The horizon is not so far as we can see, but as far as we can imagine

Month: February 2012

On Stratfor

Wikileaks has dumped a bunch of internal Stratfor documents, which they presumably received from Anonymous.  Years ago I used to read Stratfor’s briefs.  After a while I stopped, because their economic analysis was absolutely awful, straight up cookie cutter consensus macro, which missed the important events.  Since Stratfor’s briefs were supposed to give insight into what was going to happen, and since they were wrong about something so important, I decided they weren’t worth reading except as a gloss on what a certain part of the foreign policy establishment was thinking (the guys who think they’re cowboys.)

I think that Michael Brenner’a appraisal of Stratfor themselves, that they’re a immature, unprofessional and hustlers is true.  The incredulity, reading them, is “people pay for this?”

Which leads to the question of how much of worth there is in the files.  The main problem isn’t whether the files are really from Stratfor, I believe they are, the problem is that Stratfor seems somewhat clueless.  So, for example, if true, that Russia and Israel sold out those who bought military equipment from them is fascinating and important:

According to the leaked document, Israel gave Russia the “data link codes” for unmanned aerial vehicles that the Jewish state sold to Georgia, and in return, Russia gave Israel the codes for Tor-M1 missile defense systems that Russia sold Iran.

I’m inclined to believe it, but really, who knows.  I should add that countries who are serious about their defence, really should make their own equipment if they can.

Justified Pessimism

is not, in fact, pressimism.  It is realism.

I find the “be happy” crowd odd.  We have, in the past few years, seen millions of Americans and Europeans impoverished and lose their homes.  We are seeing a wave of austerity in the 1st world which has and will impoverish many millions more.  In the last quarter of 2011, Greece was on track for -7% annualized GDP growth.  Civil liberties are under assault throughout the world, and the surveillance state is tightening its grasp.  In the forseeable future, and one which is, now, almost unstoppable, we can expect to lose hundreds of millions of lives to climate change, and that, frankly, is the optimistic scenario, one which is almost certain not to occur.  A billion is a good middling number, and it could easily go much higher.  Many climate scientists believe we are beyond the point of no return.

None of what has happened, or which will happen, couldn’t have been stopped.  For decades, with increasing stridency, prophets have warned of what would happen.  Those prophets, in the grand Cassandric tradition, were ignored.

The left, virtually the world around, with the exception of Latin America, is in disarray and retreat, suffering defeat after defeat, from economic populist issues to civil liberties issues (other than gay rights).  The forces of reaction, once aiming only at the edifices of mid 20th century liberalism, are now aiming to roll back the twentieth century en-masse, getting rid of socialized medicine (under assault even in England), child labor laws, reinstituting debtors prisons and celebrating inequality which exceeds even that of the gilded age.  Gays may gain the right to marry, women may keep the franchise (and be allowed to vote between parties who will do the same thing at varying paces), but we will all be impoverished, largely powerless and watched 24 hours a day together.

Dystopian?  Apocalyptic?  Perhaps.  But also the current trendline.  Now, trendlines can always change.  Indeed, trendlines do always change.  This will not last, this era will come to an end.  The questions are when, how, and what will replace it.

Living, then, in a period where many are still prosperous, but with the first storm clouds scudding over the horizon, and the first casualties falling, I find it odd to continually have to deal with the “be happy”, “optimism is superior” crowd.  I find neither optimism nor pessimism interesting.  What is interesting and what is needed is realism.

Realistically, what is going to happen?  Why has what happened, happened?  Why are events unfolding as they have?  Part of the reason is the corruption of discourse: part of the reason is the happy talk.  Hey, your life is good, everything’s fine, so be happy.  Go about your life oblivious to what has happened, is happening and will happen.

I’m not interested in happy talk.  Never have been.  I am not interested in “reasons to be optimistic” or “reasons to be pessimistic”.  I am interested in the most likely scenarios and questions of what can be done to change the likely course of event so fewer people suffer and die.

I will note another thing.  My failures of prediction, and I now have years of data, have almost all been on the upside.  I make mistakes when I pull my punches.  People who think I’m a pessimist are fools.  My record indicates the opposite, if I have a bias, it is towards optimism, to things not becoming as bad as they have.  I think this is because I keep expecting people to protect their own future interests (not very future, often just a couple years) better than they do.  I forget just how completely depraved our elites are, and how weak and debased the populations have become by the great complacency.  Most who came of age in the post-war period in the developed world, who did not have to fight for every scrap, simply are not capable of truly believing in disaster or catastrophe, or of forestalling it even if they do.

Finally, I have nothing but contempt for most of the current generation of intellectuals, thinkers, and members of any elite.  They have demonstrably failed their job, if their job is conceived as serving the truth and looking after the common weal: of telling people what they need to hear and finding a way to make them understand.  Some have fought the yeoman’s good fight, and lost and there is honor in that, but most did not even fight.  Instead the spewed lies and reaped the rewards.  They were complicit with the political and economic elites, they took their share of the loot, a petty pence, and wrote what would please their masters.  They will be exorciated by history, but in the current day, they have their silver gripped firmly in their hands, as they lope behind and before their masters, making the world safe for oligarchy, poverty and the new despotism of the modern security state.

They deserve no respect, and I will give them none.  Their reward is the false flattery of their peers and the tarnished silver of their masters, the true gold of intellectual integrity or the gold of compassion and care for their fellows, these will be denied them.

And I watch the scudding storm clouds, and I feel the wind whip around me and it is to these signs and others I attend, not the fools crying “life is good!  It’ll be ok!”

No, it will not be ok.

Sewage

Why is Francis Fukuyama considered an intellectual?  Why is he considered an intellectual worth of praise, his opinion important?

I ask this not because I don’t know the answer, I do, and I’ll get to it, but because so many people seem to believe he is an intellectual.

Let me quote Francis Fukuyama himself, from “The End of History” for no words I could write could condemn him as well as his own:

What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.

Have more stupid words every been written?  Probably, but these are certainly in contention.  The stupidity was evident at the time (I heard the title, in my twenties, and knew immediately the author was a high functioning liar or a high functioning moron), and the piece should have been published only as a way of letting him drive a stake through his own heart, at which point he would slink of into well deserved obscurity, being sure to never show his face in learned society ever again, to spare himself the titters, coughs and awkward “oh, umm, hello”s.

Our system actively promotes people who will lie in the right way without even having to be told to and actively gets rid of anyone who is not a useful idiot – by which I mean anyone who does not tell the lies useful to the powers that be.  (Well, they can tell the occasional truth, on the rare occasion when it is useful).

Still, Fukuyama at least made it look good.  The newer generation, on both “left” and right barely even goes through the motions.

The Musical Chairs Economy

Ok, for some time, folks have been after me for a formal economics post.  What’s going to happen in the future in the US?

The answer, for around the next 5 to 6 years, maybe longer, is the musical chairs economy.  Let’s lay out the basics.

What has happened is that the general circle of prosperity has been reduced.  Less people now live in the “good” US economy.  When they drop out of that economy they also use a lot less oil and gas, and even electricity.

Since the US can no longer sell nearly as much paper in exchange for real resources and goods, the US now has to sell something the rest of the world wants.  One part of that is intellectual property, which is why you will continue to see stricter and stricter IP laws.  The other part of that is hydrocarbons.  The world is still hungry for oil.  And if Americans use less of it, and if the US moves massively to fracking of unconventional oil (which it is) then the US can, again, become an oil exporter.  (Remember, for much of the 20th century the US exported oil.)

This plan includes impoverishing large numbers of Americans, since the reduction in oil use is not primarily being produced by providing the same services with less energy, but that is not an issue to those who run America’s industry or politics, since they do not, despite rhetoric, care about the welfare of ordinary Americans.

This game, in a lesser form, has been going on for a long time.  In the older version, going on since at least 1980 or so) production was offshored or outsourced, workers laid off and they never found good jobs again.  Industries of the past were offshored, but industries of the future were mostly not created (the internet boom being the last large-scale industry creation episode).  When they were created, they “went to scale” in other countries–once how to produce was understood, the production was done overseas, where it was cheaper, not just in wages but in terms of regulations (for example, batteries are made in China by hand.  Batteries, of course, are mostly acid containers.)

The game has now moved into a more virulent stage.  During the 2000’s various economists and financial gurus used to laugh that the fools overseas were giving America real goods and resources in exchange for worthless paper.  They thought they had found a free lunch, and many of them were right, form themselves, individually (who cares about fellow Americans?  If they can’t make too bad for them.)

So what happens now is a recovery of sorts.  Life is not so bad for the upper middle class and the upper class (I don’t include the oligarchs in the upper class, they are the ruling class, the upper class are the lawyers, doctors, judges, county pols, mid-level real-estate developers and so on.)  Since the majority of the population who wants a job can find one, who cares if millions of Americans are unemployed?  They are not economically functional in this economy, it is better for them to just go away, so that oil can be sold overseas.

Bear in mind that the short history of American economics in the post-war period can be summed up as “suburbanization.”  Wave after wave of developments, and the money which were made from them.  Suburbanization, by its very nature, requires gasoline, because it requires cars.  Suburbs do not, and probably cannot, have rapid transit.  They are also not economically self-sufficient, generally deliberately (the horror of some one working from home causes vapors amongst developers and suburban homeowners, it seems.)

Peak oil may or may not be here, but it’s pretty clear that peak cheap-oil has passed.  The American lifestyle of the 20th century, which has not been fundamentally changed by the internet and assorted telecom gadgets, is oil based.

So, there will be recessions and non-recessions (amidst what is an ongoing long Depression).  And in each recession those who fail to grab a chair will be cast out into the dispossessed.  Those who keep their chairs will be allowed to keep some facsimile of the “American lifestyle”.

The people who run the American economy and political system will continue along these lines so long as it continues to bring them money or power.  As noted, they do not have fellow feeling for other Americans, they believe they earned everything they have, and that if someone else isn’t prosperous, it’s because they didn’t earn it.  Such useless eaters are a drag on society.

I emphasize the thought process, which some will find polemical, because it is at the heart of the problem.  It is the most important part of the post.  There are other options, from the managed decline favored by environmental purists through to various types of smart growth.  They are not being pursued and will not be pursued because they are more work with less certainty of who will reap the profits and power than simply managing the current decline, and culling the herd from time to time, as necessary.

“The powerful do as they will, the weak suffer what they must.”

As long as you, the people, believe you are weak, you will suffer what you must.

Next Steps for Greeks after the Austerity Bill (AKA: Hope for Greece, at last)

Ok, another austerity package just passed.  That’s the bad news, but amidst the bad news there is some good news.  More than 40 MPs were expelled from the PASOK and ND parties, two from LAOS—those MPs need to form a new, explicitly anti-austerity, pro-default government.  Odds are good they will win the next election, and can form the new government.

No deals made by a sovereign are unrevocable.  Whatever this government is doing, has done and will do, can be undone by a new government.

Oh, and Greek rioters – if you’re going to riot and burn, burn down the houses of the MPs and bankers, the banks and their offices (I see some of the right places did get firebombed.)

Greece can be fixed, if the Greeks are willing to do what it takes, both in terms of electing a new government and that government doing the right things.  Those things will be unorthodox and painful, but no more painful than austerity, and unlike austerity, they will lead to a better economy, and based on experience elsewhere, probably within two or three years of doing the right thing, with some relief being felt within 6 months.

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