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Breaking the Economy to Save the Wealthy

In November 2015, FiveThirtyEight posted, The Economy is Better. Why Don’t Voters Believe It? of which I noted they didn’t seem to believe their own explanation.

The easiest explanation for this paradox is that it isn’t a paradox at all: Americans are pessimistic about the economy because, for many of them, the economy hasn’t gotten better.

One of my infrequent commenters didn’t believe it, either.

But in, Americans Are Still Really Worried About The Economy, FiveThirtyEight seems more inclined to believe their own headline:

It’s possible that voters, with memories of the recession still fresh in their minds, simply don’t believe the signs of progress, or worry they won’t last. But here’s another explanation: Americans are feeling better about the economy right now, but they remain deeply worried about their longer-run prospects — retirement, student debt and, in particular, the ability of their children to find middle-class jobs. This shows up in Gallup polling data, which shows a marked divergence between Americans’ assessment of their current conditions and their future outlook.

Those fears are grounded in economic reality. Wages may have rebounded from the recession but they have been largely flat since 2000 after adjusting for inflation. A college degree, long the surest pathway to the middle class, is no longer such a sure bet. And a growing group of influential economists are arguing that the U.S. has entered a prolonged period of slow growth. Few economists would endorse Trump’s plans for dealing with that stagnation, but it’s understandable that voters are looking for solutions.

FiveThirtyEight, and most other pundits, are still failing to notice the savaged class of blue collar hourly wage earners so aptly described by John Michael Greer in one of his most widely read and quoted articles, Donald Trump and The Politics of Resentment:

And the wage class? Over the last half century, the wage class has been destroyed.

In 1966 an American family with one breadwinner working full time at an hourly wage could count on having a home, a car, three square meals a day, and the other ordinary necessities of life, with some left over for the occasional luxury. In 2016, an American family with one breadwinner working full time at an hourly wage is as likely as not to end up living on the street, and a vast number of people who would happily work full time even under those conditions can find only part-time or temporary work when they can find any jobs at all. The catastrophic impoverishment and immiseration of the American wage class is one of the most massive political facts of our time—and it’s also one of the most unmentionable. Next to nobody is willing to talk about it, or even admit that it happened.

Ironically enough, you had to go to Gawker’s, hello from the underclass to find stories about these people.

The Fed is also blind to the situation of the middle class, and is still toiling to preserve the wealth of the upper percentiles. In Al Jazeera, Dean Baker argues against unnecessary inflation control with, Don’t let market crashes obscure our economic malaise:

The world economy suffers from pretty much the same problem it has faced since the collapse of the housing bubble threw the world economy into recession in 2008-2009: a lack of aggregate demand. Prior to the collapse of housing bubbles in the U.S., much of Europe, and elsewhere, the demand created by these bubbles drove growth. …

The best that we can probably hope for is that they not do anything to make things worse. This is where the Federal Reserve Board comes in. The Fed raised interest rates in December. The purpose of this rate hike was to slow the economy in order to head off inflationary pressures.

If it was not already pretty obvious in December, it certainly should be obvious today: We don’t have any inflation to worry about. The inflation rate is way below the Fed’s target and more likely to go lower than higher in the immediate future. In other words, the Fed was acting to slow the economy without any real world justification.

Incredibly, Sen. Bernie Sanders was the only presidential candidate in either party who seems to have noticed. He criticized the Fed’s actions and urged it not to take further steps to hurt the economy.

No Predictions

We’re getting close to that time of the year. Some of us resolve to lose weight, find love, change jobs. Some pundits tell us how best to do all that; others tell us it is futile. Others just advise us on what recipes will make people happy – or unhappy.

I was amused to read that lifestyle diva Martha Stewart and aspiring lifestyle diva Gwyneth Paltrow were feuding through recipe columns. Stewart poked at Paltrow’s recent breakup with a “consciously coupled” dish. Paltrow retaliated with a “jailbird” cake – calling to mind Stewart’s time in the slammer. Classy stuff.

For a few years I could count on doomers of various stripes – curmudgeon Jim Kunstler, Dr Doom Nouriel Roubini, ArchDruid John Michael Greer, Kollapsnik Dmitry Orlov, retired CIA analyst Tom Whipple and even farmer/mother Sharon Astyk – posting their predictions for energy depletion for the coming year. I occasionally read Ilargi and Stoneleigh at The Automatic Earth and various folk at The Oil Drum as well. I was not a reader of the embattled Mike Ruppert – who took his own life last Spring – or Carolyn Baker or Guy MacPherson, the three of whom were even more certain of our demise.

Kunstler is still predicting imminent chaos next week, as are Raul and Nicole at TAE. Former Oil Drum editor Gail Tverberg at Our Finite World seems to have a slightly longer horizon. Tom Whipple still dutifully reports on international crises, though he hopes for the hail mary pass of cold fusion to score a touchdown against a low energy future for our grandchildren. I’m still not conversant with Baker or MacPherson, but the rest have drifted into a general feeling that we are now living through the early stages of a post-peak collapse with increasingly severe climate emergencies. Greer posts at length about how we should adapt as tinpot warlords duke it out over the next few centuries. Orlov sees America’s attempt to use Ukraine against the Russians as a sign of imperial decline and urges us to be more like Roma gypsies. Astyk seems too busy with her adopted foster children to bother with the rest of us. And good on her.

I don’t have any predictions except that things will keep getting a little worse – particularly the climate. Some of us are still insulated from the effects of a contracting economy, but many of us know people who have fallen out. Some of them are still trying to follow the American Dream; others are living with parents or friends; the most desperate have turned to dealing meth. We read about people going bankrupt from going to the wrong damn hospital. The ubiquity of phone cameras has revealed that our police are nothing like the stolid or lovable actors on television. Cameras also reveal that rich people laugh to each other at exploiting poorer people. Last night even 60 Minutes noticed that our infrastructure isn’t being maintained. We’re too busy building weapons and casinos to fix our bridges.

Outrunning the Red Death

I recently mentioned the old joke about outrunning the bear, and noted that changing the bear to a pack of wolves probably makes the joke a lot less funny for the smug libertarian or survivalist prepper. Changing the bear to a community of infected people is even less funny. While I was scrambling to learn a bit about Ebola, I ran across the the concept of herd immunity. Briefly, doctors and nurses inoculate most members of the population against a virus or bacterium to protect weaker members.

This may not make sense to libertarians, who may ask, Why not just inoculate the weaker members, and leave the strong alone? In some cases the answer is simple: weaker members may not survive the inoculation. In other cases though, as with pertussis, or whooping cough, herd vaccination is attempted even when vaccination of infants is possible.

I say attempted because there is indeed a backlash against vaccination. Many science-oriented blogs chronicle the exploits of Jenny McCarthy and other minor celebrities who still campaign against some vaccination based on the claim that it leads to autism. Other parents object to all vaccination on religious grounds. Some people have simply given up trusting doctors, the medical establishment and the government. Given the efficacy and cost of US medical care I can’t blame them for that, but I’m not sure that abstaining from vaccination is the best way to protest.

There has been a local backlash against vaccination in Pakistan after the CIA used a vaccination program as a cover to collect DNA while searching for Osama bin Laden. (Some 911 truthers claim that the government already knew bin Laden was long dead, but perhaps no one told the CIA.) One result has been that in 2014 so far, 61 of the 77 documented cases of polio worldwide were in Pakistan.

In many places the medical community complains about the return of diseases that were thought to have been eradicated. I ran across a NY Times book review of On Immunity written by Eula Biss:

In “On Immunity,” [Biss] is especially exacting on the topic of what she calls “people like me,” those blazingly hygienic parents, many of them upper-middle-class, for whom organized personal purity (air filters, water filters, “natural” foods) substitutes for organized religion.

She understands this impulse toward immaculateness. She also deplores it. She observes that purity is the “innocent concept behind a number of the most sinister social actions of the past century”: eugenics movements, forced sterilizations, miscegenation and sodomy laws, and the slaughter of millions. “Quite a bit of human solidarity has been sacrificed,” she says, “in pursuit of preserving some kind of imagined purity.”

Human solidarity is, in a way, her great subject in “On Immunity.” Our children need their shots not merely for their own sake, but also for the sake of others. “Immunity,” she declares, “is a public space.”

Biss is decrying obsessive personal hygiene as a sort of go-it-alone individualist response to a herd problem. And Ebola is a perfect case whereby a lack of investment in general sanitation and medical care could be bringing the Masque of disease and death to everyone’s door, whether rich or poor.

In Buffalo Wind, the latest of his Dark Age America series on the vulnerability of the wealthy elites during a time of slow collapse, John Michael Greer has veered into discussing Ebola, but it makes general sense to me that upholding the middle class social contract was also a sort of herd immunity that ultimately protected the wealthiest. If we still had a thriving middle class, we wouldn’t have had Occupy Wall Street, and we probably wouldn’t see the Tea Party movement still affecting primary politics. If we treated our returning veterans fairly, we would have fewer people vaulting the White House fences. If we still had a growing economy, rich guys wouldn’t be writing OpEds about poor people with pitchforks. We’d also probably have fewer zombie shows on the tube.

Unfortunately we aren’t upholding that contract and I suspect the the plutocracy knows we can’t afford it anymore. Today I’m supposed to receive a copy of Laurie Garrett’s Betrayal of Trust: The Collapse of Global Public Health and a copy of Glenn Greenwald’s No Place to Hide: Edward Snowden, the NSA, and the U.S. Surveillance State. Instead of investing in infrastructure that might protect the middle class, it seems to me that our government has invested in spying on the middle class.

The Effluenza Defense

I ran across a very brief discussion, Seriously?, of the Ferguson situation on Scott Adams’ blog. Adams was initially upset by reports of the police manhandling and arresting the press, but retracted his comments and reassured commenters that:

“I assumed the shooting itself would turn out to be justified, and it seems to be heading that way.”

Ethan Couch – a teenager who was given 10 years’ probation for drunkenly driving into and killing four pedestrians – is known for the affluenza defense. An expert psychology witness testified that a lifetime of being coddled by his parents led Couch towards irresponsible behavior. It wasn’t his fault – the way he was raised, he was bound to do something wrong.

What we are seeing in the case of Officer Darren Wilson is the effluenza defense. Wilson, and all police that kill citizens, are overwhelmingly excused by those who believe that the victims have it coming. It wasn’t the officer’s fault – the way that most poor people are raised, they are bound to do something deserving of a justified shooting.

Handling the Fergusons

Many pundits have pointed out that the situation in Ferguson has been “mishandled.” Somehow that brought to mind a snippet I read somewhere about Southern slaveowners criticizing another owner because he didn’t know how to handle his slaves.

The situation in Ferguson, and places like it, has been brewing for decades. Some smart fellow on the news pointed out that the violence in Syria was largely a result of the drought, but few people are pointing out that the situation in Ferguson is largely about managing the results of a growing drought in the middle class lifestyle. Minorities have been in the vanguard of that drought, but it is spreading deeper into all colors of the 99.9%, and that combination seems to be scaring the pants off of the officials that are supposed to keep order.

Regarding Michael Brown, John Oliver and others insist that his robbing a convenience store has no bearing on the shooting. Others say that the presence of cannabis in his blood has no bearing. I tend to think everything has some bearing. A slightly buzzed man who just strong-armed a clerk is more likely to get defensive with a police officer than a clear-headed man who has done nothing wrong. That hardly justifies firing six shots, but it may have contributed to escalation with an officer that was primed to establish his authority.

Police escalation was the spark that led to the Arab Spring.

Gonna be different this time

Since Age of Limits, I have become more aware of factions within the energy depletion crowd. Most have to do with predicting a timeline for collapse, which makes Hari Seldon references almost irresistible.

Near-Term Extinction (NTE) is just like it sounds – these folk expect things will get so bad that the human species will disappear from the earth, and fairly soon. One of their catchphrases is “Nature Bats Last.” Guy MacPherson and Carolyn Baker spoke at Age of Limits in 2013, but either declined or weren’t invited back for 2014. Two of the attendees told me that the NTE folk were a cult-like presence, but at least one person said she missed having Baker there because she spoke about dealing with loss.

At the other end would be the business as usual (BAU) crowd, pundits like Michael Lynch or Daniel Yergin who insist that peakists are misreading the data, that mankind has always gotten through bad times before and that we will find a way to do so again. None of them attended, though there was that fellow who urged we all turn to God.

John Michael Greer can recite a long history of apocalyptic predictions, and thinks the prospect of extinction makes some people feel special. Greer expects a catabolic collapse – that society will absorb a series of smaller collapses – to a point where humans can live in harmony with the carrying capacity of the planet. He writes about past collapses when some 95% of the population has perished, but the remaining 5% mourned and buried them, continued and rebuilt. In his speculative fiction, Star’s Reach, people in Meriga still speak a version of english and sort of remember the past, but rely on animal and human muscle to accomplish work.

I gather that Gail Tverberg stops short of the NTE crowd but suggests that Greer is too optimistic. She writes about a severe collapse due to, “converging crises.” Her eight horsemen are overpopulation, resource depletion, pollution, intractable debt, failed government, unemployment, loss of the electrical grid and, even though we already see them getting very ugly, geopolitical resource conflicts bringing up the rear.

At Age of Limits, Greer openly poked fun at the phrase, “It’s different this time,” leading the audience in saying it to get it out of our systems. Upon returning from AoL, Tverberg called her next post Converging Energy Crises – And How our Current Situation Differs from the Past and her latest piece, Debt: Eight Reasons This Time is Different. Maybe Gail is a Talking Heads fan.

Such arguments sound academic, and it won’t matter much who is/was right if one’s family is killed in a mudslide or a prison or a resource war. Nor will it matter much if one is lucky enough to be one of the 5% or 1% or even fewer to see one’s children live through the mess.

Dmitry Orlov seems more oriented to exploring survival strategies, and has been posting useful info about post-collapse medicine, healthcare without doctors, etc. I haven’t made it through his book, Communities that Abide, but I’m admittedly dubious about emulating the Roma. I chanced across a New Yorker article the other day by a fellow who joined his friend Leslie Hawke’s NGO, OvidiuRo, which attempts to educate Roma children out of poverty:

The conditions in the Roma settlements to which Leslie took me next made Dorohoi look like East Hampton. Where the peasants of northern Romania ate badly, the Gypsies of Colonia were going hungry; while the peasants lived short lives, the Gypsies showed obvious signs of illness. The peasants may not have had good plumbing, but the Gypsies had none at all; they defecated in the surrounding pasture, and the place stank to high heaven. At this writing, as a result of OvidiuRo’s work, fifteen hundred Roma children are getting the early education that might help them break out of their poverty. I met those children, bright-eyed and full of fun, and hoped they could escape becoming like the morose teen-agers and glassy-eyed adults who sat around Colonia in the squalor.

From what Dmitry tells of the Roma, I am assuming that OvidiuRo is tolerated for the food coupons they give the children – which probably end up handed to the big man for distribution. As Dmitry writes (so far) the Roma strategy is to remain aloof from larger culture and its edumacation, but I don’t see the industriousness that serves the Amish so well. I will be reading to see how the Roma fare without a nearby prosperous civilization to exploit.

Thanks, Short-Term Brains!

There’s a joke – popular among conservatives and libertarians – wherein two guys are running away from a bear. One guy asks the other if they can outrun the bear; the other says, no, but I can outrun you. (haha). I heard it again on the news a few weeks ago. It occurred to me that the joke has to feature a bear because they are often solitary hunters. The joke just doesn’t work with a pack of wolves.

The idea that you can survive by outcompeting your peers has some validity in some situations, but against more comprehensive threats cooperation is a much better survival strategy. Particularly if you have aged parents or small children that can’t even outwalk the bear.

In Politico, a Seattle entrepreneur named Nick Hanauer – a wealthy 0.1 percenter – argues for long-term thinking with The Pitchforks Are Coming For Us Plutocrats. First, he wants to pay the middle class enough to buy his products. Second, he thinks Occupy could be a lot worse next time around:

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible for everybody. But especially for us.

I keep thinking back to Galápagos. In his 1985 novel, Kurt Vonnegut’s narrator (a ghost) notes that he had thought himself to be smart because of his big primate brain, but then relates all the bad decisions he and his fellow primates made as their civilization collapsed. For example, he explains how a ship captain should have recognized a dangerous situation brewing in port, but since he had just enjoyed a good meal, and was looking forward to making love with his woman, the reptilian part of his brain instead chose to believe that the situation would work itself out. Somehow. “Thanks, big brain,” snickered Vonnegut after every poor and ultimately fatal decision.

Will the ghosts of plutocrats some day sarcastically thank their big brains as their heads are paraded on pitchforks? For a long time I was completely on board with Hanauer’s argument that we need a strong, stable middle class for both economic prosperity and political stability. In the short term, I still believe that to be true. But in the long term, it is exactly wrong.

Over a decade ago, I read arguments by Julian Darley to the effect that the earth simply doesn’t have the resources to support a large middle class with all the water and oil and meat that it consumes, and all the carbon and waste it generates. It can’t even support the US and European middle classes much longer, much less the rising middle classes of China, India, Brazil, and so on.

At about the same time I began reading The Oil Drum, and was exposed to other examples of short-term thinking. Many TOD commenters saw Peak Oil as the bear, and bragged about how they were going to get their ten acres of crops and firewood, and maybe some solar panels, but definitely plenty of rifles and ammo. They warned that they would shoot anyone that came to their door. In the short term, they recognized that cold, starving neighbors might be the initial threat. But how would they survive the local foraging gangs (the pack of wolves) that were bound to organize? Would they have neighbors that could help them with medical problems or other emergencies? And what of climate change? If you just shoot at everyone, who is going to pull your family out of a mudslide? Thanks, short-term brain!

Dmitry Orlov has looked a little further down the road and in Communities That Abide, advises us that certain groups have tended to survive through difficult times. But as I’ve mentioned before, those of us in the US middle class don’t much resemble the Amish or Roma folk that Dmitry implies we should emulate – whether by education, temperament or expectations. In such a community, to want more out of life than being expendable once you reproduce would be yet another flavor of short-term thinking. Perhaps Vonnegut was right about our big brains.

It is tremendously hard to think long-term about everything. Do Hanauer’s fellow 0.1%ers simply enjoy being rich too much to change? Or do they already know the risks they are running, but have no options? I look at myself and see that I have made small changes to my middle class life – less driving, no a/c, a smaller house – but nothing like joining an eco-village or transition town. Essentially I enjoy being middle class, and my family and friends and employers expect me to keep up appearances. Can I expect the rich to give up being rich when I don’t give up being middle-class?

We haven’t looked after our infrastructure, or provided for energy once the oil is gone. Our healthcare system is increasingly predatory. We are overfishing and overfarming. As I see it, the middle class faces a future of dwindling into relative poverty and insecurity, while the rich face a future where being rich isn’t as comfortable or secure as being middle class is now.