|Oh, How Little I Know - a.k.a. - Musing on Collapseniks & Crash on Demand
||[Feb. 13th, 2014|10:21 pm]
I'll share some thoughts on the big question: What will I do?|
This is the big question after all. We ask ourselves it all the time. Perhaps we phrase it slightly differently, for whatever reason, but this is really what it all comes down to: What will I do?
Last month, one person wrote and shared something a bit unexpected: permaculturist David Holmgren wrote a piece which seeks to convince others to attempt to collapse (or perhaps at least slow) Civilization.
I empathize with that feeling.
The chill outside from this winter, seemingly a result of Civilization's alteration of the global climate, begs the question: Is it time for something better? Or at least, something different?
A key idea, which I'll mention, or reiterate, is that Civilization is a living thing, with all that this implies. For some, this concept might seem obvious, and for others, ridiculous, but reality is reality.
Living things absorb energy and matter, rearrange these things in more complex patterns, and develop the quality of being self perpetuating. Now, I'm sure there are better explanations, and definitions, and I'm sure others have written some -- but that is something for a different work, at (mostly) a different time.
One can think of Civilization as a Person. By civilization, I mean all of the people, and all of the things built by people and machines, that work together to keep everything moving and flowing.
If there were a people, a small number, or a large number, who attempted to hasten the collapse of this civilization (all civilizations collapse and die eventually, as do all other living things), let's call it a euthanasia of sorts, then civilization will do everything possible to continue.
For example, one way to really test the system would be to organize a bank run. The timing would be important, to get the maximum publicity: perhaps something that was going to be televised anyway, a parade perhaps. And, it would take a fair number of people. Some would create the bank run by withdrawing all the cash from the bank. Of course, most branches have very little cash on hand, and some smaller branches have much less than others. There is probably one day of the week that is the lowest cash-on-hand day of the week, and probably the same could be said for a particular day of the month. Internet and/or phone could be used to create a flash bank run mob in numerous banks around the world, simultaneously, or one after another. The point being, that there are exceptional moments in time and space that would be optimum for attempting to initiate a bank run.
I suppose it might work. Some system of Civilization might be fragile enough to fail. And in fact, organisms die not when an entire system dies, but when a single organ dies, typically because of a lack or over abundance of a single something. A heart attack, for example, is a result of a lack of a single thing, oxygen, carried by red blood cells, too few of which can make it to the gasping cells beyond the clogged arteries.
What would Civilization do, in response to this threat of sorts?
Well, some have seen this here and there, with bank runs in Europe, and in failing countries, and in electronic bank runs in the markets. There are mechanisms that would come into play. There would be closings, and press reports, and calming words, and if necessary, people would speak, and the communication of stability would spread to calm the fears.
The most important thing, for the continued survival of Civilization, would be that the food kept getting to where it was consumed, because is long as that happens, as long as people can get food, and be fed, these people of civilization (myself included), then we'll probably keep on participating.
The food distribution system depends on a number of things: good transportation system, energized by a working fuel distribution network with ample retailers, and a function money or credit system, and, of course, with a smooth supply of the fuel itself. There are many vulnerabilities here, which brings to mind the battles in Iraq in recent memory, and how one side attacked the infrastructure, the command and control, and the power stations, and the refineries, and the oil wells (once to burn, and once to secure).
Holgren's piece, I suspect, did not call for a by-all-means-necessary, "this is a war between "the life of Civilization" and "the life of the living planet Earth as we know it".
It's interesting food for thought. Perhaps I'll write a dystopian film screenplay about a brilliant and sensitive community of humans, almost all, members of Civilization, who turn against the very creature they are part of, and become a terminal condition which robs Civilization of its life; but leads to new green grass, and a happier tomorrow. I think that films already been aired, the book already written, and how I'd have to add a sex scene from the hottest movies stars to get green lit.
Until then: What will you do? ,,, and ... Who will you do it with?
|Civilization - The Social Organism
||[Jan. 30th, 2014|07:28 pm]
We are part of a single, massive, civilization. Each of us is like a single cell in a massive and multi-cellular organism.|
Just as a multi-cellular organism has billions of cells, this civilization consists of billions of humans.
In multi-cellular organisms, cells differ in two major ways. First, they are located in different places in the organism, which means that some are closer to the surface or outside environment, and others are farther away. The second way is that the cells are actually different from one another. In humans, there are about 200 recognized different kinds of cells, each serving a very specific purpose.
Just as cells differentiate, starting with the single cell of the zygote following fertilization, so do humans differentiate, starting from newborns which are (for the most part) identical, to adult members of civilization.
In organisms, cells differentiate, forming tissues, organs, and systems. These work together to ensure that the organism survives. In general, cells transport and transform energy and/or matter.
Organisms, and civilizations, die.
All organisms in the past have died. All organisms currently living will die. All past civilizations have died. This civilization will die as well.
What leads to death? Typically, the death of a group of cells leads to death. It could be cells in the heart, or cells in the brain, or blood cells. The reason for cell death is because the environment changes in some way: too much or too little of something. For heart attacks, it is due to too little oxygen. Then, the heart can stop working, and then the blood stops moving, and then the entire body runs out of oxygen, causing the death of the entire body.
Civilizations die for the same types of reason. An essential system breaks down. That system fails due to the failure of the most critical organ of that system. That organ fails due to a breakdown of part of
|Configuring Updates: Stage 3 of 3 - infinite loop or stuck or freezes or won't boot
||[Jan. 25th, 2014|06:30 am]
Today, I installed a wireless network card in my computer. This is the first time it has had network access in a year or more. The computer is used almost exclusively for editing video.|
After the wireless network card was working, I installed a second video card. And after that, a USB3 card.
Before I had a chance to test out the USB3 card, and see that it had the best driver installed, my computer came up with this message, and would only go into a reboot loop: Configuring Updates: Stage 3 of 3.
My operating system is Windows Vista 64 bit.
After attempting many things, including removing all of the cards, unplugging a second hard drive, trying to do a system repair point, booting from a Windows Vista disk, pressing F2 and F12 at startup, etc. I finally searched the Internet and found that the offending file was pending.xml and just renaming it would allow the system to boot completely. Here are the links:
|Original Story - The Brothers
||[Jan. 25th, 2014|06:22 am]
Once upon a time, a long time ago, in a place very much like this place in that it was indeed the same place; but, of course, a very long time ago; lived two brothers.|
The brothers were the best of friends. They loved to play together and to help each other.
One day, the brothers played in the snow. The snow chilled them because of very cold polar air. They decided to find a way out of the cold, but to still stay inside. They would build a fort.
The boys got a shovel and began to pile the snow very high. As one would through on a scoop, the other would pack it down. In this way, they built up a tall pile that was well packed.
Then, they pushed dug into the pile. They dug on the bottom side, a little at a time, until a small cave formed. While too small for them, they continued digging, and using the removed snow to make the pile even higher.
Little by little, the pile grew taller, and the cave grew deeper. Soon, one of them could fit entirely into the cave. Later still, they both fit into the cave. They packed and smoothed the cave from the inside, to make sure that it was good enough to crawl into and to play around.
|QuiBids & Penny Auction Sites
||[Jan. 6th, 2014|05:59 pm]
Ponzi scheme, gambling addiction, the thrill of getting something for less than it costs.|
I was just looking over a web site called QuiBids which claims that people have "won" iPads and other items for up to 90% off the retail price. These are new items.
Of course, this sounded fishy, as did the lack of details on the website's home page.
So, I looked into it a bit and found the following articles and feedback:
Tags: quibids, madbid, beezid,
Final conclusion: Avoid. 1. It takes a lot of time. 2. You will spend money. 3. You will probably spend more than via eBay or Amazon. 4. You will probably feel like you've been cheated when you play. 5. If you win, you might play more, and lose even more. 6. Do something else. :-)
||[Jun. 15th, 2012|07:59 am]
The sun sets,|
The day fades,
The birds chirp,
The tires spin,
The cool spills,
The lights burn,
Summertime is here again.
Here we are. Right here. Right now. And not too far from here, there is someone else. How far must we go to find them.
How far to...
a person crying?
a person dying?
a person starving?
a person bleeding?
a family breaking?
a community aching?
a world shaking?
Sometimes, we think to ourselves, what should I do?
What should I do with my life?
What should I do tomorrow?
What should I do anytime?
There is no should.
Instead of "what should I do?", instead ask, "what will I do?"
What will you do with your life?
What will you do tomorrow?
What will you do anytime?
This is a choice. We decide what we will do, with a degree of freedom, which varies from person to person. While one person may be able to do many things, others may be very limited, so much that they may not even be able to move, or not even able to connect with others.
Seize the day.
Imagine the possibilities, and then fly.
|The Direction of Life
||[Mar. 22nd, 2012|04:12 pm]
Life has direction.|
Life as a whole has direction.
Life of a species has direction.
Life of an organism, a single living individual, has direction.
Life of each living cell has direction.
The billions, of billions, of billions of atoms in each person, each of them has direction.
Each came from some where.
Each is going some where.
Each and every one has direction.
If one can imagine, for a moment, that one has choice, one can consider the selection of choices that one might take, and how each of those choices might impact the direction of life, species, organism, cell, atom.
What direction, what path, will maximize happiness? Maximize happiness of the organism, the species, the community of life on earth, and all the living cells in the world?
|Four Ways to Make a Living
||[Mar. 7th, 2012|07:40 pm]
There are four ways to make a living:|
1. Be hired by someone to do what they need done, so they will give you money
2. Do something so people will give you money, primarily meaning starting a "business", taking on the risk that your good idea will be recognized and utilized (and rewarded) by others
3. Become "self-sufficient", as an individual or a family, and learn how to do take care of all of one's essential needs
4. Along with a community of people, work together to provide all of the community's needs
In school settings, only the first is taught. Students are taught skills so they can do what others want them to do, whatever that might be. As adults, they are taught to look for jobs, apply, interview, and if successful, to work hard, follow directions, and if they are successful at that, they will then get paid... which is the only feasible way for them to take care of their own basic needs of food, warmth, security, etc.
This was a major concern of the people in Belize while I was there. Students were graduating from high school, but there were no jobs. There was nothing to do. The had no skills to make a living on their own. The students were upset. The parents were upset. And this is not just Belize, it is all around the world where schools teach the same sets of basic skills, but few, if any, practical skills for living and surviving, other than as part of the globalized industrial economy.
|What is money?
||[Jan. 3rd, 2012|03:26 pm]
If you are looking for a better answer to the question, "What is money?", then you've come to the right place.
Rather than explaining what others say that money is, and then going into a back and forth about why it isn't really that, I'll just tell you what money actually is.
Money is a promise.
If you have some money, perhaps a dollar bill, then what you have is a promise from the people who live in your country to give you something in exchange for that promise.
Promises are pretty tough things to put a number on, and yet that is exactly what money is. For each different denomination, we have agreed to how big the promise is. A ten dollar bill is ten times the promise as a one dollar bill.
If we would like someone to give us something, then a ten dollar bill will get us ten times as much as a one dollar bill.
When you first received that dollar, it was a gift from someone. You may have received it for giving something to them; or perhaps because you will be giving something to them; or perhaps because they just wanted to give it without any apparent reason.
What we call work is when we give something to someone else, and then they give us a gift, and that gift is money, or more likely, credit. That credit is kept track of at a bank of some sort.
Promises. Money is promises. And, it has always been that way, even back thousands of years in ancient Egypt and Mesopotamia.
People like to get promises because, within a country, everyone agrees that when they are willing to give things, that they will accept promises (money or credit), in a certain amount, as a gift of equal value, which they can then give to someone else, in order to get something they would like.
|APSO USA 2011 - My Top Ten Take Aways
||[Nov. 6th, 2011|02:07 pm]
Top Best Things from My ASPO USA 2011 Participation
- Talking with Dr. William (Bill) Catton, author of the books Overshoot and Bottleneck, who happened to grow up in Manistee, Michigan, the same city that my dad's side of the family is from. I talked with Bill early in the morning on the second day (I guess it pays to rise early) and then again on camera that evening. Bill also delivered two very good talks on the first day, that were short and a pleasure to watch.
- Talking with Dennis Meadows, one of the authors of the book The Limits to Growth, which is another often referenced work. I talked with Dennis prior to the 2nd day afternoon session on investing. Dennis is developing a board game to help teach people the ideas of the Limits to Growth, and I'm hoping to obtain a copy in the new year, to try with friends.
- The session on the third day about vision, story, narrative, values and messaging. This was a circle session, the only one of the conference, and it offered a great opportunity for those present to share their understandings, not least of which were the contributions of Kurt Cobb and Chris Martenson.
- The journey to and from the conference was an adventure. I went car -> bus -> plane -> bus -> train -> walk -> backtrack -> walk -> to get there. On the way back it was: RUN! -> train -> RUN! -> train -> RUN! -> bus -> plane -> bus -> car -> to get home. The way home on the plane in the evening, the sky was clear, and I was able to see all of the lights from the cities, towns, cars, homes. This called back to one of the lectures which pointed out how energy comes in to the living organism via a network, and no matter the degree of magnification, this was pattern was the same.
- Interviewing people on camera, including Robert Rapier, Chris Martenson, John Michael Greer, and Mark Robinowicz. These interviews were fun and interesting, and something I look forward to sharing with others in the future. They were also a chance to get to know the people better, which is always nice.
- Catching up with friends and making new friends was great. I talked with a number of people, and shared space and the experience with the Quinn's (Tom, Susan, Megan), Albert Bates, KMO and Olga, Jan Lundberg, David Gard, Kurt Cobb, my friend Dawn Moncrief (who lives in DC), and a number of others.
- Hearing from some of the people who made interesting contributions, including Dmitry Orlov, Charlie Hall (funny guy), Jeff Rubin, Richard Heinberg, and a number of others, especially those that had contrary views that came out strongly.
- My visit to Occupy DC, and the chance to see the occupation camp, and to participate in the general assembly meeting, plus the chance to interview (audio) the facilitator of the meeting. An interesting decision, they do everything through committee structure, and all proposals must first achieve consensus within a committee before being presented to the floor.
- Hearing Wes Jackson's talk on soil depletion including the history of soil of North America, and his work to develop a way to re-enrich the soils, and put carbon back into Earth. This was a very fine talk, apparently similar to the talk he normally gives, but very good none-the-less.
- Lending a hand with the event a bit by helping as the time keeper during some of the sessions. It seems like a small role, but it is actually surprisingly helpful, plus I received a nice thank you from the event supervisor Greg Geier, which was very nice. I also enjoyed meeting the staff members of ASPO, Jan and Ray.
The more things I think about it, the more things I took away from the event, but these were the top ten to pop into my mind. If I was to think about this again after a period of time, I might say that there were entirely different things.
I do believe that the experiences, and the connections (which are themselves experiences) are the best things from any conference.
I am so much looking forward to this weeks Local Future conference, which will give much more opportunity to do this as well.
|What is going on with the economy?
||[Oct. 22nd, 2011|10:36 am]
|[||Tags|||||credit, debt, economics, economy, fed, federal, government, job, jobs, money, oil, peak oil||]|
The trick to understanding the economy is visualizing how the money flows in the economy. You can divide the people any way you like, but I tend to divide them into about eight groups:
1. the people,
2. the businesses,
3. the banks,
4. the federal government
5. foreign countries
6. the rich
7. the oil owners
8. the states and local governments
If the flow of money towards, or away from, any one of these entities changes, then it will impact the economy.
At the moment, we have several issues.One is that the flow towards the people has slowed. This leads to less sales for the businesses and corporations, and all government entities, and even the foreign countries.
This led to the government lowering lending standards in order to increase the flow towards the people via the banks. This increased the flow from the banks, to the people and businesses, and even the state and local governments; but of course, it also created a great deal of debt, and a future flow TOWARDS the banks, and away from all other sectors of the economy.
Complicating things is that the oil owners, and the global oil market, is subject to peak oil, which really is any change from "normal" in the oil production. Clearly, with Deep Water Horizon, we see that it is very difficult to get oil, and there are not many favorable places left; so there was a switch from increasing oil supply, to a stagnant oil supply. This switch led to higher prices (and the resultant speculative exaggeration) which drew money away from everyone, and towards the oil owners.
Another complication is that the US has created "free trade" agreements to outsource jobs. This decreases the flow to the people (meaning the domestic people) and increased the flow out of the country. Last week, three more of these devil deals were made, which leads to perhaps a short term change in the flow of money, but at a cost of environmental degradation, and the slowing of the flow towards the older, and "advancing" free trade countries.
The federal government response to slowing, after the banks did there bit, is to spend money into the economy directly, or via "mail drops" like tax return checks, such as Bush did twice during his years. This though, increased the public debt, and if it goes towards speculative home and real estate (or other purchases) then nothing is added to the economy.
And, another complication, that top most tax rate, which used to be over 90% for the billionaires, has been whittled down over the years to only 35% or some ridiculously low number. This slows the flow from the rich to the federal government, and puts the rich in a position to speculate with huge impacts, or to spend money out of the economy on foreign goods, or in general, to just put to much control of the flow into the hands of too few.
Back to the banks, when the increase in loan volume began to slow, then the flow from the banks to the rest of the economy decreased, and this led to a slowing of spending, and as we've seen, to an actual reversal of flow. Now money flows to the banks, not from the banks, as more is being paid towards them in debt servicing, then being paid out in expenses and new loans.
Backing out a bit, we see that the entire system is inherently unstable. It has to be monitored with utmost vigilance by those in control, and those in control are the people, of course, but really the mass of the people, the general populace, that is willing to assemble, and force the government to keep the flow of cash in such a way as to ensure full employment, and long term stability.
Of course, our schools do not teach this, and this is perhaps the largest failing of schools.
Now we see the results. As if addressing the oil situation (since the oil is literally the life blood of the global economy) wasn't enough, now we have the issues of income and wealth disparity, a huge trade gap, privatized banks drawing huge quantities of funds out of the economy, an unwillingness of the people to spend directly into the economy as true investment from the federal government, and a pinch on the people, the state and local governments, and businesses leading to insane policy choices that will only serve to exacerbate the situation.
It's complex, but we can understand it, and if we understand it, then we can figure out ways to fix it, or more likely, to replace it.
|Where were you when?
||[Oct. 20th, 2011|10:57 pm]
Where were you when?|
When everything was changing?
Where were you?
What were you doing?
I can imagine being asked that. Perhaps you can also imagine being asked that. The question may come in 30 years time, or 20 years time, or 10 years time or less.
Where were you?
I want to be able to answer that I was right there, doing my best to ensure the best outcome.
I want to be able to say that I did something unique, something different, something that only I could do; so that others could do unique things, different things, things that only they could do.
Where were you?
I was here, thinking about you, and about me, and about the future, and about the world. I was here. I am still here.
Changing times we are living in.
We can hear it.
We can see it.
We can smell it.
We can taste it.
We can feel it, in so many ways, that changes are happening, and more changes are afoot.
Today, it is "the occupation" or "Occupy Wall Street", and tomorrow it may be much more: a social change? a turning point? a revolution?
It is a sign of the times.
Here we are, at such a unique time in the story of Earth, where this one single species, and this one particular culture out of this one particular species has come to dominate, or perhaps over-run the surface of the Earth. Releasing carbon back into the air. Ripping and tearing at the land. Decimating the oceans. Doing so many horrible, almost unspeakable things.
Here we are.
We are part of the great machine of civilization.
And yet, like any machine, or more precisely, like any living thing; things are changing.
Oil, the blood energy of this civilization is failing, little by little, and we can see it, as the circulation no longer flows freely to the extremities, and we wonder... how much longer will it flow to us? how much longer will it flow to me?
Yes, promises, big, and small, and gargantuan, and minuscule, and in size beyond the limits of the imagination; promises are out there, in the forms of money, and credit, and debt.
This system of promises, mind you, promises fade in real life, as they are simply thoughts about the future, and all thoughts fade; and yet this civilization has a system of promises that does not fade, that is not rational, likely, or possible, and which must, eventually, fail, one way or another.
Few seem to get it.
Few seem to look at energy and promises as two things, one real and one fleeting, that are conspiring against this great machine.
Those looking at money, don't see debt.
Those looking at debt, don't see money.
Those looking at both, don't see their foundation in promise.
Those see this forget that promises depend on the energy to keep those promises possible into the future.
Stock and flow.
Stock and flow.
Money is like the global water cycle.
Rain falls around the world, at different times, in differing amounts. Then it pools; and it flows; and it pools; and it flows; and some evaporates; and some is absorbed; and some makes it back to the oceans and evaporates; or cycles down.
And this is how it is with money.
It too flows, and stocks, and flows.
It flows from the people (who make the promises), to other people, to the businesses, to the people, to the state, to the people, to the government, to the corporations, to the people, to the oil extractors, to the people, to the rich, to the people, and around, and around, and around. We could visualize it in our minds as an organism, and the money (or the credit) that flows is like the blood; or we could visualize the global water cycle, and the money flows, and stocks, like the water in the world.
And, perhaps something different, is that the money and the energy flow in the opposite directions.
The money for the energy, for the oil, for the gasoline, flows from the people, to the corporation, to the oil producers, to the banks, and around, and around.... while the energy, the oil, flows from the oil producers, to the corporations, to the people, and the buisnesses, and the governments, and the rich.
Two flows, moving in opposite directions.
Is this where the analogy between the flow of money, or energy, and the water cycle, or the blood inside your body, breaks down?
In our bodies, are there signals that tell our bodies where to direct the blood (the energy) that keeps all of our cells healthy?
But, it is not this simple, is it, because these are not the only two stock and flows that are going on.
There is also the debt. The debt that comes, either public or private, when money or credit are issued into the flow.
The public debt has ballooned, and this has altered the flow of money. Instead of flowing towards the people, the money is flowing towards the banks. And as the oil supply fails to grow as it had been growing, so too money flows more towards the oil producers, and less towards the people. And of course, all the others respond to this in the way that they know how, given their knowledge and understanding of economics, politics, and personal desire.
The debt, it too flows, as odd as that may seem. Sliced and diced into pieces and morsels; stocked here, and shot in a rapid flow over there, and so strange it is, but it does grow, and does grow, and this public debt it does grow.
But as the money to the people, the flow to the people, as that fails, and the debt burden grows, clearly, much of the debt will not be serviced in a way to keep people in their homes, and their cars, and in their lives.
And more promises.
Promises of "this is yours", whatever that really means.
The illusion of control over property, whatever THAT really means.
And the property stocks and flows as well, doesn't it? Moving from the public, to the private, and from the people, to the rich; and from the rich to the corporation, and the ownership stocks, and flows, and while I can barely visualize it, it is all part of this great machine, isn't it?
Where were you?
First of all, I was here.
I was trying to wrap my head around it.
I was trying to understand it.
I was trying to share what I thought I'd figured out. Because I know, perhaps better than most, that this life of mine is brief, and fragile, and a single sleeping person could end it on the freeway tomorrow, or in any other ways, knowable and unknowable to me.
And the occupation, and the Occupy Wall Street, and the people who just are angry because what they thought was going to be their life, well, it is not, and it is all changing in ways that they don't understand, and that they were never expecting.
There is a future.
It is a better future, for everyone.
And no, I am not thinking of something "beyond", but rather of something that we can indeed achieve, together, for our people, and for all of life.
There is a positive future out there.
Yes, it will be local, because we are quickly burning the oil, and it will run down much more quickly than it ran up.
Yes, it will be different, because we have changed the world. Or I should say, this great machine has changed the world. Or, perhaps, simply, that the world has changed. And, there is a different climate. And, the surface of the land, and of life, is now different.
But there is a positive future ahead; and a future I look forward to attaining, and am daily working to achieve, in advance of the great change.
Where was I?
I hope, one day, I can look back and can say, "I was there, and we were on the precipice, and the ridge was razor thin, but we saw the realistic destination, and we recognized in ourselves a way forwards, utilizing all of our strength, and our intelligence, and our emotion, and we each did something unique, that only each of us could do, and behold, here we are, and life is better than we ever imagined it could be; and I was there, and now you are here together with me."
|Daniel Quinn, Ishmael, Saving the World, and Moving Beyond Civilization
||[Aug. 10th, 2011|11:05 pm]
|[||Tags|||||civilization, cultural trance, culture, culture change, daniel, daniel quinn, food, future, ishmael, life, quinn, society, story||]|
Today, I finished reading the fourth Daniel Quinn book of this summer. I started with Ishmael, followed a couple weeks later by My Ishmael, then Beyond Civilization, and wrapping up with Providence. He has other works, most notably The Story of B, which is quite good, but this may be it for me for this reading season.
For anyone who doesn't know of Quinn's work, I'll provide a general overview.
Quinn spent about a decade working on the first book, Ishmael, which won a half a million dollar prize for offering up significant new ideas. His interest was in the way the world works, how things came to be this way, why it is that this civilization is eating the world, and why history, as taught in school, ignores millions of years of human experience.
Quinn explains that the culture of civilization is different and unique. The cultural stories include things such as:
* There is only one right way to live.
* The world was made for us.
* We were made to dominate and subdue the world.
* Civilization is the best possible future for humans.
* We are flawed, and so we will always fail.
Our culture, he explains, is easy to identify. Anytime one sees that the food is under lock and key, that is our culture. More specifically, our culture grows most of our own food, and then quickly locks it away, and then pretty much everyone has to do something required (or desired) by civilization in order to have access to food. This was distinctly different from all other cultures in that they did not lock up food, and due to that, tended to be much more egalitarian, since there was very little need for specialization.
Quinn talks about education, and how in all other cultures, the adults simply have the children with them all the time, and so the children learn everything that there is to know from hands-on experience, at the point in time that it interests them.
Quinn contrasts this with this civilization's system of schooling, where children as young as 5-years old are basically locked inside little rooms for a good part of the day, with mostly other children, and with few adults, and are presented with things to learn that they are not necessarily interested in, and that, in many cases, are irrelevant to anyone's lives. In fact, he points out, that the schooling system itself has to resist improvement in preparing people to be cogs in the great machine of civilization, otherwise, the grandparents and parents of those children would be out of work, as the more well educated children entered the workforce. Thus, one function of schools is to keep children out of the workforce, and then allow them to trickle in at a rate so that they can take up whatever jobs are unable to be filled by the current workforce, or are basically undesirable jobs.
[FYI - I'm adding some of my own reflections in here as well, so this is not all word-for-word from Quinn.]
To save the world, Quinn suggests that we need to abandon civilization, since it is clearly a failed cultural model, that is leading to the destruction of not only the earth, but of the our very ability to survive here... basically making earth uninhabitable for humans. To abandon civilization does not necessarily mean to separate from it immediately, and all at once, but to do as much as we can, and to invite others along, and to work together as equals to make a living, as much as possible, beyond civilization.
Quinn doesn't spell this out in great detail, primarily, he says, because it is an impossible task, just like if we were the inventor of the first bicycle, and were attempting to imagine what it would look like in the distant future. How would we know what technology, machining, etc. would be available? How would we know to think about a bike chain? Or spokes? Or petals? Or equal sized wheels? Etc. Basically, since we are not yet in the future, beyond civilization, we can not really imagine it, and really, what we can imagine is only really the first step towards this better future.
What are some of the take away messages?
* There is no one right way to live.
* There is something BETTER waiting for us.
* We need to present this better story so that people have something to aspire to; rather than giving something up.
* We belong to the world. (Not the other way around.)
What does all of this mean to me?
Well, it means that the future is likely to be very different from what most people imagine, and even different from how I imagine it.
When I am alone, outside my home, I think about the future beyond civilization, and how I might be standing in the exact same spot, living in the exact same house, but that things would be very different.
I would be making my living a different way, probably as one member of a group of people that were making their living together; making a living meaning obtaining food and all the essentials of existence together.
Would I be doing this with family, or friends, or neighbors, or "my people" (those that see think of the world in the same way as me)? I don't know.
When thinking of how to save the world, I think of how we need to continue to have programs to hold the line against the onslaught of civilization. We need the Sea Shepherds and the Rain Forest Action Networks and all of the non-profits, organizations, and programs that are protecting things from extinction, destruction, pollution, devastation, etc. We also need people to be moving beyond civilization, so that civilization itself diminishes in its ability to chew up the world. And, I can understand those, such as perhaps some of the readers of Derrick Jensen, that would act in such a way to hinder or sabotage the great machine.
More practically, when thinking of what I'm going to do with my life, I am trying to keep these ideas in mind. For example, with my 4-year old son, we are already talking, due to his curiosity and just seeing things happen in the world, about life and death, and how we are part of the world, and how we came from the world, and will return to the world, and are all here together, and are all successful since "behold, we are here".
I'm also thinking of how to help people to save the earth, and of course, the great biodiversity, and prevent mass extinction, and ensure the survival of as many species, especially our own, which, once succeeding, will have the ability to provide a model, if and when other species evolve into a similar level of intellect as our own. How do I help these people? Is sharing some visions of the future useful? Is getting them together in one place, so that they can connect, and share, and learn, and work together towards a brighter future, is that useful? What is it that I am specially able to do to advance this social evolution? What is my path of "biggest bang for the buck"?
So, there you go. A bit of a summary of some of Quinn's main themes and thoughts, and some of my personal reflections.
Of all the books I've read, I think that Ishmael has had the greatest resonance with my life. It may not have resulted in as major of a change as reading Animal Liberation, not yet anyway, but I never really needed to re-read Animal Liberation to become vegan again. For Quinn's books, I want to reread them so that I can remember, and re-examine the stories that I am living, as a part of this culture in this civilization, and which stories I aspire to be living. Each time, I feel that I'm moving closer to harmony with that which I already believe and feel about life.
So, for anyone who has not read Ishmael, I do recommend it, and once done, if one is hungry for more, do continue with Quinn's other works, which complement and expand in Ishmael in any number of ways. Perhaps you will find, as I did, why these ideas are some of the most influential that you'll encounter.
Enjoy, and good luck on your journey.
|Some Times, I Wonder
||[Aug. 5th, 2011|10:08 pm]
|[||Tags|||||civilization, conflict, daniel, daniel quinn, earth, history, humanity, ishmael, life, nature, quinn, wilderness, world||]|
Some times, I wonder.
Some times, I wonder... about how things might have been, had I been born long ago, or born long from now.
This is such a strange, bizarre world.
I was at a restaurant this evening, in the lavatory, washing my hands, and I thought to myself, "This is surreal. Here I am, an animal, in a box, rubbing his hands together, with some sort of slippery stuff, that came out of a white sort of box, stuck to a flat surface, with a white rock like thing catching water, that is flowing in a smooth column out of a shiny bent thing... This is not natural. This is not normal."
Such thoughts occur to me, from time to time. What a utterly concocted world we find ourselves in, surrounded by things built by others, and so unlike everything else in the world.
If I were born only a dozen millenia ago, I would be walking, feet touching the ground, seeing the plants, and hearing the animals.
Life would be all around me, all the time.
People, family, would also be all around me, almost all of the time.
My language would be different. Being part of the world, it would have to be. In fact, I doubt that I would draw a line between myself and the world, at least not in the way that I do today.
My feet would touch the ground, my skin would touch the air, my hands would touch the plants, and everything would be one.
Such a strange, strange, un-natural, bizarre, contrived, convoluted, backwards place I find myself -- when these thoughts and feelings rush through me.
There are people still who are one with the world. They survive, their families, in distant places, far from the reach of the Great Machine.
They are not safe.
The Machine is coming, slowly, but surely, to their homes.
Ripping, crashing, tearing, grinding... the Great Machine of Civilization has a life of its own.
I've been a cog in the Machine. I probably still am a cog in the Machine, most days, most of the time. After all, I consume vast quantities of energy... and the food I eat was produced using vast quantities of energy and other parts of the world, torn from it by the Machine of which I am a part.
Will the Machine grind to a halt as the energy dwindles?
Will I we be left in a world that we denude in an attempt to feel ourselves?
Will this place I now live be turned into a desert, akin to the deserts in Africa, where the people strip the land bare, and then, having destroyed, inadvertently perhaps, their world the people live on, fed by the Machine itself?
Some times, I wonder about the world.
I wonder about my direction in life.
I wonder about my goals... my purpose... my meaning... if there even is a meaning for me.
I don't think I'm the only one. We are all a part of the Great Machine, whether we recognize it or not. For those of us who see our place in it, at least we can verbalize, to a certain extent, what it is precisely that we're feeling.
The Machine calls me back in... "Here are diversions made especially for you... films, music, writings, a cozy bed, a place to call your own... Come back to me, my son, you are important to me. You are a part of me. You are home."
I answer the call...
until the next time that ...
... I wonder.
|Winning Animal Rights - Rise of the Planet of the Apes
||[Aug. 5th, 2011|03:03 am]
Rise of the Planet of the Apes - Top Five Things to Know
- The apes are the heroes or protagonists of the film. Eventually the apes escape captivity and into the wild.
- Just because a drug works one way on chimps does not mean it will work the same way on humans. This is a prime argument against testing drugs on animals.
- Keeping a chimpanzee as a pet is not a good idea. Check out the film "Project Nim" for a realistic view.
- The "Great Ape Project" is the effort to recognize the natural rights of chimpanzees, gorillas, and orangutans.
- The apes do not attack the humans, although this is what it seems to show in the trailer. Their goal is simply to escape captivity and to live free. The conflict occurs when the humans attempt to prevent them from escaping.
||[Aug. 3rd, 2011|10:51 pm]
I know of a number, many perhaps, that are horrified, terrified of the future.|
What will it be like?
How will I be treated?
Will I suffer?
Will I die?
They learn about something: climate change, peak oil, economic instability, etc. and they say to themselves, "I'm afraid. How will I face this future?"
From time to time, a wave of this washes through me. I look into the future, and I see the uncertainty there; not the uncertainty of my own mortality (that is another topic) but the uncertainty of all these changes, going on all around us, and how we might navigate what look like stormy seas.
One vision comes back to me; which eases my thoughts, which is that people are, after all, drawn together, and bound together, and in tough times, can be strong together.
The future is bright.
People, living together, eating together, playing together, working together, celebrating together, and exploring this amazing world together.
It has always been this way, since before we even looked like we do know, back along our evolutionary line. There are still those that live this way, a small number admittedly, but providing us with the knowledge that we two share this heritage.
When I am gone; I hope my sons carry on, trying to make the world a better place. When they are gone, I hope those that they have touched will carry on as well, as will all that are on the side of the earth.
|The Stars at Night
||[Jul. 10th, 2011|10:35 pm]
Looking up at the stars at night, I feel my place in the universe. I am that very low probability that other "intelligent" life exists, we may be it. We may be the only ones who "understand" the universe in the way that we do. We may be the ones; the ones that are here, now.|
As part of the universe, and being made of matter that was once in the heart of a star, we are potentially the only living things in the universe; and perhaps the only living things to ever have existed. Of course, there could be some life out there, and perhaps it is inevitable, the inevitable result of billions of years of time; but perhaps not. Perhaps we are the first. Or, perhaps we are the last. Either would be quite amazing, but also, quite possible.
But what is the point when possibilities include that everything ends in a "big crunch" or a "heat death?
|They Were Wrong
||[Apr. 29th, 2011|10:56 pm]
10:31 Public education is under attack. From the governor, to the legislators, to the business owners -- all of these people are attacking public education. They are attempting to take away our insurance. They are trying to take away our retirement. They are working to cut our pay. They have declared war on educators.|
For the most part, the people don't seem to notice. Gasoline prices are the talk of the day. What goes on in Lansing is much less interesting and relevant, other than the idea of raising taxes on the poor and working people.
The legislators in Michigan and in Washington DC propose reducing the taxes on the rich. They argue that huge tax breaks to oil companies, and no-taxes at all by huge companies like G. E. ; well these things are okay, and even good for the economy.
The economists didn't even warn us about the coming crash in the housing market, the crash in the stock market, the collapse of the job market, and the return of high gas prices.
Economists claim that it is "good for the economy". Lowering taxes on businesses? Good for the economy. Decreasing wages and insurance benefits for teachers? Good for the economy. Outsourcing jobs to any country, other than the USA? Good for the economy.
This is all false.
These things are not good for the economy. We know that. Common sense tells us that if we have less money to spend, then this is NOT good for the economy. And yet, the politicians want to reduce spending. That is code for they want to reduce jobs; or reduce pay.
They said our houses would be worth more.
They were wrong.
They said the stocks would keep going up.
They were wrong.
They said that severe recessions were no longer possible.
They were wrong.
They said that outsourcing jobs would be good for America.
They were wrong.
They said that everything was going to get better, if we just kept trusting them, and doing what they advised.
We were wrong.
We were wrong to believe them.
It is wrong... to continue teaching their false "theories" to our students and our children.
It is no wonder that a large fraction of the public supports these proposals; they have been taught that this is the "right way".
The teaching of money --- finance --- and economics in schools is in crisis.
|Individual Activism 3.0: From Vegan to Peak Oil: A Case History
||[Apr. 9th, 2011|09:04 am]
|[||Tags|||||civilization, climate change, collapse, economy, energy, environment, future, local, local future, oil, peak, peak oil||]|
In the summer of 2002, while searching for a book about reducing child poverty in Africa, I found the only book my public library held by the ethicist Peter Singer, the title: "Animal Liberation".
Nine years later, I look back upon my individual activism, not in the area of animal rights, but rather in the today's adult education movement.
The movement encompasses many seemingly separate topics: peak oil, climate change, animal rights, biodiversity impacts, economic systems, and forms of governments, just to name a few.
Each of us within this movement is an individual activist. We can look back at our efforts, those things that we each did and consider the results.
Where am I now?
During my coveted 10-day long spring break from public school teaching, rather than going on a vacation, I devoted myself to the movement. My primary accomplishment is the completion of uploading to YouTube, in high definition 1080p, twelve hours of video from the most recent Local Future conference.
The speakers from this day included Dr. Joseph Tainter, Nicole Foss, David Korowicz, Stephanie Mills, Kurt Cobb, Aaron Wissner, John Sarver and David Gard. The focus of the day started on renewable energy, peak oil, and permaculture. It then shifted to the collapse of civilizations, biodiversity, sustainability, risks and building resilience.
There are about one hundred people who watch the videos within a week of their posting, and if they are publicized, the number can grow to over one thousand. In one case, my 10-minute peak oil video has garnered over 100,000 views.
The reason for uploading to YouTube is to maximize the possibility that an everyday person might stumble upon one or more of the videos. The reason for taking the time to upload the high definition files is so that other educators might use these videos with groups of people.
To be continued...
100,000 views is about the same audience size as Chris Martenson's Crash Course on YouTube.
Peak Moment TV has also achieved around the 100,000 view level with some of their videos.
The Post Carbon Institute animated video on peak oil has done best with over 800,000 views:
|What's Going On With The Economy: Part III
||[Feb. 22nd, 2011|01:44 pm]
|[||Tags|||||collapse, crisis, depression, economics, economy, employment, energy, government, job, jobs, oil, peak, peak oil, peakoil, recession, security, unemployment||]|
The federal government and the rich are having a significant impact of the stability of the economy.
The state and local governments are in a pinch. Their revenues are down, way down, because the taxes they rely upon, namely sales taxes, income taxes, and property taxes, are all on the decline. As the these revenue sources diminish, so to does the spending of the states, most of which, is upon paying people to support the general welfare of all the people of the state.
The people are in a pinch. The total amount of money that they are bringing home has diminished markedly, and their ability to borrow is seriously curtailed. While they might like to spend much, much more, spending money at businesses, on all sorts of products, the reality is that the people do not have the capacity, or the level of irrational exuberance, necessary to increase the spending level.
In many cases, the people "buy used", which is simply an exchange of an already existing product for money. People buy stocks, bonds, houses, and other used items, which often has only a fraction of the impact that actually going out and buying products would have.
The businesses, and even the corporations, are in a pinch. They are experiencing less sales, and sales are necessary to keep the revenue coming in, and in order for the businesses to continue borrowing money, on a rolling basis, into the future. As they have less and less sales, certain businesses fail, taking with them any jobs, taxes, or other contributions to the economy. Other businesses reduce their expenses by layoffs, pay cuts, benefit cuts, hour cuts, the result being that less money is flowing through the businesses and back into the economy.
Draining the money out of the economy are many corporations, foreign countries, oil producers, and banks.
The corporations take profits, and in order to make more profits, shift as much production as possible to the location with the lowest cost to do business, which is typically in other countries.
The people in the USA buy all sorts of products from foreign corporations, sending the money out of the US economy, on a path that may or may not return it to the USA in the necessarily timely fashion.
The oil producers, both foreign and domestic, whose total world oil extraction rate is already declining, and perhaps more importantly, whose amount of oil available for purchase on the world market, is decreasing even more rapidly, leading via the existing mechanisms to very volatile pricing, whose fluctuations intensify or depress the functioning of the national economies. In the case of the USA, as the price rises, people are forced to spend a greater and greater fraction of their money on the products of oil, and thus less and less money is available to support their typical spending patterns. This puts additional pressure on the domestic private sector to reduce expenses, meaning both cutting payroll costs in the USA, and perhaps outsourcing more production to other nations.
The banks, the profit seeking private corporations whose sole purpose is to maximize returns, via their monopoly on the validation of the credit of the people, are faced with the consequences of seeking to maximize short term profits by relaxing and abolishing standards of credit approval. Now, they find that the promissory notes, including the home mortgages, are suddenly worth fractions of their noted value, as people such as those who recognize that they're in impossible situations, walk away from homes that are worth much, much less than they "owe" to the bank. The banks in turn, are, slowly but surely, marking down the values of their assets, which automatically decreases the value of the bank. Given the continued decline in the value of homes and other real estate, as well as businesses and other extensions of credit, the banks, in order to maximize profits, must raise standards of lending, cutting off a supply of credit to the people that had been used for years. The banking system, as a whole, was bankrupted in this process, but the actions of the Federal Reserve Bank and the U.S. Federal Government propped up the system in the name of stability.
We can tease two more fractions out of the whole of the economic system: the rich and the federal government.
The rich are getting richer. Their riches come from the labor of the people, from the innovation of the people, from the risks taken by the people. Each dollar they earn, or have, comes from others, either directly or indirectly, and over the past 50-years, they have convinced enough people that they themselves are the essential aspects of a strong economy. Despite the fact that they work the same number of hours, or less, than the average working person, the income of the rich, and their vast assets of property, grow disproportionately to the income of the people.
This income disparity convolutes the economic system. A person earning a million dollars per year spends their money very differently from a hundred people earning ten thousand per year. The hundred people buy food, and clothes, and pay rent, and buy fuel, and support the base of the economic activity in the country. The millionaire buys different food, and different cloths, and pays different housing expenses, and shopping at different stores. The more money that goes to the rich, the less money is available to support the bedrock of the economy.
The rich also have a disproportionate ability to alter their spending patterns. While the spending patterns of the poor are very predictable and regular, the millionaire can easily stop spending tens of thousands in one month, to save up, or just to take a break; or can spend well beyond their income, adding a sudden jump in sales to the businesses they frequent.
As the income disparity grows between the rich and the poor, the rich's impact on the the volatility of the economy increases. In one recent example, one billionaire made an announcement on his spending patterns, for the expressed purpose to stimulate the economy. One person, whose single decision, could stimulate an entire economy.
The state governments. The people. The businesses. The spending on foreign products. The spending on oil. The privately owned banks. The millionaires and other rich. What these all have in common is their operation within a set of laws and rules established and enforced by the federal government.
The federal government can create jobs, or destroy jobs, as simply as by changing its spending. At the moment, it is considering cutting $60,000,000,000 of spending. Those left jobless would include all sorts of federal employees, and those supported either directly, or indirectly, by this federal spending.
By reducing the spending levels, the federal government threatens to not only force thousands, or millions of people into desperation, but also threatening to push the economy into a new phase of contraction, leading to even more job losses in both the private sector, and, eventually, in the state and local public sectors.
The federal government could provide jobs for everyone, just as it during past crises, and yet, due to a fear of debt, a fear which appears to be mirrored by the people, the government is unable, and perhaps unwilling, to provide jobs for everyone.
One stumbling block for the federal government is their belief that the only way to employ people is by borrowing money from others. Their sources of income are two: taxes and the selling of bonds. One is a requirement. The other is a hope. Upon selling the bonds, the government has then obliged itself to repay the bonds with interest.
The federal government has the ability to simply hire people directly without borrowing money. Money, after all, is a construct of societies. It is simply a symbol to represent the credit that one has earned or been given. Various organizations have attempted to point this out to the federal government, using terms such as US Dollars (not Federal Reserve Notes), and Sovereign Money, and the like. Still, motion in the federal government on this topic is between slow, and non-existent.
Upon stepping back, to view the economy from a distance, one can see that the amount of money is inadequate. Millions are ready and able to do productive work, right now. Yet, they sit idly, available but uninvited, unable to contribute to the general welfare of the nation.
At the same time, the call for help achieving the general welfare grows by the day. There is need for infrastructure to be fixed and improved, need for help in schools, need for revitalization of urban neighborhoods, need for cleaning up the messes left by profit-seeking corporations, and needs to help us achieve a more perfect union.
With an infinite amount of productive work to be done, for both those that live now, but also for the next generations, the call to enable the people to do this work is beginning to rise.
Some argue that to employ so many would lead to great economic ills, but if one takes a moment to think, one can see that the result would be a burst of spending throughout the economy, as the people went to work for the good of the nation, and spent their hard earned money back into the private sector, which in turn would necessitate hiring. This new lifeblood in the economy would also course to the states and local governments, through the normal revenue channels, and allow the states to continue to provide for the good of their people.
The federal government also has the ability to stabilize the economy in other ways.
With one bill, the federal government could restore the necessary and appropriate level of contribution and taxation on the rich, to decrease the income disparity, to promote the general welfare and common good, and to ensure domestic tranquility.
With one bill, the federal government could ensure that tariffs were placed on imported products enough to motivate people to buy American, and to necessitate dead and dying industries, providing even more jobs for the people.
With one bill, the federal government could nationalize the entire financial services industry, to ensure the stability of the nation, and to remove the profit motive from an industry whose primary purpose is to validate the credit worthiness of the people.
Still, how does one deal with two other major impediments to economic stability: corporate personhood and energy dependence?
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
|What's Going On With The Economy: Part II
||[Feb. 21st, 2011|11:13 am]
|[||Tags|||||banking, banks, bubble, collapse, credit, debt, depression, imports, loan, money, mortgage, mortgages, oil, oil crash, peak oil, peakoil, recession||]|
State and local governments, most businesses, and most people are, ultimately, not the problem. Spending is declining because the people have less ability and desire to spend. So, what is the root problem?
As the states bring in less revenue, they have less to spend. As the states' public employees are compensated less, they have less to spend. As the businesses receive less money in sales, they have less to spend. As everyone receives less money, they all have less to spend, and less to pay in taxes.
Where is the money going?
There are a few special players in the economy that can be divided out from the rest. These special players have very large impacts on the economic system because they can increase or decrease the overall amount of spending in the rest of the economy. These special groups are:
* the foreign countries
* the oil owners / corporations
* the banks
* the federal government
* the rich
We need to understand the role that each of these can play in reeking havoc upon the functioning of the economic system. Some of these groups are rather easy to understand. Others, not so easy. Let's take them from easy, to hard.
First, the foreign countries. We buy things from the foreign countries. The dollars go to them. To their bank accounts. That money leaves the control of our country. Depending on the needs and whims of the foreigners, they can either spend the money, so it comes back into the USA, or they can keep it outside. This is akin to an open bleeding cut on our economy.
The money or blood flows out, but it does not flow back it.
It is like a vampire, draining away the ability of the country to continue.
Of course, to a certain extent, we are the ones slitting our own wrists, as we do indeed send the foreigners our money, in exchange for their cheep goods, made cheap by the abject poverty of their lands, and the willingness of the people there to work for pennies a day, so that they can feed their families.
The trade deficit, as it is known, is, in reality, more complex, but the essential point is knowing that our spending behavior, and the spending behavior of foreigners, all impacts our economy.
The oil producers or oil owning companies are the next on the list.
There was only a certain amount of oil in the ground, when it was first seriously extracted a hundred and fifty years ago. Since then, we've extracted millions upon millions of barrels, and for the most part, burned it up, putting the carbon back into the atmosphere. What remains in the Earth is the oil that is very expensive to get out, very hard to get out, and very slow to get out.
At the moment, the world extracts about 85 million barrels of oil per day from the earth, and then we burn about the same amount up each day.
This rate of extraction, though, is soon to decline. Instead of extracting 85 million barrels per day, it will soon be 80 million per day, and then 75 million per day. Still, our desire to buy and consume this oil will continue. The result is that the prices for oil will rise, first, due to the reasons of geology, second, due to the reasons of economics, and third, due to the speculation that, in the future, oil will be worth more.
In any event, as the price of oil rises, the amount of money we spend on oil, and the products of oil, also rises. The amount of money in the bank accounts of the oil owners and oil corporations, this amount rises. In some cases, the amount of money coming into these accounts, and of course, out of our accounts, may increase by 50% or more from one year to the next.
This would not necessarily be a problem, if only the oil owners and oil corporations would instantly spend this money back into the USA's economy. But, as with anyone, when money comes in, it is not immediately spent, especially when there is a windfall. As in 2008, the rush of money leaving the people's pockets as they paid for $4 gasoline ended up in the accounts of the oil owners, and then, only much later, did they spend this money back into the economy.
This situation is very difficult, because the geology conspires against us. We have burned up and consumed all the easy oil. Now, only the tough oil is left, and we have to build multi-million dollar rigs just to pump up a tiny fraction of our consumption. What we have here is a clear constraint on the future. If there were the capacity to consume the oil faster, it would just be gone that much more quickly, and that much more shockingly.
Now, we come to the banks.
We all know the banks are doing some very strange and troublesome things with money. First, they would extend credit to pretty much anyone, so that the banks could make huge profits, by slicing and dicing and selling the resulting debts, and making tidy sums in the process. Liar loans. Alt-A's. Jumbo loans. No money down. No credit check necessary. The private, for-profit banking system, did everything that they were allowed to do, to do exactly what they must do as corporations beholden to the profit motive, they sought profit, no matter the long term impact on the economic system, or even the stability of the entire banking system.
During this time, the banks certified the quality of the credit of millions, resulting in trillions of dollars in credit or money, that flooded the economy, very much like an IV with a new pint of blood would revive the ones drained of blood by their purchases of foreign products, including, most especially, oil.
Yes, it was a credit bonanza, and despite the rapid leak of money out of the country, this sudden flow of cash, it kept things going in such a way that most thought things were good and just going to get better and better. In fact, some still believe that these "good times" will return, but in reality, and as I you shall soon understand why, this sort of "good times" is most likely a point in our history never to be reproduced.
The banks now, are doing exactly the opposite of what this sort of economy would need for it to stay afloat.
As people, businesses, and state/local governments are unable to keep up with all of their bills, they are breaking their promises made to the banks. People are simply walking away from thousands of dollars of debt, that they promised to pay to the banks. The banks, in turn, are forced to record that their assets are much less than they had previously stated. This leads to a situation where the banks are unable to verify the credit of most people who might go seeking for it. At the same time, with millions unemployed, the credit they might be extended is much, much less.
The net effect is that what money continues to be paid into the banking system ends up being extinguished in the write down process; and that the amount of money coming out to the banks is being severely diminished. For the economy, this means much less spending, as both businesses and individuals no longer have the ability to get credit. For the housing market, this means that people are unable and unwilling to pay higher prices for homes, which in effect means that the value of the homes are much less than before. This, in turn, convinces the owners of homes that they are worth much less, possibly less than they owe to the bank. All of this conspires to reduce the spending that regular people and regular businesses do, further contracting the economy.
While the banking picture is more complex, and more severe, with mortgage backed securities, collatoralized debt obligations, credit default swaps, and other obscured derivatives, which come together to threaten the very stability of the economic system, for now, just understanding that people were using credit to buy, which was supporting the economy, and now that credit is no longer being used, this is sufficient, for the time being, to understand what is happening with the banks.
Finally, we come to perhaps the two biggest players in "what is going on with the economy": the federal government and the rich.
|What's Going On With The Economy: Part I
||[Feb. 19th, 2011|04:56 pm]
|[||Tags|||||collapse, credit, crisis, debt, depression, economy, future, job, jobs, money, recession, unemployment||]|
The Government has declared that it is out of money. Broke. Nothing left in the bank account. And because of that, people are going to be fired, laid off, put out of work, have their benefits cut, have their hours cut, and have their salaries cut. The Government claims that it is the fault of the retirement system, and the health care system, and that if only these costs could be restructured, that everything would be okay.
The biggest lie is hidden within a field of truth; and that is the case right now.
What is this lie?
The lie is this, and it is everywhere, on the TV, in the papers, on the Internet, everywhere: this global economic system is better than any other economic system, so what we have now is the best we could possibility have, and things will get better... if we would just let the system free.
A big lie.
One of the biggest lies that we have faced in recent memory.
It is the lie of economics.
The economic system is complex, but it is also simple. We can understand it. We do not have to have degrees in economics, or math, or science, or any degree at all. We only need to see and to think about what is happening in our lives, and in the lives of everyone.
Right now, the state budget director economists are telling us that the states are broke. There is a deficit. A huge deficit. And if this deficit is not fixed, that crisis will result. The politicians believe this, and being people just like ourselves, believe the big lie, and so they also believe that there is no solution, other than to cut expenses wherever they find them.
We hear it happening all over. Wisconsin, Ohio, Tennessee, Michigan, California, Illinois, New York, Florida... the new proposed budgets are being debated, and yelled about, and protested about. Taxes rates are being changed. Programs are being cut. Regulation is being left unenforceable. It is no mistake, things are breaking down.
It is not the fault of the states.
It is not the fault of the politicians.
It is a lie that we've all grown up with, and while we can sit around and point fingers here, and there, and everywhere, this will not help us uncover the lie, which is the first step to achieving a solution.
The revenue of state and local governments is indeed declining, by billions, perhaps over a trillion dollars, when adding all of the states together. This is real money. This is tons of money. And this money had been used to employ people, because, in the end, the only one interested in money are people. The trees don't use it. The animal's don't use it. The rock don't use it. The money spent by the state is used to employ people.
And the people use the money too.
The people use the money to employ other people.
We spend money.
We spend lots of money.
We buy things.
We pay bills.
We pay taxes.
We spend money, and once in a while, a few of us have enough that we even are willing to loan the money out to others, via institutions called banks.
The economists in the state capitals tell us that there is not enough money coming in to the state governments to continue paying out as much, and this is perfectly reasonable, because, as you know, the big lie is hidden in a field of truth.
What will happen when the states pay out less money?
The result is predicable, because we know exactly what we would do if we were a city or township faced with being unable to continue to pay all our firefighters. The choices are on a continuum.
Do we continue to compensate our fire fighters the same next year as we did this year, with the cost being that many firefighters will be laid off?
Or, do we reduce all the firefighters' compensation in the fairest and most equitable way possible, in order to ensure that all the firefighters are still at work and on the job?
In EITHER case, the result is that this group of people, this group of firefighters, is going to have less compensation, less money, and is going to have not only less ability to spend, but indeed will spend less money. In addition, these firefighters are likely to buy even less, because they might just start to view the future with less optimism, and start paying off things like credit cards, mortgages, or loans. Instead of taking out a loan, so they can spend more; they will be paying banks, resulting in them spending less.
This situation, where the people are unable to spend as much; and also unwilling to spend is much; is exactly what has been going on with us for the past few years.
What is the result of this?
We don't need a PhD, or an MBA, or even a BS degree. The result of the public employees spending less money, is that there will be less sales. Less business. And less money coming into the retail segment of the economy. Those who are trying to sell stuff find that one large chunk of the people who were doing the buying, this "market segment" has suddenly started spending less, buying less, and shifting their spending in perhaps very unfortunate ways. Some essential businesses may indeed continue to sell their products, and while people can spend less on food, and less on energy, the spending that declines the most is everything else that can go.
It is an unstable system, and in from some perspectives, an unfortunate system.
People are taught, lured, and encouraged to "go into business for themselves". What this really means is that they are asked to take huge risks that they might be able to provide what the people want AND that the people will be ABLE to buy it. Being an entrepreneur, a business owner, a stock holder -- it is a gamble, and it is gambling. It is depending upon others, many others, hundreds or thousands of others, to do something that; and if the people don't, or can't, follow through, then these gamblers find themselves in the worst position of all.
This is not a surprise, is it? We all know this to be true. We know that going into business is a gamble, a big gamble. And we know that working for private businesses are also gambles, and quite big gambles. But, we still teach the children, at least our culture does, that "getting a job" in the private sector, or "being a business owner" is exactly what they should be.
Right now, though, we can see the weakness of this system. Tens of millions, in the USA alone, have lost their jobs in the private sector.
The states have less money to spend.
The private employers have less money to spend.
The people have less money to spend; which means that they send less and less to the government, which in turn has less and less to pay the people employed on behalf of the public.
It is a vicious cycle, and this bit of understanding is just the beginning of the story of what is going on.
|Five Effective Strategies for Creating Jobs in Michigan
||[Feb. 17th, 2011|11:02 pm]
|[||Tags|||||bank, banking, budget, collapse, crisis, depression, economics, economy, energy, finance, hope, michigan, recession, renewable, tax, taxation||]|
The new governor of Michigan has proposed a budget that promises to push Michigan deeper into recession.
How could the State of Michigan balance its budget?
Reducing funding to schools, firefighters, police officers, and other public employees negatively impacts not just those workers and their families but also the workers and families of private sector employers.
All public employees, whether they are fired, furloughed, or otherwise have cuts in their take home pay, will, as a whole, have less disposable money to spend into Michigan's private sector.
This loss of income translates to less sales for retail businesses, many of whom are already teetering on the edge into bankruptcy.
Loss of sales revenue leads to a round of layoffs, cuts in hours, etc. amongst the private sector workers.
This in turn leads to less revenue for the state from not only the public employees, but also from the private sector employees, and suggests to politicians that yet another round of cuts are necessary.
This pernicious and vicious cycle has been going on for years, and the new governor's proposals serve to accelerate the pace of decline in Michigan's economy.
Five Job Creating Strategies
By increasing and redirecting the flow of funds within Michigan, jobs would be created and sustained, to help in weathering the global crisis. In addition, properly implemented economic policy would lead to long term prosperity for the people of Michigan.
1. Decrease Trade Deficit
Michigan has a trade deficit with the rest of the world. For the long term stability of Michigan, the state needs to increase its exports of products, and at the same time, minimize imports.
For one example, over one billion dollars per year leaves Michigan to import fuels including coal, oil and gasoline. By investing in harnessing free and local sources of energy within Michigan, especially wind and solar energy, Michigan would reduce its imports of fuels, which would increase the amount of money being directed instead back to Michigan generators, and thus back into Michigan's economy. Wind generation would be an outstanding industry for Michigan. Already, companies from outside Michigan are attempting to buy up leases on prime sites, and may import the turbines from other states or countries.
Michigan industry can and should manufacture all turbines and solar panels that are installed in Michigan, to put people back to work, to increase the "money multiplier" by keeping money in Michigan, and ultimately, to decreasing the imbalance of money flowing out of Michigan for imported goods.
Other policies should be pursued which minimize the importation of goods and services, while simultaneously increasing sales of Michigan made products and services.
2. Create Publicly Owned Bank
Michigan does not have its own publicly owned bank, such as the Bank of North Dakota. By creating such a bank, all deposits for all public entities within Michigan would be held within the bank, which would offer zero interest borrowing for public works projects, improving upon the BND model. In addition, citizens and businesses of Michigan would be able to refinance loans through the bank at the most favorable rates. In North Dakota, the bank is used approve credit for college tuitions, start up businesses, small farmers, public works, etc.
3. Update Income Tax Rates
Michigan has one of the most antiquated income tax systems in the USA, with a top rate of only 4.25%. Other states have top state income tax rates of around 10%. By adjusting the state income tax rate, additional revenue would be brought in. The rate for the lowest income individuals would be adjusted to increase the amount of private sector spending from that segment of the population.
4. Update Sales Tax Rates
Michigan has one of the lowest sales taxes in the nation, and excludes many items from taxation. Some parts of the US have sales taxes of around 10%.
A higher sales tax rate in Michigan would bring in additional revenue to the state, and make up for declines in sales tax revenue. For lower income individuals, annual sales tax rebates would be provided via income tax rebates. For Internet sales, all internet sales would be taxed at the same rate as the Michigan sales tax rate, and collected by the credit card providers.
In addition, those products that were produced 100% in Michigan would be exempt from sales tax, as a way to support Michigan businesses. For example, apples grown in Michigan would not be taxed, which apples imported from China or Washington state would be taxed. This sort of sales tax on food would directly benefit both the state but also the growers of Michigan, and those in-state processors, to the extent that their ingredients are from Michigan.
While this policy, if implemented directly, may conflict with the commerce clause of the US Constitution, workarounds exist that would, in effect, lower the unit price of Michigan made items, so that even if a sales tax were in place, the Michigan made items would be lower priced on the store shelves.
5. Effectively Invest State Pension Funds
Michigan's public pension funds are currently invested around the world, with a very small fraction being invested in Michigan's businesses. The funds hold over $40 billion which could and should be invested directly in Michigan. By simply adjusting the holdings of the pension fund, and purchasing ownership in Michigan businesses, the public sector in Michigan would be supported, which would in turn support the Michigan public sector.
The current governor of Michigan is reducing the income to a large portion of the workers of Michigan, which will result in less business sales, adding to the current deflationary spiral that has plagued Michigan for years. The governor has proposed no sound solutions for maintaining or increasing state revenue, following the same failed economic hypothesis that led to the global crisis.
Michigan has the ability to maintain and improve its prospects for the future. A sound understanding of systems dynamic economic modeling reveals effective policy solutions. The five strategies above, taken as a whole, have the potential of strengthening Michigan both now, and for future generations.
|What I Want from a Group or Community
||[Feb. 5th, 2011|11:55 pm]
What I Want from a Group or Community|
* Hope / Inspiration
* Purpose / Direction / Vision / Mission
* Intellectual Stimulation / Interesting / Engaging
* Fun / Enjoyable / Gratifying
* Community / Camaraderie
* Security / Safety / Support
* Truth / Reality / Facts / Honesty / Candor / Frankness / Uprightness
* People who listen
* People who I can talk to and not have to explain everything
* Opportunities to contribute meaningfully
* Food / Parties
* Successes / Movement / Progress
* Welcome / Open / Invitation / Non-judging / Non-fixing
* Charity / Compassion / Kindness / Generosity / Philanthropy
Video on what makes people inspired from RSA.
|Illinois Tax Increase: Pros and Cons
||[Jan. 13th, 2011|06:27 am]
Today, Illinois decided to increase the flow of funds from the people and businesses, to the state, to the tune of over $6 billion this year. That money will in turn be used to continue to employ people.
In theory, this is a good idea. The $6 billion might have otherwise been spent on products, and a major percentage of that money would have flowed out of Illinois, as many products spent with marginal income are undoubtedly imports.
Thus, the benefit would be that the money would instead flow back to the people, who would provide products desired by the public, and these people in turn would spend that same money back into the economy.
Actually, it sounds like quite a brilliant plan, it only it were as just described.
How could this be wrong?
In this case, the money by the public employees would go to servicing debt, especially mortgages, and so at least 25% of that money would vanish into the banks. In other words, $1.5 billion or so would end up in the banks. If this money were not flowing to the banks, then there would be lay offs, and pay cuts, and many more people would be unable to afford their homes, and foreclosures would increase.
Is it a catch-22 situation?
If the banks do not get the $1.5 billion then the houses will be foreclosed, and the home prices will fall, and more people will walk away, and more debt will be written down, and the odds of a major financial event will increase.
If the banks do get the $1.5 billion, then this money will leave the economy, as the banks will hold on to it to make up for other losses of loan assets, which will decrease the overall money supply, leading to less money for spending in the private sector, leading to more job losses in the private sector, and thus eventually leading to more foreclosures in the private sector, and now see above.
There is a question here though of the exact timing of this, as to which scenario is actually the better one.
|Education Goals for Our Sons
||[Jan. 6th, 2011|02:35 pm]
|[||Tags|||||curiosity, food, goal, learning, life, mission, nature, purpose, technology, thinking, wilderness||]|
Education goals for my sons:
What do our sons need to know about (or be able to do with) electronic information technology?
Our sons can use electronic information technology as a tool to...
- explore their curiosity and learn,
-- ex. learn about anything one is curious about
- improve their thinking, reasoning and decision making, and
-- ex. learn logical thinking, understanding, beliefs, mathematics, etc.
- communicate and collaborate with themselves and others
-- ex. sending email to spouse about working late
...so that they can...
- provide for their needs and those of their family and community, and
-- ex. food -- to procure food, learn to find food, learn to hunt food, organize growing and hunting, learn to grow food, etc.
- protect and restore nature.
-- note: this is essential for the preservation of the human species, including, of course, our sons and their progeny
Additional Thoughts for Consideration
Will there be an Internet in the future? computers? an electricity network?
Why would our prehistory parents have needed electronic information technology? How then does the answer to this inform us as to the current best use of technology?
Electronic information technology -- examples: computers, phones, TVs, radios, Internet, etc.
Prehistory parents -- our great, great (nth) grandparents (or ancestors) who lived as part of nature
|Essential Goals of a Community or Society
||[Dec. 16th, 2010|02:37 pm]
A basic society provides the following six things for everyone:
4. Safety / Security
Food - Basic food to provide for the nutritional needs of the body.
Shelter - Protection from the weather (temperature, matter [rain, object, animals, etc]) and a place to sleep
Clothing - See shelter, but portable, worn on one's body
Safety/Security - Protection from rapid changes (in the environment) [details?]
Friendship - Connection with others in the community via positive, live two-way interactions of visual, auditory, physical nature
Work - Something seen as productive by self and others in the community; providing others with the six basic needs; growing/preparing food, maintaining/improving shelter, creating/mending clothing, providing friendship to those without, helping others work
Mental Examples to Consider
* Classic Tikopia (pre contact) / Paupau New Guinea
* Tribal peoples of North America, etc.
* Own pre-historical family (community structure)
* Own historical family (1700s, 1800s, etc.)
* Care of children
* Care of the elderly and/or infirm
* Help for emergency homeless
|Economy -- The Game
||[Dec. 15th, 2010|10:00 pm]
I think there should be a board game called "The Economy". The goal should be, as a team, to see how long the game can continue with everyone having a job. The trick would be that players would occasionally get "self interest" cards, and be forced to maximize short term profits. The other players would then have to figure out ways to bring that player back in line.|
Another thought, not necessarily related to the first thought.
It seems to me that a single computer system could keep track of all of the money in the world.
||[Dec. 8th, 2010|11:20 pm]
How do we help the helpless?|
The people that live in the denuded lands?
The children of the people?
The ones that are starving, hungry, crying, dying?
How can we help without perpetuating the cycle of poverty?
How can we help the dependent become strong?
How? How? How?
I'm feeling a bit of despair today. How can I help solve this problem that seems to go on and on... or is there no way... will we just destroy person and person, culture after culture, species after species... this civilization that destroys and eats the life of the world.
|The Purpose of Transition
||[Dec. 7th, 2010|06:00 pm]
What are your thoughts on Rob [Hopkins] and Michael [Brownlee]'s ideas on connecting "the sacred" with Transition?
The mission of Transition is to help the people to create sustainable economic systems.
help -- work with; bring in information; train; practice with; experiment with
the people -- the people as a whole; especially those people who participate in the global economic system; all the people; the people who lead all the people; the visionaries; the set of people that could implement the new economic system
to create -- make; develop; discover; uncover; rework; assemble; using our best understanding of all disciplines
sustainable -- one that will continue until the final end of civilization; one that preserves the environment (or that sets a goal to preserve the environment at some level of richness that may have existed in the past); that provides for the basic needs of everyone;
economic system -- system of promises; trade; sharing; exchange; movement and change of matter and energy
|USA Emergency Jobs For Americans (proposed bill)
||[Dec. 6th, 2010|12:00 pm]
There are 32 million people in the United States that need jobs, or at least more hours. Amongst these, 14 million are officially counted as unemployed. Due to the jobs crisis, the USA should pass the USA Emergency Jobs For Americans bill to create ten million temporary minimum wage jobs.
Minimum wage in the USA is $7.25. The cost to employ a person, full time, would be 40 hours/week x 52 weeks x $7.25/hour = $15,080/year. The cost to employ 10 million for a year would be in the range of $150 billion dollars. This people would then spend all of the money, supporting the private sector with a $150 billion boost. The number of private sector jobs saved or created would probably number between 2 and 5 million.
The bill should be proposed by the President during his State of the Union address. It should be the only topic in his speech.
Key points the President should make:
1. Spending nation wide has fallen precipitously. The result is a jobs crisis in the private sector, which is also leading to a jobs crisis in state and local governments.
2. All attempts to encourage people to spend more have failed. Spending is (most likely) continuing to decline.
3. Businesses are unable to hire because such decisions depend on the need for workers, and given falling sales, there is no feasible way to hire, especially given that businesses much remain "in the black" to survive.
4. To pull the nation out of this jobs crisis, and in order to improve the economy and help people stay in their jobs, plus perhaps creating more private sector jobs, the public sector will put to work ten million unemployed Americans, in an emergency measure.
Questions and Answers
1. What will they do?
The people will do every kind productive public work. Each community shall decide precisely what productive work needs to be done, that has been left undone due to a lack of funds.
For example, in the village of Bear Lake, Michigan, the village council would decide what needed to be done. Ideas might include:
a. Reading tutors for elementary students at the school
b. Community education teachers, to teach free classes to adults and teens
c. Taking care of sidewalks, including shoveling, repairing cement, putting in new sidewalks, edging them, etc.
d. Taking care of the parks and public lands, cleaning the beach, painting the structures, serving as lifeguard, etc.
e. Helping seniors and others put in gardens, store food, etc.
Again, it would be up to each community to decide precisely what productive work could and should be done.
2. Who will get the jobs?
Anyone who resides in that local government district will be eligible to apply. Hiring decisions will be made by the local units of government, with local control.
3. What if a significant number of the job seekers are "unemployables" and do nothing and just collect a check, will they get fired and replaced?
The local units of government would supervise the workers. Local units could also employ a person to coordinate and supervise the other workers.
4. What will you pay "these people"?
The hourly pay will be the US federal minimum wage of $7.25 per hour. All jobs would be created as full time positions, 40-hours for 52-weeks per year.
5. What businesses that already exist will "you obliterate" with those "new programs"?
Businesses would benefit greatly from the program as they would receive billions of dollars in new spending. Jobs within communities would be created to provide productive services that were not otherwise being provided.
6. When will the program end?
The program will be phased out as the private sector regains strength, and as the unemployment rate declines to the target goal rate. Normally, the target rate in the USA has been 3%.
7. How long would it take to get the program started?
The program would be started immediately upon approval. In the State of the Union address, the President would call upon all citizens, and all units of government, to create list of productive public jobs, and a plan for supervision. A federal web site would be created to accept applications nation-wide. Local units of government would enter hours worked, work done, etc. for each worker. Each worker would receive a federal debit-card attached to that citizens account at the Treasury. Funds would be distributed on a weekly basis.
8. What sorts of benefits would be provided?
There would be no benefits other than those received by any other full time minimum wage worker. The jobs would be in all regards similar to other full time minimum wage jobs.
The key points to understand is that the private sector is experiencing a crisis due to declining sales. All attempts to increase sales have failed. The population as a whole is reducing spending and paying down household debt, which is decreasing the money/credit supply. This has become a self-reinforcing spiral, and without action, it could lead to a very deep depression.
The solution is for the US federal government to hire directly millions of Americans to do productive work within their own communities. These new workers would spend all of their income paying bills, increasing spending, and supporting millions of jobs in the private sector.
||[Dec. 5th, 2010|11:59 am]
Is it embarrassing to be rich?
I feel strange emotions when thinking about most of the people in the world today who struggle just to keep themselves safe, fed, and sheltered.
There are millions, or billions, who are struggling to make sure their children have at least a little food each day; that they don't freeze from the cold; that they are safe in some sort of a home at night.
Then I think about my day. I am a king. This is my kingdom.
What a contrast.
But, what should I do about this?
What should I do about this poverty, when everything that everyone else has tried has failed to fix it?
It is embarrassing that I don't know how to fix it.
I'm studying money, language, belief, culture, etc. trying to figure out what is the crux of the problem, and where might be the land to explore for solutions.
I'm trying to figure it out.
|How the Recession is Impacting Middle School Students and Their Families
||[Dec. 2nd, 2010|03:30 pm]
Today, I asked my 8th grade students to email me, and in the body of the email, to write about how the recession had impacted their families, themselves, and their friends over the past three or four years.
I was a bit taken-a-back by the candor of the students. Some of the families are really struggling. Here are some examples:
- both parents were without jobs, there was not enough food, was hungry for much of the summer
- father had to move out of state to find a job, and mom works a second job, so there was very little time to spend with family or friends
- grandparent lost their house after losing jobs
- not getting anything new for Christmas because not enough money to buy anything
- not enough money to buy shoes or a winter coat
- parents of friends are stressed out and probably "not going to make it"
- one student's 18-year old sibling has been unable to find any work; and the student is very concerned that she won't be able to support herself once she is on her own
- student's dad can't find a job and mom now has too work two jobs but there is less money coming in
- receiving phone calls constantly to pay bills, threatened cut offs of utilities, but there is no money to pay bills
- loss of Internet connection and/or cell phone service because unable to pay bills
- less money to shop for clothing, etc.
- unable to participate in summer camps, perhaps school sports
- can't visit friends and/or have friends over because not enough food in the house to host a guest
- taking less vacations or no vacations at all
Since things in my household are okay, I often forget how bad things are out there.
Reading these emails made me feel sad, angry, embarrassed, frustrated, and generally unhappy.
I felt sad when hearing that some of my students were going without food, or unable to visit with friends, or even contact friends due to loss of phone/Internet.
I felt angry when I think about the perception that "if they would only look, they would find a job". In one case, the grandfather had been looking for a year, going out every day, and nothing. There simply is not enough money in the economy, and as a result, there are not enough jobs. I'm concerned that so few people recognize this.
I felt embarrassed when thinking back on how I share stories of going to Australia scuba diving, or downhill skiing, or buying a new computer, etc. All of these things would be impossible for many of my students' families. It's embarrassing that I forget how tough it is on some kids.
I felt frustrated when thinking about how the U.S. federal government is taking away the only means of supports for many people; people who could easily be the parents of my students, or their family members. There were students who mentioned federal government payments being reduced or cut off for older siblings, aunts and uncles, or grandparents. I also feel frustrated knowing that when the U.S. federal government decides to cut people off, that those same people are unable to spend money at the businesses, which means even more families will be impacted.
Finally, I feel generally unhappy about how difficult it is for some of the students, while some other students appear to be totally oblivious to what is going on. I feel unhappy in a very non-specific way just about how screwed up things are, and how no-one, literally no-one seems to be proposing realistic strategies helping the families of my students, and all of the families of all of the students in the country.
It makes me unhappy, very unhappy, that this appears to be the best we can do.
|The Unemployment Crisis
||[Nov. 30th, 2010|11:59 pm]
Note: This is an unfinished article, posted so that the links are publicly available and the numbers easy to find.
In the USA, there appears to be no precise way to know how many people are unemployed, but there is some data to get a rough measure of how many people are unemployed.
This report shows how many people are getting checks for being on unemployment.
310,800,000 -- U.S. Population = -- http://www.census.gov/main/www/popclock.html
-- Take away everyone 15 or younger...
238,530,000 -- U.S. Population, Civilian, not institutionalized, 16 years old or older -- http://www.bls.gov/news.release/empsit.t01.htm#cps_empsit_a01.f.1
-- Take away military, prison, other institutions, people unable or unwilling to work, retirees, those choosing to stay at home (for family, etc.), those "not in the labor force" for over a year
153,600,000 -- The "Civilian Labor Force", does not include discouraged workers
139,700,000 -- The number who are employed, even for a single hour per week
-- Take away self employed and others who would not qualify for unemployment
125,800,000 -- Covered by Unemployment Insurance -- http://workforcesecurity.doleta.gov/unemploy/wkclaims/report.asp
32,600,000 -- Currently Unemployed (U6 + over a year discouraged / not in labor force) -- http://www.shadowstats.com/
13,900,000 -- Currently Unemployed (U3) -- The official rate
3,783,092 -- Currently receiving money for unemployment insurance
Federal Minimum Wage = $7.25
Hours per Week = 35
Weeks per Year = 48
Total Income = $12,180
Cost to employ one million people for a year? $12.2 billion dollars
|Double Dip Recession Pushed by Government
||[Nov. 30th, 2010|04:30 pm]
The U.S. federal government is making moves in its apparent goal to push the U.S. economy into a double-dip recession.
This week the U.S. president announced that people employed in the public sector by the federal government would not receive the money they expected. In specific, the president said that $60 billion dollars in money would not be paid to the people over the next ten years.
This week, the U.S. federal government also decided to stop sending money to people who are unemployed. In this case, the amount was $12.5 billion dollars that would not be sent to the people over the next three months alone. The money will be cut starting with 1,200,000 people this week and another 800,000 people next month.
The $12.5 billion over three months would have been spent almost immediately upon receipt at businesses, helping to keep private sector workers employed. This money in turn likely supports hundreds of thousands of private sector employees. It would not be surprising to see numerous layoffs, pay freezes, reduced hours, etc. in the private sector as a result of the U.S. federal government's action.
The people seem, for the most part, to not recognize that the U.S. federal government is attempting to push the economy into a double dip recession.
The people who are about to stop receiving money to support themselves and their families are very upset, pointing out that there are far too few private sector jobs to employ the millions of unemployed. Some feel like they are being punished by the government because the private sector is unable or unwilling to create jobs. Few of these people appear to recognize that the places where they had been spending money would suddenly also be receiving less, leading to fewer private sector jobs.
Several people have mentioned that the U.S. federal government should be doing exactly the opposite.
During a time when the private sector is unable or unwilling to create jobs for the citizens, the federal government can create very productive jobs to put people to work, and to, in turn, keep money flowing into the private sector via spending.
Given that this proposal for improving the economy is so elementary, it is very convincing that the U.S. federal government is indeed interested in pushing the U.S.A. into the second dip of a double dip or triple dip recession.
|Why We Fail
||[Oct. 30th, 2010|10:02 am]
|[||Tags|||||conservation, credit, debt, environment, environmentalism, money, peace, peak oil, peakoil, sustainability, war||]|
Why do we fail?
Why do those of us who seek to save the world, protect the environment, reverse habitat destruction, and secure a return of a sustainable way of life; why do we fail?
Over the past hundreds, and definitely the past dozens of years, we have been working to save the oceans, save the forests, save the mountains, save the air, save the water; to save the world from destruction. Yet, when we take a giant step back and view the state of the world, we see that the situation is worse than ever before. This must, absolutely must, beg the question, "Why?"... "Why?"... "Why do we fail?"
As with any failure in our lives, there can be various reasons.
Perhaps, what we sought to achieve was impossible. Jumping nude off the top of a building, nude, and hoping to fly, will always, always, always fail.
Could that be it? Could we be attempting to fly without wings? Is it that we keep trying jumping off at different angles, at different speeds, with different strategies for the fall? Do we feel like everything is going okay until the splat?
One can imagine the despair and resignation that many of us have felt when this sobering thought has crossed our minds. One can imagine the number of us who have lost their motivation and drive. One can imagine the physical agony as one sees the forest one worked years to save being uprooted and destroyed before our very eyes.
But, failure is not always about attempting achieve the impossible; sometimes it is about attempting to achieve the possible but by techniques which will never, ever lead to success.
Visualize those first film images of people attempting flight; wings strapped on their backs; with hands on grips to flap with furry, only to crash down moments later. The idea to modify oneself, to apply technology, was correct. It may have, perhaps, been a step in the right direction. And, it was probably something that would have been tried before true human flight was possible, but it did fail, and it failed due to a lack of understanding of the very problem itself.
So, what is the problem? Could it be that the environmentalist movement is looking in the wrong directions for solutions?
This question, which, no doubt, has passed through many of our minds, is one worth exploring: What is the problem? and, Why do we fail?
Writers including Daniel Quinn and Derrick Jensen have suggested some possibilities. Perhaps it is that the stories of the dominant culture encourage us to treat the world as a thing. Perhaps we are just animals that will consume until we reach a limit. Perhaps our civilization itself is unreformable, and therefore, for the sake of both the planet and the future of humanity, should be dismantled, intentionally and rapidly. Perhaps, it has been argued, that the only sane response is the planned extinction of our entire species.
Why do we fail to save the world?
I believe there is an avenue which has been overlooked, an avenue that is well worth exploring, and this is the avenue of that which binds us, that which motivates us, and that which directs the course of our lives: money.
It is something we need, yes, it is something that always seems to be in short supply, for us anyway, and it is something that brings to mind the consumptive behaviors of our culture. Some of us have attempted to minimize their personal use of money, with examples such as "No Impact Man", intentional communities, and voluntary poverty.
I think, for such experiment, one must ask one question: Is the impact of this way of living less than if you did exist at all? In most of these experiments, one would logically conclude: No. My impact would be much less if I did not exist at all.
Even for those whose net impact on the world is positive, the impact is almost invisible, when weighted against the mass of civilization.
This brings us again back to money.
Money. It is a thing that binds us and which we use on a daily basis, rarely thinking about money, or credit, as a concept. Yet what is it, this money?
Before money, there were only gifts. Families would share what they had. Families were extended, and called bands or tribes. The bands or tribes would share their food, their shelter, and their lives with one another. The story of the sustainable culture on Tikopia illustrates how a community, even one of thousands, can live quite happily without money.
One can imagine that the first need to use a symbol to stand in the place of a promise arose when strangers met, and agreed to make a trade that could not be settled at that moment. A symbol, a rock, or a bit of metal, or a shell, or a paper, or a carved bit of wood, might have been used to represent this promise.
The one making the promise to deliver something in the future is the one that most likely selected the symbol, and handed it over, to represent the promise.
In some cases, such in the case of tally sticks, the promise was marked along the side of the stick, and then it was split in half long ways, so that the promiser, now known as he debtor, took one part of the stick, to show what he had promised; and the promisee, now the creditor, took the other half, which he would have to return when the promise was fulfilled.
No matter what symbol was used, the basics of money were the same, there was one person who promised something in the future, in exchange for something now, and who offered up a symbol, which both people agreed to, to stand in the place of the promise.
Money then, the essence of all money, is that money is simply a promise from others to deliver something of agreed upon value in the future.
Normally, in non-formalized promises tend to decay, or be forgotten, or deemed unredeemable, over time. This is the nature of promises, and given that money is promises, it is also the nature of money. This is to say that money is always and inherently something that is not stable, and is prone to deterioration. It does not grow. It shrinks in value as time passes.
Now, step back... take a big step back... and look at what "money" has become. It is not seen as just a promise, but a way to wealth and happiness, and something to be counted, and converted, and gambled, and invested, and which can grow (indefinitely), no matter what limits may exist in the natural world, from peak oil, or climate change, or food supply limits, or etc.
And the system, the monetary system, that most of us participate in a daily basis, is one that is naturally, as naturally as promises, prone to instability and, eventually and always historically, to collapse. This peculiar money system that we currently use has been tweaked, and twisted, and turned well beyond comprehensibility. Now, promises flow from the person (the worker), to the business, to the government, and through every channel in between, and the inequities are growing, as this flow is unstable, and tends to tilt on its own in one direction or another.
Promises, the foundation of money, are now made primarily on paper in the form of mortgages. Promise to provide this much money to the bank in the future, following these rules, and the bank will grant you credit, so you can put yourself in debt. And now we see that these promises are decaying; being broken by the debtor, who may have been envigiled into promising something that they could never ever fulfill. Was it the bank's fault, or the mortgage broken, or the "borrower"? -- This question misses the point that the money system itself is now being distorted as all of those promises made, and spent, now have no one backing them up.
Yes, the builder got paid in bank credit for building the home, but now the borrower has walked away. The mortgage note is worthless. And the home will only sell for half of what it cost to build: our entire money system is a state of crisis -- a crisis unknown to most, and being concealed by most of the rest.
Why do we fail?
We fail because we fail to examine our own promises, and how they are formalized in the money system, and how this money system fails, in practically all ways, to protect the planet, or even to serve our own civilizations stated goals of ending poverty, and bringing freedom and equality to all.
Is there a solution, or are we jumping off the building naked?
This, I do not know. I do know, though, that the environmental movement needs to be in the forefront of the understanding of money, because it is consumption, via the use of money and promises, that are the primary mechanism by which civilization is destroying the earth. I know that there are those out there, such as the Nicole Foss's, and Ellen Brown's, and Tom Greco's, and Steve Keen's, who have great insight into the money system as it now exists, and why it fails; as well as ideas on what might be possible for a sustainable, and perhaps even sustainable money system.
I also know that if we fail to grasp what is going on in the economy, that we position ourselves to fail in even our front-line battles to protect the whales, and he rain forests, and those on the edge of poverty. These are absolutely essential, and our warriors on the front should be commended for attempting to hold the line against the army of civilization. At the same time, those of us who work primarily behind the lines, we must try to figure out the nature of this army, of which we ourselves are a part (unfortunately), and we must explore the possibilities of restructuring our very concepts of promise and money, so that this army becomes one of restoration, rather than one of our own destruction.
|The Purpose of the Conference
||[Oct. 11th, 2010|04:15 pm]
One mission, purpose, reason for being, etc. for people is to help everyone, both soon and in the distant future, to, as a collective whole, live in a sustainable way, as one species (amongst many) on the planet.
Sustainability, in this sense, means that the overwhelming majority of people would always live in ways that were sustainable, due to cultures, traditions, and structures that supported sustainability and gravitated towards sustainability and restoration, rather than away from it.
Such cultures would work to protect nature and the wilderness; clean up those places that have been contaminated, poisoned, or otherwise damaged by human action; and to restore most of the world to a beautiful, natural, pristine place.
The purpose of the conference is to bring together those who hold this mission in their hearts and minds; and then to help these people to understand how money has played a role in un-sustainability, what money actually is, how it works, how it might work, and how it might be structured to support and forward this mission.
What is your purpose, reason for being, mission statement?
|International Speaker Comes to Wayland
||[Aug. 25th, 2010|10:36 am]
|[||Tags|||||aaron, agriculture, banking, bubble, credit, debt, economics, economy, energy, finance, future, geopolitical conflict, geopolitics, globalization, housing, interest, market, markets, oil, peak, prices, renewable, tips, unemployment, wayland, wissner||]|
(Note, this is a draft of a general press release to a local paper to be read by the general public. Please help me improve the release to maximize attendance at the event.)
International Speaker Comes to Wayland
Speaker Nicole Foss will come to Wayland on Tuesday, September 14th, to explain the state of the economy. Foss, who recently completed a speaking tour of Europe, has studied energy policy and finance for the past fifteen years.
Foss will explains in plain language the economic and social challenges of the financial crisis, including the future of taxes, unemployment, housing prices, business sales, and investments.
During the lecture, Foss uses common sense to explore complex energy issues from oil supply to renewables, the unsustainable structure of the banking system, the irrationality of market behavior, credit bubbles, inflation and deflation, interest rates, agriculture subsidies and farm markets, globalization, and the potential for geopolitical conflict.
Foss concludes with sensible tips and strategies for individuals, businesses, and government officials to address uncertain times.
Foss has been a biologist and environmental consultant, a lawyer, a research fellow at the Oxford Institute of Energy Studies, and president of a renewable energy grid connection company. She is the former editor of "The Oil Drum" Canada and currently edits a web site called "The Automatic Earth".
"I'm a big picture person," says Foss. "I try to integrate everything that I've done into my talks."
Foss speaks at 7:00 p.m. in the old high school auditorium on the west side of the school. The talk is free and open to the public. Donations are requested. RSVP's are requested at www.LocalFuture.org
Foss's appearance was arranged by local Wayland Union teacher Aaron Wissner, who is also president of Local Future, a tax-exempt 501(c)(3) non-profit educational organization.
The below is only for this web page and for reference and perhaps email announcements.
To RSVP for the talk, click here, and then select the event:
The MP3 of Ms. Foss's talk is 77MB, so best for a high-speed connection. It is most highly recommended.
To listen, simply click on the link. To download and save, right-click and select "Save".
|Vision of the Future
||[Aug. 23rd, 2010|02:54 pm]
I was asked: What is your vision for the future?
My vision of the future is quite clear. This vision is set in the future, where non-renewable fuels, especially the fossil fuels, are no longer used; and imports and exports are of very minor consequence; and where the people are happy; and where nature is abundant.
What would it be like walking around in the future?
Vision of a Morning
I wake up and look out the window. It is bright outside. It is slightly windy, just enough to move the leaves and the grasses. I hear the crickets and occasionally a bird. My son is still sleeping. I will not wake him; he is tired.
I walk outside and look around. One person walks toward downtown. We exchange smiles and waves. We will see each other later in the day.
I look at the plants growing. Some more tomatoes are ready, a zucchini, a few peppers, and some corn. The berries are coming along nicely, but not yet ready to pick. I remove a few unwelcome plants and animals. I nibble on a few green beans as I sit down on the swing and take in the morning.
My family wakes. We eat breakfast together while we discuss the day ahead.
I go downtown to fetch some medicine. The village pharmacist is a friend, and extremely clever. He mixes most of the medicines himself and grows a great number of the ingredients. Those few ingredients that are imported are traded for exported food, energy, or entertainment; things that our community generates in abundance. Even without those ingredients, things would be fine. While medicines are very helpful, they are not essential; we all know how to live with or without them, as did our ancestors, whose unbroken series of success in life, led to us being here today.
I walk over to the store, bringing some of the herbs that grow well near our home. I leave with some fruit, some salt, and a small bowl to replace one that had split the day before.
I hear a woman's voice from down at the lake. She watches the children in the water as they play. Her garden does not grow well despite her best efforts, so she provides something that she is good at and that she enjoys: caring for the children.
There are enough of us with abundant gardens to ensure that everyone has plenty to eat. There are also a number of us that are quite effective at storing food, and we all work together to ensure that the stores are full. We are ever aware of the threat of disease, blight, and drought. Long ago, we designed our local food system to be resilient to such threats.
The biggest threat to our community is fire. We regularly practice our emergency plans to ensure that we would maximize our likelihood of preventing any fire from destroying our community. We are intentionally mindful in our relationships with neighboring communities; we know that our security depends on their security.
I hear music starting up in the distance. Tonight there is a celebration for the one-year anniversary of the birth of a new member of the community. Numerous creative collaborations take place beyond the one I can hear, and which we will all experience this evening. Community celebrations are looked forward to by practically everyone, and practically everyone contributes in one way or another.
Laughter punctuates the air. I see a group of children with one of the community's adults. They appear to be doing some sort of wildlife study. Nature is everywhere in our community. This appears to be a major contributor to the community's success. One has only to step outside to find a beautiful spot: in the shade of the trees is a favorite.
I chop wood and neatly stack it. We don't use much, but on cold days in winter, it is nice to keep the insides warm. I devote some time each day to this project. We have enough wood chopped for us for the winter; so it is for my community that I now prepare the wood.
|Deflation and the King
||[Aug. 20th, 2010|10:00 am]
|[||Tags|||||crisis, deflation, economics, economy, energy, jobs, loan, monetary, money, mortgage, mortgages, oil, peak, peakoil, reform, unemployment||]|
(Note: This is a very rough second draft, which I'm sharing only so as to collect some thoughts, extensions, etc. I plan to edit this post heavily. Feel free to comment below.)
A New Frame
To understand what is happening in the economy, especially with unemployment, housing prices, and the recession, it can be useful to look at the situation through a different lens or frame.
One frame that can be used is to look at the public sector, the entire public sector, as a single entity, or a single person. Since, for the most part, this has already been explored, for this essay, certain aspects of the "private" sector will be added to the "public" sector. The primary goal here is to separate the quasi-public entities from the actual private sector.
Indicators of "quasi-public" include any direct funding by the public sector, or support, implicit or explicit, of that sector.
For this frame, we will include the following as part of the "public" entity.
* all banking, lending, insuring, and other financial institutions, because as a whole, they control the monetary system.
* all military contractors and other contractors where the majority of their funds come from the government
* all public road builders and other infrastructure builders and services
* all major health care providers, especially hospitals, which receive a major portion of their support from public sector employees or via public funds
* all public colleges and universities, including any schools that receive public funds
(* there may be other entities that should be rolled in as well)
This frame will collect all of these public and quasi-public entities into one single entity, which will be referred to as "the public sector", and which is controlled by one person called "the King".
Deflation and the King
The King is in control of all of the money in the country. He has a vault with an infinite amount of money that he can use for whatever he wishes.
The money is used to pay the King's employees: firefighters, teachers, police, records keepings, etc.
The King's employees use the money in one of three ways, either it: 1.) goes back to the King, in the form of taxes, insurance payments, or banking deposits; 2.) it is physically saved at home for future purchases; OR 3.) it is spent relatively quickly, into the private sector.
In the case that money is given back to the King, it is put back into the vault.
What is going on with the recession and deflation right now?
The King is continuing to spend as he did prior to the recession.
Before the recession, the King's employees were spending everything they could get at the shops, including buying houses, and even borrowing money from the King, to buy more things.
Now, things have changed. The King's employees are not spending nearly as much, but instead giving a large part of the money back to the King, which he then puts into the vault.
Since less money is being spent in the private shops, the business owners are brining in less income, which is causing the owners to be unable to continue spending as much on the worker payroll. The business owners are thus forced to reduce worker payroll by cutting hours, cutting benefits, reducing wages and salaries, and laying off workers.
The private sector workers, as a whole, see the number of people that this reduction in payroll is effecting, and they are also reducing their spending, and giving more money back to the King. A significant portion of this money that is given back is to "pay off" loans and mortgages, which is to say, money that was borrowed from the King.
The decrease in spending by the private sector workers leads to even less income for the private shop owners, and then leads to even more cuts to payroll.
This is a vicious cycle, and a positive feedback mechanism, where the less money is spent, the less money can be paid out, and then even less money is spent.
The King has noticed what is happening. His economy is no longer growing. The shop owners are very upset. The unemployed private sector workers are very upset. The overall confidence in the country is declining, and pessimism is spreading.
The King has faced similar situations in the past, and knows that there are a few things that can be done. The problem is that the people are not spending enough, and that this is leading to massive unemployment in the private sector. What the King needs to do is to find a way to increase spending at the shops, so that the shops need to rehire the people.
First, the King decides that one way to keep the money flowing is to give the people "Food Stamps", unemployment checks, and other transfer payments. This will get money into the hands of the people, so that they can continue to spend at the shops.
Second, the King attempts to convince the people to borrow money from him. He knows that the more money there is in the economy, that the more will be spent at the shops. To encourage the people to borrow money, he tells them that they can borrow it, almost for free. Normally, people borrow the money to buy houses, and then the money goes to the seller, who then spends that money.
Third, the King can get on the TV, on the radio, in the newspapers, in the magazines, on the Internet, and can try to convince everyone to spend their money.
How is all of this working out?
Thus far, things are not working out.
The King is ending the unemployment checks after a certain number of weeks. This means that there are more and more people with no income at all to spend at most shops. The food stamps seem to be keeping spending alive at the private groceries and food stores, but very little money is being spent at the rest of the shops.
The King has lowered the mortgage rates to 3.5% but the people see that the housing prices are still declining, and they see that more and more people are being unemployed, and they are not borrowing as much money from the King as they are giving back to him.
When the King is in the media, he claims that things are getting better, but also mentions that he is paying his bankers more and more money, and that housing prices are leveling out, but none of this is very convincing to the people, and they are losing faith in the King to fix the economy.
The King's People
The King knows that he could simply employ all the unemployed people, to do things that no one else is doing at the moment, but the people seem to think that this would be a bad thing. The King had done this before, back in the 1930s, but that doesn't seem convincing to the people.
The people seem concerned that the King is employing as many people as he is at the moment, and some think that he should employ less, but the King knows that if he followed this advice, even more people would be unemployed, and they too would be unable to buy anything at the shops.
The people seem especially concerned that they are buying things from other countries, and the King's money is flowing out of the country, and that products are flowing in.
The only essential thing that the people buy is energy in the form of oil. Almost all of the other things that are imported are non-essential items that could be produced in the country by the people in either the public or the private sector.
Even in the extreme case, if the foreigners refused to sell to the King's people, the King could simply send his army to that foreign country and force that country to sell whatever it is. In fact, knowing that oil is the only important import, the King has already carefully planned to ensure that there will be no disruption in the importing of oil.
Why doesn't the King just employ everyone?
What about just employing all the unemployed people?
Why does the King pay some employees so much more?
Why is the King putting people out of their homes?
Why does the King worry about what any other country thinks?
Since the King knows full well that the oil supply is already in decline, and will decline quite rapidly; why doesn't the King put all his people to work to create a national renewable energy generation and transmission system?
Since the King can do all these things, but isn't, when will the people dethrone the King?
Portion of Original Draft for Future Reference
That group of people, which is a quite large group, having less money than before, still give a whole lot back to the king (banks) leaving less to spend at the shops. The King has agreed that he will give that back to them, given proper notice, but for all intents and purposes, it is destroyed.
At one point in time, what all of the employees did was to promise the king that they'd give him back even more money, in exchange for him creating some money for them now, so they could buy homes, cars, consumer goods, and anything else.
Now, the employees fear that they won't be able to pay back the King, and so they don't want to ask the King to make them money anymore.
The net result is that the amount of money flowing to the king is massive, and the amount the amount that the king is paying out is much less. The amount of money being used to buy things in the private sector is shrinking.
(Fleeting thought: Could the public sector plus the corporate sector be considered as one?)
The people are also savings money at home; money which is not being used to buy. This is basically the same as what the king is doing, except that the king can create more money whenever he wants, and the people are limited to the amount they have set aside.
For some strange reason, the King is paying some employees salaries that are hundreds of times larger than others. This is making the subjects very, very upset. The King claims that he will address this, but so far, hasn't seemed to do it.
So, the amount of money in the economy is getting less and less, meaning that the business owners are not able to pay all their bills, and they are angry, because they are losing their business and their livelihoods.
They are trying their best to pay all their employees, and would like to give them raises, but the money is simply not coming in, as the sales are declining. So, unfortunately, some employees are having their wages cut, and some are having their hours cut, and some are being let go.
Inexplicably, the King is doing the same with some employees, such as city workers, police officers, teachers, etc.
The King sees that people are losing their jobs, losing their homes, and beginning to get desperate. He's offered to create money for them, but few people are confident that they could pay back the King.
A number of the people are convinced that it is because the King pays the public employees that there is this problem, and that the King should pay the public employees less, or lay some off.
The King is trying to make that the unemployed people don't starve, and he is sending them money so they can feed themselves and their families, but many of the employees are getting angry about this.
The King could create lots and lots of public jobs for all of the unemployed people, and could pay them, so they in turn could buy in the private arena, but, for whatever reason, the King isn't doing it.
The King buys one important thing from other kings, that thing being energy in the form of oil.
(Note: This may imply that the oil extractors, etc. should again, be rolled into the King's public sector. Are there other corporations that should be rolled in? Big military contractors, to be sure. How about industrial agriculture? Which others?)
The King creates money to buy the oil from the other kings. The other kings accept this made up money from the King because the King has a huge army, the largest in the world, and to refuse payment by the King would mean war.
The other kings can use the money to buy things made by the private sector in the King's country, but in many cases, they would prefer to buy property, or the private companies themselves.
The private sector also uses the King's money to buy oil, and this is the primary input into their business, and so when the price of oil changes, that greatly impacts their business. When oil doubles in price, then a great deal of the King's money rapidly leaves the country, being transfered to the other kings, and then they typically take a long time buying things with it.
Sometimes, the other kings take the money and give it back to the King. They hope that, in the future, the King will give them the money back, if those kings ever find anything they want to buy.
|Deflation and You: A Guide to Understanding this Peculiar Economic Model
||[Aug. 13th, 2010|12:11 am]
|[||Tags|||||bank, bank failure, bankruptcy, banks, cash, collapse, credit, crisis, debt, deflation, demand, depression, federal, federal reserve, finance, house, housing, housing market, inflation, liquidity, money, mortgage, recession, reserve, reserves, savings, unemployment||]|
I just wanted to share a little bit about deflation.
What is deflation?
Deflation is when the combined amount of money and credit in an economic system is shrinking.
Once deflation begins, it is self reinforcing.
Let's examine how that works precisely.
To do so, think of your own spending decisions.
If you are like me, you spending behavior and patterns have probably changed quite a bit since the housing bubble started to bust, and especially since the Dow Jones Industrial Average hit its all time high on October 11, 2007 and then started it's wild ride down.
Before that thinking about your spending behavior, one thing must be known: Money is created by people when they take out loans. People offer up an asset or a promise, which the bank takes and files, and then the bank simply increases the number in their account. That is all there is to it.
This might be hard to accept at first, but this is simply how it words in this economic model.
The amount of coins and dollar bills in the economy are a very, very small fraction of the total amount of money out there.
Most "money" is actually bank credit, which is created when people go to banks, are approved for a loan, and then spend that "money".
If you imagine all those loans, all of them in the country, all at once, that is basically the money supply.
Behind each "dollar" (or bank credit) in a bank account, there is a loan document somewhere that was used to bring that "dollar" (or bank credit) into existence.
If the size of all of those loans, let's just call this the "public debt" for simplicity, if that starts to shrink, for whatever reason, then that means that there is less money in the economy.
Less money to spend.
Less money to earn.
At the moment, the money supply is shrinking because people are behaving perfectly sensibly.
They see what is going on with the rising unemployment rate, the falling housing prices, the unstable stock market, the inability of the government to fix it, and the bad economic news that comes out on the TV, on the radio, and in print.
What does a reasonable person do?
How your thoughts for the future have changed since October 2007?
(think about that for a moment or two)
Now that you've done that, let's do a case study, and examine the top ten ways that I have changed my spending, and my thinking about what things are money.
1. I don't think my house is a source of money anymore.
I used to think it would increase in value, and that I was getting rich by just sitting on it, and that I could take out a huge home equity loan, and buy whatever I wanted.
Now, I think that if I take out that "Home Equity Line Of Credit" that I've been approved for, that I would not be able to sell my house for that, which is to say, I'd be stuck in my house, unable to sell, with no money.
In fact, I don't want to take any money, not even a penny, out on this "HELOC".
True story: We were looking to buy a little summer cottage, and so we got this HELOC all set up, and we could have bought the place twice over by using that HELOC, but I thought to myself, no way, I'm not doing it, I'm not going to put myself in debt, especially if the job market gets worse, and my wife, or I, or both of us, could lose our jobs. No, I'm not using that HELOC, and I convinced my wife that we shouldn't use it.
We weren't willing to bid much on the house, since we were only willing to buy it with money out of our current savings, and so it sold for LESS than it would have, less than if we had been confident about the future.
2. I don't think that buying a house is a good idea.
I used to think that I could buy a second house, fix it up, use it, and then sell it for a tidy profit. Hey, yo, let's "flip that house".
Since 2006, I've seen that home prices were going down. And they just keep going down, relentlessly.
Why would I buy until I was confident that they were moving up? How many months of rising home prices would that take? Six months? A year? Why would I buy when there was a good chance that it would be worth less in the future? Why not wait?
And wait we did. We were looking for a second house, that summer home, for two years now, but the housing prices keep going down. Why would we buy?
In looking over the place we were going to buy this summer, we figured up the various monthly and yearly expenses, including taxes, and realized that we were going to be paying $4,000 per year, every year, at a minimum, just to have it.
Why not just rent some place for the week or two that my wife can take off in the summer, and stay at the parent's house for the few weekends that we might visit?
Why saddle ourselves with another $4,000 annual obligation when the job market is looking worse and worse?
We have enough bills as it is, plus two preschoolers to take care of.
No, buying a house is not a good idea, and buying a second house is really not a good idea.
3. I don't think I'll be getting any raises in the future.
It used to be that I'd get a 3%, or a 2%, or even a 1% raise to the top step of the salary schedule at the school, where I teach.
This year, in negotiating a "master agreement" with the Board of Education, it took us over a year just to get our wages figured out for that year. That was a year beyond the end of our previous agreement. Our negotiating team had to fight tooth-and-nail to get a compensation package that wasn't all that much worse than previous years.
Then the state came and decided that since our state pension fund had lost billions since October 2007, and since the state was broke, that we needed to contribute more towards the pension that we had already been guaranteed, in a special teacher tax.
The government showed that it could, in the swipe of a pen, decrease my salary, and our local negotiations really meant nothing.
I will be bringing home less this year, and the state is likely to try to cut salaries again, as it becomes clear that the budget is getting worse.
If I don't think I'll be getting any raises in the future, I'm certainly not going to spend like I'm expecting a raise, in fact, I started saving up, because we will need a cushion in hard times.
4. I don't see my pension fund, or my social security, as money.
A number of years ago, I was so excited about my state pension, that I "bought" five additional years of service credit, and sent the State thousands of dollars, so that I could either retire earlier, or have a bigger monthly retirement check. This was on top of the thousands that my school district already was sending back each month into "my" pension account.
Now, with all the news coming out about how all of the states are broke, and the pensions are underfunded, I don't think that any of "my" pension money will be there when I'm old enough to retire.
It's not "my" money anymore.
I gave it to the State.
It is gone.
I will probably never get it back.
So, I'm going to have to save for retirement myself, and not in a pension fund.
By the same token, with all the news about the national debt and social security no longer paying for itself, I don't think that money will be their either.
The reports showing that most young people don't expect it to be there, well, that just confirms to me that it probably won't be there.
So, I'll need to start saving up more, on my own.
5. I don't see my 403(b), mutual funds, or stocks as money anymore.
At one time, we went to a "financial advisor" and agreed to set up a 403(b) investing in mutual funds. We believed that this was basically a sure thing, and sure, there might be dips and bumps, but it was definitely, DEFINITELY, better than keeping our money in a credit union savings account.
But, with the stock markets crashing over 50% from October 2007 to March 2008, I don't have any faith that my 403(b), or my wife's large 401(k), which she automatically contributes to each pay period, will be worth anything.
I don't even know how, or if, she could get out. Can she sell? I don't know.
If the market crashes, it may never recover, and most or all of that "value" will be gone.
So, we do not have that money for retirement either. Here, we have yet another incentive to save.
6. I don't think the banks are safe anymore.
I used to think that they were great places to put money, to save up, and at one point we had over a year's salary in our bank account. I suppose I thought that because I'd opened a passbook savings account when I was about 5-years old, and was always taught to save up for a rainy day.
Now, I see that the banks are being bailed out left and right, and that they are paying their employees huge salaries for doing nothing but draining money from the person on the street.
Northern Rock failed.
Fannie and Freddie failed.
And the rest are dead-men walking, "zombie" banks.
If any bank tried to sell all of it's assets today, or even over the next month, or even the next year, (in the open market, that is), it would get far less cash back than what it owes to it's depositors.
The banks are "insolvent".
They are bank-rupt.
But the government keeps on trying to "help them".
Plus, more banks fail every single week. Here is the list:
And, when a local bank failed a few weeks ago, a bank which was flagged as "in trouble" on BankRate.com; and one that I had used as an example of a bank that would fail, well, when it failed, I FELT the failure.
Add to that the fact that the FDIC has used all of its money and is itself broke and is now relying on the government so that it can prevent a bank run.
And still more: I've learned that most banks only have as much actual cash as what is in the ATM machines and in the cash drawers.
There are no piles of cash in the vaults.
Maybe, MAYBE, there is enough for a week or so of typical withdrawals, based on what they know people tend to take out in cash each week. But that amount is a tiny fraction, well less than 10%, of what the depositors believe to be in their accounts.
Finally, I've learned that depositors like us can only take out a certain amount of cash in a given day.
At my credit union, the limit is $10,000 cash a day.
At a smaller local credit union, the limit is $600 per day.
If I had a lot of money "in the bank", I would not be able to get it out all at once.
All of these facts about banks combine to make me think that my deposits are not safe, and are not money in the same way as I used to think of them.
Obviously, I still think it is slightly safer, or more convenient, to have "money" in the bank, but only barely so. If I could figure out a way to save that money myself, and keep it safe from theft or fire, then I would only have as much in the bank as was necessary for paying bills.
7. I don't think of my gold coins as money anymore.
I used to think, when their prices were going up, that gold coins were so great, and a great investment. In fact, I bought in 2005, and now in 2010, those few coins have more than doubled in "value". There are websites galore that say "Buy Gold", and signs in shop windows that say "We Buy Gold", and everyone seems to think that "gold is REAL money".
But, I've very recently realized, that if there were a banking system failure, and people only had cash and gold coins to use as money, that the value of those coins would drop like a stone, because all the people that end up running out of cash would then be pulling out their coins to use as money, and this would happen all at once. The value of the coins would fall rapidly as they flooded the market, and my "doubling of value" would end up being "took a bath".
Interestingly, the American Gold Eagle 1-ounce coins do have a $50 mark on them. Perhaps they will not fall in value below that. That is some cold comfort with gold selling for over $1,200 per ounce right now.
The fact that I have them in the bank, and the bank could close at any minute, makes me less and less confident that I could use them as money. Also, the last time there was a major crash in the markets, back in 1929, the President of USA ordered all the safe-deposit boxes sealed, and all the gold coins confiscated and sold for a rate that the Government selected. (See EO 6102)
8. I don't think of our personal possessions as money.
I used to count the cars, the appliances, the electronics, the furnishings, the lawn tractor, even my clothes, as money. I could put them up for sale, and get a decent price, especially for the cars. In fact, I vaguely remember making a spreadsheet on the computer, listing all these sorts of things as part of my "net worth"./b>
Now, everyone is starting to look broke.
There are tons of used cars on the market.
People only want things for free off FreeCycle or Craigslist.
My DVD collection isn't work $20 per DVD, like I used to figure. The video store chain in my area went out of business, and those same DVD's wouldn't even sell for $5.
I've been to some garage sales this year, and second hand stores, and arts and craft shows, and flee markets, and I start to recognize that most of this stuff is literally value-less, despite what it might have sold for in the past.
My personal possessions are no longer money.
9. I don't think I'll get any inheritance anymore.
For a couple of years, I received an "inheritance" check from my grandmother. Her stocks were doing well. Her house was increasing in value. She was healthy and happy. And this could have continued; I expected that, and I think my family did as well.
Now, my grandmother is in the medical care facility which costs thousands of dollars per month.
The stocks had to be sold, and they had lost lots of value before that.
My grandmother's house has now been vacant for years, and the most recent attempt to sell it, for a new lower price, fell through.
I won't be getting any more checks.
In fact, my wife and I have talked about saving up some money for my grandmother, in the case that she completely runs out, because her diminishing cash reserves are going fast.
By the same token, I know that my parents are healthy and will live for another twenty or more years, but I no longer see their house as increasing in value until then.
No, the values of homes are falling everywhere, and unlikely to even return to those 2006 levels. Some housing bubbles are so big that it has taken hundreds of years to return to the same level.
So, that "inheritance", that is even less money in the future.
10. I'm not spending money.
A while back, my wife and I made a nice long list of home improvements, trips we'd like to take, things we'd like to buy, and painted some pictures in the air of a fancy-dancy future: a new barn, a new carpet, a new hardwood floor, a new addition, a new fireplace, etc.
We aren't spending on those things because we think we need to have some extra money saved up, in the event that one or both of us lose our jobs, as we would need if for food, health care, taxes, and all those other bills.
We are saving.
We are not spending, not really.
Everyone is Doing It
If this story resonates with you, it is because parts of it resonate with all of us.
We are the ones that have the capacity to spend, and yet, we save instead.
We could increase the money supply by signing up for loans, and buying things, but we are not.
We are doing what anyone would do.
The prudent thing.
The logical thing.
The sensible thing.
The responsible thing.
But, we are all doing this at the same time, including all of the businesses, and that is causing the money supply to shrink, day after day, and each new day makes us want to save more, and each new day we feel more that we need to get out, or stay out, or debt.
All of that money we are saving, those of us lucky enough to be able to save, that money goes into the banks, the same banks that are insolvent, and they can't get rid of it, because no one who is sensible will borrow it. They won't touch it with a 10-foot pole.
The banks, which are insolvent, with less assets than they owe in deposits; when they get in money, they have to find something to do with it, so they buy treasury bonds, which "earns" the banks interest, and which are very safe bets. Contrast this to the choice of offering up some subprime loans, or alt-A loans, or jumbo loans, or any of those. They aren't stupid. They know that they might not be able to sell those things anymore. They know those mortgages would be risky at best. They do the prudent thing and raise lending standards, and looking elsewhere for the profits.
"Go Out and Spend"
Savings in a bank, just like savings under the bed, are not being used to buy things, so it is as if that money did not exist. It has the potential to be money, but if it is not spent, then it can not be earned by someone else.
This lack of spending is slowing of the speed at which money moves in the economy. It is the same as if there were actually less money.
Right now, both things are happing at once. The money supply, or credit supply, is shrinking because few loans are being created, and consequently, that money is not being used to purchase things AND the "velocity of money" is slowing because people are not spending at the rate that they once did.
Now, these two are really the same thing, what we're talking about is how much you are buying this year, as compared to, say, 2006. And not just you, of course, but everyone. And we're not just looking at "net income" paycheck money here, no, we're also looking at how much you, and me, and other people, are spending out of credit sources... whether they are increasing their debt load to buy things, like in 2006, or decreasing their debt load by paying off that debt, and not spending, like now.
Most important to this is that so many people continue to pay down the principle on their mortgages, while very few new mortgages are being created to make up the difference. The money goes into the banks, and never comes out.
As mortgages are paid down, the mortgage documents, also known as promissory notes, are worth less, their value as an asset is less.
An example, image that a person pays off $500 in principal on their mortgage. Now, that mortgage document is worth $500 less than the day before. If no one takes out a loan of at least $500 to replace that, then this $500 is gone from the money supply.
Recall, that it is the total value of all the mortgages, the public debt, that determines the money supply.
As everyone is "getting out of debt", the money supply is shrinking.
Money is literally debt, in this peculiar economic model at least.
And as we all do this very, very, sensible, reasonable, logical paying down of debt, preparing for tough times, so too does everyone else, which means that people are spending less, and the businesses then are earning less, and then they have less to pay employees, and then those employees are either laid off, or their hours or wages are cut, and then we see the unemployment report on the TV, and we all tighten our belt one more notch, and then we save a bit more, and we spend a bit less, and the businesses...
This is self reinforcing vicious cycle, which is self reinforcing. It is a positive feedback mechanism.
There is not a single things that the political candidates, or the bank presidents, or the Federal Reserve chairman, or the Treasury secretary, or the President of the USA can do to make us stop acting sensibly.
What is deflation?
It is being sensible, all at once.
### Aaron Wissner ###
A change in the perception of the future, from "the future looks bright" to "the future looks bleak" is not trivial, particularly in this economy. It means everyone goes from "spending mode" to "saving mode", and that change has real impact on spending, and on jobs.
I could have also mentioned that people no longer want to have as much on their credit cards, and there are probably other things I missed.
For additional clarity, I'm going to paste below a few things that I wrote on Facebook this week, all about deflation.
If it were 1930, then certain things would work to pull the economy out of recession, eventually, that it. But, in this case, we're in for the "long ride down" (at best), because energy supply will decline really rapidly from here on out. Nicole [Foss] talks about all of this in her talk, and in the podcast. [Other "economists" are] attempting to hold one value constant, which they may not even realize is a significant value, but in fact, that value is critical, and declining. ...
What [Nicole Foss] is saying is that the money/credit supply is falling so rapidly, that no efforts to increase it can compare. Also, velocity is slowing, as everyone is trying to pay down debt. That contracts the money supply because once the money goes into the banks, it never comes back out. It is essentially destroyed, taken out of circulation. Recall that the velocity used to be something like 105% of net take home pay. Now, not only is it more like 98%, but the total net take home pay is less.
It doesn't matter one lick what QE happens. The only thing important is your spending, my spending, the people's and business's spending. It doesn't matter how low the interest rates go, that won't convince us to spend, in fact, it will do just the opposite. The same with businesses, they are run by people, and those people aren't dupes. They see the writing on the wall, "Tough Times Ahead: Get Ready!"
It does not matter how much the banks might be agreeable to lend. It only matters how much people spend. Spending IS the economy. Money has to be SPENT to be EARNED by others. If it is not EARNED, then it can not be SPENT again. ...
This all happened before, this part of [this recession]. Read Kenneth Galbraith's book, the Crash of 1929. It is the exact, same thing, this part of it anyway. Find a source. Work it out. I know you can do it.
Don't buy into the BS dished out by the people that HAVE to say that it is getting better. They either have to say it to keep their jobs, or they need to say it to make money, or they want to say it for airtime, or they think that they should say it, because in their uninformed way, they think it might make things better.
And don't think that [deflation] won't happen. People have put in their bets that things will come crashing down. Now, they are on the TV telling us that it is looking bad. What do you think all these "investors" are telling their clients? Short the stock, that's what they're telling them. Then they're on TV saying it. It doesn't matter what you or me nobodies say, they are the ones with the bully pulpit in this here deal.
The panic will be here no matter what we say [on Facebook]. We can shut our traps and watch it happen, or we can open our mouths and watch it happen. There is no way to stop it. There never is. That is what a market bubble is all about. I'd rather be a bit ahead of it, than a bit behind. In fact, I'd rather be a year early, than a second late.
There is no way to prevent the collapse of the money/credit supply.
Money/credit is not metal, paper, or electronic data.
Money/credit is faith. It is belief. It is trust. It is confidence.
The money/credit supply is the aggregate total of this amongst the people. As belief/confidence/faith/trust/whatever-you-what-to-call-it, "consumer sentiment", whatever, it is declining, and rapidly, by the day.
Every day that people wake up without a job, they lose a bit more faith.
Every day they wake up and they see their family and friends struggling, they lose a bit more faith.
Every time they see a news article about the economy that is glaringly false, perhaps days or months later, they lose a bit more faith.
Every time they see government impotence to "fix it", as the classic Saturday Night skit went, they lose a bit more faith.
Loss of faith has positive feedbacks.
Take a look at Nicole [Foss]'s chart on this; the chart helps to illustrate what I'm saying. Or look at the chart I just posted from Nicole. It is very similar.
Well, it appears that we're in a downward contraction, and I don't see any way to resist that for long. The stimulus appears to have attempted to resist, but as others have mentioned, it was like going down a skip slope, and going over a flat area before continuing down the long slope to the bottom.
As for the unemployment insurance payments, if the recipients are paying off debt, then the money is vanishing, wish no support to the economy, because whatever goes into the banks in repayments or interest, well, that money can not come out, because all of the banks are insolvent as it is. [Actually, I've revised that thought a bit, I don't think are interested in borrowing and getting in debt, as I mentioned in the article above.] I suppose [the unemployment checks] may delay the contraction of the money/credit supply a bit, if less people default. This is the same concern with raising interest rates, as then the ARM people will start defaulting en masse. [Raising rate would be economic suicide, the economy is painted into a corner... and the paint is on fire.]
As for businesses, surely the greater fraction of unemployment checks goes to buying food, fuel, electricity, phone, rents, and other "retail" activities. Withdrawing those funds would primarily hurt businesses, and not large corporations so much as small businesses. More specifically, discretionary, non-essential businesses, would feel the greatest impact, which would lead to many more business failures, putting the banks even deeper into insolvency, and pulling the system down even faster. Unfortunately, these are the positive feedbacks we are seeing regardless of policy.
Another area of spending is on taxes, I'm thinking mainly of property taxes, but sales taxes and income taxes as well. As less money flows to the unemployed, less is available to go to property taxes, which is straining the municipalities, like the township I live in, and less sales on "discretionary" means less sales tax revenue, especially since food is not taxed. So, for sales tax, as a person's purchases decline, their amount of sales tax paid declines even more quickly. This is generally what has happened to the State of Michigan, and in the same way, for other states.
So, I think you are asking if 99 weeks of unemployment is too long... I don't know how to answer that. I guess it depends on whether you desire the effects I've mentioned above. It has been suggested that a catastrophic collapse of the economy can be avoided, but I don't see how decreasing money to small businesses and local governments would improve the odds.
If you are hoping to maximize the probability that things will at least keep functioning, then I'd be on the side of extending unemployment benefits indefinitely, or as some have suggested, simply creating a standard payment amount that goes to all citizens.
Now, what would be better, would be putting these folks to productive work, assuming that they aren't already engaged in raising children and/or taking care of the elderly or infirm. There is an infinite amount of work that needs to be done.
You'll recall that the USA was in a similar situation before, and it eventually became obvious that jobs had to be created, so we created the CCC, which was much more comprehensive than most people know.
Unfortunately, there is still a problem, and this is in the area of how the federal government "finances" this spending, and this is a point of study for me, and why the various monetary improvements are of interest.
[It has been pointed out to me that the CCC, social security, and etc. can be seen as serving this peculiar sort of economic system, to try to keep people having faith in this sort of system, and preventing them from thinking about better, more effective systems. That is a good point, and I don't want to overlook it, or to forget it.]
From a Friend: The Emperor Has No Clothes (EHNC)
I note that there is adult language in this one.
[The] emperor has no clothes:
When Lehman collapsed, the international banking system buckled and actually stopped for a short period of time, until the Fed and ECB was able to, through joint effort, liquify the system. The EHNC moment was where everyone realized they had assets that were worthless because the system was illiquid, their hedges (insurance) were worthless because the issuers were bankrupt, and the cash they had on hand, which in some instances was substantial, was still no where near the leveraged liabilities on their balance sheet. At that point, there was panic. There was horrific [fall in the value] of assets - some assets went for pennies on the dollar of paper worth, and fractions of what they would be worth just weeks later. This is really well outlined in the book "Too Big to Fail" by Andrew Ross Sorkin.
When Greece finally acknowledged their debt and structural issues, the EU nearly dissolved - in a single weekend. Fifty years of progress were nearly erased over and economy the size of Michigan's. The EHNC moment was when the European leaders looked at each other and realized "shit (merde, shitzer), we have no rules to handle this." The EU was a collection of self interested entities that decided to have a common currency. Now they had to go through the process of assumption, something we here in the US went through in the 1790's. In particular, Angela Merkel, prime minister of Germany, nearly killed her political career to help pass a package of aid. If Germany or France had given Greece the finger, this would have been worse than Lehman.
In both of this instances, LIBOR skyrocketed. In both instances, the financial community pissed their pants. And in both instances, the Fed, the EU and the IMF stood up and soothed the markets.
Don't take my word for any of this. Don't be a dupe. Do the math yourself. Work it out. I'm just one person. I could be completely wrong. I don't think I'm wrong, obviously, but neither do most people, and yet most people are wrong. Most people were wrong that buying houses was a good idea. Most economists were wrong to say things would keep going up. So, I might be totally wrong as well. Be a critical thinker. It is only through looking at the facts and applying logic that one can deduce logical conclusions.
Here is my list of most of the people I've been listening to about this.
I try to listen.
It takes a lot of time to listen.
These, amongst others, are the ones I've listened to.
I seem to recall a quote that an effective learner spends most of the time listening.
Since I can't seem to find that quote, here are a couple others.
“A good listener tries to understand what the other person is saying. In the end he may disagree sharply, but because he disagrees, he wants to know exactly what it is he is disagreeing with.” -- Kenneth A. Wells
"A good listener only talks if they can improve upon silence." (or something similar)
"An essential part of true listening is the discipline of bracketing, the temporary giving up or setting aside of one's own prejudices, frames of reference and desires so as to experience as far as possible the speaker's world from the inside, step in inside his or her shoes. This unification of speaker and listener is actually and extension and enlargement of ourselves, and new knowledge is always gained from this. Moreover, since true listening involves bracketing, a setting aside of the self, it also temporarily involves a total acceptance of the other. Sensing this acceptance, the speaker will feel less and less vulnerable and more and more inclined to open up the inner recesses of his or her mind to the listener. As this happens, speaker and listener begin to appreciate each other more and more, and the duet dance of love is begun again." -- M. Scott Peck, MD
“A good listener is not someone with nothing to say. A good listener is a good talker with a sore throat.” -- Katherine Whitehorn
A Parting Thought
Very, very few people seem to understand deflation at the moment. Most reporters and commentators on TV, radio, and in print think it has something to do with things getting cheaper at the store. This is an eventual effect of deflation, on some items, but since the total amount of money that is flowing into people's pockets is decreasing by the day, falling prices really don't mean much, because the ability to purchase those things, even at falling prices, becomes less and less. This is another positive feedback. But, it is not deflation, it is simply an effect of deflation.
For a very clear, concise, down to earth look at what is going on with deflation, may I suggest the following:
I suggest starting with "The Modern Day Paul Revere" interview.
It is a good interview, and the interviewer asks the basic questions about what is going on with the economy.
After that, try reading "The Automatic Earth" where Nicole writes as Stoneleigh along with her writing partner Ilargi writes about these things.
A final, final parting thought: this economic system, which has boom and bust "cycles", or mania/collapse phases, is not the only economic system. There are many other possibilities. We should all be asking ourselves, are we satisfied with this peculiar economic and monetary system?
Interest Links about the Total US Savings Rate
Several people have responded to this article, or responded to some part of the article.
|Why Economics Should Matter to Environmentalists
||[Aug. 11th, 2010|05:10 pm]
For the past hundred or more years, environmentalists have been attempting to fix growing problems, only to find that their every small success is overwhelmed by massive failures all around. Ground water is polluted despite our best efforts, oil spills become more frequent, contaminated sites seem to increase (and decay) by the day, top soil is lost, the atmosphere is polluted, species are pushed to the edge of extinction, and yet environmentalists keep persevere, giving it their best, trying to make a difference, but losing ground at every turn.
Why do we fail?
We fail because the economic system which everyone supports everyday only lives by consuming the planet.
For this economic system to grow, it needs energy, and that energy comes from ancient sunlight, petroleum and coal. That fuel is burned, to plow fields, build subdivisions, extract other resources in strip mines, and mountain top removal, and deep water drilling, and tar sands monstrosities.
The global economy must grow because of the particular form of economic and monetary system that we currently have, namely, a debt backed money system exacerbated by high leverage fractional-reserve banking. This sort of monetary system requires that the system continuously grow.
In the past two years, I've been attempting to share with those in the environmental movement information about why we have failed to turn around the environmental destruction that we all despise. I've shared links, articles, organized conferences, and done what I could to increase the recognition that an environmentalist must understand and challenge the very economic system they work within in order for them to have any hope of success.
To succeed, we need to have the tools at our disposal to reform the monetary system, to one that no longer requires growth, and such systems are available, and have been successful historically. We need to be in a position, when this current credit bubble finishes its long collapse, to lead the debate, with the knowledge to reveal the unsustainable and inherent flaws of this system, and to present rigorously studied solutions for a sustainable, equitable, and just monetary and economic system.
To help us succeed in our great struggle, I'm working tirelessly to bringing a speaker to the United States who can help educate us about this system that we are at odds with; about what will happen with it in the near future; about how to prepare so that we still have the money, resources, drive and focus to be able to do our work despite what looks to be a recession of epic proportions.
This fall, I call to all those who see things in this way, to gather in conference to study this destructive, unsustainable monetary system, its interactions with energy and environment, and to determine how to move beyond the paradigm of infinite growth, to one of sustainability.
I know it may seem odd for an environmentalist to be so overwhelmingly focused on economics and monetary reform, but it simply is not possible to achieve sustainability under the current monetary system, but, and this is the good news, there are other monetary systems where sustainability should, and could, be achieved.
I will invite you to listen to Nicole Foss's (Stoneleigh's) talk, and if you are not familiar with peak oil, feel free to jump ahead to the 16-minute mark, and listen to what she has to say, so that we do not find ourselves powerless to do our work.
I draw your attention to the one and only talk published from the 2009 Local Future conference. The talk is by Richard Douthwaite, a researcher attempting to stop the use of fossil fuels, and to reverse climate change. Douthwaite understands that the current monetary system itself is the cause of the environmental problems of the world, and he has a plan that could create a new system of sustainability.
To all of you champions of the environment, I offer you my deepest thanks for everything that you do for the earth and for our future.
|Understanding the Economic Crisis & Deflation - Nicole Foss - Stoneleigh
||[Aug. 11th, 2010|10:47 am]
|[||Tags|||||collapse, credit, crisis, debt, deflation, economics, economy, energy, fed, federal, finance, hyperinflation, inflation, insolvent, monetary, money, oil, peak, peakoil, reform, reserve, supply||]|
Nicole M. Foss (a.k.a. Stoneleigh)
The US economy faces a deflation crisis that will fundamentally alter our nation's economic recovery. The Federal Reserve formally acknowledged the growing danger of deflation at their August 10, 2010 Federal Open Market Committee meeting. Local Future has invited economic analyst Nicole M. Foss to tour Michigan to help business leaders, elected officials, and communities understand the crisis that deflation poses to the economy in the years ahead. Foss will tour Michigan from September 10 through September 19. The talks will be free to the public. Business leaders, community leaders, and members of units of governments will especially benefit from Foss's economic insights, but all are welcome. Host cities are currently being determined. To request a location, please contact firstname.lastname@example.org.
Nicole M. Foss is co-editor of The Automatic Earth, where she writes under the name Stoneleigh. She and her writing partner have been chronicling and interpreting the on-going credit crunch as the most pressing aspect of our current multi-faceted predicament. The site integrates finance, energy, environment, psychology, population and real politik in order to explain why we find ourselves in a state of crisis and what we can do about it. Prior to the establishment of TAE, she was editor of The Oil Drum Canada, where she wrote on peak oil and finance.
Foss runs the Agri-Energy Producers' Association of Ontario, where she has focused on farm-based biogas projects and grid connections for renewable energy. While living in the UK she was a Research Fellow at the Oxford Institute for Energy Studies, where she specialized in nuclear safety in Eastern Europe and the Former Soviet Union, and conducted research into electricity policy at the EU level.
Her academic qualifications include a BSc in biology from Carleton University in Canada (where she focused primarily on neuroscience and psychology), a post-graduate diploma in air and water pollution control, an LLM in international law in development from the University of Warwick in the UK. She was granted the University Medal for the top science graduate in 1988 and the law school prize for the top law school graduate in 1997.
Resource limits (peak oil) and the collapse of global Ponzi finance are a “perfect storm” of converging phenomena that threaten to trigger wealth destruction, social discontent, and global conflict. The consequences for unprepared individuals and families could be dire.
So believes Nicole M. Foss, an energy industry consultant and financial analyst from Ontario, Canada, who will be presenting “Understanding Deflation & The Financial Crisis" on a tour of Michigan in September.
In addition to her work in the energy industry, Foss writes under the name “Stoneleigh” at the website The Automatic Earth (www.theautomaticearth.blogspot.com). She plans to discuss the many converging factors that are contributing to the predicament we face today, and how individuals can build a “lifeboat” to cope with the difficult years ahead.
At her presentation, Foss will describe how our current financial system is an unsustainable credit bubble grounded in “Ponzi dynamics,” or the logic of the pyramid scheme. She warns that most people are woefully unprepared to face the consequences of the devastating deflation that is now unfolding.
What makes this crisis different from past financial calamities?
Foss will argue that this one has developed in the context of the fossil fuel age, which will prove to be a relatively brief period of human history. We have already seen oil reach a global production peak, and other fossil fuels are not far behind, she says. While there is still plenty of fossil fuel in the ground, production will fall, meaning that there will be less and less energy available to power the economy at prices we can afford to pay.
Societies have gone through boom and bust cycles before — for example, Tulip Mania, the South Sea Bubble and the “Real” Great Depression of the 1870s — but most people in the Western world today will face this crisis without the knowledge or means to provide the basics of their own survival. Our industrial system has nearly destroyed the individual capacity for self-reliance.
Foss will argue that individuals and communities that take steps now to prepare stand a much better chance to thrive in a changing world.
"Nicole Foss, writes a finance blog with a difference; instead of saying how to make money, it tells ordinary people how to avoid losing it," says Warwick University.
For links, articles, and audio MP3 recordings, visit:
Nicole Foss (Stoneleigh) North American Speaking Tour on Deflation Risks and Severity at Local Future
|Who is Tigers In Need? Joe Schreibvogel of Oklahoma?
||[Jul. 30th, 2010|09:05 pm]
Tigers In Need is a traveling show which goes into shopping malls with infant baby tiger cubs from a private zoo in Oklahoma and then charges high prices for people to interact with the infant baby tigers. Tigers In Need claims to be a non-profit organization which is helping to conserve the tigers or serve as a sanctuary.
This type of paid interaction with baby tiger cubs is only legal for one month in the baby tiger cub's life, between 8 weeks and 12 weeks of age. In 2010, the private zoo which provides the cubs, known as G W Exotic Animal Foundation, reported that twenty-three (23) baby tigers died, allegedly due to feeding them contaminated food from China. Former employees have reported animal abuse at the zoo, failure to properly feed the animals, and failure to receive basic preventative veterinary care. The owner of the zoo, Joe Schreibvogel (who also goes by the aliases of Joe Exotic, Aaarron Alex, and Cody Ryan), performs magic shows using animals.
Due to these and other reasons, various people assert that the baby tiger cubs are being unethically and/or illegally bred for this express entertainment purpose, and that the public is being misled, and is inadvertently reinforcing this behavior.
Tigers In Need appears to be the only traveling mall baby tiger cub show in the USA. It is currently marketed by Vicki Welch's Entertainment, which appears to be the same organization as Beth Corley's Exotic Animal Rescue, Alex Productions, and Awakening Productions.
Recognized wildlife sanctuaries follow strict guidelines to not breed animals, to prevent contact with humans, and to keep them on premises. G W Exotic Animal Park is not an accredited zoo, such accreditations being done by the Association of Zoos and Aquariums (AZA).
It is unclear what the financial relationship is, either legal or illegal, between the non-profit, non-accredited zoo, the traveling baby tiger cub show, and the magic show.
( Read more on Tigers in Need and Joe SchreibvogelCollapse )
||[Jul. 28th, 2010|09:05 am]
I don't want to see anyone starving. I don't want to see anyone without a home. I want to see happy people, who are able to take care of their basic needs. I also want to see a beautiful wild nature environment. I want my family to be healthy and happy.
Many people are out of work, close to losing their jobs, losing their homes, and losing the ability to provide for their families. The primary cause of this is the economic system itself. Michigan, in particular, which has a u-6 unemployment rate of over 21%, is in need of help.
Convince friends, family, neighbors and community leaders that deflation is happening (or housing values are collapsing) and is leading the economy into a deep and prolonged depression; and then convince the same group to take action to protect themselves, along with convincing their friends, family, neighbors and community leaders of the same things; such that all these individuals can indefinitely continue to maintain means of survival, especially including ample, nutritious food and safe, secure shelter for their families.
|Get Out of Debt - Dump the Mortgage - Walk Away - Strategic Default
||[Jul. 25th, 2010|06:50 am]
|[||Tags|||||cash, credit, debt, deflation, depression, home, house, housing, housing market, money, mortgage, recession||]|
Dump your mortgage.
Get out of debt.
Because housing values are falling, and, realistically, they will continue to fall for years as the deflation leads to economic depression. Most people will lose their jobs, and will have no way to pay their mortgages.
What people will need is money, more specifically, cash.
It is extremely difficult to save up much cash when also paying many hundreds, or even thousands of dollars per month, on mortgages.
There is nothing unethical about walking away. The mortgage contract clearly states that one must either make payments on schedule OR give up the house. It is a choice to do one or the other. Either choice is legal and ethical.
If the bank loses money on the deal, that is the bank's problem. The bank should never extend more credit on a home than that home will be worth.
Staying in a home that is underwater, or soon will be underwater, is like volunteering for indentured servitude.
Get out of debt.
Dump your mortgage.
IF, one is either paid off or very close AND has a home in a place where they can live off the land AND they really love this place and are willing to live there for the rest of their lives THEN it may be reasonable to stay there.
Even if paid off, one should normally put the house up for sale, sell it, and take the cash.
Housing prices are collapsing.
Better and cheaper homes will be available next year, and the following year.
Homes are already selling (at tax sale auctions) for 25% (or less) of their assessed value.
Sell now, before the housing market collapses even more, and it becomes impossible to sell.
|Top Ten Tips on How to Prepare for the Depression
||[Jul. 15th, 2010|05:00 pm]
|[||Tags|||||collapse, credit, crisis, debt, deflation, depression, economics, economy, food, prepare, recession, security, unemployment||]|
There are those who believe 100% that an economic depression is close at hand, others who think there is some other probability of it happening, those who believe it is very unlikely but possible, and final those who deny that it could happen.
For everyone, there are useful things to know, whether or not one thinks that the probability of an economic depression is high. For those that think it is impossible, knowing what others are thinking about is quite helpful.
Top Ten Tips on How to Prepare for the Depression
Once one accepts or believes that there is a probability of a depression, it is reasonable to do a few things to prepare oneself and one's family for the challenges ahead. This is prudent in the same way that having homeowner's insurance is prudent. It is wise in the same way that preparing for an approaching hurricane is wise.
Below is a list of the top ten things to do in order to prepare for the Depression.
Minimize Expenses -- Losing wages or even one's job is devastating enough without then facing a mountain of bills that must be paid. The most essential bills are the ones that can be put off for the shortest amount of time. Some of the biggest concerns are: food, mortgage payment, property tax, heat, water, electricity, home insurance, gasoline, other transportation expenses, and medical insurance. By minimizing expenses, one sets oneself up for the possibility of less income.
Get Out of Debt -- Debt is an expense that stretches into the future and may be impossible to reduce. Some debts, such as those with credit cards, loans, and adjustable rate mortgages, can actually grow in the future; at the same time that the amount of income in one's family is shrinking. Getting out of such debt, in whatever ways possible, takes away much of the uncertainty about whether those debts can be serviced. While some debts vanish or can be erased, there are others that are sold to collection agencies. Being on a collector's list is generally seen as quite undesirable, and may be even more so in the future.
Be Food Secure -- In a depression, food from the store can become unaffordable, and sometimes, unavailable. Growing one's own food, not just a token garden producing a few tomatoes, but growing close to as much as is consumed by the household, is essential. If it impossible to be food secure where one lives, then one should look around for a place that one could move, where one could become food secure. Keep in mind that being part of one's community is a factor in being food secure. Having a very well stocked pantry is one aspect of food security. Knowing how to store or "put up" food is also critical.
Make Friends -- Tough times impact everyone, and very few are able to do everything for themselves. Having friends, many friends, close friends, trusting friends, this allows getting help from many places, and opportunities for helping and building social capital. Being safe also means being friends with one's neighbors. Working together, a group of people, particularly a large group of people, and overcome challenges that would be overwhelming or impossible.
Prepare Alternate Income Streams -- There are some expenses that one will not, or can not, eliminate. Many would very much like to keep living right where they are living. This means that enough income must come in to pay for home expenses. Consider what will others need to purchase during the depression. These are the same products that one would need to obtain for oneself. Which of these essential products might one provide to the community?
Hold Cash -- In depressions, people and businesses often refuse to accept checks, and certainly can not accept maxed out credit cards. Holding cash, real live physical coins and bills, provides real purchasing power for buying those essentials. Cash is more valuable than stocks, bonds, mutual funds, or practically any other non-tangible asset. During deflation, the same amount of cash often can buy more.
Be Skeptical of Banks -- Keep in mind that money in the bank is not the same as cash. A bank account is simply a liability of the bank to the account holder. No bank has even 10% of the cash in their vault compared to their debts to their account holders. Despite with the government might say, there is no realistic guarantee that cash will be in the bank drawers or ATMs when one requests it. There is no guarantee or that the bank (or even banking system) will be open. Also, keep in mind that banks have per-day withdrawal limits. Some banks and credit unions limit cash withdrawals to $10,000 per day, but most banks have much lower limits, perhaps as low as $500 per day. In any case, if one desires bills of certain denominations, banks may be completely unable or unwilling to oblige, especially on short notice.
Depressions are tough times, but they do not have to be quite as tough if one prepares in advance, and keeps their wits about them.
Footnote: Why the Depression is Happening
This article is not specifically about the "why" the depression might happen, or is happening. There are amble persons who have written about this on the Internet and elsewhere. For this author, a logical argument is most persuasive. For one's who are logical and/or mathematically minded, the following source may be quite compelling and convincing.
These two audio files, running nearly three hours together, were recorded in June 2010. The presenter is Mrs. Nicole Foss, a.k.a. Stoneleigh of "The Automatic Earth" blog, and formerly of "The Oil Drum" Canada. The two audio files above are most highly recommended. For those unfamiliar with "peak oil", skipping ahead to 16 min 30 sec might be appropriate.
In summary, why the depression is happening is because practically everyone, including businesses and public entities, rely on credit to pay the bills.
At the moment, the total available credit is shrinking. Available credit depends on debt being paid on time. Debt is simply credit after it is used. Currently, payments are not being made on time. Credit is contracting rapidly, much more quickly than other money is being created. This is a self reinforcing situation where the less credit there is, then the less debt is paid off, and then the less credit there is again. Credit is money, and what shrinking credit means, is less and less money, which leads to less total sales for businesses, which leads to wage cuts and job cuts, which only exacerbates the situation.
Links to What Others are Thinking on Preparing for the Depression
(Note: The author of the article above does not necessarily agree with all of the opinions or suggestions below. These links are provided as additional ideas regarding what will be helpful in preparing for the Depression.)
|Reflections on the U.S. Social Forum 2010 in Detroit Michigan
||[Jun. 27th, 2010|11:25 am]
|[||Tags|||||animal, change, collapse, currency, energy, local, localism, michigan, monetary, money, oil, peak, peakoil, permaculture, reform, renewable, rights, society, transition||]|
On Friday, June 25, 2010, I delivered a 2-hour workshop titled "The Collapse of Empire: The Future of Community" to the U.S. Social Forum in Detroit, Michigan. The workshop went well, but the room initially appeared to be double booked, as the U.S. Green Party was having an annual meeting in the same building. Despite the fact that my session was at Wayne State University, and at least a bus ride from the main venue at Cobo Hall, there were about 22 people who attended my workshop.
My workshop focused on the concept that the future will be local.
I shared a vision of the future, and that people will find that most of the food they eat will be grown very close to home, many people will be growing a major portion of the food they eat, and people will be following low input techniques for growing food, most specifically organic permaculture techniques. We looked at homes and how new homes would likely to be build super energy efficient, to high quality levels such as the Passive House standard. We looked at various ways to capture and convert wind, solar, water, and wood energy into electricity and heat.
We then looked at the reasons that the future would be local. I focused first on explaining the concept of global peak oil, and how the amount of oil available in the future would be less and less. Then, I focused on how the money system functions, including how money is created and extinguished primarily as mortgages. Along the way, we examined how the plateau of global oil extraction was related to the current recession.
As a precursor to the talk, I shared some thoughts on what my personal mission is; and the work I was doing to fulfill that mission. In particular, I shared the "Parable of the Tree" and then talked about the dozen or so things that had to be in place for the story to unfold the way it did, and more generally, what myself, and others with similar missions, could look at in trying to fulfill our missions regarding earth and humans.
U.S. Social Forum
I was only able to attend the forum for the one day due to commitments to my family, including the need to take care of my 3-month old son. Due to that, I can only comment accurately on what I saw on the day I was in Detroit.
After my workshop in the morning, I packed up, and drove to Cobo Hall, to see what else was going on, and perhaps attend a session. The hall was full of people. When I checked in around 1:30 p.m., my registration bracelet was numbered 8,386; which suggested a huge turnout for the Social Forum.
I wandered through the exhibit area.
Most of the tables focused on various rights: human rights, worker's rights, women's rights, minority rights, indigenous rights, LGBT rights; as well as: civil rights, political rights, economic rights, social rights, education rights, reproductive rights, and the peace movement, justice movement, Palestinian rights movement, anti-corporate rights movement, anti-globalization movement, communist movement, and the socialist movement; and the environmental movement including the anti-nuclear movement, anti-oil movement, anti-coal movement, protection of the climate movement, protect the oceans movement, and rights to clean water. Noticeably, there was nothing at all about peak oil, monetary reform, animal rights, permaculture, or the transition towns movement. There were at least three (out of about a thousand) workshops related to the Transition Movement. I'm sure there were other groups that were there which I did not notice, and others which were absent which I have overlooked.
The fact that peak oil and monetary reform do not seem to be on the radar of the Social Forum was telling, because these are two factors which will determine the future.
I then walked to the local community college (WCCC) and attended a session on complementary currency titled "Reclaiming Local Economic Democracy: Creating Sustainable Alternative Exchanges through Community Currencies" which was presented by Chris Lindstrom, Mira Luna of Bay Area Community Exchange, and a gentleman from Japan. The session was attended by one woman from Asheville, NC; an older couple from Philadelphia(?), a second man from Japan(?), and myself. The content was very good, including some very in depth knowledge about past complementary currencies provided by Mira Luna, details on Berkshares and GETS Plus by Chris Lindstrom, and some short videos about a complementary currency in Brazil, the Chimegaur's (sp?) in Bavaria, and a LETS system in China (?), all videos provided by the presenter from Japan.
I walked back to Cobo Hall and looked around the exhibit hall a second time. One notable change was a number of people gathered to see a large line-drawn mural about the impacts of coal mining and burning. The person advocating that corporations lose their rights to person-hood had also put up a very large and detailed timeline poster showing the major events leading to corporate person-hood.
I ran into a friend and chatted with him for about an hour. He had done an unscheduled session on animal rights, which was the only event on that topic at the Social Forum. He also observed that the issue of excessive consumerism was not really on the radar of the mainstream conference. We talked a bit about individual action versus collective action. He happens to be ultra frugal, and probably lives on less than $5,000 per year. In fact, he might live on less than $1,000 per year, in New York City.
The main session had started. I sat down to listen to several people who each had about 10-minutes to talk about social change and the future. There was a woman from the Navajo Nation, one from South America, another from North Carolina, and three others. The talks were optimistic and encouraging, but I wondered to myself a knowledge of peak oil and monetary collapse would have been useful tools for them. I video recorded a few clips from some of the talks.
The Social Forum was probably quite educational for a number of people, especially those who were not well informed about other movements. I enjoyed the opportunity to see so many different groups, and to see people interacting and sharing stories and information.
I suspect that many of the sessions served to help connect people who were working on the same movements, and as I peeked into some workshops, it looked like there were some good interactions, and perhaps strategy sessions going on.
I did not see any congress, deliberation, or decision making events. Having 8,000+ people together seems like a prime opportunity to hold such events, even if it is to make some resolutions.
The fact that monetary reform and peak oil were absent from the discussion was of great concern to me, because this suggests that most attendees will be unprepared to understand what the future brings in those dimensions, and may make decisions for personal and collective action which end up being erased by the changes that are coming. It would have been a good idea to have a plenary session on the first or second day for everyone to learn about each of these issues.
|On Social Equality, Social Justice, Hard Work, and Monetary Reform
||[Jun. 26th, 2010|05:40 pm]
|[||Tags|||||credit, depression, economics, economy, energy, job, jobs, justice, lie, local, monetary, money, myth, oil, peak, peak oil, peakoil, recession, reform, social, truth, unemployment||]|
We don't need social equality, or social justice in this country, people just need to rely on God, themselves, or in hard times, family or charity. The Government needs to quit trying to be our parents or guardian; too many looters and takers in this world, not enough earners.
Just keep in mind that the economic system was not designed to guarantee enough jobs for everyone.
With 20% unemployment in Michigan, and about 180,000 being kicked off unemployment payments at the end of the next month, there are simply not enough jobs.
It doesn't matter how much people want jobs, because the jobs are just not there. The one entity capable of creating jobs (the federal government) isn't being pushed by enough people to do it.
Self-reliant, hard working people aren't as easy to control. The economy and job market are purposely poor so big brother will be "forced" to give handouts and the people will let them take more control.
It doesn't matter how many hard working people there are, there are not enough jobs.
The "economic system" wasn't designed, rather it "evolved" over the years to "function" given the growing resource base.
Since it wasn't designed, it does not guarantee that there will be enough jobs, or (perhaps more importantly) enough money, for everyone.
Those who benefit from the current economic system are likely to promote it and to try to convince those who aren't benefiting that this is because those others aren't "good enough", "smart enough", or "hard working enough" to find a job; and that if they just "pulled themselves up by their bootstraps" that they could get a (nonexistent) job.
In the American experience, the story of the Great Depression should provide a sufficient counter example for those who think that is just a superior work ethic that is necessary to make a living. There simply was not enough money to go around, and so there was no possible way for everyone to earn the money. In fact, the Federal Reserve intentionally did nothing to help the situation, and may have made the situation worse.
This should beg the following question: Who controls the money supply?
Most money is created as "bank credit" when loans or mortgages are created. This "bank credit" functions just like "high-powered" Federal Reserve money (including both printed dollars and electronic money).
Why isn't there enough money right now?
First, banks (which are privately owned profit seeking entities) are not approving loans at the same rate as they were in the past. At the same time, those who are paying on their mortgages are whittling down their principal, and the money supply is shrinking as a result. Paying down principal means that the mortgage paper, which is an asset to the bank, is worth less than before.
Second, when people get behind on payments and then either give the houses to the bank, or are foreclosed, the banks (eventually) end up "writing down" the losses, which means that they have less assets (perhaps even less than their liabilities plus equity), meaning that they have less ability (and desire) to help create new mortgages. This shrinks the money supply in a similar way to everyone paying down the principal on their mortgages.
Third, more of those who do have adequate incomes are "saving up" or hoarding their cash. This money is unavailable to be earned by anyone else. The "money supply" shrinks again, or, more precisely, the "velocity of money" slows. Said another way, the total about of spending decreases.
The end result has been that it is impossible for this economic system to provide enough jobs to employ everyone. It is not a question of the willingness of people to work, or even a question of the quality of people as workers, it is simply an economic system that is not capable of providing jobs for everyone.
For those who identify with a "team" or "political party", those on the so-called-left might look at Dennis Kucinich's position on the Federal Reserve and job creation; whereas, those on the so-called-right might look at Ron Paul's position on the Federal Reserve and job creation. Interestingly, both of these US Congressmen ran for President in 2008; and both, when asked, who would make a good running mate, mentioned the other.
There are any number of "right-wing" books and videos that talk about the flaws of the monetary system; and there are also a number of "left-wing" books and videos that explain the same concepts.
The differences between the parties lie in the "solutions". The "right" typically proposes a return to a commodity-backed (gold/silver) money standard, because, they argue, it a gold-standard used to work. The "left" argues that people-created credit money is the answer. Unfortunately, the "left" and "right" have, thus far, failed to even recognize that they agree on the problem; with the exception of Ron Paul and Dennis Kucinich, and a very small minority of people who are paying attention to this issue.
A side-note: Most people paying attention to monetary reform aren't also paying attention to peak oil; and vice versa. Peak oil fundamentally constrains energy availability, which impacts the cost of energy, as well as energy's ability to be put to use within an economy. This vital bit of information can be used to help discover which monetary reform efforts might be effective, versus which are dead on arrival.
Returning to the earlier point: those who benefit (are benefiting) from the current economic arrangement are not only supporting it, but are evangelizing it, and saying that if there are any flaws, these are the flaws of individuals, and not of the system.
The next downturn in the recession, the second "dip", which seems ever more likely, will help make people more aware of the inherent flaws of the system, and that it isn't individuals that are the problem.
|stub -- What is Money?
||[Jun. 8th, 2010|12:00 pm]
Money is a curious thing. We have it, or we don't. We need more, at least most of us feel like we do, most of the time.
What is money, really?
Hundreds or thousands of years ago, our families and communities got along just fine without money. People shared things. They grew their food, or gathered it, or hunted for it. They shared what they collected. Sometimes, others took care of the preparing of the food, the storing of the food, the raising of the children, the work of the home, and all those other tasks which made life enjoyable. In this era, hundreds of thousands of years long, people knew each other because they lived together and grew up together, and so they shared things with each other constantly, back and forth. People gained "credit" within the band or tribe or family or community by contributing, in whatever way they could, in whatever way was needed.
The concept of "trade" emerged as one community came in touch with another. Perhaps one community was on the move, and walked past another community, things would be shared between the two, gifts exchanged, to show appreciation and perhaps show what each community had in abundance to offer. Communities gained "credit" with one another, and through that bond, might commence in more-or-less regular trades, trading things that each community desired.
Eventually, it emerged, that some things that were traded were wanted by everyone, for whatever reason. It might have been pretty shells, or domesticated animals, or salt, or anything which everyone seemed to desire, but also might be willing to trade. These items became valuable not only because of their inherent value, but because of their value in trade, in that even if one trader didn't want more salt, that same trader knew that he could turn around and trade the salt with someone else, for what the trader really did desire.
(to be continued)
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