Riding a Poorly-Fed Horse

I had heard of Hutterites, but knew very little about them. In the latest of his series, Communities that Abide—Part V: An Example of Success, Dmitry Orlov offers a quick, but interesting, look at Hutterites in the US. After an ugly episode with a handful of ardent feminists at the Age of Limits conference, Orlov is careful to not endorse the old-fashioned gender roles of the Hutterites, but it is clear that he doesn’t expect ardent feminism, or indeed the sort of ardent self-expression we take for granted, to survive in a declining economy. Commenter Lynford1933 adds some personal experience with the Hutterites.

BTW, even though Dmitry (who comments as kollapsnik) and commenter Butch disagree with commenter Edmond, the first fourteen comments are as on-topic and rational as in any comment section I have read in a long time.

First Orlov takes stock of the have-nots and haves in the US:

… just last week we saw walk-outs by fast food workers in the US who thought it unfair that their wages were low enough to qualify them for public assistance and that the terms of employment often offered them only part-time work but with the condition that they be available to work at any time, precluding them from finding any other work. This is the end result of a couple of centuries of class struggle. Labor has lost. Gone are all of their gains: regulated work week and overtime pay for nights and weekends are history; guaranteed old age pensions are finished; right to public education replaced with right to attend public schools where students are taught little, tested endlessly and medicated into submission for misbehaving.

One might think that if labor has lost, then capital must have won. Indeed, on paper the capitalists are doing better than ever, with greater than ever wealth disparities, equity markets at all time highs (for how much longer?) and non-stop displays of ostentation and conspicuous consumption by those whose profits are subsidized by the Supplementary Nutritional Assistance Program that keeps their workers fed. But look at it another way: the capitalists and the rentier class are surfing on a gigantic wave of debt, and the collateral for that debt is rather doubtful. An economy that is 70%-driven by consumer spending, where 80% of the population is toying with poverty, is not too promising. If labor is the horse and capital is the rider, and the horse dies, where does leave the rider? On foot, I would think.

There are rumblings of another recession on many sites. Peak Oil and gold bug sites are always predicting imminent collapse, but even normally steady Econbrowser is a bit disappointed in the numbers. In, Econbrowser recession indicator index up to 30.5%, James Hamilton notes:

The bare growth of the economy over 2012:Q4-2013:Q1 is the main reason that our Econbrowser Recession Indicator Index jumped up to 30.5%, a significant increase from the 9.2% figure that we released last quarter. This is one objective signal that the recent GDP numbers are even weaker than we’ve become accustomed to seeing since the economy began its disappointing recovery from the Great Recession in 2009:Q3. Note, however, that this does not mean the economy has entered recession territory. Our index would have to rise above 67% before we would issue such a declaration.

Among other mixed signals, it seems that the recent strong US auto sales are mostly due to boomers continuing to buy new cars every few years. As do many industry observers, Bloomberg wonders why young people aren’t buying cars. Jalopnik offers the obvious answer:

… when the rate of unemployment for people age 16 to 24 is double the national rate, and you add in staggeringly high student loan debt, it’s kind of understandable that young folk aren’t out binge-purchasing expensive cars. The word “unemployment” isn’t even mentioned in the Bloomberg story, …

(To Bloomberg’s credit, today writer Megan Durisin published a story about how underemployment and student debt hampers Millennials’ car purchasing, and why carmakers aren’t giving up on them.)

If, despite the complaints of many pundits and bloggers, Obama appoints Larry Summers to take over the Fed, I’d expect a lot more of us to realize that we are riding a horse that is being fed imaginary oats.

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