April 30, 2010 – Maybe we can defy the laws of physics, if we try really, really hard.
By The Cerebral Aesthetic Vagabond
I’ve been pretty quiet lately. Between the fatigue induced by my late full time job and the mindnumbing insanity consuming the globe, I’ve had neither the energy nor inclination to write anything. All I’ve been able to do of late is shake my head and wonder how “humanity” can be heading so blithely down this path to ruin and destruction.
Clearly, higher powers – and I don’t mean supernatural ones – are orchestrating events, as if somehow destroying the planet will benefit them and leave them unscathed, lording over the ashes and corpses left in the wake. This is truly a fascinating and terrifying time to be alive on this planet. I always wondered what it was like to live in the era between the World Wars, what with depression, hyperinflation, demigods, tyrannies, despotism and ultimately, another World War. Well, I’m “enjoying” the opportunity to experience that era all over again.
What is it about humankind that it collectively forgets all the lessons learned a couple of generations earlier? I’ve always felt that everything goes in cycles, not just global warming. For human tragedies, these cycles seem to occur on two-generation periods. That makes sense after all, because that’s about how long it takes for our grandparents, who lived through the awful times past, to disappear from the stage, taking their hard-earned lessons with them, forcing us to learn them all over again. And that’s where we stand today, on the brink of learning all over again what it’s like to live under a dictatorship, to endure rationing, to be out of work, to be hungry and homeless, to see people we knew vanish into the pointless maw of war.
Until this unhappy reality becomes impossible to ignore, however, we humans are making a last ditch effort to keep the party going by playing the extend and pretend game, forever if possible. It has certainly astonished me how long “they” have managed to keep the game going.
On the other hand, here in the U.S. we long ago – perhaps beginning in the mid-1970s – began substituting a phantom economy for a real one. As we dismantled our industrial, productive economy and replaced it with a “service economy,” with everyone attempting to do everyone else’s laundry, so to speak, we sought to disconnect the economy from physical reality. A productive economy is based on the laws of physics – in order to produce something, raw materials must be procured, energy must be consumed and a physical product is created. But a service economy doesn’t consume much of anything and produces little in the way of physical products. Thus, it’s not quite as constrained by the laws of physics as is a productive economy, and the “value” of the services performed can be arbitrarily assigned by whim, monopoly or perception.
The value of everything is determined by human beings, but whereas the value of food is related to how well it contributes to one’s survival, the value of paper financial instruments is almost entirely determined by human psychology. That’s why “jawboning” seems to work so well. Drum into the collective mind of the masses that the economy is “recovering” and maybe they will go out and part with some of their little pieces of green paper or affix their signature to another piece of paper that encumbers them to thirty years of debt servitude.
Is the economy recovering? I live in la-la land where most people don’t act at all as if we’re in a depression, and yet I don’t think the economy is recovering. Sure, the government can cherry pick a few highly manipulated statistics and use them to justify its claim that the economy is recovering, but nothing has actually been fixed since the current crisis became manifest. Unemployment is still increasing and incomes for those employed continue to decline, a big problem in an economy based on consumption; debt and financial obligations are growing; taxes, including the new “health care reform” taxes are rising, stifling the economy; personal liberty continues to be under grave and increasingly brazen assault; peak oil has not gone away; house prices are still too high, yet inventories of houses that need to be sold are growing; “for lease” signs stand prominently in front of seemingly every office park, professional building and shopping mall, and the commercial real estate bubble has yet to “pop”; the overvalued derivatives bubble, which dwarfs all other financial bubbles still dangles overhead like a sword.
Governments keep taking on more debt, paying back their previous debts with new debt and financing their new budget deficits with still more debt, all the while pretending that they’ll be able to pay it back when things take a turn for the better. How are things going to take a turn for the better? Without a productive economy we cannot generate the wealth needed to maintain a decent standard of living, let alone pay off tens of trillions of dollars of debt. As the Federal Reserve chairman recently admitted, the government’s only tool for dealing with this insolvency is the printing press, and we know where that leads.
Corporations are maintaining their worthless financial instruments – OK, maybe they’re not worthless; maybe they’re worth five cents on the dollar – at their full purchase price; they’re keeping bad mortgages on the books at full value; and they’re keeping real estate owned on the books at full value but off the market so as to avoid suppressing house prices. Meanwhile, to boost profits they close up shop here in the U.S. and reopen in China, where labor costs are lower. Voilá, instant profits! One time profits today, fewer U.S. consumers tomorrow.
It’s bad enough that the fascist duo of governments and corporations are neck deep in the extend and pretend game, but now mere consumers are getting into the act. More and more people are simply not paying their mortgages, but instead of putting the money into savings for the day when they eventually get evicted from their house, they’re spending the money on cars, vacations, nice restaurants and toys. I can’t help but wonder how much of the government’s contrived indicators that a recovery is underway is due to this “extra” spending power. After all, since the banks that own the mortgages that aren’t being serviced are playing their own game of extend and pretend, they are not indicating that these mortgages are in technical default, let alone foreclosing on the properties, thus, the fact that the mortgages aren’t being serviced probably doesn’t appear in the official statistics, whereas the increased consumer spending does. These deceptive practices are, of course, fully sanctioned by the government.
Since the U.S. economy has largely morphed during the last few decades into a Potemkin sham, why can’t we extend and pretend forever? Up til now we’ve done a pretty good job of duping foolish people into subsidizing our economy with seemingly endless loans, a fact that has baffled me to no end. I can only assume that the countries that continue to subsidize the failing U.S. economy do so not out of confidence in it, but because they have ulterior motives. In the case of China, one motive is obvious: the transfer of U.S. industry and its wealth generating potential to China. Down the road, perhaps China’s dream is to acquire large chunks of U.S. assets when the U.S. is inevitably unable to pay back the loans it received from China.
Personally, I do not believe we can play the extend and pretend game forever. Economics, after all, is rooted in mathematics and physics. One can defy the laws of mathematics and physics for a while, but eventually those inviolable laws catch up with one and impose their reality. The longer we play this game of extend and pretend, the more painful will be the eventual resolution, as if we’re building an ever larger arrangement of dominoes, hoping and praying that none of them fall over.
I find today’s predicament fascinating, akin to living in a nightmare. At the same time, I feel – perhaps naively – optimistic that I will somehow survive it. I’m making plans to eek out an existence in what I think is the coming new economy, one based less on government-corporate domination and more on local, interpersonal relationships. Unfortunately and not surprisingly, the government-corporate fascist monster is fighting this eventuality with everything it’s got. If one examines the slew of draconian, totalitarian legislation coming down the pike – at a time when the economy is already on the ropes – it’s utterly breathtaking. Clearly, the objective behind all this legislation is not to help the economy, because that’s a lost cause, but to preserve and enhance the government-corporate totalitarian domination of the planet. If they succeed, we’re all doomed. I care not to dwell on that possibility, but place my faith in the laws of physics, that “they” will not have the resources to carry out their objectives. For this reason, I find myself praying that peak oil hurts us sooner than later. I also find myself hoping that the seeds of destruction the powers-that-be have sown prove to be too virulent for them to control. The best thing we could possibly have going for us, if we truly relish freedom is chaos. After all, isn’t a little chaos implied by the word freedom? In any case, chaos is far preferable to tyrannical order, at least to me. I know, however, that a large percentage of people are authoritarians at heart and would disagree with me, insisting that tyrannical order is far preferable to chaos. Time will tell which path we take.