Doppleganger economy

Bernanke's testimony today on the Hill gave some reason for hope that a nascent recovery is occurring. Readers here know I've been a bear on the markets.

There's no denying hiring is making a rebound. But are we really the same economy we used to be, back before financialization of our economy began.

Financial services companies--banks, insurers, hedge funds, brokerages--comprised less than 10% of the nation's overall GDP in 1980. Today, they control a stake equivalent to 1/3 or more of our Gross Domestic Product.

Look at what's happened to the Middle Class over the intervening period: incomes stagnant after inflation. The jobs once freely available have dried up across much of the Rust Belt, victims of downsizing and industrial decline. Do jobs remain? Of course they do, but they're of the "service economy" variety, paying less and offering fewer benefits than manufacturing, which has been drained as a result of offshoring.

And many of the jobs offered in the financial services sector have been lost.

Countries in East Asian are experiencing rapid growth as they expand manufacturing. Our money flows to them as we run trade deficits.

Sooner or later, the Chinese won't work for pennies. They'll demand more dollars for their manufactured goods. A decline in the value of our dollar could bring an era of cheap imports to an end overnight.

Back home, we heard in Obama's most recent State of the Union address rumblings of trade fricition with China. The President is trying to side with voters eager to blame Asia for what are structural deficits and competitive weaknesses arising within in our economy. Stemming the flow of jobs will require revitalization of our manufacturing base. Yet the Federal government has a lousy track record of sustaining industries through federal spending alone.

As an example, Obama proposed over $50 billion to develop America's nuclear power industry. That was before Fukushima. Federal funding to keep the nuclear power industry has fostered an industry wholly dependent on direct subsidies. Good luck with that. Read Solyndra, the recipient of direct aid. Coverage of the scandal is rare exception to the mainstream media's willingness to ignore cronyism and sweetheart deals. For that, we have traditional partisanship thrusting the issue forward, based on political motives,

Many of our pending difficulties can be traced back to our excessive government spending. Like the chronic hard luck gambler, we've abused our national credit card. It's been maxed out.

Now if the rules of the game weren't rigged, then it'd be lights out. We'd be done with our reckless spending since our access to money would be cut off. As an addict, our options would be either 1) rehab or 2) denial and a life of crime or prostitution to feed our habit.

Fortunately for our debt-addicted government, there is another option: print or create money out of thin air, then give it to the Federal Reserve, which will then in turn use it to buy our Treasury bonds. In this way the government can keep going on for a little while longer. Not forever--mind you--the inflation will make an end of the system, by making the government print and create dollars at a faster and faster rate, til they've been debased.

What's the Fed got to do with it?

The Federal Reserve is tasked with a "dual mandate" to fight inflation and unemployment, but are the two goals mutually exclusive. I mean, if by some reason more people were working, wouldn't we have more inflation?

Let's not assume the two mandates can be achieved simultaneously. Being skeptical of Fed dealings is a healthy exercise, at least for people who don't readily accept what the government tells them.

At a minimum, the policy objective to reduce unemployment skews the unemployment rate. People unemployed for six months disappear from the roles. We've seen the unemployment rate drop in percentage terms even when the number of unemployed grows!

Whatever the unemployment numbers, good paying jobs are scarce. Excess wages tend to be found in the financial sector, but even there, mass firings are possible.

A pyramid, our new economy has very little need of many people at the top. The pyramid has been described as neo-feudal, where people in the lower wage brackets slave away, indebted to the hilt, while tiny numbers at the top reap limitless benefits.

It's not so much that the wealthiest in our society got there on merit, though of course market fundamentalists relentlessly plug the Horatio Alger rags-to-riches myth which is at the center of preserving the status quo.

Another symptom of a pyramidal structure is the systematic elimination of unions. A "right-to-work" wave is sweeping state legislatures across the country. The plan, executed by neo-liberals, is to so weaken the wages of the workers that they'll be unable to challenge the status quo through organized labor. God forbid the peasants lift their heads from their fields long enough to storm the castle...

It's usually the middle class that leads sociopolitical movements capable of destroying the existing order and replacing it with something more egalitarian. The rich of course want the status quo to continue. And most of the poor aren't well enough educated to lead political movements, or have the luxury of actually sitting down to think about how the world or their lives could be bettered.

What can they do?

With interest rates, it's not like Bernanke can do anything. The Federal Reserve committed to maintaining interest rates at near zero through 2014. Do they know something about the recovery that the rest of us don't? I mean, why be so sure that inflation won't be climbing?

My guess is that the Federal Reserve knows the recovery will be slow because of persistent unemployment. If the unemployed were to suddenly find jobs, there'd be a massive increase in spending and labor costs would rise. Rising labor costs are of course the number one indicator of rising inflation.

Now, it's possible interest rates could rise regardless of the Fed policy position. If owners of Treasury debt were eager to sell, the interest rates might rapidly climb.

The Federal Reserve is the number one holder of our government's debt. That won't be likely to change. The reason the Federal Reserve is the top holder of our debt is that they, as a central bank, have a limitless supply of credit.

Of course much of the money borrowed through the Fed goes to buy U.S. Treasury bonds which, combined with the interest they pay, gets fed back to the Federal Reserve and banks holding our debt.



Unlike the Chinese, Japanese , or anyone in the private sector, the Fed needn't derive profits for a Board of Directors or shareholders eager for higher returns. Instead the Fed serves the financial oligarchy governing the financial system of this country.

In addition to rewarding shareholders--banks--with dividends, banks are granted access to the Federal Reserve's numerous credit facilities. The quid pro quo is made secure, even from such eccentricities as the mortgage debt debacle, with access to infinite quantities of Federal Reserve credit.

This closed loop system has increasingly less and less to do with the real economy (RE.) Instead it serves the interests of the benefactors of the Financial Economy. Essentially the F.E. is a parasitic attachment to the mechanics of stable and orderly growth through market democratization, i.e. the maximum possible gain to the broadest segment of the economy: the middle class.

Under the new paradigm, the gains of economic growth increasingly are allotted to those with the most capital. Indeed, the imbalance between rich and poor is so wide now in this country that it may have crossed a threshold associated in history with times of great social instability, and even revolutions.


The FE hurts the RE. The FE drains capital away from where it can be invested into making real things. Instead capital goes towards speculation, and excess wages (a concept which always refers to what others get paid, not me.) The money that the Fed lends so eagerly actually just gets buried into debt securities.

The idea is that future cash flows can be monetized (turned into profit now) through a process called securitization. Once debt is bundled into marketable securities, it can be used as collateral which can then be used to--you guessed it--buy more debt.

So convoluted is the system that the total value of mortgage derivatives in 2007-8 far exceeded the value of the entire outstanding housing stock of the country! In other words, instead of the $13 trillion bailout with its myriad of Federal Reserve discount lending windows and other facilities, the government could have bought out every mortgage in America.

One has to ask why they didn't. I mean, if the assets underlying the mortgage debt are only worth $4-5 trillion, why then do the banks need to be recompensed three times as much?

The answer is obvious to me: cronyism. Turns out the same people who lend, trade, and profit from the debt securities have the most political influence in Washington. Through a process called "regulatory capture," regulators and their supervising agencies become infiltrated by lobbyists from the companies being regulated.

At one end of this, we see the Madoffs--outright thieves--who were able to sustain a Ponzi scheme. At the other end, well connected former senators like New Jersey's Corzine are able to get away with outright theft, a transfer of funds in the last days of MF Global from private customer accounts to the corporate body responsible for safeguarding them.

Then of course the response is that the MF Global funds are "unaccounted for," a euphemism for "stolen" given in the niceties of our media glitz age. And if popular fervor over the misplaced funds were to rise high enough, chances are our government will elect to refund the stolen money either through an existing (albeit underfunded) program like the FDIC, or grant it outright, essentially enabling those who stole the money to remain anonymous and unaccountable.

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Future a product of past Karma

The New Year finds me choosing whether to blog about the last year, or the one to come. The past finds a lot of troubling events. The future, meanwhile, is blessedly free of all history's garbage, or is it? We may or may not be able to live a future free and clear of all the ramifications of our past.

The Buddhists have a Buddha of the future, Matreiya, whose role as harbinger of the future carries special merit. The Buddhists know much about the passage of time, with so much of what we base our lives on just an illusion to them. We can't escape our karma, except through enlightenment.

To Buddhists in some lands, enlightenment can come to anyone, where in southern Asia enlightenment is reserved to those who choose a monastic life, one of celibacy. To these scholars and monks falls the task of freeing esoteric knowledge locked away in arcane sutras and vast volumes of written material.

I bring up the Buddhists because they have a balanced life of sorts. Fundamentalists of Buddhism exist, but the religion itself emphasizes compassion and understanding, which are the opposites of ignorance and hate which motivate so much hate in fundamentalist Islam and Christianity.

In short, the Buddhists know how to get along with the world in which they live. They tend not to be prone towards extremes but rather strive to live a more fruitful existence by establishing harmony and abandoning mental attachments.

Such a state of mind must be learned and nurtured. In this regard it must be cultivated through the exercise of discipline and restraint, while accumulating knowledge (dharma.) And when the world inevitably intrudes on the still mind, the physical form is vulnerable but through powers of concentration--alongside a little help from the Buddha, which is always appreciated--the outside world's many distractions and pitfalls can be avoided.

I know someone who cast away all his possessions, and became a simple monk. He abides in various Buddhist monasteries of his order, which is known loosely as "Thai forest." He doesn't have a car or a bank account. Nor does he stockpile food. His possessions are limited to an alms bowl and a pair of saffron robes. (Alms is the process by which some kinds of Buddhist monks get their food--which they cannot touch--through gifts by those in the believer community.)

The point is that there is another way. We don't have to pile up goodies and claim victory in some monumental struggle: "He who has the most toys wins."

We don't consciously decide to be good consumers. We are programmed instead.

During Christmas-time, it's easy to see the hyperconsumer model so plainly--it comes out of its cave. It's as if the Invasion of the Body Snatchers has come, and that those who don't shop are considered deficient in some way. So bad was the rabid consumerism this year that melees erupted in the Mall of America and elsewhere. At least one individual died in a early morning retail stampede.

It's our attitude that kills us (or enslaves us, rather.) Americans also are taught that they can remain optimistic and wish away all the things they don't like, either but ignoring them, or pretending they don't exist. In this regard, our culture conditions us to be perfect debtors.


You may have heard the expression that "those who forget the past are doomed to repeat it." The average American's understanding of history is pathetic; like Vonnegut's Fahrenheit 451, who needs the past? It's only the present future the matters in a world focused totally on material gratification.

My thinking is that Americans think on a time scale far different from most other cultures, although I guess our model is being emulated everywhere. The plan is to get everything, now. The past is ten seconds ago. The not-so-subtle implication: Dare not be left behind, for the world moves at light speed. If you miss that call, you miss everything and we'll never go back!

In CSPER.org's "Renaissance 2.0," Dr. Martenson identifies this as what he calls the velocity problem in our society. Here I recite Lesson 5.2:

"The transformation is more than financial...(it) devalues traditional beliefs like Rest, Delight, Spirit, Philosophy, Joy, Love, Family, Humanity, and Relationships."

The speed at which things happen handicaps us. We lack time to decompress, to think, to reason. The ramifications of a hurried lifestyle are readily apparent in the prevalence of ADD/ADHD among children, who crave constant interaction with a bely of media and gaming options from the second they awake 'til bed.

Weaning one's child off a diet so rich in immediate gratification is no easy task. Yet it can be done, in a process not altogether different from overcoming addiction. At first, the child will no doubt resist, as an absence of constant action and immediate gratification is like stripping away the child's best friends and yanking them outside their comfort zone.

Medication might be one path to go, but I don't know because I'm not a parent of one of these children. The pharmaceutical companies are certainly lining up to cash in on every personality disorder. At a certain point, if a child gets too used to the velocity problem, then it might be too late for them to modulate their attention span or control their impulses, creating a lifelong condition.


Rapid consumerism is destroying the planet. If people in developing nations envy the American standard of living, with its dependence on cheap fossil fuels and consumer goods, then our world is surely done.

The American style of hyper-capitalism makes so much demands on the earth's resources that it simply can't be a model to offer to the developing world. If everyone needs a car and a house, there simply won't be enough natural resources to go around. The amount of money that needs to be generated to consume demands a income, which requires a job or, the accumulation of large amounts of debt.

Spending is our lifeblood, much more so than the income we make it access to capital that determines our quality of life. From the days of our youth, we subconsciously adopt a materialistic mindset. Brands forged into our minds lead us to be good consumers first, and responsible users of bank credits second. We taught to believe that work solves

What we get instead is a dangerous level of overconfidence, which turns us into perfect debt slaves. This happens gradually over time, without ourselves consciously accepting that we'll be paying off debt for the entirety of our lives.

The amount of debt we carry shows something in our lives is out of balance. On a purely secular level, increasing debt means our spending exceeds our income (an obvious fact, I know, but you'd be amazed at how few accept at that reality.)

Easy it is to rack up debt when so much credit is available. Nowadays, the credit is less available to middle class people, but of course the debt they accumulated lingers. And despite politicized pronouncements of "low interest rates," the interest on most forms of consumer debt isn't low, it's very high! It's not uncommon for banks with access to infinite amounts of money charge 18 to 20% or more on the debt they're owed. Not too fair. Nor are the interest payments beneficial to the general economy: the interest payments represent a transfer of spending from the real economy (R.E.) into the financial one, where the money likely goes into deep dark pools rather than work its way back out into the Real Economy (R.E.).

Credit unions offer an alternative. Their interest rates are lower--showing that they don't have to be, unless of course the lending entities' shareholders demand it. That credit union rates on their credit cards run under 10% came as a complete surprise to me, not so much because they were lower but because the lower rates showed credit cards don't have to be so costly to use.

If the banks were nationalized--credit union'o'fied--think about how much interest would be freed and spent, remain in circulation, where it could be reinvested. Way it is with interest payment these days, the money disappears forever from the economy where it was earned. If it resurfaces, it'll likely be in a major financial center, where it will likely be used to speculate or possibly reenter the Real Economy as compensation for the already rich who work there. Wages for P.O.P.O.P--pushers of piles of paper (really not paper but digital investments)--have been rising far faster than other industries, with record bonuses even as Wall Street collapsed in 2008-9.

In this way things might look just fine in the nation's major banking and financial centers even as depression-like conditions dominate out in the far flung expanses of empire. Condo prices can go up; luxury good makers (who hire many middle income people) increase their sales.

I don't know if we've become an economy built to pleasure the rich. Not so sure how well that kind of economy would function. My take on the economy is that it needs to be broad, inclusive, and focused on building wealth not only for the already wealthy but for everyone, in what's called social mobility.

The stock markets are good evidence of how the wealth effect works. By increasing participation in investing, individual investors add a stabilizing force to the market (institutional holders tend to be more skittish.) And the dollars going in to the market get invested, put into work to make more money, rather than sequestered as is the case with most interest payments.

The opposite is just as true: when stock market participation is low, the markets tend to become more volatile, and trend sideways. Participation also indicates healthy income growth, something we've not had if the top quintile of income earners is excluded. As a matter of fact, adjusted for inflation, middle class wages have remained flat since 1980. Yes, 1980! Meanwhile, income for the wealthy went up over 15% in a single year! This due of course to Bush's tax cuts, which have drained the Treasury but made the wealthy much wealthier.


Many of our problems that we face here in America are the product of too much debt. Collectively we consume so much that the amount we owe simply can't be repaid by the present generation.

The debts of the Treasury are so large that the interest alone will consume a significant portion of our overall spending, something like one-fifth of the overall budget by 2020.

Now debt is one thing, but when spending gets cut look out. You'd think that we're doing a better job here than in Europe, with all its "social programs." Think again, even with a population aging faster than ours and so-called "entitlements," government spending has been cut far more in countries like Greece than the U.S..

Just look at the last page of The Economist magazine: it shows the percentage of Gross Domestic Product of various countries. Guess whose number two in the list, exceeded only by Greece? The U.S.. Spending $1.4 trillion more than you take in is an unsustainable problem.

The reason for American fiscal deficit higher than Europe's is simple: defense spending. We're tossing away over $600 billion on "defense." No one in Europe--heck, no one in the world--is spending so much on their military.

Another reason for our debt woes--and also suppressed in what's formerly been known as the media in this country--is the inability of our government to tax. Congress is beholden to powerful interests. Essentially federal politicians are being reelected based on their ability to attract campaign donations. And with such huge sums being directed towards lobbying efforts to protect the wealthy and their interests, it should come as no surprise that Congress passes laws that reinforce the economic status quo, which is more like a pyramid with the 1% and their enabling organizations like the Fed at the top.

The real surprise is how gullible Americans are about their tax burden. If they knew their dislike of taxes was setting us up for a budget collapse, they might demand fairer tax policy. But masterfully the forces of the Right have sold average Americans on lower taxes--I mean, who doesn't want that?--despite the reality they will pay more and derive less future benefit from services currently provided by the federal government.

Medicare is an excellent example. People in the system today paid in only a fraction of what their medical expenses now cost the program. With so little going in and so much going out, the benefits will be scaled back.

Now maybe the rich will be asked to pay more when the time comes to adequately fund our government's spending, sometime in the future. Yet I'm not so convinced that Washington politicians will be able to impose financial demands on their wealthy supporters and the corporations they own, being that the crony system we see there today is so firmly entrenched.

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Reality check

Where are we? Our health care costs are highest in the world. As is our military budget.

Our monetary system is in tatters and dependent on the largesse of foreigners who now own over half our debt. To finance its trade deficit, every day some $2 billion must flow into the U.S. from outside its borders. To finance our government's deficit--which will this year hit $1.4 trillion--our government needs to borrow $4 billion daily. Present borrowings will come from our future, with interest in what could be the greatest liability ever passed from one generation to the next.

There are only three ways our government can pay its debts. It can either print money, cut spending, or increase taxes.

The financial stability of many is in peril. When (not if) inflation hits, savers will get punished by others' excessive borrowing. The states cannot continue to run huge deficits or print up money like the federal system. Spending in schools is shrinking. For linked facts and info on the financial situation, see this blog post by Carl Herman, LA County Nonpartisan Examiner.

Who can say they're not worried? We already see enough elderly asking "paper or plastic?" Yeah, I know you think it won't happen to you, but who can say they're not thinking about their old age? So many millions will come of age--the Social Security and Medicare liabilities are so massive, in the tens of trillions. I've seen some vigorous debate over the fiscal solvency of the Social Security Trust Fund; put it this way: we ain't got barely enough to cover our future liabilities.

With a monetary train wreck lying ahead, will the Boomers even be able to retire? Social security benefits aren't likely to cover rising costs of living, especially as the overall fiscal solvency of our government, based largely on its ability to borrow, drops as debt loads grow to an untenable size. Rabid consumerism still rules the day--"gotta have it now." We've founded our economy on the unsustainable notion we can borrow our way to prosperity.

There may yet be hope, but it could come through correction, in the form of financial ruin and devastation. Talk to anyone who lived through the Depression and you'll soon discover that they value saving. As a matter of fact, they're very cautious about losing their investments. Move ahead a few generations, and Americans have lost all sense of frugality. Perhaps only through scarcity will we come to appreciate the value of accumulating hard-earned money.

The recent financial shenanigans show just how eager our government is to keep the financial system afloat, even though the entire premise is based on debt, as pointed out in Grignon's Money as Debt. To sustain "growth," we don't create anything, we borrow.

Fearful that the economy would stagnate, the government saw to keeping zombie banks afloat. Yet the banks still cling to trillions in derivatives and other assets of questionable value. They're hardly lending, despite the vast sums offered them through the Federal Reserve ($2 trillion +) and TARP ($700 billion.)

Due to their unstable balance sheets, banks can't lend. Foreclosures are zooming, made worse by the loss of over 7 million jobs this year. Things are so bad that Elizabeth Warren recently said the housing market might be in worse condition today then a year ago. As the Obama-appointed chair of the Congressional Oversight Panel, Warren is in a position to know.

Millions were depending on their home values to fund their retirement. Now, many can't sell their homes in such a soft market. And if the banks begin to liquidate foreclosed homes at bargain basement prices, it will further depress home values. So we enter a phase where saving face become more important to keep the American real investment scheme from collapsing outright.

A similar situation occurred in Japan during its lost decade of the Nineties. Banks had trillions of Yen in bad loans, much of it in corporate real estate, they refused to write off. In time, the financial system experienced a slow motion train crash characterized by zero growth and ongoing bankruptcies.

According to Mish's Global Economic Trend Analysis, the lesson from Japan was "no matter how much money you throw around, economies cannot recover until noncollectable debts are written off. That is why you have 'zero interest rates and still nothing’s happening.'" [link]

Banks have continued to fail here in the US. The equivalent of bad loans--mortgage-backed securities--remain on the books, adding up to more than the sum total of deposits.

And like Japan, oversight over the American banking system is plagued by favoritism and sweetheart deals--look no further than Goldman "we got our people in the White House no matter what" Sachs.

The close ties between regulators and the industry they oversee has actually become a hot field of study in economics, even earning its own term, "regulatory capture," a term The Economist magazine attributes to Richard Posner from the University of Chicago:
"regulation is not about the public interest at all, but is a process, by which interest groups seek to promote their private interest ... Over time, regulatory agencies come to be dominated by the industries regulated.”[source]

So acute has the perception gap become that Bernanke referenced TBTF (too big to fail) in a speech October 23rd:
"...to promote financial stability and to address the extremely serious problem posed by firms perceived as "too big to fail," legislative action is needed to create new mechanisms for oversight of the financial system as a whole..."

Bernanke goes on to explain the myriad of changes that need to be made, in conjunction with his delineation of the causes of last year's crisis. All nonsensical stuff, but if changes aren't implemented, it's hard to believe our financial system is anywhere near being fixed.

It's worth noting that Bernanke seems to be preoccupied more with public perception than with the financial standing of TBTF firms. Passing the buck to Congress is a way to avoid incriminating the Federal Reserve for its role in causing the crisis, which appears mostly limited to making huge sums of capital available, as well as granting investment companies "bank holding company" status at the height of the crisis, a move that has suspiciously brought billions in disaster capitalism profits to politically connected Goldman Sachs. Moreover, pushing for great regulation thrusts scrutiny back towards Congress' failure to preserve Glass-Steagall and its undermining of regulatory enforcement through interventions on behalf of companies like Countrywide, who was making millions largely from mortgage fraud (although of course the mass media frames the mortgage crisis as one dominated by irresponsible subprime borrowers, which only compromise 2% or so of the pool of at-risk assets.) Senators Dodd and Conrad received mortgages on favorable terms through Friends of Angelo, an organization tied to the company's CEO.

The idea that some entities would never be closed undermined confidence in the system, and that the problem was largely one based in perception...in other words, too obvious. Bernanke's focus on perception management echoes the prevailing Washington consensus: that problems are only problems if the people are aware of them. The Too BIg To Fail problem is real, not because a bigger failure imperils the entire system as Bernanke says but because the public's reaction might make loaning more public funds to a TBTF harder, and expose the secret arrangements between the Fed, Treasury and Wall Street insiders. As long as the public believes the banks are solvent, lending through the Federal Reserve can continue to bring massive profits to those financial entities with the most political influence.

At some point, the zombie bank will have to be cut-off, like Bear Sterns or Lehman Brothers. See Matt Taibbi's "Wall Street's Naked Swindle" at Rolling Stone. See Robert Creamer's take on the bloated and parasitic financial industry here.

Bonus Essay: Boomered out

How did we get here? I blame the generational gap for many of our woes. The plunging fiscal position of our government may make Boomer health care expenses and pensions impossible to finance. Few American Boomers have saved anywhere near enough for their retirements. Perhaps harsh economic times are a method of reacquainting Americans with the importance of saving and self-sufficiency.

It's time to re-evaluate where the values of the Baby Boom generation have taken us. Boomers had to have it now: credit became a way of life. Material gratification was elevated to the highest attainment in American society.

Moral relativism rules the Boomer generation's values. "If it feels good, it can't be so bad" goes the Sheryl Crow song. Drug use skyrocketed, along with divorce rates and premarital sex, teenage pregnancies, etc.. Compared to the generation before them, the Boomers have slipped on morals. Ideals concerning class and respect for one another have disappeared along with any sense of shame, replaced by "me first."

The Baby Boomers can't be blamed for where we are today, but one of their chief overriding values--greed--does frame the economic situation we're now in. Without Kenneth Lay' and other Boomers' desire to be rich beyond their dreams, the motivation to commit massive economic crimes simply wouldn't be there. Of course every generation has it villains, but we may see before it passes on one of history's greatest intergenerational thefts.

Of course there are redeeming characteristics to the Boomer generation. Our standard of living has expanded remarkably since the 70s. We have things. Many things.

American attitudes towards race shows how societal norms change between Generations. Boomers were raised in a far more racially intolerant environment. Boomers themselves grew up in a mostly homogenized America in the 50s through the 70s. Their first exposure to injustice was probably the struggle for Civil Rights, with Vietnam of course their defining moment. That war was an example of how society can reject the values of their parents--TImothy Leary's dropping out.

There are plenty of exceptions but it would seem that Americans born after the Boomers are far less sensitive to race, and many are in fact color blind--most don't really notice anothers' race, at least beyond recognizing the superficial differences, and filing them in the subconscious.

Children tend to inherit many of their parent's values so one way to judge the Boomers' values is through their children. Making a study of Boomer children--or Boomerspawn, as I'm prone to think of them--harder is the trend for children to gravitate away from their parents' values. Just like the Greatest Generation before them, the Boomers grew up to be quite the opposite, forgetting perhaps the value of shared sacrifices like those made by their parents through World War 2 and the Great Depression. By this standard, we can reverse-engineer Boomer values--if the young are lazy, the Boomers are hard-working, the young giving, their parents selfish, etc..

Making inter-generational comparisons can be useful. Boomers worked hard, Xers less so. As a small business owner, I tried to model my own work ethic on Boomers and failed. I realized that reaching my goals would close many of life's other interests, ending things I'd always wanted to do. It was a sacrifice I wasn't able to make. I'm probably deluding myself by assuming my business could have been profitable enough anyway.

Working hard is a perfect Boomer behaviors to model, but the present day work ethic is not so much about working for work's sake, but working to own more, to have more, to get more pleasure. With real wages flat for so many working stiffs, it's simply impossible to work enough hours to enjoy life. At least in places around here, it's very hard to get a factory job anymore. America economy is declining. Our social mobility is now less than Europe's. In other words, an American born today is less likely to enjoy a standard of living higher than his parents.

Working hard should deliver to X'ers what the Boomers got: prosperity and a rising standard of living. Then again, if those are the values that made Boomers happy, it's no surprised that the next generation might reject those things. But X'ers may not be victimized not so much by laziness but by devolution of the American economy, at least for the working classes. The capitalist system can be and is often labelled as the culprit. The Kondratieff cycle claims that that corrections every 70 years are inevitable in a system such as ours. Seventy years ago we were in the Great Depression-are we in one now?

Putting work above all other things--exempting perhaps God and family--comes at a price. The more Americans are consumed by their labors, the less free time they have. It's as if Americans are in a perpetual state of "Destination Disease," a condition where happiness must always be deferred.

Having a better standard of life doesn't mean having no free time, or no fun. Even if sacrificing all one's time now might mean even more pleasure later, perhaps much later, or too late.

Americans suffer from the ominous plague of always wanting to be happy, according to Victor Frankl's Man's Search for Meaning. We're even unhappier than we should be because we expect to be happy and can't settle for less. Without accepting the idea that it's all right to be unhappy, Americans seem cursed to always want more. Rather than look at unhappiness as a symptom that something's wrong and needs to be changed, Americans tend to think they can just work harder and everything will get better. Look at the "get'r'done" perception so common among supporters of our Mideast adventures. Don't complain, just work harder and we'll win. The mechanics of how to win, and the nitty gritty can be glazed over by the idea that all we need to be successful is more work.

Demographics have now turned against the notion that work will set us free. Many now have two or more jobs, and don't have the benefits necessary to avert disaster in the event of medical or some other calamity. If work were the panacea, how is it that so many Americans, who work the most of any people in the world, have little to show for it? Like mice on treadmills, Americans no longer seem aware that they're not getting anywhere the faster they run.

Unfortunately, the next generation will be the first that has a lower living standard than their parents, the Boomers. They'll live in an America which won't have enough to go around. As the ranks of the unemployed grow, working harder won't be a way out--many won't be able to work at all.

Depressed yet? Well, I guess if you've made it this far, you understand that understanding the truth is more important than how you feel. Our emotions, happiness and the fear of being unhappy, need to be sacrificed for the goal of learning what we need to know about our world. The ignorance that so many of us know wear so proudly, placated by knowing less despite the danger, comes at a price far worse than the temporary emotional burden associated with "depressing" news.

The time has come for Americans to grow up. We need to shed the ostrich-like preoccupation with pleasure. As we're about to learn, the pursuit of pleasure alone yields very little of substance. We can fill our TVs with endless doses of entertainment lacking any substance. It's like eating an endless diet of bland soup: it may diminish our hunger but we're never truly sated.

We've become easily manipulated, branded targets for mass advertizers, who convert wants into urgent, pressing needs. The pleasure-seeking comes at the price of ignorance, we cannot afford to question why we need the things we do. We just consume. To grant ourselves the pleasures, we must work. We exchange time for pleasure but how much is lasting. At least we accumulate an attic full of things.

Hyper-capitalism and the endless pursuit of things has decimated the planet. The American lifestyle, if emulated worldwide, will bring the planet to an end. The American way of life is simply unsustainable and we must change. To get there, we'll need create new ideals, which are the opposite of self-gratification with its over-emphasis on me, what I need. What American society is not more me, but more us. Too often, we see any effort which doesn't enrich us, or our families, is not worth it. However, we're also generous, giving more to charity per capita than virtually anyone else. So there is hope, hope that we will change. The political system alone can't guarantee change. As I've blogged, we need to make change happen, together, not just for Planet but four ourselves. For our young, so they don't end up rich in things but weak on character.

Americans shy away from political differences, so implementing change will be a challenge and a collective one as well. If we can't agree to disagree, we really won't be able to advance goals that make the American lifestyle about more than accumulating capital, and things.

What of the future we leave behind for our young?

First off, I don't see a coherent set of values being delivered from the Boomers (this would be the latter half of the Boomers, people about 45-55.) The youth of America seem to lack any core defining set of values. In this respect I see one one the greatest dangers we face as the failure to transmit distinctly American values from generations, especially considering the detour they've been on, transiting the long strange trip through the Boomer years.

Boomers' children are now on the scene--I'm surrounded by college students where I live. I observe their behavior every day and I see some troubling trends. Criticizing the youth is probably a common predilection of people moving into middle age like myself. We're grumpy and tend to see the young as incompetent, and confuse youthful inexperience with foolishness, however much the two might overlap.

Judging from fraternities around here--not exactly an archetypical group for study--we've become something of a mob. Sure we can display our feathers on national holidays, and revel in all the abundance that our consumption-oriented lifestyle has given us, but younger people don't seem to have anything that binds them together. For us, the X generation, we had respect for one another's individual identity. That was our model. This may be passed on to the Y generation to the point everyone is trying too hard to be different.

Lacking any way to incalculate value, Americans who come after the Boomers will not know what they've missed. The Greatest Generation--the Boomers' parents--is dying off and few young people will know what our society was like during that period. The shared values and perseverance that saved the world from fascism have been lost, perhaps forever. American society has become about me, a truth we seldom admit.

I've heard that modeling is the most effective method for teaching values, and providing a leadership example. The changing role of the Presidency in American society offers a window on the lack of character at the top, a place where we need it the most and the absence of character is most obvious.

Sadly, younger Americans have known Bush as their model of character. Enough has been said about our recently departed leader. Before him, Clinton, a man who lied publicly to hide a sexual relationship. Another beef against Clinton was his raiding the Social Security Trust Fund to balance the budget.

The idea that we are either with him or against him has taken hold. Partisan divisions have grown to the point the President's ability to lead our nation has been limited. The partisan divide expanded during Bush the Younger's reign. In an about-face, opposition to Bush morphed into support for Obama, which appears to be plagued by town hall screamers, birthers, and other extremists. Now as Obama waffles on domestic surveillance, torture, and other issues vital to advocates of less intrusive government, he appears to be creating a new divide.

Can we blame the dilapidated state of leadership purely on the President? No. At a certain point we need to concede the fact that maybe these Boomer Presidents have all screwed our country up. Like both his predecessors, Obama is a Boomer, though a young one.

In this media age, we've elevated the President into some kind of all-powerful Emperor the media coverage a sort of Truman Show covering every aspect of the Great Leader's life, no matter how mundane. Obama's very much a product of the media age, one where managing perception in the media has been elevated to an art form. elevated rhetoric way over reality. Say one thing to one crowd one day, another the next. Promise the world when it pleases the audience, regardless of the ability to deliver on the promise. Typical cheesy politician stuff. Obama's just elevated it to a new level of sleaze, disappointing so many who had faith in him.

The President is supposed to be a role model. From these examples, and the way, how can the young know what honor is? Who is it that will teach them? They will learn from whom, their parents?

TV plays a big role in changing societal attitudes. Perhaps TV has become a surrogate parent, except instead of Sesame Street we have South Park. Many episodes carry a positive theme--tolerance, sustainability, honesty, etc.. But the way the show delivers its message is very crude, appealing not to the merits of behaving well but rather turning misbehavior into a carnival of oddities and laughter, the best relief.

Crude homosexual themes run through South Park, exposing South Park children to adult lifestyles in a way previous generations would consider unwholesome. I guess the stigma and prejudices that prevail in our society towards BGL&T people will fall, if enough young people grow indifferent to what is done. In its distinct way, South Park blends humor with the taboo details, then smacks the viewer with the openness of its depictions of the gay lifestyle. Perversely, South Park spews a constant flow of flagrant cussing, including every manner of discrimination used in the adult world, one which they will inevitably enter. When today's young grow up, I guess we'll be better able to judge tolerance for sexual orientation. (Scarily, I just realized that South Park kids have grown up, and that the example for many of them has been no one other than George W. Bush!)

Though not made for children, I think many Americans wouldn't be troubled by their older children watching the show. Younger kids tend to prefer less adult shows, with subject matter far easier to grasp, so in many respects little has changed except the amount of TV viewing and the raw volume of data/content/input/choices from the days of Sesame Street, ABC's After School Special, and Saturday morning (only) cartoons.

DNA Reality Check

I'll admit this is a topic on which I know next to nothing, so this is pure speculation based on wild conjecture.

Interesting indeed it would be if our DNA reprograms itself between generations, reflecting adjustments in attitudes in society over time. Parents fight for the right--of blacks to equality, for instance--and their children end up embracing a world far more tolerant of racial differences a generation later. Are the Boomers more color-blind than their parents? Yes. But Americans of my generation, the Xers, have made race immaterial to the point electing an African-American president isn't a big deal, despite what it says about how race issues have advanced.

Well, I guess if my generation were to stomp endlessly for something like Womens' Rights, /Bi-/Gay/Lesbian/Transgender Rights, get them, it might be a whole 'nother generation before those advancements reflect in the way Americans treat each other. Whatever the science, it's clear societal values do change more slowly than the laws, but they do change.

The study of genomics has been making headlines recently. Apparently if a parent abused their bodies in some way, the DNA inherited by descendants might be damaged. Fascinating concept: a sort of cross-generational curse passed on parent to child, the body's revenge for its abuse. I guess this is how DNA changes itself, possibly to protect the next generation from likely over-indulgences or some such thing. I've heard that Jews have the lowest rate of alcoholism of any peoples, and it's true alcohol has been a prominent feature in Jewish society since its earliest traceable origins. On the contrary, Scots and Irish weren't exposed to alcohol until much later, suggesting that we're more likely to abuse it (having not been hardwired like Jews.)

Maybe if your parent was a heroin addict, your DNA may make your body is much more likely to reject it, perhaps making you convulse upon ingestion. Or perhaps it's the other way--heroin addiction makes you more prone to addiction. (Of course there'd be some statistical bias being that former addicts are more likely to expose their children to similar underlying conditions that are know to increase the risk of addiction.) Or perhaps not in one generation but many, the tolerance for heroin might go up to the point the drug just doesn't satisfy.

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Hyper-capitalism pushes Earth to edge

[Editors note: I'm going to post this article over at my enviro-blog, which I'm only now introducing here for the first time. My original intent was to separate the political from the environment, but there's simply too much common ground between the subjects, as I hope this article demonstrates.]

What kind of world are we going to leave our children? Even if you think no global warming is happening--a state of denial that must be progressively harder to live with--you can't deny something is afoot. And it's not just heating--it's cooling, flooding, raining, hailing, blowing...one extreme to another.

Rising levels of carbon monoxide, alongside methane escaping from arctic areas, has led to weather intensification. Under the new global warming paradigm, rather than hotter temperatures what we have is increased storm speed, longer and worse droughts, and extensive flash flooding caused by more rain coming down faster or harder.

Our oceans are in big trouble. Mercury levels are rising in fish, a top source of food. As more sulfur oxide enters the ocean from coal-fired emissions, the level of acidity has risen and is actually imperiling phytoplankton, the source of sustenance for krill and other tiny creatures that form the bottom of the food chain in the oceans.

The biggest problem is that we don't know what the future has in store for us. Like some horror film, we might know that something bad will soon happen but somehow can't seem to communicate that to the poor unsuspecting sap playing the role of victim.

We will need to feed more than 8 billion people here on Earth. The challenges associated with achieving that goal grow more dire and urgent with time. Already disruptions in monsoon and tropical airflows have become more pronounced, with dire consequences for those dependent on local agricultural production.

Often, it's the best of intentions that cause unforeseen consequences. In trying to save ourselves, we might end up doing as much harm as good.Recently, in a government-mandated move away from transfats, much tropical forest has been lost to palm oil plantations. Tropical forests compromise only 2% of the earth's surface area but convert more carbon monoxide to oxygen than any other terrain, the source of 50% of the world's natural reduction rising CO2.

As we get more efficient at extracting resources, species risk becoming extinct, like of overfished stocks of tuna. The stress upon nature will at some point be relieved, but with so many people's looking to an American-style hyper-capitalism as the model, we can only imagine the environmental destruction brought about by relentless consumption will continue. Must we wait 'til there's a Walmart on every block before we realize we stand to kill off the environment with our lifestyle?

It's not enough that we let our man-made machines continue to belch their Mordor-like stream of emissions into the atmosphere, gradually poisoning us and our children. And it's not that we haven't improved. But we're simply NOT DOING ENOUGH, FAST ENOUGH.

To make matters worst, our companies practice ruthless exploitation of the world's remaining natural resources. With the favoritism only money can buy, these entities ravage Mother Nature--they have no souls neither any ability to imagine or dream of a future where children run under skies free of chem-trails and mercury from coal-fired coal plants.

Big Agribusinesses, frequently using Genetically Modified Organisms (GMOs), have contaminated the food chain. Monsanto forces impoverished farmers in places like India to sign seed-buying contracts. Rare indigenous varieties of corn in Mexico have been undercut by global conglomerates as Mexican agricultural workers displaced by free but hardly fair, post-NAFTA prices go north to work in Tyson and Smithfield's sweat shops.

A Smithfield facility near Veracruz is suspected as the source of the so-called swine flu. Apparently flies bit a boy who lived near a huge pool of pig waste, made possible by Mexico's lax and bribe-ridden enforcement of environmental standards.

It should come as no surprise Smithfield was good friends with the Bush administration, and received preferential treatment when ICE raided their facility in North Carolina, removing suspected union organizers alongside other undocumented workers, then separating them from children waiting for them to get back from work. Instead they were incarcerated in preparation for deportation.

There's a large degree of social injustice in the way many multinational conglomerates operate. It's as if the operations, particularly in the Third World, are designed to dehumanize the people, and devastate indigenous peoples, who rely on the natural balance to sustain their traditional lifestyles.

Aquifers are systematically being privatized. As a result public access to drinkable water is being limited.

Water could be the next oil. Corporations could seek to cause any amount of environmental damage in the name of securing it, especially as supplies start to dwindle. We are seeing what could be the start of multiple resource wars.

A Russian campaign in Georgia could launched at any moment; through Georgia goes a strategic pipeline from the Caspian Sea (the unofficial holy grail of Central Asian oil.)

The US vies for strategic influence and power in Central Asia in what is called the Great Game. Russia would like to see the Georgian pipeline interrupted, as it is currently the only nation between the oil reserves and Western Europe. The Georgian pipeline would provide an alternate route.

We may be entering a sort of Last Stampede for the world's last, dwindling resources fought between giant corporate entities and the armed forces that represent them.

Resource wars are a popular theme at sites like Alex Jones' prisonplanet. The phrase "resource wars" has a corporate connotation to it. The strategy is corporatism, the modern equivalent of mercantilism as seen during Colonial times. Resource acquisition becomes the primary motivator for foreign policy. Projecting force must be bent around the goal of the investing class and corporations, between whom the ties are strong.

Rather than have government control our policies, corporate needs dictate where we must go to compete strategically with rivals like Russia and especially China. I've heard it said that Iraq may have been as much a war to keep out the Chinese, or the French for that matter.

Can we trust the government to protect us from swine flu? Millions of doses of vaccine have been made without a thorough screening of their potential side effects; if administered in large vials, these doses may contain Thimersol or ethylmercury as a preservative. are thought to contain Squalene--a chemical soup thought to have been responsible for permanent disability granted by the Department of Veteran's Affairs to over half of the veterans from that War.

We know that the last major vaccination program for Swine Flu in 1976--the government is careful to tell us this one is H1N1, so it's different--caused major health problems like Guillain-Barre's syndrome for a substantial number of vaccine recipients. See this article on that fiasco.

The US government can't be expected to know what will happen, but preparations should have been made. We've become a country of whiners who want their lifestyles granted to them in perpetuity, without having to worry about things like bird flu.

It's a political climate that relies on fear. Except it isn't fear about what will happen 10, 20 or 50 years down the line. All this hysteria is borne on the fixation that we, here and now, will not get that to which we are entitled. Deep down inside, most of us look only to our own needs and wants, and look at the environment as a never-ending source of bounty, no matter what we might collectively do to it. The leap in shared human consciousness to a level where we can simply coexist is simply too great a step from the fear-riddled existence we live.

I guess life presents too many challenges for all but a few to see the need to change before it is too late. Then of course resource acquisition becomes an end to itself, assuring ongoing environmental devastation as the have's take from Nature and the have-nots, who are too politically emaciated to protect themselves from the resource exploiters and escape permanent poverty.

The top 1% of American income-producers now constitute almost half of the total income in the US. Social mobility has become completely stagnant. Of course there's a link between the rising disparity of incomes to the congealing of political power in the hands of fewer people. The rich and the corporations they own dictate environmental policy. Meanwhile the ranks of the poor swell, forced to contend with whatever scraps fall from the master's table.


Unrepentant, mankind isn't only changing his ways, he's accelerating the pace of destruction. Probably the worst example is how petroleum producers are bulldozing huge tracts of Alberta to provide dirty oil on a massive tar sands project. The monetary costs of devastation aren't being borne by the destroyers, but rather to everyone who becomes dependent on cheap gas.

The more efficient oil producers are at getting, refining, and producing their product, the less incentive there is for consumers to change. We've become hooked as a drug addict would. If the oil "dealer" were to give us our product too expensively, we might look elsewhere, but as long as it comes plentiful and cheap, we ignore our constant use.

Oil use hasn't been increasing in the US. The recession might not go on forever though. And when the economy does climb out of its doldrums, it might do so too fast, like a scuba diver surfacing too quickly. This overheating could see the economy transition from recession to inflation in just a few months.

The whole boom and bust economic cycle seems to be at the heart of our problem. If cheap, oil and alternative energy development just isn't as high a priority for government. (Obama did manage to fund a major investment in alternative energy research, though.)

We may still be overly sensitive to short-term prices, as the $147 oil peak showed us a few years ago. Just a few miles from me in the Midwest a full-fledged ethanol plants rose up, then closed a short time later as oil prices collapsed.

Do we want a energy policy going from one extreme to another? I thought the whole purpose of government was to help secure the energy future of its citizens. Judging from the aftereffects of a run on natural gas development, where Exxon Mobil was hit with a massive fine for poisoning people with natural gas exploration and drilling chemicals. [I've followed environmental issues in the West on my enviro-blog, following the risks of uranium mine tailings in the Colorado river basin in my article "Nuclear Power Unsafe in Any Dose" and the downside of natural gas exploration, which took off late in the Bush Presidency.]

We--meaning not only the US, but the world--need to move down a path that's unsustainable. That's what sustainability is all about--not destroying the source of our sustenance. Rather than think like animals--individual, greedy, and aware of the group only as a secondary contraction, we must think and move as a group.

We're not there yet. The gap between theory and reality is still too large. Too many people are unaware how the collective sum of our actions is directly affects them. And too little accountability is being foisted on the major sources of pollution, who tend more often than not to be large corporations involved in resource exploitation or energy production.

Our enforcement of environmental laws is too ineffective to keep polluters from polluting. Government can hardly lead if it can't back up what it's saying with action. Yes, support for research into alternative sources of energy can move us in a positive direction. But no, we also need a coherent plan to getting us off the oil and CO2 emissions associated with fossil fuels.

The lack of a coherent conservation strategy also reveals how vested interests shape our government's energy policy. It's like the unsuccessful Drug War: we can't stop the importation if we don't tackle demand. Demand is the source of supply.

In the energy field, no conservation says that more is better, that demand reduction isn't a priority at all, and that we can simply produce more, which seems to be the rote response for every consumer demand since the dawn of the Industrial Age.

On top of the emissions created by combustion, we use huge quantities of energy to extract fossil fuels means the more energy produced, the more carbon dioxide. And even ethanol made from corn requires lots of fossil fuels, a good proportion imported petroleum, as well as natural gas-based fertilizers and fuel for running tractors, etc.

The combustion engine is taking humankind down a path towards its own destruction or to be more accurate, the emissions from oil-burning combustion engines are taking us to envrio-hell.

The gas byproducts don't need to contain as much CO2 as they do. We can simply use fuels that don't contain produce CO2 when they combust. Burning algae and bio-fuels may be the way to go.

Here the environment dictates that we do it right. We can't replace petroleum with cleaner-burning fuels--at some point we will need to eliminate fuels that cause any negative environmental consequences.

Once we've reduced mankind's carbon footprint, we can focus on to the next problem: how to move away from the combustion engine, to newer, lower-emitting, more efficient sources of power. Some might like nuclear, but it's extraction, and waste disposal costs are simply too big as I've explained in the past.

Why not shoot higher--towards something safer, with zero or virtually zero waste? Might not be technologically up to the task...yet. But if we can anticipate something, it is this: if we do nothing, our children will face a nightmarish world very much of our making.