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The Basic Psychological Structure of Our Society Does Not Work

2017 March 20
The Course of Empire by Thomas Cole

The Course of Empire by Thomas Cole

Here’s the thing.  Our society only works after generational crises which don’t destroy it.  After the Napoleonic Wars, the survivors make Europe more or less work.  They get a good long run out of it, a surprisingly long one, but it goes south starting around 1870, and blows with WWII.

It goes south in ways that are recognizable, by the way.  For example, the British Empire pushes laissez-faire trade policies which make the rich richer but gut the British manufacturing base over time, moving much of it to, ironically, America.

The system goes into crisis from 1914 to 1945, and the Americans take it over and run it basically well up until the early 70s, about 25 years. Then it goes into decline.  It’ll be hard to tell exactly when the end-game crisis start(ed) till we can look back, but if we aren’t in it, we’re close.

1945 to 08 is 63 years. To today, 71. If the crisis isn’t seen to have started for another 10 years, we’ll have 81.

But the core point here is that it’s very hard to create people who can run a system.

The common refrain is that prosperity destroys character.  But that’s not quite right: the people who created the good post-war economy were the FDR types, mostly. People who were adults in the 20s and 30s, who saw what went wrong.

People have a hard time learning from other people’s experiences. They have to see it themselves.  So, in the early 70s there is an attempt to get rid of the short-sale uptick rule (you can only short a stock on an uptick of the stock) and it dies in the face of massive backlash. A couple decades later, those people are dead, and even more wholesale revisions to the rules put in place to stop another Depression from happening pass.  Finally Clinton kills Glass-Steagall, the main spar, wholesale, something entirely unthinkable in 1960 when the population lived thru the reasons it existed.

But the rot goes deeper than just “it’s hard to learn what you didn’t experience”, it goes to the core of how we raise ourselves; our children.

School, as we do it, is a terrible way to raise people. What it actual teaches is “do what you’re told, when you’re told, wait to be told how to do things, don’t figure out things for yourself, and give the approved answer, not one you came up  with  yourself.”

It trains drones. It trains people who are meant to spend their adult lives under supervision, doing what they are told, when they are told and giving their bosses the answers their bosses want.

Those people make fine wage slaves, yes, but they don’t make good citizens. They have not only not learned to think for themselves, they have been taught not to.  Even worse, they have been taught that if a thought of their own should come up, they should keep it to themselves.

Meanwhile school interactions with peers are terrible.  When we call something “high school” we mean horrible peer pressure bullshit. A few people love high school, most people remember it as one of the worst times of their lives.

Wage slavery, and I use the term slavery very deliberately, is a terrible system if you want a democracy or a republic.  Mass production consumer societies, where we choose from menus rather than creating anything ourselves, are terrible for democracies or Republics.

The way we school people, the jobs most people work at, and how we distribute goods to people (thru money gained by sitting down, shutting up and doing what you are told) are antithetical to free, egalitarian societies. Only a crisis which forces people to think for themselves and where they have to be trusted for a while can briefly create people suited to political freedom.

But we can’t have world wars and depressions all the time, for what I assume are obvious reasons.  So we stagger along, brief good periods sliding into shit periods regularly.

Of course there is more to it than this, such as cycles of destruction of capital and labor and so on, but much of that is manageable in theory. It isn’t manageable in practice, not because it couldn’t be done, but because our society; we, don’t create the people who can do it.

Freedom, democracy, equality: these things are not compatible with how we order our economic affairs; how we raise our children, or how we condition our adults.

We will not reverse course, this cycle, that doesn’t happen and won’t. It’s too late. But there is always another cycle. If we don’t want it to be as disastrous as ours, we must figure out a better way to run our economy; to educate our children, and not to live as adults.  A way suited to people fit to be free.

This doesn’t mean “work or starve” as libertarian morons would think; it means allowing real choices to be made, which requires an absence of existential fear while still including consequences. It means teaching children to to be something other than “good workers”. It means jobs that aren’t “kneepad for the boss or lose everything”.  It means a structure of power that does not concentrate wealth and power in the hands of a few and gate access to the good life behind subservience born of the desperate knowledge that the good life comes from good jobs, which are in scarce supply.

All of this is do-able. In some sense most of it isn’t even all that complicated.  But that doesn’t mean any of it is easy, and it is hardest because we have been trained to have a poverty of imagination; an inability imagine world’s that are much better than the one we live in.

We have the technology. What we don’t have is the people. We aren’t the people who can run a good society (this is obvious, we haven’t.)

But as the people we can re-create ourselves and our descendants. Biology is only half destiny, the rest is in our hands.

So far we’ve been acting like bacteria in a petri dish, rushing to destroy our environment thru unchecked stupid growth.

Let us hope we can prove ourselves wiser than that. Or, instead of us instructing ourselves, Nature will instruct, and her lessons will be harsh.

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Trump Is Now Breaking His Core Promises

2017 March 17
by Ian Welsh

On January 26th, I wrote that Trump had yet to break his core promises; that his actions at that point were consistent with the major promises he had made during the election. He had ended TPP, was moving on the immigration bill, was working on the wall, and so on.

He might have lied about a lot of things, but he had yet to lie about what mattered.

However Trump made promises that lay at the core of his ur-promise, which was to make things better for those who the old economy had failed. He is now making those promises into a lie.

Trumpcare is clearly worse than Obamacare. It will not cover things Obamacare covered, will cover fewer people and will cost more.

The budget is a direct strike at the poorest and weakest and at people who voted for Trump in regions whose support he needed, like the Rust Belt. It’s one thing to “cut the state,” it’s another to cut programs that feed hungry adults and children. The extra money to the police state and military will help his people, but not as much as the cuts and the Trumpcare failure will cost them.

He has yet to move on NAFTA, a core promise.

It’s not possible for me to look at what Trump is doing and say, “This will really make a difference to his core supporters.” It won’t.

It’s quite possible than Trumpcare won’t pass, and it’s almost certain that Trump’s budget will take some huge hits before passage as well. But both indicate a failure by Trump to take his promises, and his ur-promises seriously.

Course correction is possible but unlikely. It is rare for Presidents to change from who they are during their first year: Obama never changed from the man who bailed out bankers and the rich, and fucked over small people, for example.

In one sense, this changes little. It will continue the loss of faith in the political system, continue America’s decline and continue on the glide path to the age of war and revolution our world is in. It will happen faster than it would have under Clinton, and more Americans will suffer sooner, but the trend lines remain intact.

In another sense, this is a lost opportunity, not to do the right thing, though some of what Trump promised was the right thing, but to restore some faith. Trump failing, but doing what he promised would be quite a bit different than Trump not even trying to keep his ur-promise, the same as Obama (Change!) or Bush.

So it has been, and it looks like, so it shall be.

So be it.

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The Fed Hikes

2017 March 16

So, the Fed has raised its rate by .25 percent. This is bad policy, and it is bad politics.

Employment Population Ratio

Employment Population Ratio

The unemployment rate is at 4.7 percent. As I have discussed before, the primary use for the unemployment rate is to determine wage push pressure, not whether people can get jobs (they can’t, and have given up).

Even by that policy, whose intention and largely successful result has been to keep employees from getting raises much higher than inflation, thus flushing money to the rich, 4.7 percent is not full employment. This raise is early.

That leads us to the politics. Yellen has been quite clear in her opposition to Trump’s avowed economic policies and that she intends to use Federal Reserve policy to neuter them. Given Trump hasn’t done anything yet but make promises he may well break, this seems premature, but the perception on the right will be, and possibly accurately, that Yellen, who barely raised at all in eight years of Obama’s economy, is suddenly raising when a Republican is President.

It’s not a good look, and I don’t see any reason to give Yellen the benefit of the doubt. Americans have only barely begun to get raises that put their income higher than before the financial collapse, with millions still unable to find work, and she raises rates?

The Federal Reserve is both irredeemably corrupt and anti-democratic, as well as an incompetent tool of the rich. At the least it needs to be brought back under Democratic control, a wing of the Treasury department, as it was before 1951.

In the meantime, this is another spike in Trump’s chances of a good Presidency, another spike in the jobless coffins of too many Americans, and another way of making sure that the rich get all the gains while everyone else eats their scraps.

(See Also: Trump’s Coming War With the Fed.)

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Trump Couldn’t Buy Coverage Like This

2017 March 13
by Ian Welsh

All the semi-scandals don’t add up to one cover like this.

As for Trump’s program, I am so far largely unimpressed, not as a matter of ideological opposition, but of pragmatics. His health care plan is bad, and will hurt people who voted for him in ways they will notice: increased cost, less health care, and more suffering and death. It’s not the sort of chintzing which can be waved off.

So far he has no solid stimulus proposal (and such as the one he had was, it wasn’t very good). He  hasn’t acted on free trade, beyond cancelling the TPP, which wasn’t in effect anyway. His proposed cuts to the non-military budget will have a negative trickle down and will not be good for the economy. Bannon’s okay with that, he has an ideological desire to destroy the post-WWII state, but Trump needs his people to feel good.

The one perhaps clever thing Trump has done is his asked for a 54 billion dollar increase to the military budget. Jobs created this way will tend to go to Trump supporters and communities. If you’re dedicated to slashing the rest of the bureaucracy, this is an excellent offset.

Well, it could be, depending on how many jobs it produces. The dollars/job correlation on defense funding is pretty lousy, and if I were Trump/Bannon I’d be leaning hard on the Pentagon to spend this in ways which will actually produce jobs, whether directly in the military, outsourced, or manufacturing.

Much remains undetermined, but so far Trump’s made only one potentially smart economic move. Let’s wait and see, within a couple months we should have a fuller picture and thus a better idea of his likely fate.

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Arctic Permafrost Defrosting and the Age of War and Revolution

2017 March 10
by Ian Welsh

Globe on FireFor well over a decade, I have written that we are past the point of no return on climate change. My reasoning was that hothouse gasses already in the atmosphere, or which were for sure going to enter the atmosphere given our lack of action, were enough to trigger massive carbon and methane releases.

Methane is a far more potent greenhouse gas than carbon…

We’ve seen that methane, which accounts for only 14 percent of emissions worldwide, traps up to 100 times more heat than carbon dioxide over a five-year period. This means that even though carbon dioxide molecules outnumber methane 5 to 1, this comparatively smaller amount of methane is still 19 times greater a problem for climate change over a five year period, and four times greater over a 100 year period.

It is even more potent in the short run. Meanwhile, the arctic circle was about 30 degrees warmer this year than normal, and permafrost is un-perma-ing.

Huge slabs of Arctic permafrost in northwest Canada are slumping and disintegrating, sending large amounts of carbon-rich mud and silt into streams and rivers. A new study that analyzed nearly a half-million square miles in northwest Canada found that this permafrost decay is affecting 52,000 square miles of that vast stretch of earth—an expanse the size of Alabama…

…Similar large-scale landscape changes are evident across the Arctic including in Alaska, Siberia, and Scandinavia

There is no way we are avoiding near-worst case scenarios for climate change without aggressive geo-engineering (completly unproven, and requires political willpower). We will see temperature increases in some parts of the world which are currently highly populated. These increases will make those places uninhabitable outside of air conditioning. Changes in rainfall patterns will large current agricultural powerhouses to fail; an effect which will be compounded by the fact that we have vastly drained and polluted our groundwater in prime agricultural areas.

Later on, we will see vast rises in the ocean level. Virtually every city sitting on a seashore today will be gone in a hundred years, some of them a lot sooner.

This stuff is baked into the cake. It is essentially unavoidable. It has been effectively and politically unavoidable for quite some time now.

Do not expect the political, economic, and social arrangements you favor to survive this. The waves of refugees will be magnitudes larger than those currently shaking the Middle East and Europe. There will be water wars; people will not sit still while they are dying, they will fight. Some of those wars will involve, at the least, the use of tactical nukes.

Capitalism, Democracy, the Chinese Communist Party, etc…any system and group of people who can reasonably be blamed for this, will likely be on the block. When hundreds of millions to billions start dying, they will not go gently into that long dark night. No, they and those they leave behind will look for people, ideologies, and organizations to blame, and they will plenty of them, because everyone and everything who had any power has failed to prevent an entirely forseen and largely preventable disaster.

Our failure will not be considered acceptable to those who pay the bill, and our “capitalism” and “democracy” and “corporations” and “free trade” and everything else you can think of will be on the block, liable for destruction.

This is coming on faster than many expected. Added to ecosphere collapse, the current cyclical capitalist sclerosis, and vast arsenals, it is going to be immensely damaging.

If you aren’t old, or sick, you’re going to suffer some of this. If you’re young, you’re going to suffer a lot of this, assuming you aren’t an early casualty.

So it is. So it shall be. We were warned, we chose not to act, because corporations needed profits or something.

So be it.

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So Trump and Republicans Are STILL More Popular than Clinton and Dems

2017 March 8
by Ian Welsh

After the last month and a half, after endless brouhaha and constantly “losing the media,” here are the favourability ratings according to the Suffolk poll.

Pence 47/35% +13

Trump 45/47 -2

GOP 37/48 -11

Media 37/50-13

Dem Party 36/ -16

Hillary 35/55 -20

Congress 26/52 -26

As Matt Stoller points out, it is also fascinating that 39 percent of union households approve of Democrats, while 50 percent disapprove.


  • Trump isn’t losing his war with the media, and he’s not wrong to attack them.
  • Trump should be scared of Pence, because the population would rather have him as president, and, by all reports, so would most Congressional Republicans.
  • People may not like Trump much, but they aren’t wishing they’d had Clinton in charge (though doubtless some of the disapproval is from Democrats angry she lost).
  • Trump is more popular than the Republican party, he has room to use that to get them to do what he wants.
  • Pence aside, if Republicans try to impeach Trump, they’ll have problems.

I think it’s fairly remarkable that after all the mini-scandals about Russia, the screaming about immigration, and so on, that Trump’s numbers are still this high. It simply hasn’t penetrated; people are going to give him time to prove himself.

What will matter is Trump’s results. So far he’s not moving in the right direction on that (as with the new healthcare bill), but he still has time to course correct.

What he should take away from this is to take the media less seriously. By all means, de-legitimize them as much as possible, but don’t let them rile him. Work on his most important promises: a better healthcare bill (still possible, though the current one is in trouble) and a better economy.

Little else really matters, it’s just a distraction.

And keep an eye on Pence.

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Brazil’s Economic Tumble

2017 March 8
by Ian Welsh

No surprise, but…

Brazil’s economy has fallen further into its worst ever recession, contracting by 3.6 percent in 2016…

…Brazil’s economy is now eight percent smaller than it was in December 2014.

Recently, there was a legislative coup in Brazil, but that was a symptom, not a cause, as are Venezuela’s problems, the electoral reversal in Argentina, and so on.

All that is required to understand what is happening is this chart of commodity prices.

 Bloomberg 5 years commodity index March 8 2017

Bloomberg 5 years commodity index March 8 2017

We have a very foolish economy. The developed world has been in austerity since 2008, China does not have a rich enough middle class to take up demand. Without demand for goods and services in the developed world, commodity prices have crashed.

Our lords and masters don’t want growth they can’t capture, and they value low wages and debt-slavery more than they do a thriving economy. As a result, the economies which prospered by supplying commodities to China and other manufacturers have stumbled and crashed out. This simple fact is behind many headlines which seem unrelated to it, including virtually every change of government in South America.

A globalized economy is moronic. It makes countries dependent on policies over which they have no control. There is virtually nothing that Brazil’s government can do about this (though engaging in austerity of their own is stupid); nor was there a damn thing Venezuela could do about it (though, yes, the Bolivarian economy was mismanaged, something I said as far back as 2004).

This is by design. Our elites don’t want national elites to be able to make policy. As a result, there are only two nations which approach full sovereignty in the world: the United States and China. Only they are powerful enough and rich enough to make unilateral moves without suffering vast consequences (and maybe not even them). The EU could almost be sovereign, if it wasn’t run by ideological morons, but it isn’t, and Russia has enough resources and military power to have some sovereignty, and that’s basically it.

And so, the Brazilians will suffer what they must, because however large and rich they think they are, they are still a non-sovereign state in the ways that matter in our world.

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The GOP Healthcare Plan

2017 March 7
by Ian Welsh

This is a good overview.

I’m not going to waste a lot of time on it. Other than the changes to state-based regulations, the removal of the individual mandate and the removal of the tax on good healthcare plans (so-called gold-plated plans), as it stands, this plan is slightly worse than Obamacare in pretty much every way.

It is not an improvement, it is not what Trump promised in his speeches, though it’s not far from what was in his policy documents. It is also not a disaster, but it certainly won’t be a win for Trump or make his followers feel better off and it was one of two ways he could, or can, do so. The other would be to improve their economy.

This matters far more to Trump’s future, and his presidency, than all the noise over immigration or Russia. He should have pushed hard for something simple that was an obvious win; something Democrats would find it hard to oppose.

This is not a win for his supporters, or for him.

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