How the Next 4 Years Will Play out

Yup. At some point the United States falls apart, I don’t know that it’s in the next four years, but it’s probably in the not so distant future. At that point lots of things people take for granted, like child labor laws, 40-hour work weeks, and retirement, evaporate completely.

California, the northeast, and the Midwest soldier on as before. The south further degenerates until parts of it are third world countries. The nation of Texas becomes an autocracy, as do Utah and Arizona.

With nation-states pretty much done for, the next sociological battle is between corporations and organized crime.

Since the Dems will be in charge of the Presidency and the Senate, I think they’ll get the blame for the next two years

Sure, but I could also see that, because the TV networks love to put Republicans on, by 2012 everyone is convinced that John Boehner is President.

I keep thinking that some other shoe is going to drop and change a lot of perceptions, 9/11-style. Something gets out of hand and there’s a war: China-Taiwan, India-Pakistan, Israel-everybody, etc. Or there’s an epidemic. A mega-drought. Or even something good — some solar energy breakthrough or something. It just feels like we’re at the edge of something.

in any case, it is going to be interesting to watch. too bad i have to live here/America. The Right turn America in to an Iran style/Christian version of Sharia, further codifying their enforcement of Calvinism/”Lord of the Flies” style.

it really would be better if the Republicans won both houses this time. just to accelerate the crash their politics represent.

too hazy to hazard a guess. though i know the economic depression continues for a long time, with the depth of the morass depending on how quickly the Republicans finish their Contract on America that Newt launched back in 94 or 95.

once i get able to i will move to another country, so i can watch this Titanic sink from a “safer” distance. unless there is a deep and complete “overthrow” of the Elites/Versailles, nothing will left for anyone but the Rich. the bridges that connected our Society are being destroyed as we speak.

everytime i drive on or see a WPA era road or physical structure from the 30’s, i see why the Republicans and Obama have worked so hard to destroy the infrastructure that held America together.
it will be so much easier to finish off/complete the “Rape” the way the Elites have set up the “scam.” Ayn Rand would be proud.

I hope you are wrong, but I cannot come up with a good reason why you are wrong.

Somehow I think that they Democrats will keep the House of Representatives. There does seem to be a last minute surge in the Democrats direction (my friend in Wisconsin is pessimistic however).

It may be wishful thinking on my part, but I think that Social Security will be protected. Food stamps on the other hand, will be cut.

An alternate scenario (satire) from Prof. Randy Wray:

The Great Depression and the Revolution of 2017

what might change the dynamics is if the Middle sides with the Left against the right. and also it may be too late for this dynamic to influence the Congressional Reps that owe their wealth to the Elites.

all along the Middle has never trusted the Left other than in theory. the Left is far too dangerous and “unrealistic” for the Middle Voters. the Right has always been more “practical” in practice than the Left. the Left is too “unreal” and “Idealistic” for the Middle Voters to ever trust the Left.

and now with 40 years of ideological PR, courtesy of Goebbels’ little lies in practice, the Middle Voters would trust a shark before trusting the Left. lol. Shark is Obama’s chess game personified. Could/Would the Middle ever trust the Left? that is what the current depression/Bankster theory we see being played upon us now.

how bad does it have to get before the Middle Voters dare to risk alliance with the Left.
and is it too late to make a difference. It took 40 years of setting up the various pieces of Government control to effect the “perfect storm of Shock and Awe” Capitalism, courtesy of Naomi Klein’s wonderful book.

The Middle Voter never trusted the Left, being Radical. The Middle felt safer with the Radical Right, thinking it could counter the Right’s excesses.

and now the Middle reaps the whirlwind of the Elites. Sarah Palin’s Tea Party, John Roberts’ Citizens United, Obama’s bipartisanship, Greenspan with Ayn Rand’s trickle up economics. and Christian Sharia law.

“Trust me,” the Right said. sow the wind and reap the whirlwind.

I would not be so confident that the Democrats are going to lose the House on Nov2, though it is quite possible and even likely. If they do, I would not be so confident that Obama would lose in 2012—in fact, a Republican House may make it more likely that he would win in 2012, because he would have a direct opponent to run against for two years, ahead of the Republican nomination process.

Even so, if the Democrats lose the House, the general trend of your prediction is probably true, if not necessarily the specific dates and times.

If the Democrats keep the House, then the general trend is probably the same also, except that it becomes more likely that Obama will lose in 2012. I’d actually prefer Obama to lose in 2012 than the Republicans win the House now—because it is possible (I believe The Raven has suggested it so) that the Tea Party wave might have crested by then.

You forgot:

2016 – The voters engage in another massive repudiation of conservatism, just like they did in 2006 and 2008. This time the media and progressive blogosphere reject untested and inexperienced “messiah” candidates and the voters choose a real liberal for POTUS

Jennifer,

I’m no fan of Obama’s but if Bush didn’t get impeached, Obama won’t either. The financial elite are happy with him and they call the tunes for both parties. The only way he doesn’t run in 2012 is if he is successfully dumped by the Democrats. Right now, that seems unlikely.

I think you forgot one more thing that will happen in maybe 2011 or 2012. The internet will no longer be free.

Yeah, that’s pretty much the way I see it too.

Obama has been an unqualified disaster.

David: GW and the Pubs doubled the US debt during a time of the largest bubble ever seen. Now the US faces structural deficits as far as the eye can see. With the Pubs free lunch “all tax cuts are good” core belief, and another unfunded war in the prospects, I could easily see the ROW coming to an “anything but the USD” point of view. And that doesn’t even require another “better” currency to flee to.

The most likely result is a flight to hard goods: commodities, oil, wheat, gold, rare earths, etc. In the Gonzalo link this leads to the hyperinflation result. Seems plausible to me.

Chris Hedges on the Collapse of Liberalism:

http://www.truthdig.com/report/item/the_world_liberal_opportunists_made_20101025/

Read it and weep. Is it time to co-opt the right wing movement? Couldn’t we just infiltrate the Tea Party and take advantage of all of the righteous anger and slowly mold it to rebuild civilization? Maybe not, because..

…as Dimitri Orlov says, “There are no non-destructive ways to decomplexify complex systems…”

http://cluborlov.blogspot.com/

Stoneleigh says that private citizens will not have access to petroleum products within five years:

http://theautomaticearth.blogspot.com/

and Joe Bageant wishes some bright young people in Italy didn’t have to see Reaganomics come to their country:

http://www.joebageant.com/joe/2010/10/algorithms.html

Snow is in the air here. The woodshed is packed. The root cellar smells of sauerkraut, apples, and onions. The last green tomatoes sit in boxes on the living room floor beside the holey sheets where scarlet runner bean pods are spread out to dry. The last ears of corn were cut up and frozen yesterday. I’ll teach my students during the day, and sit at my spinning wheel at night, until spring comes. I raise a glass of mead to you all. Use this winter to think about what part of civilization you will personally dedicate yourself to saving over the dark age to come.

I’m actually more pessimistic than Ian. I think we are good for at the most three more competitive presidential elections, of the type where, you know, you get a choice of candidates.

As Ian’s latest post shows, the American elite is getting grabbier, and I think they will reach the limits of what co-option and propeganda will get them, and will have to start using more coercion to maintain control.

However, I am somewhat more optimistic about social security. The private accounts idea seems to have been an attempt to head off the financial crisis of 2008 by diverting the social security money into the stock market. Its too late to do that now, getting rid of social security will just mean pissing most of the population off. Then you really have to resort to coercion.

Also, who winds up as the Republican presidential candidate in 2012 makes a huge difference. They could nominate a joke candidate that causes them to blow the election, just like they might be blowing their chances to take back even the House this year with too many joke candidates. The could conceivably nominate someone who gets elected and is not that bad. The US has lucked out at least twice in its history with the electoral system throwing up good presidents in times of crisis. There was no reason to believe, given his pre-presidential career, that Lincoln would turn out the way he did, nor could you expect the 1930 version of the Democratic Party to produce the New Deal, it was actually generally to the right of the Republicans at the time.

I think luck plays a bigger role in how these these turn out than people realize, but I agree the trends are all bad.

Ian says:

>>>>>>End the mortgage deduction (a trillion a year alone) while decreasing interest rates on mortgages, increase tax rates on the rich, add a transactions tax, and close corporate tax loopholes and you’ve more than closed it, you actually have money to play with and fix the fundamentals of the economy.<<<<<

I think you're way off on that trillion dollar estimate. Here, among other places, I’ve seen it reported the cost to the Treasury in 2012 for that deduction would be $131 billion:

>>>>>The mortgage interest deduction (MID) is one of the oldest and largest tax expenditures in the federal income tax and is the largest single federal subsidy for owner-occupied housing. The president’s fiscal year 2010 budget reports that, in 2012, the MID will cost the federal Treasury an estimated $131 billion, much more than the total of all outlays by the Department of Housing and Urban Development ($48 billion). Homeowners also benefit from other federal tax preferences, including deductibility of residential property taxes on owner-occupied homes ($31 billion), and exclusion of tax on the first $250,000 ($500,000 for joint returns) of capital gains on housing ($50 billion).”<<<<<

Here, and elsewhere, I’ve seen the total deductions on mortgage interest in 2008 were in the $70 to $80 billion range:

>>>>>A bipartisan federal commission looking at ways to cut the federal deficit is at least willing to consider a recommendation to eliminate the mortgage-interest deduction, a tax break which cost the U.S. Treasury about $70 billion in 2008.<<<<<

Elizabeth Warren 2016 !!!

“Even now, in theory, the US has no major problems it can’t fix. It also has no major problems it will fix.”

Gods Yes. This should end up on the US’ tombstone. Our legislature is such a sad joke, so special-interest-encrusted, that no solution to _any_ problem can be even approached without goring someone’s sacred ox, so it isn’t even attempted. It’s just the vultures arguing over the corpse.

I think MMT could work, but only if approached with capital controls and a WPA style employment program that built oil replacement technologies, as Ian has suggested in the past. I had a discussion with MMT advocate Detroit Dan, he commented “You can’t have a default in your own currency as long as there is faith in the government” I said “True, but that is exactly what the Pubs have been destroying for the last 30 years.”

At this point I don’t think I know anyone who doesn’t believe that the government is simply filled with crooks. Now, you can say that it has always been that way, but in conversation today I can speculate that in 20 years, there won’t even be any such thing as the United States, and I don’t get any push back. That would have been unimaginable in 1970.

Strangely, I think we will get the money printing desired by the MMTers, once the Pubs trash faith in the USD and the FED has to monetize to keep the casino open. Only the spending will be wasted on wars and corporate handouts, keeping the salad shooters coming from China, not increasing productive capacity.

Hence hyperinflation.

“There is nothing wrong with America that the faith, love of freedom, intelligence and energy of her citizens cannot cure.” — Dwight Eisenhower

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings. — John F. Kennedy

“There is nothing wrong in America that can’t be fixed with what is right in America.” — Bill Clinton

“Even now, in theory, the US has no major problems it can’t fix.” — Ian Welsh

These guys quoted above are wrong. Eisenhower and Kennedy can be excused because of ignorance, but Clinton and Welsh should know better. We have a population of approximately seven billion people on the planet with a diminishing resource base and a biosphere that is being destroyed by the world economy. It is not certain that we can transition from the fossil-fuel energy base of the industrial economy to a sustainable energy base without an economic and societal collapse or that we can reverse the global warming and oceanic acidification soon enough to avoid catastrophic biological consequences. And it is definitely not “obvious” that we can do this.

In his youth, a younger Ian Welsh wrote:

As I understand the science it’s already too late—we’re going to get hit with runaway temperature increases over the next century, and they are going to make a good chunk of the globe essentially uninhabitable.

Huge climate change events are the sort of events which end civilizations. While it is always possible that something I can’t forsee could occur, of course, it seems to me that we’re on the glide path for disaster. With the best will in the world, and a great deal of competence, we might keep the deaths under a billion or so.

…

“It also has no major problems it will fix.” — Ian Welsh

Agreed. Major problems will be addressed only once they cause a crisis. When the crises occur it is not certain that they will be handled competently (no reason for optimism there, given the experience of recent decades) or in time.

@ anon2525

Paul Kennedy’s 1987 book “The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000(sic)” (sorry no ISBN) does a brilliant layout of factors that give rise to great powers and what leads to their eclipse from power for the last half millennium that comprise the “modern” era. Leading powers at the beginning were based upon trade and merchandising. Later the discovery of mineral and other natural resource wealth added immensely to that power (i.e. Spain’s New World empire). To compete, the British used their abundant energy resources to power their development of industrial power to gain economic advantage, still in a mercantile fashion in competition with the Spanish and Dutch. This success of the British in powering industry to gain economic power which in turn became supportive of projection of military and naval power and was soon copied also successfully, so successfully that there became a balance of great powers and competition between great powers became so expensive as to require coalitions of powers. Those coalitions of powers failed in 20th century wars to dominate through the force of war, attrition became the only means of defeating the opposing coalition.

What becomes obvious in this history is the application of economic wealth to military ends to project power is the root cause of the loss of the economic wealth and empire. It would seem obvious that projection of (political) power, if avoided, would likely preserve economic power. It is striking the historical relation of energy use and power status. Do away with status and that tax on the economy, and energy use can be applied to maintenance of economic process, providing economic income at a reduced level of energy requirements. That is if the ecological damages don’t fry civilization first.

Welcome back to commentary, selise. (No, I don’t know you personally — just a long-time reader of your comments and postings.)

What becomes obvious in this history is the application of economic wealth to military ends to project power is the root cause of the loss of the economic wealth and empire. It would seem obvious that projection of (political) power, if avoided, would likely preserve economic power. It is striking the historical relation of energy use and power status. Do away with status and that tax on the economy, and energy use can be applied to maintenance of economic process, providing economic income at a reduced level of energy requirements.

Although it may well have been true historically that governments and countries hurt themselves through the waste of resources by their military forces, it would not matter today whether the U.S. was squandering fossil fuels on military invasions and occupations or not. In less than 200 years of use, the world’s economies have nearly burned through the one-time supply of fossil fuels. It’s not a U.S. economic problem — it is a problem with providing energy for industrialized economies and transportation systems. Germany and Sweden will be hurt by this in the same way that the U.S. and China will be. They’re all using the same fossil-fuel energy base that the industrial revolution started with, and now it needs to be replaced.

howdy backatcha, anon2525.

worth repeating*:

My position is that the government should focus on real problems: unemployment, care for the aging, energy, climate change, and the disaster in the Gulf of Mexico. — James Galbraith

In other words, an economist who is saying the problems we face are not in the realm of economics. Someone who is able to raise his head above the trees of his profession and see the forest of the world around him.

*yet again

@ anon2525, comment 10753

That which you quote is my summary of a 540 page, extensively end noted and bibliographed book (obtained through BOMC) which mentioned the role of energy utilization in the economic process of projecting national power and as a measure of the economic power supporting military establishments. The observations were germane to your argument, added depth and further substance to your opinions as well. My role is solely to bring the work to attention, you will have to take up your disputations with the author or a greater authority than myself. If a guess were to be hazarded, three quarters of all energy used by the US is expended upon economically frivolous pursuits. This may scuttle your argument though, concerning energy. Yes, the low hanging fruits have all been used, however that is not the end of things which will happen when a barrel of oil is needed to obtain a barrel of oil. Your milage obviously differs, but then I am not the one asserting to have all answers to everything.

Unilaterally printing money in ways which create resource inflation (and it will, if it is actually creating economic growth that is widespread)… — Ian Welsh

Krugman’s latest WEITW

Higher commodity prices will hurt the recovery only if they rise in real terms. And they’ll only rise in real terms if QE succeeds in increasing real demand. And this will happen only if, yes, QE2 is successful in helping economic recovery.

So many ‘ifs’. I’m looking around trying to find Truman’s one-handed economist.

anon2525: lol, that’s what i get for not keeping up.

ian: well, i guess i’ll just have to hope that you do eventually read at least wray’s book and then write some serious analysis/critique on MMT (the paradigm) for discussion.

beowulf: howdy and thanks for the links (although please don’t feel slighted if it is awhile before i get the chance to read them — they are printing now and will go on my “to read” pile with your handle for reference).

re the current account deficit. i get the political problem that the fed gov is unlikely fill the demand gap and that’s a problem at home, but won’t attempting to decrease it export deflationary pressures onto the rest of the world so long as the US dollar maintains its reserve status and there is foreign net saving in US dollars? (i asked bill about this about a year ago — so, i don’t think i’m completely off base — but, as always, i could very well be and unfortunately i can’t seem to find the link to my question at billyblog.) what could work to fill the global demand gap if our current account deficit was brought to near balance other than a different kind of reserve currency?

i don’t see an answer that doesn’t involve a different kind of reserve currency — and even if one could be devised, there is no way we have the institutional structures to do it (the imf? that’s not a joke, that’s a death sentence) and i can’t imagine anything but an awful transition.

anyway, lots more reading for me before i will have a chance to productively think further on this….. hope i get the time.

re the current account deficit. i get the political problem that the fed gov is unlikely fill the demand gap and that’s a problem at home, but won’t attempting…

I don’t want to weigh in on whether the economic reasoning around this is right or wrong, but I do think that it is wrong-headed, or playing into the hands of those who do not want the gov’t. to do anything about the economic plight of the middle class and poor. I have written this before in several previous posts, but as Ian Welsh likes to say, “repetition”…

By arguing about how the fed. gov’t. should react to the economy in terms of how it should pay (or not), we remain stuck (as many desire) at step 1: Deciding how to pay for any gov’t. expenditure and therefore never actually spending. The steps are:

Step 1: Figure out how to pay — In which many argue that we can’t pay or can’t decide how to pay.

Step 2: Decide what programs to spend the money on — “No point in taking this step; there’s no money to spend.”

Step 3: Employ people to work in the programs — “Can’t employ people when we don’t have programs or money!”

“Gosh, we’d like to help you with your unemployment and losing your house and your food and stuff. And we will, we will — just as soon as we decide how to pay for any programs. Don’t call us, we’ll call you.”

This is the reverse of what is done in, for example, recent military actions.

Step 1: Employ people in the military

Step 2: Decide to invade a country that hasn’t threatened us and which has no weapons to threaten us. Commence shocking and awing.

Step 3: Figure out how to pay for the invasion and occupation (well, that step still hasn’t been completed — in the meantime, “emergency, off-budget” bills will provide the funds).