"Raymond Bykes, Western Union No. 23, Norfolk Va. Said he was fourteen. Works until after one a.m. every night. He is precocious and not a little "tough." Has been here at this office for only three months, but he already knows the Red Light District thoroughly and goes there constantly. He told me he often sleeps down at the Bay Line boat docks all night. Several times I saw his mother hanging around the office, but she seemed more concerned about getting his pay envelope than anything else."
Ilargi: Somewhere down the line, I have somehow wound up with a contingent of friends I've never met. In person, that is. It’s something to do with the internet. There's just too many people I’d like to go and see, and it doesn't always work out. Automatic Earth readers are simply all over the place.
One of these friends is my man VK, who lives in Nairobi, Kenya, of all places. VK’s all of 23 years old (unless he had his B-day in the past two months). We've been in -almost- daily email contact for a while now, and his is a great perspective. Much younger than just about any voice on finance sites, and living not just on the other side of the tracks, but on the other side of the "great divide".
VK's voice is a tad raw of yet, but that’s not by any means an excuse not to hear him. 99% of what we discuss concerns baby boomers trying to control their investments and pensions. But what about their children? "What's to become of the next generation" is a very valid question, and if you can't think of an answer, it will be provided for you.
What chance do they have of ever even building up any kind of pension, let alone land an actual job? A job with the same sort of benefits their parents have or had? Does zero Kelvin mean anything to you? And do you think that entire younger generation, all these millions of strong and healthy young people, are just going to sit down and watch their parents enjoy the perks while they themselves have nothing much of anything at all, including, for a fast growing segment among them, food and shelter?
What will you tell the young people who come knocking on your door, angry and hungry?
VK's essay below made me think of two songs, which you can find below. First, David Bowie's "Boys Keep Swinging", recorded 30-odd years ago, and a wry testament of what has changed since. In many societies today, being a boy means having to fight other boys for a scrap of decent life, not the "Luck just kissed you hello" Bowie talks about. Second, Bowie, but in Kurt Cobain's version, of "The Man Who Sold The World". How can you not think of Hank Paulson, Bob Rubin, W., Ben Bernanke, Barack Obama and Tim Geithner, when you hear:
Oh no, not me
I never lost control
You're face to face
With The Man Who Sold The World
But I'm cramping my main man VK's space, so here goes:
VK: I was thinking of writing something about the age of consequences that we have entered. With the world going all topsy turvy and unending chaos. I wanted to write something about the decline of complexity, an age of payback or blowback but before I do that, I reckon I want to thank the old farts who got us here. I mean the baby boomers -and gen X’ers to some extent-. No really, I want to thank you from the bottom of my heart from Gen Y. It is not even conceivable how ridiculously spoilt the boomers and Gen X'ers are.
You had everything, and you give us nothing. Now that's a gift worth giving isn't it?
Where to begin on the gifts that just keep taking from us. You saddle us with your debt burdens, your legacy costs. You use our names and paint little bullseyes on our dreams and hopes and shatter them with the gift of debt. Trillions upon trillions you've saddled upon us to save your McMansions, your stocks, your portfolios and your yachts. Thanks for that.
Youth unemployment across much of Europe and the US is hovering between 20-25% with Spain at 45%. This doesn't even count underemployment, where the youth have been even worse hit. Unemployment and underemployment among young people could be as high as 40-50% in much of the world. So you gift us with debt as well as with no jobs and low wages!
Why do I feel like a PhD in Greece who's serving fat tourists on a beach earning €700 a month, or maybe the Italian kids who can't afford to buy their own house or maybe the Australian kid who was sold out by his government into buying houses that (s)he can't even afford, in an effort to prop up ridiculously over-valued home prices. Or maybe it was the American kid who got out of college with a huge debt burden and now can't find a job or even get a start in life because of your reckless greed and exuberance to party. Thank you, you're so kind and gentle and giving.
I thank you also for the environmental gifts you have given, pollutants, CFC's, methane and carbon. Dirty rivers and smogged-up cities. Dead babies and frankenseeds. Thank you so much, we're well past the climate change tipping point at 350ppm, the permafrost meltdown will come to us, from Russia with love, adding god knows how much methane into the atmosphere.
Thanks for the making Australia potentially uninhabitable in a few decades thanks to your desire to garden your quarter acre of suburbia, thanks for ripping Alberta apart, thanks for damming the rivers, for the need to wear face masks in cities just to breathe and turning the Pacific and the Atlantic into great big giant garbage patches.
The rivers will dry, the seasons will alter, add on top of that top soil depletion, phosphate production decline and a smattering of freak weather incidents and we're all set to have a rocking good time. Thanks. It's great to know that because you couldn't live without your iPhone, your double cheese burger and holidays to Florida, you have given a gift that will just keep on giving for multiple centuries.
It's also great to know that since you couldn't understand urban planning and build right rail and tax people for driving cars and provide subsidies and incentives for bicycling. You were just too hard headed and stubborn, you wanted it all. You still are and you still do.
No limits, fast muscle cars and cruising to your local drive-in with that hot guy/ gal who turned fat 3 years or 3 decades later on a steady bloated diet of fructose syrup and is kept alive seated, forget standing, with prozac and cialis. You wanted it all! You didn't want to understand either peak oil or its effects on generations ahead. Let me say it simply, the world is finite. Hence logically it has finite resources. Technology can only do so much, without hitting the brick wall known as the laws of thermodynamics.
You came up with all sorts of excuses, in the 1970's it was,"This is bullshit, there are no limits", in the 1980's you said, "there might be limits, but the market will solve them", in the 1990's you said, "markets can be inefficient, but technology will save us, magic bullets people!" and in the naughties you said, "Do I look like I care about you? we'll all get rich selling houses to each other and stealing our kids futures, they suck anyway"
So thanks, for this gift, you used up the easiest and most precious finite resources discovered by man in about 1000 years, the last 50 have seen you grab and squabble harder than ever before. Thanks for leaving us with all the hard to find, tough to extract energy sources with such low marginal rates of return that civilization might not survive. You're all heart and a bag of gold to boot.
So thank you really, you had a blast, a great time. You had Elvis, the Beatles, Dylan, free love, cheap oil and free money. You leave us a bitter ponzi scheme. A world burdened with nearly 7 billion people as you couldn't stop shagging each other now could you? You leave us a world so polluted and so close to the edge that we'll wonder where to get our next meal from. A world so saturated with debt and bleak employment outcomes, we'll be servicing your debts forever and then some more.
You've sent your kids to die. In wars where rich men argue. You've sent your kids to the abyss. With environmental recklessness and greed. You've sent your kids to the house of pain and broken dreams. With your ponzi finance schemes. You've sold us off to satisfy your strange urges and feelings, your own inadequacies and insecurities and misgivings. Thanks a quadrillion for that! I know you did it all for us, to make us feel better and to give us a bright promising future!
Now please, let the kids sort things out. You geezers should take a hike. Quite literally, go to a park, go trekking, like try the Great Beyond. You've done enough damage as it is.
Boys Keep Swinging
David Bowie, Brian Eno
Heaven loves ya, The clouds part for ya
Nothing stands in your way, When you're a boy
Clothes always fit ya, Life is a pop of the cherry
When you're a boy
When you're a boy, You can wear a uniform
When you're a boy, Other boys check you out
You get a girl, These are your favourite things
When you're a boy
Boys Boys, Boys keep swinging
Boys always work it out
Uncage the colours, Unfurl the flag
Luck just kissed you hello, When you're a boy
They'll never clone ya, You're always first on the line
When you're a boy
When you're a boy, You can buy a home of your own
When you're a boy, Learn to drive and everything
You'll get your share, When you're a boy
Boys Boys, Boys keep swinging
Boys always work it out
The Man Who Sold The World
David Bowie
We passed upon the stair, we spoke of was and when
Although I wasn't there, he said I was his friend
Which came as some surprise I spoke into his eyes
I thought you died alone, a long long time ago
Oh no, not me
I never lost control
You're face to face
With The Man Who Sold The World
I laughed and shook his hand, and made my way back home
I searched for form and land, for years and years I roamed
I gazed a gazely stare at all the millions here
We must have died along, a long long time ago
Who knows? not me
We never lost control
You're face to face
With the Man who Sold the World
The Future of American Jobs
by Robert Reich
Many of my students at Berkeley who will be graduating in June are worried about the job market. I understand their worries. But they and other new college grads have less cause for concern than most American workers. Let me explain.Since the start of the Great Recession in December 2007, the U.S. economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who’d rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they’re in.)
This means even if we enjoy a vigorous recovery that produces, say, 300,000 net new jobs a month, we could be looking at five to eight years before catching up to where we were before the recession began.
Given how many Americans are unemployed or underemployed, it’s hard to see where we get sufficient demand to support a vigorous recovery. Outlays from the federal stimulus have already passed their peak, and the Federal Reserve won’t keep interest rates near zero for very long. Although consumers are beginning to come out of their holes, it will be many years before they can return to their pre-recession levels of spending. Most households rely on two wage earners, of whom at least one is now likely to be unemployed, underemployed or in danger of losing a job. And even households whose incomes have returned are likely to be residing in houses whose values haven’t—which means they can’t turn their homes into cash machines as they did before the recession.
While consumers have been shedding their debts like mad—often simply by defaulting on loans—their remaining burdens are still heavy. At the end of last year, debt averaged $43,874 per American, or about 122% of annual disposable income. Most analysts believe a sustainable debt load is around 100% of disposable income, assuming a normal level of employment and normal access to credit—neither of which we are likely to have for some time.
Some economic cheerleaders say rising stock prices are making consumers feel wealthier and therefore readier to spend. But most Americans’ biggest asset is their homes. The “wealth effect” is felt mainly by the richest 10%, whose net worth is largely stocks and bonds. The top 10% accounted for about half of total national income in 2007. But they were only about 40% of total spending. A vigorous jobs recovery can’t be based on 40% of what was spent before the economy collapsed.
What’s likely to slow the jobs recovery most, however, is the indubitable reality that many of the jobs that have been lost will never return.
The Great Recession has accelerated a structural shift in the economy that had been slowly building for years. Companies have used the downturn to aggressively trim payrolls, making cuts they’ve been reluctant to make before. Outsourcing abroad has increased dramatically. Companies have discovered that new software and computer technologies have made many workers in Asia and Latin America almost as productive as Americans, and that the Internet allows far more work to be efficiently moved to another country without loss of control.
Companies have also cut costs by substituting more computerized equipment for labor. They’ve made greater use of numerically controlled machine tools, robotics and a wide range of office software.
These cost-cutting moves have allowed many companies to show profits notwithstanding relatively poor sales. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. It managed this largely by cutting 28,000 jobs, 32% of its work force. But for workers, there’s no return. Those who have lost their jobs to foreign outsourcing or labor-replacing technologies are unlikely ever to get them back. And they have little hope of finding new jobs that pay as well. More than 40% of today’s unemployed have been without work for over six months, a higher proportion than at any time in 60 years.
The only way many of today’s jobless are likely to retain their jobs or get new ones is by settling for much lower wages and benefits. The official unemployment numbers hide the extent to which American workers are already on this downward path. But if you look at income data you’ll see the drop.
Among those with jobs, more and more have accepted lower pay and benefits as a condition for keeping them. Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far lower wages than the old. (In January, Ford Motor Co. announced that it would add 1,200 jobs at its Chicago assembly plant but didn’t trumpet that the new workers will be paid half of what current workers were paid when they began.) Or they have become consultants or temporary workers whose pay is unsteady and benefits nonexistent.
This shift also helps explain why the unemployment rate for Americans with college degrees is now only 5%, while it is 10.5% for those with only a high-school degree, and 15.6% for Americans with less than a high-school diploma. The jobs of well-educated Americans, although hardly immune to foreign outsourcing and technological displacement, have been less vulnerable to these trends than the jobs of Americans with fewer years of education.
The likelihood, therefore, is that as the economy struggles to recover and today’s jobless begin to find work, the median wage will continue to fall—as it did between 2001 and 2007, during the last so-called recovery.
More Americans will be working, but for pay they consider inadequate. The approaching recovery will be tepid because so many people will lack the money needed to buy all the goods and services the economy can produce.
Americans will once again be employed, but they will also be back on the downward escalator of declining pay they rode before the Great Recession.
Consumers in U.S. Face the End of an Era of Cheap Credit
by Nelson D. Schwartz
Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates. That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession. The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.
"Americans have assumed the roller coaster goes one way," said Bill Gross, whose investment firm, Pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. "It’s been a great thrill as rates descended, but now we face an extended climb." The impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest level since last summer.
Along with the sell-off in bonds, the Federal Reserve has halted its emergency $1.25 trillion program to buy mortgage debt, placing even more upward pressure on rates. "Mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market," said Christopher J. Mayer, a professor of finance and economics at Columbia Business School. "It’s a really big risk." Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer.
The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year. Another area in which higher rates are likely to affect consumers is credit card use. And last week, the Federal Reserve reported that the average interest rate on credit cards reached 14.26 percent in February, the highest since 2001. That is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical American household.
With losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to Dennis Moroney, a research director at the TowerGroup, a financial research company. "The banks don’t have a lot of pricing options," Mr. Moroney said. "They’re targeting people who carry a balance from month to month." Similarly, many car loans have already become significantly more expensive, with rates at auto finance companies rising to 4.72 percent in February from 3.26 percent in December, according to the Federal Reserve.
Washington, too, is expecting to have to pay more to borrow the money it needs for programs. The Office of Management and Budget expects the rate on the benchmark 10-year United States Treasury note to remain close to 3.9 percent for the rest of the year, but then rise to 4.5 percent in 2011 and 5 percent in 2012. The run-up in rates is quickening as investors steer more of their money away from bonds and as Washington unplugs the economic life support programs that kept rates low through the financial crisis. Mortgage rates and car loans are linked to the yield on long-term bonds.
Besides the inflation fears set off by the strengthening economy, Mr. Gross said he was also wary of Treasury bonds because he feared the burgeoning supply of new debt issued to finance the government’s huge budget deficits would overwhelm demand, driving interest rates higher. Nine months ago, United States government debt accounted for half of the assets in Mr. Gross’s flagship fund, Pimco Total Return. That has shrunk to 30 percent now — the lowest ever in the fund’s 23-year history — as Mr. Gross has sold American bonds in favor of debt from Europe, particularly Germany, as well as from developing countries like Brazil.
Last week, the yield on the benchmark 10-year Treasury note briefly crossed the psychologically important threshold of 4 percent, as the Treasury auctioned off $82 billion in new debt. That is nearly twice as much as the government paid in the fall of 2008, when investors sought out ultrasafe assets like Treasury securities after the collapse of Lehman Brothers and the beginning of the credit crisis.
Though still very low by historical standards, the rise of bond yields since then is reversing a decline that began in 1981, when 10-year note yields reached nearly 16 percent. From that peak, steadily dropping interest rates have fed a three-decade lending boom, during which American consumers borrowed more and more but managed to hold down the portion of their income devoted to paying off loans.
Indeed, total household debt is now nine times what it was in 1981 — rising twice as fast as disposable income over the same period — yet the portion of disposable income that goes toward covering that debt has budged only slightly, increasing to 12.6 percent from 10.7 percent. Household debt has been dropping for the last two years as recession-battered consumers cut back on borrowing, but at $13.5 trillion, it still exceeds disposable income by $2.5 trillion.
The long decline in rates also helped prop up the stock market; lower rates for investments like bonds make stocks more attractive. That tailwind, which prevented even worse economic pain during the recession, has ceased, according to interviews with economists, analysts and money managers. "We’ve had almost a 30-year rally," said David Wyss, chief economist for Standard & Poor’s. "That’s come to an end." Just as significant as the bottom-line impact will be the psychological fallout from not being able to buy more while paying less — an unusual state of affairs that made consumer spending the most important measure of economic health.
"We’ve gotten spoiled by the idea that interest rates will stay in the low single-digits forever," said Jim Caron, an interest rate strategist with Morgan Stanley. "We’ve also had a generation of consumers and investors get used to low rates." For young home buyers today considering 30-year mortgages with a rate of just over 5 percent, it might be hard to conceive of a time like October 1981, when mortgage rates peaked at 18.2 percent. That meant monthly payments of $1,523 then compared with $556 now for a $100,000 loan.
No one expects rates to return to anything resembling 1981 levels. Still, for much of Wall Street, the question is not whether rates will go up, but rather by how much. Some firms, like Morgan Stanley, are predicting that rates could rise by a percentage point and a half by the end of the year. Others, like JPMorgan Chase are forecasting a more modest half-point jump. But the consensus is clear, according to Terrence M. Belton, global head of fixed-income strategy for J. P. Morgan Securities. "Everyone knows that rates will eventually go higher," he said.
States Skip Pension Payments, Delay Day of Reckoning
by Gina Chon
State governments from New Jersey to California that are struggling to close budget deficits are skipping or deferring payments to already underfunded public-employee pension plans. The moves could help ease today's budget pressures, but will make tomorrow's worse.
New Jersey's governor, a fiscal conservative, has proposed not making the state's entire $3 billion contribution to its pension funds because of the state's $11 billion budget deficit. Virginia has proposed paying only $1.5 billion of the $2.2 billion required pension contribution. Connecticut Republican Gov. M. Jodi Rell is deferring $100 million in payments this year to the pension fund for state employees to help close a $518 million budget gap"Yes it's wrong," said New Jersey Republican State Sen. Robert Singer. "But the governor "has no other choice."
The deferrals come as pension experts say the funds need the money more than ever, after losses during the financial crisis. Before the 2008 market collapse, 54% of public pensions for states and local governments had assets totaling at least 80% of their liabilities. Last year, only 33% of plans met that criterion, according to a study released Thursday by the Center for State and Local Government Excellence and the Center for Retirement Research, both nonpartisan groups.
The issue of the contributions is heating up right now with legislatures in the thick of budget season. The recession has left states with less means to make their pension payments just as they are rising.
Now or Later
The deferred payments are particularly irksome to some public union employees who say they have been unfairly blamed for the fiscal burden of public pensions on taxpayers."The state has kicked the can and now the can has become a 55-gallon drum," said Anthony Wieners, president of the New Jersey State Policemen's Benevolent Association. "But our members have sacrificed, some with their lives, and they deserve and expect to have their full pension."
Of 71 pension plans that submitted 2009 contribution figures so far, the Center for Retirement Research found that more than 50%, or 39, reported not paying their full pension bill.
The "kick the can" approach has surfaced before in times of trouble, for example in years after the Sept. 11 attacks. Sometimes the pain gets alleviated if markets improve and pension funds' assets rise.
But this time funds are expected to face pressure because accounting practices are pushing out some of the pain of 2008's market declines into later years, leading to a jump in pension contributions next year.
The delays mean higher bills in the future, because pension payments—the funds' liabilities—are guaranteed to the government workers whose money the pension funds manage. With 401(k) plans, by contrast, employees can enjoy more upside if markets rise but also stand to lose savings if they decline.
In a worst-case scenario, in which a public pension fund was so underfunded that there were concerns it wouldn't be able to pay benefits, a state could resort to taking funding away from schools, social-service programs or other services to fully pay the pension bill.
While funds on average remain close to the recommended 80% funding level, the ratio is expected to decline further unless contribution levels increase, Thursday's study concludes.
(State public pensions are generally viewed as adequately funded at the 80% level because, unlike private corporate pensions with stricter standards, governments generally don't face the same risks of bankruptcy that companies do.)
In New Jersey, Republican Gov. Chris Christie followed steps of his predecessor to address a budget gap for the coming fiscal year by proposing last month to skip a $3 billion payment to the retirement systems for teachers, state employees and other public employees, valued at $66 billion as of June 30.
New Jersey's prior governor, Democrat Jon Corzine, mostly missed a $2.5 billion payment to the pension system and allowed cities and other local governments to pay only 50% of their share of the pension contribution. The fund is one of the most underfunded in the country.
Illinois, with the worst unfunded pension liability in the country, has failed to pay its full annual contribution for its five retirement systems in the past few years. Democratic Gov. Pat Quinn had proposed that the state pay $300 million less than the total $4.5 billion estimated contribution to the state's pension systems for the next fiscal year. The state last month passed bills to scale back pension benefits; the measures are expected to save $100 billion over several decades, according to legislators.
Even states that had been making their full annual contributions have fallen short this year because of budget issues. Connecticut previously had paid all or a big chunk of its annual required contribution for the state employee fund, but this year it paid less.
"Connecticut has only reduced the contribution as a result of the extraordinary financial situation facing the state," said Jeffrey Beckham, undersecretary for legislative affairs.
Some states, like Kansas, have legal limits on their contributions that prevent them from paying the full amount. That has helped reduce costs for those governments but also hurt the funding status of pensions. Some legislators in Kansas have recently contended that was a dangerous course. A bill currently in the state Senate would gradually increase the employer contributions until it reaches the annual required contribution.
Even states that have traditionally met their full contributions have seen funding levels decrease, largely because of the decline in their pension fund's assets because of investment losses. The $113 billion Florida Retirement System, with strict funding payment policies, had been overfunded since 1997 but dropped last year to 88.5%. The state made more than 100% of its annual pension payment to the system from 2007 to 2009.
A few states have tried to mitigate the impact of their delay. Because Virginia recently decided not to pay $620 million of its annual pension-fund payment for the next fiscal year to help balance the budget,, the state legislature approved a repayment measure earlier this year.
"We understand this is money that has to be replenished," said Republican State Sen. Walter Stosch, an accountant.
Declining Bailout Costs or Bad Math?
by Barry Ritholtz
There is a bizarre article in this morning’s WSJ. It declares that the bailouts will cost less than initially feared. It is notable not for what it includes, but what it managed to completely ignore.The 2008 Emergency Economic Stabilization Fund passed by Congress was over $700 billion dollars — not $250B.
There is no mention of the trillions of dollars on the Federal Reserve’s balance sheet. The ongoing costs of the Federal rescue of Fannie and Freddie — indeed, the complete takeover of $5 trillion in mortgages by Uncle Sam — is glossed over. The journal also seems to have forgotten about the cost of bailing out Chrysler and GM (they mention GM possibly going public, but just barely).
Foreclosure trends are increasing; second liens are defaulting in greater numbers. Banks now have over $30 billion in bad home equity loans. Somehow, these are not mentioned in determining the health of rescued banks.
Depleted FDIC reserves? Not mentioned. Bad loans on bank balance sheets? Ignored. FASB 157 authorizing fantasy bank accounting? Never mind.
The newly concentrated banking sector’s lack of competition is apparently too abstract for discussion. Nor does this final calculation so much as consider any future problems caused by moral hazard (its not so much as mentioned). Future inflation? US Dollar debasement? What TF are they?
Here’s the WSJ:
“The U.S. government’s rescue of wobbly companies and financial markets is starting to look far less expensive or long-lasting than once feared.
As momentum grows at companies that looked like zombies just a few months ago to repay taxpayers for lifelines they got during the financial crisis, the projected cost of the bailout is shrinking to just a fraction of previous estimates. Treasury Department officials say the tab is likely to reach $89 billion, which includes the Troubled Asset Relief Program, capital injections into Fannie Mae and Freddie Mac, loan guarantees by the Federal Housing Administration and Federal Reserve moves such as buying mortgage-backed securities and propping up the commercial-paper market.”
You can read the article, but you might notice it has a hole or two . . .
Total Bailout Costs = $89B! WTF?
Is the World's Second Biggest Economy On the Ropes?
by George Washington
Iceland has approximately the 101st biggest economy in the world.Dubai is also tiny.
Greece is somewhat bigger, with the 27th biggest economy.
When Iceland, Dubai and Greece tanked, that was horrible ... but not catastrophic.
Portugal - the 37th biggest economy - may be next. It would be horrible if Portugal tanks.
But Spain is also in real trouble. As the 9th biggest economy, a default by Spain could be major.
But none of these are in the same ballpark as Japan - the world's 2nd biggest economy. Only the U.S. is bigger.
So it is newsworthy that S & P cut Japan's sovereign credit rating in January.
And that, as Bloomberg wrote April 2nd:
Japanese National Strategy Minister Yoshito Sengoku said the country should have a greater sense of urgency about the nation’s fiscal situation, comparing it to the plight of Greece. “So far some have been crying wolf, but Greece’s situation isn’t entirely unrelated to Japan’s,” Sengoku said at a news conference in Tokyo today. “At the end of the day, Japan’s situation right now is not that good. There hasn’t been a sense of crisis about this, including from ourselves.”And AFP reports today:
***
Sengoku is not the only policy maker to compare Japan with Greece, whose fiscal woes weakened the euro and forced the government to adopt austerity measures as its borrowing costs surged. Bank of Japan board member Seiji Nakamura said in February that Greece’s example shouldn’t be regarded as “a burning house on the other side of the river.”Greece's debt problems may currently be in the spotlight but Japan is walking its own financial tightrope, analysts say, with a public debt mountain bigger than that of any other industrialised nation.
Public debt is expected to hit 200 percent of GDP in the next year as the government tries to spend its way out of the economic doldrums despite plummeting tax revenues and soaring welfare costs for its ageing population.
Based on fiscal 2010's nominal GDP of 475 trillion yen, Japan's debt is estimated to reach around 950 trillion yen -- or roughly 7.5 million yen per person.
Japan "can't finance" its record trillion-dollar budget passed in March for the coming year as it tries to stimulate its fragile economy, said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
"Japan's revenue is roughly 37 trillion yen and debt is 44 trillion yen in fiscal 2010, " he said. "Its debt to budget ratio is more than 50 percent."
Without issuing more government bonds, Japan "would go bankrupt by 2011", he added.
***
The system of Japanese government bonds being bought by institutions such as the huge Japan Post Bank has been key in enabling Japan to remain buoyant since its stock market crash of 1990."Japan's risk of default is low because it has a huge current account surplus, with the backing of private sector savings," to continue purchasing bonds, said Katsutoshi Inadome, bond strategist at Mitsubishi UFJ Securities.
But while Japan's risk of a Greek-style debt crisis is seen as much less likely, the event of risk becoming reality would be devastating, say analysts who question how long the government can continue its dependence on issuing public debt.
"There is no problem as long as there are flows of money in the bond market," said Kumano.
"It's hard to predict when the bond market might collapse, but it would happen when the market judges that Japan's ability to finance its debt is not sustainable anymore."
Japan also has very unfavorable age demographics. As I wrote last October:
The following chart shows that Japan has the worst demographics of all, with a staggering percentage of elderly who need to be taken care of by the young:
Chart 2: Old Age Dependency Ratios for Selected Countries
Source: http://data.un.org/
On the other hand, as AFP notes, Japan has some good things going for it, including a large current account surplus, and the fact that Japanese are largely financing their debt themselves:
The system of Japanese government bonds being bought by institutions such as the huge Japan Post Bank has been key in enabling Japan to remain buoyant since its stock market crash of 1990."Japan's risk of default is low because it has a huge current account surplus, with the backing of private sector savings," to continue purchasing bonds, said Katsutoshi Inadome, bond strategist at Mitsubishi UFJ Securities
And, as AFP points out, Greece is part of a currency union with strict exchange rates, while Japan has a fiat currency with flexible exchange rates:
The likes of single-currency Greece and non-eurozone countries are also different in that the latter group have flexible currency exchange rates which are more closely calibrated to their fiscal conditions, [Nomura Securities economist Takehide Kiuchi] said.The Bank of Japan is also taking radical measures to keep interest rates low, but I don't think that's a very helpful approach for the long-term.
Of course, no country can be analyzed in a vacuum. It is - to some extent - a beauty contest, and bondtraders could change horses when they decide that the horse they've been backing is a nag.
As Bruce Krasting comments:
And if Exeter is right, then the holders of all nations' bonds might get nervous and flee into cash or gold. This would drive many debt-heavy countries into default.Japan sure looks like it is trouble. But some comparisons to the US are more troubling.From the CIA fact book:
Japan External Debt = $2.13 Trillion
Japan Reserves = ~$1 Trillion
US External Debt = 13.45T
US Reserves = 75b
From this you get the Japanese External Debt/Reserves as 2:1. For every dollar of debt they owe outside the country they have 50 cents in a piggy bank in real reserves.
The US External Debt/Reserves is 180:1. Our reserve coverage ratio is 1/2 cent for every dollar of external debt.
GW makes the case that Japan is broke because they owe 200% debt to GDP. He is right. They are broke. But the real question of solvency come down to "Who do you that debt to?"
Japan's GDP to external debt is 2:1.
The same ratio for the US is 1:1.
So by this calculation Japan has a much more managable debt load than the US. They owe it largely to themselves. We owe it to non US persons.
Please don't tell me that the US has the ability to print reserves. That argument is not going to fly in 2010. We have a much bigger problem that does Japan.
![clip_image002[5]](http://www.creditwritedowns.com/wp-content/uploads/2009/10/clip_image0025.gif "clip_image002[5]")
If The U.S. Economy Is Experiencing A Recovery Why Does It Seem Like Things Keep Getting Worse?
The talking heads on all the major news shows keep telling us that the U.S. economy is experiencing a recovery. Usually the term "recovery" is accompanied by a qualifier such as "jobless", but they continue to use the word recovery anyway. We are told that the greatest financial crisis since the Great Depression is behind us and that the great American economic machine is roaring back to life and everything will be back to normal soon. So why does it seem like things keep getting worse? Why does it seem like the American Dream is out of reach for more Americans than ever? Why does it seem like economic pain is spreading to more families and more businesses?
Well, maybe it is because things are getting worse. Gallup's underemployment measure hit 20.0% on March 15th. This was up from 19.7% two weeks earlier and 19.5% at the start of the year. While the U.S. unemployment rate has leveled off (for now), the truth is that job seekers are increasingly finding that all they can get is part-time work. In the vast majority of cases, part-time work will not pay the mortgage or even really feed a family.
All of this economic pain is causing havoc in many American households. In fact, 1.2 million U.S. households have been lost during the recent recession as economic pain has forced many Americans to move in with relatives. It can be an extremely humbling thing to have to turn to relatives for help, but that is what an increasing number of Americans have been forced to do. But now there are indications that things may soon get worse for the U.S. economy.
The Federal Reserve is pulling its emergency financial supports from the U.S. financial system, and this is leading some economic analysts to speculate that deflation could be on the horizon. Already there are signs that the American economy is slowing down. The Federal Reserve said on Wednesday that consumer borrowing declined by $11.5 billion in February. But it just isn't consumer borrowing that is slowing down. The biggest banks in the U.S. cut their collective small business lending balance by 1 billion dollars in November 2009. That drop was the seventh monthly decline in a row.
As the U.S. economy slows down, the U.S. government is going to look to U.S. taxpayers to pick up the slack. According to Federal Reserve Chairman Ben Bernanke, the United States will soon have to make difficult choices between higher taxes and reduced social spending. Higher taxes or reduced government spending? Maybe both? Either of those alternatives is not good for the U.S. economy.
And the burden of taxation is falling on an increasingly smaller pool of taxpayers. It turns out that about 47 percent of all Americans will pay no federal income taxes at all for 2009. The 47 percent who pay no taxes either earned too little or they had so many credits or deductions that they were able to avoid taxes altogether. It must be nice for them.
Meanwhile, the faith of the American people in the financial system continues to wane as more evidence of corruption keeps coming out. In fact, there are new allegations that JPMorgan Chase has been involved in gold price fixing. Many have suspected for a long time that there was some really funny business going on with gold prices, but the latest bombshells that have been dropped by whistle blowers are absolutely mind blowing.
But it is about time that we learned more about what is going on at these major banks. After all, they know so much about us. For example, it has come out that the data mining operations of the major credit card companies are becoming so sophisticated that they can actually predict how likely you are to get a divorce. Isn't that lovely?
Big Brother is watching. And this is only just the beginning. With the stated intent of combating illegal immigration, Senators Chuck Schumer and Lindsey Graham are creating new legislation that would institute a national identification card. Will we all soon be forced to take a national identification card with us wherever we go? Will we all soon be forced to show "our papers" whenever we are confronted by authorities?
Let's hope not. But things are getting really crazy out there. So many of the things that we used to take for granted are quickly disappearing into thin air. What in the world is happening to America?
Don’t Bet the Farm on the Housing Recovery
by Robert J. Shiller
Much hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy. But will the recovery be sustained?
Alas, the evidence is equivocal at best.
The most obvious reason for hope is that, unlike stock prices, home prices tend to show a great deal of momentum. Correcting for seasonal effects, home prices as measured by the S.&P./Case-Shiller 10-City Home Price Index increased each month from June 1995 to April 2006, then decreased almost every month to May 2009. Since then, they have risen through January, the latest month for which data is available.
So, because home prices have been climbing of late, isn’t it plausible that they’ll keep doing so?
If only it were that simple.
Home price booms and busts do end, sometimes quite suddenly, as was the case for the boom of 1995 to 2006 and the bust of 2006 to 2009. Today, we need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market.
Consider some leading indicators. The National Association of Home Builders index of traffic of prospective home buyers measures the number of people who are just starting to think about buying. In the past, it has predicted market turning points: the index peaked in June 2005, 10 months before the 2006 peak in home prices, and bottomed in November 2008, six months before the 2009 bottom in prices.
The index’s current signals are negative. After peaking again in September 2009, it has been falling steadily, suggesting that home prices may have reached another downward turning point.
But why? Unfortunately, it is hard to pinpoint causes for a change in demand for housing. The factors clearly include government economic policy, like interest-rate changes and tax credits. But these moves don’t line up neatly with major turning points in the market.
Sociological processes may be driving these changes. Trends in news media coverage, for example, generate conversations in barbershops and hotel lobbies, which in turn alter the conventional wisdom about investing.
Consider how that process might have worked during the run-up to the 2006 turning point in home prices. In May 2005, two months before the peak in the N.A.H.B. traffic index, Consumer Reports magazine had a cover article, “Your Home: How to Protect Your Biggest Investment,” that conveyed a very bullish sentiment.
“Despite years of dire warnings from some economists that the housing boom is about to end, it hasn’t,” the magazine said. “Indeed, last year prices rose even more — about 11 percent nationally.”
The article went on to give advice: “You can no more time the real estate market than you can the stock market,” it said. “If you need a house, and can afford one, go ahead and buy.”
The article extended to the housing market the conventional wisdom that then prevailed about the stock market — namely, that it was quite efficient, without identifiable bubbles and bursts. According to this theory, there was an identifiable profit opportunity: buy and hold stocks, and by extension, housing, and watch your wealth grow.
But as 2005 continued, the conventional wisdom began to change.
Some people in the United States were by then aware of the 2004-5 home price decline in Britain. Some were learning a new lexicon: “housing bubble,” “housing crash” and “subprime mortgage.” Newspapers and magazines began to include some derisive reviews of a March 2005 book by David Lereah, “Are You Missing the Real Estate Boom?” And accounts began to appear of the risky behavior of an army of real estate flippers.
In May 2005, I included in the second edition of my book, “Irrational Exuberance,” a new data series of real United States home prices that I constructed, going back to 1890. I was amazed to discover that no one had published such a long-term series before.
This data revealed that the home price boom was anomalous, by historical standards. It looked very much like a bubble, and a big one. The chart was reproduced many times in newspapers and magazines, starting with an article by David Leonhardt in The New York Times in August 2005.
In short, a public case began to be built that we really were experiencing a housing bubble. By 2006 a variety of narratives, taken together, appear to have produced a different mind-set for many people — creating a tipping point that stopped the growth in demand for homes in its tracks.
The question now is whether a strong case has been built for a new bull market since the home-price turning point in May 2009. Though there is no way to be precise, I don’t believe it has.
Since that turning point, most public discourse on housing has not been about a new long-term view of the market. Instead, it focused initially on whether the recession was over and on the extraordinary measures the government was taking to support the housing market.
Now we’re shifting into a new phase. The recession is generally viewed as being over, and those extraordinary measures are being lifted.
On March 31, the Federal Reserve ended its program of buying more than $1 trillion of mortgage-backed securities, and the homebuyer tax credit expires on April 30.
Recent polls show that economic forecasters are largely bullish about the housing market for the next year or two. But one wonders about the basis for such a positive forecast.
Momentum may be on the forecasts’ side. But until there is evidence that the fundamental thinking about housing has shifted in an optimistic direction, we cannot trust that momentum to continue.
U.S. Posts 18th Straight Monthly Budget Deficit in March
by Jeff Bater
Despite a substantial trimming of government bailout spending, the U.S. posted a record 18th straight budget deficit in March. The government spent $65.39 billion more than it collected last month, the U.S. Treasury said in its monthly budget statement released Monday. For the first half of fiscal 2010, the government ran a $716.99 billion deficit, compared to a $781.39 billion shortfall in the first six months of fiscal 2009.
The Congressional Budget Office had projected a $62 billion March federal budget deficit. The CBO is a federal agency that provides economic data to Congress. The government in March 2009 ran a budget deficit of $192 billion. The deficit was much lower this March because of a $115 billion downward revision to costs involving the Troubled Asset Relief Program. TARP was created to bail out Wall Street after the 2008 financial crisis.
March was the 18th consecutive month in which the U.S. had a budget deficit. The country has posted a budget deficit for 43 of the last 56 months of March. Revenue in March totaled $153.36 billion, compared to $128.93 billion in March 2009. Spending totaled $218.75 billion versus $320.51 billion. Year-to-date revenue was $953.90 billion, compared with $989.71 billion in the first six months of fiscal 2009. Spending so far this fiscal year, which began Oct. 1, 2009, is $1.67 trillion versus $1.77 trillion a year earlier.
So, How Are Stock Prices Now That We're Back At DOW 11,000? They're 30% Overvalued
by Henry Blodget
So, how do stock values look now that the DOW is back to 11,000?Not outrageous. But certainly not cheap.
Measured using our favorite valuation technique, Professor Shiller's cyclically adjusted PE analysis, the S&P 500 has a PE of 22X. The long-term average (1880-2010) is about 16X. The current level is actually close to the big bull market peaks of the past--with the exception of the gigantic one that peaked in 2000.
Check out the chart below, from Professor Shiller's web site. The blue line is the cyclically adjusted PE ratio for the last 130 years. (The cyclically adjusted PE mutes the impact of the business cycle by averaging 10 years worth of earnings. This reduces the misleadingly low PEs you get at peak profit margins, like the ones in 2007, and the misleadingly high ones at trough profit margins, such as the ones we had last year).
Note a few things:
- The long-term average for the cyclically adjusted PE is about 16X.
- Stocks have spent vast periods above the average and vast periods below it, usually in multi-decade cycles
- We've just descended from the longest period of extreme overvaluation in history, suggesting (to us, anyway) that the next multi-decade cycle is likely to be below average
- At today's level, 1200 on the S&P, stocks are trading at a 22X CAPE, about 30% above the long-term average
Blue line = Cyclically adjusted PE, 1880-2010
Image: Professor Robert Shiller www.irrationalexuberance.com
Now, you can also unfortunately see from the chart that valuation doesn't tell you anything about what will happen next. As the blue line shows, stocks can get a great deal MORE overvalued than they are today. And they can stay even more overvalued for a decade or more.But what the apparent overvaluation does tell you--or, at least, has told you in the past--is that your future long-term returns will likely be below average. There's a strong correlation between starting valuations and ending returns (high valuations lead to low returns and low valuations lead to high returns). And today's valuations can now be described as "high." (Not extreme, but high.)
Yes, you can argue that "it's different this time." You can argue that, since stocks have traded at an average CAPE of more than 20X for the past two decades, we're in a new normal. And you might be right. But they don't call "it's different this time" the "four most expensive words in the English language" for nothing.
You can also argue that "interest rates are low, so P/Es should be high." That argument is in vogue right now, because there's been an inverse correlation between P/Es and interest rates for the last couple of decades.
But take a look at the RED line in Professor Shiller's chart. The red line is interest rates. As you can see, if you go back more than a couple of decades, there's not much correlation. (In fact, as the great UK economist Andrew Smithers has observed, there's none.)
Again, Prof. Shiller's chart doesn't tell us what stocks are going to do in the near term. As owners of index funds, what we'd like stocks to do is what they have been doing, which is keep going up. We're not expecting we're going to get excellent long-term returns from this level, though. And we're really worried about that housing double-dip.
Greece Wins $61 Billion Aid Pledge to Blunt Crisis
by James G. Neuger and Jonathan Stearns
European governments offered debt- burdened Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates as they try to end its fiscal crisis and restore confidence in the euro. Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. That’s less than the current three-year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund.
"This is a step of clarification that markets are waiting for -- it shows there is money behind this," Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels today after chairing the ministers’ conference call. "The initiative for activating the mechanism rests with the Greek government." With the euro facing the sternest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece’s financial plight from spreading and to mute concerns about the currency’s viability. Germany also abandoned an earlier demand that Greece pay market rates.
The euro has dropped 5.7 percent against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe’s economic management. It now buys $1.35. "This is a huge amount," said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. "This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run the market is short Greek assets so we’ll get a rally in those."
A Greek finance ministry official said today that market reaction to the aid package over the next few days will determine future developments. While Finance Minister George Papaconstantinou welcomed the announcement, he said the government wasn’t requesting the bailout and planned to go ahead with planned debt sales. Greek officials plan a roadshow to U.S. investors this month before selling a dollar-denominated bond. Greece will need to continue to tap markets even if it triggers the bailout, Erik Nielsen, chief European economist at Goldman Sachs Group Inc. in London said in a note to investors.
The 30 billion euros from the EU "will not fully cover the Greek government’s financing needs for the next 12 months, let alone for 3 years, so Greece will still rely on commercial money beyond the April-May payments, and whether such money will become available will very depend on how credible the policy framework is and what investors think will happen beyond the program period," he said. "Unfortunately, this thing is unlikely to go to bed any time soon."
The teleconference of euro-region officials, which included European Central Bank President Jean-Claude Trichet, left open was how much Greece might need in 2011 and 2012, the final years covered by today’s decision. Aid will flow to the Greeks "when they ask for it," Cypriot Finance Minister Charilaos Stavrakis told reporters in Nicosia. "The decision was unanimous." European governments would put up about two thirds of any aid, with the IMF chipping in the rest, European Union Economic and Monetary Commissioner Olli Rehn said.
"We cannot speak on behalf of the IMF, but we know that they are ready to cooperate and contribute with a substantial amount," Rehn said. Greek, EU and IMF officials will meet tomorrow to discuss details. European pledges in February and March to provide aid in an emergency failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8, according to Bloomberg generic prices, amid concern that Greek Prime Minister George Papandreou’s government will be swamped by its bills.
The jump in Greek yields to the highest since December 1998 helped overcome resistance to a loan package in Germany, which as Europe’s biggest economy would contribute almost a third of the loans, the largest single share. The premium investors demand to buy Greek 10-year bonds instead of German bunds jumped to 442 basis points April 8, easing to 398 basis points the next day as speculation over a rescue gained steam.
In the compromise hammered out today, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to granting a subsidy to a country that failed to live within its means. The EU will offer a mix of fixed-rate and floating rate loans. The IMF would charge less than the EU. Both types of funding would be offered at the same time, Rehn said. Transfers to Greece would be made by the ECB.
Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit. While rules dictated by Germany in the 1990s foresee fines for countries that go over the limit, no penalty has ever been imposed. Germany also led the charge to loosen the rules in 2005 after three years of excessive deficits. While all euro-region governments promised to contribute, some like Ireland would need parliamentary approval. Ireland, itself reeling from the financial crisis, would require "national legislation," Finance Minister Brian Lenihan said in an e-mailed statement.
The Greek government has yet to request a European lifeline, confident that this year’s planned budget cut of 4 percentage points will stem speculation that it is heading for the euro region’s first-ever default. Fitch Ratings highlighted that risk by shaving Greece’s debt rating to BBB-, one level above junk, on April 9. A combination of higher taxes, lower spending and salary cuts for public workers have prompted strikes and protests against Papandreou, a socialist elected in October on promises of raising wages. The EU showed no sign of setting tougher conditions today. Rehn hailed the Greek government for implementing "a very bold and ambitious program."
Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit. The debt agency plans to offer 1.2 billion euros of six- month and one-year notes on April 13, in a test of investor confidence in today’s pledge. A global bond in dollars will be sold in the next two months, Petros Christodoulou, Greece’s debt-management head, said on March 31.
The Greek people are being punished for Europe's errors
by Ambrose Evans-Pritchard
The moment of "Ultima Ratio" has arrived for Greece. Brussels has failed to bluff investors with fudges that mask the battle between Germany and France over the shape of Europe. Last week's rise in spreads on Hellenic two-year bonds to 730 points over German debt is proof that Greece cannot tap capital markets at bearable cost. It must spiral into default unless the EU-IMF rescue mechanism is activated. "There is no point waiting for an accident to happen," said Nomura's Laurent Bilke.
As I write, it appears that EU experts have agreed on a package of €20bn to €25bn at 350 points above the IMF tariff, or 5pc. This achieves nothing. Such wishful thinking has plagued the Greek/EMU crisis from the start. Simon Johnson, the IMF's former chief economist, said Greece needs €110bn to have any hope of pulling itself out of a tail-spin, given that the twin cures of default and devaluation are blocked. Even that may not work. Greece must squeeze a further 13pc of GDP from the budget to stabilise debt costs by 2012, and do so during a slump when every euro of tightening leads to €1.5 to €2 in lost demand. "The risk is of a viscious downward cycle," Mr Johnson wrote in the Huffington Post.
He likens the crisis to Argentina's slide before default in 2001, a fiasco that led to calls for the abolition of the IMF itself. The Fund concluded in a post-mortem that it should never again throw good money after bad to prop up an unworkable structure with an overvalued exchange rate. EU officials react with outrage to comparisons with Argentina, but as Mr Johnson says "Greece is far more indebted, is much less competitive in global markets, and needs a greater fiscal and wage adjustment".
Argentina's public debt was 62pc of GDP in 2001: Greece will top 120pc this year. Its budget deficit was 6.4pc: Greece's was 16pc last year on a cash basis. Its current account deficit was 1.7pc: Greece's was 11.2pc in 2009. The cleanest option for Greece is an Argentine default with a 65pc haircut for creditors, and exit from the euro. Argentina recovered fast after liberation. Greece could expect "decent growth" by mid 2011.
True, but Greece is just "the tip of the iceberg", in the words of China's central bank. The design faults of EMU have left all Club Med trapped in debt deflation or perma-slump. Europe's banks are in turn stuck with fatal exposure. You cannot safely uncork Greece without risking a chain reaction. This has echoes of Credit Anstalt, the Austrian bank that collapsed in June 1931, exposing the underlying rot of Europe's banks. It set off an earthquake across Germany and Central Europe. Contagion spread back into the Anglosphere, snuffing out the recovery of early 1931. The global financial order came crashing down. The Great Depression began in earnest.
Liaquat Ahamed recounts in Lords of Finance how rescue talks succumbed to geo-politics. France held up a loan for Austria, using it as leverage to stop a customs union with Germany. (Paris secretly withdrew funds from Vienna to force capitulation.) Disputes over German war reparations poisoned everything. By the time France, Britain and the US could agree on anything, events were out of control. This time Germany is proving difficult, refusing to be led by the nose into an EU debt union. Chancellor Angela Merkel cannot bend the rules even if she wants to. German professors are itching to launch a complaint at their constitutional court for breach of the EU's "no bail-out" clause the day any rescue is activated.
Yet let us be honest. This is not a bail-out for Greece. It is a bail-out for European creditors that account for most of Greece's €391bn external debt (163pc of GDP). As such it is the first line of defence against greater sums at risk across Club Med. The EU rescue shifts the debacle onto taxpayers in order to prevent a systemic crisis, just like the bank bail-outs after the Lehman failure. The question is whether German Landesbanken with wafer-thin capital ratios can withstand a second crisis after losing so much already on US subprime debt.
As for blaming Greece, let us remember that the European Central Bank stoked property booms in much the same way as the Greenspan Fed. It let the growth rate of M3 money balloon to 12.3pc by late 2007, against a 4.5pc target, pouring petrol on the fire in Club Med, Ireland, and Eastern Europe. Greece can perhaps claim its entry terms into the euro were violated by the ECB. Yet the Greeks are being singled out for punishment under the rescue terms. Mr Johnson says they will have to transfer 8pc to 9pc of GDP each year to foreign creditors from 2012 onwards. No nation will tolerate such debt servitude for long.
This crisis stems from the original sin of EMU and the collective self-deception that lured debtors and creditors alike into excess. To lecture Greece gets us nowhere. Default will happen one way or another. So will contagion.
Greek Aid Deal Could Hurt Spain, Portugal Spreads
by Emese Bartha
Two-year Greek yield spreads over German paper and Greek two-year yields tumbled Monday following weekend details of the Greek aid package. The two-year yield is trading at 5.80% compared with 6.97% at Friday’s close, driving the yield spread to 4.76 percentage points from 6.02 percentage point Friday. The weekend’s deal on Greece should mean the higher-yielding sector of the euro sovereign government bond market can enjoy a rebound, says Credit Agricole CIB.
However, the yield spreads over bunds of the euro zone’s weaker credits, such as those of Spain and Portugal, may actually widen after the weekend agreement on Greece, as the possibility is that those states may have to participate and thus drive up their debt load, says KBC. The bank adds that the total 40 billion to 45 billion euro package from the European Union and the International Monetary Fund seems "large enough" to convince markets that a default by Greece is unlikely, at least in the short term.
In addition, while a joint EU/IMF aid package for Greece should ease any short-term crisis, Greece still faces challenges cutting its deficit beyond 2010, says HSBC. "The short-term crisis should abate to some extent," the bank said. "However, as we have consistently stated, 2010 is not the biggest challenge." HSBC said that lowering the deficit "towards 3% of GDP in the subsequent three years will be much tougher and the markets will require much more convincing along the way."
Zapatero: Spain prepared for harsher austerity
by Lionel Barber, Victor Mallet and Mark Mulligan
Spain will implement its economic austerity plan to cut its budget deficit "whatever the cost", and will introduce even harsher measures if necessary, according to José Luis Rodríguez Zapatero, the Socialist prime minister. In an interview with the Financial Times, Mr Zapatero - who has been heavily criticised in Spain for failing to recognise the gravity of the economic crisis - admitted that he was an optimist and quoted former US president Bill Clinton as saying that pessimism had never created a single job.
However, Mr Zapatero said he was determined to take the unpopular measures needed to cut a Spanish budget deficit swollen by government spending. "We have a plan - a credible, quantified plan - which we have already begun to implement," he said. "Let's wait and see how we end 2010 and where we are on the budget and whether we are meeting our targets and, of course, if we have to make more cuts or demand more austerity, then we will do so."
Mr Zapatero and the Spanish government are eager to distinguish their country from Greece, where borrowing costs have soared in recent weeks amid predictions that it would require a bail-out from other eurozone countries and the International Monetary Fund to avert a sovereign loan default. The government in Madrid, however, has struggled to convince economists either of the credibility of its austerity plan or of its long-term commitment to restoring lost competitiveness by reforming the labour market.
Spain's austerity plan, hastily introduced at the end of January, aims to reduce the deficit from 11.2 per cent of gross domestic product in 2009 to the European Union target of 3 per cent of GDP in 2013. The measures include cuts in government spending, a near-freeze on the hiring of civil servants to reduce the overall headcount and the wage bill, and some tax rises. Such cuts represent a reversal of Spanish government policy, which only months ago was focused on emergency spending to slow the rise of unemployment and stave off depression.
"We've had to make a huge effort in public expenditure to provide social protection to our unemployed citizens and to bolster production and activity as far as we were able," Mr Zapatero said. "But now that the deficit has got to a point that's unsustainable, we are equally determined and we do have a three-year plan to bring it down." Spain's economy grew on the back of a surge in home construction until the onset of the global crisis two years ago. Since then, it has sunk into recession and unemployment has risen to more than 4m, or nearly a fifth of the workforce.
In a recent note about Spain, Diana Choyleva, an economist at Lombard Street Research, said the rigidity of the labour -market, a collapse in the trend economic growth rate and the lack of exchange rate flexibility posed "a recurrent threat likely to condemn the economy to years of meagre growth". Mr Zapatero, however, insisted that Spain would not "fall back into the second division" of nations. "Spain has major achievements during its 30 years of democracy, but also problems. Now we're going through a difficult time, but we're going to get out of this," he said. "We'll leave it behind and if we do things well we'll be the stronger for it."
Soros Says Pound Devaluation Is Option for Next U.K. Government
by Jennifer Ryan
Billionaire investor George Soros said the next U.K. government after the May 6 election should decide whether to allow a further devaluation of the pound to rebalance the economy and assist the recovery. Britain "has more room to use exchange rate adjustments as a way of adjusting the economy" than do nations that use the euro, he said in an interview yesterday in Cambridge, England. "It’s a question for the next government to decide. It has a number of options, of which a currency depreciation is one."
The pound has dropped about 25 percent on a trade-weighted basis since the start of 2007, making exporters’ goods less expensive overseas. Bank of England policy makers are counting on sterling’s weakness to aid the recovery and rebalance the economy away from domestic spending at a time when the nation faces a record budget deficit. "It’s a question now of, if you now cut the budget deficit and borrow less, you could probably keep the currency, raise the interest rate, you could keep the currency from going down," he said. "Britain, by having kept out of the euro, has that option of allowing the exchange rate to adjust."
Soros made $1 billion in 1992 betting against the pound. In January 2009, a month when the pound reached as low as $1.3506, he said that a bet on its decline "was one of the positions we carried," though the "risk-reward was no longer clear" after it dropped below the $1.40 level. Sterling was at $1.5367 at the close in London yesterday.
Soros said that history shows Britain still has room to borrow more to bolster its public finances. Its debt levels have been higher, and Japan’s 10-year borrowing costs are about 1.5 percent even after its debt load swelled, he said. "Probably Britain is not at the limit of its borrowing capacity," he said. Still, "Britain is in a very difficult situation." At about 12 percent of gross domestic product, the U.K. deficit rivals that of Greece. Net debt climbed to 60.3 percent of GDP in February.
"It has had a really serious jump in its indebtedness because its had to take over the debt of the banks that are in trouble and also the financial industry’s a very large part of the economy," Soros said. Soros Fund Management LLC manages about $25 billion. The firm increased its investment in SPDR Gold Trust, the world’s largest exchange-traded fund for the metal, by 152 percent in the fourth quarter. Soros told Reuters in an interview in January that he didn’t trade himself. Soros was attending a conference organized by the Institute for New Economic Thinking in Cambridge.
Britain's dwindling pension culture is setting stage for another financial crisis
by Ruth Sunderland
Debate about gap between public and private pensions is a sideshow. The real apartheid is between top earners and everyone else The Confederation of British Industry has stirred the pot on the thorny election issue of public sector pensions, suggesting in a report that funding the retirement of these workers created a "black hole" of £10bn a year and was an unfair burden on taxpayers. Both main political parties have been giving this debate a wide berth for fear of losing votes from fearful public sector employees, though the Conservatives have made ominous noises in the past.
The pension liability cannot be left to run unchecked, but even before the credit crunch the debate was emotive and there is deep resentment among public sector workers at being lectured by politicians – who have a nice retirement deal of their own – or captains of industry (likewise). As Tony Cutler and Barbara Waine of the Centre for Research on Socio-Cultural Change point out in a recent paper (Moral Outrage and Questionable Polarities, www.cresc.ac.uk), the language used in discussions is often inflammatory and moralistic, claiming public sector workers are beneficiaries of "pensions apartheid" and "gold-plated" retirements.
That paints a highly misleading picture of what awaits low-paid council staff – although in fairness, equivalent private sector workers will almost certainly be even worse off when they retire. The alleged public-private duality is overplayed: only those at the top of the public sector have pensions that could reasonably be described as gilt-edged. Very, very senior civil servants might receive an annual pension of £50,000 to £100,000 a year. The CBI does not highlight that a number of private sector executives are in line for double that, and there are at least 10 FTSE 100 directors aged over 50 who are on track for an annual payout of more than half a million a year for life.
It is a similar story with David Cameron's pledge to stop any senior public sector manager earning more than 20 times as much as the lowest paid employee. Calculations by the Guardian found that would force 10 bosses at companies which signed the Conservatives' national insurance letter to reduce their pay and bonuses by a combined £74m to comply. Even if it is a bit rich under these circumstances for an organisation of industry leaders to prescribe pension curbs for people much poorer than themselves, the CBI's idea of an independent commission on private sector pensions is not an outrageous one. However the real pensions apartheid is not between public and private sector employees, but between top earners who still enjoy generous provision and everybody else.
Neither does the CBI delve into trend for employers to pull up the drawbridge on final-salary pension plans. Membership fell to 2.6 million in 2008 from 3.6 million in 2004. More than 70% of such schemes are closed to new members or have gone further and shut to existing members. This has contributed to an alarming increase in the number of people with no pension savings at all. Figures from the Office for National Statistics show that the share of the private sector workforce without any coverage was 62.6% in 2008, up from 54.7% in 1999.
Most alarming of all, young people are not acquiring the pensions habit. The Annual Survey on Hours and Earnings shows that of the 16-21 age group, 89.9% had made no pension provision at all and in the 22-29 age group, 64% had nothing. Pensions might not seem a big priority for youngsters, but it is expensive to regain lost ground later. Before turning the heavy guns on public sector retirement plans, we should remember the dangers of losing the pension culture: we are already sowing the seeds for another financial crisis.
Millions of Britain's private sector workers face poverty in retirement
by Phillip Inman
• 62.9% of private sector workers do not save into a pension plan
• 85% of staff in public sector contribute to a retirement scheme
Almost two thirds of private sector workers are failing to save for a pension, according to official figures. While almost all public sector workers are scheduled to receive a guaranteed pension, most workers in the private sector are without a pension at all. For many private sector workers the situation could leave them only a modest top up to their state pension and close to the threshold for means tested benefits.
Data from the Office for National Statistics show that 62.9% of private sector workers are not saving into an occupational scheme. In the public sector 85% of workers contribute to a retirement plan, leaving only 15% outside the schemes run for nurses, teachers and firefighters. Liberal Democrat treasury spokesman Lord Oakeshott said the figures highlighted the government's failure to encourage workers to save for retirement. He warned that the country risked millions of people reaching retirement without enough to live on. "Public and private sector pensions used to be broadly comparable, but now they are worlds apart in terms of take-up and the benefits they pay," he said.
Pensions have yet to surface as an election issue despite several protests by the National Pensioners' Convention, the largest body representing retired people. The employers' group, the CBI, said last week it was concerned that generous public sector pensions, which in most cases pay the equivalent of two thirds of final salary for 40 years service, far outstripped private sector provision and were unaffordable.
Unions have defended public sector pensions, which they argue will cost less to provide after a series of reforms over the last two years. Labour ministers have also rushed to defend pensions which cover about 5m of the 6.5m nurses, teachers, police and firefighters. However, the number of workers in similar pensions in the private sector has shrunk to 2 million and only 800,000 are in schemes open to new members out of a total private sector workforce of 22 million.
The government plans to open a new private sector scheme in 2012 aimed at millions of people without a pension. All workers will be automatically enrolled in personal accounts or an existing occupational pension scheme. They will pay 5% alongside a contribution of 3% from their employer. Critics of the scheme argue the low contributions will fail to lift many people out of poverty. They also expect high opt-out rates as people decide they cannot afford to make pension contributions, despite the tax breaks.
A survey for the Association of British Insurers also found workers were turning away from saving. While people's confidence in the economy was increasing, the majority believed the benefits of saving had fallen during the past year. Around 44% of people now expect the economy to improve during 2010, up from just 5% when the same research was carried out three months ago. But six out of 10 people who are not saving think the benefits of setting money aside have fallen during the past year, with 54% of savers feeling the same way.
The ONS figures follow a survey across public and private sector by the Department for Work and Pensions showing that fewer than half of Britons are actively saving for when they retire, despite 34% admitting they are worried about the future. The survey revealed that only 17% of people disagreed that putting money into a pension was the best way to save for their retirement, but just 48% of people are currently saving for their old age in this way. Young people are the most likely to be delaying setting aside money for when they stop work, with 80% of those aged 18 to 24 and 50% of those aged between 25 and 34 not saving.
Simple Demographics Shows Why US Housing Is Screwed, Japan Is Doomed, And Vietnam Is The Place To Be
by The Mad Hedge Fund Trader
Desperate homeowners counting on a "V" shaped recovery in residential real estate prices to bail them out better first take a close look at global demographic data, which tells us there will be no recovery at all. I have been using the US Census Bureau's population pyramids as long leading indicators of housing, economic, and financial market trends for the last four decades. They are easy to read, free, and available online at http://www.census.gov/.It turns out that population pyramids are something you can trade, buying the good ones and shorting the bad ones. These graphical tools told me in 1980 that I had to sell any real estate I owned in the US by 2005, or face disaster. No doubt hedge fund master John Paulson was looking at the same data when he took out a massive short in subprime securities, earning himself a handy $4 billion bonus in 2007. To see what I am talking about, look at the population pyramid for Vietnam.
This shows a high birth rate producing ever rising numbers of consumers to buy more products, generating a rising tide of corporate earnings, leading to outsized economic growth without the social service burden of an aged population. This is where you want to own the stocks and currencies.
Now look at the world's worst population pyramid, that for Japan. These graphs show that a nearly perfect pyramid drove a miracle stock market during the fifties and sixties which I remember well, when Japan had your textbook high growth emerging market economy.
That changed dramatically when the population started to age rapidly during the nineties. The 2007 graph is shouting at you not to go near the Land of the Rising Sun, and the 2050 projection tells you why. By then, a small young population of consumers with a very low birth rate will be supporting the backbreaking burden of a huge population of old age pensioners.
Every two wage earners will be supporting one retiree. Think low GDP growth, huge government borrowing, deflation, and a terrible stock and housing markets. If you are wondering why I am aggressively shorting the yen right now, this is a big reason. Dodge the bullet.
If demographics is destiny, then Americas outlook sucks. Brace yourself. We are turning into Japan. As a silver tsunami of 80 million baby boomers retires, they will be followed by only 65 million from generation "X". The intractable problems that unhappy Japan is facing will soon arrive at our shores. Boomers, therefore, better not count on the next generation to buy them out of their homes at nice premiums, especially if they are still living in the basement, and not paying any rent.
They are looking at best at an "L" shaped recovery, which is a polite way of saying no recovery at all. What are the investment implications of all of this? Get your money out of America and Japan, and pour it into Vietnam, China, India, Brazil, Mongolia and other emerging markets with healthy population pyramids. You want the wind behind your investment sails, not in your face with hurricane category five violence. Use any serious dip to load the boat with the emerging market ETF (EEM).
Now that we have figured out that Vietnam is a great place to invest, take a look at the Van Eck Groups Vietnam Index Fund (VNM). The venture will invest in companies that get 50% or more of their earnings from that country, with an anticipated 37% exposure in finance, and 19% in energy. This will get you easily tradable exposure in the country where China does its offshoring.
Vietnam was one of the top performing stock markets in 2009. It was a real basket case in 2008, when zero growth and a 25% inflation rate took it down 78% from 1,160 to 250. This is definitely your E-ticket ride. Vietnam is a classic emerging market play with a turbocharger. It offers lower labor costs than China, a growing middle class, and has been the target of large scale foreign direct investment. General Electric (GE) recently built a wind turbine factory there. You always want to follow the big, smart money. Its new membership in the World Trade Organization is definitely going to be a help.
I still set off metal detectors and my scars itch at night when the weather is turning, thanks to my last encounter with the Vietnamese, so it is with some trepidation that I revisit this enigmatic country. Throw this one into the hopper of ten year long plays you only buy on big dips, and go there on vacation in the meantime. Their green shoots are real. But watch out for the old land mines.
Japan Bank Lending Falls Sharply
by Takashi Mochizuki
Japanese bank lending in March fell at its sharpest pace since August 2005, a reaction to the steep increase in loans a year earlier during the financial crisis but also reflecting weak corporate demand for funds due to an uncertain economic outlook. Lending by all banks excluding credit unions dropped 2.0% on year to ¥401.13 trillion ($4.3 trillion), the fourth straight month of declines, the Bank of Japan said Monday.The shrinking lending comes even as the country's central bank pushes ahead with an easy monetary policy to try to revive private demand in the world's second largest economy. The Bank of Japan has kept its target short-term interest rate at 0.1% since December 2008, and last month it doubled the amount of low-interest loans it will lend to banks to Y20 trillion. The BOJ's easing isn't explicitly aimed at increasing bank lending--with companies' funding demand weak, monetary policy alone has little power to get banks to make more loans. But with many Japanese firms dependent on bank loans to do business, such lending would need to rise to improve business confidence among companies, especially smaller firms.
Ruling party politicians have criticized the central bank for not doing enough to jumpstart demand and get the economy out of deflation, and weak data such as Monday's bank lending could lead to even more pressure on the BOJ to loosen credit more, particularly ahead of parliamentary elections in July. Monday's data "confirmed that Japanese economic growth is still weak. It showed that firms are not so optimistic about the outlook and are cutting their capital investment as a result," said Naomi Hasegawa, a senior strategist at Mitsubishi UFJ Securities.
A major cause of the steep drop in bank lending in March was the comparison with the year-earlier figure, when the financial crisis made it difficult for large firms to raise funds by issuing bonds and commercial paper, resulting in a big increase in borrowing from banks. Bank lending rose 3.6% in March 2009. However, "weak fund demand and the slow earnings recovery among some small- and medium-sized firms were also reasons for the sluggishness in bank lending, especially to smaller firms," said Azusa Kato, economist at BNP Paribas.
The data showed that lending by so-called city banks, Japan's largest lenders headquartered in the major cities, dropped 3.6% in March, falling at the fastest pace since September 2005. Following calls by ruling party politicians to ease monetary policy more, the BOJ last month expanded a lending facility that offers three-month loans to banks at a 0.1% interest rate, to Y20 trillion from Y10 trillion. But analysts believe that banks have invested most of the funds they borrowed in government debt rather than making new loans.
"As firms are not borrowing aggressively, banks have plenty of cash at hand. They are investing the money into securities, and I'd say 70% of their investment portfolio is in Japanese government bonds," said Mitsubishi UFJ Securities' Hasegawa. BNP Paribas' Kato said that capital spending especially among large manufacturers is likely to show a clearer recovery later in the year. However, "when you consider that large companies have plenty of funds on hand, it's unlikely that this will lead to an increase in lending," she said.
Bank Lending Slows in China
by J.R. Wu
China's bank lending slowed in March, after moves by Beijing to stem a flood of credit now that the economy is improving. The nation's banking regulator has been calling on lenders to break their long-held habit of concentrating new loans in the year's early months and to ensure a more balanced supply of credit throughout the year. New loans spiked sharply in January, accounting for almost 15% of the full year's target.
According to data issued by the People's Bank of China Monday, financial institutions in China extended 510.7 billion yuan ($74.8 billion) of new local-currency loans in March, down from 700.1 billion yuan in February, and well below the 1.39 trillion yuan extended in January. China's banks issued 9.59 trillion yuan of new loans in 2009. "Beijing's efforts to tighten liquidity and credit conditions have clearly started to have an impact," said Brian Jackson, an analyst at RBC Capital Markets. "This should take some of the steam out of the Chinese economy, but we believe that policy makers will need to use all of the policy tools at their disposal to prevent overheating. That includes rate hikes and a stronger currency."
New yuan loans totaled 2.6 trillion yuan for the first quarter, a bit less than 35% of the total 7.5 trillion yuan Beijing has targeted for the full year. The total is still slightly higher than the regulator's target. Banks should extend 30% of their full-year lending totals in each of the first and second quarters, and 20% in both the third and fourth quarters, Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, said in an article in China Finance magazine early this month. China Finance is backed by the central bank.
China's broadest measure of money supply, or M2, was up 22.5% at the end of March from a year earlier. The year-on-year increase was 25.5% at the end of February, the People's Bank of China said. Other data issued Monday showed the country's foreign-exchange reserves at the end of March totaled $2.447 trillion, up $48 billion from Dec. 31, after growing by $22 billion in March, $10 billion in February and $16 billion in January. The increase for the quarter was smaller than the $126 billion rise between Sept. 30 and Dec. 31. The PBOC issues data on foreign-exchange reserves on a quarterly basis.
Wang Qing, an economist at Morgan Stanley, said that while the growth in the country's reserves in March could be attributed in part to so-called hot money inflows, Chinese financial institutions have also been repatriating assets because they expect the yuan to start appreciating soon.
China to crack down on heavy local loan books
by Tom Mitchell
The top Chinese banking regulator on Sunday said special investment companies created by local government authorities to make loans were his main concern. Liu Mingkang, head of the China Banking Regulatory Commission, told a high-profile Asian economic forum that China's financial institutions had until the end of the June to submit "comprehensive" reviews of their loan books. "We asked all the banks to hold back and monitor [their lending portfolios] project by project," Mr Liu told the Bo'ao Forum for Asia.
Local governments in China have borrowed heavily from banks for pet investment projects, often posting large tracts of vacant land as collateral. Unofficial estimates of their resulting exposure run as high as Rmb11,400 bn (USD 1,676bn). In a stimulus response to counter the effects of the global financial crisis, China's banks doubled lending last year to Rmb 9,600 bn. The government has set a target of Rmb 7,500 bn in total new loans in 2010, a significant decrease from last year', although still well above the roughly Rmb 4,000 bn in new loans extended in 2008.
While Mr Liu did not say how much of the new liquidity had flowed to local government investment vehicles, he said banks would be required to switch guarantors for at-risk loans, demand additional collateral or increase provisioning by the end of this year. Chinese banks have also been told to insist on buildings and other tangible assets for collateral, rather than empty plots of land. "Banks must do their homework in a thorough way," said Mr Liu, adding that inspection teams from the regulator were prepared to fan out across the country in the third quarter if necessary.
Mr Liu said the policy was "real and firmly backed up by the State Council", referring to the Chinese cabinet. He added that where necessary the regulator would "downgrade assets and increase provisions". Much of the local government borrowing has been funneled into residential development projects, fuelling fears of a nationwide property bubble. "Demand for housing is very high now, pushing up prices," said Wang Yongping, secretary general of the China Commercial Real Estate Association. "But there has also been panicked buying."
Mr Liu cited the residential property sector as another area of concern. He said the regulator has ordered banks to increase down-payment requirements for second-home purchases and to compile lists of "approved" developers. The southern Chinese island of Hainan - the location for the annual Bo'oa forum - has emerged as a symbol of the speculative frenzy. Mr Liu did not have to wander far from the venue to find evidence of the boom.
The resort home for the Bo'ao Forum was itself started by a well-connected private entrepreneur, who later turned to a Chinese state shipping company for financial backing to complete the project. Aside from the one weekend each year when the forum is in session, the hotel that hosts the forum struggles with occupancy rates. On the other side of Bo'ao's famous estuary, where three rivers flow into the South China Sea, sixteen construction cranes loom over a new residential construction site. In another direction, work is racing ahead on a new state guesthouse project. "Real estate projects are mushrooming here," said one resort executive. "The last six months have been crazy. I should have bought two years ago."
Geithner Confronts Curse of 15 Plaguing China
by William Pesek
Chinese numerology is a fascinating thing. Take the obsession with eight. China chose August 8, 2008, for the start of the Beijing Olympics. What date could be luckier than 08/08/08? Weddings are planned around eights. Chinese pay extra for eights in phones numbers and license plates. Businesses seek offices with eights in the address. Four is perhaps the most dubious of numbers. That, coincidentally, was how many U.S. bigwigs were in China last week. Treasury Secretary Timothy Geithner was on the job. Also there for various reasons were former President George W. Bush and former Treasury chiefs Henry Paulson and John Snow. Chinese bloggers buzzed about the unluckiness of it all.
Let’s consider an even less auspicious number: 15. While it’s not known to spook the average Chinese, 15 keeps cropping up in ways that should worry those who sense China is losing control over inflation. Last year, China began pouring 15 trillion yuan ($2.2 trillion) into projects -- mostly at the local government level -- to boost growth. All that building has some analysts predicting stock-price gains of 15 percent for Xinjiang Tianshan Cement Co. Also, 15 percent is the low end of the range of estimates for how much the yuan is undervalued.
That leads us to the most worrying 15 of all. Failure to rein in local-government spending may push inflation to 15 percent by 2012, says Victor Shih, an economist at Northwestern University in Evanston, Illinois. He has received lots of attention for tallying government borrowing. This appears to be Geithner’s new line with Chinese officials. Not trade deficits, lost U.S. jobs or fairness between nations. The bill from China’s massive stimulus is coming due and the hangover will be severe. A stronger yuan would limit the pain.
Here, 15 pops up again. April 15 was the deadline for a semiannual U.S. review of the currency policies of major trading partners. That was until Geithner postponed it. Rather than take the bait from Congress to label China a currency manipulator, Geithner jetted to Beijing for an unscheduled chat with Vice Premier Wang Qishan last week. The U.S. is right to take a less confrontational tone. There’s zero chance China will bow to table-thumping -- not when its economy is growing at 10.7 percent and the U.S.’s is expanding at 0.1 percent. China should boost the yuan for its own good. Traders are betting such a move is now afoot.
Geithner’s reticence underscores an inconvenient reality. Everyone knows China manipulates the yuan. It wouldn’t be adding to its $2.4 trillion of currency reserves if it weren’t married to a mercantilist model. Yet China could hold up a mirror to the U.S. When U.S. Senators Charles Schumer of New York and Lindsey Graham of South Carolina berate China, they forget their government also is a massive manipulator. Zero interest rates and trillions of dollars of government debt tend to depress a currency over time.
The only reason the dollar isn’t plunging is Chinese support and the fact investors don’t have many alternatives. U.S. policies have a clear beggar-thy-neighbor quality. It’s not China’s fault if it plays the game better. In a perfect world, Geithner could push the issue by buying mountains of yuan. After all, the U.S. only has $44 billion of reserves, which is about how much China spent staging the Beijing Olympics. Yet loading up on yuan to boost China’s exchange rate isn’t an option until the currency is fully convertible.
How China figures all this out is of vital interest to markets and politicians the world over. China has been the "It" economy for years. What’s dawning on the world, though, is how many challenges are linked to its development. Be it global imbalances, climate change, the optimal style of government or the role of human rights in diplomacy, China is at the center of the debate.
The global crisis devastated the "Washington Consensus" of democracy, free markets, transparency and unfettered globalization. It’s now competing with a "Beijing Consensus" of open markets, autocratic government and limited press freedom. Anyone who thinks this tug of war between the Group of Two will go smoothly is dreaming. Geithner is putting the Group of 20 to the test as he tries to prod China to revalue. Seven months ago, the G-20 replaced the Group of Seven as the steering committee to rebalance world growth. The idea was to broaden the power base. Instead, it has grown smaller. The G-20 is taking a backseat to the G-2.
It’s a marriage of inconvenience. As the U.S. struggles to increase jobs, China risks overheating as it grapples with the Curse of 15. It was on Dec. 15 that New York hedge-fund manager James Chanos made headlines in a CNBC interview about shorting China’s economy. He’s hardly alone in betting on when China’s 15 minutes of economic fame might be up. We’ll get a fresh idea when China unveils its first-quarter growth numbers on -- yes, you guessed it -- the 15th of April.
John Dugan: Why It's So Hard to Hold Wall Street Accountable
by Zach Carter
The Financial Crisis Inquiry Commission hearings continue to be a broad, boring failure, peppered with a few moments of significant insight. Throughout most of yesterday's hearing featuring the nation's top bank regulator, Comptroller of the Currency John Dugan, Commissioners treated their witness as a credible expert, rather than a culpable catalyst of the crash.
You'd never know it from Dugan's calm, mousey demeanor before the FCIC, but he spent several years working as a high-powered bank lobbyist before being appointed to his current job by George W. Bush in 2005. Since then, he's been a major defender of big banks, pushing to defang consumer protection regulations and provide legal cover for subprime predators.
Nobody on the Commission ever pressed Dugan on his lobbyist background. Who he lobbied for, what he lobbied for, and how much he got paid were never under discussion. Nobody asked him why he's been receiving lobbying talking points from major bank executives in secret during the debate over financial reform. Nobody asked him what sort of job he's likely to take after his term as Comptroller expires in August. This is a tremendous problem: Wall Street's political influence is so tremendous that they can secure top-level regulatory jobs for their own lobbyists. It's as if someone appointed Billy Tauzin head of the FDA.
And in Dugan's warped history of the past decade, both he and the banks he regulates never really did anything wrong. "We made very clear that predatory lending . . . was not something we would tolerate," Dugan said. "Honestly, those practices never really took root."
This astounding claim is impossible to square with any credible account of the explosion in subprime lending over the past decade, an explosion in which Dugan's banks were some of the top players. In a 2007 speech, FDIC Vice Chairman Martin J. Gruenberg said, "It now appears that the most elementary notion of predatory lending--failure to underwrite based on the borrower's ability to pay--became prevalent in the subprime mortgage market."
Throughout his testimony, Dugan claimed it was not banks, but independent mortgage companies like New Century and Ameriquest who created the subprime debacle. These other companies that didn't accept consumer deposits, and thus were not subject to bank regulations, were able to get away with terrible practices, but the banks were generally innocent.
Yet according to an analysis by the National Consumer Law Center, Dugan's banks issued 31.5% of all subprime mortgages in 2006, along with 40.1% of exotic Alt-A mortgages, and 51% of tricky option-ARM loans (Alt-A and option-ARMs were often worse for consumers than subprime). Late in the hearing, FCIC Chairman Phil Angelides hammered home an equally important point: the Ameriquests and the New Centurys were being directly supported by the banks Dugan regulates. In fact, 21 of the 25 largest subprime lenders relied directly on support financing from national banks. The Wall Street behemoths were fueling the subprime machine, even when they weren't issuing the loans directly.
But the gravest sin committed by Dugan's agency, the Office of the Comptroller of the Currency (OCC), was an aggressive effort to block state regulators from enforcing consumer protection laws against big banks. The OCC regulates federally chartered banks, but until 2004, states still had the right to enforce their own laws against national banks operating within their borders. That meant that for national banks, the OCC's rules served as a regulatory floor-- state regulators couldn't enforce weaker standards than those imposed by the OCC, but they could enforce stronger rules.
That changed when Dugan's predecessor, John Hawke Jr., asserted sweeping preemption powers, insisting that the states' authority was invalid. Dugan continued this crusade throughout his time as Comptroller, and at yesterday's hearing, he defended the move in his opening statement.
"If it were true that federal preemption caused the subprime mortgage crisis by preventing states from applying more rigorous lending standards to national banks, one would expect that most subprime lending would have migrated from state regulated lenders to national banks. One would also expect that all bank holding companies engaging in these activities that owned national banks would carry out the business through their national bank subsidiaries subject to federal preemption, rather than their nonbank subsidiaries that were subject to state law . . . neither of these conjectures is accurate."
In fact, preemption spurred a race-to-the-bottom in regulatory standards, and was a major cause of the subprime explosion. But nobody challenged Dugan on the assertion seriously until Angelides took the reins around 3:00 p.m., two-and-a-half hours after the hearing began.
"You tied the hands of the states and then you sat on your hands," Angelides said.
Angelides was exactly right. State and federal bank regulators are funded by taxes they levy against the banks they regulate. Banks game this system, flocking to whatever regulator will give them the most leeway. Preemption sent a clear message to the states: if they want to keep their bank tax revenue, they have to go easy on their banks. And so about half of all states in fact lay off after preemption came down.
But another half of the states decided at some point or another to go after predatory national banks. Anytime that happened, the OCC would intervene, deploying every legal excuse it could come up with to protect the bank. There are dozens of examples of the OCC engaging in this activity, but the most egregious case is its lawsuit against First Franklin, a bank whose sole raison d'etre was subprime lending. There is no way to construe the OCC's assault on First Franklin's state regulator as anything other than an attempt to protect a subprime predator.
Metal$ are in the pits
by Michael Gray
There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits. The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.
Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public. Maguire -- in an exclusive interview with The Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.
"JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer," Maguire said. In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short. "HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added. "No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment.
Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver. Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal.
The remaining requests would have to be settled for cash equivalent. "That is tantamount to a default on the trade," says Bill Murphy, chairman of the Gold Antitrust Action committee. Maguire goes further and calls it a fraud: "If you sell something you do not own, then that is fraud."
Back in 2007, Morgan Stanley agreed to settle a $4.4-million lawsuit brought by precious-metal clients, who alleged that Morgan offered to buy gold and silver and store it for the investors, but never purchased any metal and still charged them storage fees. Morgan Stanley denied the charges at the time, but "settled the case to avoid the cost and distractions of continued litigation," the firm said.
Despite gold's rise each of the last 10 years, Murphy believes the price of gold today would be closer to $2,300 an ounce if the price just moved with inflation. Maguire believes the price should be even higher given the fear trade that would have sent prices spiking during the financial crisis in 2008-09. Both precious metals have seen a recent spike since Maguire's e-mails became public. Gold has gained 6.5 percent to close at $1,161.55, while silver has spiked 10 percent to $18.38.
According to the e-mails Maguire sent to CFTC regulators, he was spot-on in his expectations of how the precious metals would trade on release of the January jobs report. This message is to "confirm that the silver manipulation was a great success and played out exactly to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview," Maguire wrote to a staff investigator after the trading day. CFTC commissioner Bart Chilton said, "I'm appreciative of the information Mr. Maguire provided and I'm glad it was introduced into the investigation."
High, low silver
The prices of gold and silver have been allegedly suppressed by JPMorgan Chase and HSBC, according to a London whistleblower. Andrew Maguire, who laid out the banks’ plan in e-mails to the CFTC prior to trading on the Comex on Feb. 5.
1.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb.
Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the US dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added.
Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels. Kind regards,
2.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? Kind regards,
3.) Andrew T. Maguire
From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today Good afternoon, Mr. Maguire, I have received and reviewed your email communications. Thank you so very much for your observations.
Judge Jed Rakoff taps into nation's outrage over economic crisis
by Nathaniel Popper
The outspoken federal jurist has condemned not only big banks for their financial misdeeds but also their regulators. The economic crisis has brought out the populist in many politicians and others. Among the more unlikely ones may be a silver-bearded federal judge who has wasted no chance to tell the country's biggest banks what he thinks about how they operate.
When Bank of America Corp. was trying to settle civil charges over its conduct in its purchase of Merrill Lynch, U.S. District Judge Jed Rakoff wrote that the bank's executives had led what "could have been a bank-destroying disaster if the U.S. taxpayers had not saved the day." Addressing how the firm pays its top people, the judge spoke in February of "the incredibly bloated compensation of too many executives in too many American companies."
In another case, Rakoff called JPMorgan Chase & Co.'s handling of a major client improper at the very least, "if not a downright sham." He condemned not only big banks but also their regulators, saying the Securities and Exchange Commission's enforcement in the Bank of America case did "not comport with the most elementary notions of justice and morality." "He has tapped into some of the national and populist outrage that has followed the economic meltdown," said Anthony Barkow, executive director of the Center on the Administration of Criminal Law at New York University. "He's made an intellectual and legal case for what a lot of people are thinking based on their own common sense."
Rakoff has even become a reference point in the legal world. In chastising the SEC last week in the online magazine Slate, Eliot Spitzer, who as New York attorney general took on Wall Street, pointed to Rakoff's rulings. When another judge criticized the SEC recently, a Wall Street Journal blogger said that judge had "pulled a Rakoff." Some defense lawyers privately describe Rakoff as a publicity-seeking maverick. Even fans say he is not a fun judge to appear before. "He certainly gave me, as a prosecutor, a little lecture, which I didn't often get," said Steven Feldman, a former assistant U.S. attorney. "You know that you have to be on top of your game with Judge Rakoff -- ready to take it to the next level."
In an interview in his chambers in Lower Manhattan, not far from Wall Street, Rakoff, 66, spoke cheerfully about the controversy that surrounds him. He compared his judicial philosophy to the values underlying baseball, a passion of his along with bridge and ballroom dancing. (One of his opinions in the Bank of America case quotes Yogi Berra.) "One of the many things I like about baseball is how it combines individual talent and teamsmanship," Rakoff said. "In baseball you have individual responsibility, and if you fail it, you get an error. But at the same time your focus is on the common goal of the team to win. This is part of what resonates with people about baseball. This is how they would like society to work."
The Philadelphia native and Harvard Law School graduate joined the federal bench in 1996 after being appointed by President Clinton. He spent seven years early in his career in the financial crimes unit of the U.S. attorney's office in Manhattan. "Once I really got into securities fraud prosecutions," Rakoff said, "I came to realize how central they were to the maintenance of a free market and how, in many ways, they are far more important to the welfare of our society than many of the more sensational criminal cases that one hears about."
Rakoff may retain some of his prosecutorial attitude. "Deep down I think this is someone who is primarily a prosecutor," said John Coffee, who teaches a law school course with Rakoff at Columbia University. "He's got a strong moral perspective that there is right and wrong, and there are things that shouldn't be done." Relying on that perspective, the judge has consistently pushed the SEC to take action against the people responsible for financial misdeeds, not just the companies.
"If crimes are committed they are committed by people, they are not committed by some free-floating entity," Rakoff said. "These companies and other entities don't operate on automatic pilot. There are individuals that make decisions -- and some make the right decisions and some make the wrong decisions. If the decisions they make break the law, they are the ones who are responsible."
Lawyers say Rakoff approaches every case seriously, regardless of its scope. In one criminal case, a defendant complained about his treatment during a routine traffic stop. Rakoff had the entire court travel at 10 p.m. on a Friday to the Bronx intersection where the incident occurred. "I wasn't a huge fan of doing that, but I respected it," said NYU's Barkow, who was the prosecutor in the case.
Rakoff has also made some notable rulings in nonfinancial cases. In 2002, he found the federal death penalty unconstitutional. An appeals court overturned his ruling later that year. In 2006, he compelled the U.S. government to release information about detainees at Guantanamo Bay in Cuba. But because Rakoff works in Manhattan, he gets a steady stream of cases dealing with high finance.
On Monday, saying he needed more information, Rakoff refused to approve an SEC settlement with a securities trading firm tied to a high-profile case of alleged hedge fund insider trading. Late last month, he rejected Citigroup Inc.'s bid to have a lawsuit against it thrown out. Last week, he dismissed a case brought by pension funds against rating firms Moody's and Standard & Poor's.
For now, Rakoff's greatest long-term effect is likely to come from the Bank of America case. Last year the judge rejected the company's first settlement with the SEC, saying the $33-million payment that had been negotiated was insufficient. He ultimately approved a revised accord that called for a $150-million payment. The case has sent a clear message to the SEC, securities lawyers say. "What he was trying to do in part is to shake up the agency and prod them to work harder -- to do better investigations," University of Cincinnati law professor Barbara Black said.
SEC enforcement chief Robert Khuzami told the Washington Post last week that the agency, as part of an effort to be more aggressive, might detail its findings of wrongdoing in cases that the agency settles. Rakoff says he gave up any hope of moving to a higher court when he ruled against the death penalty -- and says he has no desire to be anywhere else. "To have the thrill of seeing actual people testifying in hotly disputed matters -- to see a jury at work -- I cannot tell you how enticing it is," he said. "I love my job. That's the bottom line."
Richard Dawkins: Arrest The Pope During UK Visit
Richard Dawkins and Christopher Hitchens, two of the world's most prominent atheist intellectuals, are seeking means to try the pope for crimes against humanity, their lawyers confirmed this weekend.
The pair are said to be working with British lawyers to see if the pope can be arrested for his part in the alleged cover-up of widespread sexual abuse in the Catholic Church during a visit to the United Kingdom in September
The Vatican has suggested that the pope is immune to prosecution as he is a head of state - Dawkins and Hitchens suggest that he is not immune as the Vatican is not represented at the United Nations.
"I'm convinced we can get over the threshold of immunity," their lawyer Mark Stephens told The Guardian. "The Vatican is not recognized as a state in international law. People assume that it has existed for time immemorial but it was a construct of Mussolini, and when the Vatican first applied to become a member of the UN, the US said no. So as a sop they were given the status of permanent observers rather than full members."
Dawkins, author of The God Delusion, has confirmed he is seeking the pope's arrest, although he later denied reports he was planning to perform the arrest personally.
Last month Dawkins wrote a scathing article for the Washington Post in which he said:"Should the pope resign?"
No. As the College of Cardinals must have recognized when they elected him, he is perfectly - ideally - qualified to lead the Roman Catholic Church.
A leering old villain in a frock, who spent decades conspiring behind closed doors for the position he now holds; a man who believes he is infallible and acts the part; a man whose preaching of scientific falsehood is responsible for the deaths of countless AIDS victims in Africa; a man whose first instinct when his priests are caught with their pants down is to cover up the scandal and damn the young victims to silence: in short, exactly the right man for the job.
He should not resign, moreover, because he is perfectly positioned to accelerate the downfall of the evil, corrupt organization whose character he fits like a glove, and of which he is the absolute and historically appropriate monarch.
No, Pope Ratzinger should not resign. He should remain in charge of the whole rotten edifice - the whole profiteering, woman-fearing, guilt-gorging, truth-hating, child-raping institution - while it tumbles, amid a stench of incense and a rain of tourist-kitsch sacred hearts and preposterously crowned virgins, about his ears.
Hitchens told the Sunday Times of London: "This man is not above or outside the law. The institutionalized concealment of child rape is a crime under any law and demands not private ceremonies of repentance or church-funded payoffs, but justice and punishment."
144 comments:
I think it is getting worse as well. Every single person I know (that has kids) always says the throw away phrase "I am doing X for my children" when X is clearly all about themselves and has zero to do with the kiddies. Thoughtful essay VK.
*sigh*
VK, the vitriol you level at my generation is seriously misplaced.
Last I checked Generation X encompassed individuals 30 to 46 years of age.
Yes we were able to get in on the tail end of the era of cheap credit and cheap oil, but none of us have much in the way of actual assets.
Most of us have significant student loan and mortgage debt obligations. Some, like me, were awake enough to avoid both.
None of us will see any of the Medicare or SS entitlements that the Silent, Boomer, and Jones generations will revel in.
I would recommend those as the most logical targets if you're bent on starting internecine warfare among age cohorts.
Gen X has far more common cause with the generations that follow than those that have gone before.
VK,
Upon further reflection, your post yesterday made me think of this video by the Pinky Show: Re: Structure, Power and Agency.
Incidentally, I recommended The Pinky Show to everyone. It might seem quirky and unassuming at first, but they critically challenge basic cultural and historical assumptions in a pretty neat way. It's fun stuff, and I'm a supporter of their work.
zander said...
"glad to hear you try to wring every last bit of enjoyment out of life...as do I.
El G said many posts ago, and if I'm wrong I apologise El G, that hopefully by the time it all goes to shit he might be lucky enough to be out of it. I don't get that, life is an amazing experience I never want to end, not ever, don't think anything could ever get bad enough for me to want this once-only time to end, the fact I'm a devout atheist means I know/think when its gone its gone.
Enjoy your sunny day."
Well, I believe that I said that many of my generation will be fortunate enough to expire before TSHTF. I believe what I was trying to express that some viejos my be fortunate enough to get their **fair share of years before** they expire in unheated tenements, the fortunate ones getting dog kibble or soylent green to keep the motors idling. We all can't expect to aspire to immortality without David Rockefeller's billions. As to life being amazing, I will not argue, and I am enjoying more than ever as I shuffle toward the edge of this mortal coil. However, you admit that you have no expertise in alternative processes so are not qualified to make comparative judgments :-)
VK said...
The ship sails to the abyss! Moby Dick! Aaarrrggh! Shiver me timbers Cap'n! Sucking whooooosh sound.
Praise be to Nero’s Neptune
The Titanic sails at dawn
And everybody’s shouting
“Which Side Are You On?”
And Ezra Pound and T. S. Eliot
Fighting in the captain’s tower
While calypso singers laugh at them
And fishermen hold flowers
Between the windows of the sea
Where lovely mermaids flow
And nobody has to think too much
About Desolation Row
@ VK...I have no defense.
And this nightmare outcome seems now to have a momentum of its own.
re:"So thank you really, you had a blast, a great time."
You're welcome!
:)
Yo, VK: Don't trust anybody over 30! Girls say "yes" for boys who say "no".
Make love,not war!
Legalize PEACE!
So,my younger brother, each generation is naturally self-rightous at the point where it enters the adult world and realizes that the ideals it was assiduously taught through childhood and youth, are broadly compromized, corrupted and hypocritical in practice.
We, the boomers brought you the Summer of Love, protested the Vietnem war until it ended, brought you civil rights in a land that had tacit slavery.
A big V-8 in a cheap old car that you fixed-up yourself was a GOOD thing.It was what was happening.
The generation that we all owe is the generation that brought us through the Great Depression and WW-2.
Now, let me say, that the Great-Generation has had the benefit of their greatness in old age, and well they deserve it.
Your generation will live in a world of exhausted resources, and will screw the Baby-Boomers in a way that few generations have ever been screwed by their offspring.
This is inevitable. The debt we saddled you with is the "reductio-ad-absurdum" of what has become of the world economic system instituted as a solution to the Great-Depression and WW-2.
It worked well, but successive generations gamed it. This is the way of our species. You would have done the same. Just watch what you do in 30 years. (Nothing personal, of course, business is business.)
So, there is this "generational cycle" thing, and some people believe it like a religion, and some deride it viciously, but it seems like a pretty useful broad model. A Bolshevik economist,named Kondratiev worked this out historically. We go through a 4 generation cycle of collapse and rebuilding. In the US it was the Revolutionary War, the Civil War and Great Depression/WW-2, and now the cycle is coming around again.
Your benefits at the start of this include an access to information (and tripe, lies and BS) unparalleled in human history,an extremely sheltered youth, a world where you have more choices (good and BAD) than ever before possible, and all the information and resources you need right-now, to position yourself for the collapse we have scheduled for the day after tomorrow.
You have your youth, but you are the softest, weakest, most dependent generation ever, unable to find your way home without a GPS and a car. You got fat on the junk food that the generation before us invented, as a snack, and we boomers perfected as a drug. You play shooter games, and the Army recruits you to shoot civilians on computer screens from helicopters. Howrude will be your generational awakening? As rude as any ever, and you will react viciously, turning the elderly boomers who can no longer work, into Soylent Green, because you are no better than the boomers, just spiteful, just as human, just as ready to show some fresh cruelty, while decrying the cruelty visited upon you (reference modern Israel).
That being said, there are some in every generation who are thoughtful, some who are good and bad leaders, and many who just try to do whatever their part seems to be.
You are thoughtful, but the thoughtful have their Achilles heels as well, and failure to examine one's own programming is the most common.
Feed shit into the best cognitive processor in the world, and you still get garbage-in-garbage out.
Your kids and especially your grandkids, will hold you to have been so fortunate to have known all this, to have had the freedom to choose anything on the buffet.
What will it be kid? Make your choice. Make it once. That's how much time you have. All bets are final.
@John
+100
I have been a lurker on this site for sometime and really enjoy it. This is my first post. Concerning the discuss of apathy yesterday, I have feeling that the computer has played such a large part in the feeling of helplessness. The black box complexity has made us passive and dull.
When computers (and the internet) first got a foothold the productivity increases were staggering and I thought the access to information were make us smarter and foster more intelligent decision making. The result has been the opposite in the majority of cases. Most of it's commonfolk use is trivial entertainment.
We are stunned by special effects and media overload. It is common to have many TVs on at a time in public areas, which are only sound bites and tweets. A slow thoughtful discussion is unwelcomed to our newly acquired taste for the adrenelin high. The new financial instruments and trading practices would not be possible - and they do permit a new shield for the scammers to hide behind. This is what mainly is different about "this time". I believe the computer's dulling effect is the core cause of the lack of outrage toward this incredible debacle.
Sort of like the Time Machine movie I saw when I was a kid where in the future, people had been reduced to cattle who passively were herded to the slaughter by their keepers.
By the way, I do not believe in conspiracy theories. Congress, Wall Street, and us are simply gliding down this path of least resistance and nothing is going to change until we hit a wall and have to change course. Long term I have faith in humanity, short term I am extremely sceptical.
My early retiree parents have lolled in the Florida Sunshine since their mid 50's. The way things are going, I will be lucky to be eating catfood my 50's. Thanks mom and dad.
So yeah, intergenerational warfare is coming. But there is something about vk's writing that makes this woman so fracking angry with his pompous male privileged ass.
He sees and treats women exactly the way his fathers generation does.
He's exactly like the old men he blames for his generation's plight! He has been given the same privileged male status [which in his male-dominated home country no doubt he does have] which he doesn't question but has used it here on this commment section to put women down with ignorant testosterone induced pontifications that show he doesn't know anything about women. His lack of self awareness shows that given the same lucky circumstances he'd unconsciously have made the same testosterone induced top down choices as his fathers and grandfathers generations to put violence backed hierarchy above all. It's only an accident of birth timing that makes him aware of the plight of 'his generation'. If he were a wealthy male not losing anything he'd be defending that side of the equation with equal conviction.
Top dog or underdog, it's all the same for the men in a male dominated world. Switch their roles and their ages, but the story stays the same.
Re: Gen X, Y, Z....
Most civilizations have had an artisan or "middle class" element to some extent, but how often has this class been large and wealthy enough to have the fantastic luxury of the leisure to even consider classifying ourselves in this embarrassingly self-conscious and self-aggrandizing manner.
I suspect this is characteristic of only the privileged middle classes born into the societies at the centre of large empires, this particular one being the "West" (and the elite "westernized" administratative class enclaves scattered throughout the rest of the world).
Can these popular notions of grand cycles of generations exist in any non-imperial civilization, without wealth concentration so exessive that much even trickles(or used to) down to the artisan classes?
(I am considering all European empires of the past three or four hundred years to be the same "West". It would be interesting to learn if earlier Persian/Arabic/Turkish or even Roman empires developed similar "pop" philosophies within the middle class?)
Hey, VK, I'm a boomer who has stuck to The Dream and defied The System for the last 40 years. It's been a wonderful journey!
SMALL IS BEAUTIFUL!
GO VEGAN!
LOVE & PEACE!
Ahimsa
"There are many causes that I am prepared to die for but no causes that I am prepared to kill for." ~ MOHANDAS K. GANDHI
@VK
The inter-generational war/blame thing is crap. Lay the bad at the feet of the elites and their proxies who manage the human herd; just as it has always been. Name some names if you want.
I didn’t have any kids --that’s what I did about the condition of the world. I give to food shelves. I don’t do vacations. My impact on the endless wars, “greed is good”, Terminator® seeds, plastics, house flipping and hot tub sitting is as much as yours. And I am responsible for government, corporate and mafia overlord’s actions as much as you are, that being exactly zero responsible. Humans are trashy, not just the previous generation, all generations.
And sorry I can only afford one guy to plow my driveway, not your whole generation.
This just in from the friend who turned me on to TAA:
The Market Ticker shows that $400 billion of debt just appeared in the US system in one week.
WTF?!
Check this out!
http://www.market-ticker.org/
@ John
One of the best comments I have read here or anywhere. You get it, my friend.
Keep posting!
I'm having trouble ... I cannot connect to Z.H., of two minds, the market ticker.
Anybody else?
jal
Your argument seems a little misplaced. Man is just an animal after all, and all animals will take free meals. I too have inherited much of the mess (Gen X), but I won't blame because I don't think it is that simple. It's impossible to say Gen Y (or any Generation) would have done something different. It's probably practical to say that Gen Y or any of the 10,000 generations before them (or after) would have done the same thing. The boomers didn't have knowledge that is present now which allows for monday morning quarterbacking.
I will tell you what they did have. They had all the greed and lies of corporatism. They were fed a steady diet of propaganda, lies, misinformation, disinformation and deceit all supplied via 'owned' media outlets.
They were given access to all the TV, radio, sports, movies, plays, music and entertainment they wanted. And they were paid well, in fact very well. Generations don't rock the boat when they are given that, none do. They drink a beer, watch the game and have a bbq. There was no motive to dig deeper and to see what was really going on.
But I don't think they should bare none of the blame. They were enablers, guilty yes, but not the pushers. It just seems more complicated. The corporate and elites greed were driving the ship. The boomers were just on board eating all you can eat buffets...
@ VK - I hear you. I appreciate your perspective.
I'm a boomer, but an atypical one. I've never been in tune with the materialism, self-centeredness, and competitiveness of many of my generation. I've mostly felt like an alien. Sometime in the late 70s or very early 80s, I designed a political poster: "work and shop, work and shop..." That way of living, that mindset, made no sense to me then, nor now.
I think there are viable alternatives to "the indebted future," but those alternatives depend on new models that are abhorrent to TPTB, the banksters and their frontmen politicians. Will we ever have the collective will to toss them on their heads?
Economist and historian Michael Hudson is one of my heros - take a listen here.
I am also fond of David Korton. Check out this - the New Economy Working Group's 10 essential areas of action.
To Ilargi - What has got into you allowing this drivel by VK on an otherwise excellent site.
To VK - I have heard this sort of intergenerational nonsense before and not just from Gen Y.
What makes you think that all the members of a specific generation can be lumped into one category?Very few of any generation are seriously wealthy or have any more power than the average voter.
I was born in 1947 and I have had a few ups and plenty of downs.I have made sacrifices,including fighting for my country. I have worked and payed tax for the best part of 50 years,including 27 years in a helping profession.Not to mention thousands of hours of volunteer work and I doubt if I am unique.
Actually, you strike me as being a spoilt brat.You may well be resident in Kenya but I doubt if you are of African descent.The sheer gormless arrogance of you is strongly sugestive of the sub continent.
As the the most serious problem the world has is population overshoot and you and your cohort are of breeding age I suggest that you lot take a hike to the crest of that Great Divide and jump off a cliff.Do some good for the world for the first and only time in your miserable litle lives.
Ilargi - I'm disappointed; this post is WAY below your usual high standards.
VK - What's to say... sophomoric, shallow, BIGOTED, and hateful. Boomers are hardly unified and monolithic. They are as disparate and divided as any "group" can be. They do not dominate society and politics, as is plainly obvious by the trash culture and governance ushered in by YOUNGER generations. You have no idea what you are talking about and you have embarrassed and discredited your BFF Ilargi. Get a life.
+ me myself and i.
next.
"You do not inherit the earth from your parents, you borrow it from your children", goes an old Native American saying.
There's one reason why VK is getting all this flack, and that's because he's telling home truths.
"You've never had it so good", Gordon Brown used to crow in his years as Chancellor of the Exchequer, conveniently forgetting to tell us "but your children and your children's children will be the ones who pay for it".
"We have met the enemy and he is iu" - Pogo
plussing john, in LG's many footsteps, that is.
At 27 within my life time I expect to see the depletion and probable extinction of most significant fish stocks around the world, extensive (and possibly very violent) resource wars, major food riots based on soil depletion and wide spread crop failure, widespread ecosystem collapse, the continued destruction of a significant amount of the remaining forest land to make way for the ever growing population which even with the most generous of estimates will long have breached the accepted carrying capacity of the earth without moving to a monoculture gm based food sources. I expect to see the fall of major empires and a return to extremism in political views and fanaticism in religion. I could keep going but I’m sure you all get the point.
And all I can think is how many times has this happened before. My favourite example always ends up being the story of Easter Island. The blind faith in their leaders and ability to ignore the obvious is astounding, only now we get to experience on a global scale.
I am always left wondering what it is about human nature and the role of technology that left us unable to find our equilibrium with the planet.
Whilst rather dramatic it is a grave thought to realistically plan out a life based around what can only be expected to be a continuously decline in living quality and security, and one that the few of my friends who look outside of the mtv culture struggle with.
The dream of a house and security for the extension of my life is not in my mind realistic.
I do not seek to pass blame by writing this, just to express what I feel to be a similar view (whilst less eloquently written) to VK.
You're presuming a bunch of people are even going to be allowed to *HAVE* a next generation. I'm not so sure on that one.
There are no poor white people in South Africa either.
And heh, we have all been issuing our own fiat currency and run our own ponzi FRB schemes since coming into this world.
Must pop off to my local bank and deposit 500 quamquats, because you know, the banks accept them as legal tender.
Regarding Ahimsa's comment of 11.36....
ditto, ditto, ditto!! AND
'Be the change you want to see in the world'
-Gandhi-
: D
@VK, with a ;} I shall join the adolescent frolick.
Hope you're feeling better from getting that of your chest.
This boomer doesn't recall being given the opportunity to voice an opinion on anything to the elites. They have an evil way of quietly shutting you down if you try to rock the boat. That was my experience at small city level, and it happens from common interest club level politics all the way up to the big folks that do such a wonderfull job of mis-managing the planet.
The rich and politically powerfull are in that position quite often because of their selfish and predatory natures. Only the truly evil ones make it to the top game level "Illuminatis" and the overwhelming majority of folks just have zero say in the running of matters.
You're "blaming" the wrong folks buddy. Not that blaming is going to help anyone. Having said that, I blame the television for totally destroying my life and i can still remember the day in the fifties when dad brought it home, switched it on and our family stopped existing as the elite's machine programmed away our souls. Guess the computer and internet just did a better job of fucking up your brain space.
How else may I irritate the WHYS a little, hmmmm, oh yes - my pile of bullion is growing steadily, all glittery yellow and white, and I'm about to put a solar power system on my house, that will keep the security cameras, electric gates and refrigerators going in a blackout.
Oh, and best of luck with that intergenerational violence your trying to drum up, breaking in and stealing stuff and raping my dog, I think a properly loaded shotgun should neatly blow your head clean off, just a neck spurting blood like Monty Python tennis.
Maybe poor little WHY is playing the wrong role player on his i7six core gameboy and cannot dispel the angst. Try Fallout 3 dood, coming to your neighbouhood very soon, it will prepare you quite well for the real world (when you decide to take your head out of your arsehole that is).
You're just pissed coz you missed out on the Paisley era and all that good acid. Big pharma just doen't give the same clearly lit field of view does it.
Was that was the response you were looking for. Having a New Moon episode are we.......we apologize for this break in transmission, the antenna was struck by lightning. Normal programming should resume shortly. In the meantime, TEST PATTERN and some very bad muzak.
Crowds of people sitting on the grass with flowers in their hair.....
Peace and Love and one of those ban the bomb signs.
@ rumour...I like the approach taken on The Pinky Show, kind of like thinking aloud.
The angry reaction to this post was of course predictable, but consider that most younger people will not even attempt to analyse and understand their situation.
Whatever one's opinion of intergenerational "guilt", it is essential to consider the PRACTICAL consequences of what Ilargi says above:
"And do you think that entire younger generation, all these millions of strong and healthy young people, are just going to sit down and watch their parents enjoy the perks while they themselves have nothing much of anything at all, including, for a fast growing segment among them, food and shelter?"
The term "entitlements" is much used to refer to government social welfare commitments, but the real "entitlement" crisis is the inability or refusal to honestly examine the foundations of middle class expectations.
Great essay. Reminds me of a song by Offspring from 1994 (Gen-X) called Not The One.
First verse and Chorus:
I'm not the one who made the world what it is today
I'm not the one who caused the problems started long ago
But now I deal with all the consequences that troubles our times
I carry on and never once have even questioned why
I'm innocent
But the weight of the world is on my shoulders
I'm innocent
But the battles started are far from over
Full lyrics:
http://www.plyrics.com/lyrics/offspring/nottheone.html
Song:
http://www.youtube.com/watch?v=hl4ndwyMObI
while some seem upset that VKs piece lumps entire generations together, blaming basically all that have come before him for the misfortunes that his own generation will inherit, I must say that I (as a gen Xer and a female) thoroughly enjoyed reading it and completely identified with his frustration/s.
I never wanted children. the world is overpopulated as it is. the resourses evaporating before our eyes. pollution has all but ruined the seas. people are f@#$ing crazy these days. who would want to bring a child into this disaster of a place?
Things happen though and my daughter will be 7 next week. I love her more than I ever imagined I could love anything. I look at her with her beautiful little face and sweet and giving and loving personality and I could just CRY for her future. Is it my fault? Is it my generation that created this? Is it my fathers? His fathers?
I think unless you, me, we, they are constantly and intentionally busting our asses to make this world a better place for those who come after us, then yes, the blame lies with all of us
Thanks for all the comments. Interesting and varied response to say the least. I intended the article to be controversial though it turned out to be far rawer than I had originally intended as Ilargi posted the original minus any editing!
I realize some of you have tried your best over the decades and those on this blog and others are acutely aware of the world's present situation. What I wanted to let the older generation in on was the view with which they are seen by others of my generation who are aware and how they will be judged by future generations collectively as a group.
Eric Hoffer wrote an age ago in his book, The Longshore Man that;
"there is a tendency to judge a race, a nation or any distinct group by its least worthy members."
"Though manifestly unfair, this tendency has some justification. For the character and destiny of a group are often determined by its inferior elements,"
Baby boomers, Gen X and even some of the earlier elements of Gen Y are going to be judged by billions of children across the world as being selfish and immoral for the most part, of having a lack of control and decadence.
It is a natural consequence of what is going to happen when living in a world of hunger, war, depravity and poverty. The psychological shock will be all too hard to bear.
My friends and I are barely getting started with life, some know the shit is going to hit the fan soon while others are barely starting, scrapping by on working 10-12 hours a day in order to live and studying for all sorts of exams and degrees in order to have a nonexistent 'future'. Imagine the discrepancy with what they were promised and what they got returned to them?
I wonder how they will react when they realize they have no future whatsoever in the way they thought it would work out? An era of low wages, mass unemployment, no skills with which to help themselves as the drive today is towards a service sector economy and no hands on skills.
There is this stark realization that the end is near, on my part - my dreams and ambitions have long since died and turned into ash. I am trying to raise awareness and knowledge amongst the people I know but I am angered by older generation because they are mostly apathetic and have walled themselves off.
In America people complain about the immorality of the elites, so how come none of you elected Nader? The most ethical, responsible man I know of in politics. You had the choice. You could've opened your eyes, the information age was at your finger tips. All that was required was a tipping point - the 100th monkey. Too bad only 20 monkeys woke up.
I would like to ask why boomers, Gen Xer's are so comfortable shifting blame to elites and others? (Very soon I suppose I will be asked the same question by my younger cousins!!) When clearly they are beneficiaries of a civilization that exploits both man and earth. The avg. Westerner and now we can add the citied Easterner enjoy luxuries built on exploitation. People use 32 times more resources per capita in the West when compared to the poorest of the world. 100 times more energy per capita is consumed then in Bangladesh for instance. People can live on far less and be happy.
The same fractal process is present when the elites exploit you and you exploit the benefits of cheap goods produced in Walmart at the expense of present (virtual slave labour) and future children (their short lives).
The greatest injustice in this world stems from the current default stance - ignorance and apathy best summed up by, "I don't care and I don't know".
And the baby boomers and to a certain extent Gen X have allowed themselves to be ignorant and apathetic for far too long because they were enjoying the tube and interwebs? How will you justify this to your grandkids, your nieces and nephews when they are hungry and broken. We couldn't do anything because we were too fat and happy! Wheee!
Quit blaming everyone else for your lack of ambition. Your generation is the most disrespectful, rude, arrogant and least motivated of any I've witnessed. Other generations (boomers, X'ers) have to take blame for their own stupidity as well. As you may have read, most of the population has been on a speculation binge and is just now coming to the realization that leverage has a downside too. Check with some of the folks who have huge mortgages and can't find their way out from under them. That is known as a poor assessment of risk. There are VERY few with the common sense to avoid over-leveraging themselves. This excess you rage about is not limited to one generation ravaging the globe and saddling the next with the bill. This is a global phenomenon and can be described as a mass hysteria for speculation, i.e. the Greater Fool Theory. We are all going to suffer for this excess and I'm willing to bet that things are going to get a lot worse before the bottom is reached.
VK,
Here's a dollar. Why don't you go take in a movie, relax a little, you know, have some fun?
One interesting feature of life is that I actually do care more for those young people in which I have some DNA invested. I guess it's a biological thing. As for the rest of the Gen Y crowd, _why are there so damn many of you_!?
As for me, I dodged the draft when LBJ, and then Nixon, wanted to ship my sorry ass over to Vietnam. Some of my friends and acquaintances went, and returned different, not for the better. And I already knew Reagan was going to be an unmitigated disaster in 1980. I voted against him. What more could you ask? :->
http://www.superseventies.com/worstgen.html
Greatest Generation chronicler Tom Brokaw has the difference pegged: "The World War II generation did what was expected of them. But they never talked about it.
Let's start with the Sixties, the Boomers' dilettante ball. While a few courageous people like John Lewis and the Freedom Riders risked their lives -- and others like Andrew Goodman, James Chaney, and Michael Schwerner gave theirs
-- the civil-rights movement was led by pre-Boomers like Martin Luther King Jr.(who would be 81 if he were alive today) and continued without strong support from the Boomers on college campuses.
Still, I must say this: If you were one of those young people who did risk their lives to fight racism in the Sixties, who put their bodies on the line to register voters, who marched and sang and taught and preached against segregation, you stand as the best refutation of my anti-Boomer tirade. In that
one moment of conscience and courage, you did more with your life than I've done in all the moments of mine. In a generation of selfish pigs, you were saints.
But the reality is that most campuses did not become hotbeds of unrest until the Boomers' precious butts were at risk as the Vietnam War escalated. They didn't
want to end the war because they were bothered by working-class kids being blown apart; if they had been, they wouldn't have spat on those working-class kids when they came home from Vietnam, or tried to make heroes out of the Communists
who were trying to kill them.
Yet as troubling as that may be, the Sixties were in many ways the Boomers' finest moment. It was at least a fad then to pretend to care about racial justice at home and war abroad, to speak out against pollution and prejudice.
But it was mostly just talk. As they came of age, and as idealism might have required some real sacrifice, idealism suddenly became unfashionable.
And so the Boomers careened into the Seventies without a thought to picking up where King and the Kennedys left off. Without a war to threaten them, their selfishness came into full bloom. You know the results: Drug abuse, once a
boutique curse of hip musicians, became more common than the clap.
And speaking of sexually transmitted diseases, the Boomers began to fornicate with such
abandon that rabbits we asking them to cool their jets. They didn't invent sex or drugs or rock 'n' roll, but they damned near ruined them all.
And don't give me this crap about Boomer music. The Beatles were all born before the end of the war. So was Janis. So while the Boomers can claim they had the
good taste to listen to gifted pre-Boomers, when it came their turn to make music, the truest expression of their generation, what did they give us?
Disco.
The generation that came before the Boomers gave them Dylan. The Boomers gave us KC and the Sunshine Band. Thanks a lot.
Tomorrow I turn 71. I have been aware of our possible future for many years, lurked here since TAE's & TOD's beginnings, and as a woman--neither beautiful nor brilliant, I have been, am, and always will be almost powerless.
But I tried. I wrote a book extolling the virtues of hiking and nature, I wrote ecological articles published in obscure magazines, I worked for a corporation and hated it, but derive part of my income now from a small corporate pension. I left two abusive husbands; I am on my own with a paid off house in a cold climate where food is hard to grow. My children (3) ignore me if I try to give them advice. Amazingly some of my friends agree that we have somehow blown it, and the future will be a challenge.
Always, I have loved nature and the outdoors and the wondrous beings with whom we share this earth. I now send them loving energies as I walk through their habitats, or paddle my kayak through their worlds. For what else can I do? We will all expire and I can only hope this has all been a bad dream, as watching our world die is painful in the extreme. And yes, I can see VK's points, but believe me--most women had no time and no clues as we tried to keep our jobs, our homes together and children happy and fed and husbands reasonably content so they didn't walk on us! (Until we walked on them!) (I vividly recall not being able to get a credit card in my own NAME!)
Like most on this board, I am not "normal" in my understand of what is to come and am prepared, at this age, to die, but I hope to have left some good behind, if only a tiny voice pointing to beauty and the hope that nature will eventually recover. Humanity...? I don't know.
Great rant VK - I have been railing along similar lines for a while now.
Two things. First the boomer-X's are giving back a bit right now. They are underwriting alot of their unemployed offspring and relatives. Trouble is it comes with a catch. They can only spend it in pursuit of the existing, dead in the water paradigm. But that is a big part of what is keeping things trundling along at present.
Second- It is my feeling that we can't make these indictment against this demographic without providing a reasonable opportunity for them to make amends.
During the depression area there was the WPA that built out the infrastructure of industrial US. I propose a new "new deal" called the Localization Projects Fund (LPF). Donations of equipment, materials, supplies, real estate, and of course MONEY, all of which goes to repurposing and building out the infrastructure of Localization.
Kumbaya ya all!
There is nothing to be gained from judging or attacking the generations. There is much to be gained from understanding the generations and each role in history -- the positives and the negatives. There are huge tasks ahead and it will take all generations and all kinds of people to get through it.
Imagine what the "greatest generation" said to its parents: as if the great depression were not enough, you nearly destroyed the world with your perverted wars; drenched the world in blood like never before; marched us off to the slaughter and those who survived had to rebuild from the rubble.
And the boomers/'68/Kunstler generation to the "greatest": you imposed upon us a soul-crushing conformity, corporatism, suburbia. We lived in the shadow of your cold war M.A.D. and imperialist wars. We endured your Mrs. Robinson sobriety. You spent every weekend fertilizing the lawn so it would look perfect when the nukes fell.
And generation X to the boomers: You only cared about yourselves. You divorced and shattered my world. You were into your career and yoga and were never there for me. You tried to buy me off with material goods. It like totally sucked. Good thing for video games or I would probably off myself like Curt Cobain.
And Now VK complains about debt and CO2 and overpopulation comprising himself and his age-mates.
What each generation has in common: it inherited a ruined world from parents who were without doubt the dumbest and most short-sighted in human history.
Marc Faber says sell dollars and bonds, and buy stocks...for up to ten years.
http://www.bi-me.com/main.php?id=45873&t=1&c=62&cg=4&mset=
Btw, I notice very little discussion around here anymore regarding imminent collapse. Gang, markets can grind and churn for a lot longer than most here think possible.
But seriously, VK, nice essay. And I'm sorry we burned it all up and fouled the atmosphere. And never realized all that potential we talked about in the '70s. Though there is this principle in ecosystems -- if one generation controls its numbers a later one will simply fill in the space with numbers of its own.
Perhaps the cephalopods have the right idea, no generational strife there. They're all orphans, you know. (for many species at least)
an original bike messenger! oh i just love you Ilargi†
the kid's bike has a really long head tube though, must be his father's. like his bars, a lot. these are back in style and todays bike messengers kinda havin the same setup. fixed gear, no brakes.
"it turned out to be far rawer than I had originally intended as Ilargi posted the original minus any editing!"
How does it feel VK? You have just been used.
My first reaction to your piece was - why didn't ilargi edit this stuff? My second was - oh,I know, because it makes good rabble rousing copy.
-----
Good going John I hope VK reads your comment well. I think he has the potential to be a real leader if he can chuck the hot headed demagoguery.
VK you got it wrong.
nearly 7 billion people as you couldn't stop shagging each other now could you.
this shagging is what keeps the economy going. since the educated white woman has stopped procreating we now have trouble. the economy is based on shagging.
I would imagine the most likely breaking point comes when young people realize that not only can they not make as much money working 12 hours a day as their parents' generation gets in pension benefits, they also have to hand over a substantial part of what meager salary they earn, to pay for those very pension benefits the parents enjoy.
Any and all pension plans are of necessity Ponzi schemes: it’s the first to join who reap the profits, and whoever comes after holds the empty bag. VK will never get a pension, and neither, for that matter, will anyone in about ten years time or sooner.
I want to let VK have his -largely unedited- say because his generation has no voice to speak of in any debate on these and related topics, and will therefore wind up being forced not to speak with their voices, but with other means. And that is not a rosy prospect.
I have little patience for boomers who declare themselves innocent, but I mostly put that down to a pervasive inability to oversee the difference between what’s real and what’s not. If any word encompasses the boomer generation, it must be selfishness, something that was probably inevitable from the moment the nuclear family was declared the staple of our societies. The less contact you have with others, the more you focus on yourself. And burbs are not exactly sociable places.Nor, for that matter, are cubicles.
None of this is to say that boomers are all to a man and woman selfish rotten bastards, but to tell them they better start thinking of sharing, and much more than they have so far. As I said when I asked the question
"What's to become of the next generation"?:
"if you can't think of an answer, it will be provided for you."
Holding on to what you have plus what you think you're entitled to is definitely not an option. Anything beyond that is up to you yourself. This is not about who shares the blame, it’s about who shares the wealth and resources.
.
I'm with pdh1953. We can sit here all day with each generation blaming the others. But what good is that? Those who regularly read TAE, both young and old, already know the world is a mess and going to get worse. So those of us who are aware of impending economic implosion, we need to learn from each other and build our 'lifeboats' so we'll be better prepared to help our family, friends and neighbors.
What are the differences between childhood and adulthood? One of the major ones is that the young child wants everything; while the adult understands that resources are constrained--that if he buys X he can't buy Y. This understanding used to be reflected in the political process: conservatives calling for lower taxes/fewer government services and liberals more services/higher taxes. This has changed--mostly due to the Baby Boomer generation: politicians of all persuasions are now saying we can have it all: cut taxes, more on defense, more middle class entitlements, more pork for political contributors (the only difference is the conservatives are willing to cut the safety net for the very poor and want bigger tax cuts for the rich). I think the Baby Boom generation understands that their political choice of "having it all" means the mortgaging of later generations, and thus they are culpable as VK says.
VK, nice piece, I’m a fan. But the reality is, we’re a defective bunch thru&thru, this place is just a big hamster wheel as the human race has a gene defect. Generation after generation atrocity after atrocity occurs. The only advancement in the species is that we get better @ hiding our crimes. There are a few who wake up, show us the light & well then they usually either get killed or quickly fade away. RedemptionSong: How long shall they kill our prophets, While we stand aside and look?
Just the history of the US alone, I listen to my kids come home from school & tell stories about Thanksgiving how the Indians helped the Pilgrims farm, give them food, show them the way... & there was 40 years of peace... but the schoolbook stories end there, what’s missing is how the Pilgrims turned into something else, gene defect takes over & presto chango the Country needed Growth damn-it and Plymouth Rock & the surrounding areas, well that just would not do! So those Pilgrims obliterated the Indians off the face of the earth, & rounded up the last few to live in concentration “liberated land” camps.. & now they exact there revenge with cheap tax free cigs & casinos. **Sigh**.. The death of tens of millions of Native Americans... barely a footnote in the history of the Great Pilgrim Generation...Surely we could learn from them?
Fast forward 100yrs & unalienable rights long forgotten for Women & African Americans. For the sake of more growth, cotton & peanut plantations, must grow!
Redemption Song: Old pirates, yes, they rob I; Sold I to the merchant ships,
Minutes after they took I; From the bottomless pit. But my hand was made strong
By the hand of the Almighty. We forward in this generation; Triumphantly.
Brought over to America in slave ships... treated like property, here we go again.. Thomas unalienable rights Jefferson included… the human genome defect large at work here again allowing the conscious mind to wander far off & convince the greater population that these Slaves were not people they had no unalienable rights, we could treat them outside the parameters of the constitution, Patriot Act anyone? Times do not change. The Civil War Generation, certainly we could learn from them? Right??
1913 ah yes, now that they got pesky Teddy out of office, back to hiding the truth in plain site, Women still cannot vote! & let’s take that pesky money out of your control shall we? Ah yes, the Fed Generation 100 years later 97% dollar devaluation great job guys! The average American still does not know that the Fed is not even a Government entity & that the control of their Money, is in the hands of a private banking cartel. Try to touch our money & well… bad times ensue (see A Jackson, A Lincoln, J Kennedy). Ahh yes The Fed generation, surely we could learn from them right?
Finally we get the vote to women, and now we can party like it’s 1929… here we go.. boom crash.. the Great Depression, lessons learned as this generation saw the face of hard times, they demand some accountability, & they get some with the Pecora Commission. But then they have to send their sons and daughters off to war, & well, war is hell, and in viewing some of the eps of HBO’s The Pacific, you can’t blame these poor bastards who survived that horrific action & started partying & drinking & forgetting the brutal deeds that a World War can do. How can one live on after witnessing the unimaginable? Kick in that old human genome that’s how…
Pack up your troubles and just get happy, Ya better chase all your cares away
Sing Hallelujah, c'mon get happy, Get ready for the judgment day,
GetHappy
Well here we are JudgmentDay
I'm not a generation, I'm a me, an individual. The collective guilt thing is preposterous. Even my old U of Wisconsin curmudgeon anthropology professor would have dismissed it out of hand. Some of you would do well to read the egoist, Max Stirner, regarding how the cow really eats the cabbage.
Those who will be blamed, will be those perceived as the greatest beneficiaries.
Today we rail on about the financial crisis, peak everything, climate crisis etc. Adducing blame on the political and ruling elite for their lack of foresight and criminality.
Yet, who elects these same people, election after election? Who votes for higher taxes to limit consumption? Who votes for making gasoline more expensive so as to develop light rail and better urban planning? Hardly anyone.
Gen Y has barely voted once. Gen X and the boomers have been doing so for decades. What have you done with that privilege?
Civilization exists within a system of exploiter and exploitation. This is an observed fractal phenomena across all levels of society and class and country.
Which generation has accumulated the most wealth and has contributed the most to global warming, peak everything and debt? The boomers for the most part by virtue of their culture of self and me and I consumption, add a sprinkling of Gen X and Gen Y is dead in the water before it even gets a chance.
The big banks never forced anyone to take a loan that they couldn't pay back. No one forced people to speculate on the stock markets. No one forced you to conform to the materialist lifestyle. No one is forcing the vast majority of people to keep their money in the top 5 banks. The boomers are the richest generation the world has ever seen and will see.
It's easy to blame the elites though isn't it? You enjoyed all the benefits of empire and take none of the responsibility. You run away and blame the elites, anyone but me. I myself have benefited from the civilization of exploitation but it won't last much longer for my generation. You had all the fun, we'll be taking most of the pain.
These things are done by ignorance & apathy. The generations of the future will indict you for your failings, this was a moral failure of epic proportions, a crushing blow for humanity that will be felt for centuries to come.
For you were the greatest beneficiaries of a system that was rigged in your favour and generations long after will remember you as the generation that sold them off for the cheapest trinket and the snazziest wine.
I want to let VK have his -largely unedited- say because his generation has no voice to speak of in any debate on these and related topics, and will therefore wind up being forced not to speak with their voices, but with other means. And that is not a rosy prospect.
What crap! This generation has more means at its disposal for individuals and groups to speak than any generation ever has had. If it uses Internet Blogs Facebook and Twitter to post drunkard revels, that is their decision, just as it was ours to misuse the public radio network by allowing it to become the mouthpiece of corporate government.
(drunkard revels is used more, though not completely, in a sense of poetic license rather than of point to point accuracy)
"This is not about who shares the blame, it’s about who shares the wealth and resources."
Expected answers
I got nothing to share!
I need more!
Triage time!
Survival of the luckiest or wealthiest!
jal
I concur with the excellent post made by John,it was spot on.As for you VK,you need to stop your whining and moaning and grab life by the horns and realize what you make of your life is up to YOU.Everybody and every generation has it's problems,so stop crying and begin acting like an adult.
"Why do Scuba divers always fall backwards off their boats?"
"If they fell forwards they'd still be in the friggin boat."
jal
May I suggest to young VK that he spend some time reading about human biology and the evolution of our brains. We are the way we are because of countless adaptations by our ancestors over millions of generations. The sorry state of affairs it has brought us to is no one's fault and you are no different than the rest of us.
Think of it this way: If you have a bunch of pigs lets say of different breeds and you keep throwing free food into their pen what do end up with? More pigs! Do they say oh we better control ourselves or we'll soon eat all the food and overpopulate and crash? No they just keep eating and screwing because that's what they do. Humans are no different.
Whatever selection pressures caused our brains to expand ended up being a real bum deal. It allows us to sit around and ruminate about the awful mess we are in, our dismal futures, the fact that we are going to die (before our time!!), and look for scapegoats.
May I suggest The Origin of Consciousness by Robert Ornstein, Plague Species by Reg Morrison, and Constant Battles by Steven LeBlanc as starters for you education VK. Stock up now because you're going to have a lot of free time sitting around unemployed.
There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.
Franklin Roosevelt - 1936
I believe both Generation Y and the Millennial Generation will have much asked from them. Having known many of both generations, it is my opinion that they will rise to the challenge.
God's Speed.
overshoot - trailing edge boomer
Aaah, the old crutch. Hide behind the genes. Hide behind the shadow of human nature. It's the human condition really, genetic determinism. Of course no mention of epigenetics or the fact that the science behind consciousness is highly unresolved.
The other crutch is the one of all innocence. Anyone who has looked at how civilization and society works at even the slightest level knows that the system is all about exploitation and exploiter along a continuum. It's a fractal process, all are guilty and all are victimized to a certain extent. Denial of this is your delusion and irresponsibility.
Also what of memetics, the culture and values of a society? What made the Chinese civilization sustainable for over 4,000 years?
Today we roundly condemn child marriages, yet in the ancient world it was fairly common. Still is in some parts, so what changed in the parts that changed? The culture.
Why is a murderer imprisoned? If it is only the genes that made him do it. Why are they captured and locked away then? It's because culturally, it is outrageous.
Why is the cheat and scoundrel chastised? His genes made him do it!! So why?
Why is the pedophile ostracized? His genes made him do it after all.
Yet, we find these things unacceptable and intolerable.
It's because these things are not culturally acceptable. The Chinese didn't invade the world in the 8th Century because it wasn't culturally acceptable to them.
It's only when you push back against the culture that it changes and evolves. The whole world is not obsessed by Growth and materialism, they view these things as sick obsessions. Their culture is different, their goals are different - to actually leave their children a future rather then eat it all up.
@VK
Thanks for all your very good and thoughtful replies, VK.
You set yourself up as a "straw man" with your original post.
You are made of much finer stuff. I seldom post, not since the Ann Frank essay have I posted.
You got me fired-up. So devious...
John
VK,
Determinism is a fact. Cause and effect. Simple as that. How people deal with other people--punishment, prison, etc--is also a function of determinism, and is certainly not a logical contradiction as practiced. Moralism, guilt and innocence, are are no more relevant than me likey or me no likey. YOU aren't who YOU think YOU are. Who/what is the YOU doing the thinking and acting? Your brain? Your thoughts inside the brain? What made your thoughts spring forth in the first place? Consult David Chalmers for further clarification.
Malmo,
...markets can grind and churn for a lot longer than most here think possible...
Be that as it may, in the US, UK et al today there are no markets left, there are only governments. And that is a very large difference, even if the $trillion a month sleight of hand makes you think otherwise.
@ VK:
I recently posted an essay, a rant if you will, on what YOUR generation has been acting like lately.
Gimme, gimme, gimme. Poor me.
I guess I'm a gen Y'er. Didn't know I had a designation til this morning. I have mounds of student loan debt and a profession I've learned to hate, mostly because of the people of your generation who act like they're owed something. Who are rude, demanding, ungrateful, and complaining.
And to think I actually believed a life of service to humanity was going to be a good thing.
Ilargi said:
"....in the US, UK et al today there are no markets left, there are only governments. And that is a very large difference, even if the $trillion a month sleight of hand makes you think otherwise."
I could not agree more with your characterization of market reality.
I trade for a living and I'll admit that I never put that reality into my trading calculus--the reality of govt capture of the markets. The reason I linked Faber's comments was because he's still, in spite of the unprecedented govt intervention, calling for a final deflationary climax. I only disagree with his time frame. I see it, the climax, manifesting itself in only a few years--at most. He sees it going on for a decade before the final deflationary spiral.
Actually, in spite of the global governments actions to date, I still think we have a decent chance of visiting financial Armageddon THIS YEAR.
What made the Chinese civilization sustainable for over 4,000 years?
Dumb luck? Seriously there has never been an intentionally sustainable human civilization. Intentional defined as deliberately keeping their population and resource consumption below sustainable levels. Those that have persisted longer have been blessed with large land and natural resources in relation to population levels. And its harder to overshoot with primitive technology.
Human beings are inherently unsustainable. The one time bounty of fossil fuels has just allowed us to overshoot much more effectively. Too bad you were born 50 years too late.
I am concerned that all this scapegoating is going to lead to a lot of violence.
@VK
“… so how come none of you elected Nader?”
You certainly have faith in the electoral process.
If absolutely everyone voted for Nader he would still “unexpectedly” loose.
That‘s my personal opinion. But the political barriers to entry and the privately owned vote counting machines for public elections are facts. Not to forget the pay for access legislative culture.
Could have been the engineer Buckminster Fuller who observed 60 years ago that everyone in the world could have access to clean drinking water right then; it was technically possible to build at that moment. I’m sure local food systems to feed people everywhere could have been assembled too. And water-born diseases and starvation did not need to be the normal. But that’s apparently a moral position not a business as usual position.
And finally, what about this activism, other that the approved political dead-end type?
Ohio
VK,
I think your post had valid points but to me at least came across as self indulgent finger pointing with an adolescent twist. I think your essay could have been much stronger and powerful had you left out the sarcastic tone which permeated the entire thing. Serves no purpose and as some of the others have said has you coming across as a spoiled brat. I was rather surprised as your comments in the past have been intelligent and measured. This childish indulgence really threw me
As others have said - you can't point the finger of blame at an entire generation. Frankly I am horrified by your own generation and even younger people - strike me as a bunch of rude, uncaring wasteful individuals - burgers, tatoos, cell phones, heavy metal music, throwing their empty burger king bags, KFC boxes and beer bottles out of the car windows in to nature, daily drinking binges at university and in foreign lands. I've seen them in Europe - usually English or American terrorizing little Italian or Greek villages - outrageous behavior accompanied by heavy drinking throwing up everywhere (not to mention the young soccer fan mentality). That is their world and they are a plague upon the planet. God forbid they go forth and multiply.
So indeed no one is perfect and each generation has it's foibles. There is a saying that goes like this:
every time you point your finger, there are 3 more pointing back at you.
Instead of complaining and putting all that negative energy in to venting, think of how much positive you could do by redirecting that negativity to serving in some way, by making a difference in the world.
@ Tinfoilhat
One wonders if people actually bothered to read my posts? I'm beginning to get where Ilargi is coming from. Words being put in my mouth.
While my initial post as John correctly surmised was an unintentional straw man whose full argument had yet to be meted out, the rest of my posts have been about recognizing the collective responsibility we have and the fact that boomers have more responsibility for the mess we are in given their accrual of wealth, power etc for a much longer period of time.
The failure of the culture to recognize that the very processes and systems they set up for success were leading their children to doom and beyond with warnings for over 40 years at the least.
We now have entire continents held hostage by the idea of no moral culpability, everything can be blamed on someone or something else except innocent little me?
I entirely accept that collectively my generation Y is flawed and empty as a result of the technology induced social vacuum. When will you accept the moral failures of your generation? And yourself?
The curse of separation, that makes man see himself as discrete and different from the earth. That the earth and people are resources meant for exploitation and profit rather then to be nurtured and requiring protection. This has led to a spiritual crisis, where man is deprived of his link, his birthright to nature. He finds himself trying to find in stuff/ material that peace which lies within him. The consequences of which will be dire.
VK,
Your last paragraph made at 4.06 is right on. Said without the emotional charge it had a much greater impact.
Yes - the constant need for more and more possessions, more things and stuff is a wonderful form of escape. Helps people to forget about their mortality for a few minutes and serves as a substitute for finding true inner peace through connection to something bigger then themselves: nature, the earth and the animals we share this planet with.
That is the real travesty and that shall be our undoing.
Intel's earnings were a home run. China must be buying hand over fist.
Determinism is a fact.
Determinism: Events flow predictably from causes and are hence repeatable and objective.
Oh my, the religion of determinism shows it's head again. The fact that even today 80 years later after the discovery of QED and the work of Hal Turing and Kurt Goedl, we still cling on to this myth as a society show how blind we all are to the uncertain fabric of reality.
The very fabric of the universe has disdain for determinism and has uncertainty built into it. For instance the double slit experiment that has confounded physics for 80 years now(?). The collapse of the wave function can be accurately described by mathematical functions onto a particular point but the fate of one individual particle, be it the proton, neutron or whatnot is simply unknowable.
Why did that particular particle take that path? What made it do so?
We simply don't know. No cause has been determined to understand why a particular particle acted in the manner in which it did, we merely observe the effects.
What of radioactive decay? The half life maybe observed but no one can determine why a certain particle would leave at a particular moment in time. What made it do so and why? Effect is seen, cause is missing.
David Deutsch & Johnjoe McFadden elucidate the concept more in their books on how nature confounds any notion of objectivity and determinism.
Why does the Universe exist at all? From nothing came something. Why does life exist at all? Effect is seen, cause is missing. The point and purpose of all things.
Gregory Chaitin (Meta Math: The quest for Omega) who builds upon the proof of Kurt Gödel and the Turing problem explains that axiomatic mathematics is a failure. There is something always necessarily missing from a mathematical description of reality.
Chaitin has extended the Turing problem and has observed that almost all mathematical fact is unprovable, that mathematical truth is random (see algorithmic information theory). Reality is necessarily objective as well as subjective. Some truths are true and can never be proven. Only by experience can we know that which is true and that which isn't in some cases.
And according to Turing's Halting problem we can't know which problems are true but unprovable in advance as well. And we might as well go to infinity inorder to find out. A long wait.
Determinism and objectivity are out dated concepts. Reality is uncertain, indeterminate and subjective to the experiencer via perception/ belief systems. Old physics, biology are stuck, new ground is being uncovered with quantum biology, digital physics and information theory as well.
VK,
Thank you for your thought-provoking posts.
You are so right that 40 years ago Boomers were cognizant of humanity's predicament. Yes, we knew it in college in the late 60s and early 70s and many amongst us thought we would change the world. It didn't happen because most Boomers gave up on The Dream in the late 70s and early 80s (Reagan's years of the Me generation!). I watched in horror how friends and acquaintances embraced materialism -- buying fancy cars and houses and designer label clothes, taking expensive vacations, competing for the most fancy private or public schools for their Ivy League bound kids, etc. -- and adopting the lifestyle they had condemned so vehemently. I felt alienated from them then, and I still do. I feel like an alien and am a hermit in this gone mad culture of luxury, waste and exploitation. Solitude and nature are my best friends.
VK,
You're going far afield. The following linked Q&A is what I'm getting at:
http://www.determinism.com/archives/current.shtml
From the link:
Determinism, however, in its simplest definition, means that everything is caused, including all events that have occurred since the Big Bang. Humans are intelligent but not all knowing, so we may never know or understand all the causes preceding a certain event or action. A total belief in determinism leads to the conclusion, that we’re all doing exactly what nature required of us, based on antecedent variables. Accordingly, we and all others are not blameworthy. In this way, we distinguish between people and behavior. The behavior may be odious, but the person is always doing the best (only thing) he or she can.
All effects have causes. Heck even Jonathan Edwards had that down cold.
@ VK
" the rest of my posts have been about recognizing the collective responsibility we have and the fact that boomers have more responsibility for the mess we are in..."
Even if you were correct in this assesment (which is simplistic to the point of absurdity) the question I have for you is...who really cares?
Even if everybody here agreed that the boomers were the scourge of the earth and they are almost fully to blame for our current predicament what then? What do you propose?
Reparations? Should we just break all of thier legs for punishment for thier sins? What possible value does this line of inquiry have right now at this point in time other than to cause a reaction?
Let's just slap the boomers on the wrist with a wet noodle and make them wear the dunce cap and leave it at that.
FYI I am an early thirties so I guess that makes me a young Gen X.
Sister Hermit/Alien - (a.k.a. Ahimsa @ 4.52),
You're singing my song again.
Solitude and nature - balms for the world weary soul!
:)
me too, velobabe, liking the photo.
i can't see how it's the bike he uses for work as there's no way he can sit in that saddle. and when mashing on the pedals the bars would be chest high.
to digress:
bikes, VK - cool, right? except the ones made in china and the ones made in america or europe or anywhere else because, you know, making them cheap or making them expensive, it fucks shit up somehow. rail, too, i expect. veganism, indeed, which of course doesn't really exist. you are vegan, aren't you? so sorry it doesn't exist in any practicable way. i put my head down when i navigate the slippery slope. so should i vote for nader because he's presumably into bikes and trains and reportedly owned a single suit for years on end? i did vote for nader. every time. or should i not vote for nader because he is merely reformist? why do you like him so much? what are his views on fractional reserve banking? so, then, should i not vote? no, wait - that's apathy. right? is it?
i have no doubt you've discovered your own hypocrisy by now. you should make the effort to make peace with it as best you can. nobody would have a problem with you being pissed off about shit in a blog post, and subsequent defenses of it, so long as you do it well. you're all over the place, man.
linda, your post was wonderful.
@ Wolf at door
Simplistic to the point of absurdity?
Which generation has consumed the most resources in the history of the planet? These things are calculable and we have the data. We have the oil consumption data for a century, the metals consumption data, the exponential growth has been observed. the WWF produces a biodiversity index every 2 years that includes global overshoot data as well as ecological collapse.
The Limits to Growth has been around for 40 years atleast and we are trending along the median case (BAU scenario) the one which showed a population collapse from 7 billion people to 2 billion people with technology proving unhelpful in preventing collapse.
Electricity consumption by household wealth and distribution would show boomer usage of resources relative to the rest.
Who consumes the most in America? Take a look at credit card data and home sizes and other demographic data on consumption. Check your local storage company, their demographics on who their customers are. Who owns the largest share of land, stocks and bonds across the planet. Follow the money, the data is all over the place.
What I would like the boomers to realize is this;
You really messed up. Share what you have with your family and the planet. Give as much love to your kids and grandkids as you can and not to the stuff you have worshiped for the past 50 years. Because stuff is not important. People are. Your kids are and your grandkids are. This is a generation that needs to learn to be more selfless.
That's it really. We are now in an age of consequences, on a global level collapse is going to take place. On a local level, we still have a chance. The time to make a difference is now.
* We cry when we think of our children's future; We think we are doing things for them but are really doing things for ourselves; So long and thanks for all the hydrocarbons
* Gen X only got in on the tail of the binge; Gen X won't get SS or Medicare; Gen X will join Gen Y in letting the air out of the tires of Boomer mobility scooters
* Boomers aren't to blame, elites are to blame; Boomers aren't monolithic, especially when they get osteoporosis; Boomers hope to die before TSHTF; Gen X and Y may be able to help
* No comment from the Silent Generation
* The Greatest Generation: They drilled the oil wells, dammed the rivers, invented nukes, started Social Security, created DDT and elected Nixon, and all for us; Gen Y should take life by the horns like they did
* Gen Y is soft and weak; They can't find their xyphoid process without a GPS; Gen Y would have acted like Boomers if they had had the guts to be born 50 years ago; Generations come and go but pompous males are here to stay
* Some are boomers in age only; There are many causes that I am prepared to die for but no causes that I am prepared to go vegan for
* VK spouts intergenerational nonsense; His post was shallow and hateful, not deep and loving like Boomer responses
* We will be condemned by the unborn for doing what they would have done in our position; Don't have kids; Who the gods would destroy they first create
* Each generation inherits a ruined world and succeeds in ruining it further; Easter Island is a prototype for our times; The flesh of the Boomer sticks between my teeth
* The end is near; We are all beneficiaries of the machine; We have met the enemy and he is everybody else; We all did the right thing, it's other people that raped the planet; None of you people cares enough about me to throw yourself off a cliff
* Darth Boomer: Luke, I am your father.
Luke YWalker: No. No. That's not true. That's impossible!
Darth Boomer: Search your feelings, Luke, you know it to be true!
Luke YWalker: No! No! (Throws self off cliff)
VK, I enjoyed your essay & follow-up comments.
What seems to be missing from many of the arguments made for & against genetic determinism vis-a-vis cultural awareness is the concept of external, controlling forces.
We are all economic animals competing for scarce resources. Once that fundamental knowledge is utilized to manage, direct & incite the herd, neither genetic determinism and/or cultural awareness provide much, if any, resistance.
The events we see transpiring were set in motion long ago. Arguing over the causes makes about as much sense as debating who offended whom before the Titanic's last dinner party.
We are entering the stage where we will begin to see a combination of tax increases and service cutbacks (ie 'austerity' measures) which will be implemented to service un-payable sovereign debts.
Next up will be various capital control measures instituted to further fence in those selected for slaughter.
Whether your generation alone, or in combination with others, pulls the plug on existing entitlements & further expansion, it merely hastens the debt-deflation cycle scheduled, but repeatedly delayed, to make its grand appearance.
Next up comes riots, social chaos, and of course, war. State & national dissolution will become de rigeur. C'est la guerre will be uttered with nonchalance & a shrug of the shoulders.
It's easy to plot this arc. My advice, for what's it's worth, is to forgo assessing causes/blame and focus on one result: securing your own personal survival.
@TAE Summary,
Dig it man! Right on Bro! Word!
For myself (an early boomer), I accept whatever condemnation and sentence the current generations witness on me. But for the record, I blame it all on that bad acid I dropped back in '69. Or maybe it was reading "Desolation Angels" in that Danish jail in 1968. My memory fails me at this late date.
"you really messed up."
No, I didn't.
Just two points:
A. This entire conversation, top to bottom, is at least 4 thousand years old. Literally. In all that time, the number of minds that have been influenced or changed by this conversation is (I'm pretty sure) zero.
Which makes one wonder about why anyone would bother going down this road.
B. The pointing finger will have one of two basic effects. For those like me, who have spent a lifetime striving to do the right thing, it will piss us off. No, I did not do, I was not guilty, of any of those things. For those who ARE guilty- it will piss them off. And their attitudes will harden like Roman concrete.
Which again, makes one wonder where the value lies in these attitudes.
Exactly what changes do you expect to come about, now that all this truth has been revealed?
:-)
Greenpa said...
"Exactly what changes do you expect to come about, now that all this truth has been revealed?"
Can I answer?
Answer:
.
.
.
.
jal
I concur with Greenpa and others that finger pointing is only likely to turn off the majority of the audience in these parts.
Most are aware of man's plight and have at least made the attempt to slow the rate of collapse.
That said, I'm going to turn right around and mention that the elder generations in the US should have little to fear form Gen Y. I say this because my experience concurs with the stereotype of that generation put forth by tinfoilhatsociety and others.
In any event, it doesn't really matter because the US Air Force and Navy are facing dire reductions in capability due to their inability to replenish their air and naval capital equipment. The populace is also rapidly and literally becoming too fat too fight our imperial wars.
TAE Summary- a delight. :-)
@ VK
"Which generation has consumed the most resources in the history of the planet?"
The boomers, of course. But the same could have been said of thier parents before them and of thier parents before that, in thier respective times.
And the same thing would have been said about generations X, Y and beyond if we had been born earlier along the graph of this particular ponzi cycle or if our current system had another 50 - 60 years of growth left in it.
Do you honestly think your generation and mine would voluntarily decide to do with less because of some devotion to principal, rationality or common sense? We are only going to be cutting back and "dealing" with these problems because we have to, not because we are any more forward looking or engaged.
@VK - Well said. It's sad when the greed and selfishness of the baby boomer and genX generations is accurately dipicted and met with such emotional hostility from thin-skinned characters.
I'm genX but have refused to play the consumer game by embracing a life of minimalism. When you boycott and refuse to buy products you are actively fighting a corporate elite system.
The elites hold the highest degree of blame, but who buys their mortgages, insurance, cars, clothes, food, phones, computers, and keeps money in their banks? Baby boomers and genXers have been doing it for the last 50 years. The baby boomers ushered in an era of hollow materialism and GenX shared the torch. GenY won't have that decadant vice to cling to in the coming years, but the people from all generations who make it through will be better people for it. Trial by fire.
...Peace from a public library
Malmo's Ghost said...
All effects have causes. Heck even Jonathan Edwards had that down cold.
Gonna lay around the shanty mama and put a good buzz on :)
@ The3rdcoast,
The war has been waged already. Our generation has already lost. We'll pay with our lives and much more and you know that. That much is clear. Sold for the cheapest trinket and some sparkling wine.
@ ben
I didn't understand a thing you wrote. And it would be kind of you to edit your post for correct punctuation and grammar. It's not that hard to press SHIFT + Alphabet key.
@ Greenpa
Somehow I knew this would amuse you :) Surprised to see you came into the discussion so late. I've said what I wanted to say on behalf of Gen Y and much more. The only difference now as compared to the previous 4,000 years is the level of collapse, death and destruction that awaits us. It is literally a triple whammy of blows - financial, ecological and energy related. Humanity has never really faced such a scale of crisis before and their convergence within a 20 year time frame is historic!
The result of a cultural framework that encouraged self aggrandization, self promotion and selfishness. Change the meme, change the cultural environment, change the world.
Now if only I could download a useful guide on wildlife management on pushing on icebergs.
@ snerfling
Thanks and true enough. That personal survival can only happen across a community level, sharing resources, caring for each other and not being selfish, insatiable, greedy pigs. Today there are a billion humans who live like gods but very few who live like moral beings. With any care or worry about the future.
The fact that there are thousands of people who read TAE daily shows that there are moral beings across the planet. People can change tremendously given the right knowledge and change in culture even if it's at a local level.
All this was foretold in "The Chalice and The Blade, Our History, Our Future".
The dominator model of human relations holds the seeds of doom:
"Throughout recorded history, we have seen that a regression toward more supression of women is an early predictor that a generally repressive and bloody history is setting in.....What this all points to is the grim conclusion that unless systems relationship between the supression of women and the supression of affiliative and caring values is finally addressed, we are inevitably moving toward another period of massive bloodletting through war."
"Ideologically, our world is in the throws of a major regression to the women-hating dogmas of Christian[ and Orthodox Jewish -gylangirl] and Islamic fundamentalism."
"...it is not hard to see how men who are taught they must dominate the half of humanity that is not as physically strong as they are will also think it their "manly" duty to conquer weaker men and nations."
"Capitalism...remains fundamentally androcratic. Capitalism as we know it rests on male supremacy."
"The failure of communism lay in the failure of its leadership to to bring about any fundamental changes in the relations between the two halves of humanity."
" And those working for 'progress' fail to perceive the logical impossibility of creating a just and equal society as long as the dominator model of human relations remains in place."
"Modern Totalitarianism is the logical culmination for a cultural evolution based on the dominator model of social organization."
Frankly, feminism is the only ideological system that could have saved us from the doom that you blame on the previous generations. And their failure to embrace feminism is the real cause of your generations problems. IF you ever put it down or complained about feminists, YOU ARE ALSO GUILTY.
@VK
Well, my friend, you have won me over with your brash and unprepared style. I'm not being coy. I mean that. You threw some half considered shit out there to stir up a hornet's nest, then stood there like a man and dealt with every damn pissed-off hornet, with far more grace than your inital impetuous casting of the gauntlet would suggest you were capable of.
At least the first half of your style corresponds well with what has always been my own style. Part 2 is how I imagined myself eventually becoming. Now, not so much.
What I developed as my backup strategy was the long view. I am very pleased to see that you have that already.
So, you never needed my irritated, but still well-intentioned advice.
I hope to hear more from you, now that we have this little spat all behind us.
Maybe some day I'll tell you something about my life, and that of my 4 kids, your cohort-peers.
John
@VK...thanx for your words, biting as they are, they are true because they are yours.
At 23, I was a mere mutt, having then believed that the good humans were too plenty to ever kick empathy off the bus. Or so I thought.
But as we all see, each in our own way how callous we have been, we now reside in our own separate visions of how, why and where to go now.....never realizing that someone very close to us is hurting too.
I was hurt just as you are today. Defeated for the moment by the invisible weight of undelivered compassion.
I have no answer, nor a defense for your accusations of blindness on behalf of those boomers you allude to.
I can tell you but one thing that changes nothing but it is for me a comforting thought.
I still believe in people, good people, honesty and believe most are of that kind.
I will no doubt leave this life, whether conveniently or not, firm that in all our differences was our greatest beauty.
Nothing is wasted.
peace
There is a middle way between determinism and randomness. If there was not some degree of determinism, then a pea plant would not develop from a pea seed. Having said that, any particular pea plant is "randomly" influenced by (and is interdependent with) its context.
Buddhists call this dependent origination or pattica samuppada.
This kind of "mutual causality"--as Joanna Macy calls it--may be why the timing of the collapse so often mentioned here is difficult to predict. I & S posit that there is a pattern unfolding that is determined by the underlying issues of debt.
But this particular manifestation of the pattern they recognize is randomly influenced by many contextual factors unique to this point in time, making the timing of collapse difficult to predict.
And the Buddhists also say: "Death is certain; the timing is not. What should I do?"
That particular saying may pretty much be applied to life as we know it.
And lastly, if dependent origination is a valid way of seeing things, then VK's analysis of the "cause" of our present situation is overly-simplistic.
while i don't know what brokaw would think of the late harold pinter's fierce nobel speech from 2005, may it serve to erase any memory of the recent peace prize debacle:
http://video.google.com/videoplay?docid=-5779318336871023559#
print version below, if you don't have fifty minutes. the man's voice and delivery, though, are sublime:
http://nobelprize.org/nobel_prizes/literature/laureates/2005/pinter-lecture-e.html
That personal survival can only happen across a community level, sharing resources, caring for each other and not being selfish, insatiable, greedy pigs.
This will only become possible when both halves of humanity are sharing power in local societies. The community values & the environmental values are the feminine aspect values. They will not materialize under the current dominator model.
We don't have much time left to bring about this change. Doomsters who understand what is to come in terms of losses in standards of living and TWAWKI seem to be more interested in maintaining selfish survival through domination of women and shutting out community instead of through sharing. They are the inheritors of the poisonous patriarchal pedagogy. This dominator/androcratic attitude, uninformed by and fearful of feminism/gylany and the suppressed feminine aspect values, is THE PRIMARY obstacle to an equitable, sustainable, humane outcome.
OTOH, are we watching the messy implosion process of the old dominator model - with the institutional demise of catholicism and of nation states; the utter failure of communism and capitalism and now progressivism to deliver on prosperity promises; the fallback onto more sustainable local practices in order to insure basic human survival?
ie Is this looming crisis the beginning of patriarchy replacing itself of necessity by something more earthlike and therefore gylanic?
I think yes but only if feminism/partnership modelling is allowed to lead the way. And the guys are going to have to get on board.
I would especially like to say thanks to TAE Summary who gave this forum some kind of point today.
Who the gods would destroy they first create !
Another long-time lurker surfaces...
I found VK's piece quite interesting, and I think many of the critical comments about its tone missed the point.
While we (all the older generations back until the dawn of time) have been generally unreasonable, prone to scapegoating, and very fond of unfair broad generaliziations, we now expect those that follow us to take a completely balanced and nuanced view of the "blame" that can be apportioned in the current dire situation.... Yeah, right!
As the situation deteriorates anger, justified or not, will come boiling to the surface. As Ilargi has commented previously, the generations (grandparents, parents, children) will be pitted against one another in the fight for increasingly scarce resources.
VK's peice encapsulated that feeling wonderfully. It matter not if that feeling offens you. That feeling is there. How do we deal with it to prevent an even worse outcome?
I also don't buy the "determinism" arguement. We are clever thumb-monkeys. We have the capacity to predict the results of our actions, we just (as a society) choose not to.
To my mind what is different about the current situation is that, perhaps for the first time in human history, we knew we were on the wrong track, and we didn't care to change course.
In a pre-industrial civilization natural resources generally replenish faster than they are depleted (I do know there are extinction exceptions to this), and population is kept in check by disease and other factors. Thus they are quite "sustainable."
With industrialization came the increasingly rapid utilization of finite resources, but the population-resource use-curve was such that it was easy to see how this could go on for a long time, and with the rapid pace of technological change, who knew what was next! So why worry! Coal is so last century! Now we are onto oil! And soon we will have a replacement for that!
Up until as little as 40 years ago you could argue that a "bright future" was still theoretically possible. Yes, Hubbarts' Peak Oil theories were being proven correct, but there were viable alternatives (Fission, until TMI and Chernobyl scuttled that future), and we had a small enough population and the resources to deal with the issues.
But by 25 years ago it was abundantly clear that we had picked greed over wisdom, and were merrily steering the civilization to the edge of the cliff.
As for who is responsible, I ask you- do you pick up hitch hikers? About 15 years ago (when I had a car for the first time) I decided I was tired of the complaint "oh, how society has changed! It used to be we trusted one another! People would stop for hitch hikers!"
Well, you know what? "Society" is not some mysterious external force. It is us. We change it (in large and small ways) by our actions. So yes, we all bear at least some responsibility for this mess.
So now if I can I stop for the hitch hikers. Even the ones with scary full-facial Moko. Maybe one day I will be the victem of a hockey-mask-wearing and chainsaw-wielding maniac, but in the mean time I make life better for people without cars.
That is how community-building works. We look out for the people around us. Trust builds trust.
Now back to working on my DoomStead.
Iliargi, VK, and other bigoted malcontents:
Remember the first rule of holes - when you find yourself in one, stop digging.
Really? All the commenters are so far along they could not no way never be the people VK is pointing at?
People that far progressed would surely recognize righteous anger in a young person and say, "Yeah!!"
And also maybe have a short reminiscence about when they had such fire in their belly.
Hey VK... Stay positive ! A negative focus doesn't achieve anything positive. Just think... when IFR reactors come online... reactors that use 99% o fissile material (compared to 1% now)... existing nuclear waste will be fuel. No Oil ! And IFC reactors are close ! Also... it's time to retire our military commitments around the world and save 1 Trillion $$$ a year. Stay focused on the positive things that you can manifest in your Life. That's the deal. Great things are still possible. Make it happen...
As for fate (superdeterminism) and Destiny there is growing support:
http://chapmannews.wordpress.com/2010/03/18/chapman-professor-lands-discover-cover-story/
@ John, mikel paul, jeotsu, ruben, gylangirl
Many thanks for your kind words and criticisms as well. Overnight an analogy came to me. One of cognitive capture. Jay Hanson has spoken of this as well but let me elaborate.
We are all it seems part of a religion, the religion of economic growth. Where our parents indoctrinate us and then we indoctrinate our children. The high priests are the economists and politicians and the religious buildings are to be found in the halls of corporations, banks, Universities etc.
The creator doG provide much to the gentle members, 3% economic growth per year, TV, the interwebs and lots of stuff with batteries. Life is good. What are they supposed to do in return is worship this doG and send him sacrifices every year in the form of finite resources and ever increasing garbage dump sizes plus their children's lives at some point in the future. Especially so at the end of days, the rapturous conclusion of overshoot and collapse.
There are many who realize the hell this will create, yet they seem like tiny droplets in a vast ocean. They try to make the ocean aware. Look, there are other religions - steady state economies and gift economies. And if push comes to shove there's always survival socialism! They create pretty charts, write eloquent words and angry words as well to warn those around them.
The masses, knowing full well the outcomes of their actions 40-50 years in advance through scientific modelling and analysis carry on sending themselves and their children to the very institutions that seek to eat them. Who fills the corporate halls of power? People and their children. Who fills the halls of political buildings? People and their children. Who fills the barren landscapes of suburbia and Wall St? people and their children.
This is what strikes me as so odd, knowing full well in advance of the consequences of their actions. People continue to take the same course of action, current pleasure to the detriment of those others ahead of them. While at the same time, there exist other religions and maybe even secular philosophies that can save them, all they had to choose was a different culture. A culture of a certain amount of self sacrifice, is this so difficult? The Chinese did it for 4,000 years, they must be doing something right. The Aboriginals have a culture dating back some 50,000 years, while the current era of industrial growth and progress is going to last what? 300 years. Enlightenment to lights off.
The religion of growth and consumption is not in man's genetic predisposition, we did quite well for over 2 Million years as hunter gatherers mind you, minus any growth and probably that's where our deep inner longing for freedom and self expression and love comes from.
Man has in recent times culturally chosen the cult of growth and possession. He chooses knowingly and willingly to stay on in the culture even though he knows full well the consequences. What would happen if there was a cultural shift overnight? If parents decided to live in smaller houses and bicycle to work? Better health, far less energy consumption. What if kids decided, NO, I'm not going to join the military to fight wars, not going to join banks and corporations and send myself to the slaughterhouse? The meme is what needs to change and humans have that capacity as they have done it before.
We are beneficiaries and victims of a system that we and those around us propagate. Our friends, family, children, parents etc are all part of the same system of denial in the face of truth. Two generations have come before us and now we are all true believers it seems. Faith in the one doG of technopia. The very technology that has failed to reduce the suffering and inequality on Earth. The very technopia that tears man apart from all around him. In an age of instant communication, man has never been so alone. So alone, ignorant and apathetic he staggers believing the religion of growth, soon to the singularity will save him, from himself, his madness. His delusions.
There is no problem: mankind is merely fulfilling its destiny.
Thusly, the typical sap (homo sapiens sapiens) finds his place in the scheme of things.
James Chanos interviewed on Charlie Rose
Interesting article which I have passed on to quite a lot of people in the last 24 hours.
I am certainly NOT denying that a large portion of my middle-aged group are somewhat responsible for the situation that the entire globe is now living through, but I feel that finger-pointing towards all Boomers is less than honest. We are not some homogenous mass -- we are a group of unique indivduals.
Some of us most certainly do not fit the stereotypes cited and have spent our entire lives trying to live below our means, act ethically, purchase only what we need, and live lightly on the land whilst teaching our children to live the same way.
And our reward? I am retirement age, have zero pension, and am living on a small acreage in Australia hoping that the future is not too grim in this dust-dry continent as we try to keep trees and plants alive on our 7-plus acres amidst dire drought conditions. We drive old cars, built our house with our own hands, grow as much of our food as we can, trade vegetables and fruit with the neighbours, and don't take posh vacations or wear spiffy clothes.
And to VK -- I grew up in the South in the USA and was a teenager in the 1960s -- and I skipped school to go and march in the streets for integration. Those actions spoke to my heart since it never occurred to me that ANYone should be treated differently due to race or income.
It is only through unifying, not dividing, that we are going to find some solutions to this mess that we are in right now. Let's all just give the finger-pointing a pass and start looking for solutions instead.
VK - "Humanity has never really faced such a scale of crisis before and their convergence within a 20 year time frame is historic!"
While this is physically true, no doubt- I'm not sure it is EMOTIONALLY true.
Imagine the world of the mammoth hunters. For some hundreds of years, at least, perhaps thousands, it was pretty stable, as far as we can tell from cultural artifacts. Up and down this cold temperate river valley, for hundreds of miles, daily life was stable and secure within its own understood and accepted limits (raids by neighbors will happen, and people get sick; of course.)
Then- something shifts in the ecology, mammoths, previously the main food source for winter survival, no longer reproduce as successfully as they used to. Quite possibly, partially because an expanding and successful human population now disturbs quite corners needed for new calves to reach self sufficiency. Or maybe newborn mammoth becomes the filet mignon of the day.
As the mammoths become more scarce, they become more prized; more status is connected with killing one - and the result is, the day comes when it is clear that next year, or the next; there will be no mammoths left. And as far as they know, they will never come back.
Right about then is when I can easily see the young hunters, who grew up admiring the elders functioning in a way now impossible, making the same charges; "you just ate everything; no thought for the future - OUR future- and now the world is ruined!"
And it would be, for them. Their entire way of life now would have to change very drastically; they could well be forced to migrate south without that huge source of winter meat and fat- in which case the would have to fight the humans already living there, and not in any friendly band-against- band horse or woman stealing way.
To them- the emotional view would be very similar indeed- they see no future, and their world has been destroyed- by careless greedy elders.
Likewise, in the present situation- we cannot see into the future, and cannot clearly visualize how we will be living in 30 years.
But just like when the mammoths were hunted out- and the moas- and the wheat ground of Italy eroded to the point where wheat would no longer grow there- there is life on the other side.
We just can't see it yet, though it's clear getting there is likely to involve enormous changes; and probably a lot of death.
Scary, yes indeed.
VK "We are all it seems part of a religion, the religion of economic growth. Where our parents indoctrinate us and then we indoctrinate our children."
Yes, and/but this is a religion with teeth, and real world proofs.
What happens when a culture espousing Growth encounters one which believes in Steady State existence?
All the calm Steady State cultures on the planet have seen the power of the Growth cultures, usually as they stood among the burning ruins of their town.
Easy to make converts; hard to deny the power; no visible alternative available. Yet.
VK wrote:
"The religion of growth and consumption is not in man's genetic predisposition, we did quite well for over 2 Million years as hunter gatherers mind you, minus any growth and probably that's where our deep inner longing for freedom and self expression and love comes from."
It might surprise you but I have a not too weak proclivity for harmonic balance vis-a-vis the philosophy of anarcho-primitivism--viz, humans and the earth alike maximize their collective self interest under that living arrangement (I like John Zerzan's take on this the most). Very radical stuff, I know, but not a waste of time mulling over either. It's anti authoritarian to the core too, which I like, A LOT.
VK wrote:
The religion of growth and consumption is not in man's genetic predisposition, we did quite well for over 2 Million years as hunter gatherers mind you, minus any growth and probably that's where our deep inner longing for freedom and self expression and love comes from.
I've been mulling over the idea you laid out above for several years now. There was relative harmonic balance existing in that state of affairs. Not anymore.
I know he's as radical as they come, but John Zerzan probably gets it more or less right regarding the terrible turn man took from the non-civilized to the civilized. We went essentially from a non authoritarian living arrangement to a hyper authoritarian arrangement at virtually every level of existence, which has been at odds with our embedded nature ever since. Given the determinants that have been put in place subsequent to this sea change in the way we live I, unlike Zerzan, think we, and the world surrounding us, are likely headed straight on to meet a metaphorical freight train, brought to you courtesy of so called intelligent human beings.
I'm not moralizing here, hence my thoughts regarding determinism. This isn't a blame game, it just is. We're past the point of no return. Doesn't mean we can't/won't enjoy the future, or even attempt to change it. Maybe it's a contradiction of sorts to not be sanguine about the future, yet enjoy THE MOMENT at the same time, but that's how I navigate day to day. I'm a walking contradiction. I'm not alone, I think we all are.
@VK 8:16
re: why people keep on racing towards the cliff, despite fulsome studies and warning signs the cliff is approaching rapidly.
A great little study put people in a room, with two lines projected on the wall, a long line and a short line. People were asked which line is longer. No problem, one line is visibly longer, everyone gives the right answer.
But then the researchers put a ringer in the room, who, when asked first which line is longer, said the SHORT line is longer. Much confusion, and up to 50% of the group now said the visibly shorter line is longer.
As Stoneleigh says, we really are a herd animal, and we are really uncomfortable breaking outside the herd. From a pragmatic view, most of us will be happier if we run with the herd right over the cliff--there is only that small moment of fear right at the end.
Alms for the poor said...
@VK - Well said. It's sad when the greed and selfishness of the baby boomer and genX generations is accurately dipicted and met with such emotional hostility from thin-skinned characters.
I'm genX but have refused to play the consumer game by embracing a life of minimalism. When you boycott and refuse to buy products you are actively fighting a corporate elite system.
The elites hold the highest degree of blame, but who buys their mortgages, insurance, cars, clothes, food, phones, computers, and keeps money in their banks? Baby boomers and genXers have been doing it for the last 50 years. The baby boomers ushered in an era of hollow materialism and GenX shared the torch. GenY won't have that decadant vice to cling to in the coming years, but the people from all generations who make it through will be better people for it. Trial by fire.
...Peace from a public library
Well said! Thank you for sharing your wisdom.
Keep contributing "from a public library." :)
Paz!
"If there were no greed, there would be no occasion for armaments. The principle of nonviolence necessitates complete abstention from exploitation in any form." ~ MOHANDAS K. GANDHI
"It is no measure of health to be well adjusted to a profoundly sick society." ~ J. KRISHNAMURTI
Life has become almost exclusively synthetic/artificial. Immediacy and presence has been replaced through reification (thingification). These are replacements for face to face interactions, which used to mark most of our pre-civilized, day to day existence. We've morphed into freaks of nature, and hence we no longer know or understand the world around us, at least not like our long lost ancestors did. We're glorified domesticated animals now. Ruff ruff, feed me.
Sister Hermit (Carpe Diem),
You might find this of interest:
http://hermitary.com/
:)
Greenpa said:
"Likewise, in the present situation- we cannot see into the future, and cannot clearly visualize how we will be living in 30 years.
But just like when the mammoths were hunted out- and the moas- and the wheat ground of Italy eroded to the point where wheat would no longer grow there- there is life on the other side."
I'm reminded of Arundhati Roy's words:
"Not only is another world possible, she is on her way. On a quiet day, I can hear her breathing."
VK's intro , a day later, has me thinking of Charles Dickens, of Scrooge and the ghosts of Christmases past.
Long time lurker with a recommendation -
For a deep insight into the role generations play in driving history, and a profound view of historical processes in general I would urge everyone here to take a look at Jose Ortega y Gasset's MAN AND CRISIS (that's the English translation, he wrote in Spanish which unfortunately I don't know). You won't be disappointed.
Vk, I sometimes have similar sentiments concerning the responsibility and accountablity gaps. I try not to place specific blame on age groups, because they are either too generalised or too constricted a category. One ends up analysing the cultural zeitgeist anyway to ascertain intergenerational motivations, in that respect the boomers were evidently overwhelmed by the unnaturally seductive qualities of the ascending imperial corporatocracy, as it was too effective in cognitive capturing, by means of refined information dissemination technologies such as public relations, to allow for the natural formation of cultural values in the boomer generation.
"While at the same time, there exist other religions and maybe even secular philosophies that can save them, all they had to choose was a different culture. A culture of a certain amount of self sacrifice, is this so difficult?"
Well, yes, for most of history people were seldom exposed to other cultural identities besides the one in their immediate community, and assuming a conflicting cultural identity would have one alienated and ostracised. I dont think one can choose a set of cultural values quite as freely as you would suggest here, even when exposed to alternative values in a frictionless multicultural setting.
Determinism must have its place in behavioural sciences though, on a basis of predictive physiological and cognitive modelling. It is because human behaviour is partially predictable, sometimes to an unsettling degree of accuracy, that the system has been largely effective at preprogramming and herding the masses thus far.
Although any argument for deterministic behaviour as a controlling factor could not readily alleviate blame or the felling of guilt, it might place additional responsibility on those who have abused such insights for selfish gain from within the system core, providing they are not captured likewisely.
Sorry, but VK is wrong about hunter-gatherers. And that's what I call such romantic nonsense from people who don't have an anthropological clue. That makes me question everything else he has written. Also, his romantic notion that the kids can sort this out is just as silly. The 1960s generation thought the same thing and we see that that got us. But let's discuss exactly why VK is confused.
Over the last 2 million years, hominid population grew slowly but steadily, but especially with the rise of homo sapiens. Homo sapiens was so efficient that it went from a few thousand individuals 180,000 years ago or so, to a crisis state about 12,000 years ago.
And what was that crisis state? Overpopulation. Yes, we were overpopulated for life as hunter-gatherers. Hunter-gatherers require a certain amount of space per body, just like lions, wolves, jackals, or any other animal. Density, at that level of behavior, could only go so high before famine and death resulted.
The response of homo sapiens was not the same response of prior hominids. Prior hominids died off, reducing population stress, in a cyclic process. Homo sapiens, however, invented agriculture. This solved the first population crisis and allowed homo sapiens to blossom to even denser population levels.
There is no possibility of return to hunter-gatherer roots. Why? Because someone, somewhere, will decide to return to agriculture. And as soon as they do they gain a short term survival advantage over their hunter-gatherer competitors. And nature selects for short term survival, not long term. This is why hunter-gatherers have nearly died out - agricultural homo sapiens is more efficient.
There are only two ways forward for the planet as a whole. The first is that homo sapiens goes extinct, removing the pressure produced by a species that is, quite literally, too good at its selected ecological niche.
The second alternative is that homo sapiens controls itself, controls its population, and controls its consumption. There is reason to believe that a stable, technologically capable society that is not focused on consumption could theoretically exist indefinitely on planet earth with a population of 500 million or less. Unfortunately, expecting that behavior from homo sapiens goes against everything in our genetic code programmed by our selection as hunter-gatherers.
So... we either learn to rewrite our own genetic code to allow us to control ourselves or we go extinct.
If there are hominid hunter-gatherers 30,000 years from now they won't be homo sapiens.
I'm sorry, VK, but your generation will almost certainly fail to fix anything unless you learn to rewrite our genes. Anything else is romantic nonsense on the road to extinction. People who cannot face this fact wrap themselves in all sorts of mythology and faiths but they still aren't effecting real change. They blame others, other generations, other races, other nationalities, but they never face who and what they really are - red toothed apes.
M,
Thanks for your response. I was actually looking for someone to challenge me about my anti-technological fix stand considering how today life is so great as a result of 'technology'.
In the little studied, limits to growth carried out in 1972. The technological fix actually served to worsen the conditions of collapse. For those of you who have the time, I hope you consider the research of Dr Garth Turner, who compares 30 years of data vs the limits to growth projections.
http://www.csiro.au/files/files/plje.pdf (PDF Warning)
As shown, the observed data for 1970-2000 most closely matches the simulated results of the LtG "standard run" scenario for almost all the outputs reported; this scenario results in global collapse before the middle of the century. The comparison is well within uncertainty bounds of nearly all the data in terms of both magnitude and the trends over time. Given the complexity of numerous feedbacks between sectors incorporated in the ltG World3 model, it is instructive that the historical data compares so favorably with the model output"
The above in the midst of unprecedented technological fixes and the miracles of the internet and computing, which require vast amount of resources, energy, time and labour that future generations will have little or no access to.
The law of diminishing marginal returns is well observed in society and has been thoroughly explored by Joseph Tainter in his work, The Collapse of Complex societies. All of society's investments bring fewer and fewer benefits, until the maintenance costs alone consume all the resources. At the point where, diminishing marginal returns exceed rising marginal costs, society begins to buckle under the pressure and begin an inexorable decline to much diminished complexity replete with war, corruption, crisis etc.
Diminishing marginal returns can be seen everywhere, the GDP per capita spent on healthcare costs while the life expectancy gains are marginal or negligible at best. Topsoil depletion means the use of fertilizers through repeated applications, while each application provides less punch each time and you have the associated eutrophication of water systems.
Diminishing marginal returns can be seen in the declining marginal productivity of debt, depleting fish stocks, climate change, costs (both physical and economical) of resource extraction (falling EROEI) and so on and so forth.Each silicon chip we use in computers consumes 630 times it's own weight in energy.
Technology merely delays problems and creates many new ones. Eventually one more techno fix will send humanity over the edge. That is why the cultural narrative is so important.
The world wide web might have allowed for the dissemination of information globally but society has never been more alone, for more reference I recommend Robert Putnam's book, Bowling Alone.
Putnam draws on evidence including nearly 500,000 interviews over the last quarter century to show that we sign fewer petitions, belong to fewer organizations that meet, know our neighbors less, meet with friends less frequently, and even socialize with our families less often. We're even bowling alone. More Americans are bowling than ever before, but they are not bowling in leagues. Putnam shows how changes in work, family structure, age, suburban life, television, computers, women's roles and other factors have contributed to this decline.
More data here: http://www.bowlingalone.com/data.htm#
@VK,
Perhaps not the most important issue which you have raised for me to address, but...
While I agree with your non-determinism, I don't think your interpretation of Goedel and Turing's results is relevant. You say that those results show that axiomatic systems are unworkable. But since those results were achieved from working within axiomatic systems, then the only conclusion we can reach is that axiomatic systems are unworkable only if they are workable.
Of course, axiomatic systems work just fine. What they are not is complete. And that's good, as it means mathematics has an infinite future.
@Ruben
The study of social pressure in a room actually had a room full of ringers, and one real subject per episode. there were 3 lines to arrange by length. There were assessments of signs of physiological stress in the test subject, which were watched (twitchiness, rapid breathing, etc.). As I recall, about 2/3 of people gave the same response as the group, with no sign of stress. Of the remaining 1/3 some gave the group response with signs of stress, some contradicted the group response with signs of stress, and the smallest subset contradicted the group response without signs of stress.
Reuben : "But then the researchers put a ringer in the room, who, when asked first which line is longer, said the SHORT line is longer. Much confusion, and up to 50% of the group now said the visibly shorter line is longer."
Wow, I love it! Can you point me to the actual study somewhere?
"We've morphed into freaks of nature, and hence we no longer know or understand the world around us, at least not like our long lost ancestors did. We're glorified domesticated animals now. Ruff ruff, feed me."
John A Livingston examines human domestication in detail in his book Rogue Primate (1994)
Perhaps the most useful function of maintaining a state of high technological innovation is the non-zero possibility of expanding the duration of sentient existence beyond the limited lifespans of this planet and solar system. In absolute terms, despite the obvious negative aspects of impeding development of the naked species, there would be infinitely more timespace configurations to explore if we manage to not go extinct prematurely here, which is otherwise guaranteed by periodically recurrent planetary cataclysms.
By far the least useful aspect of selfsaturation with such high technology would be the infinitely increased chance of technological autoextinction, from 0% chance to higher. This chance, already producing unfavorable odds by accelerated biospheric collapse, will likely increase exponentially for the next few centuries while temporarily diminishing the concurrent eventuality of natural extinction, possibly resulting in forced multisingular transhuman speciation in this century, which would be a likely evolutionary adaptation on a long enough timeline.
I do not believe humans as a species are capable of further evolving biologically, emotionally or cognitively by means or tools other than cultural technology.
Gravity is only culture when shared.
Interesting exchange of ideas!
VK said...
“The world wide web might have allowed for the dissemination of information globally but society has never been more alone, for more reference I recommend Robert Putnam's book, Bowling Alone.’
Gravity said...
“... for most of history people were seldom exposed to other cultural identities besides the one in their immediate community, and assuming a conflicting cultural identity would have one alienated and ostracised. I dont think one can choose a set of cultural values quite as freely as you would suggest here, even when exposed to alternative values in a frictionless multicultural setting.”
----
When I was 23 years old I was busy learning the proper responses of mating game so that I could become an evolution success.
In those days the web did not exist. The acquisition of information was limited. The exchange of ideas, that we are now doing, was impossible.
Greyzone said...
“we either learn to rewrite our own genetic code to allow us to control ourselves or we go extinct."
@ Greyzone
May I suggest a rewording?
“We either learn to rewrite our own genetic code to allow us to adapt in the changing environment or we go extinct.”
The regular readers will recall that I would like to have a beautiful golden fur coat with a long curly bushy tail that I could wrap around my neck. ;-)
jal
Broadly speaking, human societies have always treated world resources as infinite- this is true since the rise of modern humans ~125k year ago. It was just that until recently, their ability to wreck the world was limited by a small population and primitive tools.
I was informed by a local ecologist/botanist/conservationist that "it takes humans about 500-1000 years in a new eco system to settle down and learn how to use resources sustainably. The Maori here in NZ were just learning those skills (after rendering plenty of local species extinct) when the Europeans arrived and the destructive cycle started anew." It is good to remember hat the "sustainable" aborigines of Australia completely transformed the landscape and ecology of the entire continent before they became "sustainable"!
Will our technological prowess make us any smarter or quicker in learning to be sustainable? If not, we have another 250-750 yers to go until we reach a new equilibrium, and oh what a different world that would be!
Personally I think one of the great ironies of the coming "interesting times" is that we are entering an age when selfishness becomes critical for survival (where previously it was just a means to luxury). 40 years ago we could have worked together and saved everyone. Now we are most probably in line for a multiple gigadeath. People and communities that want to survive will have to, at some level, be selfish. While at the same time we know this type of behavior means overall fewer people will survive, and the damage will be greater.
Human nature is a real bitch.
Oh dear, denial is contagion.
Before I write this I would like to say I'm a boomer, albeit a late one.
Of course this f..ing mess is our fault, not previous generations, not the current generation, not the tooth fairy.
The boomer generation ALLOWED all the ills VK describes to happen.... how?
Because we did not prevent it from happenening when we easily had the power to do so, thats how!- yes myself included-, I'm not going to use a million and one excuses to cover up my generation's shortcomings, if these things happened during our watch, then who the hells fault is it if not ours? the night watchman sits reading his paper while the firm's premises are broken into, whose fault is it? his granpa's?, his child's?, the genetic make up of his ancestors? it's HIS, plain and simple. However I feel VK's generation will do the same damage, relatively, with fewer resources, it's who we are, it's what we do, consume and destroy, individuals may claim Conscientious Objector status but as a whole the unit is to blame. get over it.
@El G
Believe me, no one wants to be wrong about my view of "alternative processes" more than myself.
I'll even accept reincarnation as long as I can come back as me.
:)
@Ahimsa
That was such a deflating comment last post about your son jumping ship after being on board with your viewpoint for so long as well!!
Had me shaking my head.
Z.
Greyzone,
You clearly have not read what I have written and misinterpreted me. Why keep putting words in my mouth?
Also, his romantic notion that the kids can sort this out is just as silly.
I'm not saying we can sort it all out, the whole post was about the scale and magnitude of the problem. And the inevitable population decline and collapse. We can do something at a local level though. I believe that my generation can contribute that much and this is a change in the culture, something which is doable and possible given past instances at a local level atleast.
Charles Eisenstein puts it eloquently in the Ascent of Humanity;
The fact is that competition is much less a determinant of behavior and evolution than commonly supposed, and our view of nature as "red in tooth and claw" is mostly a projection of our own cultural prejudices. We find what we look for.
Secondly, the idea that genes "program" behavior and serve as the blueprint of physiognomy is also wrong, a product of our mechanistic worldview; evidence is emerging that the environment triggers and even alters DNA to serve purposes that transcend the individual.
Thirdly, the genetic integrity of higher organisms is not so absolute as commonly supposed: plants, fungi, and even animals share the genetic fluidity of the bacteria in previously unsuspected ways. A fourth indication that the supposed genetic integrity of the biological self is largely is cultural projection is that the leap from anuclear bacteria to eukaryotic cells, like other macroevolutionary jumps, happened through a symbiotic merger of simpler organisms.
Cooperation, and not competition, is the primary basis of life and the primary engine of evolution. In a later chapter I will explore how this new understanding of life may also provide a model for a new phase of human civilization. For now, suffice it to observe that the individuality of modern single-celled eukaryotes and the multicellular higher plants, animals, and fungi derived from them is built upon a merger of simpler individuals. As Alfred Ziegler puts it in Archetypal Medicine, life is a chimera.
Your behaviour alone serves as an outlier. You spend your time writing a blog and warning people you have never met on how to prepare for the inevitable. And you don't gain any recognition or wealth from it. How can you describe your behaviour?
Is it red toothed ape behaviour to help people who are outside of your genepool? Isn't that giving them an advantage? You waste precious time, energy, resources on 'them', not good for inclusive fitness! Your behaviour alone contradicts some of the theories you posit.
The US with some 300 Million people uses 20 million barrels of oil per day to keep it's cultural narrative and structural paradigm going, while the entire region of East Africa with some 200 Million people uses less then 250,000 barrels of oil per day. And given the waste I have seen, this could easily be halved! Two different cultures, narratives and stories. One that on average survives on 1/100th the energy use and material consumption of the average Westerner with a perennial smile.
I agree that people have done terrible things over the years and they will do so in the future but people are also good. They cooperate as well, they trust, they love, they teach, they nurture and care. And you are a prime example of a teacher. You give the gift of knowledge. What does that say about you?
From John A Livingston's "Rogue Primate" (1994) :
"..we , on the other hand, are evolved domesticates..."
"There are many visible earmarks of domestication. One, however, must be stressed above all others, and that is the matter of dependence. All domesticated animals depend for their day-to-day survival upon their owners. The capacities of wild self-sufficiency having long been subtracted from them, they must depend upon whatever prosthetic devices their owners see fit to provide. The human domesticate has become equally dependent, not upon a proprietor, but upon storable, retrievable, transmissible technique. Technology provides us with everything we require. Knowledge of how-to-do-it sustains us utterly. And since none of us knows how to do everything, we are further dependent upon the expertise of countless others to provide even the most basic of daily necessities. Like that of a race horse or pekingese, our dependence upon agents external to ourselves is total."
"This is not merely a consequence of the complexity of modern technology. The human animal of any society and at any time was and is a creature of how-to-do-it. That is the most fundamental characteristic of humanness"
VK, via Eisenstein: "Secondly, the idea that genes "program" behavior and serve as the blueprint of physiognomy is also wrong, a product of our mechanistic worldview; evidence is emerging that the environment triggers and even alters DNA to serve purposes that transcend the individual. "
THAT is so funny! A totally prime example of human blindness, where self is concerned. "evidence is emerging that the environment triggers and even alters DNA to serve purposes that transcend the individual" - is a pure reflection of the WRITER- exactly what he is decrying, in terms of attempting to describe reality.
From my standpoint as a geneticist/evolutionist- neither of his flat statements about genes are "true" or "useful". Evidence is indeed emerging that genes often carry far more information than we used to think- but that this information "transcends the individual" - um, that is such a sophomoric stretch as to bring a big grin to my physiognomy.
@Reuben & Greenpa
The experiments with the line lengths and group of planted ringers, are the Asch Conformity Experiments. They were looking at social pressure and authority pressure when making a judgement openly.
Wikipedia has a quick blurb on these, and on the related Miligram Experiment.
Hi VK,
Thanks for pointing out Eisenstein.
If you don't mind, could you send me an e-mail of your edited draft? Am thinking of including it (with your permission) in a project I'm doing. :-)
rwilliams23atthatyahooplace
Wow. No response to the feminism comments. Like my post NEVER EVEN HAPPENED.
It begs the question
Are you conditioned to ignore the female perspective? Or are you so poorly educated on the subject that you are incapable of a discussion? Or does the female perspective just scare the shit out of you?
New post up.
A fragile teetering tower of debt
.
@ Greenpa
The 1st Law of Arthur C Clarke;
When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong. ;-)
For example, MIT's Feb 2009 Technology review - http://bit.ly/bVmneC
The effects of an animal's environment during adolescence can be passed down to future offspring, according to two new studies. If applicable to humans, the research, done on rodents, suggests that the impact of both childhood education and early abuse could span generations. The findings provide support for a 200-year-old theory of evolution that has been largely dismissed: Lamarckian evolution, which states that acquired characteristics can be passed on to offspring.
"The results are extremely surprising and unexpected," says Li-Huei Tsai, a neuroscientist at MIT who was not involved in the research. Indeed, one of the studies found that a boost in the brain's ability to rewire itself and a corresponding improvement in memory could be passed on. "This study is probably the first study to show there are transgenerational effects not only on behavior but on brain plasticity."
In recent years, scientists have discovered that epigenetic changes--heritable changes that do not alter the sequence of DNA itself--play a major role in development, allowing genetically identical cells to develop different characteristics; epigenetic changes also play a role in cancer and other diseases. (The definition of epigenetics is somewhat variable, with some scientists limiting the term to refer to specific molecular mechanisms that alter gene expression.) Most epigenetic studies have been limited to a cellular context or have looked at the epigenetic effects of drugs or diet in utero. These two new studies are unique in that the environmental change that triggers the effect--enrichment or early abuse--occurs before pregnancy. "Give mothers chemicals, and it can affect offspring and the next generation," says Larry Feig, a neuroscientist at Tufts University School of Medicine, in Boston, who oversaw part of the research. "In this case, [the environmental change] happened way before the mice were even fertile."
.... read further at link
And this, the Acceleration of human evolution - The PDF paper can be found here: http://www.anthro.utah.edu/PDFs/accel.pnas.smallpdf.pdf
More at the author of the papers website: http://bit.ly/dfj4Cn
Or in laymans language: http://bit.ly/9AMvQ5
In a study published in the Dec. 10 issue of the Proceedings of the National Academy of Sciences (PNAS), a team led by University of Wisconsin-Madison anthropologist John Hawks estimates that positive selection just in the past 5,000 years alone — around the period of the Stone Age — has occurred at a rate roughly 100 times higher than any other period of human evolution. Many of the new genetic adjustments are occurring around changes in the human diet brought on by the advent of agriculture, and resistance to epidemic diseases that became major killers after the growth of human civilizations.
“In evolutionary terms, cultures that grow slowly are at a disadvantage, but the massive growth of human populations has led to far more genetic mutations,” says Hawks. “And every mutation that is advantageous to people has a chance of being selected and driven toward fixation. What we are catching is an exceptional time.”
The findings may lead to a very broad rethinking of human evolution, Hawks says, especially in the view that modern culture has essentially relaxed the need for physical genetic changes in humans to improve survival. Adds Hawks: “We are more different genetically from people living 5,000 years ago than they were different from Neanderthals.”
What role does technology play in all this? The role of culture? The possibility of a complementary overlap of lamarckian and darwinian evolution from technological, cultural and environmental factors.
@Zander
“The boomer generation ALLOWED all the ills VK describes to happen.... how? Because we did not prevent it from happening when we easily had the power to do so, thats how!”
Power. Do you recall what happened to the US Black Panther Party? They were a threat to power. Of course every once in a while the public dominates, something coalesces –an assault on the Bastille say and the old King is swept away. Bricks, bottles, barricades and people get seriously hurt. Sure citizens always have the power, but “easily”? No. Not ever.
The riff about population on today's post by VK is so ludicrous it bares a little evisceration.
First off, the U.S. fertility rate is about 2.05, below the approx 2.1 for replacement.
The only reason the U.S. population goes up is because of immigration, legal and illegal.
The Vampire Mafia who control the show want cheap labor, they always have historically.
Cheap labor is a function of too many people for to few jobs.
When ever the modern women of America don't deliver the 'goods', (i.e. a repo rate over 2.1) they, the Vampire Mafia simply turn on the immigration spigot. Problem solved. Modulation.
Women having double digit rates of children were the preferred method that church and state used for millennium to assure Cheap Labor.
Fertility rates have gone down in countries, cultures and ethnic groups when women in them are given a shot at Real equal opportunity, education and access to modern contraception methods. (as opposed to things like the 'rhythm method')
This is a fact, not a theory.
The jabber about uncontrolled human population (7 billion and counting) is a function of countries, cultures and ethnic groups treating their women like crap.
Let me rephrase that, when ever I see large rates of reproduction, I don't think, "It's just like those poor (non-white) people to multiply like rabbits", I think, "There's a [country, culture, ethnic group] that still suppresses their women like they were chattel and goes out of it's way to deny their women a real chance at equal opportunity, education and access to modern contraception methods."
Totally un-evolved Knuckle Dragging Mouth Breathing Caveman Cultures do this.
The excuses for treating women this way are myriad and all of them are inexcusable.
Tell us VK, what is the reproduction rate where you live?
If it's above 2.1, you (and your generation in that country) are obviously not treating your women very well. They must be looked upon by the men as Objects of Reproduction, not equal members of the human race.
Gonna blame that on Boomers sport?
Here's a chart on 220 countries and their fertility rates. Replacement is 2.1, roughly half the countries are above, half below.
Spot any patterns?
There are plenty of non-western countries above AND below the replacement line.
There are only non-western countries above the replacement line (except for Greenland, WTF?)
In Europe, Spain and Italy are at 1.24, WAY below replacement level and both nominally 'Catholic' countries. Spot the irony?
The only other reason for low long term fertility rates is long term chronic war, disease and mental depression. (Japan-1.21 and Belarus-1.24 win for mental depression)
Controlling global population (as in at least NOT increasing anymore) is already being done, thank you, by roughly half the countries in the world. It's being done by those that give their women a shot at Real equal opportunity, education and access to modern contraception methods.
It's not magic and it has nothing whatsoever to do with generations.
We can work on the per capita consumption rates by country, culture and ethnic groups in another post.
Maybe what the baby-boomers had was the anomaly. Perhaps we are headed back to normal. My maternal grandparents were married in 1932 but they didn't buy a home until after WW2; they just rented a small apartment above a store until they saved enough money to buy. My paternal grandparents lived with my grandmother's parents in a home built at the turn of the century. This worked out well for them; it provided a steady stream of income for my great-grandparents, baby sitting for my grandparents. I had great aunts and uncle who lived in extended family relationships.
When did a home go from a roof over ones head; to twin master suites and great rooms? My grandmother was one of 14 children who were raised in 3 bedroom row home in South Philadelphia. Family services would come and get your kids if you tried that today. A friend of mine asked me "When did we, as a nation, decide we don't take care of our aging family members; but instead institutionalize them?" I replied. "When everyone decided they needed their own house and mom went to work. When both parents work to keep the mortgage paid, the minivan in the driveway and pay junior's $8000 summer camp fees; granny is sent off to assisted living." We never get ahead; we just keep the wolf from the door. In a few years you will probably see a lot more multi-generation families under one roof because we don't have the money to do anything else.
And VK you may find out that your generation is a lot wiser than the ones that came before you
Hey don't lump Gen X in with the Boomers! Otherwise, you've got their number. I don't believe the eco-sky is falling, but economically speaking the Boomers screwed us all. It will take a long time to crawl back so it will be a time of opportunity for those with talent and energy.
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