Puerto Rican Jubilee

All basic infrastructure in Puerto Rico is down and remains nearly out. Hurricane Maria made a direct hit on the U.S. colonial territory, whose people are American citizens, mas o menos. Maria obliterated Puerto Rica’s electrical grid, destroyed homes, schools, hospitals, and most facilities and supply lines of all kinds. The third record hurricane in the Caribbean this season, Maria had sustained winds at 155 miles per hour when it hit the island.


Because of the sophisticated satellite imagery, data processing, and computer models of NASA, NOAA, and the National Weather Service, they could forecast its general path and power days ahead of its impact. Yet, U.S. government response was delayed, slow, and partial at best. It appears another Katrina failure is underway, with little or no leadership at the top. The president’s focus on the island’s debt to Wall Street creditors and exorbitant claims of success still accompany “foot-dragging” on mobilizing the assets a genuine response requires.

Yes, 3.5 million U.S. citizens live on the island of Puerto Rico. Well, they are sort of citizens… The U.S. citizens of Puerto Rico cannot vote in presidential elections and their representatives in Congress cannot vote on legislation. Puerto Ricans are by law, second-class citizens, a colonial legacy. They are, after all, mostly Hispanic people of color and former colonial subjects. They are also classic victims of disaster capital.

Modern empire is more subtle in its methods of domination and exploitation than were the colonial powers of the past. Vulture capitalists exercise oppression with financial weapons. One of the most important but largely unacknowledged powers of holding great wealth is the ability to use money to extract more money from others through the imposition of debt structures. In Puerto Rico, as elsewhere, we blame the victim for “decades of poor management.” However poorly managed, a debt trap is a debt trap.

The Empty Clown Suit who stole the presidency through voter suppression, demagoguery, and Russian interference, conveniently contrasts Puerto Rico with Florida and Texas, by implying that in some sense it was their own fault. He tweeted:

“Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble..” (Donald J. Trump @realDonaldTrump 6:45 PM – Sep 25, 2017)

“…It’s old electrical grid, which was in terrible shape, was devastated. Much of the Island was destroyed, with billions of dollars….” (6:50 PM – Sep 25, 2017)

“…owed to Wall Street and the banks which, sadly, must be dealt with. Food, water and medical are top priorities – and doing well. #FEMA” (6:58 PM – Sep 25, 2017)

David Dayen in The Intercept, described Trump’s response as “…one of the most historically grotesque responses to a natural disaster, highlighting Puerto Rico’s debt difficulties.” It was not about human suffering or a federal mobilization to help. No, it was all about financial power. It was about doing as little as possible and making grandiose claims of “success.”

The bondholders who bought over 70 billion dollars in Puerto Rico’s indebtedness for pennies on the dollar, have offered new loans that would further indebt the island’s people to the Wall Street predators while contributing a paltry few million toward recovery from the devastation that itself caused over 70 billion dollars of damage. Instead, Puerto Rico ought to have a modern “jubilee” – the debt to vulture capitalists ought to be erased from the books.

Disaster Capital in Puerto Rico

Puerto Rico is a textbook example of Naomi Klein’s concept of “the shock doctrine” applied by the corporate state to weaker countries around the world to gain or retain control over their economies and resources. Puerto Rico is a bit different in that it “is a part” of the U.S. But then, so is the town of Port Arthur, Texas, a “sacrifice zone” near Houston; whose citizens of color suffered toxic devastation by the petrochemical industry long before Hurricane Harvey. FEMA ignored it too while wealthier districts were tended to. Home mortgages are now secured by worthless toxic-chemical infused devastated lots piled with rubble. The impact of the debt hanging over Puerto Rico is little different, though owed by its government and much larger.

To rescue Puerto Rico requires that it we somehow liberate its people and public institutions from the predatory vulture capitalists of the hedge funds and banks on Wall Street, who have squeezed Puerto Rico to the brink of economic death because the corporate state enables their destructive behavior.

Jubilee for Puerto Rico

The answer, which those who would protect the criminals of Wall Street at all costs will immediately characterize as “impractical,” or “utopian,” is to declare a Puerto Rican Jubilee. Congress had already intervened several years ago in favor of Puerto Rico’s predatory creditors by establishing an outside “fiscal control board” that now governs Puerto Rico’s finances. Created by 2016 legislation called the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA, it favors the Wall Street predators over Puerto Rican children’s health and education. Desperately needed normal operation of schools, hospitals, or other social services shrink to pay vulture capitalists. The island is bankrupt. Only relief from debt will allow a genuine recovery for Puerto Rico. It is time for the criminals of Wall Street to take a loss too.

Biblical references to “Jubilee” reflected formal, even legislative, return of land to its original owners, release of slaves, and cancelation of debts. Even the ancients recognized the ultimate dysfunction of excessive accumulation and concentration of wealth by the few and unbearable debt of the many, for the larger society. The combination of extreme wealth, computational technology, and political influence, has produced equally extreme inequities in the final phases of the industrial era. Puerto Rio’s plight epitomizes this process.

“Babylonian kings … occasionally issued decrees for the cancellation of debts and/or the return of the people to the lands they had sold. Such ‘clean slate’ decrees were intended to redress the tendency of debtors, in ancient societies, to become hopelessly in debt to their creditors, thus accumulating most of the arable land into the control of a wealthy few.” (See Wikipedia for a brief description of these ancient practices.) That is the exact position of Puerto Rico as a U.S. territory today.

The oppressive debt structure that Puerto Rico endures, demonstrates that there are no bounds to the rapaciousness of the modern creditors of nations. Puerto Rica’s marginal status – not quite a nation, not quite a U.S. state – makes it even more vulnerable, especially with the congressional collusion with the powerful Wall Street financial interests that enrich themselves through the suffering of millions. The history of our debt-based economy is a sorted one. It has produced great wealth and great poverty.

Economies do not have to be debt-based, but the power of the super-rich has forced the model of debt-funded economic growth upon most of the world. It cannot last, for very physical reasons having to do with resource depletion as well as ecological and climate destabilization. Harvey, Irma, and Maria reflect both normal weather patterns and their intensification by warmer seas resulting from global warming, which jacks up the energy and destructiveness of storms. And, this is only the beginning.

A Puerto Rican Jubilee is the only chance for the people of the island to rebuild and live on. Otherwise, mass migration may ensue. A number of scientists have studied the emerging risks of chaos and conflict when mass migrations respond to intolerable environmental conditions. Armed conflicts (such as in Syria) become more likely. Many great changes are in store for us all.

The sooner we recognize the mess the fossil-fueled societies have caused, the sooner we can mitigate them and adapt to the damaging effects already “in the pipeline.” In that sense, Puerto Rico could be a test case, an opportunity to rebuild in an ecologically sound way that will not contribute to the worsening climate destabilization we now experience. A Puerto Rican Jubilee would have to be a first step in establishing a model for the ecological communities necessary for human survival. The more likely “business as usual” course portends even greater disasters, mass migrations, food insecurity, suffering, and armed conflict around the world.

Funny Money: Social Illusions about Value, Reward, Cost, and Risk

Money is a funny phenomenon, funny-peculiar that is. Money has a lot of odd characteristics, most having something to do with social definitions and the assumptions that shape perception. It exists, for example, only because we have willed it so – it is a social construction. Money has value only because we value it – we instill it with value. No money has intrinsic value. But most people don’t believe that. “Real” money, they think, is inherently valuable.

Now here is where I get in trouble with the monetary realists – mostly “gold bugs.” These folks believe that gold has intrinsic value independent of human perception or definition. I once took an “independent study” class with a philosopher at the University of California, Santa Barbara. I was supposed to read Karl Marx’s Capital. Well, it was a very big book and I didn’t exactly finish reading it; I skimmed a lot of it toward the end of the semester. Any college student knows what I’m talking about. So, yes, Marx was quite a scholar and economic researcher – unlike many of his followers. But it was the reaction of the professor to my apparently unorthodox views that I remember most distinctly. Well, I thought his views on both money and matter were rather peculiar too, and overly resolute.

He was convinced, based on what evidence I do not know, that atoms have intentionality, some sort of free will – as if they could do as they pleased. I think it had something to do with his trying to make sense of Marx’s materialism. Maybe he was trying to reconcile the obvious existence of purpose in humans with the mechanistic aspects of materialist determinism. He also asserted that gold has intrinsic value regardless of its relationship to humans. That contradicted other things I was learning that made much more sense to me. That semester I was taking a class in social psychology from Tomatsu Shibutani. He was teaching us about symbolic interaction and its central role in human behavior.

Golden Illusions, Symbolic Reality
Shibutani was a great teacher; he tied the theories and experimental work in social psychology directly to everyday experience. He was one of the most impressive teachers I ever had. I was really into that class. Shibutani was amazingly organized in drawing evidence and explanations from all the social sciences to demonstrate how people behave in relation to one another and the often illusory symbolic worlds we inhabit. So I wrote a paper for this philosopher. I explained how I thought money was essentially a symbolic process in which humans engaged to facilitate their economic relations, whatever their illusions about it. Who knows what Marx might have thought of my paper? But the result did not reflect the philosophy professor’s view of Capital. I cited my sources, but somehow he concluded that I’d plagiarized the whole thing from some author unknown. I didn’t; I explained that it was my interpretation of what I had been learning in social psychology applied to money as a socially constructed symbol of value. I got the impression that he didn’t believe I was capable of writing what I had written. I was offended. We argued. To my distinct indignation, he gave me a B.

That ‘academic’ experience was part of a series of things – including my military experience – that framed my sociological thinking. I was ultimately led to see much of human behavior as well as thought and emotion as based in illusions framed in symbolism. It’s not that our responses to experiencing the real world are not real or are necessarily mistaken. Instead, the thoughts and emotions about the world we experience indirectly respond to and help shape our perceptions. Perceptions are filtered and “edited” by what we already believe. They are always colored by the ideas and attitudes that we have previously acquired and are committed to.

A new phenomenon has to really get our attention in order for it not to be pushed into an old comfortable category. Global warming is a clear example of this. At any point in time, we come to the world with a “preconceived” framework for perceiving and interpreting our experience. In that sense, almost no experience is “pure.” Instead, it is tainted by our expectations. Those expectations are based on our pre-existing beliefs. Here’s the kicker: most beliefs are not a result of perception; they are the result of our being “socialized” into the culture in which we live.

Most of what we believe, we have learned from others and from the mass media that surround us, not from direct experience. But most of us don’t believe that since we define ourselves as “independent.” Any honest assessment of the mass persuasion of electoral politics ought to dissuade us of that illusion. Our perceptions are shaped by the culture within us and its manipulation by corporate-controlled mass media. That is why it is so difficult to face the new facts of climate disruption, the end of the growth economy, and the necessity to reorganize the way we relate to the planet and each other. Yes, many of us are in denial. These emergent realities do not fit the world view that has dominated our entire lives.

Untenable Beliefs in a Rapidly Changing World
Today, we live in the last stages of the dying culture of an extractive industrial economy of increasingly concentrated wealth, expanding poverty, massive waste, and flourishing ecological destruction. But that dying culture still shapes most of what we believe and the way we perceive the world. The industrial revolution began when the earth was not densely populated, and vast expanses of land and mineral wealth were not yet exploited. New technologies were just beginning to apply fossil-fuel energy to do work and reorganize the way we live. There was much room for expansion. The debt-based money system required continual expansion for a return on capital investment. The whole ideology of unlimited economic growth grew and took over the cultures of nations as they industrialized. We perceive value, reward, cost, and risk through the lens of that same dominant preconceived framework that industrial capital continues to sustain in the face of massive evidence that it will no longer work.

Money no longer represents value. Today, money – which is created and tightly concentrated and distributed by and in the interests of the power elites – controls value. The real costs of extractive industrial production are externalized by corporations to the people and planet in the form of increased poverty, diminished health and ecological destruction. The risks of continued economic growth and concentration of wealth are avoided by elites who have transferred those risks to the people and the planet. The power elites – financial and mega-corporate executives and their political allies – are temporarily insulated from risk by obscene salaries and bonuses, bribes, political cover, and gated compounds. But they won’t be protected much longer; Mother Nature makes no class distinctions.

We have already reached the tipping point of ecological destruction and climate disruption. Only massive social action to counter the in-place system of money-driven illusion of unlimited economic concentration and growth will have a chance to turn the tide. The illusions of money are not funny anymore.

Runaway Capital and the Necessity of SLOW

Slow Food; Slow Money; Slow Life. Such concepts are anathema to the frenzied culture of the dying industrial age. But these ideas are becoming popular among a small but growing class of folks who are simply tired of ‘the rat race.’ “Slow” is closely aligned with the simplicity movement. What do they mean, why should we want to achieve them, and what’s the point?

To fully recognize the fatal flaw of the current economic path and the need for a new direction, one really must understand acceleration. Or, grasping the power of compound interest would do. With regular savings and compound interest over a working career, a worker with a modest salary could retire a millionaire. But how many do?

For that to work, the saver must also avoid debt – especially consumer debt. That is increasingly less likely as wages are squeezed for ordinary workers who are pressured to consume more with “easy” credit. Of course, “credit” is the availability of money for borrowing. Consumer debt is a burden that more than neutralizes any savings program. The debt-based economy is a complex trap.

Runaway Capital
The debt-based economy must continually expand. How else can interest be paid but by adding more money to the system? Banks are allowed to loan a lot more money than they keep in “reserve.” That new money is created as debt in the accounts of borrowers. Economic expansion is based on expanding debt. Government debt and private debt are the basis for the profit that interest rates generate as growth.

Since the 2008 collapse, the Federal Reserve loans the Big Banks money at near zero rates. It has bought the bad debt that should have pushed the Big Banks into bankruptcy. But infused with new cheap capital, banks are nevertheless afraid to lend to businesses since so little demand remains in the economy. The result is that with institutional rates so low, banks buy each other instead of lending to business.

Corporations are afraid to invest in production since demand is so low. They use their trillions horded in cash to buy back shares and drive up share prices, making themselves appear more valuable. This allows executives to ‘justify’ larger bonuses, instead of investing in meaningful production – which would expand employment, if only in Asia.

In a finite world, at some point the acceleration of growth – via compound interest on growing debt– becomes an unsustainable Ponzi scheme. It is no longer the real economy that is growing. The expanding “financialized” economy of accelerated growth of phantom wealth through complex derivative instruments keeps expanding. It is allowed because no real restraints have been imposed on the banksters who caused the crash. The fatal flaw has been covered over in imaginary cash.

This false creation of money has no substantive basis for capital creation in real life. These financial manipulations generating phantom wealth produce no real value. The consequences for the currency will be dire. The basis for the value of the dollar cannot be sustained in debt alone. That is why the Chinese are quietly unloading dollar debt instruments – treasury notes and bonds – in favor of gold and currencies with more long-term security.

Slow Capital, Real Investment
The most important problem with “Fast Capital” is that it drives financialized economic growth at the expense of the real economies of communities. “The economy” no longer fits the real circumstances of the world we live in. It was a tenuous fit to begin with. By the 20th century so little of the world was left to conquer that it had scant room to grow. Now the growth model is being tested against environment limits. But financial growth, being abstract, is only limited by debt structures.

Today the real-growth economy is restrained by a finite supply of depleting resources and its own accelerating ecological destruction. Unfortunately, most attempts to provide an alternative world based on ‘renewable’ energy and resources are framed in the failing economic-growth model. Most advocates of renewable energy and resources do not argue for a no-growth economy. Growth is a deep political value in the economic culture. Growth is seen as an inevitable requirement for prosperity – everyone is for it. It is both the essential element and fundamental flaw in the conventional model of the economy.

A new economy that is based on slow capital is now necessary. Certainly, the transition from the economy of indiscriminant expansion to a carbon neutral economy of stability will involve selected areas of real growth – and others of major contraction. In this new context, capital investment must apply technological innovation to “the old ways” of producing needed goods in creative ways. The technologies of “labor saving” overproduction cannot work. Slow production with higher quality responding to real needs will support more jobs requiring more skill and education. Slow education is labor intensive and would require little capital – it will require social commitment of slow capital.

Creating an abundant new ecological economy requires innovative thinking and experimentation, not automated extractive industry to supply overproduced useless objects. Slow capital must be invested in new technologies for effective use of more skilled labor to convert the economy to more carbon-neutral activity serving human needs, not fast capital serving financial growth for elite phantom wealth.

It is still hard for us to visualize. Our thinking is so influenced by the growth-economy culture. But the ecological economy will be slow and both intellectually and artistically rewarding. It will focus on human interaction to realize the cultural goals of achieving basic sustenance, artistic expression, intellectual exploration, and civic engagement. None of these require fast capital, or false wants for overproduced meaningless objects of momentary attraction. All those suburban storage units will not be needed. What is most required is a societal commitment to an economy driven by core human needs.

Making Money: The Ultimate Illusion of a Debt-Driven Economy

How is money made? Well, in conventional terms we work for it. But where does it come from? We know that the economy needs a sufficient “money supply” so we can exchange “goods and services” every day. Of course, it’s not that simple. After the “Great Recession” of 2008, the Federal Reserve injected hundreds of billions of dollars into the Big Banks. The purpose was to keep them from going under as a result of their gambling with depositors’ money. So, where is all that money now?

The conventional wisdom is that the “the government prints our money.” Technically but only partially true, this image of overworked treasury printing presses is increasingly irrelevant. Most money today is created electronically when banks lend up to some multiple of the money held in their accounts. A bank’s solvency depends on the money it holds “in reserve” – does not lend – in accordance with banking rules. If the ratio of loans to reserves is too high, the bank risks not being able to cover losses if loans go bad.

Reserve requirements were reduced significantly in the years before the 2008 crash. But the “too big to fail” banks took it a step further. They packaged many risky mortgages into highly leveraged “derivatives,” re-sold them to investment clients and each other, and took exorbitant “fees” at each step. It all blew up when mortgages failed and the Big Banks couldn’t cover their losses. So, the Fed stepped in and kept them solvent by “lending” them billions upon billions of dollars.

With the lowering of reserve requirements and the elimination of the firewall between commercial and speculative investment banking, all hell broke loose. Lending practices and the bundling of debt took on the logic of gambling in a casino, but with more hubris. Reliance on complex mathematical models of “risk management” to justify reckless behavior became the biggest illusion of all.

Most critics of the federal “fractional reserve” banking system worry that our “paper money” or “fiat currency” is not “backed” by gold. They consider gold to be “real money,” not arbitrarily “created” money. Gold is an effective standard of value because it is scarce, not reproducible or easily faked, and is universally valued by humans. That’s great, as long as everyone believes in gold’s value.  After all, value is what we make it.  But any economy needs its money to circulate. If paper money had to be backed by gold, there would not be enough to circulate and the economy would stagnate. Yet, if too much paper (or electronic) money is put into circulation, borrowed and invested, then inflation can get out of hand.

There is some validity to the concern of producing an oversupply of money leading to inflation, as has happened in several historical cases. But the biggest problem of money creation lies in our debt-based banking system, created under the influence of the big bankers in 1913. That was when the Big Banks convinced the government to create the Federal Reserve banking system. The Fed is essentially a private banking cartel that “lends” money to the federal government – the nation. Where does the Fed get the money it lends to the government? It simply creates it out of nothing – other than the government’s authorization for it to do so! That sounds crazy because it is, unless you own the Big Banks. But if national banks were owned by the nation, then money creation would not produce national debt.

So, you can see that fundamentally the “national debt” is an illusion created when the government gave up its sovereignty over our currency. Without the privatization of currency creation, indebting the government, there would be little need for an income tax.

A debt-based monetary system is inherently unstable and succeeds only as long as economic growth continues. But as long as conservative reserve requirements held sway and investment banking was separated from commercial banking after the Great Depression, another crash was averted. The Glass–Steagall Banking Act of 1933 kept commercial banking separate from investment (speculative) banking after the Great Depression. And relatively strict reserve requirements limited the Big Banks tendency to engage in excessive speculation – until deregulation beginning in 1999 unleashed the Hounds of Wall Street.

For a hundred years, the government has become increasingly indebted to the Federal Reserve and buyers of treasury notes and bonds.  These instruments are the means by which  the Fed sells our government’s debt worldwide. Despite the increasing debt and interest payments, the economy could be managed as long as it kept growing – adding new money from new debt to pay old debt and interest. The Federal Reserve – the private central bank owned by its member big private banks – partially controlled inflation by controlling interest rates, some of the time.

But the illusion of endless growth and the phantom money it creates are rapidly coming to an end on our finite planet. The debt-based monetary system will be unsustainable in a steady-state economy aligned with real-world limitations – it must be replaced. We must move to a stable ecologically grounded economy.  We can no longer support an ever-growing debt-based money system. In an ecological economy, money will simply circulate as the means for exchanging real value – that is, actual goods and services.

The Great Jobs Myth and the Transformation of the Growth Economy, Part I

A lot of congressional politicians and media pundits of both Republican and Democratic persuasion are jabbering these days about “job creation.”  The 2014 mid-term elections are fast approaching and nobody wants to be caught looking indifferent to the lack of jobs for an increasingly large numbers of Americans.

Their approaches are different, of course.  The Democrats want more ‘stimulus’ to “grow the economy” by restoring government spending and infrastructure investment.  The Republicans, as usual want to cut even more taxes on business and the wealthy than ever, despite already record low taxes and swollen corporate coffers.  They would “encourage investment” in economic growth to “create jobs.”  But despite the obvious cruelty of actions such as cutting food stamps – a program benefiting more working age recipients than ever before – and failing to extend unemployment benefits when jobs are so hard to come by, neither wing of the ‘republican/democrat’ Corporate Party gets the basic facts of a changing economy nor wants to face them if they do understand the situation.

The entire history of the industrial era has involved forcing people off their lands and into a vast pool of “free labor” to be tapped by growing industry as needed, then forcing them out of their jobs by outsourcing capital to cheaper labor markets.  The whole time, investment in growth has included technical innovations that increase production while reducing the labor required for a given level of production.  Only the slave holders of the South wanted to retain a labor-intensive method of agricultural production – the labor was free!  Government policy all along has been to subsidize increased productivity and to supply the kinds of labor needed.

After World War II, the G.I. Bill allowed returning vets to get a college education that would open employment for them in a technologically expanding economy.  Continuing technological innovation – especially the explosion of computer technology from the 1980s onward – required fewer middle-management jobs and increasingly required smaller numbers of new jobs with highly technical skills in product development for military hardware, medical devices, industrial processes, computer hardware, software, and networks.  The labor market bifurcated into 1) high paying upper-management and technically-skilled jobs and 2) low paying unskilled jobs, as manufacturing capital was moved overseas for production with labor at a fraction of the cost that manufacturing labor had been in the U.S.  The middle class shrunk accordingly as consumption was increasingly funded by credit-card and mortgage debt.  That, of course, rolled into highly leveraged financial “assets” by the Big Banks, led to the 2008 financial collapse.

We now have a labor market which is composed of an increasingly smaller number of very high paying executive positions, well paying technical jobs, fewer and fewer moderately compensated white-collar jobs, very few blue-collar manufacturing jobs at depressed wages.  This followed the successful destruction of unions in the U.S.  Wage suppression and outsourcing let to an expanding labor market for low to minimum wage dead-end jobs that cannot be outsourced because they involve direct manual labor in the service sector, largely retail clerking, cleaning, building maintenance, etc. –  jobs that cannot adequately support a worker no less his/her family.

Despite my thirty-five years in higher education and belief in the importance of education for every citizen in a democracy, I know that more college educated workers in a labor market that does not need them is no solution to the shortage of jobs with a living wage.  Nor will technical training programs create the jobs they are meant to fill.  Most proposals from politicians to improve access to college education – low-interest student loans, subsidized tuition, loan forgiveness for those who go into teaching, etc. – are good in their own right.  But they will not solve the problem of insufficient livable-wage jobs available in the labor market.  Too many private training ‘institutes’ or ‘universities’ arrange federally subsidized student loans to pay for training that does not result in jobs for graduates.  The problem is not just the lack of educated workers; it runs much deeper than that.  The political rhetoric completely misses the real problem.

Labor markets were sustained in the growth economy because expanding production always needed new workers, even when technological innovations reduced the number of workers needed for individual industrial processes.  As long as growth could be sustained, debt-based capital infusion into new production increased the total number of new workers needed even though each process needed fewer workers to function.  But that is over now.  And the end of the growth economy is in fact the beginning of the Great Transformation that politicians are entirely unprepared to deal with, even as it fast approaches.

The accumulation of massive private and public debt is today running up against the enormous accumulation of the waste and damage produced by unfettered economic growth as we approach the end of cheap energy and natural resources.  As resource limits and ecological collapse draw near, a Great Transformation is inevitable.  What that transformation will look like is a very open question.  How it plays out will be up to the ability of humanity to recognize the new planetary reality and to reorganize society and its deployment of technological and social innovation to create a new realism of hope that transcends the illusions of the recent past.  Part II of this post will explore where we stand in that quest.

What It Will Take: Living in a World We Made But Never Expected to See, Part II

The reality we face in the coming decades involves three integrated crises: 1) the consolidation of the corporate state driven by the debt-based endless corporate-growth economy, which increasingly damages populations by isolating them from economic resources and destroys the environment we all need, in service to short-term profit and political power; 2) accelerating resource depletion which makes the conventional economic model of debt-based economic growth and expanding populations unsustainable; and 3) accelerating climate disruption caused by unrelenting carbon emissions resulting from (1) and (2).  Unlimited economic growth is an illusion that is ultimately self-terminating.  Our current path poses the utmost threat ever to human survival, making it the greatest imaginable challenge to an outlook of hopeful realism.  If you recognize the existential threat facing us, how can you not be a hopeless pessimist?  If you deny the existential threat facing us, you must be a foolish optimist.  Both those options are useless.

Any solution requires both hope and realism.  We must face necessary massive transformations in the ways we live on the planet if hope is to be sustained.  We must sustain a huge dose of hope in order to take the drastic challenging actions necessary for survival.  Most discussions that recognize the threat look for solutions that assume continuing on some “green” path of the consumer culture we have come to view as “normal.”  That will not work.  However, the Great Transformation that is now inevitable – though its outcome is unpredictable – need not require a Luddite approach that would simply destroy manufacturing technology.  Instead, we must recognize that human technology has gone off in a direction of “creative destruction” and must be re-directed and transformed into a new human-scale enterprise.  But that’s just one piece of the puzzle.  It is not hard to come up with a list of imperative economic and technological changes, all of which involve freeing ourselves from fossil-fuel dependency.  Here are just a few major items for such a list:

  • Convert electricity production from coal and gas to wind and solar.
  • Convert the hugely wasteful long-distance electricity transmission grid to interconnected local-community solar/wind electrical smart grids.
  • Reduce much of capital-intensive production to labor-intensive production.
  • Convert transportation from petroleum based to electricity based propulsion.
  • Break up the Big Banks; re-institute the Glass-Steagall wall between commercial banking and investment (casino) banking, and while were at it, have the Federal Reserve re-sell all those casino junk bonds back to the Big Banks at the price paid; that will re-direct the Bad Debt back to where it belongs; then resolve those bloated unnecessary institutions and let those gamblers take the losses they earned.
  • Establish State and local banks as public institutions in service to public needs.
  • Limit international trade to products and materials that are not capable of being produced in the receiving nation; convert all shipping to non-fossil-fuel propulsion systems.
  • Etc., etc., etc.

Obviously, this list could be extended considerably, and much detail would have to be worked out.  But you get the idea: massive transformation of international, national, and local-regional economies in line with the energy requirements of stabilizing the biosphere to achieve stable local and planetary ecological systems.  Well, that was easy.  But wait.  How can these things be accomplished?  Conventional political processes are controlled by the very corporations that continue to resist such changes in order to grab as much short-term profits as they can before being forced to change.  But if we wait for the force of nature to stop the insanity, then it will be too late to stop the acceleration of climate disruption beyond the limits of human habitation on the planet.  Many corporations see the climate writing on the wall, but they are compelled by their own internal logic to grab all they can before the end of the era of endless growth.

The only answer left is popular resistance, and that is a long shot because the popular culture is largely controlled by the corporate media that promotes only its own short-term interests, and we will have to change the way we live rather quickly to make enough difference.  Yet, people are not nearly as stupid as politicians and CEOs think they are.  We know we are in crisis, but most just don’t know what to do personally and most still believe that we can somehow have a “green” economy and still consume all that stuff the corporations are selling us.  The most important result of the Occupy Movement – and the Arab Spring as well, for that matter – is that it really scared the political-economic power elites.  Occupy has dispersed, but many local actions based on similar principles are occurring.  History shows that the power of numbers can overcome the power of elites.  No guarantees; we have so much to do and so little time.  In Part III of this essay I will discuss the sources of hope in this sea of harsh reality.

Clearances, Foreclosures, and Evictions

I used to wonder how it is that after generations of Americans spent their entire adulthood paying mortgages just as their parents had, only a tiny fraction actually owned their modest homes outright upon retirement. The next generation, in most cases, starts the process all over again with little if any inheritance. Where is the accumulation of wealth in home ownership? In the 1950s, interest rates were very low, around three per cent, and the credit card had not yet been invented. Of course, World War II had pulled the nation out of the Great Depression. Roosevelt’s New Deal programs had only partially alleviated the suffering against all odds and aggressive opposition by the wealthy. But after the full employment of the war and the educational and lending benefits of the GI bill, a returning veteran could get an education and a job with a wage to support a family. With most women staying home, a man could still support his family and save enough for that standard twenty percent down payment to purchase a home. That’s quite a contrast with conditions today.
I had been reading a lot about money and the debt-based economy before I began a trip through Scotland last August. But I wanted to get a sense of the lives of the Scots in the centuries past that were represented in the many historical sites I observed across that land, so I decided to read Neil Oliver’s A History of Scotland, as I traveled. The thick small paperback traveled well and the saga drew my interest, although I was a bit stunned by the incredibly bloody record of violent transitions among clan chiefs, noblemen, kings, and eventually the industrialists. That got me thinking about the possible inheritance of America’s culture of violence from Great Britain’s violent evolution. What I did not expect was to find parallels in economic history.
Then, later in Oliver’s book, I read of “the clearances,” which had occurred with the agricultural “improvements” of the eighteenth and nineteenth centuries, and had accompanied the early stages of the industrial revolution. After countless generations of attachment to the land through tradition and relations of fealty, large populations of both highlanders and lowlanders were forced off their land and into the industrial towns or expanding coal mines, or to emigrate to North America or Australia. James Webb chronicles the subsequent lives of the Scots-Irish descendants of those emigrants to the U.S. in his fascinating book, Born Fighting: How the Scots-Irish Shaped America. The landowners, clan chiefs and noblemen, needed to combine the small traditional plots into larger more efficient holdings to apply the new agricultural techniques with far fewer workers and vastly greater profits.
Those “clearances” reminded me of the eighteenth and nineteenth century English “enclosures” which ended traditional rights to common lands, but were accomplished by the legal means of the parliamentary “Inclosure Acts.” As I traveled through Scotland, that context brought to mind the current massive loss of the homes of American mortgagees. How could it not? Our national economic crisis was brought on by the vast concentration of “paper wealth” (indeed, more accurately, electronic forms of abstract wealth) in the shape of heavily leveraged sub-prime mortgage debt packaged into a falsely valued derivative “asset” pyramid that ultimately collapsed because investors could not be paid when inevitable losses occurred.
The government covered the losses of the Big Banks because the Treasury and Fed officials all came from Wall Street firms where their first loyalties (and wealth) could be found, and because too many in congress drank from the trough of Wall Street lobbyists. The Banksters kept their giant bonuses and nobody went to jail. But we know all that. My point is that in each case, a very small number of very wealthy people found a way to exclude very large parts of the population from any viable participation in the economy in order to vastly advance their own wealth.
New and old ways of removing people not needed for the current ‘capital formation’ game, and consolidating assets among the wealthiest 0.1%, are essentially much the same. The technological, economic, and political tactics have changed, but the plunder of the larger society by its most powerful elites remains the same. Having read of the bloody history of Scotland, I cannot say that today’s billionaire bandits are any more ruthless than their historical counterparts, except in the scale of the suffering their plunder causes. But they get to keep the suffering they cause at such a greater distance that they are conveniently insulated from it. It is clear that given the planetary impact of their misdeeds, the consequences for humanity are vastly greater.