New Normal


Friday’s employment numbers have caused many analysts to set their hair on fire. Initially the Dow fell more than 100 points before saner money returned in the afternoon. This reinforces a theme I have been pursuing on these pages for the last year. For 22 years since George Soros made $1.5 Billion in a week, shorting the British Pound and forcing the Bank of England to devalue the currency on Black Wednesday, September 16, 1992, most of the great fortunes on Wall Street have been made short selling. Since that time, with the rise of the Hedge Fund Industry, built to take advantage of the misery of others–be they firms or whole countries as with Soros and the UK or with Paul Singer’s current pusuit of Argentina. The great fortunes made during the 2008 crash, were those betting the market would crash. Exhibit A would be John Paulson, who actually designed the catastrophically toxic mortgage securities, that he then arranged for Goldman Sach’s and his other banking partners to sell to money managers after they had paid the ratings services Moodys, S & P and Fitch to rate this crap AAA. This is what my finance mentor Richard Rainwater used to call a “self-fulfilling prophecy”. John Paulson bought all the short positions in these toxic bonds that he had designed to blow up and then just waited for the sound of the explosion to collect his billions.


And these guys are not in jail?

Anyway, back to my thesis. The great fortunes of the next fifty years will be made betting on the upside of an emerging global democratic capitalism that actually capable of delivering smart and reasonably priced services to all classes of society. People who bet on the short side are going to be the fools of the future. I agree with Ruy Teixeira, The Whole World is Getting Much, Much Better.

For many on the left, a positive attitude toward economic growth and globalization seems counterintuitive. After all, isn’t there a basic lack of progress in the world today—aren’t things just getting worse rather than better?

No, in fact they’re getting better — much better — and that is despite trends toward increased inequality which have damped down economic advance for average citizens in some countries. Consider the American case, where trends toward inequality have been particularly serious. In 1947, the median family income in the US was around $27,000 in today’s dollars. Today, median family income is around $61,000. Looked at another way, in 1947, 60 percent of families made under $30,000. But today only around 20 percent make less than that figure and 40 percent make over $75,000, a figure that was exceeded by less than 5 percent of families in 1947.

So let’s go back to those unemployment numbers and see why all this fear that the Wall Street Bears are constantly trying to gin up is really just guys “talking their book”. First, traders view the fact that the unemployment rate actually fell in a month when only 88,000 jobs were added, as if everyone had just given up looking for a job. What they hardly ever mention is that 300,000 boomers  Every Month are reaching retirement age, with fairly decent pensions and good Social Security Benefits.No wonder many of them are “leaving the workforce.” That’s what “Social Security” means. And in a few months at least half of those people’s positions will have to be replaced every month. Not everyone reaching 65 can or will retire, but we will witness a big transition in the workforce from the Boomers to the Millenials, and that in itself will change the way business is done.

That was also remarked upon by Teixeira.

By the end of the 20th century, more technological advances had been made in the previous hundred years than in all of history before 1900.  There is no good reason to believe that this breakneck pace will slow in the 21stcentury, since we are just on the verge of mastering knowledge gleaned from technological revolutions in three interwined areas: computer science, biomolecular science/engineering, and quantum physics.  Indeed, as we transition from an era where we have discovered the basic laws and building blocks in these fields to an era where we apply that knowledge, the pace of innovation, if anything, may accelerate.

We think we are seeing this same acceleration happen in the USC Annenberg Innovation Lab. All of this is counter to the End of the World Crowd, filled with idiots like David Stockman.

So here is my advice. Stop obsessing with the end of world theme. Stop reading the doom and gloom books, Stop buying gold. Stop trading in and out of stocks every time you get scared (like Friday morning). Invest in companies you think are innovative and have a long term plan and pay dividends. And stick with them. I can assure you, Groupon does not have a real long term plan. Apple does.

In your politics, work with candidates that want to build a world of justice and peace. Not with ones who want to scare you that a vote for the other party will mean the end of the world as we know it.

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32 Responses to New Normal

  1. Jeff Rose says:

    Thanks Jon! This is a good one.

  2. Hrothgar says:

    Malthusians have a long history of being wrong. Your investment advice is pretty much the Buffett plan (not a criticism).

  3. JTMcPhee says:

    That’s a nice bubble you live in, sir. Too bad there’s not room for 300 million or 7 billion more of us. “Invest in companies…?” “Stop trading in and out of stocks”? “Stop buying gold”? “300,000 boomers Every Month are reaching retirement age, with fairly decent pensions and good Social Security Benefits.” Who are you talking to? Me? or len? or even Hugo? “fairly decent pensions and good Social Security Benefits”? What the hell are you talking about? Good-o on you, in your part of the world! Go for it! Don’t stumble over any of those Street People, including a lot of “recently retired” veterans that might be lying inconveniently in the doorway…

  4. Jon Taplin says:

    @JTMcPhee JTM-Whether you recognize it or not the role of unions in the 1950’s and 1960’s and 1970’s was to successfully secure for their members a decent retirement. The 401K assets in the US are about $18 Trillion. Add on to that the classic pension assets and you can realize that a lot of working class people in their 60’s are going to have a comfortable retirement.

  5. len says:

    @Jon Taplin

    And you don’t recognize that a lot of people have to die at their desks because the costs of getting to and staying in the comfortable class has become unsustainable while the unions have disappeared in the right to work states where the new investors locate for an advantage over their employees similar to what they obtained in China. Meanwhile the POTUS is about to cut the Social Security benefits the working stiffs paid for so his masters won’t have to dip into their very deep pockets and he doesn’t have to skills to change that.

    You are a classic spreadsheet manager: all numbers and no production so a deficit of understanding what is actually going on in the shop.

  6. Fentex says:

    I get the impression some feel that whether Jon is right or not that unions won healthy concessions in the past for people retiring in the near future people working now won’t have that in their future.

    I suspect the concern is that reactionary elite has found a way to take back past concessions and reconcentrate the wealth.

    If not, then why the recent post pointing out the increasingly unhealthy and growing imbalance in wealth? How can that be reconciled with a post claiming things are good and getting better for workers retiring?

    It seems curious to be worried about wealth imbalance and yet advise people ought not worry about, well, future wealth allocation.

  7. Hugo St. Victor says:

    Hrothgar is worth skipping a beat. Fentex, I’ll address this directly to you, because you’re a realist, and this is hard to say. I’m a sometimes hyperactive unionist who is ashamed as hell of NEA. And if you’ll look at the pie chart that Taplin seems to stare into, we’re fucked. That’s, believe it or not, all I have to say, except that humans are not themselves resources but rather are that for which resources exist. Try espousing that to NEA and a midnight cornfield
    shall be the very last thing you see. No shit. Labor stats. God, it’s a Yiddish set-up. Where in hell are we supposed to find these clever, not stupefied workers? We keep borrowing money and talent whilst pissing away our patrimony.

  8. rhbee says:

    Mechanize this folks. Chart reports, collect data, ‘splain away every thing, everything, and still here we are with no real change in the way we economize. More product, the less workers needed. More products when less is needed. Is it socialist to want all of us to reorganize? Mechanize that on your endless charts.

  9. rhbee says:

    Frankly, I would give my award to the first person who can make money obsolete.

  10. JTMcPhee says:

    @Jon Taplin
    It’s not really worth arguing about. You are well positioned, financially, through your personal combination of luck, skill and externals, and a whole lot of your fellow citizens are not. As to Baby Boomers, ask Google what percent of Americans will have comfortable retirements and you get a flood, as usual, of undigested and indigestible information. I like this one, from the NPR that has become such an organ of the Empowered:

    How much income can be generated in retirement?

    “We’re really looking at three different sources [of income]. If they’re one of the few who still have a pension, that would be a great benefit. Then they will also have some sort of Social Security. The baby boomer generation is expecting quite a deal from Social Security, actually. Some of them will be getting up to $2,400 per month of income from Social Security. And then they have their retirement savings.

    “An easy way of getting an idea of how much income your retirement savings can generate is that you add it all up and you multiply it by .04. That is the equivalent of 4 percent, which would be a reasonable rate of return that you can expect to take out of your investment dollars. If you take the pensions, add the Social Security and add 4 percent of the retirement savings that they currently have, that will give them a good idea of what they can reasonably generate in terms of income today.”

    And there’s lots of drive-by advice for What To Do, too:

    Aggregating that claim of all those trillions in supposed wealth in the hands of Boomers sure looks impressive, but of course there are nets and averages and medians and all that, coupled with a lot of anecdotes, that maybe give a truer picture of the net discomfort index?

    Don’t worry, I’m not arguing to take away any of the stuff you have accumulated. There ain’t no way that is going to happen, short of a different future now that it appears you are announcing the end of the beginning of the Interregnum. A little humility and a little empathy and a little recognition that “innovation” at a pace that is way beyond what humans are capable of assimilating (except for the exceptionally profitable few, and that of course includes the Hated Kim Dotcomm) might be in order? Or maybe it’s just

  11. len says:

    Jon can’t see it but he lives a life where people break their necks to tell him what he wants to believe so they can get one step closer to his stuff. That’s the karma he made when he left Princeton to manage a Band because that was where the money was and when it wasn’t enough, he made the moves to get more. It has given him what he needs but not what he wants: he wants to be right, the sagacious mensch. Anyone who is that discovers the humility of fans: if you blow a note and can’t smile, they turn into critics.

    Again: sustaining a system (say business) is not about innovation. Even innovation is means. It is about making sure the gozentas and the gozoutas are balanced to a positive return. Stay in the XY quadrant and even if the slope is shallow, you will stay in that business. No exceptions. So you have to answer the two questions every time you make a change, a sale, or a product: how much is enough and what is worth not doing.

    Education is never wrong. Creating a culture where winning is being top dog is. The top dog is the next to last meal.

  12. Alex Bowles says:


    I’m not seeing the contradiction between not worrying about intense wealth concentration and and not worrying about the short shills.

    I mean, you’re entirely correct to note that the present levels of inequality are an extraordinary drag on growth. A re-redistribution of wealth (to reverse the sudden upward redistribution we’ve recently suffered) would do wonders for everyone. But there’s a difference between an economy struggling to make do with scraps and one that is hurtling off a cliff. The latter view is the one the short sellers are promoting and as noted, their reliance on shaded and incomplete facts underscores the fact that they’re being unreasonably bearish. For a more reliable picture of prevailing trends, see here:

    The question in my mind is whether the last decade or so of derivative-driven bubble bullshit has so hollowed out Wall St. culture that there are no longer any deep benches of actual investing talent left to pick up the pieces. That is to say, are there teams of people focused on building businesses for the long haul, as opposed to people who ave made careers stripping and flipping them Romney style?

    Much has been written about the shift from partner-owned firms on the hook for their mistakes to publicly traded companies shielded from risk and limited only by what they can get away with (Lloyd Blankfein’s rise epitomizes this change). And of course, the biggest banks didn’t grow organically. They’re all products of M&A binges that resulted in huge payouts for the people who orchestrated them, and flat to negative returns for everyone else. A lot of the pain expressed elsewhere in this thread is testament to the ruin that this breed of financiers has produced, and which our present politics have been unable to resolve.

    At the same time, we’re in the early stages of a major, major energy transition which will, I suspect, produce a far more decentralized and resilient set of economies around the world. Inequality is slowing this, but I don’t believe that the present concentration of wealth is a permanent feature of the global economy. It may take another decade before we see a critical mass of policy shifts big enough to accommodate the tremendous population spike that started in the 1950s and is only starting to slow, but when we start properly pricing “externalaties” like a functioning biosphere, discard the lunatic ideology of unfettered capital, and scrap the nationalist war machines left over from the 20th century, we can focus on meeting the needs of 8-9 billion people in ways that don’t ensure that they’ll be the last 8-9 billion people.

    Again, this is little consolation to the people dealing with the day to day hell of graduating into an awful job market with a mountain of debt, people who have had their retirement accounts wiped out, their property foreclosed on, and their jobs offshored. The “market” for health care remains a source of nightmares, and distinctly unequipped to handle the mental and emotional wounds being carried by millions.

    But the bigger picture goes well beyond the implosion of supply-side economics, and the lingering malaise of rentier capitalism. It has everything to do with the global baby boom that took us from ~3 billion in the Kennedy era to more than double that today.

    The Malthusians may be wrong about population and collapse, but they’re right about the drama the huge surges bring. My own best guide in this area is David Hackett Fischer, whose work on the history of price revolutions highlights a pattern in which periods of economic equilibrium (e.g. the High Medieval period, the Renaissance, the Enlightenment, the Victorian Era) are interspersed with periods of concentrating wealth, escalating prices, and eventually massive crisis which give way to the next period of equilibrium.

    The key features he notes are (a) that the triggers of each great wave are found in major birth rate surges (e.g. the 1960s) and (b) that each of the resulting crises are characterized by less violence than the previous one, and more dramatic social development. Those of us in the Developed West will probably be spared the worst of both. The real shocks will be / are already being felt in places like the Arab world, India, and China.

    The global birth rate crested in 1970, and has been on a downward trajectory ever since. Though the absolute number of people will continue to climb thanks to all the people now here, the rate of change is slowing, and should plateau beneath 10 billion. In other words, the target is moving less and less. A clear number is in sight. That means people interested in reaching the next period of equilibrium have a frame to operate within. Starting with the UN Declaration of Human Rights, and ending with the requirements for a post-carbon economy, the parameters are in place. Working out how to make the system of the world work within them, for as many as humanly possible, in the least amount of time, is the basis for innovation – social, technical, political, and economic – in the 21st Century.

    Building something new, as opposed to extracting wealth from what already exists, is what it’s really about. Somehow, I suspect Mitt Romney wouldn’t be any good at this game. Same goes for Jamie Dimon. And Lloyd Blankfein? He ought to be in prison. In terms of broader change, busting up the banking cartel, unwinding the derivatives markets, and taxing high frequency trading into oblivion will all clear the air for genuine investment in the world waiting to emerge.

  13. Alex Bowles says:

    I said “waiting to emerge”. I should have said “desperate to emerge”. See Cairo for details.

  14. Alex Bowles says:

    For more on population growth, see here:

    Note the chart showing wheat yields. The point at which is begins to climb sharply (early 1960s) coincides with a surge in the global birthrate. And while birthrates begin to decline after 1970, they do so gently. And of course, these slightly lower rates are among larger populations, so the overall population curve tracks the growth of wheat yields fairly closely.

    In terms of macro political events (i.e. in contrast to major developments that started small, like the discovery of relativity and the invention of the transistor), the Green Revolution may prove to be far more consequential than any of major wars that dominate histories of the 20th century. Those, in retrospect, may prove to be the surface tensions that obscure the view of a truly profound development in human history – one that underlies and unifies so much of the mounting tension developing around the world today.

    Put it this way: all the wars combined took fewer than a hundred million lives. Whereas the Green Revolution not only produced 40 times that number (more or less) it did so in a matter of decades. The shock, both to the global economy and the world’s ecology, is still far from complete.

  15. len says:

    Economic theory won’t cut it this time, Alex. The wolves had a long cold winter and they are ravenous. Your stuff is glistening in the melting ice. The game riggers are not calculating for an obvious but overlooked convergence. People on all sides of the divided electorate are agreeing on one fact: the screwing of the economy and the working classes by the wealthy elites is criminal and in immediate need of redress. Because there is no way to do that equitably, inequitable means will be tolerated and those advocating them will be embraced.

    And that ain’t good for Hillary or Joe although Joe may do better given his affinity for rash moves is no surprise and even attractive. Some people are tired of chick flicks and Dancing With the Bizarres.

    Eat the rich and cook them on the toney flesh of their weenie kissers.

  16. len says:

    This is becoming more “common” in commentary:

  17. JTMcPhee says:

    @Alex Bowles
    I guess I am getting slower with age. Your point? Are we to be enthusiastic and hopeful with our host that Wonderful Things Are About To Happen? Or is there really a reason to be concerned about what gets dismissed as “Malthusianism” whether it’s concern about Terminator Technologies and the ascendancy of godless, heedless entities like Monsanto that actually claim ownership of the Universe’s fundamentals as expressed in genetic material, along with predatory financialisms that result in what, 100,000 Indian farrmers oppressed into “crop slavery” by Monsanto who find suicide the only way out?

    Can I ask if the Green Revolution, built on a certain set of inputs and externalities, is any kind of sustainable phenomenon? And being a negative kind of person, can I ask where the “less than 100 million” number came from? WW II supposedly accounted for 70 million killed (and I don’t think that kind of follows out the various chains of causation, starvation and dislocation and redirection and such, that have kind of driven history since then, actually since every noticeable war event?

    I look at the stuff on the Annenberg Innovation web site and I guess I miss the entire significance of what’s claimed to be innovation. Where’s the stuff that feeds and clothes and addresses the rest of the Maslowvian Needs of the rest of us?

    On the other hand, I bet elephants and sharks and manatees and a wide variety of other critters might, if their consciousnesses extend to that ability, welcome the decimation or altogether complete departure of whatever species Teh Scientists have determined we are properly taxonomized as. We should be happy that those who have figured out how to Have More have done so, and accept our lot as serfs and slaves awaiting the next turn of the Great Wheel?

    Politics, American-style, is a nice distracting fabrication. I bet our host knows that, for all his fealty and attention to that fake “reality’ and its front people. As len notes, there’s stuff that’s fertilized and implanted and ravening and still waiting to be born out of the steaming filth in the Rich Folks’ kitchen midden…

  18. Alex Bowles says:

    @JTMcPhee I suppose my point is trifold. The first is that I agree with JT’s premise. The second is that I share len’s perspective. The third is that I don’t see these as contradictory so much as two sides of the same coin.

    The insight I’m working with isn’t my own. It’s what I’ve gotten from Hackett Fischer, in whom I place a great deal of stock. Here’s an excerpt from the conclusion to his 1996 book “The Great Wave”. Consider the pattern he describes on p. 247-8 in particular, and see if it seems familiar. It has repeated (more or less) four times in the last 800 years.

    Elsewhere, in a section not available online, he reiterates his observation like this (parentheticals are mine).

    To summarize, each price-revolution developed through five stages: slow beginnings is a period of high prosperity; a period of surge and decline (in prices, accompanied by increases in social anxiety and wars); a time of discovery and institutionalization (of price inflation as a long term trend); an era of growing imbalances and increasing instability (where we are now); and finally a general crisis. The climax was followed by a fall of prices, recovery of stability, and a long period of comparative price equilibrium. The social and cultural impact of these movements changed from one great wave to another…Each successive price-revolution became less catastrophic in its demographic consequences, but more sweeping in its social impact.

    Fischer elaborates on the post-crisis social changes like this,

    (T)he radicalism of these events increased through time. The crisis of the fourteenth century did much to end villeinage in western Europe, and to transform societies based on conquest and subjugation into customary systems of orders and estates. The general crisis of the seventeenth century transformed political systems and expanded the rule of law in Britain, America, and Europe. The revolutionary crisis of the eighteenth and early nineteenth centuries (1776 – 1815) made public institutions in America and Europe more responsive to the will of the people, and more protective of their individual rights. It also transformed systems of social orders (i.e. guilds) into classes. the great wave of the twentieth century has not yet reached its end, but it has already caused to collapse of totalitarian systems of the left (eastern Europe) and the right (Latin America), as well as sweeping social and economic reforms in many nations.

    And here’s the key observation:

    Every general crisis in modern history has improved the condition of ordinary people. It has also enlarged ideas of human dignity, freedom, and the rule of law. This tendency has become more powerful in each successive wave.

    The growing reckless of unfettered capital, in both the social and environmental realms, is at sharp odd with this basic trend. And as len noted,

    People on all sides of the divided electorate are agreeing on one fact: the screwing of the economy and the working classes by the wealthy elites is criminal and in immediate need of redress.

    So much of this criminality has been obscured by the myths that came out of the Regan / Thatcher period (“Work hard and you’ll make it big”; “The world isn’t divided into rich and poor, but rich and soon-to-be-rich”; “tThe magic of the market is in its optimal allocation of capital”, etc. ad nauseam.) When Reagan died, a lot of this hokum still had currency. With the death of Thatcher, it’s become clear that belief in supply side economics is also well and truly dead. The disenchantment is profound, and there will be no re-enchantment.

    So I don’t think the looming crisis is an economic one, so much as a political one. And where the economic crisis of 2008 did the worst damage outside the Acela corridor, I think the political crisis works in the opposite direction, focusing on the deep illegitimacy of the rigged electoral system that is the lynchpin of the crony capitalism we’re suffering under now. I have no idea of they dam will crack this year, next year, or sometime the year after. But I’d be astonished if it hasn’t been swept away by 2020.

    What I expect to see emerging from this is a clear conception of people not just as economical beings, but as ecological ones. Trashing the environment becomes indistinguishable from assault an a massive scale. The extractive trades that presently dominate will have their institutional underpinnings pulled out form beneath them, with new growth emerging around the renewable, post-carbon energy systems that we’re already moving towards.

  19. len says:

    The mood of the affected class that feels it because they have felt otherwise is understood in the numerous posts on Facebook from Brits celebrating the death of Thatcher (really, truly celebrating) as opposed to the morning joe punditry (she saved Britain) in the context of overwhelming sadness about the passing of Annette Funnicello.

    They say Thatcher changed the world. Annette was simply loved. Guess who will be mourned the longest? Warren Buffett is right.

    The problem of sweeping historic perspective is it has no tincture of anguish. It is opium for the vested fearful who desperately want to keep their stuff.

  20. JTMcPhee says:

    All these great waves. Do the Hacketts and Rothbards and anyone else one might name have a great wave to account for what one can see in the middle of the Atlantic and Pacific Gyres? Something that will police up the visible (there doesn’t seem to be any way to recover the mercury and the rest of the in-visible, short of EATING it) detritus of our great population growth? Do anything to wash away the notion of “ferae naturae”,, under which (with a few localized exceptions of selfish-protected enforcement in “economic zones,” sharks are “finned” and long-lines and enormous nets sweep the whole “water column?” Where the “innovators” are holding what might be termed “constitutional conventions” to apply geomapping to the whole effing planet from core to stratosphere, with an eye to facilitating the “”claiming” of all those as yet unreduced-to-property “assets” like seabed metals? A “convention” like the “Trans-Pacific Partnership” that tells the ordinary people that “guess what, suckers? the Rule of Law is now whatever we say it is, and you have no standing to challenge any of our grabs and most particularly no right to complain when we turn your own laws against you to collect “damages” if you impose any kind of strictures on our absolute rights to take what we want”?

    Look, there are always “investment opportunities” for people who have figured out how to spin up a localized collection of MONEY that lets them buy Canadian land (not killed by XL) that thanks to global climate change will now produce more wheat ‘n stuff, and all the other “opportunities.” The ones that so generally seem to benefit not the species or the planet (if one dares to be so arrogant as to claim there is a set of conditions that could be aimed at that would, er, optimize things for the most of us, which the ones who yell FREEDOM and scream about “socialism” from behind the sets of self-interested “rules” they are creating to “legalize” the taking, only want to see broken into ownable, rentable pieces that will advantage THEM over the rest of us.

    Yeah, let’s be all positive about how things are good and going to get better. Populatioin maybe levels off at 10 billion (based on certain fortuities and assumptions.) Innovation comes up with some “carbon sequestration” that will hopefully be less dead-end idiot and without the inevitable Murphy-mandated unintended consequences. Make your best guesses about which corporate entities will be staffed up by people doing work for hire once the startup part is past that have those Jobsian inspirations that lead to PROFIT based on the willingness of people who grow and make food and clean toilets and wipe the drool off the chins of your aging faces to part with the money that at their scale of life actually means something in numbers with less than 4 significant figures to the left of the decimal. Don’t worry, be happy! cuz someone will somehow concentrate wealth, or is it just COUNTERFEIT as with the whole financial-industry scam in amounts with 18, eighteen, sig figs to the left of the decimal. And how and by what magic will the drives that got us to this point in our occupation of the planet get modulated, moderated and re-directed into sets that have fundamental symbiosis (based on some kind of new conscious awareness, since we are now too big and stuff moves way too fast for geologic-timescale processes to sand off the rough edges, carve out the cancerous stuff and build any kind of meta-stability of the sort that seems to have existed up to the point that that first innovative genius said “Hey, these seeds from this unprepossessing weed taste pretty good! Maybe we can get a whole bunch of it to grow in one place, and then I can stop walking around behind these beasts and stepping in their shit and getting bitten by them, and build me a McMudMansion from the labor I can get others to give me in exchange for a basket of seeds!”

    People as ecological beings? Will that extend to the pirate cultures of Somalia and the FATA and all of sub-Saharan Africa and the forest-killers and gold miners of South America and the fishermen of Japan and Taiwan and China and on and on and on? Will that be accomplished by some kind of bio-based infection that some Innovator will cabbage up, from an infinitely deep understanding of all the interactions of all the atoms of all the molecules of all the tissues and organs that make up all the species that would have to be Changed to achieve that New Consciousness?

    I don’t know, just asking. It’s a seductively pretty vision, of course… Green lawns, perfectly tended plantings, water features sparkling and babbling, and people in white linen, standing around drinking heady, nosy little wines and speaking sonorous greatnesses while the Morlocks are doing what again? Did I hear someone say “their duty?”

  21. Rick Turner says:

    Until we get “unemployment” figures that are real, it’s all bullshit.

    I think you’d have to use numbers that included everyone not in school or college between the ages of 18 and 65 who is physically capable of holding down a full time job. Part time work should be prorated in this, and perhaps there should be a factoring in of people who have part time jobs that do not provide benefits like health care.

    I’ll bet we’d all be shocked to see US unemployment rates of well into the two figures as the permanent norm. I’ll just hazard a guess at 18% as the real new normal…

  22. Roman says:

    “And these guys are not in jail?”

    “Bueller? Bueller? Bueller? Barry? Barry? Barry?…”


    ‘Nuff said…

  23. len says:

    We need real something, Rick. The chasm between the newspeak and the perceptions of those affected by the bullshit is illuminated like a megachurch front these days. This is Annie Lennox (third party quote so trust but verify; Annie gets the decade wrong) on Margaret Thatcher and it’s one of the kinder comments on FB. The Ding Dong The Witch is Dead videos on YouTube are unkinder and the quotes where the calls Mandela a terrorist and Pinochet a friend of democracy more contextual.

    Margaret Thatcher’s death has provoked an outpouring of polarised responses, clearly reflecting how people felt, and still feel about her, right up to the present day.

    As a political leader, her style was strident (some would say strong), inflexible (some would say firm), authoritarian (some would say powerful ), tough (some would say resolute), arrogant ( some would say assured), snobbish (some would say she had a sense of values), and faintly ridiculous, ( some would say patriotic). She was the headmistress and we were the renegade schoolchildren. She was the leader and we were the ardent followers…all depending on which side you happened to be on. Despite the evidence of her gender, she could never be described as a Feminist. She was more of a singular woman in the old boys club than a defender of women’s rights.

    Although she was the daughter of a humble grocer shop owner, her aspiratio…ns far outreached her roots..which is tremendous but… she failed to have any real understanding or connection with ordinary people, riding rough shod over their lives, leaving them to deal with the aftermath of a decimated industrial era. Entire communities disintegrated with generations being left to cope for decades down the line.

    I admire dedication, strength of purpose and vision, these are all fine qualities but when political policies are so brutally hard line, that they affect people’s entire existence at a pen stroke (whilst being told to pull themselves up by their boot straps), you can be sure that the spirit of dictatorship has arisen. From my own perspective I keep recalling the heavy sense of oppression that saturated every aspect of the Seventies, and I can’t say I have any sense of fond nostalgia.

  24. Alex Bowles says:


    The problem of sweeping historic perspective is it has no tincture of anguish. It is opium for the vested fearful who desperately want to keep their stuff.

    That may be true of some accounts, but not what I’m reading. If anything, it points in the opposite direction by observing that what we call inflation is really product of imbalances, instabilities, and inequalities. In other words, its injustice institutionalized. Fischer notes that it hurts everyone in the long run, but it hurts the poor and middle class far more. He also notes that disabling democracy exacerbates this damage.

    During the turbulent decade from 1963 to 1973, forty nations suffered from rates of inflation above 15%. A recent study has shown that thirty-eight of the forty countries abolished or abridged democratic institutions in one way or another. A society that seeks to make its political decisions by open elections, and also hopes to regulate its economic decisions by the operation of the free market, is specially vulnerable to the effect of unstable prices.

    What he’s talking about here is the constant danger of regulatory evasion and / or capture. Elsewhere, he has this to say.

    In our complex and highly integrated modern economies, there are no truly free markets any more. The free market of the twentieth century is an economic fiction, much like the state of nature in the political theory of the eighteenth century. Markets today are highly regulated and actively manipulated by both public and private instruments. The real question is not whether we should interfere with the market, but what sort of interference we should make, and who will make it, and what its extent will be.

    The core of the free market myth is that its outcomes, however iniquitous, are somehow just. And even if they’re obviously unjust, the theory holds that correcting them in any way (redistribution! socialism! evil!) is a one-way ticket to an even less desirable situation. In a contest between democracy and mercantilism, the angels are on the side of capital, so it’s democracy that needs to be “restrained”.

    Fischer’s point is that this restraint is exactly what lead directly to sustained, institutionalized abuse. Moreover, it does so in a way that absolved the abusers of any responsibility (“Hey, it’s what the market wanted!”). Uncorrected, the situation produces a catastrophe that’s bad for everyone, but in a way that’s the inverse of the events that lead to it. Where the run-up sees the greatest suffering among the poor and middle class, the aftermath tends to favor them, though “favor” in these situations, is a relative term in that they’re still having to deal with the effects of a serious implosion.

    The challenge, then, is correcting the situation before it corrects itself.

    I still think that if Americans can recover control of their electoral system, they can impose the kind of regularly scheduled discipline that, while painful for the industries on the receiving end, helps them in the long run by preventing their worst tendencies from taking over. Of course, those who want nothing more than the ability to abuse, rob, and wreck (“freedom!”) protest mightily, circulating furious op-eds about “anti-business regulation”, but this only has traction in a world where people believe the free market myth.

    Far better to say that we want a society where basic education is universal, advanced education doesn’t require crippling debt, medical care is accessible to all and free of charge to those in dire need, and people’s retirements are dignified and secure. Any system that fails to deliver that, or worse, undermines the systems that do, becomes – by definition – a crime against humanity.

    Crime is the operative word. As noted, situations like the one we’re in now are the product of sustained and compounding injustice. And a failure to prosecute those who operate outside the already very relaxed limits only accelerates social decay. I really think we’re nearing a breaking point, and that the next 3-4 election cycles provide a window for something transformative. So when JT talks about the next 50 years, he’s talking about a period that, for the most part, falls on the other side of this inflection point.

    The great fortunes of the next fifty years will be made betting on the upside of an emerging global democratic capitalism that actually capable of delivering smart and reasonably priced services to all classes of society.

    That fits squarely with Fischer’s thesis. It’s also bad news for rentier capitalism. I suspect that patent holders in software, agriculture, genetics, and pharmaceuticals are going to have an especially hard time, as their models work well in capturing value produced by fully developed economies, but fall apart in developing economies. Indeed their application in these spheres actually hinders development itself. In an increasingly networked world, I wouldn’t bet on suppressing this growth for any appreciable duration – especially when people want to know what they’re getting in return for the patent protection they grant. If the answer is “A $70 round of chemo treatment for $10,000 long after the compound in in the black several times over”, the regime imposing that will be seen less like Louis XIV, and more like XVI.

    In fact, it’s already happening.

  25. JTMcPhee says:

    @Alex Bowles
    A whole lot of flies in the ointment, potholes in the road, and little cliff! surprises, and it would seem that “I still think that if Americans can recover control of their electoral system” is maybe one of the quaintest. We need a sense that there is some kind of “legitimate government,” some SOMEthing that provides consistency and order, and there’s more than enough proof in history that it does not have to clear a very high bar to be considered “legitimate,” since most people just look down, put their shoulders to the wheels that are grinding on them, and keep on doing what they are expected to do. Louis XIV was not a very nice guy, either, and his oppressions and taxations and wars an excesses helped charge up the huge capacitor that was the Revolution, eventually. Which of course did not really change anything over the long haul, just a little shift in the rosters of the people at the pinnacle of the pyramid.

    But then I’m just an old grouch…

  26. JTMcPhee says:

    And speaking of shit sandwiches, and interregni, and apropos apparently of absolutely nothing, any of youse been following and looking for the silver linings in what “the White House” has just laid upside the haid of the vast majority of your fellow (former) (citizens,) the “budget proposal.” “Defense sequester cuts” fully re-funded, SS Superlative CPI take it in the shorts, taking away heating fuel assistance to unemployed and impoverished, oh, there’s a lot of curly turds between those luscious slices of Wonder Bread… simply XLent!

  27. len says:

    One bit noticed JTMc: he wants to privatize the TVA. The TVA receives no tax dollars and has a good business model. So why do it? Because he is not a progressive or a socialist. He is a front man for the “seize all the wealth while we have the power” band. He isn’t running for reelection and it shows.

    The anger is rising and unifying. Progressives like to say a population with small arms cannot fight a military such as ours. Tell that to the Taliban. The tragedy unfolding is of the hubris of the ownership class in that they believe this can go on unresisted and unchallenged indefinitely. Bad brew.

  28. Alex Bowles says:

    @len I think you’re right about the hubris. I really don’t know how else to explain the nerve of the thoroughly captured Fed and OCC. Ostensibly regulators, they are now running straight interference for the banks by withholding from Senator Warren information on the rates of illegal foreclosures on the grounds that the numbers are “trade secrets”.

    This is like sitting on top of a powder keg and deciding that it’s a good spot to light a cigarette. Situational awareness = zero.

    I don’t know what’s going to catch up with Obama first; truth about the war in Pakistan, or silence in the face of banksterism. Both point to the extraordinary democracy deficit we’re suffering, and neither can be rectified without a significant transfer of power away from special interests and into the hands of the electorate.

    Since the suppression, degradation, and outright rigging of the electoral system has been the primary enabler of the badness, it’s the most effective focal point for a restoration of sanity. And you’re right about the unifying anger. More importantly, that anger is matched with clarity, and it’s reaching a point where it can make very specific demands about the design of elections, and how they’re run.

    Absent the power of K Street, I have a hard time imagining how few – if any – of the worst interests can maintain their death grip on American policy. For all the extraordinary control they maintain over government, the weakness of their position is that all their eggs are in the same basket. This means that when things do change, they change fast. Like Lenin said, there are decades in which nothing happens, and weeks in which decades happen. And if you want a sense of just how dramatically, thing can evolve, consider California. We were a terminal basket case. When it cane to partisan rancor and fiscal insanity, we were the the worst of the worst. Then 2010 happened. Electoral fixes meant two years later we’d kicked the worst of the partisans to the curb, balanced the budget, and started to stabilize the economy.

    For those who care to look, it’s a blueprint with undeniable value.

  29. Hugo St. Victor says:

    It’s that Jon says this:

    “In your politics, work with candidates that want to build a world of justice and peace. Not with ones who want to scare you that a vote for the other party will mean the end of the world as we know it.”

    One, in our politics. Useless if not exercised. Two, failing to find an ear where we are, we’re free to go elsewhere. The Country wasn’t accidentally structured that way. People crossed outrageous personal and sectional borders to bring in Lincoln by 38.9 on a three-way plurality. I personally dread Rand Paul, for example, but he wouldn’t have been elected even to a Senate seat without outside help. There’s a Congressmember in Iowa who represents convictions otherwise unrepresented in Congress, so my first assistance goes to him though I’ve never been to Iowa. See? The Constitution wants us in part to travel. Watch out for court decisions attempting to curtail our interpartisan or interstate political commerce. Each of us is also, at times, a free agent, a free born sovereign citizen, in charge ultimately of all three variously tentative branches. Make no mistake: This was the problem with the “Nigger Vote” and with Women’s suffrage. So, yunno, the good team won. But we lose if we don’t exercise these gains to the hilt, even in crossing boundaries of whatever sort. Thus endeath my Rock Exortation. We Are Free!

  30. len says:

    Vacation is over. Back on my head. JOB!

    … and I had time to relearn classical gas, jesu Joy of Man’s desiring santanna, stevie ray vaughn on guitar, and toni braxton, elton john, john d loudermilk and some other oldies on piano. Gig next week. And a treatment but I can do that too.

    Personal stuff, but you are my friends and I thought a little good news would be good news. Improves my mood.

    So back to the revolution.

  31. len says:

    Thanks JTMc. :)

    @alex: The hope is that the rotten soulless bastards are fast approaching their Teddy Roosevelt moment, when courage, tenacity, the facts and a stick arrive to whack their peepees.

    And a woman will be swinging it:

    When Thelma and Louise sailed over the chasm, one could take three positions:

    1. Two heroines met their destiny.
    2. Two homicidal bitches saved the state the costs of dual executions.
    3. A Ford Thunderbird can’t achieve the momentum to arc that high.

    When Warren steps up we are seeing what real feminism means: it means being a woman makes no difference at all. Courage and tenacity do.

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