Saturday, July 19, 2014

It woulda been nice

I'm in North Carolina this week, talking with people about the nature of government and what role it can play in causing or solving our nation's problems.

But at the moment I'm procrastinating in the hotel room before going out.  Continuing this week's theme of 21st century capitalism's decline and fall, over at my favorite doomer blog, the Archdruid Report, John Michael Greer is once again exploring the mismatch between material decline and our guiding myth of Progress.  He thinks it is going to be a painful and traumatic wrench - one which people are completely unprepared for.  I think he's probably right, but I'd add a few caveats.

As I've related before, when I went to the former USSR as an eager young anthropologist in 1994, I thought I'd be looking at the excitement of the end of an ideology and the beginning of a new one.  But when I got there, no one wanted to talk about any such thing.  They were much too busy trying to keep a roof overhead, keep the daughter in school, the son out of the army and find a place to store 100 kilo of potatoes for the winter.

There's no doubt that many people did not survive the dry run for collapse that was mid-nineties Kazakhstan.  Male life expectancy was dropping to the mid-fifties and most of that had to do not just with material suffering, but the ripping away of life's sureties - salaries, certificates, positions, status all lost their value and that hit middle aged men the hardest.  Vodka and automobiles culled that herd.

But one advantage the Soviet people had was that they'd almost all given up on the monomyth of Soviet progress.  There was no collapse of an ideology to study, because it had been hollowed out to just another bit of habitual theater.

So the reaction (and the long-established practice) was to hunker down, and do their best to ignore anyone who was rash enough to rave about a new myth - capitalism, Islamism, nationalism, socialism or whatever.  The state was happy to encourage that for the most part.

In the current US, as I ignore the pundits and the boosters and talk to regular people, I find very little faith in the myth of progress.  Yes, Greer's analysis is correct that it's the accepted default mode, and people don't really have cognitive alternatives other than to wish for it to be true.  But they don't seem to believe it.  The faith is broken at least when it comes to their little part of the world - and for many, in the big picture as well.

If and when the failure of Progress becomes too obvious to ignore, there will be those who can't adapt.  But I wonder if the majority of people are being eased into decline at a pace that will eventually result in a "well, it woulda been nice" rather than an abrupt collapse of a world view.

Wednesday, July 16, 2014

Inflation, unheralded


A fascinating little article in the New York Times, called "Everything Boom, or Maybe the Everything Bubble," makes the observation that with so much money chasing after too few assets, the assets are expensive even though the returns are low.  What's an investor to do?

One obvious explanation for the quandary is that money isn't worth as much as it used to be. There's a huge unheralded process of inflation going on.  Most things are valued less (because of a decline in demand or because an asset that used to be a good investment isn't any more), but since money is also worth less, it looks like nothing is happening. 

On the other hand, the minority of sought-after assets are holding their value but the declining value of money means more is needed to buy it, and so prices rise.

A good way to think about this hidden inflation is to think about something - a thing or a service that you could get at a high quality a couple of decades ago, but today you notice that the quality has declined significantly.  I have some great old kitchen utensils, spoons and a spatula built to last forever, and I salvage old steel screws and bolts because they don't strip and bend like the ones at the hardware store.  But of course the quality hasn't really declined.  I could replace those steel spoons for $100 or so, and I'm sure there are places to get quality hardware rather than the Chinese scrap.  But if you had to spend a buck fifty on a wood screw that you're used to paying 15 cents for, you couldn't help but notice the inflation.

And then you realize that the furniture couldn't hold a screw even if you wanted it to, since the stuff you can afford is mostly particle board held together with staples and glue.

For investors, however, there is a second half to this story: the end of economic growth.  Investment is the practice of taking one's wealth and buying something that will produce more wealth - regardless of whether the currencies are stable or inflating.  The printing presses of the Central Bankers have been running day and night, in the vain hope that the beneficiaries (bankers and financiers mostly) will invest it in wealth-making activities - factories, buildings, new technologies.  But vast trillions of these quick-spun dollars and euros and renminbi sit, flitting from hand to hand in the markets, eroding in value because investors don't see anything that is going to pay off in real wealth.

Now the peak energy people won't have any difficulty diagnosing this.  Our economic growth has been primarily based on access to more and more cheap energy, almost exclusively in the form of fossil fuels - coal, gas and oil.   Now that the cheap fuels have been used up, we have to pursue, dirtier, less concentrated, harder to extract sources - economic growth begins to slow down.  The economy will eventually go into contraction if it hasn't already.

I suspect there's more to it than thermodynamic destinies.  These things are always over-determined.

21st century capitalism is exhausted.  Marx was perfectly aware that capitalism, left to its own devices will tend toward monopolism and eventually stagnation and self-strangulation.  It's taken longer than he thought, but the sclerotic state of our capitalism is probably terminal - as any entrepreneurial upstart is taken up and ingested.

And if the only solutions are to do something different than what we've been doing, who achieves the levers of power these days?  Are the kinds of people who rise to the top of our broken politics and our bureaucratized corporations really the kinds who are likely to solve the problems, which business-as-usual is bringing down on our heads?

So whatever the underlying cause, pity the poor investor who just wants to put those dollars or euros or renminbi "to work", but sees nothing but bad risks and varying degrees of wealth erosion.  Lo and behold, it turns out he's getting poorer.  Just like the rest of us.


Krugman has a timely rejoinder to my little sally, Addicted to Inflation.  In it he argues that hidden inflation is a phantasm of the political right that proves their inability to see things as they really are.  Krugman is an economist and I'm not, so take what I say with a grain of salt.  But in my opinion the thing that neither he nor the conservatives he lambasts are willing to contemplate or enter into their calculations is the possibility that the party is ending.

The conservatives were wrong about the printing presses causing the currencies to crash, because though vast sums of money were printed, they mostly sit in cyber vaults un-spent by the banks and billionaires.  Krugman is wrong because, like all mainstream economists, he doesn't seriously consider the geologic, thermodynamic and biospheric limits on the economy.  The normal tools of economic craft don't work when we run up against those limits in the way that we are today.

Sunday, July 6, 2014

Pollinators and predators

fritillary on butterfly weed
The butterflies are out now that the rains have passed.  

on the phlox
The vetch that is swallowing up the back garden is abuzz with bumble bees.  
The boys refuse to pull it.    

A pretty hairstreak suns on a potato leaf
Red-spotted purples and red admirals are fluttering through.  
The brown-eyed susans are full of little bees, flies and wasps.

Is this tiny fly fooling anyone with his hymenopteran disguise?
There are thousands of flies in North America -
hundreds of species of green long-legged flies, little metallic predators.  

A bronze colored long-legged fly

Members of two distinct species are patrolling adjacent milkweed plants.

A long-legged fly munching on a midge
For a hundred million years 
(according to the amber)
they have been plying their hunting grounds.

Wednesday, July 2, 2014

Hobby Lobby and the levers of power

It was probably the wrong day to give up coffee.  

This week, we woke up to another infuriating ruling by our Supreme Court.  

Ostensibly, the "Hobby Lobby decision" was about certain religiously conservative business owners, who felt that the religious beliefs of their corporation (huh?!) should be insulated from the laws crafted by Congress and its voters.

This ruling brought out a rich outpouring of commentary from many directions, lamenting, among other things:

  • the assertion that powerful men's religious sensibilities are more important than working women's health and autonomy
  • the bizarre notion that corporations can hold religious beliefs, and that those beliefs earn Constitutional protection
  • that unlike the rest of us, business-religion gives one the ability to opt out of laws, even if they only indirectly burden a "conscience"
  • a culmination of the Catholic Church's long project of placing religious doctrine above secular law
  • a table being set for a legal establishment of discrimination rights against gays, Muslims, and others

and so on.

All those things are true, but I think they are also window dressing for the larger project.  The 5 radical members of the Supreme Court are barely bothering to disguise the fact that their overriding goal is to help install oligarchy in the US and to place powerful men and their corporations securely above democratic control.

The courts interpret the Constitution and rightly place limits on the dictatorship of the majority.  Since the document is expressly protective of basic rights, it has often served to protect liberty from momentary, unenlightened swerves of public opinion - and at least it offers a helpful ramp up and away from oppression, whenever such is finally wanted and needed by enough people (see civil rights movement, women's suffrage).

US democracy might still have the potential to unwind the ongoing movement toward a corporate and elite oligarchy.  And for that reason, democracy itself must be neutered, and in an Orwellian twist, the Constitution must be re-interpreted as an instrument to tie the hands of the people.

The Court recently ruled that showering politicians with money is not corruption, but is in fact political "speech," protected by the Constitution and so beyond our right to interfere with.  (There are few in this country, with the exception of would-be oligarchs and the lackeys who work for them, who believe that money has not corrupted the political process.)  Remember, this is not the court just saying such corruption is OK, it is the court saying that we, as a democratic society, have no right to make laws to interfere with this corruption, even if we disagree and believe it is not OK.

The Hobby Lobby is another step forward in this project.  The Court has been laying the groundwork for making each corporation into a kind of "super person" - one whose liberties must be protected by the Constitution - a super person who has free speech to exercise and sincere religious beliefs that must be respected - a super person who must be protected from the general populace's (heretofore widespread) belief that corporations ought to be subject to specific legal controls and even expected to contribute to a common good.

Americans have woken up to the knowledge that our democracy has been hijacked.  The Court is rushing to make sure that if we attempt to reign in these men, their corporations, and the political power they have bought, the legal and political terrain is arrayed against us.  This week's effort, which made a mockery of the Constitution's protection of religious liberty, should be understood in that light.