« Japan's Homeless Mirror US Homeless | Main | Bush's Speech Is Meaningless But Hu's Speech Is Scary »

Comments

Megsdad

Elaine, do you think that china has told Bernanke that if he lowers rates they will start selling US Treasuries?
That's a mighty powerful incentive, don't you think?

listener

The fallacy in this whole modern way of looking at life: A) Increasing cost of education leads to young graduates starting adult life with killer debt loads at the same time more and more jobs paying enough to service those debt loads are outsourced - disappeared - from manufacturing to technical. B) How do the young now get into the housing game in the first place? With no overpriced current home to sell to step up to the next even more overpriced home, they are almost forced by the system to find a way to game the process, since the traditional hard work ways don't even work any more. Thus the rational for shortcuts, quick riches, funny money. IPO's, hedge funds, teaser home rates, internet startups. When you can't make it playing honestly, people will find ways to game the system, which progressively deteriorates the whole thing lower and lower, cycle by cycle.

You nailed it - the attitude here has gone from "we are all in this together and need to cooperate in order for all to survive and prosper" to "everyone for themselves. I advance by taking from you". The latter is the worldview of a sociopath. That is exactly what has happened - our country has been taken over by sociopaths. Enron was sociopaths. Bush and Rove and Cheney and modern GOP are sociopaths. Hedge funds are sociopaths. Its all about me and me and the hell with you. You are the patsy I steal from to advance myself.

How do you get rid of sociopaths once they are entrenched? They value power for the sheer sake of power. Their brains do not have the capacity to empathize. Their reason for existing is to dominate. How do you get rid of them? Elect a Democratic President and Congress in 2008 and they will be working the sidelines undermining and plotting their return - think "Monica". They keep coming back, no matter what you do. When one is exposed and slithers away, 5 others arise, fighting each other for the power slot that has opened. And each succeeding one has to appear more extreme than the last, to win the confidence of "the base". Where does it end? And, even more important, how does it change?

We have been mortgaging not just our homes, but our futures, and our children's children's futures, in a narcissistic orgy that goes beyond consumerism to ADDICTION - addiction to hedonism, to paper over the emptiness of the American collective life-view. The papering over requires endless intake of the addict's drug, in our case, spending, to keep from having to face the pain of inner emptiness.

Stimulants like meth and cocaine create the sensation of euphoria by borrowing today, from the body's natural bank account, doses of natural feel-good chemicals like seratonin and dopamine, spending them ALL NOW, instead of having them doled out bit by bit over time, as tens of thousands of years of brain evolution intends. As a result, recovering addicts can go through a period of many years where they literally are unable to feel pleasure about anything. They blew their wad - nothing is left. Only the passage of time allows some of the neural damage to repair itself.

When a society spends the natural wealth intended for the next 2 to 4 generations all at once, within a few decades, the inevitable results are similar. Its been one HELL of a party, but it has wrecked the national soul, and also the collective national future.

The root principle in an addict is they can not face their own inner pain. They avoid everything, by consuming increasing doses of their drug of choice, which over time becomes less and less effective at numbing the pain. Where it once caused euphoria, it increasingly makes them feel crappy. But they continue taking it, in larger and larger doses, hoping upon hope to once again reexperience the initial high. Sound familiar?

This inevitably leads to a a bottoming out experience, where they have to decide whether to live or die. Living requires going through the incredibly painful process of learning to face the reality they have been avoiding. (Sound at all like an economic depression?) Or, they can decide that is just way too difficult, and keep taking the drug until it finally kills them, which it will, while selfishly continuing to inflict pain on everyone who cares about them.

Nowadays all major nations are entwined in a global dysfunctional-family relationship. Each individual (nation) brings their own unique dysfunctions to the stew (US, Japan, China). Every nation's individual dysfunctions adversely affect all the other nations, the sum total of which creates the overall global dysfunction. The only way I see out of this mess is if the world bottoms out, like an addict, and chooses to live, requiring coming out of denial that with our present population levels and technologies, unless we stop competing and start cooperating, life as we have known it is going to end since we are destroying the biosphere's capacity to sustain the life we have known. No nation can "win" any longer at the expense of other nations - that leads to the death (literal or symbolic) of all of us. The jury is still out which way the world will choose to go. I'm not an optimist, but when one refuses to be an addict of the global drug, the only thing that makes any sense at all is to keep moving self in the cooperation direction.

How interesting that at the time of total national addiction, our president is in fact a (former???) addict. How much more symbolic can you get?

Elaine Meinel Supkis

Addict? How about 'multi-arrested criminal'? As well as AWOL during war.


I warned America years ago, if they put into power a man with addictions and a criminal record, we are doomed. This is why I am very pissed about the Supreme Court ruling against the simple act of counting some votes. That was the really nasty crime. It destroyed our Constitution, the only thing between ourselves and tyranny as we can plainly see today.

And thank you for the long, thoughful comments, Listener. Greatly appreciated.

D. F. Facti

"Many elderly people lost everything because they were forced to take their savings out of safe banking accounts and put them in riskier schemes in order to make more than the rate of inflation."

Don't forget the collapse of the FSLIC - the chickens are still coming home to roost on that one.

Why did S&L's go the way of the dodo bird?

Oh, yes. Greed is good. And boring is bad. Saving is boring.

Each reverberation of the cycle is louder - this is the same circus, really, but someone opened the python's cage.

btw, read section C of Wednesday's (Aug. 29) WSJ. lots of eye-popping news - - - State Street (Boston) has $22 billion in exposure to commercial paper asset-backs

CARLYLE had to bail out a subsidiary which invests in mortgage-backs.

and, oh, gee, how WILL the Wall Street titans value all the crappy investments in their portfolios come the quarter's close?

"The real issue is, how consistent will the firms be on the accounting treatment, and we may never know, as much of that is not immediately visible," said Glenn Schorr, an analyst at UBS AG.

I laughed out loud at the last.

spatz

here's a fast history of contemporary coops.

http://www.dollarsandsense.org/archives/1997/1197huet.html

More in this alternative vein is going on in argentina after their collapse, and also in venezuela. peace.

DeVaul

If I remember correctly, Kruschev's response (among others) to Nixon's tour of new American kitchen machines was this:

"These are mere gadgets!"

I can understand how a man charged with helping to organize the defense of Stalingrad might not be impressed with such luxuries in a world filled with poverty, something that the Communists were (at least outwardly) concerned about.

Elaine is right in that we make no attempt to unite under an ideology or belief system that promotes the common good over the greed of a few individuals.

Cannibalistic tribes that turn on their own do not live long enough to tell their stories and are soon forgotten by history.

Elaine Meinel Supkis

Russia, despite huge destruction from WWII as well as WWI, the loss of literally many millions of citizens, still managed to run some awesome things starting with the space program. They were beating us all the way until we surpassed them, going to the moon. Then we bogged down with the low-orbit space shuttle and now they caught up again.


They rebuilt the opera world, the ballet world and so many other things, a considerable cultural achievement. People forget the good things and focus on the bad but both the West and the East had strong points as well as weaknesses. As communist Russia was saving all the arts and skills of the Czars, China was destroying its entire culture, utterly, vandalizing it hideously.


China is now rediscovering its culture and other things it lost under Mao. Interesting, watching them do this.

ken

The great Austrian economist Ludwig von Mises said "The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Tom Noonan

You mentioned the increasing war debt previously, and WWII here:

It seems to me that some brand of economic rationalist developed this magical theory that the Second World War was such a boon in fixing the Great Depression, that another war would be a great prophylactic against a new depression.

But as you infer, back then you had a home grown steel industry. In Australia we had a steel industry, ship builders, woollen mills and so forth, but we got rid of them because they messed up the landscape, and were not in keeping with the image of a clever country.

Also there was rationing, to help the army and Allies; and long hours to compensate for labour shortages. It was not much of a good time. I was just a little kid then but the echoes went on for ages before the community started thinking rationally again.


Also today young people, immature professors, and their economic rationalist friends; seem to believe that those who fall by the roadside in the race for self-improvement should be left to die. They are very scary people, and not very politely spoken either.
(While they claim Mises, the Austrians, and Hayek, I think they may have missed some essential features of the system.)


I'm collecting whatever horror stories of bad financial practise, and trying to connect the dots and add up the figures. Thanks for your help. In Australia we have recreational drugs scandals in football clubs, and a raging equine flu epidemic; rumours of ordinary quarantine practise, vehemently denied by the authorities; who are busily promising to bail out the thoroughbred industry (AU$4 million), because it is so important to the Australian economy. Oh, and President Bush is coming to Sydney next week for APEC.

When the kitchen gadget fails I reach for a sharp knife, the chain-saw an axe, looking foreward to more walking.

Elaine Meinel Supkis

Thanks for all the thoughtful comments, will talk about all this again later after digesting more information.

Yes, we have cycles. Yes, the repairs always makes things worse. i suspect the cycles are moving faster and faster because the repairs are more and more inappropriate and badly timed.


Generally: times of increasing debt leading to a collapse in savings MUST be counterbalanced by times of increasing savings while there is little opportunity for debt. It can't be all of one or the other forever. It is a typical dynamic yin/yang system

The comments to this entry are closed.

Blog powered by Typepad