Thursday, December 29, 2011

Where We Can Go (3 of 3)

Read Part 1 and Part 2 first

What would an alternative look like? There is a great deal to be optimistic about once we discard our ideological blinders and use the tools at our disposal. This is not to suggest we don't face major challenges, we do.  Two out of every five calories mankind consumes are the product of nitrogen produced from fossil oil: this will have to change as the finite resource on which we are in fact feeding will eventually be depleted. While it isn't yet clear what the consequences of anthropogenic global climate change will be, it is clear the climate is changing with unending consequences: processes set in motion by our technologies are unpredictable and irreversible. Sustained adaptation, continuous change, will be the only viable response to continuous environmental evolution.

While the scale of these problems is enormous, their speed leaves them well within our ability to cope. These forces we have set in motion will affect everything we do henceforth. However they will not determine what we ultimately do. We simply know too much as a species to be materially constrained: as we organize ourselves to benefit from the oceanic reserve of knowledge embedded in the minds of seven billion reproducing souls it is pure fatalism to imagine we can't create opportunities from the challenges into which the future will inevitably crystallize.  And the history of civilization is the history of ever growing organizational systems that aggregate ever larger groups of people into effective, prosperous, healthier and longer living communities driven there by changing conditions.

Saturday, December 3, 2011

Where We Are (2 of 3)

Read Part 1 first 

The cash piles and mountains of Treasuries sitting idly or nearly so on Western investors' balance sheets are the mirror image of a demand collapse: they are two ways of seeing the same thing.  If I recall correctly it was A. C. Pigou who said "economics is the art of making simple things complicated".  With regard to Macro-Economics, the efforts of the last two generations of PHDs has proven his point by their almost universal failure to predict the implosion of the illusory Great Moderation in a monumental financial collapse.  The so called Moderation has been revealed as the Class-Cold War it actually was. In this war, pure propaganda against all the available evidence of real outcomes, well funded by corporate managements and corporate media, has cloud and debased popular understanding in a miasma of obfuscatory complexity. While Americans have an accurate sense that the US Government no longer works for them, they have been deliberately deceived as to who it does in fact work for while for forty years it lined corporate bottom lines with productivity gains diverted from working Americans.

During the Carter Administration, while Milton Friedman and Alan Greenspan were whispering in the Presidents ear, the Supreme Court determined in Buckley vs Valeo that paying politicians bribes was a Constitutionally protected form of political speech.  This metonymy began the process of converting what had been a corrupt political forum into a spotlessly efficient political marketplace. While successive court cases have codified the structure of regulation in this market in detail, this efficiency has come at the cost of divorcing politically viable ideas from popular needs. As the upward wealth redistribution of Neo-Liberalism advanced, the political marketplace, like all market places, lost touch with poverty and real human need to focus ever more efficiently on ideas that could be exchanged for cash: it went where the money is.

Monday, November 28, 2011

How We Got Here (1 of 3)

The architects of our post war civilization suffered greatly for their knowledge.  Having watched Europe stumble blind into disaster in 1914, blundering on to genocide thirty years latter these policy makers earned in blood and toil a terrible respect for the Vulcan power inherent in the industrial systems they managed, power for both good and evil that all too easily grinds individuals to dust.  Even before the outcome was clear, in the thick of World War II these humanists began to lay the groundwork for what would become the most successful framework of political economy in human history, a framework that would take the world from 2.5 to 7 billion souls who live both longer and better.

The burden of such success is pressure each of us now bears to exceed the standards set by our predecessors. Occasionally epochs consume their paradigm and having done so raise this pressure logarithmically. When success outstrips the basic conditions that spawn it and progress stalls before what is old has finally collapsed, with the new defenseless in utero, the resulting hiatus is a limbo where both grand vision and epic execution are required just to maintain the achievements of the expiring era. To even imagine a future, something fundamentally new must be conjured into being.  This is what we are living through.  As the Homogenocene extinguishes species at a pace to rival the Cretaceous asteroid impact, our voiceless dominions in other genomes are expressing their disapproval by simply vanishing.  The narcissistic cacophony of our politics drowns their growing silence as we shout down even the distressed humanity who bear in  hardship the shortcomings of our aging and overtaxed systems at who's margins it is increasingly difficult even for people to survive.

Sunday, November 20, 2011

Communism vs Capitalism

Today's Izvestia includes a story by Jeff Sommer detailing the incipient schism within The Party between the Capitalist business class Bosses and their Communist financial overlords in the Politburo.  While beginning with an account of the contents of the Party's official "Beige Book ", Mr. Sommer has apparently got his hands on a copy of the Party Executive Committee secret "Beige Book" made only available to full members of the Executive Committee.

While Sommer is careful to present the differences between the public position of the Party in the official report and those of the secret version as primarily one of tone, Samizdat readers will recognize key phrases as indicating the possibility of a more significant political breach within the Politburo.  The article begins with summaries from the official report derived from statistics provided by local Party Bosses in required "Three Month Plan" filings.  However the executive report includes an interpretation of these statistics by local Bosses diametrically at odds with the official Four Year Plan interpretation.

Thursday, August 25, 2011

Aurora of Empire Part 2

For fifteen hundred years from the decline of Rome until London in 1800 no civilization in the western world supported a city of a million souls.  While across this era global population continued its steady upward crawl, it did so by populating increasingly marginal parts of the planet, adapting and improving them to support forms of living mostly familiar from antiquity.  When the improved technology of early industrialization began to transform the possibilities of urbanism, drawing ever-greater portions of society into cites as it did, the pressures of density began the systematic transformation of every aspect of the human habitat. 

Cities and the increasingly remote agricultural systems on which they depend became ever more man made artifacts. In the last 200 years we have remade our habitat to conscious tastes without regard to, in fact in near total ignorance of ancient genetic adaptations we physically embody for an organic habitat we have left behind and are now actively extinguishing.  The demographic pressure driving this destruction has both aesthetic and ethical implications and before returning to aesthetics is Part 3, a digression into ethics is warranted because very real ethical constraints explain much of why the complexity of the modern world is so confounding .

Friday, August 5, 2011

The National Asset Base

Is this really the best Washington can do? It is pathetic.  So hopelessly lost in the mythology of neo-classical economics is our cult of Mammon in DC that they can not see past their own greed, what they see as their greatest virtue.  The US is the fiscally sovereign issuer of a floating fiat currency.  This means it can afford whatever it wants that can be purchased in the dollar economy any time it wants.  This includes Social Security, unemployment benefits, infrastructure, education, banker bailouts, multiple wars, etc, anything that is available to purchase that can be purchased with dollars. 

This also means that the very conceptualization of “the national debt” is an archaic relic of the expired gold standard era.  In that bygone world, for the government to spend beyond tax receipts it was in fact required to borrow in the international market from other hoarders of gold, and as it did so interest rates went up because those external creditors got to set the rate at which they would lend.  

Monday, July 25, 2011

The Platonic Hell of our Commercial Guardians

It is a global clusterfuck of looting at the moment.  Power and money are confused to the point that ideas like corruption and ethics are simply no longer relevant. A self serving global elite has captured the levers of all of the worlds major currency systems and is looting on every continent on an epic scale.  The problems begin with the United States, the monopoly issuer of a floating fiat currency that is pretending it is on the gold standard to justify as necessary a massive upward redistribution of wealth.  

This policy, and a similar one at the ECB leaves open the door of currency manipulation on a global scale by entities with the economic power to execute.  The Chinese have to buy bonds from both the EU and the US in order to force an export market by depressing the value of the Yuan which in turn prevents the Chinese from consuming and thus exports demand to debt selling countries.  China is able to do this because both western systems pretend they are constrained in some unexplained manner from simply creating the money their economies need rather than selling debt to, among others, the Chinese.

The Great Leap Forward

The capitalist "Great Leap Forward", of which we are on the brink, like its communist predecessor is an attempt to impose on reality an ideological system's claims to universal truth, regardless of the underlying reality. The Maoist conceptions of "collectivization" and "industrialization", with perfect knowledge of how humans will behave in the communist utopia to come, were uninterested in the realities of how millions and millions of Chinese actually got their daily rations. Somewhere between 20 and 50 million people had to die to kill this vision.
The capitalist conception of "efficient markets" and "rational expectations", with perfect knowledge of how humans will behave in the "free market" utopia upon who's brink we teeter, are uninterested in the realities of how millions and millions of Americans and Europeans get their daily rations. So committed to their utopia are mainstream economists that  they take it upon themselves to scold the reality based community for it's sinful insistence on reality.
Shut down the government, cut off social security, medicare, medicaid, food stamps and other income supports. These all offend the free market utopia. How many will need to suffer how much to prove the insanity?

Saturday, June 25, 2011

The Marginal Propensity to Hoard

Dick Cheney said "deficits don't matter", and for his purposes that was true.   Speaking as he was of the budget deficits of the United States, monopoly issuer of a floating fiat currency, he was correct if he meant these deficits could never threaten the solvency of the US government. For Cheney this meant it was OK to spend prodigious sums that would go mostly to management bonuses and salaries at companies contracting to fight America's wars for it, companies with which he was deeply affiliated.  Cheney meant that since the deficit could not make the US insolvent, there was no problem with it making him and his friends rich.  

On a floating fiat currency, so long as the issuer of the currency, in our case the US government, denominates its debts solely in that currency, as ours does, it can never be made insolvent by those debts.  This is a simple fact of fiat currencies, money is created whenever the government spends and extinguished whenever it collects taxes.  While this does not mean that deficits are unimportant, it certainly means they do not threaten the solvency of the government.  Deficits are an outcome of an hysteresis in economics that results from the inextricability of human nature from the object of the discipline.  

Monday, June 6, 2011

Aurora of Empire

Part 1

The first great drama of New York City skyline was the rise of the piers for the Brooklyn Bridge. Born in the ashes of America's great internecine conflagration, alignments forged in war between commerce and politics, between laborers and visionaries and between capital and human creativity were set loose in the sprawling and expanding city. Grand projects of a scale and ambition never before conceived in the New World were dreamed of and then made real. Imagined half way between the dawn of industrialization and the present, the Brooklyn Bridge, and particularly it's piers, can be read as both ancient and contemporary. They stand at the dawn of American Empire and are the harbinger of full scale American industrialization towering over a vanishing pastoral to heights even steeples never dreamed of.

The gilded age, parallel to which the piers arose, was at its' end an era still deeply rooted in the ancient traditions of European civilization. Although the sinews of industrialization were insinuating themselves into every aspect of the new, between the Civil War and the First World War most of the advances in industrial technology were sublimated into infrastructure which unlike the Brooklyn Bridge remained invisible. While H. H. Richardson's buildings had been bearing wall masonry, Charles McKim's were mostly steel frames, parged with terracotta and only veneered with stone. Privy gave way to sewer, stairs to elevators and gas light gave way to electric.

Monday, March 7, 2011

The System Investigates Itself

Boardman Robinson, 1921.
Published in The Liberator
March 19, 1921

Saturday, March 5, 2011

Suckers & Kochs

By personalizing the issue, the focus on the Koch brothers involvement in right wing politics confuses the causality of the endemic corruption in our system. The Koch's, among others, are an inevitable result of the Supreme Court's metonymy confusing a signifier, money, for speech, one of the infinite number of things money can represent that also happens to be a constitutionally protected right of U. S. citizens.

Money is a universal signifier of abstract value, a yardstick by which all relative economic values can be compared. It is created through a printing monopoly by an issuing government, in our case the Federal Treasury. Speech on the other hand, most narrowly, is vocalizations by individual humans. More generally and as constitutionally conceived, it is the lined up sequences of words with their meanings individual citizens speak or write with political purpose.