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James Howard Kunstler: Racketeering Is Ruining Us

Understanding why there are all those hands in your wallet
Monday, August 15, 2016, 8:33 PM

If you don't understand what's causing a particular problem, then it's pretty difficult to come up with an effective solution.

Author, commentator and longtime friend-of-the-site James Howard Kunstler returns to our podcast this week to discuss the importance of accurate diagnosis -- in this case, of the scourge he sees as accelerating America's downslide into economic and social decline: Racketeering.

More associated with the organized crime bosses of a century ago, it's not a word used often these days. But that doesn't diminish in any way its relevance to and impact on our lives today:

The disorders in politics that we're seeing now are really expressions of the larger disorders in our economic life and our financial life. That just happens to be the avenue that the expression is coming out of. Another point I'd like to make is that the reason that people are against Hillary or dumping on Hillary or don't like her, is because she's a poster child for racketeering. I encourage people who are talking about our circumstances and people who are interested in the news and election, to use the word racketeering to describe what's going on in this country. You really need the right vocabulary to understand exactly what's going on.

Racketeering is just pervasive in all of our activities. Not just in politics but in things even like medicine and education. Obviously the college loan scheme is an example of racketeering. Anybody who has to go to an emergency room with a child whose broken their finger or something, is going to end up with a bill for $20,000. You know why? Because of medical racketeering. And so, these are really efforts to money-grub by any means necessary, often in ways that are unethical and probably illegal. Let's use that word racketeering to describe our national situation.

And let's remember by the way, the activities of the central banks is just another form of racketeering. Using debt issuance and attempting to control interest rates in order to conceal our inability to generate the kind of real wealth that we need to continue as a techno-industrial society.

Societies have a really hard time understanding what they're doing, articulating the problems that they face and coming up with a coherent consensus about what's happening, and coming up with a coherent consensus about what to do about it. Combine that with another quandary, the relationships between energy and the dead racket for concealing real capital formation. I like to reduce it to one particular formula that is pretty easy for people to understand. It's a classic quandary: that oil priced at over $75 a barrel in today's dollars tends to crush economies, and oil priced under $75 a barrel in today's dollars tends to crush oil companies. There is no real sweet spot between those two places. We're ratcheting between them and each one of them entails a lot of destruction. That's a terrible quandary that we're in and it's being expressed in banking and finance...and the people in charge of those things don’t really know what else to do except continue the deformation of institutions and instruments.

Click the play button below to listen to Chris' interview with James Howard Kunstler (58m:21s).

Transcript: 

Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host Chris Martenson and it is August 10th, 2016. I am really pleased to have back with me today James Howard Kunstler, who is the author, extraordinary writer, blogger, you name it, all around guy, speaker...goes out and tells the world the things that I've been trying to say, in his own wonderful style. Of course, he's been doing it longer than I have. One of the very first books that I came across that really caught me and put the dots together in a way that I understood was the Long Emergency; just a fantastic read. And taking that tour of the data, as it were, that's in The Long Emergency, that explains the predicaments we face. He's also got another series of books in The World Made by Hand, which is a fictional account of what the world might or looks like once the long emergency gets under way. With that, James, really happy to have you back with me today.

James Howard Kunstler: It's a pleasure, Chris. You forgot to say that I bake cookies and make my own clothes.

Chris Martenson: Well...

James Howard Kunstler: And they come in nine decorator colors.

Chris Martenson: Yeah, your long underwear series, I hear, is just not to be missed.

James Howard Kunstler: That's next.

Chris Martenson: Where do we start on this? Jim, it's been a while and you and I have had some offline conversations by phone. I wish people could have been listening in, because you and I are out there doing what we can to interface with the world, and let it know what we think is coming, and to engage in the conversations. I'm discovering that people are getting nervous, that there's a little bit more ability to engage in conversations. Here's one quick example. Five years ago nobody would believe me. It was a very small crowd of people who understood these election machines are easily hacked and elections are easily stolen. In fact, of course they are. A few of them get away with something that has that much at stake...you're probably going to rig it. The data was always there. There wasn't a question of shortage of material, information, data, evidence...all of this could have been laid out prosecutorial and very easily; a very easy case to win. But people still weren't ready to go there, and now people are ready to go there.

Now more people are going: “Huh, I guess that might be true.” I'm finding that we're in this weird moment in time where people are at once both kind of worn down by the larger experience of life. Nothing really seems to be breaking. Maybe it's just going to go this way forever. And simultaneously, understanding that things are getting further and further off the rails, and that things can really go pear shaped. I'm finding that tension out there right now. Just now that I have you and the record button's on...I would just love to talk about your experience in that regard.

James Howard Kunstler: Well, the dynamics you're describing I think - for the most part, the financial and economic dynamics that we pay a lot of attention to. But if you want to see something that's really flying apart, all you have to do is look at the gruesome spectacle of the 2016 presidential election. What's happening with Trump is just unbelievable. I have to be clear that I'm not fond of either of these candidates. I'm very disenchanted and disappointed with both of the major parties and their candidates. Trump is especially, just an amazing case of somebody completely out of control who doesn't seem to get his whole lower half of his body out of his mouth. I am beginning to wonder...if behind the scenes, all these Republicans aren't running around with their hair on fire trying to find some device, some way to get rid of him; to do something.

My thought today is...an outside possibility that in desperation they might just turn to supporting the libertarian ticket of Gary Johnson and Bill Weld. But that's kind of a low percentage deal. But you never know. On the Hillary side, there are two things...three things about Hillary that I think are kind of salient at the moment. One is, this gathering question about her health. She seems to have some peculiar health problems. People are speculating about some kind of brain convulsion seizure problem. Who knows...that remains unresolved and deeply hidden and stuffed down. The other thing is that with all the noise about her email scandal, the one thing that we're not really getting a whole lot of information about - which I think is really the vital thing - is the connection between her state department email server activities and the activities of the Clinton Foundation in grubbing money from donors all around the world; especially donors in countries doing business with the State Department in one way or another. Getting approvals for arms sales and things like that. The dearth of reporting about that is really stunning and the dearth of inquiry from supposedly, responsible authorities.

Another thing that ought to be really troubling is the advocacy of major media outlets like the New York Times and CNN. There was one story today in the New York Times that was just stupefyingly weird. It was about the difficulty that Hillary and Bill supposedly had when Bill lost the governorship of Arkansas in 1980. He had served one term. They had two year terms. He got unelected, un-re-elected. And so, the New York Times story was, here are these two poor people who are coming out of government and they're using to living in the governor's mansion...and now all of a sudden they don’t have jobs and they don’t have any money. They have to buy a house in a crummy neighborhood, and isn't that sad? I'm thinking, okay...you have two Yale educated lawyers. One of them a former governor and they can't get jobs at a decent law firm somewhere in the South or anywhere else? It was preposterous that this sob story that we're supposed to believe they couldn't make a living. How many ex-governors... Ex governors can get seats on university boards of directors, corporate boards of directors...and get paid stupefyingly large sums of money just for doing nothing, or attending three meetings a year.

Chris Martenson: This was back in the 80s, right?

James Howard Kunstler: This was, the Times story about what happened in the 80s when Bill did not get re-elected.

Chris Martenson: Now, they should have just turned back to Hillary's extraordinary abilities as a cattle futures trader where she did turn $1,000 into $100,000. Wink, wink, we know how that happened...in the future's market. So, yeah...but your larger point... The sob story, we have to humanize these people, how do we make them just like everybody?

James Howard Kunstler: How credulous do they think their readers are. That we're going to feel sorry for them that they couldn't get a job? It's ridiculous.

Chris Martenson: There's an astonishing thing I'm noticing. For whatever reasons when politics get involved, it's like people resort to team sports. They're not aware that there's just a different uniform on one versus the other. Oh, no! The Jets, I hate the Bills. It's just this whole craziness. But I've seen a lot of people come out with this canard that Hillary's just getting a really bad deal in the press because she's a woman. That's what they're trying to show, but I'm thinking no, she's getting less than a bad deal because they're not actually talking about all the stuff she's done. If she's getting a bad deal at all, it's because those are the decisions and choices she made in life, to do some really awful things. And so, I really am very much against this whole idea of trying to say that sexism has a role in this or racism has a role. All these things which are just device of elements. How about we just talk about who the people are, what they've done, what their records are...and can we start there? Because she's got in my mind, a horrible record. Just horrible.

James Howard Kunstler: Well, two things about that. One is that to get back to the larger point we were on a few minutes ago. The disorders in politics that we're seeing now are really expressions of the larger disorders in our economic life and our financial life. That just happens to be the avenue that the expression is coming out of. The second point, or another point I'd like to make is that the reason that people are against Hillary or dumping on Hillary or don't like her, is because she's a poster child for racketeering, for political racketeering. I encourage people who are talking about our circumstances and people who are interested in the news and election, to use the word racketeering to describe what's going on in this country. You really need the right vocabulary to understand exactly what's going on.

Racketeering is just pervasive in all of our activities. Not just in politics, but in things even like medicine and education. Obviously, the college loan scheme is an example of racketeering. Anybody who has to go to an emergency room with a child who's broken their finger or something, is going to end up with a bill for $20,000. You know why? Because of medical racketeering. And so, these are really efforts to money grub by any means necessary; often in ways that are unethical and probably illegal. Let's use that word racketeering to describe our national situation.

Chris Martenson: Sure, let's absolutely do that. I remember reading this, probably back in 2011, an article about occupy Wall Street. They had just come up with some money and was at a party or some event, this person was like...isn't this ironic, those occupy Wall Street people are putting that money in a bank? He said, it's not ironic. They're not anti-bank. They're anti-corruption in the banking system. But the mean got out there that oh, these people must just be anti-bank and somehow the whole message gets corrupted. But really, this larger thing that we're seeing in the United States, we're seeing it in France, across big parts of Europe. If you hadn't been reading what's going on in Greece, what’s really going on there...average, ordinary people are getting squeezed and harder and harder. Forget all the headline statistics about oh, we had 200,000 new jobs created and wage growth has been fantastic. It's not fantastic, particularly not compared to the actual rate of inflation.

Here's my larger view of this...I think this holds well...is that, if you want to understand an economy you have to understand how much energy it's using. If there's a lot of energy flowing through it, of course you can have a dynamic economy. Who knows what creative people will do with all that energy? They'll drive to soccer games or build giant things. Who knows.

James Howard Kunstler: Well, energy that's affordable.

Chris Martenson: Affordable, but let's look at it in terms of energy per capita. How much energy do you have going per person? The United States had rising energy per capita up until about 1970 because we had all this petroleum. Then our petroleum peaked and ever since then, we've had declining net oil per capita or energy per capita. On a net basis even worse, because what we know about energy return and energy invested. Think...if this main thesis holds which says, gosh...just track the amount of energy going through and you will understand the larger shape and context of a culture...the United States by this model, we'd say, something in the average person's experience would have peaked around 1970-ish and would be going downhill ever since. I don’t mean in terms of Pokemon Go and wonderful smart phones and all that stuff. Obviously technology is advanced. But you could support a family on a single income in the 1970s. I remember because, not that I was supporting a whole household, but I was actually working for minimum wage, much lower on an hourly basis compared to today nominally. But I could actually put money aside. Today there would be no chance of surviving on minimum wage. In fact, two wage earners on minimum wage, forget about it. It's still almost impossible in most places...thoroughly impossible in many metropolitan markets.

James Howard Kunstler: Sure.

Chris Martenson: By this model we would predict that things are getting harder and harder. That's thrust one. I think that's in play. Affordable energy is on its way out the door and of course that's adding some pressures to this. Then you have to combine it with the racketeering that you're talking about, where the people in charge can't help themselves. Almost like the rats who can detect the ship about to sink. They grab everything they can. So, the thieving, the money grubbing that's going on...it's a hurricane force of vacuuming from the bottom to the top. The the gatekeepers, which is the New York Times, are busy trying to pretend as if this is just a thing that happens. Why are people so cranky? The truth of the matter is that the elites are overstaying their welcome. They don’t understand...the basics that there needs to be some fairness in a society for it to be livable. I think that's escaped them.

James Howard Kunstler: Well, it's a very demoralized society now. And that...I think, is one of the only things that might explain the failure of people of stature arising out of the elites, to make some kind of credible opposition to what's going on. Aside from Bernie Sanders...can there be only one guy, one figure in America who wants to take a stand against what's been going on? Let's remember, by the way, the activities of the central banks is just another form of racketeering. Using debt issuance and attempting to control interest rates in order to conceal our inability to generate the kind of real wealth that we need to continue as a techno-industrial society.

I actually do think the Human Project has the capacity to produce people of good will. But there may be a kind of sign/co-sign wave form that explains that at certain times in history...societies have a real hard time understanding what they're doing, articulating the problems that they face and coming up with a coherent consensus about what's happening, and coming up with a coherent consensus about what to do about it. The other quandary, which you are painfully aware of, is the relationships between energy and the debt racket for concealing real capital formation. I like to reduce it to one particular formula that is pretty easy for people to understand. It's a classic quandary and that is, that oil priced at over $75 a barrel in today's dollars tends to crush economies and oil priced under $75 a barrel in today's dollars tends to crush oil companies. There is no real sweet spot between those two places. We're ratcheting between them, and each one of them entails a lot of destruction. That's a terrible quandary that we're in, and it's being expressed in banking and finance...and the people in charge of those things don’t really know what else to do except continue the deformation of institutions and instruments.

Chris Martenson: We've been talking on our site at Peak Prosperity for a while about some of the ecological signs that are out there. One of the things that caught our attention for a while was talking about insects. My observation was that when I was a boy in the woody station wagon we would drive from Connecticut to upstate New York and across route 90 there - the New York State Thruway. I remember every time we stopped for gas, somebody would have to get out and just scrape the bugs off. You just couldn't see anymore.

James Howard Kunstler: Sure.

Chris Martenson: We just made the trip recently in July, and drove the whole way there and not a single bug on the windshield. Not one. Of course, there's all this data coming out of Germany and other places and the guy who does the soundscape, he's been dutifully recording very specific locations with high fidelity microphones for 30 years...and just saying there's this collapse of sound. He calls it the deafening walls of silence on his recordings now. This is all happening around us and it takes a minimal sort of awareness to A, notice that's happening and then B, say maybe we should look at that. That's actually an important sign, we think. This generalized loss of species. A rapture has happened, only it wasn't humans...it was insects, that got taken. That there's this general really big giant stuff happening ecologically, and we can't summon the attention for it, because we're just too distracted of maintaining the fictitions of our current environment...the happy motoring utopia. This is what I feel in the Hillary campaign, to a lesser extent the Trump campaign, but in other political movements...just this desperation to maintain the status quo because I think what's happening Jim, that will allow people to not have to confront what's actually happening. It feels like a last gasp at reality ignoring or something like that.

James Howard Kunstler: I think it's very, very hard emotionally. It's hard for me. I can barely stand to read stories in the press about what's happening to the oceans, what's happening in mass extinctions. You, I think especially as someone coming out of the hard biological sciences...you have a particular appreciation for this. You're probably more able to give your attention to it than me or some other ordinary person. I just find it so sad. I can barely think about what's happening to the oceans. I understand that other people can't, either. That's one of the things we can't grapple with at the moment and I'm not sure we're going to be able to do anything about it. Although, I do think that in the larger sense...reality always has mandates of its own and circumstances are eventually going to compel us to do things differently. They will change the situation for us. We'll probably be dragged kicking and screaming into the recognition of the predicament that we're in. But we're not going to let go voluntarily and there are ways of understanding that. One of my favorite ways is understanding the psychology of previous investment. The idea - that's also another way of expressing some costs. The idea that you put so much of your personal wealth or cultural, national wealth in a certain infrastructure for daily life, that you can't imagine letting go of it. That's kind of where we're at.

Chris Martenson: I completely agree and I have a confession to make...which is that, for all the time I spend talking about these giant predicaments, I actually love my own life. The life I fashioned for myself. I hope it's not a case of fiddling while Rome burns a little bit...but I believe I have to walk the talk, that I have to be the change I want to see. But more importantly, I actually really like gardening, building soil, and I like being in a relationship with all the insects...not just the bees and butterflies I plant for. I like to...I really think that this is the thing I've been wrestling with.

I did a lot of existential intersection over my summer vacation and here's what really came to me. It's that we had this set of institutions that served us pretty well for a while in the hunter/gatherer time. Then there was this big switch and we went into agrarian pursuits with mixed results and we'll see how that experiment turns out. Fundamentally, the institutions that arose during that time were extractive. I was just reading a book called Why Nations Fail and interviewed the author...great book. It deposited this idea that some nations are poor and some are rich, not because of geography, culture, none of that. It's because they had the right political institutions that were inclusive and the right economic institutions that were also inclusive. But if the political institutions were in any way marginalizing or exclusive to elites and the economic institutions were also that way...like you can imagine, Mexico. 

Carlos Slim, the second or first most wealthy person in the world depending on which day we're counting...he got there because he got the telephone contract out of the Mexican government and he knew the right people. So, there was that lack of inclusively. There would be no way for an average Mexican person to compete against him and get a loan from the banking system there. It's not possible because it's not how it's structured. That was the explanation of this book...well, if you have these extractive political and economic institutions, you end up with poor nations. But look, you get these shiny, wonderful examples where you have these wealthy nations...that’s the United States, etcetera. It's an interesting framework, I like it a lot. But what's missing that - and I asked him this question... Yes, we have these inclusive political and economic institutions, but they're still extractive. They're just not extractive of humans...but still of the natural world.

And so, I think that as much as capitalism and inclusive political institutions, was the wave of one period of time. This next period of time, if we're going to make this next transition in any way, shape, or form... When the dust settles we're going to have new cultural institutions. I'm not talking about just buildings and things like that. New political, cultural, and economic institutions that are regenerative and relational. Where now it's fairly isolated and extractive. I don’t know how we get to that second stage, but that's really where my thinking is at this point. There's nothing salvageable in most of our institutions, because they're founded on a premise that's false...which is that we can extract forever.

James Howard Kunstler: Right and I will reiterate that. I think we will get there, but we'll probably be dragged there kicking and screaming against our will. We'll find ourselves there. I think one aspect of this that interests me and kind of amazes me, is the inability of thinking people...the thinking classes in our society and they're still there. Their inability to understand that the institutions of modernity were very special. They were extra special. And so many of these thinking people assume that these institutions are permanent. This is the whole amazingly weird thing behind the Tom Friedman idea that the global economy is a permanent part of the human condition. When in fact, it's obvious that it was the product of a set of very special circumstances, during a special time and place. Namely, the late twentieth century and the advanced nations of the world.

Two conditions that prevail, namely about 100 years of relatively, very cheap energy. And about 70 years of relative peace between the great powers. There was animosity and there was friction, but there were no great world wars for that period. That has allowed a series of economic relations between distant nations to play out, and the idea that these things are permanent, just strikes me as hilarious and preposterous, and yet that's what we're asked to believe by the avatars of Keynesianism, and the New York Times, the people who want to keep the rackets going.

Chris Martenson: Indeed. Even if things don’t collapse all at once, there's this idea of the institutional drift that happens over time. What you're talking about is first there were some contingencies that had to be in play. If for whatever reason we hadn't discovered oil - trust me, this is all a different sort of a world we're sitting at in this point in time. The thing that I took from this book as well though is that you have to guard the institutions you do have carefully in some respect because it really matters what's happening in them and whether they're adapting well to the times or not. Right now I can see as I add up all my little data points, our political institutions are being revealed as increasingly not inclusive. Right?

James Howard Kunstler: Ah huh.

Chris Martenson: This whole thing that happened, it really still shocked me to see Bernie toss in the towel...reading the reports I read that said, look...there was voter suppression, there was voter roll purgings, actual outright statistical evidence of vote flipping and the electronically rigged machines, tabulators that were giving erroneous results, and also vote tallies that did not match the exit polls. Just all this buffet of crud. That just says stolen election. For him to overlook that and say, yeah I know you guys have a lot of energy, but we lost fair and square...they stole it fair and square. It was a flat note in that. But what's really missing in that is that he missed on the point there in saying, once you've sort of rolled over and admitted that you have corrupt systems and that's just the way it is. That's actually a really far more important point than just saying: “Well this is bigger than just about me and I guess next election we'll have a shot at fixing this.” Once you institutionalize and accept that level of thievery - which happened in 2000 by the way...this is not about Bernie, it happened earlier. These are big moments. I think really big sweeping big fundamental things are happening to the fabric of our country in terms of privacy, the voting issues, the banking. All rackets. It’s just all rackets.

James Howard Kunstler: I think it's the essence of the demoralization that you're describing. We're in a period, really, where everything goes and nothing matters. You know, among the many proofs of that is the fact that the supposed guardians of our collective virtue, of right and wrong, are disabled. We have institutions like the Securities and Exchange Commission, and some of the duties of the Federal Reserve, and the Department of Justice... They were supposed to take actions. The FBI is supposed to make referrals to the SEC for the prosecution of financial misconduct. All of this stuff is missing. And of course, you can lay a lot of this at the desk of Barack Obama. A really kind of peculiar figure in our history, in our politics, because he seems to be a decent fellow. He's articulate, he’s calm, and suave...He seems to have personal characteristics that are admirable. And yet, he has done absolutely nothing to guard the sense of right and wrong in our institutional life. I think it's been hugely damaging. And the fact that nobody is able to recognize this, especially among what I call, the thinking classes.

In that wad of people, I come out of the old New York liberal, Democratic part of the wing of the thinking classes. That's sort of my heritage. I'm completely disenchanted with it. I wonder how other people feel about it. I don’t really see that disenchantment so much in other people. I see a more general sense of being discouraged and - Cynicism, which is merely thinking the worse of the human race...which is really not good enough. That's not enough of an emotion to get you forward; get you to anything better. That’s all I see. I don’t know what it takes to make this right. As I said before, I think it's one of the great abiding mysteries of the last dozen or so years...that no figures of stature have stepped forward to oppose this behavior. That is something that ought to make us very, very concerned, because it tells us that we're going to have to wait until circumstances really whack this society upside the head with a two by four, to get its attention and make some of the changes we're describing.

I do think that we will get to a new disposition of things. I think it's going to be very different from our expectations and very different from the comforts and conveniences that we've enjoyed in the last 50, 60 years. But I don’t think it's going to be all bad. I just think that people cannot imagine...we just have a national incapacity to imagine the sort of future that we're entering. The reset of economic life, especially.

Chris Martenson: This has been one of the longest stretches of economic ease, really. To the extent that somebody's poor in the United States, let's compare them to somebody living 300 years ago and it's just a king's life even then.

James Howard Kunstler: Oh, yeah. Flat screen TVs, all the cheese doodles you could ever want to eat. A lot of people who are supposedly poor are definitely not going hungry. We can tell that from the crisis we see of just the condition of American citizens. They are in the worst shape of people you can imagine. I went to Stockholm on a speaking gig in June. I got off the plane and I noticed I was in a city full of normal sized people. It was like a stupefying experience to all of a sudden be in a place where people actually looked like healthy adults. Whereas, now I live in the corner of the world...not too different from yours and we're not that far away from each other. But I live in kind of an old industrialized corner of the upper Hudson valley where there are very few good jobs and the remaining population doesn't have that much to do and doesn't get paid very much. They look terrible. You go into the supermarket and maybe 5% of the people in the supermarket are not grossly overweight, don't look terribly sick, or diabetic, or suffering from vascular problems...have to lean on some kind of a shopping cart just to walk up the aisle. It's a pretty scary thing to see.

Chris Martenson: Indeed. You can literally be starving to death while you're packing the weight on with the food that we have in this country. These are the kinds of things that people do to themselves when they're really just asleep at the switch. I don’t know where it starts. We did homeschool our children because I had some concerns about the...the indoctrination that I think public schools are forced to enforce at this point in time. Ranging from the idea that...I've used this anecdote before, but I was talking with somebody and he got in a bit of a tiff with his son's teachers because his son, who was nine or something, was with two other boys at the back of the recess yard throwing rocks at trees in the woods. They just thought that was violent and his son got in trouble. He was just mystified. He's like, think of all the things you learn by throwing. Every rock's differently shaped, you’ve got gravity involved, there's all this coordination. It's actually an important part of learning. It would be like saying to otters, no playing...or to puppies. No tussling with each other. It's a normal part of human development and we're like, we can't even honor normal anything at this point because we have lost... To me, if I had one phrase it would be common sense.

James Howard Kunstler: Well, you ask where it starts and I think that the general run of humanity really does need some kind of a coherent armature for daily life and that includes role models, who offer examples of behavior that will allow them to thrive rather than be defeated by life. They need a certain amount of discipline in order to fulfill the behavior that those role models show them. And they need some aspirations, the ability to aspire to...the products or results of leading a good life. A lot of those things are missing, especially in these unfortunately sort of disenfranchised, thrown away, forgotten, lower middle classes that we have in America. You can see it very clearly in my region, which was, as I said, a former thriving region of small, fact[tories] manufacturing...small factories, at least eight or ten factories around the confluence of the Hudson River where I am. A lot of these companies were paternalistic, but as part of that paternalism, they sponsored a lot of institutional activities for people. They had baseball teams, they had outings, they paid these people enough money to live decently and these people produced children who aspired to do better. And they were able to do better. They got a better education by the eighth grade in the 1920s, than people are getting now in grad schools.

All of this stuff has dissolved. You actually need quite a bit of built in structure in everyday life for society to thrive, and for individuals to thrive within it. That's not there and we don’t care about it. We just don’t care. We have eliminated most of the public gathering places in small town America. I live in a town that doesn't have a coffee shop, a bar, any place that somebody might go outside their home. There's the expectation that all of the "community" that you're going to be a part of is found on your TV set. Well that's just a lie and it's based on a very basic and almost universal misunderstanding in America, that the virtual is an adequate substitute for the authentic. That having relationships with made up people on TV is the same thing as having relationships with people who are really in your life. That structure for leading a good life is absent. We're seeing the results of this anything goes and nothing matters society that we've created for ourselves.

Chris Martenson: All very well said and if I can just piggyback on that and say if I had one wish for any family that would be a big, big boost to their lives...it would be to get rid of the TV. You can do worse than to start right there. Just getting rid of that box that consumes so many hours, but worse...it's a box that suppresses your own thinking , no thoughts necessary while it's doing the thinking for you...and they are very, very good at what they do with TV now in terms of how messages are crafted and inserted using the latest neurological understandings, wirings, programming, and all that stuff. Anyway.

James Howard Kunstler: But I think, Chris, I think it would take a tremendous act of will for ordinary people to do that. And many of them would be bereft because for one reason or another, they're out of the habit of reading. Even the newspaper which used to be something that working people did and they don’t do that. They're out of the habit of evaluating their own ideas, which gives them very little basis for even understanding what's going on, let alone developing a political coherent viewpoint about things. So, it's asking a lot. It doesn’t seem to be happening and I wouldn’t say that people are out there throwing their flat screen TVs away in any great numbers. The question is, what happens despite that?

Chris Martenson: I don’t know the answer to that, but I'll tell you, maybe if it's too much to throw the TV out, turn it off for a week or 28 days. That's all it takes. It's an experiment. These larger...it feels to me that hopefully we're at some sort of a nadir in terms of involvement. Whether people are politically involved, culturally involved or involved in their own health...moving around or locally involved, even involved in their garden out back. That level of involvement seems and hopefully, it's some sort of a low.

At a quick aside...the contrarian in me wants to derive the Pokemon Go craze and phenomenon but I'm seeing people go outside and interact with the outdoor world. Which, if it has to happen through their phone, great. I actually see there might be some benefit. I would bet that there's going to be more than a couple people that when that craze is over, is going to say you know what...I still like walking around outside.

James Howard Kunstler: Well, maybe but that kind of raises another issue which is something that I covered in some of my first non-fiction books back in the 90s, namely the Geography of Nowhere. Which was about the deficiencies of the human habitat in America and especially the fiasco of suburbia. I think the bottom-line is, the outside in America is such a degraded place in most places. Whether it's suburban Minneapolis or suburban Dallas...Long Island, Jersey, or the inland empire out in California. These are places where it's almost impossible for a human being to feel okay neurologically. They're punishing environments. They're psychologically and neurologically punishing. You're around these large machines that are moving at lethal speeds. You're around a tremendous amount of incoherent visual clutter that assaults your brain. You have to traverse these terrible distances, which, unless you're in a car...it's like going on the death march to walk from one mall to the other. Nobody except a person who has nothing...no other way of getting around will do that. We're kind of stuck with the human habitat itself, which is working very poorly.

You and I live in the northeast and we live in small towns. I think that's really going to end up being the place that gets rehabilitated first in our daily life. Largely because a lot of these places have a meaningful relationship with food production. Many of them in our area, I know here, have a meaningful relationship with hydropower. Even if you're not going to make electricity, you can do other things with hydro. I think those two things are tremendously important. I'm beginning to see the signs of what I think will eventually be an upstate New York economy much more focused on agriculture and the activities that support it. Right now it's not really based on anything except a lot of people driving 40 miles each way to be janitors in large buildings that probably can't be sustained in the future. That economy of 40 mile janitorial jobs, you can forget about that. That's toast. The question is, what is going to be the next economy in these places, and these are the places most suited I think to the next economy. The places that have some meaningful relationship with water and growing food.

Chris Martenson: I certainly agree with that. Through all of the...contrarianism and seeing the potential looming catastrophes, I do see a lot of the opportunities in this as well. I'm cheering them on. I really am looking forward to that future which is more regenerative and more relational and I already have a small manufactured facsimile in my own life. It's possible. I'm living that way and of course, someone would say...you got dealt the privilege card there. True. But I think this could be recreated anywhere.

James Howard Kunstler: Chris, let me give you an example. For the last 50 years the American public literally been under assault by chain stores. They have destroyed local economies, especially local commercial economies. Americans did it, they walked into that gleefully. I remember going to all these permitting hearings for Wal-Mart and other chain stores in the 90s and early 2000s where there would always be some group of people saying, we want bargain shopping. And they turned around and destroyed their communities by getting it. I think that people and listeners ought to be aware that probably that whole chain store economic model is very close to extinction. It's closer to the end of its useful life than to the middle.

One of the things I take a lot of comfort out of is the idea that there will be tremendous opportunities for young people to rebuild local main street economies. These are going to have to be fine grained sets of relationships with tremendous numbers of vocational niches and economical niches for people to occupy or reoccupy or reinvent actually...because so much of that matrix of commerce has been destroyed. But I'm convinced that it's coming and it's going to be...for kids who think there's nothing more out there for them but some job in a cubicle working for Old Navy's marketing department...they ought to consider getting into a local business, because that's really on the horizon.

Chris Martenson: Absolutely agree. I'm wondering how much of that thinking was part of, and came into your World Made by Hand series, which is in many ways, taking that thinking and just going further. When you've removed the basic support elements of a debt based economy in abundant energy and refashioned a future that makes sense, given those constraints. Let's talk about your most recent installment in that World Made by Hand series.

James Howard Kunstler: I pretty much completed the series. I had intended from the beginning to do one book for each season of the year. So, I wrote four of these books. My agenda really was to - first of all, I wanted to depict the conditions that I outlined in the Long Emergency book, a nonfiction book. I wanted to depict them in a way that would get to people through their senses and their emotions, so they could really feel what it might be like to live in that post-industrial, post-petroleum economy where the Internet is no longer a presence and we no longer rely on computer devices...the electricity is not running anymore. There have been a lot of problems like, epidemic diseases...things that we are kind of a part of the scene of the converging catastrophes that we face, and what the product of that would be.

So, I created this fictional village of Union Grove in the part of the country that I live in now, in upstate New York. I wanted to inform people that the human project would continue, we would be able to find joy in our daily life. Although, the sources of it might be different than TV and iPhones and Pokemon. That people would still find love, people would still get over the adversities that they face. And that also, we would kind of return to a lot of things that we've thrown away in our rush into modernity. Especially into this techno-narcissistic end game of modernity that we find ourselves in now. So, that was the whole idea. In the third volume of Made by Hand books, which was called the History of the Future, I kind of opened it up so that we could see what the United States was like, what condition it was in. My young character, who had gone off into the center of America, discovered that there was a new breakaway nation called the Foxfire Republic, which is my idea of a tea party fantasy of a right-wing authoritarian breakaway nation, run by a former country, western singer and TV evangelist who I like to describe as Dolly Parton meets Hitler. The third volume was concerned with that, and what happens in that place, and what's happened in America.

The fourth value, which was called The Harrows of Spring. It was just published by the Atlantic Monthly Press in July. Takes place back in Union Grove and we're back to the everyday struggles with the folks involved there. And the villains in this story are the social justice warriors who have come over from Great Barrington, Massachusetts to basically graft money out of my people and to try to exchange their paper murky bucks for the scarce silver that my people have acquired in the few years that post-industrial economy has been over. I had a lot of fun with that and in particular because I'm very concerned about this new rise of Maoism on the campuses. This whole idea that it's okay to shut down freedom of speech and the despotic nature of the kind of fake intellectualism that's coming out of the universities right now in our culture. I think it's terribly dangerous and I think it needs to be opposed.

Chris Martenson: Well, it's not easy to oppose that, because there's a buzz involved in that.

James Howard Kunstler: Reputations are destroyed, careers are destroyed. I think you and I are fortunate because we don't have to teach in college. We're not dependent on college jobs. We're not concerned about our tenure, losing that position. But there are an awful lot of people who are and it's had a terrible effect on the intellectual life of our country in the last several years. To some extent it's kind of destroying it. So, we need to oppose that movement and we need to get behind freedom of speech and understand that it is okay to talk about things that make us uncomfortable. I think one of the watch phrases of the period that we're entering is, get comfortable with being uncomfortable.

Chris Martenson: Which is something I do in my own life on purpose, because edges are where growth occurs. I love to keep growing and changing. I will go further and say that having uncomfortable feelings, and experiences, and conversations is not just okay. They're essential.

James Howard Kunstler: I agree.

Chris Martenson: They're absolutely essential. So, really a lot of the so-called PC movement to me is about enshrining peoples' rights to have wounds that they don't want to look at and examine. Then you have to dance around those. Somebody saying, oh there's this thing that makes me feel uncomfortable so, you are now responsible for not bringing that up. That's flipped. That's exactly backwards, I think.

James Howard Kunstler: It ensures the failure of development of people from being children to moving into adulthood.

Chris Martenson: I agree. That's been a big part of my adulthood - owning my own reactions and discovering that when I do have a strong reaction to something, it doesn't mean necessarily that thing is a really bad thing that I should avoid. It means I have something to look at. Separating for me as I get older, learning to separate and parse out the difference between having a reaction to something and having a response to something. I feel like the PC movement pretends they're the same thing and they're not. You can have a reaction that's very different from your response. That's the essence of maturity. At least for me. I'm a boy, so we develop late anyway.

James Howard Kunstler: Well, that's true. I think it's been demonstrated that in boys, the part of the brain that controls judgment, really doesn't flower until they're about 25 years old. That was true in my case. I do think that your youth is a time when it's okay to flounder around. In fact, if you're going to do floundering in your life, you're better off doing it before you're 25 than doing it when you're middle aged or older. So, that's okay and that was the case for me. It took me quite a while to grow up and finally, I understood some things about life. I have what I call Kunstler’s law of social relations. Which is the idea...you can state it this way, that out of any room with 100 people, 99 of them think they're the only ones who don’t have their act together.

Chris Martenson: We're all frauds.

James Howard Kunstler: Well, not frauds necessarily, but that we're all insecure. A lot of young people go out in the world and they think, oh gosh everybody else is so much more confident than I am. They're all doing so much better than me. They've got that job. I didn’t get that job and they have it...they're okay and I'm not okay. But the truth of the matter is that when you really get down to it, just about everybody is insecure and that's the human condition. And so with that in mind, we go forward and we try in the best way that we can to overcome the adversities and hardships that we face. Everybody does that too. Everybody has a hard time in life.  Even the movie stars, even the gazillionairs. Everybody has a hard time one way or another.

Chris Martenson: Absolutely and maybe the hard times if we can reframe that and say without a judgment saying it's a bad thing...sometimes out of the hard times, that's where you really blossom. Some of the most spiritual people had almost psychotic splits in their background, really awful experiences that led to the flowering of their consciousness. To me, whether PC is good, bad, right or wrong, all of that...if something is in the service of making us become more conscious, more whole, more engaged, more connected, more alive, I'm in favor of it. Sometimes those things aren't...it's not all rainbows, unicorns, and Skittles. Sometimes there's some hard times associated with that development. But growth isn't easy and that's really what I feel is that you're talking about that - I'm using this word carefully - that retardation of development or that arrested development. It's almost like entraining our rights to not grow up. It's like a Peter Pan play, being written out at this point of time. I'm opposed to that because I do think that this next period of time is going to really call on us to be as conscious and as developed as we can. Of course, the ability of demigods and other characters to sort of rise up and play on peoples' wounds and fears is going to be very large when the economic storm re-arrives in full gail force. And so, before then I think anything anybody can do for themselves, because that's the only thing you can control, to increase your emotional intelligence, increase your emotional maturity - which is fundamentally the process of becoming able to handle and tolerate wider and wider ranges of discomfort. Not avoid them, handle wider ranges of them. That's been my learning over the past few years. It's really starting to cement for me.

James Howard Kunstler: Well, I think it's even applicable on just the physical level. There's an idea, which I happen to believe, that if you expose your body to a certain amount of discomfort, whether it's the stress of using your muscles, or being cold for a certain amount of time in the day, or in someway, pushing yourself to the edge you described. That too, will help you develop into a stronger and healthier person. Of course, that's exactly what we don’t see in America, where comfort and convenience are absolutely the highest values. And we have a whole nation of people sitting on the sofa, scarfing down those cheese doodles watching the Kardashians on TV and that's not healthy. I do think we are going to go to a better place and that nothing lasts forever, including the deformations of our time. And we're going to get there together. I'm going to watch you go through it and you'll watch me go through it.

Chris Martenson: Fantastic. On that positive note, we have been talking with James Howard Kunstler, the author of The Harrows of Spring, the latest fourth installment in the World Made by Hand series. Rush out and get that, it's just a fantastic series. I have it right here on my bookshelf. Jim, thank you so much for your time today.

James Howard Kunstler: It's always a pleasure to talk to you, Chris. I admire what you're doing hugely.

Chris Martenson: Thank you.

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81 Comments

pat the rat's picture
pat the rat
Status: Bronze Member (Offline)
Joined: Nov 1 2011
Posts: 99
L.A. desert

I remember seeing a promo video about bringing water to the desert in the 1950. The desert will reclaim the land someday?   

pat the rat's picture
pat the rat
Status: Bronze Member (Offline)
Joined: Nov 1 2011
Posts: 99
L.A. desert

I remember seeing a promo video about bringing water to the desert in the 1950. The desert will reclaim the land someday?   

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
The Machine

All consistent growth is exponential in that it must have a doubling time. Until it becomes exponential decay.

Exponential industrial, financial and economic growth has forced The Machine to extract womenfolk from their homes to fill cubicals .  To do this it has allowed mens' wages to deflate so that women are forced by economic circumstances  to leave their children. It has made a virtue out of a vice. Women are told that they can All break the Glass Ceiling. (OK men, enough ribaldry.That wasn't a joke.)

This has had the inevitable consequence of  producing young adults that are overly sensitive and emotionally fragile, useless to The Machine. Hence the Machine looks to other lands for labour or to automation.

Producing  healthy children is a sacred duty of womenfolk. If they don't then society becomes extinct.

In an existential crisis, such as all out war, removing women from their primary function can be justified. That we have chosen to do that is evidence that we unconsciously know that we are are (or rather, were) in just such a crisis.

But there will be consequence to depriving children of their mothers. There always is.

The crisis is over. We lost.

aggrivated's picture
aggrivated
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 523
LA and water

I remember reading that LA had around 2000 people before water importation became necessary. The rest of its population is unsustainable.

srelf's picture
srelf
Status: Member (Offline)
Joined: Feb 20 2011
Posts: 11
JHK interview re human habitat

Here here! JHK's comment re the human habitat in suburbia is right on. I live in one of the nation's hottest residential real estate markets and there is such a dearth of local parks it is pathetic!

LesPhelps's picture
LesPhelps
Status: Platinum Member (Offline)
Joined: Apr 30 2009
Posts: 716
A Few Comments

I resonated with JHKs reluctance to look at what we are doing to the oceans, not because I'm not a scientist, but because I have a sense that there is no action humanity would be willing to take that could start to mitigate the situation.  Why stare at the problem if there is no solution.  I resonate and yet I cannot ignore the issue.

Regarding Pokemon Go, I can't see an up side to the game.  The people I have seen playing the game are not outside in any real sense.  They are still interacting almost entirely with their phone.  When my wife and I are walking or bike riding in a park, we not infrequently have to take the initiative to avoid colliding with these unaware people. 

The final thing that hit home was the mention of a visit across the Atlantic to a country with "normal" size people.  My daughters are both nurses in Texas.  At separate times they have both described to me special lift equipment that they have to use to assist a not insignificant portion of their patients to get out of bed.  Obviously, this is not shocking to me.  A fair percentage of people in Central Wisconsin, including youngsters, are so large they have great difficulty getting around.

I liked the discussion of turning the television off for a few months, though I can't imagine many people even considering doing it.  If you turn the TV off, you loose the distraction that facilitates hiding from what is going on all around you.  That can be scary.

blackeagle's picture
blackeagle
Status: Silver Member (Offline)
Joined: May 16 2013
Posts: 208
TV, Fat People, etc...

LesPhelps,

You mention two interesting points:

TV: I divorced from the TV back in 2000 when I divorced from my first wife: the TV was in her share. And because I did not have enough money to by a new one, I spent a few months without TV and I realized I didn't need one at all. Today, We have a TV, but no mean to receive the crap that is fed to the world (No dish, no cable, no antenna). Just a BD reader where we insert a selected disk from time to time.

Fat people: We just came back from a visit to France where people are less heavier than here in North America (For now, as the trend is up almost everywhere in the world). Industrial food, there, is similar to what we have here but French people cook more at home. They find industrial pre-cooked meals expensive. This is also a cultural trait. We spent almost all our time in the country. Paris was for the last few days. They still have bi-weekly markets where they can buy local production (veggies, fruits, meat, dairy, bread). This trip was to me a return in the past. When I was young (I am not saying I am old - the sun is much much older than me!) I recall there were no industrial food as we see today (apart from a few cans of beans or chicks). Everything had to be bough fresh and cooked at home.

marchetrets.jpg

Of course, diet is not the only factor in human super size...

About racketeering, it's almost everywhere. I saw this post in LinkedIn a few days ago: Cheeky racketeering (of course, the manager provided a perch...)

ext?w=531&h=400&f=n&hash=clWcDGvAeFb7tflgUgGc8Cn5j%2B8%3D&ora=1%2CaFBCTXdkRmpGL2lvQUFBPQ%2CxAVta5g-0R6jnhodx1Ey9KGTqAGj6E5DQJHUA3L0CHH05IbfPWi4cc7bKOeg9UAXKywEjQBnLO21EjWyFI65Io3sddt33cHicpX5agYUbhl4j3lK6w

This post alone, is not very scary. The worst part are the comments: Almost 9/10 people who commented found it "smart", "bright", etc...

SaaS (Software as a Service) is also a form of racketeering as customers becomes captive. This is the phone company business model.

Microsoft pricing model uses the "Top Psychological Accepted Price" model. Germans pay more for their software because they accept it. Other countries have lower prices because they are not as easy as Germans. Etc...

By the way, Quebec justice authorized an action class lawsuit against all Canadian phone providers because of excessive roaming fees (up to 30$CAD/MB). Will see how it will end. Two years ago the mayor of Quebec city came back from a trip to find a 11,000$CAD invoice for roaming fees. With his strong character, he made a lot of noise. wink

 

Hotrod's picture
Hotrod
Status: Silver Member (Offline)
Joined: Apr 20 2009
Posts: 172
JHK nailed it again

It has become the "skimming and scamming" economy, where the new business model is to force a captive audience to pay over and over again.  Monsanto's glyphosate tolerant seeds for example.  You must buy a new order of seeds every year and pay the attending "technology fee".  If you keep seeds and plant them the next year Monsanto will come after you with a legal vengeance.  I suspect Monsanto has access to the USDA crop reports most every farmer has to file to get crop insurance.  This would allow them to compare reported acreage with the amount of new seed purchased and tell them exactly who was saving seed and replanting it. The problem is Monsanto has bought up almost all of the competition in the seed industry so you almost have to buy from them-or try to find comparable non glyphosate tolerant seed.  The problem being that non- tolerant seed is being left behind in the genetic traits development and research area.

Used to be that new, and most times better seeds were developed by university research departments and they were labeled "Public Varieties". This seed could be saved and planted the next season. This is almost non-existent today.

Part of the theory of Supply and Demand is that there by many willing sellers and equal access to information about the marketplace.  Both of which no longer exist, thus unbalanced power to the seller.

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 203
Monsanto, etc.

I'm glad you brought that up Hotrod.

Maybe it is too much of a luxury these days, but I wish that people would begin to look at their actions from a moral perspective. Or at least ask themselves if they are victimizing their customers and end users.

What did they say in the '60s?: If you're not part of the solution you're part of the problem.

sand_puppy's picture
sand_puppy
Status: Diamond Member (Offline)
Joined: Apr 13 2011
Posts: 1658
Pharmaceuticals Also Priced "Whatever ya can git."

Just after we moved to Virginia, I went to a small locally owned pharmacy to fill a prescription for 30 Ambien (sleeping pills).  I was new to my job and my prescription insurance coverage had not kicked in.  They explained that without insurance it would be $58 for 30 tablets.  But, if I would be willing to wait until my insurance kicked in in a few weeks, the price would come down to only $30.

I asked if I could talk to the manager.  It turns out the person at the front was the manager and owner.  After some talk about where we had moved from and how we liked living here, it turns out we were neighbors and our dogs had met in the park a couple of times.   She offered me the Ambien at cost.

She charged $5.  I was shocked.  "Can you really afford to give it to us that cheaply?"    She replied: "Sure. Generic Ambien costs us practically nothing.  The $5 is just for the labeling and paperwork."

 

 

Mark_BC's picture
Mark_BC
Status: Gold Member (Offline)
Joined: Apr 30 2010
Posts: 402
Just a comment regarding the

Just a comment regarding the occupy wall streeters being anti corruption rather than anti bank. I would hope that they would be anti bank. Has there ever been a non corrupt banking system? The sole purpose of the banking system is to milk the population. I have never agreed with the need for credit to get things done, the only reason we "need" credit is because we're debt serfs and in order to get "money" to do something we have to go begging to our usurious masters who have convinced us they are doing us a favour. 

I say, get rid of the banks, all of them. I'm totally anti bank. The hard part is how do you explain this to people without alienating them when people think banks are good because they "give" us money? And the same empire that controls the banks controls the media, and the racketeering political system? The entire system is a sham and needs to be dismantled through a bloody revolution. Why beat around the bush, let's say what needs to be said. 

thatchmo's picture
thatchmo
Status: Gold Member (Offline)
Joined: Dec 14 2008
Posts: 414
Non-bloody revolution....

Careful what you wish for Mark.  I'm counting on the system in place, including the banks, collapsing of their own unsustainability and, hopefully, the awakening of "the people".  An unsuccessful bloody revolution will, at this point, possibly only result in the elimination of excess "trouble-makers".  At the American Revolution, both sides had muskets.  The people are "outgunned" now.  Hard to gain tactical advantage when we're all GPS-connected and video-ed at every turn.  Ghandi had a successful method as well.....Aloha, Steve.

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2365
Agreed BC...

Mark_BC said;

I have never agreed with the need for credit to get things done

Finite money systems with strong scarcity integrity, like Gold and/or Bitcoin, can always accommodate any size of economy, or any level of good growth, because the value of the money can shift up via deflation.  Bitcoin by design is divisible by 8 orders of magnitude, such that today, 0.1 Bitcoin is worth $57.  Given that 1.0 Bitcoin was nearly worthless (in dollar terms) just a few years ago.. one can see this deflationary, pro-saver effect in action.  The theoretical max. of 21M Bitcoins will always be enough to service the economy.. but the benefits of this deflationary process would go to everyday Bitcoin holders, and especially to savers.  Banks, and bankers, would lose all of their power in such a scenario.  

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford
Read more at: http://www.brainyquote.com/quotes/quotes/h/henryford136294.html
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford
Read more at: http://www.brainyquote.com/quotes/quotes/h/henryford136294.html

“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford
Read more at: http://www.brainyquote.com/quotes/quotes/h/henryford136294.html

Why this doesn't happen is well explained by Mark_BC.  We live in a world of -isms that serve to divide us and distract us.. when in reality it's this debt-based money system that lies at the root of almost all of our problems.  Our blindness to this is our biggest weakness.          

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 203
Beating the banks with Cob, rammed earth, straw bales, etc.



You don't need to be a carpenter (or skilled tradesman or even particularly physically fit) to build an inexpensive and beautiful house with natural, local materials.

The banks would have a lot less power and we would use a lot less materials and a lot less energy for heating and cooling, if building your own house became a popular thing to do. 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 4765
no more banks at all?

The free market has made it pretty clear that people want to outsource guarding their money (in whatever form its in), as well as making it easy to transfer between people without (once again) having to provide security for that operation themselves.

I'm guessing that you aren't really saying everyone must use only gold and silver and that there are no banknotes, no digital payments, no place to store your money, etc.

Given that, I'm curious as to which services that banks currently provide you find societally beneficial, and which "services" you find predatory and should be eliminated.

 

blackeagle's picture
blackeagle
Status: Silver Member (Offline)
Joined: May 16 2013
Posts: 208
Dirty pharmaceutical games

Dirty games: higher prices, stock shortages, unfair contracts, ... you name it.

Our societies are ageing and increasingly sick and the modern medical system is addicted to drugs (Which by the way, most of the time address only symptoms, not the deep causes)

Last year in Quebec we got a situation that would normally trigger strong reactions, but it went very soft. Here are the facts:

Health Canada closed a drug distributor for a few weeks in order to comply with some standards. Unfortunately for some hospitals in Quebec, this was their only distributor for one drug used in cancer treatment. They had to look for this drug elsewhere in the meantime. The usual price was around 40$CAD per dose. The new price from the only other distributor, was 4000$CAD (Not a typo! Three trailing zeros). Other hospitals were not allowed to share their stock with the hospitals in need because of bizarre contracts terms. All hospitals in Quebec belong to the same organization, so why they cannot share drugs? Even politicians did not step in.

At the end, the new distributor (temporary) did a favor: he lowered the price to 1000$CAD per dose. Politicians were satisfied by this "happy" ending.

Everyone was upset and frustrated by the weak reaction of the politicians and the health ministry. In a normal country, the government or hospitals would say "Go to hell!" and share their stocks until their usual distributor reopens.

Sometimes I think that courage and balls are so precious that Nature did not waste them... and unfortunately less and less people deserves them.

We can come with endless examples and nothing will change. Something must happen to go back to more normal ethics...

 

Christopher H's picture
Christopher H
Status: Silver Member (Offline)
Joined: May 29 2009
Posts: 146
That's where the tyranny of the building code comes in....

Yes, there are definitely ways that things can be done (usually they're the way that things USED to be done) that can work around the banks, the credit system, and even money to a large degree.  The problem then becomes legal codes -- like the building code -- that have been set up to literally outlaw all of those things.

I don't know about where you live, but where I live you MUST have a centralized heating system, you cannot rely only on, say, passive solar and a woodstove, or a Jean Pain system.  You MUST have a septic system if you do not have connection to sewer service.  You MUST have running water.  Without these things -- all of which cost beaucoup bucs -- you cannot get a certificate of occupancy.  That's the case even if you have alternative systems that you plan to use as primary ones -- you STILL have to have them.

It's all about empowering the professions over the layman, and more importantly, maintaining "real estate values" and the connected tax assessments.

Christopher H's picture
Christopher H
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Think deeper -- beyond money itself

One of the traps that I see many very thoughtful people falling into is the assumption that money is something that is needed on a widespread basis.  The historical truth, however, is that money was something that was typically rather rare, and that the overwhelming majority of exchanges were conducted outside of hard currency.  When I was studying early America while pursuing degrees in history, one of the things I was struck by was how often the term "mutually-shared obligations" kept popping up in descriptions of how people lived, especially prior to the Civil War.  This was also a prime theme in the writings of the late Joe Bageant, where he described the post-WWII Appalachia he grew up in as a place where "the prime currency was the calorie, not the dollar."

Of course, one of the prerequisites for stepping outside the monetary system is TRUST, and that is certainly in short supply in a society where most of us commute away from home for work and return to houses in which we shut ourselves in, barely interacting with our neighbors.  You have to have deeper relationships with people to operate in a system designed around paying it forward instead of settling every transaction at the moment of transference.  You also have to be willing to live a life that is much more focused on real necessities as opposed to conveniences and luxuries that we have mistakenly come to view as necessities.  But if you're really serious about a life without being a slave to banks, that's what you have to do.  And judging by the way that the banks and "progress" has crushed under foot every alternative system out there, I'm not even sure that's enough.

Time2help's picture
Time2help
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Deus Ex Machina
Arthur Robey wrote:

All consistent growth is exponential in that it must have a doubling time. Until it becomes exponential decay.

Exponential industrial, financial and economic growth has forced The Machine to extract womenfolk from their homes to fill cubicals .  To do this it has allowed mens' wages to deflate so that women are forced by economic circumstances  to leave their children. It has made a virtue out of a vice. Women are told that they can All break the Glass Ceiling. (OK men, enough ribaldry.That wasn't a joke.)

This has had the inevitable consequence of  producing young adults that are overly sensitive and emotionally fragile, useless to The Machine. Hence the Machine looks to other lands for labour or to automation.

Producing  healthy children is a sacred duty of womenfolk. If they don't then society becomes extinct.

In an existential crisis, such as all out war, removing women from their primary function can be justified. That we have chosen to do that is evidence that we unconsciously know that we are are (or rather, were) in just such a crisis.

But there will be consequence to depriving children of their mothers. There always is.

The crisis is over. We lost.

Buried within the Machine are the seeds of it's own destruction (hat tip environment and EROEI). Most are completely dependent on the Machine for their basic survival - pull that rug out and it' a done deal. It is hard (for me) to envision a transition to a equilibrium state with Nature without a large reduction in population.

I suspect that longevity of the Machine going forward is a function of decay rate. A slow decay rate is ideal from a systems stability perspective (assuming no large magnitude black swans). Faster elevates risk. Unless, perhaps, you go really fast. I would expect the continuation of slow burn as long as possible...and then a large step function. Possibly natural, but potentially a planned and executed one.

As an Owner why would you want to bother with 7 billion very upset, unwashed souls? Perhaps if you transitioned quickly enough, you might be able to maintain some key elements of the Machine. At least on paper or in your mind. It's only business after all.

pyranablade's picture
pyranablade
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Building Codes

Of course you are right Christopher H. Building codes and other laws incentivize and even force people to get their houses built by teams of professionals who use (and even waste) lots of non-local, manufactured products.

In The Hand-Sculpted House (Chelsea Green, 2002), the authors discuss ways to get around the building codes, the foremost being to avoid local officials if you can, while getting your neighbors in on some of your decision-making processes - that way the important people won't have any objection.

 

Michael_Rudmin's picture
Michael_Rudmin
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You might be right, SP, about ambien,....

... or it might be that the pharmacist decided to bbe neighborly and do you a double good turn, giving it to you for almost free, and disclaiming the cost to make you not feel beholden, thus freeing you to be a friend, not a debtor-of-favors.

If I were you, I'd reciprocate the friendship. More dog walks.  (and chew leathers, too, plea^H^H^H^H^H^H^H^H^H^H^H^H^H

 

Michael_Rudmin's picture
Michael_Rudmin
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Hotrod, my brother avoids glyphosphate like the plague.

In fact, considering that his symptoms including internal hemhorrage, and celiac/wheat intolerance are indistinguishable from glyphosphate poisoning, and they occurred after he overate bread and nothing else, and considering that grains are washed of glyphosphate, which washing does nothing to get rid of it...

...  I'd say that he considers that glyphosphate may BE the plague. 

So, I'd say more and more that as this happens, people are going to stop buying the wheat.  Eventually, this problem is going to overwhelm SOMETHING.

Hotrod's picture
Hotrod
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Roundup

It is a crime that Roundup can be sprayed on wheat right before harvest, being used as a dessicant to ensure easier and faster harvesting.  If you buy your bread at the store more than likely it has residual Roundup in it.  This may be one reason many people now can't stomach wheat products. 

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pinecarr
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Roundup: On oats as well as wheat

I hate to be the bearer of bad news, but glyphosate is also sprayed on oats.  See http://www.realfoodhouston.com/wp-files/2015/06/10/glyphosate-monsantos-roundup-is-applied-to-oats-not-just-wheat/

So all those warm-fuzzies I was getting buying Cheerios (whole grain, low sugar), and Old Fashioned Oatmeal for my son turned into alarm as I discovered I was feeding him products that were likely tainted with glyphosate.  BTW, I did find an alternative: Nature's Path Organic Oats.  See http://www.naturalnews.com/053721_glyphosate_Quaker_Instant_Oats_Silk_soymilk.html

But please be forewarned that some Organic grains are still contaminated with glyphosate.  Per the first article referenced above:

"Tropical Traditions, a supplier of organic foods and pastured meats, decided to test its grains and found that all of its commercial wheat samples were contaminated with glyphosate.  Glyphosate was also found in samples of organic grains, including barley, oats, spelt, and einkorn.  No glyphosate was found in its organic rye and millet.  Samples of organic wheat from small farms in Wisconsin were also free of glyphosate.  (source)"

Mark_BC's picture
Mark_BC
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Does anyone have any

Does anyone have any relatively non biased research on how toxic glyphosate really is to the human body? A decade ago we were told it's harmless and you can drink it. If you listen to some people today, just looking at it will give you cancer. I use it on occasion to control invasives.

Mark_BC's picture
Mark_BC
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davefairtex wrote: The free
davefairtex wrote:

The free market has made it pretty clear that people want to outsource guarding their money (in whatever form its in), as well as making it easy to transfer between people without (once again) having to provide security for that operation themselves.

I'm guessing that you aren't really saying everyone must use only gold and silver and that there are no banknotes, no digital payments, no place to store your money, etc.

Given that, I'm curious as to which services that banks currently provide you find societally beneficial, and which "services" you find predatory and should be eliminated.

 

Yes I was being a little facetious. I understand that people don't want to store gold coins in their houses and use them for transactions.

In my perfect world banks would exist only to be a repository for physical money, whatever form that is, NOT issued by the banks but by some other entity. And banks would be involved in administering the electronic representations of that physical money (equivalent to today's debit cards), whatever form that is, and transferring said money between people and countries. Providing an arena for simple, non-securitized commodity markets to operate.

I see no beneficial role for banks in society much beyond that.

Institutionalized interest returns on parking money somewhere would be illegal, not only because it's usurious, but because it is unsustainable in a finite world. No more fractional reserve money creation, no more debt-money at all other than unofficially through acquaintances.

Anyone who wants to invest their money in a real world venture and make a profit, hey no problem, but that isn't making money simply by sitting on money in the bank, that is pooling your money with other similar like-minded people and directly funding something.

Very explicitly write in the constitution that central banks shall not be formed and impose very strict rules on what private banks can do in order to limit their power and keep them limited to a very small sector of the economy, and prevent collusion to instigate market bubbles. Write everything we can in the constitution to avoid loopholes like which allowed the current tragedy to develop over the last century.

That's my perfect world which I know will ever happen, so we are forever banished to enslavement by the financiers until society breaks down so far that a coherent financial system can't be maintained.

davefairtex's picture
davefairtex
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banks, money, credit

Mark-

Ok, that's kind of what I thought you meant, but I wasn't sure.  :)

In this thought experiment, banks just store money, and provide a place that converts between digital money and physical money - services I find particularly useful, so I'm glad you didn't make them illegal.

I also heard you say that you give someone "other than banks" the power to create the banknotes.  Who would you give that power to?  And, related, what limits would there be on banknote creation?

Regarding borrowing & lending: free market has pretty clearly revealed that people don't want to all become lenders & loan collectors, any more than they want to guard their own pile of loot.  Enforcement of contracts is distasteful - when people don't pay, you want collection of your loan outsourced, especially if all you have to lend are small sums.  Plus, you really want someone else to validate the borrower.  At least, I do.  Collective lending just makes sense, just as collective money-security makes sense too.

I further claim that lending at interest is perfectly sustainable in a finite world if the loans are self-liquidating.  If I buy a computer that will help me to make $500/month, and I borrow $1000 dollars to do this - and without the computer, I can make nothing - that loan is self-liquidating.  Same thing with taxi drivers borrowing money to buy cars, and so on.  Eliminate borrowing, you have a lot fewer taxi drivers.

Likewise, there is the issue of credit.  I get the sense you don't like credit.  What about business credit, such as "30 day payment terms" for products that my (b2b) company produces?  Or credit for a farmer to buy seed from the seed company, payable when the crop comes in?  This sort of credit seems pretty important, as it reduces the capital required to start a business.  Otherwise, everyone has to save 100% of the capital required to start any business.  Presumably, the macro-effect of requiring all that capital for every startup venture to be saved means that the economy takes a whole lot longer to react to scarcity in a particular area.

Last point: if the world is a collection of economies, an economy where credit is illegal will most likely lose out to the others where it is not, because it will react as a whole much more slowly to any gaps in goods or services production.  People will see opportunity, but they will not have the savings piled up to take advantage of them.

davefairtex's picture
davefairtex
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imagination failure

Mark-

One last point:

That's my perfect world which I know will [n]ever happen, so we are forever banished to enslavement by the financiers until society breaks down so far that a coherent financial system can't be maintained.

I reject the premise that we cannot work towards imagining the world we'd like to see.  First we must imagine, and only then we can create.

Wasn't Nelson Mandela able to imagine the world he would help to create while he was in prison?  If he hadn't imagined it first, he certainly never could have created it later on.  These things just don't happen by accident.

Edwardelinski's picture
Edwardelinski
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Posts: 309
The millenialls distrust of banking and financial institutions.

There are now many new start-ups created by and for millenialls as an alternative to standard banking.Venture capital is flowing fast into these areas,Two that are off to a great start are simple and chime.Problem-Solution youth...Gotta love it...

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cmartenson
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Except for local zoning, etc
pyranablade wrote:



You don't need to be a carpenter (or skilled tradesman or even particularly physically fit) to build an inexpensive and beautiful house with natural, local materials.

The banks would have a lot less power and we would use a lot less materials and a lot less energy for heating and cooling, if building your own house became a popular thing to do. 

That's a good plan if and only if you live in an enlightened area with minimal, flexible zoning.  But even if you do, there's still the federal government weighing in.

The entire system is 100% geared towards assuring that you cannot escape the clutches of a predatory and serf-addicted system of banking.

Government regulations are responsible for adding $84,671 to the final price of a new single-family home, according to a report from the National Association of Home Builders.

According to the report, regulations implemented during the lot’s development are responsible for 14.6 percent of the total, while 9.7 percent is due to costs that accrue after the builder has purchased a finished lot.

“Regulations come in many forms and can be imposed by different levels of government,” explains the report. “At the local level, jurisdictions may charge permit, hook-up, and impact fees and establish development and construction standards that either directly increase costs to builders and developers, or cause delays that translate to higher costs.”

“The federal government can also impact the price of a home—for example, by requiring permits for stormwater discharge on construction site, which may lead to delays in addition to the hard cost of filing for a permit.”

The association applied the percentage increase due to regulation to home prices from Census data and found that regulatory costs in a home went from $65,224 in April of 2011 to $84,671 in March 2016—a 29.8 percent increase.

(Source)

First we can note that the minimum average cost of a new home cannot be less than $84,600...and that just gets you a bunch of permits and adherence to construction standards.  Actual building costs are extra, of course.

Second, that the nearly 30% increase in said cost over the five years between 2011 and 2016 alone is waaaAaay above the government imputed housing inflation for that period of time.

At any rate, may we get back to a time when people could build what makes sense to them, within reason, applying common sense and weighted trade-offs rather than whatever the heavily lobbied regulators can dream up.

Uncletommy's picture
Uncletommy
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And, so what should we do about it?

Racketeering has been going on for centuries. Anytime you get a select group, who wishes to control the supply or access to a supply of a given commodity to the masses, you have a racket. Call it a guild, cartel, union, regulator, what-have-you, it ends up the same; supply management. Most of the social ills of our human history are the result of this behavior. 

CM and JHK have touched on the downside, but we fail to acknowledge the upside behaviors that can lift us out of this collective mess. Western Christian history has demonstrated the typical response of small groups banding together with a benevolent philosophy to reject the exploitive/extractive system. Unfortunately, most human reactions have been violent and only replaced one tyranny for another. The successful ones have been agriculturally based, self reliant and locally based. JHK's, World Made By Hand, highlights this option and suggests a realistic solution. Getting back in touch with the land is essential in this quest. More "Featured Voices" on these topics would be welcomed

I applaud PP's efforts as a small contribution to these efforts and urge more of us to spread the word of this time tested response. Whether it be the Christian movements of the past and present(Amish, Anabaptist, Brethren, etc.) or Gandi's efforts or peasant movements, in general, it should be noted that there are realistic solutions to the racketeering proclivity endemic in our species. 

I'm out to the garden to dig some more spuds and onions that will be stored in a root cellar I built myself(without a permit).

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sand_puppy
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Story of building own home

Pyranablade and Chris' discussion above reminded me of a clever and very patient young man, Johnny Sanphilippo, who build his own home on the Big Island of Hawaii without a loan.  He worked as a housekeeper never earning over $20,000/yr.

...[F]or $3000 cash he bought himself an empty lot in a failed subdivision on the Big Island.

... the permitting office wasn’t as enthusiastic about allowing him to build small. So he had plans drawn up for a conventionally-sized home, plus a 400 square foot garage.  Then he just built the garage.

Once the inspectors signed off on his fully-equipped garage (which included a bathroom, utility sink, electricity, septic system and rainwater capture), he let them know he wasn’t planning on building the house. Then he set about swapping the garage door for sliding glass and the utility sink for a regular kitchen.

Instead of relying on a loan to buy a house up-front, he had to do it the slow way, in stops and starts as he worked to pay off he step of the process. First, he saved up for a foundation, then the shell, then septic, etcetera and today, 13 years later, the home is complete.  [He camped on the land in a tent during the early years, then after the foundation, frame and roof were completed, he "camped" inside the shell as he worked.]

Since no contractor wanted to take on a tiny house project, and because he couldn’t afford doing the project all at once, he hired people on an individual basis (construction worker, plumber, electrician, etc).

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Jim H
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Money system dynamics

I don't think that debt-based money is itself inherently evil or anything.. I just think that history has proven over and over again that it will be used by elites in the system to profit at the expense of the many.  If banks are well restrained, and you had truly free, market-based interest rates.. then we wouldn't have half the problems we face today.  One also needs a free market money that everyone can participate in to keep the debt-based money system honest.. i.e. you need freeGold.  I am not an advocate for a return to the Gold standard.. just let Gold compete as a free market currency as the no counter party (risk) money that it is. 

In the US most of us are under the illusion that our debt-based money has lasting value... it has pretty much worked for the last 45 years.  But when you look at the contemporary (since 1971) history of the US dollar as told by the interest rate chart, you see the story writ large of our money becoming worthless.  What do I mean by worthless?  I mean that it has no yield.. that you get paid nothing to, "lend" or deposit it in a bank.  Not only is it worthless - given our debt load in the US, and all Western nations.. there is no way the money masters could make money yield again given the box they (we?) have painted themselves into.  Money with counter party risk should never yield zero, nor less than zero (if the return on money in a savings account is 0.1%, and inflation is 1.5%, your real return is negative 1.4%). 

The story told by the chart below will not be told again with the money we have today.  It can't happen.  The writing is already on the wall - the money is worthless.  There is enough residual confidence in the system left among our PokemonGo playing population that it may yet be a while until the velocity (of money) starts increasing again, and dollars ultimately become the hot potatoes that they deserve to be... but that day will come.  

The money system had a crisis not a decade after being taken off the Gold standard.. and Volcker made a stick save by making money yield.. and making it yield a lot!  People who conservatively invested their life savings in long term bonds in the late 1970's were very well rewarded.  The party has gone on ever since, driven by lower and lower ave. interest rates.  Now the party has ended.. there is no way to make money yield again, there is no way to make bonds yield principle gains through further rate reductions.  No amount of rear view mirror modeling can explain what is happening now.. it has to be viewed more philosophically.  Our money system is screwed.  One can only appreciate the usefulness of Gold as a means to save your stored labor when you understand the dynamics, and the past and present status of our debt-based fiat money.       

      

United States Fed Funds Rate

 

 

Uncletommy's picture
Uncletommy
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Posts: 424
As to Pokemon Go. . .

" I fear the day when technology overlaps with our humanity. The world will just have a generation of idiots."    -  Albert Einstein

Cornelius999's picture
Cornelius999
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Posts: 357
You might be interested to

You might be interested to know SP that Ambien is the sleeper that the Seal who shot Ben Laden used on the helicopters to sleep between actions. According to the book he " wrote" which I don't believe anyhow. I use it myself on suburban missions ( which are no less taxing to my over-driven fears!) 

Also Joseph P Farrell has a book out next month about the Twin Towers puzzle. He has expressed the opinion somewhere that we might be " property".

 

 

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Michael_Rudmin
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Debt, evil, freedom, Fraud (Jim)

Jim, my take on debt is the following:

If debt is not fraudulent, then it impinges on the freedom of the borrower.  It is a version of slavery :  limited, in many cases, but still slavery. 

Therefore, it usually empower the lender, and disempowers the borrower.  That then places the borrower in a worse position. 

Is that evil?  Well, if we had a true jubilee every 50 years, then no:  lending would be reserved to be a form of charity... but not exactly justice.  Other than that, I think the slavery is the reason that debt tends towards "evil" inclinations. 

I don't have a fix.  Just an awareness.

aggrivated's picture
aggrivated
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HEADS UP! readers.

Great new book on positive thinking during the long emergency. Check out 'Surviving the Future', by David Fleming. He is a deep thinker and rubbed shoulders with the Transition Town folks.

Chris and Adam, see if you can get his editor Shaun Chamberlin lined up for an interview.☺

davefairtex's picture
davefairtex
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inherently evil

JimH-

I really have to agree with everything you said.

I think the issue was not "going off the gold standard", it was the conduct of the politicians that led directly to actually having to go off the gold standard.  Leaving the gold standard was simply the necessary consequence that followed the actions already taken.

I forget who made the observation, but humans love a windfall.

  • Buying something you can't afford, to make yourself feel better, using debt: a possession windfall.
  • Taking a drug to make you feel briefly happy: emotional windfall.
  • Eating something sweet because it tastes good: calorie windfall.
  • Hoping to make a quick buck flipping a house using ponzi debt: a monetary windfall.
  • Hoping to make a quick buck through playing lotto - same thing - another monetary windfall.

For a con to work, there must first be a greedy mark.  I don't see a lot of difference between bankers who engage in predatory lending, drug dealers, casino operators, or soda manufacturers.  They all focus on exploiting the weakness in people's desire to receive a windfall of some sort.  And the best way to find a greedy mark is if you could somehow manufacture a whole lot of them - to set out to make people weak in just the right way.

Make them feel unsuccessful, not good enough, sick, and so on.

So do we blame moral decay for all this, or is it something else?  Advertising flips all the right switches in human psychology, and it becomes "mind control meets human weakness."   Its hard to forego the windfalls, its even harder when you hear about them incessantly.

https://www.csun.edu/science/health/docs/tv&health.html

The average child sees 20,000 30-second commercials per year.

Evolutionary biology teaches us that children are more or less in a "programmable mode" when they are very young - so they can learn rapidly how to survive.  That's why they can learn 3 languages simultaneously.  Brain changes as they age.  So, hitting them with 20,000 commercials per year - well, that's mind control.

How far do we go to protect society from itself?

If we removed the mind control, would people still choose debt, and drugs, and massive amounts of sugary, fatty foods?

Maybe we're looking in the wrong place for the problem.  It might not be about "sound money", it might instead be about "clear thinking" - which would end up yielding a sound money system as a side effect of the way people made their decisions.

Imagine for a moment: a society without advertising.  People would have to buy things based on their own feelings about the product.

Imagine that.

 

Jim H's picture
Jim H
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Necessary to restate some of my points....

My words have been misinterpreted by Dave.  I said that debt-based money is not inherently evil, and I said that if banks were restrained, and the interest rate was freely determined by the market (and not by central banks, either directly as in short term rates, or through manipulations (like QE when it comes to long term rates) then we would only have half the problems we face today.

I did not say that bankers are not evil.. I think that they are for the most part.  Dave turned his, "agreement" with my post into a blame-the-victim (of banking) screed.  While on some level, it does take two to tango (a borrower, and a lender) the lender has all the power.  When my wife's father's second wife, then his widow, was given a loan for a house in Florida by a banker who completely made up a number on the application for her income, which in reality was near zero at the time... a transaction that ended up putting her in the poor house...  that was evil.  Does anyone not have a story within two degrees of Kevin Bacon about the evils of modern banking?  Was it not evil to influence our lawmakers to change the laws such that student loan debt is not subject to bankruptcy, right on the eve of a huge expansion of student loan debt?  The evil could fill a few books.        

Honest people in banking end up outside of banking pretty quickly;

  http://www.zerohedge.com/news/2016-08-18/why-deutsche-bank-whistleblower...

My second point was that we would only have half our problems were fractional reserve banking, and debt-based fiat money reformed but still left in place -  I should have been more explicit about what the other half of the problems are;  expandable debt-based fiat money always favors spending our future today.. and hence is inherently extractive towards the earth.  The other half of the problems in my analogy are the third E problems we face.  For this I don't really blame the bankers, because it's up to all of us whether we act as good shepherds of the earth, although bankers in league with corporations are probably a beast that requires further analysis in this regard.  We need to wake up to the fact that, "growth" most often means accelerated extraction, and spending our finite (and even our renewable) resources more and more quickly and un-sustainably. 

  

davefairtex's picture
davefairtex
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Posts: 4765
most bankers are evil?

JimH-

I did not say that bankers are not evil.. I think that they are for the most part.  Dave turned his, "agreement" with my post into a blame-the-victim (of banking) screed...

My post had some nuance in there that perhaps you missed.

Do you remember when I compared predatory lending (which is exactly what your mother-in-law experienced) to drug dealers and more generally, con men?  I'm not a big fan of con men.  What she experienced is not banking, its fraud, and it deserves prosecution and jail time.  While I think your relative might have avoided engaging with these people had she been paying attention to her inner voice (if it sounds too good to be true...it probably is), it was the con men who put her in that loan that was guaranteed to fail that were guilty in the eyes of the law.  They did this trick to a lot of people.  The con men should all be wearing orange jumpsuits, if the rule of law actually prevailed these days.

Again, what she experienced was not banking, it was criminal fraud.

Let me ask you directly.  Do you believe that making a loan on a property with 20% down, where the borrower is legitimately checked for ability to repay - is that evil?  Are the bankers who make such a loan evil?

How about a business loan - for buying equipment, say for a factory, a self-liquidating loan.  Is a banker making such a loan evil?  Is receiving such a loan an evil act?  Do you feel its unsustainable?  Is it bad for society?

There is all sorts of borrowing.  I believe some borrowing is useful to society - it lets society react rapidly to remedy scarcity in a particular area without having to wait for the savings to build up, by expanding the money supply.  Other borrowing is just to facilitate gambling or consumer purchases, which ends up being various levels of destructive to society.  That's how I see it anyway - and its taken a lot of discussions like this to wrap my brain around all of it and to get to this point.

I don't think much of the borrowing happening today is particularly constructive for society, and the sum total of the borrowing we've done has us in very deep water.  But that doesn't mean I'd get rid of all borrowing as a reaction.  Baby, bathwater, etc.

I do think the power of the bankers to expand (or contract) the money supply is an extraordinary privilege, and as such needs to be very closely regulated, and I do understand why people no longer wish to give the bankers this privilege because they have abused it so often.

To those people, I'm asking - in whom would you vest this power going forward?  A non-expandable money supply has consequences of its own.

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aggrivated
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Jim, half bad and such talk

Debt based money creates an untenable long term environment for humans.
The earth and the demands of our metabolism are enough to keep us busy without adding the artificial atmosphere of debt money for the greedy to afflict on the rest of us. No matter how we approach this, coming off an addiction is a painful process taken one day at a time.

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Jim H
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money

Dave said,

A non-expandable money supply has consequences of its own.

I disagree with the premise of this comment.  If the money is not (infinitely) expandable, like Gold, or Bitcoin, then it can expand it's reach via deflation.  It's just that deflation is not currently allowed in our conception of money.  There can easily be lending in a non-expandable money system..  Folks or entities with saved money can lend it to those who want to borrow it.  It's just that in the non-expandable system, speculation can be a very dangerous game, and lending standards would be much higher since the lenders are lending real capital (vs. thin air money).  See?   

Aggrivated.. I do agree with you.  Debt-based money will be our undoing based on the extractive behavior that it promotes.  It obscures the true value of the fish in the sea, the ores we mine, and the oil that we burn.     

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evils of debt based money

So its all fine to talk about "the evils of debt-based money", but the ability to expand the money supply to, for instance, put solar panels on the roof of your house - assuming you haven't amassed a pile of savings to pay for it directly - its a fairly nice feature.

It creates inflation, but as a trade off it also allows the economy to respond much more rapidly.   Solar panels are a perfect case of self-liquidating debt.  This seems like a total "proper use" for debt to me.  I'd say that's a societal benefit, both short and long term.

If we constrain what money can be created for, debt-based money ends up being just a tool, rather than automatically being some force of evil.

Is a gun evil?  The bullets?  Or does it depend on the use to which it is put?

I know, I'm swimming upstream here.  But this is the conclusion I've come to after looking at how the system works.  Losing debt based money - I'm really not sure you'd like the implications of the world that would create.  And really fast, too.

Someday I'll come up with a model and game you can all play.  Then we can experiment with these ideas and see how they'd play out.

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aggrivated
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Fiat money is founded on domination

Good money should be at its core based on a mutual agreement of value. Our current fiat currencies work only because the force of government is behind them. Many of the preemptive actions by these USA have been against those countries that have dared to challenge the dollar for international trade. If exchange is based on a commodity that requires work (printing excepted) then it has a much better chance as a stable medium of exchange in the long economic descent ahead of us.

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Time2help
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Save some time
davefairtex wrote:

Someday I'll come up with a model and game you can all play.  Then we can experiment with these ideas and see how they'd play out.

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aggrivated
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Competition of currencies

How long would fiat money last if other currencies were allowed to compete in trade. This is allowed in some countries. Hence the need for "money changers". May the best one win!

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davefairtex
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more like minsky

Well you can play monopoly.  I had something different in mind.  Steve Keen has a mini-economic computer modeling system he uses called Minsky.  Something like that, only more fun to play.  I've had something in mind for a while now.  I've just been working on other projects.

 

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davefairtex
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false claim

aggrivated-

How long would fiat money last if other currencies were allowed to compete in trade. This is allowed in some countries. Hence the need for "money changers". May the best one win!

Many of the preemptive actions by these USA have been against those countries that have dared to challenge the dollar for international trade. If exchange is based on a commodity that requires work (printing excepted) then it has a much better chance as a stable medium of exchange in the long economic descent ahead of us.

There are hundreds of fiat currencies out there.  They are all accepted, at some rate of exchange.  Exchange rates provide the discipline that the gold standard once provided.  Fiat is worth whatever "real stuff" you can buy with it.

I'm not saying our current fiat-only money system is great - but pretending "fiat won't be accepted" is one of those arguments that simply fails because of the overwhelming current evidence to the contrary.

And I'd say having the reserve currency is much more useful than having the USD be used in trade.  The two aren't the same thing.  And a reserve currency has nothing to do with fiat or non-fiat - reserve currency has to do with power.  If the US loses that power, that doesn't mean people won't accept USD.  It just means it won't be the reserve currency anymore.  It will be like the Ruble, or the RMB - accepted at some rate of exchange, but not stored as a central bank reserve.

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davefairtex
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Posts: 4765
expandable money

JimH-

I disagree with the premise of this comment.  If the money is not (infinitely) expandable, like Gold, or Bitcoin, then it can expand it's reach via deflation.

If there is a physically limited supply of gold (or money, or bitcoin) out there, and individuals decide they don't want to lend, it may well be the case there is just no money to borrow at that duration.  The savings itself will be the rate limiting item.

See, if you have no fractional reserve system, you must have duration matching - you must have people willing to lend their savings for a specific duration - for a solar panel system, maybe 10-15 years.  Will normal people be willing to tie up their cash for that long?

The amount of "long term savings" available will probably be very small.  And once it has been deployed, it is gone.  You go to the bank, ask to borrow money for 10 years, and they say: "sorry, we have none to lend - not at any price.  There just isn't any 10-year money here."

And if other nations around the world didn't follow suit, I believe they would have a competitive advantage.  Perhaps their savers would be less happy, but the society overall would end up being able to react much more quickly.  What they could do as a society would not be limited by the willingness of savers to have their money tied up for that period of time.  They could have panels on every rooftop, not limited by the amount of savings lying around.

Short term borrowing would probably be mostly ok.  Long term - it would be a disaster.  Nobody would be able to plan long term.

In a deflationary/fixed money system, the available savings at a given duration will - probably - always be the gating item.  Money will become the master, rather than the servant.

I understand why you want to do this, I like saving too, but I think it would have a whole bunch of consequences on the society that you did not intend to have.

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Jim H
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Posts: 2365
Dave, Dave, Dave, Dave......

I am approaching my limit before my next ad hom fusilade ensues....you said,

Exchange rates provide the discipline that the gold standard once provided.  Fiat is worth whatever "real stuff" you can buy with it

This is utter BS.  We live in a world of self-referential fiat currencies, yes.  But the central banks play together in this cesspool of exchange, doing swaps, creating, "liquidity" amongst themselves, etc.  As well, they play together to keep the Gold price suppressed.  If exchange rates were based on fundamentals, the Yen would already be toast.. but it's not, because the central banks are acting as one organism in order to keep the fiat game alive. 

It's a hall of mirrors.. to say that there is some kind of discipline involved is ludicrous.  It's a con game at it's end stage.  The only honest discipline is enforced when there is a free (non-paper) supply vs. demand Gold market price;

  https://www.amazon.com/Monetary-Elite-Golds-Honest-Discipline/dp/0976842...

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