffs, football being, after all, mock warfare with mock warriors. San Francisco quarterback Colin Kapernick’s arm tattoos were hard to decipher even on a large high-def flatscreen. At first I thought they were maps of suburban Milwaukee, or perhaps the full text of Jude the Obscure but it turns out (I looked it up) they record his ongoing life “narrative,” his triumphs and distinctions, his mom’s heart transplant, and his dealings with the fugitive deity known as Jesus Christ. Between scoring drives, Colin vamped on the sidelines in a red Cholo hat, one of those ball caps featuring an exquisitely flattened brim designed to make the wearer look like a homicidal clown — which is the favored motif of aspiring criminals abroad in the land nowadays. As Lon Chaney, the master of horror, once remarked apropos of his character creation technique, “There’s nothing funny about a clown in the moonlight.” The objective: to look as ridiculous as possible and yet give off a vibe of unpredictable danger and violence.
Colin was hardly the sole creature on the field adorned with ink. At times, the scrimmage looked like the recreation yard at the Washington State Penitentiary. But that brings us to another theme of contemporary American manhood having to do with the grand initiation rite of serving time in prison. There is a meme on the loose, especially among the hopeless idealists, that American jails are filled with “political prisoners.” This is just not so. Though our drug laws are certainly idiotic, cruel, and pointless, I believe sincerely that the prison system is filled with psychopathic monsters. They may be creations of our monster-making culture, in all its depravity and pernicious falsity, but they are monsters nonetheless.
But the romance of monsterdom is yet another theme in the current caboodle of American manhood. Boys are in love with monsters, and want to be them, or like them, or with them, and nowadays many succeed at that. The indulgence in all these juvenile enthusiasms presents in the absence of any better models of a way to be. The time is not distant when a lot of things are going to shake loose in this land, and when that happens, there will be monsters amongst us everywhere: tattooed clowns in baby clothes with large muscles and weapons. Really, what are the chances that such people reared on dreams of triumphal violence will operate on the basis of kindness, generosity, and consideration of any future beyond the next fifteen minutes.
Let’s face it, the reason we do the things we do, and act the way we act, is because American manhood is in full failure mode, in full retreat from what used to be known as virtue. We wouldn’t know what this is anymore if it jumped up and bit us on the lips. I’m afraid it will take very stern leadership to reform all these current trends. When it comes around, it will look like Dolly Parton meets Hitler.
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The Fate of a City | KUNSTLER
The Fate of a City | KUNSTLER.
I was born and raised in New York City, on the east side of Manhattan (with a brief intermezzo in the long Island Suburbs (1954 – 1957) though I have lived upstate, two hundred miles north of the city, for decades since. I go back from time to time to see publishers and get some cosmopolitan thrills. One spring morning a couple of years back, toward the end of Mayor Bloomberg’s reign, I was walking across Central Park from my hotel on West 75th Street to the Metropolitan Museum of Art when I had an epiphany.
Which was that Central Park, and indeed much of the city, had never been in such good condition in my lifetime. The heart of New York had gone through a phenomenal restoration. When I was a child in the 1960s, districts like Tribeca, Soho, and the Bowery were the realms of winos and cockroaches. The brutes who worked in the meatpacking district had never seen a supermodel. Brooklyn was as remote and benighted as Nicolae Ceausescu’s Romania. The Central Park Zoo was like a set from Riot in Cellblock D, and the park itself was desecrated with the aging detritus of Robert Moses’s awful experiments in chain-link fencing as a decorative motif. Then, of course, came the grafitti-plagued 1970s summed up by the infamous newspaper headline [President] Ford to City: Drop Dead.
Now, the park was sparkling. The sheep’s meadow was lovingly re-sodded, many of Frederick Law Olmsted’s original structures, the dairy, the bow bridge, the Bethesda Fountain, were restored. Million dollar condos were selling on the Bowery. Where trucks once unloaded flyblown cattle carcasses was now the hangout of movie and fashion celebrities. Brooklyn was a New Jerusalem of the lively arts. And my parents could never have afforded the 2BR/2bath apartment (with working fireplace) that I grew up in on East 68th Street.
The catch to all this was that the glorious rebirth of New York City was entirely due to the financialization of the economy. Untold billions had streamed into this special little corner of the USA since the 1980s, into the bank accounts of countless vampire squidlets engaged in the asset-stripping of the rest of the nation. So, in case you were wondering, all the wealth of places like Detroit, Akron, Peoria, Waukegan, Chattanooga, Omaha, Hartford, and scores of other towns that had been gutted and retrofitted for suburban chain-store imperialism, or served up to the racketeers of “Eds and Meds,” or just left for dead — all that action had been converted, abracadabra, into the renovation of a few square miles near the Atlantic Ocean.
Nobody in the lamebrain New York based media really understands this dynamic, nor do they have a clue what will happen next, which is that the wealth-extraction process is now complete and that New York City has moved over the top of the arc of rebirth and is now headed down a steep, nauseating slope of breakdown and deterioration, starting with the reign of soon-to-be hapless Bill de Blasio.
Mayor Bloomberg was celebrated for, among other things, stimulating a new generation of skyscraper building. There is theory which states that an empire puts up its greatest monumental buildings just before it collapses. I think it is truthful. This is what you are now going to see in New York, especially as regards the empire of Wall Street finance, which is all set to blow up. The many new skyscrapers recently constructed for the fabled “one percent”— the Frank Gehry condos and the Robert A.M. Stern hedge fund aeries — are already obsolete. The buyers don’t know it. In the new era of capital scarcity that we are entering, these giant buildings cannot be maintained (and, believe me, such structures require incessant, meticulous, and expensive upkeep). Splitting up the ownership of mega-structures into condominiums under a homeowners’ association (HOA) is an experiment that has never been tried before and now we are going to watch it fail spectacularly. All those towering monuments to the beneficent genius of Michael Bloomberg will very quickly transform from assets to liabilities.
This is only one feature of a breakdown in mega-cities that will astonish those who think the trend of hypergrowth is bound to just continue indefinitely. It will probably be unfair to blame poor Mr. de Blasio (though he surely can make the process worse), even as it would be erroneous to credit Michael Bloomberg for what financialization of the economy accomplished in one small part of America.
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James Howard Kunstler: The Disenchantment of American Politics | Peak Prosperity
James Howard Kunstler: The Disenchantment of American Politics | Peak Prosperity.
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The Disenchantment of American Politics
Considering the problems we face as a nation, the torpor and lassitude of current politics in America seems like a kind of offense against history. What other people have allowed circumstances to run over them like so many ‘possums sleeping on the highway?
The financial disturbances of recent years especially have trashed millions of households, yet the fat middle (no pun intended) of the broad public (ditto) seems strangely content with all the tawdry sideshows of the day — Black Thursday, the Kardashians, the NFL playoffs, Twitter, texting, twerking, side boobs — taking little-to-no interest in politics while their prospects for a habitable future swirl around the drain. How might we account for such supernatural passivity?
And, since human affairs don’t remain static indefinitely, in what direction might things go when the political mood finally heaves and shifts? The possibilities are unsettling.
A Failure to Lead
If you care about poll numbers, they tell a simple story of contempt for the current crop of US political leaders. Congress rates a 12 percent approval rating and President Obama, at 35 percent, scores lower than Richard Nixon did in the midst of the Watergate fiasco. I’m surprised that Obama’s numbers aren’t lower (and I voted for him, twice). After all, few American lives were actually touched by the lies and shenanigans that spun off of Watergate, and money was an inconsequential part of it. But a whole lot of people were affected by Obama’s dissimulations around the Affordable Care Act, while his tragic failure to reestablish the rule of law in banking from the get-go in 2009 probably amounts to impeachable malfeasance. Add to this the NSA domestic spying operations revealed by Edward Snowden plus the troops indefinitely garrisoned in Asian countries and you have a portrait of a creeping Orwellian contagion.
The only whiff of rebellion in the air lately has emanated from the so-called conservative end of the political spectrum: the Tea Party. Its complaints mainly range around the offenses of Big Government, though a certain incoherence pervades its agenda as a whole. (I will get to that presently.) I am sympathetic to gripes against the size and reach of government but I’m convinced that the swerve of US politics in the not-distant future will hinge on the failure of government at this scale to conduct any business competently. Anyway, as a veteran of the hippie uprising of the 1960s, when the Left was insurgent against an obdurate “establishment,” it’s interesting to observe the perverse flip-flop of history that has now put the Tea Party in charge of rebellion central.
The failures of the Left these days are pretty obvious and awful. They got their storybook change-agent elected president and he hasn’t done a darn thing in five years to halt the wholesale racketeering that pervades our national life. Obama’s Department of Justice is home to more zombies than the Grand Cemetery of Port-Au-Prince. The Attorney General’s office essentially signed off on prosecuting bank fraud when Lanny Breuer, chief of the Criminal Division, declared some banks too big to jail. End of story, as Tony Soprano used to say.
Obama promised to brick up the revolving door between Wall Street and the federal agencies and he only added more turnstiles to the gate. Most of the government officials involved in the 2009 TARP program and related crisis management operations are now pulling in six figure salaries at the banks and hedge funds they formerly regulated, while a veteran fixer (Mary Jo White) from the whitest white shoe fixit law shop in the land (Debevoise & Plimpton) was appointed to head the SEC a year ago.
The Left, as represented by President Obama and a majority in the US Senate, did nothing to arrest the ongoing corporate hijacking of the USA. When the Supreme Court ruled in the Citizens United case (2010) that corporations could buy elections via unlimited campaign contributions under the free speech clause of the constitution, Obama had the chance to propose new legislation or a constitutional amendment to redefine the distinction between human persons and corporate “persons.” You’d think that as a constitutional lawyer, he would have been eager to lead on this. But he just ignored the historic opportunity and, anyway, he was on the receiving end of gobs of corporate “free speech” money to run his reelection campaign.
Apart from its pitiful roll-out bugs, the Affordable Care Act has the odor of the biggest insurance scam in history. People joke these days about Obama serving George W. Bush’s fourth term. The internal contradictions of Democratic Party behavior under Obama have only driven political cynicism to new heights. The millennial generation must feel horribly swindled by it.
A Paucity of Good Options
As for the rebellious conservative Tea Party faction, it is hard for me to square their umbrage at Big Government with their avidity for foreign wars (and support for the military-industrial rackets behind them), their failure to oppose the security-state activities of the NSA (while branding whistleblower Snowden “a traitor”), their love of corporate commercial tyranny a la Wal-Mart, their devotion to economically suicidal suburban sprawl, their zeal to control the social and sexual conduct of their fellow citizens, and their efforts to impose religion in civic affairs — all of which is to ask, what do they mean when they shout about “liberty?”
These contradictions probably seem abstruse compared to the gritty plight of ordinary citizens getting monkey-hammered in an economy that can provide neither decent incomes nor dignified, meaningful social roles for classes of people who could be earnest, honest, and enterprising given the chance. This gets to a more general failure across the political spectrum to apprehend the larger changing dynamics of our time — resource scarcity, capital impairment, contraction, environmental collapse, population overshoot — and to frame a coherent response to these developments. In short, the politicians seem to have no idea where history is taking us, and no road-map to prepare for the journey to get there.
There will probably always be some alignment of Left and Right in politics, but from time to time the packages they come in and the ideologies they contain are in desperate need of either rehabilitation or dissolution. I’d bet that we may soon see the demise of both the Democratic and Republican parties as they are currently structured. They’ve been around an awful long time now, and their presence probably provides a certain reassuring familiarity, but that is also the same growth medium as contempt. The useless and tiresome public quarrels they spawn these days, the kabuki theater debt ceiling showdowns, the can-kickings, and other evasions of responsibility, erode basic institutional trust to a dangerous degree; the people lose faith in the courts, the news media, the banks, the value of their money, and eventually all authority. The two major parties function as mere conduits for all the racketeering operations that define life in this nation today. The mature two-party system may prove to have been a transient product of America’s industrial heyday, which is now over despite the euphoria over stock bubbles, shale oil, computers and other new technology. If the two old parties dry up and blow away, will anyone shed a tear for them? When that happens, there may not be enough political vitality left at the federal level to reconstitute them in new packaging.
Trouble Brewing
If party politics are weak, muddled, and contradictory, the divisions between Americans are starkly clear: wealth in America has never been so unevenly distributed — the fabled one percent versus everyone else. Despite the election of a mixed-race president, and the wish-fulfillment fantasies of Hollywood, race relations in the USA remain tense. 2013 was the year of the “knockout” game for black teenagers randomly targeting “woods” (i.e. non-black “peckerwoods”), some of whom died. It was the year of George Zimmerman’s acquittal in the Trayvon Martin case and the echoing recriminations.
Divisions between men and women are tragically compounded by the dangerous dynamics of work in America that leave many men (especially men) in a vacuum of purpose, meaning, and potency. It is almost impossible these days for low-skilled men to support a family. The indignity of this thunders through broken communities and the penitentiary cellblocks. But the anomie is also expressed in the higher ranks of an economy where office work can be done by anybody, and gender confusion lately has been valorized as a compensating mechanism for the marginalization of men and the failure of manhood. The political blowback from this, when it comes, is apt to be fierce. Look no further than Duck Dynasty.
The ongoing national culture war pits the “traditional values” faction against the sexual libertarians; the red states against the blue states; urban against the conflated suburban and rural; the Christian fundamentalists against an array of other positions and belief groups; the entitlement “socialists” against the “free market” conservatives.
Perhaps most divisive of all will be the schism between the young and the old over the table scraps of the dying industrial economy.
These tensions will not remain unresolved indefinitely.
In Part II: Get Ready For Strange Days, we’ll forecast the direction that this resolution may follow. The last time the USA faced a comparable political convulsion was the decade leading into the Civil War, but this time it will be more complex and confusing and it will have a different ending. A dominant theme will be a continued loss of faith in the Federal government to solve our ills, and a re-emergence of reliance on local support networks at the state, municipal, community and family levels.
This devolution will likely play out very differently across the major regions of the US. And most will follow this course unwillingly.
Strange days are coming.
Click here to access Part II of this report (free executive summary; enrollment required for full access).
Olduvaiblog: Musings on the coming collapse 