Is the Recovery Real?
I don’t want to rain on Wall Street’s parade, but I’m a bit suspicious of the current economic recovery boomlet. When 20% of U.S. personal income (chart above) is coming from Government transfer payments (social security, unemployment compensation, etc), you’ve got to wonder about what happens when all the government stimulus runs out at the end of the year.
I know that the stimulus was critical to our survival, but unless we start creating private sector jobs, we’re pretty much screwed. All the wonderful talk about the glories of globalization will look pretty hollow to Main Street, when only Wall Street is benefiting.
Stephen Roach, the great Morgan Stanley Economist who was exiled to Hong Kong for his bearish views, still manages to be heard.
In the face of a massive labor market shock to jobs and wage earnings, together with the bursting of property and credit bubbles, the consumption share of the U.S. economy is likely to fall by five full percentage points of gross domestic product — from its current record of 71.2 percent to the pre-bubble norm of 66 percent.
This should reduce trend growth of real consumption from the almost 4 percent pace of the pre-crisis decade to 1.5 percent to 2 percent over the next three to five years. No other consumer in the world is capable of filling this void.
I personally believe that our dependence on the Mall Economy was foolhardy, so this “new frugality” is welcome. But we must not underestimate what a huge sea change it will be. A smart piece from a Chicago Tribune writer, Gail Marksjarvis, reflects on the potential mindset of the kids I teach, watching their parents retirement go up in smoke.
Researchers Paola Giuliano of UCLA and Antonio Spilimbergo of the International Monetary Fund, in a National Bureau of Economic Research paper looking at recessions from 1963 to 2006, found that young people who live through downturns tend to doubt their control over their careers. Unlike people who have lived through sweeter economic circumstances, the youths of recessions tend to look at career success as luck rather than a result of personal action.
As I have said before, we are in the midst of an Interregnum–”The old is dying and the new cannot be born”. The path to an economy of saving and investment away from the binge of debt and consumption will require huge structural adjustments. We cannot have a whole generation of students believing success is just a casino game, even though that is the constantly repeated message of our Reality TV culture. The American struggle, since Emerson published his essay on Self Reliance in the 1820’s is to prove that individual development and collective wellbeing are complimentary not contradictory goals. We have not often succeeded, but when we have, as in the Depression years or during World War II, we have found a national unity that was extraordinary.
We can find it again.
I agree completely! The economy will not have any real and sustainable economy until the jobs that were lost are recovered. Wall Street and the Government want to make people believe that the recovery has already started. Until people are put to work again, any recovery is (very) temporary.
It appears that the banks (Wall Street) wants us to believe that the recovery is well under way so they can rip-off the American People again!
I have been writing on my blog about the situation…
http://rodriolguin.wordpress.com/2009/12/01/one-inconvenient-truth-about-the-great-recession/
http://rodriolguin.wordpress.com/2009/12/10/keeping-score-bank-of-america-2-points-american-taxpayers-0-points/
I agree completely! The economy will not have any real and sustainable economy until the jobs that were lost are recovered. Wall Street and the Government want to make people believe that the recovery has already started. Until people are put to work again, any recovery is (very) temporary.
It appears that the banks (Wall Street) wants us to believe that the recovery is well under way so they can rip-off the American People again!
I have been writing on my blog about the situation…
http://rodriolguin.wordpress.com/2009/12/01/one-inconvenient-truth-about-the-great-recession/
http://rodriolguin.wordpress.com/2009/12/10/keeping-score-bank-of-america-2-points-american-taxpayers-0-points/
What a beautiful essay of your own, Jon. Read it twice. Second time still better than the first.
Three breezy thoughts:
1. When you say that “we” have to “start creating private sector jobs” am I right in assuming that by “we” you mean the nation as
a whole, and not the Party in particular? Because if you think that modern Democrats have any notion of how to “create” jobs, then you’re smokin rope. The last big Democratic jobs project was a muscle play called TSA, andLokik where that got us.
If’n, on t’othah han’, you mean “we” as the national collective then there’s just one way to “create” jobs, and that’s to hiccup. You know the drill: you pump the employers by tightening your own belt; you wait breathlessly; and then maybe THEY will create “new jobs”.
So which is it?
2. I dig how you put the term “new frugality” in quotation marks, over against the reignant Mall Economy. Your quotation so nicely encapsulates the idea that even the simple sanity of self-reliance just couldn’t possibly catch on in Woodland Hills unless it were “new”.
3. This is still more immaterial, but it goes to your point about the demoralization of your students. So many of the war veterans I’ve known–practically all of them, and that’s a lot–have relied on your word, “luck”. Almost universally they’ve attributed their survival to “luck” and when you ask the happy or even prosperous ones their secrets of success, almost invariably they answer with that word. So Giuliano and Slimbergo, I’d argue, are an exercise in youthful inexperience. What passes for advanced studies these days is a discovery of the obvious on the part of the coddled.
What a beautiful essay of your own, Jon. Read it twice. Second time still better than the first.
Three breezy thoughts:
1. When you say that “we” have to “start creating private sector jobs” am I right in assuming that by “we” you mean the nation as
a whole, and not the Party in particular? Because if you think that modern Democrats have any notion of how to “create” jobs, then you’re smokin rope. The last big Democratic jobs project was a muscle play called TSA, andLokik where that got us.
If’n, on t’othah han’, you mean “we” as the national collective then there’s just one way to “create” jobs, and that’s to hiccup. You know the drill: you pump the employers by tightening your own belt; you wait breathlessly; and then maybe THEY will create “new jobs”.
So which is it?
2. I dig how you put the term “new frugality” in quotation marks, over against the reignant Mall Economy. Your quotation so nicely encapsulates the idea that even the simple sanity of self-reliance just couldn’t possibly catch on in Woodland Hills unless it were “new”.
3. This is still more immaterial, but it goes to your point about the demoralization of your students. So many of the war veterans I’ve known–practically all of them, and that’s a lot–have relied on your word, “luck”. Almost universally they’ve attributed their survival to “luck” and when you ask the happy or even prosperous ones their secrets of success, almost invariably they answer with that word. So Giuliano and Slimbergo, I’d argue, are an exercise in youthful inexperience. What passes for advanced studies these days is a discovery of the obvious on the part of the coddled.
Jon–you have been a nay sayer on the economy for over a year and while you were right going into the downturn you also completely missed the upturn–while I don’t believe that there will be a great acceleration we have clearly passed the bottom and are growing our way out of this recession–growth will be stunted however as we work our way out of the real estate mess and have to deal with a government that will over regulate, over spend and over tax— not a good formula for growth
Jon–you have been a nay sayer on the economy for over a year and while you were right going into the downturn you also completely missed the upturn–while I don’t believe that there will be a great acceleration we have clearly passed the bottom and are growing our way out of this recession–growth will be stunted however as we work our way out of the real estate mess and have to deal with a government that will over regulate, over spend and over tax— not a good formula for growth
Doug: what upturn? Yes, the stock market is up, and yes, manufacturing is up a little bit from last year’s terrible lows. But we are still losing jobs; those of us who have jobs still are more unhappy in our jobs than at any time in the 22 years that polls have been made of such things. And housing and real estate are not growing.
To Jon, I’d ask you to do a little simple arithmetic. If the new frugality has us buying less junk, what will we make to buy instead? If we are buying less, period, then how can factories reopen to give people work? And if we are buying less, period, then how can shops stay open and continue to pay clerks? And if the shops close, how can malls meet their loan payments? And if the mall owners go bust, and the malls close, how can the banks to whom they owe money stay solvent?
The only way I see out of this is to make more of what we consume. And the only way I see to do that is through laws that are commonly decried today as ‘protectionism’ and are blasphemy according to all economists and the top CEOs and investors on Wall St.
But is there any other way to do it — looking at the simple math of a growing population and shrinking consumer market?
Doug: what upturn? Yes, the stock market is up, and yes, manufacturing is up a little bit from last year’s terrible lows. But we are still losing jobs; those of us who have jobs still are more unhappy in our jobs than at any time in the 22 years that polls have been made of such things. And housing and real estate are not growing.
To Jon, I’d ask you to do a little simple arithmetic. If the new frugality has us buying less junk, what will we make to buy instead? If we are buying less, period, then how can factories reopen to give people work? And if we are buying less, period, then how can shops stay open and continue to pay clerks? And if the shops close, how can malls meet their loan payments? And if the mall owners go bust, and the malls close, how can the banks to whom they owe money stay solvent?
The only way I see out of this is to make more of what we consume. And the only way I see to do that is through laws that are commonly decried today as ‘protectionism’ and are blasphemy according to all economists and the top CEOs and investors on Wall St.
But is there any other way to do it — looking at the simple math of a growing population and shrinking consumer market?
Upturn? We’re at the bottom of a hole with two trap doors still to open – consumer credit and commercial real estate. Better yet, three: climate change.
What’s the annual interest service on our USD 12 trillion debt ? I’ll bet it’s more than UHC from cradle to grave.
The Mall Economy is a transfer of our wealth to the lowest cost supplier. Where are the investments in our future economy and what is that economy going to be? Green? We’re buying our wind power equipment from China!!
This is going to be a multi-generational shift in what exactly the USA means. Right now we’re a Military-Industrial-Ponzi scheme that exports death and entertainment.
Upturn? We’re at the bottom of a hole with two trap doors still to open – consumer credit and commercial real estate. Better yet, three: climate change.
What’s the annual interest service on our USD 12 trillion debt ? I’ll bet it’s more than UHC from cradle to grave.
The Mall Economy is a transfer of our wealth to the lowest cost supplier. Where are the investments in our future economy and what is that economy going to be? Green? We’re buying our wind power equipment from China!!
This is going to be a multi-generational shift in what exactly the USA means. Right now we’re a Military-Industrial-Ponzi scheme that exports death and entertainment.
How many young people (see Warstler, e.g.), or any of the rest of us for that matter, especially the fractions that have “succeeded” or “moved into positions of power” or both, are even close to internalizing any kind of thinking that would meld the current version of “self-reliance” and the New Tribalism as presently preached and understood, with any notions of advancing the “collective well-being?”
You mentioned not long ago, in passing, that there does not seem to be much of a market for even discussions of sustainable-economy-think. Have we as a species gotten to that point where the only perceived reason to interact with others is to get something off them? And yes, I know there are many examples of altruism and generosity, and even companies (often owned by a family or the employees and not via the forced 401k participation) where things are better and even government offices where some senior person catalyzes an actual I’m-from-the-government-and-I-am-actually-going-to-help generall attitude.
What’s the medicine for social entropy? The talk is all about “recovery,” but that implies going back to the shit we have been doing to dig ourselves into this 2×6x6 foot hole we are looking up out of. For individuals, with what they’ve got left of their own personal life spans, their hope is most likely to be able to rip and claw some more gobbets of meat off the dying animal before the other teeth-and-claws get it.
Not the stuff of “recovery.” It’s the wrong mental model, and I doubt there’s much chance of changing it for something more suitable and sustainable.
How many young people (see Warstler, e.g.), or any of the rest of us for that matter, especially the fractions that have “succeeded” or “moved into positions of power” or both, are even close to internalizing any kind of thinking that would meld the current version of “self-reliance” and the New Tribalism as presently preached and understood, with any notions of advancing the “collective well-being?”
You mentioned not long ago, in passing, that there does not seem to be much of a market for even discussions of sustainable-economy-think. Have we as a species gotten to that point where the only perceived reason to interact with others is to get something off them? And yes, I know there are many examples of altruism and generosity, and even companies (often owned by a family or the employees and not via the forced 401k participation) where things are better and even government offices where some senior person catalyzes an actual I’m-from-the-government-and-I-am-actually-going-to-help generall attitude.
What’s the medicine for social entropy? The talk is all about “recovery,” but that implies going back to the shit we have been doing to dig ourselves into this 2×6x6 foot hole we are looking up out of. For individuals, with what they’ve got left of their own personal life spans, their hope is most likely to be able to rip and claw some more gobbets of meat off the dying animal before the other teeth-and-claws get it.
Not the stuff of “recovery.” It’s the wrong mental model, and I doubt there’s much chance of changing it for something more suitable and sustainable.
Is there some motion, other than Brownian, in the area of building sustainable energy infrastructure? Even saying or writing those last three words gives me the creeps, it’s so econo-jargony, but stuff like solar panels and windmills and earth-sheltered structures and hydroponic farming systems all take actual hardware, things you can touch and break the skin of your knuckles on when you apply wrenches to them. Mechanical and relatively simple electrical/electronic stuff. Things and structures we Nacerima could in theory make right here at home, if only tax codes and destruction of older notions of corporate governance and ever shorter profit-measurement horizons and bigger expectations weren’t loaded up against them. And “we” still need a shitload of steel and concrete to fix a bunch of bridges and overpasses and roadbeds and ancient water and sewer lines and plants, and so forth. “Make more of what we consume?” More Chinese cell phones and Wiis and Giant Flat Screens? or maybe recalibrate the notion of consumption? I have this horrible feeling there is a seed crystal coalsecing somewhere, that might precipitate an enormous change in the entire nature of the supersaturated “consumer” soup in favor of something clearer and purer and unladen with the toxins that muddy it now.
What a wonderful challenge this bit of making lemonade with lemons ought to be. ‘Cept the folks in the “financial industry (sic sic sic sic)” have drained off all the sugar. Stopping that rathole up, maybe with a few perfectly-coiffed heads redolent of expensive colognes, might go a long way toward that mimesis and renascence that might help us now.
Is there some motion, other than Brownian, in the area of building sustainable energy infrastructure? Even saying or writing those last three words gives me the creeps, it’s so econo-jargony, but stuff like solar panels and windmills and earth-sheltered structures and hydroponic farming systems all take actual hardware, things you can touch and break the skin of your knuckles on when you apply wrenches to them. Mechanical and relatively simple electrical/electronic stuff. Things and structures we Nacerima could in theory make right here at home, if only tax codes and destruction of older notions of corporate governance and ever shorter profit-measurement horizons and bigger expectations weren’t loaded up against them. And “we” still need a shitload of steel and concrete to fix a bunch of bridges and overpasses and roadbeds and ancient water and sewer lines and plants, and so forth. “Make more of what we consume?” More Chinese cell phones and Wiis and Giant Flat Screens? or maybe recalibrate the notion of consumption? I have this horrible feeling there is a seed crystal coalsecing somewhere, that might precipitate an enormous change in the entire nature of the supersaturated “consumer” soup in favor of something clearer and purer and unladen with the toxins that muddy it now.
What a wonderful challenge this bit of making lemonade with lemons ought to be. ‘Cept the folks in the “financial industry (sic sic sic sic)” have drained off all the sugar. Stopping that rathole up, maybe with a few perfectly-coiffed heads redolent of expensive colognes, might go a long way toward that mimesis and renascence that might help us now.
JTM-I think what we need is some serious “sustainable economy think”. What I was trying to get at is that people are already changing their habits towards a simpler lifestyle. But the economists and politicians are freaked out by this, because they don’t know of another economic way except the Mall Economy.
JTM-I think what we need is some serious “sustainable economy think”. What I was trying to get at is that people are already changing their habits towards a simpler lifestyle. But the economists and politicians are freaked out by this, because they don’t know of another economic way except the Mall Economy.
Pond-What if we start making Wind Turbines and solar panels that we export to Spain and China? An economy doesn’t have to just make cheap consumer goods. We will continue to be an agriculture exporter and if we could figure out a way to get paid for our software, movies and music that might be a source of income as well.
Pond-What if we start making Wind Turbines and solar panels that we export to Spain and China? An economy doesn’t have to just make cheap consumer goods. We will continue to be an agriculture exporter and if we could figure out a way to get paid for our software, movies and music that might be a source of income as well.
Doug- I did not miss the upturn. I’m just not convinced that there is anything to this boomlet other than government spending.
Doug- I did not miss the upturn. I’m just not convinced that there is anything to this boomlet other than government spending.
Jon, as you know, I’ve posed the question here several times: What about a “steady state” economy? One that doesn’t need growth in disposable products to thrive? What if you bought a phone and used it for 20 years or more? My parents did… What if you bought a relatively “state of the art” stereo…and kept listening to it for 25 years or more? I do, and it’s a great system… What if you inherited a nice dining room table that’s been in the family for 4 or 5 generations and you then didn’t have to go buy some POS from WalMart and throw it out in 5 years? Extend that to all your furniture if possible… What if the population declined a bit to where there isn’t quite the pressure on freeways and water systems? Or what if it just stayed the same? Clearly there’s a point where Malthus kicks in, but what about a 50% Malthusian crisis where we just get uncomfortable with all the people? Oh, we’re past that point, aren’t we? What if the religious nutters didn’t feel impelled to over populate to increase their numbers by their god’s will? Oh, the pope and the imams and all the like won’t go for it…
Jon, as you know, I’ve posed the question here several times: What about a “steady state” economy? One that doesn’t need growth in disposable products to thrive? What if you bought a phone and used it for 20 years or more? My parents did… What if you bought a relatively “state of the art” stereo…and kept listening to it for 25 years or more? I do, and it’s a great system… What if you inherited a nice dining room table that’s been in the family for 4 or 5 generations and you then didn’t have to go buy some POS from WalMart and throw it out in 5 years? Extend that to all your furniture if possible… What if the population declined a bit to where there isn’t quite the pressure on freeways and water systems? Or what if it just stayed the same? Clearly there’s a point where Malthus kicks in, but what about a 50% Malthusian crisis where we just get uncomfortable with all the people? Oh, we’re past that point, aren’t we? What if the religious nutters didn’t feel impelled to over populate to increase their numbers by their god’s will? Oh, the pope and the imams and all the like won’t go for it…
Hello Rick! I am originally from Mexico and many of the practices you mentioned I still see with many of my family members who live in Mexico and other parts of the world. Here in America we have been “conditioned” to think of everything as disposable and convenient. Your argument is impeccable in its logic. However, logic is something that is at odds with human nature.
Hello Rick! I am originally from Mexico and many of the practices you mentioned I still see with many of my family members who live in Mexico and other parts of the world. Here in America we have been “conditioned” to think of everything as disposable and convenient. Your argument is impeccable in its logic. However, logic is something that is at odds with human nature.
JT – You’re the first person I’ve seen discussing the really long terms effects of this crisis. From what I understand, recent graduating classes have all been “the largest in history”, with peak high-school matriculation having hit in 2009.
So not only do you have the biggest employment meltdown in living history – and one with no short or medium-term prospects for recovery – you also have the largest influx of (potential) new workers that the U.S. economy has ever seen. And unlike every other generation, this one is starting with crippling levels of debt, much of which was supplied by the very institutions that wrecked the economic prospects of those now holding the bag.
I also understood that that there was an average discrepancy in lifetime earnings of $100k between those who started their careers in the downturn on 1982 and those who started in 1986. So timing counts for a lot, with bad timing having an astonishingly long-lasting effect.
In other words, the convergence of a unprecedented demographic surge, and unprecedented debt load, and a nearly unprecedented financial implosion is going to have a defining effect for decades to come.
Back in February of 2008, the Washington Post ran a piece about the cultural shifts that could be expected when the millennial generation came into its own. It included a few good observations, and one that bears serious reconsideration.
The piece goes on to cite that civic generations tend to have a much more positive view of government as an institution, and see its capacity in a more favorable light.
Again, that was from 2006, and written about in early 2008. But if there’s one thing that 2009 demonstrated, it’s the astonishing incapacity of our government (and our Congress in particular) to even anticipate – let alone contend with – our most pressing structural issues. And it also demonstrated the extent to which the common good is the last thing on the minds of representatives who seem entirely consumed with securing re-election funds, and of their staff members who are chiefly interested in their post-Congressional private-sector career prospects.
I don’t think any of this changes the underlying moderate, sober, and civic minded outlook of millennials. At the same time, it’s simply not possible to maintain broad trust in a system that hurt so many so severely at such a critical juncture in their lives. That benign faith noted by the Magid Associates has – I suspect – been shattered for good.
For this group, it’s no longer about having faith in Government. Rather, it’s about having faith in possibility of trustworthy government – and a formidable commitment to seeing one come to pass.
That may start here, with bill S.752 (Durbin’s “Fair Elections Now” act). Then again, this may get buried. But if it does, it won’t be by people who can claim that time is on their side. And once post-crsh Boomers realize the extent to which they’re going to depend directly on their grown children for retirement support, they can’t expect to carry on electing ‘ideologically pure’ but wildly dysfunctional candidates. Nor can they continue looking the other way when flat-out corruption becomes an issue.
Put simply, there will be far to much at stake to tolerate a system that can’t do better than terminally sub-prime.
And based on what’s noted in that 2008 Post piece, it’s the right-leaning Boomers who are going to have the hardest time with this adjustment. The gay bashing / crusading military / war on drugs / tough on crime / torture (of Arabs) is fine crowd has lost their claim to economic probity. And with that gone, they’ve go no remaining capacity for governance.
JT – You’re the first person I’ve seen discussing the really long terms effects of this crisis. From what I understand, recent graduating classes have all been “the largest in history”, with peak high-school matriculation having hit in 2009.
So not only do you have the biggest employment meltdown in living history – and one with no short or medium-term prospects for recovery – you also have the largest influx of (potential) new workers that the U.S. economy has ever seen. And unlike every other generation, this one is starting with crippling levels of debt, much of which was supplied by the very institutions that wrecked the economic prospects of those now holding the bag.
I also understood that that there was an average discrepancy in lifetime earnings of $100k between those who started their careers in the downturn on 1982 and those who started in 1986. So timing counts for a lot, with bad timing having an astonishingly long-lasting effect.
In other words, the convergence of a unprecedented demographic surge, and unprecedented debt load, and a nearly unprecedented financial implosion is going to have a defining effect for decades to come.
Back in February of 2008, the Washington Post ran a piece about the cultural shifts that could be expected when the millennial generation came into its own. It included a few good observations, and one that bears serious reconsideration.
The piece goes on to cite that civic generations tend to have a much more positive view of government as an institution, and see its capacity in a more favorable light.
Again, that was from 2006, and written about in early 2008. But if there’s one thing that 2009 demonstrated, it’s the astonishing incapacity of our government (and our Congress in particular) to even anticipate – let alone contend with – our most pressing structural issues. And it also demonstrated the extent to which the common good is the last thing on the minds of representatives who seem entirely consumed with securing re-election funds, and of their staff members who are chiefly interested in their post-Congressional private-sector career prospects.
I don’t think any of this changes the underlying moderate, sober, and civic minded outlook of millennials. At the same time, it’s simply not possible to maintain broad trust in a system that hurt so many so severely at such a critical juncture in their lives. That benign faith noted by the Magid Associates has – I suspect – been shattered for good.
For this group, it’s no longer about having faith in Government. Rather, it’s about having faith in possibility of trustworthy government – and a formidable commitment to seeing one come to pass.
That may start here, with bill S.752 (Durbin’s “Fair Elections Now” act). Then again, this may get buried. But if it does, it won’t be by people who can claim that time is on their side. And once post-crsh Boomers realize the extent to which they’re going to depend directly on their grown children for retirement support, they can’t expect to carry on electing ‘ideologically pure’ but wildly dysfunctional candidates. Nor can they continue looking the other way when flat-out corruption becomes an issue.
Put simply, there will be far to much at stake to tolerate a system that can’t do better than terminally sub-prime.
And based on what’s noted in that 2008 Post piece, it’s the right-leaning Boomers who are going to have the hardest time with this adjustment. The gay bashing / crusading military / war on drugs / tough on crime / torture (of Arabs) is fine crowd has lost their claim to economic probity. And with that gone, they’ve go no remaining capacity for governance.
The short answer is “no, the recover probably isn’t real” if, by “real” you mean something that will take care of itself happily and for the foreseeable future.
Based on nothing but instinct, I suspect that the stock market will carry on producing anemic which is how long it will take the deadwood of corporate cultures defined by finance-driven MBA’s to be purged for good.
By 2020, I suspect the top economic ranks will be formed by those coming from a fundamentally more entrepreneurial set, who will have spent a decade concerned not with swift recovery, or the fake gains of mergers and acquisitions, but with the more long-lead efforts that go into real regeneration.
Gen X was always supposed to be a transitional one. Perhaps this is the transition that will actually define them.
The short answer is “no, the recover probably isn’t real” if, by “real” you mean something that will take care of itself happily and for the foreseeable future.
Based on nothing but instinct, I suspect that the stock market will carry on producing anemic which is how long it will take the deadwood of corporate cultures defined by finance-driven MBA’s to be purged for good.
By 2020, I suspect the top economic ranks will be formed by those coming from a fundamentally more entrepreneurial set, who will have spent a decade concerned not with swift recovery, or the fake gains of mergers and acquisitions, but with the more long-lead efforts that go into real regeneration.
Gen X was always supposed to be a transitional one. Perhaps this is the transition that will actually define them.
yes this has been a severe recession–but by definition at the bottom we feel the worst– the economy will grow–maybe slower then we would like but it will grow–people will still consume and the population will grow–but the real problems that we have relate to clearing out the over valued real estate and excess assets of the boom–once these assets are cleared out we will still have an overly invasive government that will also be forced back to the middle–right now the rush of Obamma is because he knows that come November the dems will no longer controll policy and will have to acknowledge the rest of the country
yes this has been a severe recession–but by definition at the bottom we feel the worst– the economy will grow–maybe slower then we would like but it will grow–people will still consume and the population will grow–but the real problems that we have relate to clearing out the over valued real estate and excess assets of the boom–once these assets are cleared out we will still have an overly invasive government that will also be forced back to the middle–right now the rush of Obamma is because he knows that come November the dems will no longer controll policy and will have to acknowledge the rest of the country
Jon you haven’t answered a damn thing. Thank you for your hospitality, truly, but dammit are you FOR a
“New Federalism”, or aren’t you?
People, like, wan’t to know and shit.
Jon you haven’t answered a damn thing. Thank you for your hospitality, truly, but dammit are you FOR a
“New Federalism”, or aren’t you?
People, like, wan’t to know and shit.
Hugo- You are probably right about the social scientists spending years discovering the obvious.
Hugo- You are probably right about the social scientists spending years discovering the obvious.
Hugo- I am for the New Federalism, but I’m concentrating on an even more local level–The City.
Hugo- I am for the New Federalism, but I’m concentrating on an even more local level–The City.
Rick- You know I agree with your sense of what a steady state economy could look like. I would like to bring back the Whole Earth Catalog aesthetic.
Rick- You know I agree with your sense of what a steady state economy could look like. I would like to bring back the Whole Earth Catalog aesthetic.
Alex-I do sense the Millenials are onto something different. But there is also a lot of static in the atmosphere–a low signal to noise ratio created by an always on mediasphere. How do we deal with that?
Alex-I do sense the Millenials are onto something different. But there is also a lot of static in the atmosphere–a low signal to noise ratio created by an always on mediasphere. How do we deal with that?
Did I fall into RedStates by error?
Not to be a nattering nabob of negativism, but you sure we’re at the bottom? Since when are way-upside-down properties “assets?” And as to government, “conservative” down here in FL and elsewhere in this great nation of ours, that “overly invasive government” is serial-killing any vestiges of our once just flaccid Growth Management Act, at the bidding of developers who are gung-ho to repeat the successes of the ’80s by paving and building and further draining our limited potable water sources and escaping even the little bit of planning that forward-looking people in communities not hung out to dry by boughtandpaidfor Free Market legislators and mayors and county executives had been able to achieve. And relieving the Development Community (sic) of even the vestigial “impact fees” that gee, Free Marketeers might see as externalities like more roads and sewers and water and cops and firemen and all the rest, that even the Austro-Chicagoans might argue, in the very abstract of course, ought to be forced into the cost of something like “development.” So the triumphant City Fathers and state incumbent placeholders could maybe estimate more accurately the real cost of parasitic “development” with its smaller, earlier reification of “socialized costs, privatized profits” like the derivative-cloud Nukular Winter we are in the early stages of. And even if the initiative measure that might loosen up the gerrymandered Red grip on the power levers of this state manages to get on the ballot and “win,” you can bet that subtle men and women will ensure More Of The Same for at least decades yet to come.
Empty condo towers and office towers and millions of dying or dead houses, those “over-valued” and “excess assets” you expect to be “cleared out” somehow, are not a few square yards of Ronald Reagan’s or Bushit’s ranch brush, to be cut out and burned for a photo op. Especially when there’s a whole new crop of towers and PUDs and Magically Made Communities where Public-Spiritedness is designed by the architects and written into the Deed Restrictions by crafty and oblivious lawyers and marketeers, with their front porches and alleys and “community centers” and other Amen-ities waiting to mushroom up and clog the collateral circulation that kept this nation from fully checking out via that most recent economic ischemia.
Dems control policy? They, like the rest of the pols that are so busy attracting $campaignmoney$, any of them gonna “acknowledge the rest of the country”? Where’s the Real Wealth that’s the foundation of stability gonna come from?
Whatyoutalkin’, fella? Want some FREEDOM FRIES?
Did I fall into RedStates by error?
Not to be a nattering nabob of negativism, but you sure we’re at the bottom? Since when are way-upside-down properties “assets?” And as to government, “conservative” down here in FL and elsewhere in this great nation of ours, that “overly invasive government” is serial-killing any vestiges of our once just flaccid Growth Management Act, at the bidding of developers who are gung-ho to repeat the successes of the ’80s by paving and building and further draining our limited potable water sources and escaping even the little bit of planning that forward-looking people in communities not hung out to dry by boughtandpaidfor Free Market legislators and mayors and county executives had been able to achieve. And relieving the Development Community (sic) of even the vestigial “impact fees” that gee, Free Marketeers might see as externalities like more roads and sewers and water and cops and firemen and all the rest, that even the Austro-Chicagoans might argue, in the very abstract of course, ought to be forced into the cost of something like “development.” So the triumphant City Fathers and state incumbent placeholders could maybe estimate more accurately the real cost of parasitic “development” with its smaller, earlier reification of “socialized costs, privatized profits” like the derivative-cloud Nukular Winter we are in the early stages of. And even if the initiative measure that might loosen up the gerrymandered Red grip on the power levers of this state manages to get on the ballot and “win,” you can bet that subtle men and women will ensure More Of The Same for at least decades yet to come.
Empty condo towers and office towers and millions of dying or dead houses, those “over-valued” and “excess assets” you expect to be “cleared out” somehow, are not a few square yards of Ronald Reagan’s or Bushit’s ranch brush, to be cut out and burned for a photo op. Especially when there’s a whole new crop of towers and PUDs and Magically Made Communities where Public-Spiritedness is designed by the architects and written into the Deed Restrictions by crafty and oblivious lawyers and marketeers, with their front porches and alleys and “community centers” and other Amen-ities waiting to mushroom up and clog the collateral circulation that kept this nation from fully checking out via that most recent economic ischemia.
Dems control policy? They, like the rest of the pols that are so busy attracting $campaignmoney$, any of them gonna “acknowledge the rest of the country”? Where’s the Real Wealth that’s the foundation of stability gonna come from?
Whatyoutalkin’, fella? Want some FREEDOM FRIES?
Learn how to herd Schrodinger’s Cat? Maybe hire Maxwell’s Demon? Run the Brownian Motion through a collimator?
Learn how to herd Schrodinger’s Cat? Maybe hire Maxwell’s Demon? Run the Brownian Motion through a collimator?
Yes. I’m afraid we’ve been horridly self-congrullatulatory, without so much as a wiink.
Wanna guess who winked? Who’s winking now?
Yes. I’m afraid we’ve been horridly self-congrullatulatory, without so much as a wiink.
Wanna guess who winked? Who’s winking now?
When did the Recession really begin? Certainly our fearless leaders held off stating the truth about it… And when does…or did…a Recession become a Depression? And for whom is that reality all too real? You’d have a hard time convincing someone who lost their job, home, and health insurance because of “the economy” that they’re not in a Depression as well as being depressed.
So is it the Pollyannas who get to title our business cycles? How many mall closings does it take ’til real estate developers “get it” that it was stupid in the first place to build that thing way outside of town…or in Dubai? Shit, I saw a picture of the just “opened” tallest building in the world there in Dubai, and without reading the caption I instantly thought “Tower of Babel”. I’m afraid that may be all too true on a bunch of levels. Especially the “we can’t talk to one another anymore” bit…
When did the Recession really begin? Certainly our fearless leaders held off stating the truth about it… And when does…or did…a Recession become a Depression? And for whom is that reality all too real? You’d have a hard time convincing someone who lost their job, home, and health insurance because of “the economy” that they’re not in a Depression as well as being depressed.
So is it the Pollyannas who get to title our business cycles? How many mall closings does it take ’til real estate developers “get it” that it was stupid in the first place to build that thing way outside of town…or in Dubai? Shit, I saw a picture of the just “opened” tallest building in the world there in Dubai, and without reading the caption I instantly thought “Tower of Babel”. I’m afraid that may be all too true on a bunch of levels. Especially the “we can’t talk to one another anymore” bit…
interesting question of when recession began–I suspect 2nd half 2008 in earnest but cracks began to show up at the end of 2007–if I am right the recession while deep is not alot longer then others
interesting question of when recession began–I suspect 2nd half 2008 in earnest but cracks began to show up at the end of 2007–if I am right the recession while deep is not alot longer then others
The recovery is a bank recovery and doesn’t mean nothing it is not a people’s recovery. It is not a human recovery. When you survive wars on your own territory ( Europe) you understand the importance of personal freedom. A corporative employee is a slave compared to a small farmer that produces camembert or an artisan that does ceramics. Happiness is achieving small things everyday. The US has become much to my sadness a country under siege. I do hope that somehow it will wake up and get back on the track of being a nation free individuals. My wish for this year is that you get out of all the wars you are in and bring to justice what needs to be corrected.
The recovery is a bank recovery and doesn’t mean nothing it is not a people’s recovery. It is not a human recovery. When you survive wars on your own territory ( Europe) you understand the importance of personal freedom. A corporative employee is a slave compared to a small farmer that produces camembert or an artisan that does ceramics. Happiness is achieving small things everyday. The US has become much to my sadness a country under siege. I do hope that somehow it will wake up and get back on the track of being a nation free individuals. My wish for this year is that you get out of all the wars you are in and bring to justice what needs to be corrected.
job recovery always follows earnings recovery–business’s won’t hire untill profits begin to move up–which they are—jobs will follow–they always do
job recovery always follows earnings recovery–business’s won’t hire untill profits begin to move up–which they are—jobs will follow–they always do
Just 2 cents from a web architect: my company was profitable (and even hit our numbers) for the 5th year in a row, and we are hiring dozens of engineers this quarter as part of an ambitious long-term growth plan. Various other entrepreneurs I’m close with have had a mixed experience, some downsizing while others grow. None of the many technical people I know are out of work, and most are getting at least occasional cold calls from recruiters. I know this isn’t remotely representative of the economy at large, but FYI it’s not all brutal everywhere.
Just 2 cents from a web architect: my company was profitable (and even hit our numbers) for the 5th year in a row, and we are hiring dozens of engineers this quarter as part of an ambitious long-term growth plan. Various other entrepreneurs I’m close with have had a mixed experience, some downsizing while others grow. None of the many technical people I know are out of work, and most are getting at least occasional cold calls from recruiters. I know this isn’t remotely representative of the economy at large, but FYI it’s not all brutal everywhere.
I wish it really worked that way regards the MBAs. They tend to be locusts. That is, they find out where money is, where a company has cash, and they swoop in with plans to maximize profitability.
Then they choke the chicken. I’ve seen this a couple of times now. It isn’t the economy that drives that behavior. It is what they are taught to do in school. That’s MBA thinking per the top schools. For that to change, there has to be more than economic forces at work. There has to be a conscious and actionable recognition that what is taught in these schools is actively harmful and an epiphany among boards around the world that the plans these types talk in their interviews and the promises they make are not good for the greatest number. They only advance the *elite*.
I worked for ten years, gave up other opportunities, ate a lot of bad beef and took the punishement to help a company recover from such. We took a stock from around $3 to $30 based on nothing but hard work: no net bubble, no web BS, no promises unkept. Then the hedge fund investors kicked out the CEO who’d done that, replaced him with a money manager, and within two years, all of that vanished into the pockets of people who’d been there less than 18 months to the tune of millions apiece. The SF investors who bought it per plan were handed a very optimized, maximized, efficient pile of horsesh*t.
I’m all for burning the gated communities to the ground and running their pansy white tails into pounding shark infested surf and toss Bernanke and Company in after them for flava.
I wish it really worked that way regards the MBAs. They tend to be locusts. That is, they find out where money is, where a company has cash, and they swoop in with plans to maximize profitability.
Then they choke the chicken. I’ve seen this a couple of times now. It isn’t the economy that drives that behavior. It is what they are taught to do in school. That’s MBA thinking per the top schools. For that to change, there has to be more than economic forces at work. There has to be a conscious and actionable recognition that what is taught in these schools is actively harmful and an epiphany among boards around the world that the plans these types talk in their interviews and the promises they make are not good for the greatest number. They only advance the *elite*.
I worked for ten years, gave up other opportunities, ate a lot of bad beef and took the punishement to help a company recover from such. We took a stock from around $3 to $30 based on nothing but hard work: no net bubble, no web BS, no promises unkept. Then the hedge fund investors kicked out the CEO who’d done that, replaced him with a money manager, and within two years, all of that vanished into the pockets of people who’d been there less than 18 months to the tune of millions apiece. The SF investors who bought it per plan were handed a very optimized, maximized, efficient pile of horsesh*t.
I’m all for burning the gated communities to the ground and running their pansy white tails into pounding shark infested surf and toss Bernanke and Company in after them for flava.
A few random thoughts:
“Is the recovery real?” What recovery? You can’t be referring to the stock market’s most recent masquerade. For those who focus on it as their barometer of economic well being, what caused the market to “recover” on Mar 10, 2009? What changed from Mar 9 to Mar 10?
The crisis isn’t over by a long shot. But now that health care reform legislation is all but signed into law, what’s next on the master to-do list, and how does ending the economic crisis factor into their fruition? Mr. Emanuel’s words from Nov 21, 2008 come to mind “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”
Talk about millennial angst! If mandated premiums survive reconciliation, they’ll be added to the list of transferred wealth (“social security, unemployment compensation, etc”). I wonder if this will be the catalyst needed to galvanize and energize the millennials into a potent political force. I wonder if the Republican leadership is wondering the same thing?
A few random thoughts:
“Is the recovery real?” What recovery? You can’t be referring to the stock market’s most recent masquerade. For those who focus on it as their barometer of economic well being, what caused the market to “recover” on Mar 10, 2009? What changed from Mar 9 to Mar 10?
The crisis isn’t over by a long shot. But now that health care reform legislation is all but signed into law, what’s next on the master to-do list, and how does ending the economic crisis factor into their fruition? Mr. Emanuel’s words from Nov 21, 2008 come to mind “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”
Talk about millennial angst! If mandated premiums survive reconciliation, they’ll be added to the list of transferred wealth (“social security, unemployment compensation, etc”). I wonder if this will be the catalyst needed to galvanize and energize the millennials into a potent political force. I wonder if the Republican leadership is wondering the same thing?
For a long time, operations – not finance – were the backbone of a business education. Interestingly, you learn far more about this by actually doing work than studying financial formulas, which may explain why MBA programs didn’t take off until they managed to uncouple themselves from the direct needs of business, and started to focus on the value that could be extracted from business.
Here’s a good Economist interview with Bill George. He cites the problem you describe as a generational one, and the product of now discredited focus on short-term thinking that is starting to fade from the scene (though not nearly fast enough in his estimation).
Towards the end, he makes the point that there’s a management class with the right sensibility on the rise, but that there’s an old guard that’s determined to frustrate their progress by channeling their careers into the kind of bureaucratic mazes that keep talented people from securing real influence before age 55.
Nevertheless, he remains optimistic about cultural prospects in the business sphere. Tellingly, he’s far less confident that the right lessons have been learned by members of this generation who are in the finance sphere. So I don’t think the problem you cite is going away immediately. If anything, I suspect you’ll see an intensification of combat between value-building operators who have a sense of their industry’s role in customer’s lives, and the short-term, pump and dumpers who don’t give a damn about anyone or anything not pegged to their bonus payments.
The difference between the last decade and the coming one is that the latter group will not have to fight for advantage that – until recently – they could simply take. With senior management on the side of (or in thrall to) the Wall St. types, these fights were non-starters. But as the external financial types loose their supporters / partners / marionettes in the C-suite, challenges to the approach you suffered from are likely to sharpen.
The thing that will determine the length of this fight is how well Washington deals with the finance trade itself. This is where things get murky.
Paul Volcker seems to raising his voice (figuratively speaking) for the first time, citing the chief source of resistance in the lunatic levels of partisan rot that have become the two major parties defining ‘contribution’ to political life.
Here’s an excerpt from a recent interview with BusinessWeek.
In the Economist interview, Bill George (who says he’s an Obama supporter) is pretty blunt in his criticism that Obama blew a major opportunity through his extraordinary deference to Congress at the expense of the voters. This has got to end. Perhaps it’s bad luck that history has produced a president who seems deathly afraid of the bully pulpit at the exact moment it’s truly needed. Or maybe he’s just on the steep part of the leaning curve. Who’s to say?
For a long time, operations – not finance – were the backbone of a business education. Interestingly, you learn far more about this by actually doing work than studying financial formulas, which may explain why MBA programs didn’t take off until they managed to uncouple themselves from the direct needs of business, and started to focus on the value that could be extracted from business.
Here’s a good Economist interview with Bill George. He cites the problem you describe as a generational one, and the product of now discredited focus on short-term thinking that is starting to fade from the scene (though not nearly fast enough in his estimation).
Towards the end, he makes the point that there’s a management class with the right sensibility on the rise, but that there’s an old guard that’s determined to frustrate their progress by channeling their careers into the kind of bureaucratic mazes that keep talented people from securing real influence before age 55.
Nevertheless, he remains optimistic about cultural prospects in the business sphere. Tellingly, he’s far less confident that the right lessons have been learned by members of this generation who are in the finance sphere. So I don’t think the problem you cite is going away immediately. If anything, I suspect you’ll see an intensification of combat between value-building operators who have a sense of their industry’s role in customer’s lives, and the short-term, pump and dumpers who don’t give a damn about anyone or anything not pegged to their bonus payments.
The difference between the last decade and the coming one is that the latter group will not have to fight for advantage that – until recently – they could simply take. With senior management on the side of (or in thrall to) the Wall St. types, these fights were non-starters. But as the external financial types loose their supporters / partners / marionettes in the C-suite, challenges to the approach you suffered from are likely to sharpen.
The thing that will determine the length of this fight is how well Washington deals with the finance trade itself. This is where things get murky.
Paul Volcker seems to raising his voice (figuratively speaking) for the first time, citing the chief source of resistance in the lunatic levels of partisan rot that have become the two major parties defining ‘contribution’ to political life.
Here’s an excerpt from a recent interview with BusinessWeek.
In the Economist interview, Bill George (who says he’s an Obama supporter) is pretty blunt in his criticism that Obama blew a major opportunity through his extraordinary deference to Congress at the expense of the voters. This has got to end. Perhaps it’s bad luck that history has produced a president who seems deathly afraid of the bully pulpit at the exact moment it’s truly needed. Or maybe he’s just on the steep part of the leaning curve. Who’s to say?
Not sure, JT. I’ve been re-reading Hamlet.
More on that later.
Not sure, JT. I’ve been re-reading Hamlet.
More on that later.
For now, I will say this:
In the space of 20 generations, humans have gone from tiny specks putting everything on the line to simply cross an ocean, to a force so powerful that their simple presence can shift the ocean’s current.
Today, the biomass of our species is approaching one trillion pounds. In terms of life expectancy, our species is one of the longest lasting, and in terms of adaptive capacity, we appear unparalleled. Our presence is – suddenly – extraordinary, as are the consequences of our collective actions.
This isn’t a development that the established publishing trades have truly come to terms with. Aside from commercial advertising and fashion magazines, most media arts have seen their work as an end in and of itself. What people do in response to that media has been a secondary concern – except in cases when audience behavior challenges the capacity of IP holders to demand and extract rent.
Today, the capacity of media is far to important to leave to those who create it. By way of comparison, imagine allowing steel mill that supplied the metal for you car being given total control over where you could drive, when, and how many passengers you could carry at any one time. Copyright – when used to define and dictate every aspect of in an individuals relation with media – is moving into equally absurd territory. And our habits are changing accordingly.
My suspicion is that the always-on media murmur you describe is a transitional thing. Or rather, it’s position as a dominant and defining layer is a passing phenomena. Once producers and publishers catch up to the audience, and stop seeing royalties and artificial monopolies as the one and only way to pay for creative enterprises, I think the evolution of a new layer will accelerate rapidly.
People still appreciate the shining end-in-and-of-itself quality that has always defined great art. And I don’t think they’ll be satisfied in treating their commercial transactions as the highest and most self-defining activities they can conduct (sorry, advertisers). We’ll never find cultural sustenance in marketing messages – no matter how clever or sophisticated they become.
At the same time, I don’t think that people can continue seeing their own involvement in their culture as being strictly for the economic benefit of others. It’s not a ‘product’, designed strictly for consumption as though it were a hamburger. And a legal system that treats it this way is intrinsically appalling.
Given our new-found consequence as a species, those with a capacity to influence thought need to refocus on the actions that (can) result, and the awareness (or lack thereof) that attends them. What’s going to happen is that our trillion pounds of collective yet self-directing biomass will be seen – increasingly – as the fundamental engine of any economic model sustaining media arts. This is already the case for marketing people – who have always seen their output as a means to an end. But along with their natural leg up, they’ve also got a ceiling – which has only gotten lower following the credit bubble’s bursting. They have a secure place – but not at the top.
That position is reserved for groups and individuals who can act in a way that produces a positive effect for themselves and the environment that our biomass depends on. It needs to do so in a way that increases awareness and appreciation of our momentary existence.
I heard a very sensible person who was also quite religious dismissing Biblical literalists by saying that the truth isn’t in the words themselves, so there’s no point in declaring war over different interpretations in meaning. She insisted that the truth of the thing is entirely inaccessible until you start living it, and only then does it become manifest. At this point you see the words for what they are – a point of departure.
I think there’s something to that, and something from which artists, producers, and publishers should all take a cue. Instead of going to war over permission to perform, copy, and circulate (and, by extension, to interpret and respond to freely) I think they should look for redeeming qualities that can only be found in the living, then develop work that guides people towards the actions through which they can realize (and develop) these things for themselves.
That’s what our biomass depends on. And again, there’s nearly a trillion pounds of the stuff, in all it’s toothy, sinewy, passionate glory. If you think that threats, fines, and prison sentences are the only way to coax a suitable measure of economic energy from this, then you should hand in your navigator card for good, and go look for employment opportunities with the Spanish Inquisition.
I realize that this is still a bit unfocused. Like I said – it’s still developing. But the direction is becoming clear.
Personally, I think the beginning of the Recession is a lot earlier than common “wisdom” would indicate. I think it was masked by the incredible extension of credit and rise in personal and corporate debt through the media of credit cards and property equity loans. We’ve been “under water”, but we’d been sucking on financial snorkels for so long it seemed normal. Wealth is not debt on the one hand and masses of disposable consumer goods on the other. We’ve been broke with a cornucopia of shiny things.
That last ‘you’ should read ‘anyone’.
It is an Industrial melt down off old ways of doing things that are no longer sustainable. Make way to new tec., bring justice to wall st, get out of wars and the economy will be back.
You named it, brother. Amazing how easily a whole range of humans can be distracted by shiny objects. Like Sarah Palin’s glasses and (wink.)
Lot of comments here suggest the goal is to “recover” the economy we lost in 2008. Not going to happen. We have to define and build a different economy with lowered expectations of consumers. For instance, one of the fastest growing segments of the economy last year was expenditures on “virtual products” in gaming world and elsewhere. You can make and sell an infinite amount of that stuff without degrading environment, or for that matter hiring assembly line workers. Right now Millennials are the most dissatisfied with their jobs, if they have one, of any generation in America. Corporate hierarchies and cubicle life is not the future that they want to “recover.” Instead get ready for something “completely different” to quote that great futurist, Monty Python.
that should be Winograd, not winorad
That’s wonderful, Godspeed. I’m a fourth-generation Angeleno. But in the context of Federalism the Town will have to establish (not to say reestablish) right relations–treaties–with the County, with neighboring counties, with the Statehouse and, most importantly, with the school board and the special districts. This to me is the practice of Federalism. You look to your left and barter, then you look to your right and barter. It’s vital to do it in earnest, in good will. Antonio tends to gobble. His favorite political theorists are Fisher and Price: the big fish swallow the little fish. The fear is that when he withdrew from the gubernatorial he’d determined to build his castle closer to home.
I wish you well. You’re better than the people you have to suffer. A cold look at L.A.’s record on transportation, 1990-2010, will open up the whole thing, wide across the policy domains. And Dr. Starr probably would enjoy a wry observation or two to the effect that Los Angeles already was a city state for a time: the 1930s. Trust me, no happy ending.
Yeah, they want something for nothing. The virtual goods economy is a harbinger.
Meanwhile, the virtual worlds market itself is collapsing.
Hey Jon, howabouts Annenberg rigs you a chat with Brand–my two favorite futurists!–such that the rest of us could join in virtually? I’d really like to see what your correspondents would offer. Honestly, I’d like to hear.
An interesting idea, no?
Wonder how well a virtual roof keeps the rain off your real head, a virtual sweater takes the chill off your real arse, and a virtual Chateaubriand fills your actual growling belly?
There has to be some “real economy” and “real culture” somewhere to create the Real Wealth that can be leveraged into “money” to buy your copy of Modern Warfare or fund your Grand Theft Auto-eroticism.
Good luck to the “Millenials,” yet another self-identified thingie that further helps break down the continuity and slow steady flow of population rollover into discrete warring factions to make sure that the oligarchy can keep us under the heel of the boot.
“Stability?” “Steady-state?” “Functioning culture and economy and ecology?” Aw, screw that old fogie stuff — I want my Maypo! And you old folks make sure you keep my room just the way I left it, so I can boomerang back home when my virtual world dissolves back into random pixels.
Of course you’re not sure. You’re both shy of the 12th Century model of education: leadership through immitation. The burden is on the master to emmulate. How simple; how daunting. Today, chickenshitting and head-scratching.
Outside of virtual sex areas, a lot of that economy is discretionary spending by teen agers and pre-teens. Once Second Life at the behest of its big corporate clients sequestered the sex trade to a different area, population uses of the non-sex trade areas dropped off steeply. On the other hand, they are still having a profitable year.
When some wonder where some of the money went in the music trade, there is a clue. Once upon a time holding that 45 vinyl in your hand and showing it off to the rest of the kids was a big day. Now, not so much. They don’t hold up their iPods as much as the file swap. The virtual world builders go to great lengths to stop that from happening. Anshe Chung went on the warpath about that a few years ago claiming she couldn’t have a sustainable business with a technology that allowed others to quickly duplicate designs her shops in China were turning out. Ironic, eh? When the software industry wants to protect its own products, it finds a way to do that quickly and ignores the whining. When the advantage is to file copy as is the case for iPods, there doesn’t seem to be a practical solution that is possible.
And that is why the geeks are going down.
I think 2000 / 2001 is a fine place to look for the beginning of the recession.
Now that we know the ‘gains’ since then were – essentially – fake, it’s easier to see the housing and credit bubbles as a policy-driven creations to “engineer a soft landing” (remember that?) and not real economic activity.
Meanwhile, actual wages stagnated, with take-hope pay shrinking even further as the value of health plans as compensation eroded sharply. Employment remained tight throughout the decade, so these trends continued steadily. It was a funny looking sort of ‘prosperity’, no matter how you cut it. So much for The Committee to Save the World”.
Finally, their charade become unsustainable, with the bottom starting to drop out in early 2008. Unemployment kept rising through the summer until it hit a tipping point, and triggered mass panic in the derivatives market as mortgages started defaulting en masse.
The relentlessly downward curve went from shallow and hidden to visibly steep and deep. And the rest, as they say, is history.
Love it — “take-hope pay.” Your fingers are wiser even than you are.
So many pieces to a puzzle that is more frustrating than that ’60s time-eater, the 6,000-piece 3-foot-CIRCULAR (no corner peices, even) jigsaw by Milton Bradley called “Little Red Riding Hood’s Hood.
You focus your 3 trillion ton remarks on artists creating value to feed themselves . I see that mass as something close to the number of cells in the human body. The body thrives, or even just stays alive, only if the various cells do their parts according to a carefully produced and stage-managed script. One kind of cell starts proliferating wildly and metastasizing, and pretty soon you got one dead organism. The diaphragm and chest muscles stop responding to the CO2 sensors and you got a blue-black dead organism. All those carefully drafted negative-feedback loops that humans in small communities might be able to sense and react correctly to, to keep the organism called the “band” or “tribe” alive and relativley stable, around one fire pit or in one or three hogans, are Trumped and drowned by predatory and cancerous behaviors (yes, you fucking ‘bankers,’ I’m talking about you, you MBA = Me Belong All tumors.
Any bets on what the shape of the curve looks like from here? Keep rootin’ for the DJIA, folks, and pumping enthusiasim and pumping up the pump price of gasoline as fast as your manipulations of oil futures can cause a profitable departure from even. My bet is that it’s like a shadow-rendered drawing of a Norman Rockwell tyke with the flap of his Dr. Dentons unbuttoned and hanging open — curve down the baby-butt, then zoom down the flap and into the toilet. But that’s just me.
len, I’m nothing if not persistent. One definition, I know, of insanity. But:
Even back in Econ 101, I had trouble with some of the postulates. M1 through M12, “money,” does not represent “value” to me at least, it’s just a way of exchanging FUNDAMENTAL WEALTH. As in the diminshing piscatorial stuff that’s caught from a fishing boat, oatspeasbeansandbarley grown from the depleting topsoil, Texas Tea and methane sucked out of old crushed deposits of once-living carbonaceous matter, and stuff made from ores dug and refined and cast or machined into tweezers and freezers.
Seemed to me then and now that the rest is just “trust” and “faith” and “belief,” as in “full faith and credit,” especially in “growth,” and “progress,” and “innovations.” If you leave Loss Angeles under a mushroom cloud, Real Wealth is what will feed you and clothe you and give you a safe roof over your head.
Derivatives are just that, the last expression of a totally derivative notion of “wealth,” where the shit has turned back perceptibly into nothing but watery turds with a lot of frank blood mixed in.
But I am sure all the really smart economists that wrote the textbooks and peddle their ideas hither and yon, insisting that they and only they, each and every one of them, have the only one and true complete explanation for all the many gazillions of interactions that have been fostered and supported by that original excess of storable grain, beyond the needs of the planters and reapers, that made static walled “civilization” possible and maybe the current state of 3 trillion tons of fermenting humanity possible and maybe inevitable, can tell me in a few clear sentences what “money” is and where “wealth” comes from.
So where does the “wealth” that lies behind the “money” that pimple-faced potential cannon fodder uses to buy his copy of “Modern Warfare II” appear in his debit card account from? Please don’t tell me how “money” works. I am trying to ask a question that should have been addressed earlier in the syllabus. You know? Anybody out there? Warstler? John Papola? doug?
JT – I dont’ think I quite understood what you were getting at, but having read this (recently published by the National Interest Online, I think I see what you mean about the signal:noise ratio.
The piece is not optimistic, though it does seem prescient.
Gutenberg’s invention ushered in a series of developments which replaced with power of kings and popes with democratic nation states and increasingly non-agrarian economies. Assuming that the emergence of the internet is a similarly catalytic event, why wouldn’t this produce entirely new and baffling political order – to say nothing of the ethical codes and notions of right that come with it?
The article uses the term ‘information entropy’ loosely and incorrectly. The term they should use is anomie. Unrelenting boredom is an onset state to anomie.
I don’t see a new focus on the meaning of meaning in media increasing its entertainment value. IMHO, the coming turning out of the geek generation is a direct effect of two forces amplifying each other: 1. It’s time. 2. They take themselves so seriously they’ve become very boring.
Anomie quickly follows.
I don’t expect that much change in the executive suites. That requires too much change in the A-schools and possibly a true sea change in how the thought leaders view themselves and the tools with which they believe they are changing our culture but in reality are feeding the engines of entertainment.
At some point, the millenials who are so quick to criticize the boomers and claim to be pushing them out of the way will have to step up and admit they chose badly, naively and with a lot too much hubris. That is the fun I was having with the “Curses! Foiled Again!” video. With all the fur flying in the last election, they punched out the right candidate and empowered the wrong one on the other side. We ended up with a Betty Boop movie as Mutley sniggers. It seems to be difficult to get across the point learned from hard experience: you can’t put a freshly scrubbed amateur into the most difficult if powerful job there is and expect it to end like a Frank Capra movie.
Don’t be too depressed about that. You live in a state that takes Jerry Brown and Arnold Schwarzenegger seriously as leaders. As the boomer-led coalition melts away, it will be fun to see what California offers up for leadership next. Stay locally smart and don’t believe your own publicity.
The silliest and probably career ending event is an entertainer wanting to be taken seriously (See the dustup with the web gals and Vanity Fair) after they sign the release forms for a photo posing in trench coats. In a culture like ours where our thinking is dominated by sports and entertainment thinking, survival depends on taking as little as possible about one’s own image seriously. Ask Tiger.