einhverfr

 
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  • in reply to: All Hail the Greek Exit #3493
    einhverfr
    Member

    First, I think a lot of people are trying to figure out how to manage a Greek exit. Greece can possibly manage their exit in a way that minimizes the ramifications for them to some extent, but there are a lot of problems they can’t address.

    The big one is that Greece leaving the Eurozone, particularly if they show within a year or two, that they can begin to recover, will put tremendous pressure on other nations to follow suit.

    I actually agree that in the abstract, a Greek default would be a good thing for them, just as bankruptcy can be a good thing for those who are too deep in debt. The problem though is that this is would send deep shockwaves through the rest of Europe and this has tremendous implications for Greece as well as everyone else.

    Also the BBC piece is interesting because if you read it slowly and carefully, it is a *lot* more doom and gloom than I think even the author was aware. She basically paints a picture of international currency and debt markets already essentially near collapse and a world of financial institutions bordering on insolvency.

    in reply to: Potential Consequences of a Greek Exit #3375
    einhverfr
    Member

    There are a couple of other aspects here that aren’t really discussed.

    The first is that Greece leaving might affect Euro supply and thus lead to inflation in Europe even in the absence of other crisis factors. the Euro may be somewhat devalued just because of the fact that you have more Euros for a slightly smaller economic unit.

    The big risk that is missing in this article though is that the reason you’d see deposit withdrawals in Spain and Italy is that there would be a very reasonable sentiment that these countries were heading towards withdrawal as well. And if Spain or Portugal goes, then what next?

    A spreading crisis of withdrawal from the Eurozone would devalue the Euro drastically. It isn’t clear to me whether the Euro would, over the course of the next few years, fair better than the Drachma. That would depend on how contained the crisis is. If the Euro starts to get in bigger trouble though, would Germany stay in the union?

    Basically you could have a death spiral of the Euro taking place after a Greek exit.

    in reply to: Planet Earth – F.U.B.A.R. #3356
    einhverfr
    Member

    Regarding money, I have found John Medaille’s essay {https://www.frontporchrepublic.com/2012/01/friends-and-strangers-a-meditation-on-money/) on the subject to be very insightful and worth contemplating. It also provides plenty of ideas for how to keep economic activity going in a monetary collapse by using models which have worked in the past.

    in reply to: Please Don't Listen to Ambrose #3347
    einhverfr
    Member

    First, I think there are some genuine insights in the article. The fact is that the Euro is doomed specifically for the reason stated— it is a currency without a monetary policy, and a monetary union without a real central bank or a loss of local financial sovereignty. Yes, this could be stopped by getting rid of the European countries’ sovereignty. Yes, I think *everyone* is aware of this. I don’t think however *anyone* wants this, and for good reason, as Ashvin pointed out.

    Moreover, I think the costs for Greece dropping out of the EMU are greater than he suggests. If Greece drops out, they could continue to use Euros and just simply default on all their debt, or they could switch to the dollar and default, or they could issue drachmas and default. Either way they will have trouble raising bonds on international markets but they might not have to raise bonds on international markets. There may be other ways of financing spending in the short term, such as looking back to the war bonds campaigns in the US during WWII, and the like, and encouraging Greeks to help out their country by lending the government money. Now the Euro is almost as valuable to Greece if they are outside the ENU than if they are inside it. However if Greece drops out this encourages Ireland, Spain, Portugal, and Italy to do the same, and pretty soon the EMU begins to shrink in from the periphery relatively quickly, and the value of EMU membership goes down.

    Remember, EMU membership is primarily important because it means that international trade within Europe doesn’t have to go through multiple forex exchanges, and given that the USD is the world’s reserve currency, this process is fairly US centric which adds both time and cost to exchanges. (Note that if you wire money in MYR from Indonesia (currency is IDR) to Malaysia (MYR), the wire goes through New York because it is converted into USD in the middle. I have personal experience with this…..

    in reply to: JPMorgan: A Tale of Whales and Sharks #3324
    einhverfr
    Member

    A second point is that central bankers can use hyperinflation (by drastically increasing the money supply) to keep banks’ balance sheets positive when housing prices are shrinking in terms of real income.

    Consider this: artificial hyperinflation can be used to inflate away deflating housing markets which themselves threaten the existence of the banking system. In other words, if housing prices shrink 90% on average in real income terms, but you see the dollar lose 95% of its value in the same period, there is no insolvency in the banks when folks strategically default and declare bankruptcy. This allows us to pretend that debts are still collectable while using inflation as a form of essentially debt forgiveness which doesn’t harm balance sheets.

    in reply to: Discovering the "End" in "Extend & Pretend" #3321
    einhverfr
    Member

    RE: Greece could exchange their Euros for USD on the open market, just like they could keep using Euros if kicked out of the Eurozone. The big issue is that they couldn’t have their banks borrow from central banks. This is an issue but as Ecuador has shown it’s not a fatal one.

    So Greece currently collects taxes in EUR. They could sell those EUR for USD. This is an interesting proposition because the sheer volume of USD traded on a given day makes Greece relatively unable to affect that market significantly, but it might cause a serious devaluation of the EUR so I think they’d have to proceed slowly rather than just buy/sell on a single day.

    This would only work along with strategic default on most or all of the Greek debt. Question: how much of the Greek debt is owned by Greeks?

    in reply to: Planet Earth – F.U.B.A.R. #3319
    einhverfr
    Member

    One brief note. I think there is a bit of confirmation bias here, but there is something else going on too, and that is that it is generally easier to spot forces for change than forces for the status quo. That doesn’t mean we won’t see economic collapse, but just that it won’t happen as quickly as we think it will.

    One note on Canada. Canadian tar sands have an EROI of about 5:1 which is lower than imported oil today, but is higher than a lot of other sources of energy. One implication here is that it creates a significant wealth transfer into Canada. If, as I argue, the economic instability of the last thirty years is due to oil becoming far more scarce relative to demand, this provides important benefits to Canada. A drop in may or may not be catastrophic depending on when it happens.

    in reply to: Discovering the "End" in "Extend & Pretend" #3292
    einhverfr
    Member

    RE: I think you have to ask realistically what options are open to the Greeks and what the costs are.

    1) They can stay with the Euro, and continue to deal with the question of democracy being secondary to the policy preferences of central bankers……

    2) They can re-issue the Drachma, see hyperinflation, and have to deal with IMF demands regarding monetary policy…..

    3) Or they can go with the US Dollar. Buy dollars on the open market in exchange for Euros.

    I think you would be right as to the problems with #3 if this was still 1999. However, a lot has changed regarding US monetary policy in the last ten years, and in particular we have seen a shift from a strong dollar policy to a weak dollar policy. A conversion to USD would mean a strong uptake in the demand for dollars which strengthens the currency. The result is that the fed has to create more money to weaken it again. I don’t see a downside here for Greece, and I see the US as more or less having to accommodate Greek wishes here because failure to do so undermines current US currency policy……

    in reply to: There Is Not Enough Money On Planet Earth #3291
    einhverfr
    Member

    RE:

    As I read it, Marx was largely advocating worker’s revolutions to build some sort of communistic system on top of existing Capitalist systems. This is the inescapable conclusion that arises from the total sum of his writings. Capitalism is a necessary stage (missing in the Soviet and Chinese experiments) and it serves as a foundation for what comes next via the Historical Dialectic theory. It seems to me that the case studies of Marxian thought really should be focusing on Scandinavia rather than Russia.

    I don’t think you can easily hold people responsible for how people abuse their works. Marxist thought did help shape the Russian and Chinese systems but their systems were certainly nowhere near what Marx generally talked about. These systems were built on a feudal (in the taxonomy of Marx) rather than a capitalist foundation and consequently they never stopped resembling that system.

    I am not a Marxist or a socialist btw. I just think it is important to break out of the way we think about some aspects of the past. There are Marxist thinkers who I respect (Wilhelm Reich for example, and his idea of work democracy), and I think Marxist criticism of capitalism is interesting and important. However, I don’t see Marx as offering solutions that achieve what is needed in the future.

    in reply to: Discovering the "End" in "Extend & Pretend" #3284
    einhverfr
    Member

    RE,

    In 1999, the Ecuadorian governent ditched their currency and went to the USD as their national currency. The exit would be very simple, if Greece initiated it. People just convert their current Euros into USD, and this means that the Greek government ties their currency to a central back attached to an actual governmetn, and that the IMF cannot use currency policy as a bargaining tool.

    They can then start to use strategic, partial defaults to reduce their debt load.

    All of the above will take time though.

    Keep in mind that “money” is mostly a matter of accounting entries in banks. Actual cash is a small part of the money supply.

    in reply to: Discovering the "End" in "Extend & Pretend" #3282
    einhverfr
    Member

    That’s exactly what Ecuador did, Skipbreakfast.

    in reply to: There Is Not Enough Money On Planet Earth #3281
    einhverfr
    Member

    As for Marx, did I miss it or did he also predict Stalin and Mao?

    Isn’t that like holding Einstein (E-mc^2) responsible for the A-bomb?

    in reply to: Discovering the "End" in "Extend & Pretend" #3279
    einhverfr
    Member

    It seems to me that when you have a single monetary instrument covering a bunch of at least allegedly democratic governments iwth their own policies then the people fundamentally become the enemies of the central bankers.

    I don’t believe the Euro can survive. But this is an interesting development because without the Euro, there are even fewer good alternatives for a world reserve currency to the USD, so the European debt crisis may be a good thing for a while for the US.

    in reply to: Shackles That We Will Believe In #3246
    einhverfr
    Member

    g-minor: One key thing to keep in mind: in the US there is the 13th Amendment which limits “involuntary servitude” to prison labor. It doesn’t eliminate slavery, but it limits it.

    Now that doesn’t mean that new crimes couldn’t be created by legislative bodies, or that we couldn’t make bankruptcy or failure to pay debts a crime that could include slavery as a case. However here there are major problems.

    Additionally if the United States falls, then the 13th Amendment becomes irrelevant.

    in reply to: There Is Not Enough Money On Planet Earth #3239
    einhverfr
    Member

    At the same time, Karl Marx just about predicted all of the problems occurring in global markets right now, and he didn’t write a lick about energy or oil. OTOH, he implicitly recognized its importance when he focused on the global expansion of industrial capitalism and its constant means of “revolutionizing production” through technology.

    I think it is more complicated than either a complete decoupling or a close coupling. Additionally fossil fuels aren’t only about energy, but also materials. Without coal, we can’t produce steel without rapid deforestation, for example, and natural gas itself is used as a feedstock in producing all sorts of things, as is oil.

    Money pretty clearly functions as a proxy for scarce resource allocation generally, and energy sources are scarce resources, and indeed is necessary for the production or exploitation of every other resource……

    in reply to: Creating Community in the Modern World #3226
    einhverfr
    Member

    I am the author of the article.

    A few responses here briefly.

    @Babble:

    I think the relationship between the past, present, and future is far more interesting and complex than we give it credit for. As Victor Turner has shown regarding his field work among the Ndembo in Africa, there is tremendous dynamism in actual tribal life and custom. We tend to think of it as static in part because of seeing it through a structuralist lens. And of course, as Henry Spencer said of computer science, “Those who do not learn from UNIX are doomed to reinvent it poorly.”

    Often by being aware of what has worked or not in the past we can better free ourselves.

    @mrawlings:

    It’s not only that the current paradigm blinds us (we can at least partly step outside that by doing comparative and anthropological studies), but also that we have built up obstacles to thinking of things in any other ways. Consider for example the idea of deliberate stratification of society. This is the basis for the caste system in India, and for similar systems in ancient Greece and Rome. People here in the West are generally hostile towards it because of enlightenment views that everyone has inherent equal worth. But whether people have inherent equal worth in the abstract, they don’t have inherent equal value to the community, and stratification allows better allocation of effort and rewards for effort than plane, simple, homogeneous society. Again, here’s where a combination of trans-historical and cross-cultural studies can come in very helpful. If you are trying to find a new paradigm, that’s certainly where I would suggest starting.

    in reply to: Shackles That We Will Believe In #3224
    einhverfr
    Member

    Of course we still have slavery. What else do you call it when people who are in prison are let out sooner if they work for the profit of other companies while in prison? Is there another word that describes our current prison labor system in the US?

    in reply to: Spain Has Been Shut Out #3223
    einhverfr
    Member

    Some thoughts here. First the major selling point for the Euro is that it reduces banking fees for international transactions. For countries that are small like Luxemburg, it is a godsend. The reason why countries like Spain or Greece are hesitant to leave the Eurozone is that leaving carries large financial costs for international businesses.

    Leaving the Eurozone by itself won’t solve any problems. However one thing it does do is open up the door to greater localization of the economy, and from colleagues in Europe, I understand this is already happening.

    The solution is to localize the economies and then leave the Eurozone, but that’s a tough thing to do.

    in reply to: A Defiant, Yet Desperate Leap Into the Dark #3222
    einhverfr
    Member

    Have to add the insight of Clark and Dawe here even though it is a few years old at this time.

    https://www.youtube.com/watch?v=YZMJ-3nVdIU

    in reply to: There Is Not Enough Money On Planet Earth #3221
    einhverfr
    Member

    @Golden Oxen

    Ecuador was very smart about their default. What the government (elected in part on an anti-US-base, pro-debt-default platform) actually did was argue that specific bond issues were fraudulant and that therefore the nation had no obligation to pay them back. They also used the FARC base raid and subsequent US mishandling to declare that all foreign military organizations, particularly the FARC (and incidentally the US) could no longer have any open bases in the country.

    in reply to: There Is Not Enough Money On Planet Earth #3220
    einhverfr
    Member

    I have been thinking a lot more about the housing issues lately. We are about 10 years into a thirty year mortgage and don’t intend to sell because owning a home provides a freedom of movement that’s not generally found renting. There are ways to hedge your bets when you own that are very hard to do when renting.

    But I see this reduction in interest rates as a way of hiding deflation that’s currently going on, possibly countering it with inflation instead. This means deflation is already happening on a practical level and tricks are being pulled out of a hat to try to keep balance sheets positive.

    When people buy a house, the sticker price is generally a general comparative marker. it is the monthly payment that’s the primary marker, and this is also the major reason for concern— when property costs too much then young people can’t buy it and landowners can’t rent for enough to pay for the mortgage. This is a major reason to question long-term economic outlooks.

    But right now, we are watching our monthly prices drop every six months, going down about 40% in 6 years. Housing prices spiked after we bought but are now down to about what we paid. I don’t think there is any question that relative to inflation, we are going to see continued deflation of monthly payments, and that it cant go much below where we are without either seeing increased inflation for everything else or deflation in housing prices. In general the latter is a far greater threat to banks, and so I think the fed will start pursuing a high inflation strategy to keep the banks open.

    in reply to: China, or How To Live in Interesting Times #3054
    einhverfr
    Member

    In 1973, the major shortages were political, but I picked it for a couple of reasons.

    The key thing is that oil prices prior to 1973 more or less tracked inflation exactly, and were stable. In other words, producers pumped out of the ground as much oil as people wanted to use. Prices were non-volatile and slowly dropping relative to inflation.

    After 1973,. we see a very dynamic oil market where little changes in supply or demand create big changes in price. Decreasing demand allows oil prices to slowly sag (inflation-adjusted) through the 1990’s except during the Gulf War, when we see a price spike, but the prices are still volatile compared to 1972 and before. This is why I say it was peak oil supply relative to demand. Now we see more new little disturbances (like Libya) causing big changes in oil prices. And producers are not just pumping more oil to meet demand. The closest thing you have to that are tar sands extraction, and that is limited by the fact that it is a very intensive process economically.

    Political issues may have been the catalyst, but I think the root issue is that oil discoveries peaked in the 60’s and so change was getting ready to happen anyway.

    So as far as peak oil, we can see peak discovery (60’s) peak supply relative to demand (73), peak reserves (82), and at some point we will see peak maximum supply if we haven’t already (but it isn’t clear when that will happen). These are all significant points depending on how you track it.

    in reply to: China, or How To Live in Interesting Times #3021
    einhverfr
    Member

    Prior to 1973, oil was a demand-constrained market, with prices roughly tracking inflation and a great deal of price stability. After 1973, it was a supply constrained market where little changes in supply and demand affect prices significantly. I often refer to 1973 as peak oil year because it was when supply began to drop relative to demand (or rather supply rose slower than demand)

    It is clear that oil producers, worried about the fact that we are already past peak oil reserves (1982 when we hit that oil peak) are starting to ration output, so that can account for things too. Prices too low? Pump less. Make people pay more as supply is reduced.

    Peak oil theorists assume that we are pumping oil as fast as we can. This is not the case, and so we have been living peak oil for decades. Prices rise relative to inflation, and are more volatile. Little disturbances like Libya cause prices to jump significantly.

    But in the end supply or demand numbers by themselves don’t mean anything. It’s supply relative to demand which is the relevant measure. By that measure we have past peak oil nearly 40 years ago.

    in reply to: The Limits to Mankind #3006
    einhverfr
    Member

    How do you propose to deal with the issues of differences in potential energy between the energy at the asteroid belt and Earth? I would assume that chunks of asteroids launched at the earth would be moving very fast by the time they’d get here…..

    in reply to: "If Only" They Had Listened #2997
    einhverfr
    Member

    Ben: I guess what I am getting at is how you define industrial energy. I don’t think it is possible to draw bright lines there. But how do you define industrial energy?

    Edit: I could see an argument that the key metric is net energy *imports* but that isn’t what the individual I was replying to said, and coal mines where coal is used nationally wouldn’t be industrial energy by that definition.

    in reply to: "If Only" They Had Listened #2990
    einhverfr
    Member

    Ben:

    What counts as industrial energy? Is a horse eating oats and pulling a plough different from a diesel tractor? Why would one count and the other not?

    Does coal-generated electricity count when it heats my stove, but not charcoal when I do a bbq? Why?

    Do wind-powered water pumps not count but electrical ones count?

    in reply to: "If Only" They Had Listened #2976
    einhverfr
    Member

    When energy use in defaulted countries is reduced to zero it will remain at zero … essentially forever.

    Energy use can only be reduced to zero when the last human dies. How else will we cook? Burning charcoal is energy use too. Austerity is here to stay because we have lost the energy subsidy. However that doesn’t mean that energy use can ever decline to zero wherever humans are alive. We are all consuming solar energy whether that sunshine hit the earth recently or in geological ages past.

    in reply to: The Limits to Mankind #2975
    einhverfr
    Member

    I am not opposed in general to a space program although I think we are fast approaching a time when we can’t afford one. I would also point out that it isn’t just a lack of energy or resources. It is also waste within those resources. Would we be better off with 68 Skylab equivalents? Or one ISS? That costs about the same…..

    A second major issue is what it would take to sustain a lunar colony. I find it highly unlikely that such a colony would be self-sufficient and therefore would require regular shipments from earth, whether these are for solar panels, or system components or whatever. Such shipments are likely to be energy intensive. There isn’t a good way of getting components to the moon in the event of a global economic collapse. I think it would be very unlikely that we’d be able to create a sustainable lunar colony, or even one we could sustain from earth post-peak-oil.

    Mars is of course somewhat different. While the Mars landers have provided a lot of interesting scientific results, the challenge of setting up any sort colony there is beyond what we could have done I think even with a lot of additional resources. Right now we don’t even know how to land a manned space capsule on Mars, much less with enough fuel to lift of again. The atmosphere is too thin to use parachutes and too thick to use retrorockets. There is no reason to think we can even put a man on mars and return him safely to earth, much less establish a colony there.

    The problem with asteroid mining, mining energy from Jupiter, etc. is that you have massive energy costs of getting the infrastructure in place and it is unlikely that the metals and energy will be worth it. How much energy does it take to pull the methane out of Jupiter’s gravity well? how much energy do you get from it? I would be seriously impressed by an EROI over 1 for such a project even before transfer to earth would reduce efficiency. So I don’t see this as much of an energy source.

    in reply to: The What's in your garden thread #2957
    einhverfr
    Member

    Thanks, Frank

    I am in zone 6a, and we have had some 6a winters in recent years…. Indeed many neighbors lost all their roses (graft joint died).

    I don’t have many annuals (aside from the constant self-seeders) this or last year because of being out of the country, but I prefer perennials because it is possible to make far lower maintenance. Also I am not including the wild asparagus that cropped up under my spruce tree.

    Most of my crops right now are fruit crops: strawberries, blackberries, grapes, ornamental plums (came with the house but they taste good and do produce surprisingly useful yields as well as attracting bees).

    Each of these lists will have overlap because most of the plants have multiple functions. For example lavender attracts bees, it is an ornamental, a medicinal, and I cook with it as a seasoning. Indeed I will omit the ornamental list because every plant can be ornamental.

    Fruits: grape, strawberry, blackberry, ornamental plum, peach, rose hips (many varieties, become edible at different times during the fall and winter)

    To add to salads: calendula, mint, some of the roses, lavender, barberry leaf, grape leaves

    Other veggies: Grape leaves, day lillies. Ok, so I eat lambs quarters and chickweed too where it grows in areas I haven’t gotten to and am known to pull salsify roots out of the lawn (I still have lawn, and haven’t converted it all to permaculture yet) to eat. Not sure if I should count those though because that’s not really an intentional crop.

    Culinary herbs: lavender, thyme, sage, terragon, mint

    I have also found that some of the plants I have used to deny space to weeds (like Iris germanica) had important uses in the ancient world. Indeed I. germanica was seen as being basically a substitute for I. florentina (Orris root) in both perfumery and medicine though it was considered to be somewhat inferior.

    I want to plant chestnuts and walnuts next year, and expand on the perennial veggies I am currently growing in a permacultural setting.

    in reply to: Revisiting the Physical Risks of Debt #2948
    einhverfr
    Member

    A few thoughts here.

    In 1912, Hilaire Belloc suggested (in “The Servile State”) that class warfare was inherent in industrial capitalism and would eventually lead to the capitalists enslaving the laborers. He defines slavery as a legal obligation, on pain of penalty enforced by the state, to labor to the benefit of another person. Prison labor is slavery by that definition, and it fits his view of the dynamics, namely that the corporations want productivity and that the poor want subsistance. Prison slavery is thus fast becoming our social safety net, just as formal slavery was the social safety net of ancient Rome. That ought to scare the living daylights out of any American.

    I think it is against this background that the physical risks of debt have to be understood. Legalizing prison slavery for mere nonpayment of debts is problematic because of the 13th Amendment which restricts slavery to that for punishment of a crime. I greater likelihood would be to create laws to allow prisoners to work off debts while in prison. Then you can get busted for smoking a joint and whether you get prosecuted can depend on how much you owe people. Add some vague laws and extra surveillance, and you get to the point where people might be able to be prosecuted on a “show me the man and I’ll find you the crime” basis. So I dont think the 13th Amendment is a magic bullet here.

    The second major risk is that if there is a rapid collapse, it may result in local areas breaking away. This may change dynamics, but I can’t imagine that creditors would be able to utilize the power of the state in such an environment. However for local debts, it may be the case that it is a lot easier to go after someone with fewer laws in the way. So I am not sure that would be necessarily pro-creditor or pro-debtor. It may depend a lot on physical distance, administrative issues, and relationship between creditor and debtor.

    Modern prisons are new institutions born of social complexity. The old institutions for dealing with debt were formal slavery. The story of Virginius and Virginia should be instructive there as a warning.

    in reply to: Skeptical Science Analysis #2947
    einhverfr
    Member

    Some odd thoughts that come up reading through the accusations of logical fallacies.

    The first is that the correct boundaries of the ATA fallacy are remarkably hard to define in part because every one of us has to go on other people’s authority on all manner of things. The idea that we can be an expert in everything is no longer really possible. Therefore in any work we end up having to aggregate other people’s conclusions. This thus strikes me as a problem. We can’t go verify every result of everyone ourselves. We can’t even memorize all the core research. And so we end up having to incorporate it by reference. In some cases this is harder because an authority is an authority over something by definition. If the Pope says something about Catholicism, it is by definition correct, so ATA in that area is a tautology, not a fallacy. Same with the Supreme Court and the state of federal law in the US. But even there you have to be careful.

    But with science this problem runs into all sorts of issues, and it isn’t clear where lines can be drawn.

    I wonder if this is a problem of social complexity and whether it essentially means that scientific progress is fundamentally unstable itself.

    in reply to: "If Only" They Had Listened #2942
    einhverfr
    Member

    @Karpatok: First, regarding prison labor, one of the scariest books that in many ways predicted this was “The Servile State” by Hilaire Belloc, written in 1912. He suggests that capitalism leads to formal slavery, and I think he is right. The book is public domain, so you can find it on the internet. Prison is becoming our social safety net. Subsistence in exchange for labor, and it is the only form of slavery explicitly allowed in the 13th Amendment. Then of course the convicts are released with no means to support themselves, so that they will end back up as slaves, I mean prisoners.

    Regarding Afghanistan, I think there are two critical things to keep in mind. First, every society runs on the image of legitimacy. Authoritarian regimes spend a lot of time trying to isolate dissenters by making sure they feel that they are alone in their thoughts. But without social legitimacy, society breaks down. Imagine if next year every American decided to drive 20 miles an hour above the speed limit and refuse to pay fines or taxes. The state and federal governments would cease to effectively exist at that point. Government is like fiat money. It exists because we all agree it does. The Afghan people can and will take responsibility for their government at some point, and we may be accelerating the demise of the current governmental structure by our continued interference. Afghans are having every sense of national pride insulted by us. In the end they will decide what to do about it. I wouldn’t want to be Karzai though.

    The second thing is that I don’t see American military power as being sustainable for a lot longer. We are seeing two important trends which cut against long-term military might able to dominate the world. The first is that the price of oil in inflation-adjusted dollars is growing, and of course that has severe implications for every branch of the armed forces in every country. But the second is the growing disparity of wealth. As the Western Roman Empire found, as the concentration of wealth increases, the tax base narrows, and the ability to collect taxes goes down. Our social safety net and our military might are both based on the idea that we are starting off with a broad tax base. As this shrinks, both social and military spending become harder to maintain. Add national debt to this and you have a very toxic mixture. All it takes is one regional war in the Middle East and we may be done for. And this is why we have so much effort going into military domination of that region.

    As a side note, the interplay of oil and WWII is fascinating. Japan was essentially defeated by isolating them from the Indonesian oil fields, and this was undeniably a larger factor than the atomic bombs. Indeed the whole kamikaze tactics only became formalized when Japan was unable to obtain enough oil to sustain a war effort for much longer, and before they were formalized they were only informally used in the battle that lost them that access. I think our military learned the lesson that nobody can fight today without oil.

    in reply to: "If Only" They Had Listened #2936
    einhverfr
    Member

    @karpatok

    I think that anyone who realizes that diversity is important in a nation realizes that the Taliban must have a seat at the table of the Afghan government. The problem with the Afghan government is not Taliban participation. In fact I think there should be fewer barriers to Taliban participation in the Afghan government.

    Rather Afghanistan is the best example in the world right now as to the problems that exist when one expects all solutions to be top-down. The government is structured to make it hard for regional governments to break away and rebel, but this is done in a very heavy-handed way. For example city and local governments have to have their budgets approved by the central government in Kabul. There is very little room for real grass-roots localism in Afghanistan and this is the way it has been since the current governmental structure was formed.

    Afghanistan is a country where the government must be worked around, not where it does anything useful. Indeed the only things I would trust a government like that to do would be to suppress local dissent and help out corporations.

    As for alternate structures, I really think urban permaculture is a good place to start. It may not produce all the food we need, but it is a good start and it gets people thinking and hedging their bets. If we can create more intra-community food production, we reduce the power of companies like Monsanto, and mega-farms, and CAFO’s. Buy local. Eat local. Multipurpose everything.

    in reply to: limits – and current energy waste #2934
    einhverfr
    Member
    in reply to: "If Only" They Had Listened #2933
    einhverfr
    Member

    @Karpatok

    One thing I have learned from history is that violent revolutions usually only succeed with the help of those who are in de facto power anyway. Getting rid of the old order is more like a snake shedding it’s skin than a butterfly emerging from a chrysalis.

    This is true even for external invasion.

    When the Ostrogoths swept into Itally and essentially took over what was left of Rome, they found themselves unable to address the inability to collect taxes that lead to Rome’s defeat at their hands, and thus doomed themselves as well. See “The Roman Empire and Its Germanic Peoples” by Herwig Wolfram. You can see the same dynamics at work today in Afghanistan, whose government is more centralized than North Korea’s.

    What we need is not a violent revolution. We need people to quietly rebel not with force of arms but with our economic choices, to fight a war of attrition against corporations by building alternate structures and denying the corporations our labor and our money. This is a massive revolution and it is a hard one, but it is one that has a chance of doing something other than making us feel good about changing the puppets but leaving the puppetmasters in place.

    in reply to: Just Wait Til' Next Weekend #2931
    einhverfr
    Member

    Hyperinflation may be a good thing for Greece though. It means debts hyper-deflate…..

    in reply to: "If Only" They Had Listened #2929
    einhverfr
    Member

    Here is why I don’t think transparency allows an answer as to what needs to be done.

    There are several important aspects to the current crisis. These are intertwined.

    The first is fraud on the part of the banks and other institutions. This should be prosecuted but is probably so widespread it won’t be in all honestly. The issue is not a lack of transparency but a lack of political will. However, the fraud was largely limited to sub-prime mortgages, and it was largely limited to securitization of CDS’s.

    The second is economic instability. I don’t think the crisis is merely a credit crisis. I think oil prices, which have risen quite a bit (and risen quite a bit faster than inflation), are partly to blame. Oil touches the manufacture and distribution of everything in our economy, so it is a huge brake on everything when prices rise. I think unemployment is best seen as tied to this, rather than the lack of credit.

    In the United States, housing prices have been rising slower than inflation, and now home mortgage rates for prime mortgages are a lot lower than inflation. This tells you something is very wrong. Indeed prime mortgage rates keep falling, to the point where the mortgage payment we have on our house has fallen 40% from the original law payment of about $1k/month (now to a bit over 500/month). This has been combined with a weak dollar strategy from the Fed since early 2006, essentially using inflation to hide deflation of large assets.

    You can go after the fraud but that’s not going to put people back to work, and if you don’t put them back to work, then they can’t pay their mortgages. If they can’t pay their mortgages, then the banks get in trouble because housing prices drop and more mortgages go underwater.

    einhverfr
    Member

    Recently I have fallen in with Distributists (mostly Catholic and Orthodox, but I like to think I am helping bring Distributism to Neopaganism as well). Distributism arose in the English Catholic community in the early 20th century as a reaction against big systems thinking and an attempt to get back to an agrarian, small business society. Chesterton for example (while rather caustic in his religious views) made the insight that I think fits this article very well:

    “Too much capitalism does not mean too many capitalists but rather too few.”

    That’s about it. Not much more can be said there except to say that too few capitalists will always lead to too much capitalism. In the end I think that distributed economies are fundamentally better than centralized ones. In this regard I think Distributism beats Capitalism at its own game.

    in reply to: The Limits to Mankind #2926
    einhverfr
    Member

    The question of economic growth and whether it can be sustained in the long run is something that is a very difficult question and one I personally go back and forth on. A major part of the problem has to do with defining economic growth.

    The general idea of economic growth tends to be measured in consumption, which is itself measured by aggregating purchases over time. The purchase is not the consumption. The utilization is the consumption. Obviously this cannot continue to grow indefinitely.

    But suppose we look at this from an accounting side instead? Instead of utilization and depletion of purchased resources as being the metrics, suppose we look instead at production and distribution? It doesn’t make sense to talk about consumption of houses for example, but it does make sense to talk about production and distribution of these. More to the point it doesn’t make sense to talk about consumption of apple trees, but it does make sense to talk about consumption of apples.

    So suppose we define economic activity as production and distribution of useful modifications to our environment (useful modifications to our environment being Belloc’s definition of wealth)? This *sounds* like the same definition as the economists use but I don’t think it is. For example, I think urban permaculture would show up in economic metrics very differently in a consumption-based vs a production-centric approach (the utility of an urban lot transformed permaculturally goes well beyond the resources consumed). In this view is it possible for perpetual growth? Perhaps. The definition here doesn’t seem to be as subject to the problem of physical limits as the standard definition.

    However, at the same time, I think that such perpetual growth would still be an illusion. It would be like running up the side of a hamster wheel not really realizing we aren’t actually going anywhere.

    in reply to: "If Only" They Had Listened #2924
    einhverfr
    Member

    I have concluded that this economic contraction is not something we can fix, but only something we can survive. The problem is that almost anything you try to do will have unintended consequences. For example if you are worried about deflation in the housing market, devaluing your currency makes a lot of sense (in essence, hiding deflation by trying to off-set it by inflation). While private debt is a big deal, the closest thing you can have to a bailout for the little guy is a low interest rate coupled by high inflation (this makes the debt worth less in real income terms over time). We actually have been seeing a policy aimed at this approach in the US called “weak dollar policy.”

    Of course the problem is you devalue debt this way, but you also devalue people’s savings, and you increase the problem of imported oil as a drag on the economy. While a weak currency policy may save the banks, it does so at the expense of the economy as a whole, and hte little guy to survive it must be able to or willing to contract his/her spending.

    If the spending primarily is restricted on imports but goes back to the local economy it may be enough to save things. So the question to my mind is not what policies come down from on high, but how we react to them on the ground.

    To be clear a weak euro policy is not to my mind on the table. However, the EU is fast running out of options to prevent a massive catastrophe here and this may be the final option available.

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