James Howard Kunstler: Broke
The story-line behind the convulsions shaking the money centers of the world is such a hopeless labyrinth of mathematical metaphysics because abstraction unto infinity is the last refuge of those seeking to evade reality. This is why individual human beings faced with terrible choices go crazy, and it is true of societies and nations, too.
Reality is so boringly concrete. The facts just sit there implacably like dull cement bollards in a roadway, waiting for impact with objects in motion. These facts are as follows:
- The world is dead broke. (By “world” I mean those places where the electricity is on more than it is off.) The world spent all of its future capital to stage an orgy of blow-out development and then the future arrived and there was no money to run everything.
- To make matters worse, there are massive interest payments due on all that money misspent. Nobody has the means to pay the interest. All the activity around this fact is an Olympiad of money games that amount to musical chairs and hot potato, signifying that 1) there is not enough to go around, and 2) somebody has to end up stuck with a problem.
- The orgy averred to above coincided with the last years of cheap and abundant energy supplies to run the development. That’s over and done with, too, despite the strenuous efforts of wishful thinkers, cornucopian propagandists, and corporate racketeers to pretend that technological magic can make up for dwindling cheap supplies.
The net effect of all this is that advanced societies all over the planet have entered a comprehensive compressive contraction of activity and, more ominous, of technological progress. The world can’t cope with contraction. For one thing, it wreaks havoc in the mechanisms of capital formation. Capital can only be formed under conditions where interest can be paid. That is, loans are only tenable when they can be paid back with interest. Hence, the current insanity in world financial markets and banks – the mad scramble to pretend that interest payments will be made on bailouts tendered to nations that cannot make interest payments.
The assumption that this craziness can go on forever without consequence is now dissolving in an international mood of frantic despair. The spotlight for the moment is on Europe because that is where the games of hot potato and musical chairs with the most players are underway. The mutual entanglements over money tendered and interest owed are so complex and abstruse that the number of moves needed to complete the games seems infinite. But trafficking with infinity is itself one of the universe’s most hazardous ventures – it invariably ends in the death of the adventurer.
What’s more, the trajectory to that sorry ending accelerates fastest in the last moments of the venture. Hence, expect Europe to melt down like an overheated nuclear reactor, with an aftermath of deadly political goop oozing out to make parts of the continent unable to support human life at levels we are currently familiar with, i.e. civilized society.
That is to say I’d expect a lot of internal disorder in the nations of Europe in the decade to come, before there is even a chance of anything that resembles war between nations breaking out – and by the time war does occur, it may be fought with crude swords and helmets forged out of the scavenged detritus of a bygone age.
The current extravaganza across the Atlantic Ocean has taken the spotlight off doings here in our own colossal floundering confederation of quasi-sovereign American states. Our situation with money spent and interest due – and the resulting impairment of capital operations – only seem less dire in comparison.
It’s just that we are playing a different game than hot potato and musical chairs. Our game is more like the old American schoolyard game called salugi (suh-looj-gee), or “keep-away.” The “big kids” (the one percenters) like Jamie Dimon, Jon Corzine, Lloyd Blankfein, et al, have stolen the baseball mitts of the dweeby little kids (the 99 percenters) so that most of the people in this country feel that they cannot participate in the national pastime anymore. The big kids have certain advantages, obviously, but sooner or later they run the risk of being torn to pieces by the vengeful mob. Of course, that happens when the game stops being simple keep-away but seems more and more a matter of larceny – “they stole our mitts!”
When that moment arrives anything might happen politically here in the North America, from a corn-pone Nazi takeover of central government to a complete dissolution of the republic into autonomous and even hostile regions. Similar games and outcomes are possible in China, Russia, and the nations of the Middle East. In fact, the tendency world-wide in the face of accelerating compressive contraction will be to break up large political units into smaller units. The main question is: how much heat will that process of global fission generate as we lurch into a world made by hand.
(Originally appeared at Clusterfuck Nation. Image by Bob Jagendorf under a creative commons license.)