Blog Archives

Christmas 2017: Why I’m Hopeful

Readers often ask me to post something hopeful, and I understand why: doom-and-gloom gets tiresome. Human beings need hope just as they need oxygen, and the destruction of the Status Quo via over-reach and internal contradictions doesn’t leave much to be happy about.

The most hopeful thing in my mind is that the Status Quo is devolving from its internal contradictions and excesses. It is a perverse, intensely destructive system with horrific incentives for predation, exploitation, fraud and complicity and few disincentives.

A more human world lies just beyond the edge of the Status Quo.

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The Problem Isn’t Populism: the Problem Is the Status Quo Has Failed

The corporate/billionaires’ media would have us believe that the crisis we face is populism, a code word for every ugly manifestation of fascism known to humanity. By invoking populism as the cause of our distemper, the mainstream media is implicitly suggesting that the problem is “bad people”–those whose own failings manifest in an attraction to fascism. If we can successfully marginalize these troubled troglodytes, then our problem, populism, would go away and the wonderfulness, equality and widespread prosperity of pre-populist America will be restored.

The problem isn’t populism–the problem is the status quo has failed 95% of the populace. Life isn’t wonderful, prosperous and filled with expansive equality except in the Protected Elite of the top 5% of technocrats, corporate executives, tenured academics, bureaucrats, financiers, bankers, lobbyists and wealthy (or soon to be wealthy) politicos.

The bottom 95% need a time machine to recover any semblance of prosperity.They need a time machine that goes back 20 years so they can buy a little bungalow on a postage-stamp lot for $150,000 on the Left and Right Coasts, because now the little bungalows cost $1 million and up.

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Which Rotten Fruit Falls First?

To those of us who understand the entire status quo is rotten and corrupt to its core, the confidence of each ideological camp that their side will emerge unscathed by investigation is a source of amusement. The fake-progressives (fake because these so-called “progressives” support Imperial over-reach and a status quo whose only possible output is soaring wealth and income inequality) are confident that a “smoking gun” of corruption will deliver their most fervent dream, the impeachment of President Trump, while Trump supporters are equally confident there is no “smoking gun.”

One camp is confident that the wily Clintons and their army of enablers, from former FBI Director Comey on down, will finally be brought to long-evaded justice for their various perfections of corruption and collusion: pay to play, and so on.

Clinton supporters are equally confident that there is no “smoking gun” that will bring down the House of Clinton, and by proxy, the organs of the Democratic Party.

The implicit historical model each camp is anticipating is of course Watergate, which unfolded with a dramatic inevitability that in retrospect almost seems scripted: a minor burglary led to the hubris of cover-up which led to the destruction of the Nixon presidency.

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Are We Fiddling While Rome Burns?

It turns out Nero wasn’t fiddling as Rome burned–he was 60 km away at the time. Did Nero Really Fiddle While Rome Burned?

The story has become short-hand for making light of a catastrophe, either out of self-interest (one theory had Nero clearing a site he desired for a palace with the fire) or out of a mad detachment from reality.

Are we fiddling while Rome burns? I would say yes–because we’re not solving any of the structural problems that are dooming the status quo. Instead, we’re allowing a corrupt, corporate mainstream media to distract us with fake “Russians hacked our election” hysteria, false “cultural war” mania, and a laughably Orwellian frenzy over fake news which magically avoids mentioning the propaganda narratives pushed 24/7 by the mainstream media–narratives that are the acme of fake news.

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State of Denial: The Economy No Longer Works As It Did in the Past

If there is one reality that is denied or obscured by the Status Quo, it is that the economy no longer works as it did in the past. This is the fundamental economic context of our current slide into political-social disintegration.

The Status Quo narrative is: the policies that worked for the past 70 years are still working today. Boiled down to its Keynesian state-corporate essence, the Status Quo economic narrative is simple:

All we need to do to escape a “soft patch” (recession) is for governments to borrow and spend more money to temporarily boost incomes and demand until the private sector gets back on its feet and starts borrowing and spending more.

To help the private sector, central banks lower interest rates so it’s cheaper to borrow and spend.

As soon as the private-sector borrowing and spending rises, we can raise interest rates and trim state fiscal stimulus (i.e. governments borrowing and spending trillions more than they did before the recession).

But the inconvenient reality is these Keynesian policies no longer work. Fiscal stimulus (governments borrowing and spending trillions more than they did before the recession) has continued for a decade–or in Japan’s case, almost three decades.

The Keynesian gods have failed, but the worshippers of these false idols have no other form of black magic to turn to.

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Our Society Is Sick, Our Economy Exploitive and our Politics Corrupt

In noting that our society is sick, our economy exploitive and our politics corrupt, I’m not saying anything you didn’t already know. Everyone who isn’t being paid to deny the obvious in public (while fuming helplessly about the phony cheerleading in private) knows that our society is a layer-cake of pathologies, our economy little more than institutionalized racketeering and our politics a corrupt auction-house of pay-for-play, influence-peddling, money-grubbing and brazen pandering for votes.

The fantasy promoted by do-gooders and PR hacks alike is that this corrupt system can be reformed with a few minor policy tweaks. If you want a brief but thorough explanation of Why Our Status Quo Failed and Is Beyond Reform, please take a look at my book (link above).

If you want an example of how the status quo has failed and is beyond reform, it’s instructive to examine the pharmaceutical industry, which includes biotech corporations, specialty pharmaceutical firms and the global corporate giants known as Big Pharma.

I hope it won’t come as too great a surprise that the pharmaceutical industry isn’t about cures or helping needy people–it’s about profits. As a Big Pharma CEO reported in a brief moment of truthfulness, We’re in Business of Shareholder Profit, Not Helping the Sick

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The More the Establishment Freaks Out Over Trump, the More Attractive He Becomes

The Establishment is freaking out about Donald Trump for one reason: they didn’t pick him. The Establishment is freaking out because the natural order of things is that we pick the presidential candidates and we run the country to serve ourselves, i.e. the financial-political elites.

Donald Trump’s candidacy upsets this neofeudal natural order, and thus he (and everyone who supports him) is anathema to the Establishment, heretics who must be silenced, cowed, marginalized, mocked and ultimately put back in their place as subservient debt-serfs.

With Trump ascendant, the serfs are selecting the noble in the castle on the hill. Outrageous! Unheard of!

You know the Establishment is freaking out when Establishment pundit mouthpieces like David Brooks and Francis Fukuyama are freaking out about Trump. David Brooks could not restrain his disdain for Trump on a recent Charlie Rose segment, in which he intoned (and I paraphrase) that Trump can’t put eight words together without referring to himself, i.e. he is not just a narcissist, but he is (take this, Trump!) a fragile narcissist— unlike people like Brooks, of course, who are solid, secure, wise, well-educated, erudite water-carriers for the status quo.

Policy heavy-hitter Fukuyama confesses the political system in the U.S. is broken but he can’t understand why the citizenry has selected the “singularly inappropriate instrument” (his description of Trump in the pages of Foreign Affairs) of Donald Trump to express their disdain for their neofeudal lords.

Well, Mr, Fukuyama, let me explain it to you: the debt-serfs have selected Trump precisely because the neofeudal financial-political nobility you represent consider him a “singularly inappropriate instrument”.

But, the pundits rage, he’s a narcissist. He’s fragile. (Now isn’t that a classic middle-brow slam from the hopelessly middle-brow (“I only sound middle-brow due to my starring role in the mainstream media; actually I’m brilliant beyond words”) Brooks.

Policy guru Fukuyama has a much better turn of phrase, of course: “narcissist” is way too common and middle-brow a critique at his level. Thus we get “singularly inappropriate instrument” (ooh, now there’s a sharpened blade that slips easily between the ribs).

Dear Establishment pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists: the more you label Trump as “singularly inappropriate,” the more attractive he becomes to the 81% who’ve been left behind by the financialized-globalized-neofeudal order that has so greatly enhanced your own wealth, influence and power.

Trump is attractive because the Establishment fears and loathes him. Why? 1) They didn’t pick him and 2) he might upset the neoconservative liberal hegemonyEmpire that the Establishment elites view as their global entitlement.

The elitists like Brooks and Fukuyama admit that politics have failed. But they believe the solution is more people like us in power. You know, reasonable, well-educated elitists who won’t stoop to get our hands dirty with laundered millions (for example, the Clinton Foundation).

The utter cluelessness of the professional apologists and punditry would be laughable if it wasn’t so pathetic: the more you fume and rage that Trump is unqualified, narcissistic, singularly inappropriate, etc. etc. etc., the more appealing he becomes to everyone who isn’t inside the protective walls of your neofeudal castle.

The people outside the cozy walls of the protected elites don’t care if he is unqualified (by the standards of those who get to pick our presidents for us) narcissistic, singularly inappropriate, and so on–they are cheering him on because you, the multitudes of water-carriers for the Imperial elites, the teeming hordes of well-paid, I-got-mine-so-shut-the-heck-up pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists, are so visibly afraid that your perks, wealth, influence and power might drain away if the 80% actually get a say.

Dear pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists: we’re sick of you, every one of you, and the neofeudal Empire you support. We want you cashiered, pushed outside the walls with the rest of us, scraping by on well-earned and richly deserved unemployment.

My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

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Will Any Future POTUS Matter (Other Than Launching More Wars)?

We are already experiencing the powerlessness of POTUS.

We all know the POTUS (President of the United States) has the power as Commander-in-Chief to engage the nation in senseless, costly, needless wars.We also know the POTUS has a media-saturated bully pulpit to set an agenda and fashion a cultural tone for the nation.

But beyond the power to wage war and dominate the media spotlight, does the President have the power to solve the structural problems that are eroding the nation’s economy and social contract?

This chart summarizes one such problem: wage earners are receiving a diminishing share of the nation’s output (GDP):

A second related problem is the national income that is flowing to wage earners is increasingly flowing to the top 5%:

If the president can’t solve the nation’s systemic problems, then he/she no longer matters. The President, outside of declaring war, is nothing but a source of “news” chum for the media feeding frenzy aimed at grabbing eyeballs to maximize advertising revenues for the media’s corporate owners.

Analyst Gail Tverberg explained why the political machinery of POTUS cannot change the downward trends in household earnings in a series of insightful essays, most recently Overly Simple Energy-Economy Models Give Misleading Answers.

Tverberg considers the costs of finance/debt and complex hierarchies in the matrix of energy production and consumption, and references the work of Joseph Tainter on the systemic impact of the rising cost of complexity.

In a similar vein, I have often mentioned The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization by Thomas Homer-Dixon.

In summary: successful civilizations generate sufficient surplus to invest in complex hierarchical communication-command-control mechanisms which boost productivity and generate additional surplus. The cost of these complex systems continually rises while the increases in production eventually plateau and decline in an S-Curve:

The net result is a society with higher costs and diminishing returns. Eventually the costs of maintaining the status quo exceed the benefits of maintaining the status quo hierarchy and the society decays and collapses.

My own work has focused on two dynamics of the cost of increasingly unproductive complex systems. One is privilege, which can be defined as unearned wealth and power. Privilege is by definition unproductive, and a drain on the economy and society. Once the privileged class (i.e. the protected class that shifts risks and taxes to the unprotected/non-elite classes) expands and social mobility decays, the economy collapses under the dead weight of the privileged class.

I covered the history and dynamics of this process in The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable (April 18, 2016).

The second dynamic is the destructive consequences of a self-serving political-financial elite that is structurally incapable of real reform because real reform will collapse the high-cost structures that enable the concentration of wealth and power.

I explain these dynamics in Why Our Status Quo Failed and Is Beyond Reform.

I know this runs counter to the media-supported delusion that POTUS is the most powerful person on Earth, but in reality it no longer matters who’s president. The inevitable collapse of a debt-based model of complexity, energy extraction and consumption is already baked in.

The only potentially positive role of any President would be to downsize the unrealistic expectations of the citizenry to align with real-world dynamics. But downsizing expectations doesn’t get you re-elected, so the political reality is that future presidents will no longer matter in terms of solving the critical problems we face in the coming decades.

We are already experiencing the powerlessness of POTUS: the campaign for the office of President has already been reduced to two poor players that strut and fret their hour upon the stage, a tale told by an idiot media, full of sound and fury, signifying nothing.

My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

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Why Real Reform Is Impossible: We Can’t Believe the Mighty Titanic Could Actually Sink

Why did passengers remain on the Titanic even as its bow sank deeper into the ice-cold Atlantic? They believed the experts and authorities because they wanted to believe the ship was “unsinkable.” And why did they want to believe the ship was “unsinkable”?

Two visceral realities fueled their misplaced faith in the ship’s supposed safety:

1) The warm ship seemed so mighty, and the alternative–open lifeboats drifting in the dark cold night–seemed so vulnerable, uncomfortable and risky.

2) It was much easier to believe the experts’ assurances that the ship was safe than it was to clamber into a small lifeboat and bob around the open Atlantic.

We all know which alternative turned out to be safe and which one was fatally unsafe. The apparently risky open lifeboats were the sole source of survival and the enormous, complex “unsinkable” ship sank, ending the lives of everyone who clung to the appealing fantasy that the mighty ship was too technologically advanced to sink.

We are all on a Titanic, a complex system that experts and authorities declare safe and unsinkable for all time. Our money, our government, our Social Security, our Medicare and our entire debt-based way of life is mighty and invulnerable. Those few who see the eventual need to prepare “risky” lifeboats are mocked and ridiculed.

But the status quo’s bow is already sinking into the ice-cold waters of reality.The only way the status quo can support the debt-based financial system and government that funds all these vast systems is if the economy creates 10 million more “breadwinner” jobs (in David Stockman’s definition, a job that earns enough to support a family of four) a decade.

These new jobs are needed to raise the additional $1 trillion per year in payroll and income taxes needed to keep the fiscal ship afloat, and to provide the household income needed to support trillions more in private-sector debt–new home mortgages, auto loans, student loans, credit card debt, etc.–that’s needed to support consumption.

If the status quo can’t create at least 10 million new breadwinner jobs a decade, it sinks just as surely as the Titanic, which was doomed the moment the fifth watertight compartment was ripped open by the iceberg.

And please don’t tell me we can raise $1 trillion in new annual taxes by “taxing the owners of the robots,” another “unsinkable” fantasy I dismantle in my books Why Our Status Quo Failed and Is Beyond Reform and A Radically Beneficial World.

Now that software and robotics are commoditized, the scarcity value of these tools and the goods they produce is plummeting. Take a look at profits in commoditized goods: they’re razor-thin, and getting thinner by the day. As the cost of software/automation tools drops, they become affordable to an ever-larger pool of owners/producers, which means the competition from new owners will increase until there is no profit at all.

And exactly how do you extract $1 trillion in phantom profits from “owners of robots” who happen to be overseas? The belief in “taxing the owners of robots” is identical to the doomed souls on board the Titanic believing the ship was unsinkable.

The belief in the status quo’s permanence is exactly like the belief in the Titanic’s invulnerability. The systems we depend on are so vast and seem so mighty, it doesn’t seem possible that they could unravel and fail. But their eventual unraveling and failure are already baked in and cannot be undone by the modest tweaks of what passes for “reform” in the status quo.

The financial realities of systemically stagnant jobs, incomes and tax revenues have already ripped a fatal gash below the waterline of the status quo. The bow is sinking but the parties on the First Class deck continue. The passengers in steerage are getting anxious because they see the cold water sloshing around the lower decks, but few on the upper decks care what mere steerage passengers are experiencing.

Unfortunately for those partying on the upper First Class decks, they are as doomed as the steerage passengers when the ship goes down.

As the supposedly risk-free status quo decays, the supposedly “risky” lifeboats– decentralized private-sector arrangements of multiple income streams derived from ownership of productive assets that are debt-free and not dependent on debt-based government funding or global corporate cartels–will be cooperating and collaborating with each other.

Those seeking lifeboats will benefit from the Mobile Creative credo: trust your network, not the corporation or the state.

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If You Want More Jobs and More Job Stability, Disrupt More, Not Less

Two recent studies reflect the ongoing rapid transformation of the U.S. economy: The New Map of Economic Growth and Recovery (eig.org)

The U.S. Labor Market Is Far More Stable Than People Think (itif.org)

I’ve addressed the dynamic mix of technical and entrepreneurial skills, social and financial capital and infrastructure of opportunities required to successfully navigate this transformation in my books Get a Job, Build a Real Career and Defy a Bewildering Economy and The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.

Here’s the problem in a nutshell: job growth, new businesses and wage gains are becoming increasingly concentrated in a small number of geographic regions and a narrow class of workers / entrepreneurs while the overall economy struggles to maintain productivity gains, which are ultimately the only sustainable source of prosperity.

the productivity growth rate has been slumping since 2005.

Longer term, productivity gains have flowed to the top 5%–those workers and entrepreneurs with higher levels of education, ownership of assets and access to cheap credit:

This chart shows the concentration of income in the top tier: the top 5% have garnered the gains while the incomes of the bottom 95% have stagnated.

The overall employment picture has changed for the worse: the percentage of the populace that’s employed has fallen from peak periods.

The number of workers with full-time jobs has stagnated in the 2000s, breaking a 50-year trendline of steady growth of full-time jobs.

The growth of new businesses (annual change in the number of firms) has also cratered: business creation never recovered in the “recovery.”

The number of new businesses in the US is falling off a cliff

Growth in jobs and new business has become increasingly concentrated in a handful of high-population metropolitan counties. In the high-growth early 1990s, half of all new businesses sprouted in 125 counties nationwide. In 2002-2006, the number of counties that were home to half of all new enterprises fell to 64. In the “recovery” years of 2010-2014, half of all new firms arose in a mere 20 counties nationally–an astonishing concentration.

The point of The U.S. Labor Market Is Far More Stable Than People Think is that disruption generates more stability in the job market, not less. The obvious stagnation of employment and wages for the majority of workers has created a feeding-frenzy of potential explanations and causes, and this has led to all sorts of proposed policy tweaks.

The point here is: if you want growth and stability, disrupt more, not less. The vast majority of policy tweaks are ultimately aimed at protecting privileged classes from disruption and reducing disruption of the status quo–in government, higher education, healthcare, defense, etc.

Reducing disruption to protect the privileged status quo is akin to poisoning the patient to “protect them from harm.” The only way to successfully navigate a rapidly transforming economy is to embrace disruption by making it easier and cheaper to disrupt the protected status quo.

In my book The Nearly Free University and the Emerging Economy: The Revolution in Higher Education, I lay out a blueprint for reducing the cost of college by 90% while greatly improving the value of that education.

It’s Time to Ditch 4 Years of Costly College for Directed Apprenticeships (June 2, 2016)

One reason why jobs and entrepreneurial are increasingly concentrated in counties with high densities of population and capital is these locales possess the infrastructure of opportunity I describe in my book Get a Job, Build a Real Career and Defy a Bewildering Economy— the traits author Eric Weiner explored in his book The Geography of Genius: A Search for the World’s Most Creative Places from Ancient Athens to Silicon Valley.

I have often discussed the cultural capital and decentralized, dynamic models this great transformation favors, for example: Flexible Labor Is the Future (June 1, 2016)

In essence, we have a choice: 1) try to freeze history in its tracks, so those who are currently privileged remain privileged. This will slowly strangle the economy and increasingly concentrated gains in the hands of the few. Or 2) embrace disruption of the status quo as the only path to widespread prosperity and stability.

A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

 

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Why Real Reform Is Now Impossible

It’s difficult for well-meaning pundits to abandon the fantasy that meaningful reform is possible. Indeed, a critical function of the punditry and corporate media is to foster the fantasy that the status quo could be reformed if only we all got together and blah blah blah.

As I explain in my new book Why Our Status Quo Failed and Is Beyond Reform, real structural reform would trigger the collapse of the status quo. (As a reminder, the status quo benefits the few at the expense of the many.)

But there’s another dynamic that makes reform impossible. I’ve prepared a chart to explain this dynamic:

Central banks have transformed the market–in stocks, bonds, commodities and risk–into the signaling mechanism that tells us all is well. Even though the real-world finances of the bottom 95% continue deteriorating, a rising stock market and suppressed measures of risk signal that the economy is doing well. If you’re not doing well, it’s your personal problem; the status quo is fine and needs only minor tweaks.

Elevating the market into the oracle of economic health creates a systemic risk:If the market tanks, the status quo is called into question. People start asking, is it truly a wonderful arrangement that benefits us all, or is it really just a skimming machine that funnels money and wealth from the many into the voracious maws of the few?

Central banks thwart this existential danger to the status quo by rescuing the market every time it approaches the market clearing event level. (see chart) In a market clearing event, risky loans and bets are liquidated, credit dries up, risk soars and the price of assets falls to levels that once again make fundamental sense.

Market clearing events are a necessary part of a healthy credit and asset-allocation system. If the market is never allowed to clear away the dead wood of mal-investments, high leverage, nose-bleed valuations, bad bets and risky loans that should never have been issued, all this dead wood eventually chokes off healthy expansion.

The problem for central banks is a market clearing event pushes markets to levels that call the entire travesty of a mockery of a sham status quo into question. That is too dangerous to risk, so central banks quickly defend the fantasy that markets only drift higher, stopping any market clearing event in its tracks.

This leaves the economy increasingly vulnerable to the financial equivalent of an uncontrollable forest fire that burns away all the collected dead wood that has been protected by the central banks.

At some difficult to predict point, a random financial flame ignites the accumulated dead wood and the markets are torched in a conflagration so intense not even massive central bank intervention can extinguish the flames.

Structural reform is only possible when markets and sentiment crash far below the market clearing event level. Meaningful reform only becomes politically, economically and socially possible when the status quo has failed so obviously and so painfully that even its most entrenched defenders concedes that the choice has boiled down to either full-blown revolution or meaningful reforms that limit the power of the few at the top of the wealth/power pyramid.

The pyramid by the number of people in each wealth bracket:

The pyramid by the assets and income held by each wealth/income bracket:

But the process of real reform is quickly hijacked by vested interests once the markets recover back to the market clearing event level. Once the crisis has passed, the well-oiled machine of lobbying, grift, graft and campaign contributions kicks into gear and waters down or co-opts the reforms into PR facades designed to fool the masses into believing the reforms will work as advertised (for example, all the “reforms” passed in the aftermath of the 2009 meltdown: thousands of obfuscating pages of Obamacare, bank regulations etc.)

The only time meaningful reform is possible is in a crisis that reveals the true nature of the status quo, and central banks will create as many trillions of dollars, yen, yuan, euros etc. as are needed to erase that moment of clarity and truth.

The endless bleating of well-paid pundits in the corporate media about “reform” is just more circus designed to distract us from the much colder truth:the status quo is beyond reform. The choice is either collapse or well, collapse: letting the status quo strip-mine the bottom 95% will eventually lead to collapse and so will structural reforms that deprive the few of their power to create near-infinite sums of money and credit for their cronies.

My new book is #2 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, a 20% discount thru May 1, $8.95 print edition) For more, please visit the book’s website.

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The Status Quo Has Failed and Is Beyond Reform

That the status quo–the current pyramid of wealth and power dominated by the few at the top–has failed is self-evident, but we can’t bear to talk about it.This is not just the result of a corporate media that serves up a steady spew of pro-status quo propaganda–it is also the result of self-censorship and denial.

Why do we avoid talking about the failure of the status quo? We know it is beyond reform, and we’re afraid: afraid that the promises of financial security cannot be kept, afraid of our own precariousness and fragility, and afraid of what will replace the status quo, for we all know Nature abhors a vacuum, and when the status quo crumbles, something else will take its place.

We all prefer the comforting promises of vast central states. No wonder so many Russians pine for the glory days of the Soviet Union, warts and all.

But the central bank/state model has failed, and history can’t be reversed. The failure is not rooted in superficial issues such as which political party is in power, or which regulations are enforced; the failure is structural. The very foundation of the status quo has rotted away, and brushing on another coat of reformist paint will not save our societal house from collapse.

Yet those who benefit from our status quo (or hope to benefit from it upon retirement) naturally deny it has failed, for the reason that it has yet to fail them personally.

So we pretend to not understand that all unsustainable systems eventually collapse, and hope that the next central bank policy–negative interest rates, or bank bail-ins or helicopter money–will postpone it.

But the writing is already on the wall for us to read: these are the tell-tale signs of systemic failure leading to systemic collapse:

 

  • We keep doing more of what has failed spectacularly.
  • What began as emergency measures are now permanent policies.
  • The returns on status quo solutions are diminishing to less than zero.
  • Social mobility has eroded.
  • We have lost social cohesion and shared purpose.

 

But the failure runs even deeper: Our status quo is not only failing to solve humanity’s six core problems– it has become the problem.

To explain why this is so, I wrote Why Our Status Quo Failed and Is Beyond Reform, a new book that’s focused (90 pages) and affordable, i.e. the cost of a latte ($3.95 Kindle ebook, $8.95 print edition).

Why can’t our status quo be reformed? There are two primary reasons:

1) Those benefiting from the current arrangement will resist any reforms that threaten their share of the pie–and meaningful reforms will necessarily threaten everyone’s slice of the pie.

2) Reforms that actually address the structural flaws will bring the system down, as the status quo can only continue if its engine (permanent expansion of debt and consumption) is running at full speed. Once the engine stalls or even slows, the system collapses.

This is unwelcome news not just to privileged insiders–and the harsh reality is thatour status quo exists to protect the privileges of the few at the expense of the many–but to everyone who hopes to benefit in some way from our status quo’s cornucopia of promises.

So we cling to the dangerous hope that all the promises can be met by some future magic, and cocoon ourselves in an equally dangerous denial that collapse is inevitable. We don’t just want to avoid the decay and collapse of all the happy promises–we want to avoid the responsibility of taking part in shaping the replacement system.

We all want to wallow in the false security of one form of the old Soviet Union or another. Call it Japan, or the Eurozone, or the U.S.A., or Russia, or the People’s Republic of China–they’re all versions of the doomed Soviet model of central planning, propaganda and supression of anything that isn’t supportive of the status quo, i.e. dissent.

The truth is the usual menu of reforms can’t stop this failure, so we have to prepare ourselves for the radical transformations ahead. The decay and collapse of our status quo is not the disaster we assume; rather, it is good news for the planet and everyone who isn’t in the privileged elites, as the collapse will clear the way for a much more sustainable decentralized system that is already visible to those who know where to look (crypto-currencies, local community economies, etc.).

The decay phase of the status quo (i.e. the present) offers us a magnificent opportunity to fashion alternative systems that operate in the shadow of the status quo, making use of technologies such as the Internet. Alternative systems can arise without challenging the status quo; indeed, sustainable, decentralized systems offer open-minded elements of the status quo new models and new partners.

My own proposal for a replacement system is called CLIME–the Community Labor Integrated Money System. Whether you agree with my proposal or not, the point is that we have to wake up from our propaganda-induced slumber and take responsibility for being part of the solution rather than passively clinging to the problem, i.e. our status quo.

You can find our more about Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle ebook, a 20% discount thru May 1, $8.95 print edition) on the book’s website. The book is #2 on Kindle short reads -> politics and social science.

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