Wednesday, October 14, 2009

So what is the end game?

We have achieved regulatory capture, with the top four banks that control 60% of the money supply using that to bludgeon Washington into giving them whatever they want. We have an economy that has outsourced most of its good-paying jobs elsewhere, leaving only jobs selling overpriced real estate to one another and that's not exactly a growth industry these days if you haven't looked at the real estate market lately. We have a set of oligarchs, the top 1% of the population, who control over 50% of the assets of the nation and who have instituted "crony capitalism" here in America where in order to be leader of a major corporation you need to be a crony of one of the oligarchs. The economy is in free fall because we make nothing, because cronies are selected for loyalty to their oligarchs rather than competence, because we're simply too effective at creating and distributing goods to have sufficient jobs to absorb all those goods and the resulting job losses mean that we have even less demand for those goods, resulting in a downward spiral of employment whose bottom I cannot see.

So how do we get out of this? The right wing's notion is that the downward spiral of job losses will stop once labor becomes cheap enough to bring jobs back home from overseas is complete fail. The problem is that $1 a day, what someone in Vietnam might make,isn't enough money to survive on here in the United States, so we will never arrive there -- people will have starved to death first. In addition it's not just wages that are lower overseas -- it's regulatory framework entirely. Dangerous factories where one or two people lose their lives every day are common in China. The Chinese government shrugs and points out they have a billion Chinese peasants to bring into the modern era so what's a few dead peasants in the greater picture of things? But we have this strange allergy to volunteering for unnecessary death here in the USA and have thus enacted worker safety laws. Republicans attempted to eliminate these safety regulations via gutting OSHA and via tort reform but haven't completely accomplished that, so the point is that those jobs aren't going to come back just because wages decline. This right-wing talking point is a non-starter.

So, are we destined for Communism? Hardly. Communism has been discredited as an economic system for one simple reason: Because it has been an utter failure every time it has been attempted. Either it is incapable of competing with capitalism on an organizational and military basis (e.g. the communes of Spain, which were utterly crushed by fascists) or if organized with a central committee to handle defense, inevitably ends up falling to strongman rule and runaway military expenditures that destroy the economy because there's no checks and balances. Even without that self-defense flaw, Communism as an economic system overproduces some commodities and underproduces others because it has no real-time feedback system for adjusting supply and demand such as the feedback system provided by money, and has extreme difficulty with producing complex products that have many intermediaries, typically resorting to extremely inefficient mechanisms to produce those profits. For example, the Ural motorcycle factory, prior to the fall of Communism, produced its own engine castings and stampings, had its own steel mill and tubing factory on site to create the steel for its motorcycles, had its own machine shop on site to build the tooling for its motorcycles, etc. None of these could take advantage of the economies of scale the way a steel mill in the West could, but it was the only way the Ural factory could assure that it got sufficient supplies of these materials to build its motorcycles.

So if Communism isn't the answer because of its inefficiency and the problem of military capture, and capitalism isn't the answer because it is too efficient and the problem of regulatory capture by the capitalists (remember, power grows from the barrel of a gun, and money buys a lot of guns, thereby rule by capitalists is always exactly identical to rule by gun once you dig down the layers to the core of a capitalist's power), what is the answer? I suppose a mixed system like in Europe might be one answer. It adds sufficient inefficiency to the capitalist system to keep most people either employed or at least in a position where if there is every a need for their services they could be employed (as vs. starved to death). The problem is that this sort of pragmatic mixing of systems is immune to slogans. "We're going to have a socialist revolution, except with some Communist parts to counter the power of capitalists to rule by gun and some capitalist parts to insure that the standard of living doesn't decline!" doesn't exactly pour trippingly off the tongue. And unfortunately, demagoguery -- getting masses of people to follow you -- typically does require some sort of talking points or slogans to fire up the masses.

The end game here in the United States? I don't see it being anywhere as tidy as in Europe. The US is too big and too ethnically diverse, too difficult to institute changes that require national unity and too easy to institute changes via control of mass media, which is owned by and serves the interests of the oligarchs. What I suspect, in the end, is that someone like Glenn Beck is going to go off the reservation and lead a fascist revolution against convenient scapegoats -- Mexicans, liberals, Muslims, whatever. And as with Nazi Germany, the majority of people will go along with it either out of fear or because they agree with him. And as with Nazi Germany, average wages will continue to fall, but because more people are employed (it takes a lot of manpower to round up all them Messicans and liburahls and put them into extermination camps!), nobody will seem to notice. And of course the end result will be national disaster, as it always is with fascism -- national stagnation, economic uncompetitiveness, endless wars that deplete the resources of the nation -- but I see no FDRs in the wings to stop it.

Let us hope I'm wrong. I was wrong about the chances of Obama getting elected, after all -- I was sure that America would never elect a black President because of all the closet racists who will insist they have a black best friend but never seem to produce him at any gathering you meet them at. But if I'm right... we're in for a ride, friends, and it's a ride straight to Hell.

-- Badtux the Apocalyptic Penguin


  1. I reckon the endgame is collapse.

    I don't disagree with your take on things, even the likelihood that there will be a fascist who tries to ride a wave of fake populism, a cross between Huey Long and Adolf Hitler. But he will run into two problems: complexity and externalities.

    It's hard to run a complex society like the U.S. As you noted in your example of the Ural motorcycle factory, things work better if there is a diverse, connected system. But laws and honesty and decent behaviour are needed to keep that functioning.

    A system based on oppression, violence and poverty will not work at that level of complexity. If someone is getting paid $1 a day, they're not going to work hard, or show up for their slave job at all times expected. You can't have a high-quality civilisation if you can't expect that shipment to be delivered on time, or if the metal in the mortar tube is cracked because the pitifully thin worker who casted it couldn't be arsed to heat the machinery to the right temperature to temper the steel. Etc.

    What's going to happen to the U.S. is that shit is just going to stop working. The electricity won't come on every time you want it. Lines are down, and nobody rushed to fix them. A part went bad at the generator, and delivery of the replacement cannot be expected any time soon. The water coming from the pipe is brown, and it tastes funny. One lane of the bridge is sagging, and no one wants to drive across it... Entropy will start winning.

    Your analysis ignores the outside factor, too. China is not going to just tread water as the U.S. Empire weakens. The oil states will not keep doing business with the people who pay them in worthless dollars. As the U.S. weakens and hollows out, there will be other entities that fill the power gap. I can't predict exactly how, but a country with a disgustingly rich oligarchy and a starving, stupid population base will get eaten alive.

    You and are are still young enough that we're going to see how it plays out, Tux. Barring accident, we've got 20 years to view the unfolding. It's going to be damn interesting for me, watching from the outside. I feel sad for those of you trapped in the maelstrom, mate.

  2. Great post, BT. I agree wholeheartedly, and Rick, you are right on the money too about the ever more worthless U.S. dollar.

    China has already made its plans.

    As have all the other vulture countries just licking their lips awaiting the final gasps from our sector.


    China is not going to just tread water as the U.S. Empire weakens. The oil states will not keep doing business with the people who pay them in worthless dollars. As the U.S. weakens and hollows out, there will be other entities that fill the power gap. I can't predict exactly how, but a country with a disgustingly rich oligarchy and a starving, stupid population base will get eaten alive.

  3. I don't disagree with the final outcome of a fascist takeover of the US, it will in the end be the final collapse of the United States as a nation. But I think you underestimate the viciousness of the average American or his willingness to get behind a leader who wants to go out and kill lots of darkies. Patriotism will keep that guy going to the steel mill and tempering that barrel for that mortar tube long after any sensible person would quit and go off and find some place to scratch out a miserable existence as a subsistence farmer. American civilization will go down *hard*, and it would not surprise me if more than a few cities were glowing in the dark by the end -- some of them American cities, by American hands.

    One of my science fiction novels has a final breakup of the United States where a nuclear device goes off in the middle of the San Francisco Bay, wiping out the whole Bay Area, and it's traced back to a right-wing Christianist faction of the military. The entire west coast breaks away from the United States as well as the Northeast and a huge civil war breaks out, with the U.S. military mostly going with the Christianists against the break-away parts of the nation. That war doesn't go well for the breakaway portions because ingenuity and resourcefulness has a hard time against F-16 jet fighters and M1 tanks in the hands of crazed religious jihadists with no regard for human life that's not their own (the beginning of the novel has Christianist jihadists taking over a suburb in Arizona and lining up the entire male population over age 10 or so and shooting them in the street), and they end up taking some desperate measures... but I'll leave the details of that to the novel, thank you (sorry, not finished/published, you'll have to wait).

    Yeah, that's the sort of shit I think about when I'm not blogging. Probably why I spend so much time blogging, trying to spend less time thinking of dark, dark things like that...

    - Badtux the Apocalyptic Penguin

  4. Unfortunatly, I agree with you, and the items mentioned. But corperate welfare is the classical definition of national socialism, and I believe we are there already.
    We didn't consider taking care of the people, we took care of the corperations. We have laws that are supposed to protedt the public, but we set out revised laws to aid the corperate person, and then let them loose on an unsuspecting public.
    All it would take is what you say in your repost. Some idiot zelot.

  5. First - I want to thank you for a brilliant post.

    Second - My wife told me that her aunt in Riga, Latvia wants to leave my wife the apartment she owns there in her will, and I found myself asking 'How big is it?" Could I retire there? Would I want to? And I am an optomist.

    Third - We are trending in the right direction economically, but there's no way to know if it's too little, too late.

    It's just as likely that a socialistic, charismatic leader will capture the hopes of the people as FDR did in times a lot worse than this that lasted a lot longer. And the people kept the faith with FDR in bad times. While I agree that there is a risk of a religious,fascist neo-con coup (shades of Nehemia Scudder) - I don't see it as likely.

    Maybe a remake of the French revolution with the aristocrats a head shorter. A old friend of mine up your way in SLV has a working guilotine... just a thought.

    I was writing something in my head related to your comment about China. They have managed to combine the worst elements of an oppresive communist society with the worst elements of capitalist greed. But it should be possible to do the reverse, combine the most benign elements of socialism with the productivity and innovation that comes from a free market.

    The questions are - how bad will things get before an American politician has the nerve to suggest it out loud - and - will there be enough resources in the country left to finance a recovery?

    Try anti-depressants, BT. I would miss you.

  6. Speaking of fascism TYT shows that the right is ripe with it even on foreign policy, of course he's not much different than all the GOP presidential candidates who espouse the world marching to our drum beat or pay the price.

  7. Perhaps the endgame will not be total collapse, but disintegration similar to the Soviet Union? Instead of assuming everybody is yoked together for the ride to hell, the states could simply decide to disband the federal government and allow each region of the country to work out its salvation in its own way. The far right has been arguing something similar for years (you could say as far back as 1860), but it seems now that the idea is catching on in some quarters of the left. I can't say how this will all actually play out; your guess is as good as mine.

  8. Astute observations and insightful analyses of conditions leading to epic fail, 'Tux. I'll take prophets over profits any day.

  9. Doug, don't worry, flightless waterfowl aren't into that whole suicide thing, drugs, alcohol, or anything like that. Unlike you, I see no FDR's in the wings. Look around you. Who could be FDR? Our system has been set up to squash potential FDR's for the past fifty years, the whole point of the 22nd Amendment was "No more FDR's". Closest we got was That Bastard LBJ, who pissed it all away on a war of choice in Vietnam and slunk off in disgrace. Since then... nothing. Nada. Ain't nobody in the wings either.

    Sardonicus: The inbred welfare states would not let the productive states of the West and Northeast leave without a fight, and the inbred welfare states provide the bulk of the U.S. Armed Forces. Thus my comments about the end game maybe resulting in some U.S. cities glowing in the dark by the time it's all over.

    Phil: My prophet credentials are somewhat tarnished. I'm mostly just good at recognizing other people's prophecies and repeating them. Like when the Shrubbery invaded Iraq, I shook my head and said, "this will not end well." Not because I'm a prophet. But, rather, I read Poppy's book, which mentioned why he didn't go into Baghdad after Saddam (i.e., it would be a mess, for reasons X, Y, Z, it would give Iran more power over the Middle East, etc.), and recognized he was telling the truth. Daddy really did know best here...

    - Badtux the Sadly Unprophetic Penguin

  10. So Tux, I'm not the only one who worried about a U.S. nuke going off in the middle of San Francisco Bay?

    In 2004, I used to wonder whether realPresident Cheney would do that, placing it strategically where it could incinerate those dirty nests of liberals in Oakland, San Francisco and San Jose, while sparing the Chevron refinery in Richmond. He could then blame it on the North Koreans and use it as an excuse to impose martial law/fascist takeover.

    That was before I knew that Snarlin' Dick did not have the stick-to-itiveness to be a full-on dictator; that he was just a thief who'd settle for ripping off billions while trashing the country, the way that "capitalists" do when they "buy" a company with debt, strip it of all value and then let the company collapse.

    Our house was near that big red-and-white transmission tower on Mt. Sutro, on the ocean side. Many was the time when I'd look at what little I could see of the towering monstrosity (we were so close to it that the hill whose peak we sheltered under cut off most of the view) and wonder "If it was blown down in a blast, would it fall in such a way that we'd be crushed by it? Will the lip of this hill shield us from the blast effect?"

    Glad to see I'm not the only one who's so crazy-paranoid. I worry too much. But just because I'm paranoid doesn't mean there's NOT some ominous shit going on out there.


Ground rules: Comments that consist solely of insults, fact-free talking points, are off-topic, or simply spam the same argument over and over will be deleted. The penguin is the only one allowed to be an ass here. All viewpoints, however, are welcomed, even if I disagree vehemently with you.

WARNING: You are entitled to create your own arguments, but you are NOT entitled to create your own facts. If you spew scientific denialism, or insist that the sky is purple, or otherwise insist that your made-up universe of pink unicorns and cotton candy trees is "real", well -- expect the banhammer.

Note: Only a member of this blog may post a comment.