Thursday, August 30, 2012

Warriors and Heroes

Two inspiring videos came across my Facebook page this morning. Forget Lance Armstrong, this man is my hero:

Will Allen: The Urban Farmer from Spark Project on Vimeo.

And this interview has me so inspired, I'm ready to put on my princess warrior costume and go into battle:

Higher Ground

Hurricane Isaac just brushed by. Only a few days ago, it seemed that he was headed straight for us and so we prepared. We spent two days carrying tools and books and the artifacts of a lifetime to our second floor. My husband boarded up our windows while I filled the pantry with food, the first aid kit with supplies and the refrigerator with containers of water. Then we hitched up the boat and headed for higher ground. By the time we left home, Isaac had already changed course and was no longer a direct threat, but it only takes a 5 foot surge to inundate our house; predictions for our area were a 3-6 foot surge. Why take a chance?

We came home the next day to a house that was high and dry. Instead of just putting everything back where it was, we are going to take this opportunity to do some deep cleaning -- and to get rid of some of the stuff that no longer serves us.

Not everyone was as lucky as we were. The low-lying areas of Louisiana are still getting pounded by Isaac's slow moving progress, relentless rains and winds. Even here, the wind is still whipping up white-caps and bending palms.

I walked out to our dock this morning and paid my respects to Isaac's power, and it came to me that there is a lot we can learn from storms.

*Even the most educated predictions are never wholly accurate -- each storm is unique and while we may project the path and potential of a storm, there are always unknowns.

*It is wise to heed the warnings. We may not know exactly what is coming, but being prepared and having options is always a smart thing.

*While storms bring great destruction and lasting change, there are always silver linings. That may be really cliché, but true nonetheless.

So the lessons of a storm: Be prepared, be flexible, accept that the future cannot be known with any certainty, and look for the good that comes in a storm’s wake. I also believe that storms can be messengers. If so, then the message of Isaac is that the time has come to move to higher ground -- both literally and figuratively.

Thursday, August 16, 2012

Yet One More Time

Okay, I've finished reading Korowicz's 78 page paper and I'm still processing. There’s some interesting stuff on what Korowicz means by ‘collapse,’ a term I’ve had a hard time understanding (emphasis mine):
As this paper is opening up a discussion about a collapse in the globalised economy, it would be useful to have a definition of what collapse might be. Following Tainter and Homer-Dixon we could associate collapse with a sudden loss of complexity. However, there has been confusion in such studies where collapse has been also identified with a break-up of empires but which did not significantly alter the socio-political complexity of the constituent parts....

A systemic collapse in the globalised economy implies there is connectedness and integration. It also requires contagion mechanisms; these have been framed within the trophic web model. (In our framework we are not considering global pandemics, nuclear war or asteroid impacts, for example). It should be born in mind that a collapse could have intermediate states, characterized by partial breakdown and semi-stable states. However, here we are just outlining broad features.

The two other considerations are how big a fall has to be for it to be considered a collapse and over what time period. A global systemic collapse as framed here is different from much of the word's common usage in relation to the current crisis - a relatively sudden fall in income, a significant rise in unemployment, and a forced shift in a societies' previously held expectations of what the near-to-medium term holds. However, the operational fabric continues to operate as before, supermarkets are re-supplied, money works, and a diversity of complex goods and services can operate.

Rather, drawing upon section III.1, it can be argued that collapse happens when a system crosses a tipping point and is driven by negative feedbacks into a new and structurally and qualitatively different state, one with a different arrangement between parts and a fall in complexity. The operational fabric could cease to operate and the systems that are adaptive to maintaining our welfare could cease or be severely degraded. As a society, we would have to do other things in other ways to establish our welfare. Functions and specialities, a diversity of goods and services, and complex interdependencies would be lost.

Korowicz goes on to describe what such a collapse might look like (again, emphasis mine):

We consider one scenario to give a practical dimension to understanding supply-chain contagion: a break-up of the Euro and an intertwined systemic banking crisis. Simple argument and modeling will point to the likelihood of a food security crisis within days in the directly affected countries and an initially exponential spread of production failures across the world beginning within a week. This will reinforce and spread financial system contagion. It is also argued that the longer the crisis goes on, the greater the likelihood of its irreversibility. This could be in as little as three weeks. . . .

Consider briefly a 'soft-to-mid-core' (Spain, Italy.....Belguim, France?), disorderly default and contagion in the Eurozone, coupled, as would be likely, with a systemic global banking crisis. There would be bank runs, bank collapses and fear of bank collapses; uncertainty over the next countries to default and re-issue currency; plummeting bond markets; a global market collapse; and a global credit crunch. Counter-party risk would affect trade, just as it would affect the inter-bank market. However, production and supply-chain networks are far more complex than the banking and shadow banking system.

Within days there could be a food security crisis, health crisis, production stoppages and so on within the most directly impacted countries, and the number of such countries would rise. Those with access to cash would clear out supermarkets in panic. Many would immediately suffer as we now hold little cash and have small home inventories. Supermarkets could not re-stock, and even if they could, there would be declining availability of fuel for transporting goods. Hospitals adapted to JIT would also run low on critical supplies and staff might not be able to get to work. Pandemic modeling has shown that removing at random only small numbers of a population can cause cascading failure of functions across an economy. Lack of inputs and people required for production would also begin to shut factories within days. Governments, emergency services, and the public would by and large be shell-shocked. Without serious pre-planning, a government would be unable even to provide emergency feeding stations for weeks. There would be growing risk to critical infrastructure.

Imports and exports would collapse in the most exposed countries and fall for those at risk. It would also cut global trade as Letters of Credit dried up. The longer the crisis went on the more countries would be at risk. But once the contagion took hold, it would be very difficult for the ECB/ IMF or governments to stop; it would be a large-scale cascading failure at the heart of the global financial system.
Okay, so what do I think? First of all, there is a part of me that is saying, “Who are you to have an opinion? You don’t know Jack Shit about any of this,” and the other part of me is saying, “What, am I just supposed to take things on faith and swallow them whole? And if I’m going to do that, which camp speaks the Word of Truth? Should I just eenie-meanie-minie-mo, grab an opinion and away I go?

So at the risk of exposing the depths of my ignorance, I’ll wade in. I believe K’s analysis of our systemic risk is solid. Anyone that is paying attention can see that our globalized financial system and economy are zooming down a one-way street that ends in a brick wall cleverly camouflaged as Endless Prosperity Blvd. I’ve been aware of this for some time -- because our financial structure is based on ever increasing levels of debt and because the ability to service debt is dependent on growth and because there are real world physical constraints to growth, a crash is inevitable -- the biggest question becomes ‘when?’ and the logical answer seems to be ‘soon.’ It is obvious that the world’s financiers are attempting in every way they can to shore up those countries most at risk and will continue to do so for as long as it works. It is often said that they are merely kicking the can down the road, but no one knows how long before they reach the dead end. In the meantime, confidence in the game they are playing keeps the market afloat.

So what happens when kicking the can only results in a stubbed toe? Things will start to unravel, international banks and agencies will do what they can to contain the damage, and the optimism of Wall Street will be strained and perhaps broken. The market is so volatile these days with all the instantaneous trades courtesy of our whiz-bang toys that panic can spread faster than an Australian wildfire. Not that it will, but that it might. I am not sure K is right, though, when he describes the speed at which the supply chain might break apart. It seems to me that our shared mythology, the one that says all problems are temporary and that growth will resume any minute now, is so strong that it will carry us for much longer than one might expect. Some how, some way, we will patch things together and make them work. For a while, at least. Although the supply lines will eventually begin to fray, factories will stay open as long as they can, international trade will limp along, and businesses may shed some marginal employees but won’t close entirely until they have no other choice. At some point, however, our unfounded optimism is going to founder -- and as the waves of a new reality begin to wash over us, panic will set in. I just don’t think it will happen as fast as K predicts. Neither do I believe that our infrastructure will begin to crumble within the time frame he suggests.

I also don’t believe that any government would be able to do much to prevent the collapse. JMG wrote about the measures taken by the US government back in the 30’s and I don’t see how they would be effective today. First of all, banks are no longer national but international and have more real power than that of most nation states. Secondly, seizing control of a bank drowning in toxic debt does nothing to enrich a government, nor does, quite frankly, the seizing of gold even if one could do that these days without inciting armed rebellion; we haven’t been on a gold standard for a long, long time. Even assuming that a government would have the political will to respond in a timely manner -- or that any government action would be seen as a legitimate use of authority in today’s anti-government climate -- how could a government, itself already trillions of dollars in debt, restore viability to a crashing financial system?

So I seem to come out somewhere between Korowicz and JMG -- and I don’t think they’re really all that far apart to begin with.

Assuming that what we are speaking of is a collapse, most likely in the financial sector, that leads inexorably to a new stasis however unstable and temporary, I do think it is a matter of time. The questions then become how soon, how fast, how bad? As for how soon, my best guess is anytime between later today and three years from now. If I’m generous, I’ll give it five. As for how fast, I think the first stage, the collapse of the financial sector, which includes Wall Street, could happen within hours of something triggering a national default and/or a panicked sell-out, or it could drag on for months with heroic efforts being made to contain the damage. As for how bad, I really don’t know. In part, it depends on timing. If things fall apart over a period of months, and if it is summer and local foods are available, and if there is a steady downturn between now and then that accustoms folks to survival thinking and creative solutions, we might not see actual starvation, at least not here in America -- there is already starvation in this world, just not here.... If it happens with a sis-boom-bah, during the winter when heat and food are more critical, and if there are natural disasters on top of an economic melt-down, we could see a more pronounced denouement.

So now that I've hashed through it all, yet one more time, does anything change -- or is this just a self-indulgent intellectual version of a dystopic video game?

Sunday, August 12, 2012

I Ought to Know Better

We went out in the boat today, and as we motored in, we passed the houses of friends and neighbors. Some of the houses look more like hotels than homes, and the boats moored to their private docks are yacht class. If I were a casual observer, I might think, "Damn, these people have it made!" The casual observer wouldn't know that Larry is in a battle for his life with leukemia, or that Steve's wife, weakened by MS, died when she was swept from their house during hurricane Ivan. They wouldn't know that Eddie's promising son found his life permanently altered when a car crash left him brain damaged and unable to earn his own way in the world. It struck me how easy it is to judge, and misjudge. Not that I don't do it, but that I ought to know better.

Saturday, August 11, 2012

One of Those Days

I once had a friend named Donna. Donna and I used to take long walks in the woods and talk about anything and everything. She was as interested as I in everything from world affairs to the paranormal; she was extremely intelligent and well-informed. When Donna spoke, I listened, and when I spoke, she listened. We argued and disagreed and together created new perspectives and gained new insights that changed how we saw the world. That changed us.

Some days I miss Donna more than words can say. This is one of those days.

Mulling It Over

John Michael Greer had another thought-provoking post this week, and I am still mulling it over. This is actually his second response to a paper by David Korowicz, which I am still in the process of reading. The first time around, JMG had this to say:

Korowicz argues, if I may oversimplify his careful prose, that the current global financial system is a tottering mess that could come apart at the seams in no time flat, and it’s under stress already from a variety of factors, including peak oil. If and when it comes apart, he suggests, the entire structure of letters of credit and currency flows that supports global trade in little luxuries like enough food to eat could quite readily come apart also, producing a fiscal cardiac arrest that could shatter supply chains and bring most nations’ economies to a screeching halt in a matter of days or weeks.

Is this a plausible scenario? It’s considerably more than that, for a close equivalent happened in late 1932 and early 1933 in the United States.... as banks folded one after another, the basic trust that makes a credit-based economy function evaporated; nobody could be sure if the bank that received their deposits or their loans would still be there the next day, bank runs followed, and the whole economy shuddered to a halt....

Could that happen again, on a global scale? You bet. It’s the sequel, though, that didn’t get into Korowicz’ analysis. Faced with the imminent reality of national collapse, the US government did not sit on its hands, which is what those with the capacity to do something are always required to do in fast collapse theories. Instead, it temporarily nationalized the entire American banking system, declared that all assets held by the banks were owned by the government until further notice, made private ownership of gold by US citizens illegal, and ordered every scrap of gold in the country much bigger than a wedding ring sold to the government at a fixed, below-market price, with stiff legal penalties for anybody who tried to hang onto their gold stash....Flush with seized bank assets and confiscated gold, the government poured money into the nationalized banks, which could then meet every demand for funds, stopping the panic in its tracks.

It is this argument that JMG continues in this week's post:

Korowicz is quite correct in suggesting that the current global financial system is a house of cards that could easily come crashing to the ground, taking a quadrillion dollars or so of imaginary wealth with it and dealing the world’s industrial societies a staggering blow.

It’s purely his suggestion that this could cause the global economy to freeze up, not for weeks, but for years or even longer, that strays out of the realm of realism into territory mapped out well in advance by Western civilization’s penchant for apocalyptic fantasies. In the real world, of course, governments facing sudden financial collapse don’t just sit on their hands and make plaintive sounds; they take action, and there are plenty of actions they can take ... and while it’s always popular to say "It’s different this time," I hope my readers recall how often, and inaccurately, these same words get used in the not unrelated field of speculative bubbles.

At the risk of sounding like another deranged adherent of apocalyptic fantasies, I am going to say, "It's different this time."

It's different this time because of scale. Everything is bigger and more connected and more interdependent now than it was in the 1930's; it may be a tired maxim, but true nonetheless, that the bigger they are, the harder they fall -- which is the whole concept behind 'too big to fail.' The failure of a giant creates a chain reaction that can quickly devolve into collateral damage on a previously unknown scale.

It's different this time because of the speed at which things happen now -- the current speed of international communications would have been inconceivable a few decades ago. Take, for example, the coronation of Queen Elizabeth in 1953. At that time, extraordinary measures were taken to share the event with Canadian subjects:

Millions across Britain watched the coronation live, while, to make sure Canadians could see it on the same day, RAF Canberras flew film of the ceremony across the Atlantic Ocean to be broadcast by the Canadian Broadcasting Corporation, the first non-stop flights between the United Kingdom and the Canadian mainland. In Goose Bay, Labrador, the film was transferred to a Royal Canadian Air Force CF-100 jet fighter for the further trip to Montreal. In all, three such voyages were made as the coronation proceeded.
source Wikipedia

Contrast that to someone today using a smartphone to record the Queen's Diamond Jubilee and posting it on Facebook moments later.

And last, but not least, it's different this time because of the now precarious state of governmental legitimacy, a topic which JMG also addresses at length in this week's post:

A successful political system of any kind quickly establishes, in the minds of the people it rules, a set of beliefs and attitudes that define the political system as the normal, appropriate, and acceptable form of government for that people. That sense of legitimacy is the foundation on which any enduring government must build, for when people see their government as legitimate, no matter how appalling it appears to outsiders, they will far more often than not put up with its excesses and follow its orders.

So the question becomes, if the financial sector were to fail, and if the government were to attempt to react massively and quickly enough to stave off economic collapse, would gun-toting Tea Partiers hand over their gold and allow their banks to be nationalized by an Obama administration? Or a Romney administration, for that matter? Or would we have an armed revolt just-in-time to ensure cascading disaster?

Not sure you're right on this one, JMG.

Tuesday, August 7, 2012

More Garbage

I really don't care that Ann Romney's horse is in the Olympics. I'm not even interested in whether or not Mitt Romney continued to work at Bain Capital, shipping jobs overseas, after he said that he had left. And if I never see his tax returns, that's okay with me. As for Obama's remark "You didn't build that," it was awkwardly put, but so what? And much as we would like a scape goat, the slow job growth really isn't his fault.

What I care about are the issues no one ever mentions -- climate change and the way it is already affecting our weather, the dire consequences of continuing to burn fossil fuels, the horrific environmental impacts of fracking for gas, mountain scalping, and the wringing of black sludge from tar sands -- irreversible impacts not only to the land itself, but to our waters, turning one of our most valuable resources into toxic cesspools. I care about our dying oceans, our melting glaciers, and the growing hole in the ozone layer. I care about corporations gone amuck -- buying our elections, writing our laws, shutting down competition, controlling our food sources and engineering food itself. I care about the erosion of civil rights -- the violations of our freedom to assemble peaceably, to speak freely, to bargain collectively, and to vote democratically. I care about the legacy of our generation and I care that no one, NO ONE, is talking about these things on a national stage.

When are we going to get real?

Monday, August 6, 2012

Smoke and The Dollar Store

James Howard Kunstler has a way with words. I often find him a bit overbearing and overblown, but I always admire the craftsman's work. Having lived in Europe for most of my adult life, I found today's post exceptionally entertaining and his images incredibily apt.

That Old Martial Spirit

By James Howard Kunstler
on August 6, 2012 8:48 AM

A great orgasm shuddered through the money world last week when Mario Draghi paused between scamorza con arugula tidbits to remark that the European Central Bank (ECB) would stop at nothing to keep the financial blood of Europe circulating. Of course you wonder how many pony glasses of Campari he knocked back before that whopper came out. The markets squirmed with glee. I suppose it feels good to have quantities of smoke blown up your ass.

This is the last month of the Great Pretending over on that lovely continent of exquisitely preserved towns and the corniche winding down to the crashing green sea, and the lunch table under the grape arbor... I mean, compared to, say, the universal slum vista of tilt-up, strip-mall America along the deafening highways, with the wig shops, tattoo dens, pawn shacks, dollar stores, parking lot swap-meets, and supersized citizens waddling through the greasy 100-degree heat of a new climate regime. When things blow, as you may be sure they will, at least the Europeans will sink amid all that loveliness while the American experience will be more like getting flushed down a toilet.

Check, Please

Good article on 'the power of negative thinking,' though I do think it might be more accurately entitled 'the dangers of positive thinking.' Maybe not quite the same impact . . .

Wearing rose-colored glasses, wallowing in wishful thinking, expecting to get something for nothing used to all be considered the behavior of fools -- nowadays, the positive thinking/visualization mindset pervades our culture to the point where realism is suspect and any suggestion of negative consequences is regarded as an invitation to disaster. We are exhorted to avoid any and all dire predictions lest they become self-fulfilling prophecies of doom. Time for a reality check.