[R-G] [BillTottenWeblog] What Now?

[Bill Totten]

Clusterfuck Nation

by Jim Kunstler

Comment on current events by the author of
The Long Emergency (Atlantic Monthly Press, 2005)

www.kunstler.com (October 20 20)


It's fascinating to read the commentators in mainstream journals like
The Financial Times and The Wall Street Journal all strenuously
pretending that "the worst is over" (maybe ... we hope ... fingers
crossed ... hail Mary full of grace ... et cetera). The cluelessness
would be funny if it didn't involve a world-changing catastrophe. All
nations that have reached the fork-and-spoon level of civilization are
now engineering a vast network of cyber-cables that lead directly from
their central bank computers to the Death Star that is hovering above
world financial affairs like a giant cosmic vacuum cleaner, sucking up
dollars, euros, zlotys, forints, krona, what-have-you. As fast as the
keystrokes create currency-pixels, the little electron-denominated units
of exchange are sucked out of the terrestrial economies into the black
hole of money death. That's what the $700-billion bail-out (excuse me,
"rescue plan") and all its associated ventures are about.
       
To switch metaphors, let's say that we are witnessing the two stages of
a tsunami. The current disappearance of wealth in the form of debts
repudiated, bets welshed on, contracts canceled, and Lehman
Brothers-style sob stories played out is like the withdrawal of the sea.
The poor curious little monkey-humans stand on the beach transfixed by
the strangeness of the event as the water recedes and the sea floor is
exposed and all kinds of exotic creatures are seen thrashing in the mud,
while the skeletons of historic wrecks are exposed to view, and a great
stench of organic decay wafts toward the strand. Then comes the second
stage, the tidal wave itself - which in this case will be horrific
monetary inflation - roaring back over the mud flats toward the land
mass, crashing over the beach, and ripping apart all the hotels and
houses and infrastructure there while it drowns the poor curious
monkey-humans who were too enthralled by the weird spectacle to make for
higher ground. The killer tidal wave washes away all the things they
have labored to build for decades, all their poignant little effects and
chattels, and the survivors are left keening amidst the wreckage as the
sea once again returns to normal in its eternal cradle.
        
So, that's what I think we will get: an interval of deflationary
depression followed by a destructive wave of inflation that will wipe
out both constructed debt and constructed savings, scraping the
financial landscape clean. There's no question that stage one is
underway. But we can be sure the giant wave of money recklessly loaned
into existence in just a few weeks time will wash back through the
global economy leaving a swath of destruction.
     
And then what? The societies of the world will be faced with the task of
rebuilding systems of fruitful activity, that is, real economies based
on productive behavior rather than the smoke-and-mirrors of
Frankenstein-finance con games. In fact, excuse me while I switch
metaphors again, because the Frankenstein story - the New Prometheus -
is yet another apt narrative to inform us what we have done. We have
"played" with financial fire and brought to life a monster now bent on
killing us. One question that this metaphor-narrative raises is: when
will the angry peasant mob storm the castle with their flaming brands
and cries for blood from the makers of this monster? Rather soon, I
think. Perhaps, in some countries (maybe the USA, if we're lucky), this
will take the more orderly form of systematic prosecutions, bringing to
justice persons who perpetrated swindles involving the alphabet soup of
investment "products" that have gone bad in so many accounts (and ruined
so many individuals, institutions, and governments). I think it has
already begun with the inquisitors summoning the shifty Dick Fuld of
Lehman Brothers - but there are hundreds of other characters like him
out there, who scored untold millions of dollars in activities that were
simply grand swindles. I wouldn't be surprised if, eventually, Treasury
Secretary Hank Paulson found himself in the dock to answer how come,
when he ran Goldman Sachs, there was a special unit in the company
dedicated to short-selling the very mortgage-backed securities that
another unit in the company was so busy pawning off to every pension
fund on God's green earth.
        
Apart from orderly prosecutions (which can certainly turn harsh and
cruel), there is the possibility of sociopolitical upheaval -
revolution, violence, civil war, war between nations, the whole menu of
monkey-human mischief that afflicts mankind. We are not necessarily
immune to it here in the USA, despite our cherished notion of
exceptionalism, which would have us inoculated against all the common
vicissitudes of history.

Anyway, prosecution through the courts, while perhaps satisfying the
hunger for justice (or, more particularly, revenge), is not a productive
economic activity. So, the question begs itself again: what will we do?
Under the best circumstances we will reorganize our society and economy
at a lower level of energy use (and probably a lower scale of
governance, too). The catch is, it will have to be a whole lot lower. I
think we'll be very lucky fifty years from now to have a few hours a day
of electricity to do things with.
     
The energy story and its hand-maiden, the climate change situation, are
both lurking out there beyond the immediate spectacle of the financial
fiasco. Both these things imply pretty strongly that the economic
relations currently unraveling will not be rebuilt - not the way they
were before, or even close to it. The best outcome will be societies
that can practice small-scale "process-intensive" organic agriculture
and equally small-scale process-intensive modes of manufacture in the
context of very local sociopolitical networks. An accompanying hope is
that we can remain civilized in the process. Personally, while I
recognize the appeal (to others, not me) of the "singularity" narrative,
which has the human race making a sudden evolutionary leap into some
kind of cyborg-nirvana, I regard it as an utter bullshit fantasy that
has zero chance of occurring, given our stark predicament.
      
But returning to the short term, or "the present", shall we say, there
is the matter of how the US gets through the election and then the first
months of a new government, even while the larger fiasco continues. I'm
voting for Mr Obama. While I believe he will make a much better
president than the addled old mad dog Mr McCain has become, I feel sorry
for anyone who is placed nominally "in charge" of things this coming
year. The best a President Obama can do is offer some reassurance to a
public that is totally unprepared for the convulsion now upon us. Mr
Obama will certainly not have "money" to "spend" on any of the promised
social support programs that have been endlessly debated. But he could
clearly articulate the reality we're facing, and ask not necessarily for
"sacrifice", as the common plea goes, but for something more and better:
for bravery and resolute spirit, for intelligence and resilience, for
kindness and generosity - among a people long unused to consorting with
the better angels of their nature. He's already begun to set the example
by appearing in public with his sleeves rolled up. The change that has
been in the air all year - that Mr Obama has talked so much about - is
coming in a bigger dose than anyone expected. I hope we're ready to get
with the program.

_____

My new novel of the post-oil future, World Made By Hand, is available at
all booksellers.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/10/its-fascinating-to-read-the-commentators-in-mainstream-journals-like-the-financial-times-and-the-wall-street-journal--all-st.html


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