There's an echo in here. A sense of foreboding, of dread. Not the pessimism of the informed, something much more personal. The fear of not having enough, as Derrick Jensen calls it in A Language Older Than Words.
It's an echo because those of us in the blogosphere are more
knowledgeable than those in society's mainstream, where most live with
that fear, to a greater or lesser extent all their lives, and because
we are less distracted than those who get their information and sense
of what is happening from the detached, distorted and learned
helplessness-inducing mainstream media.
The rest of society will catch on sooner or later, but for now this fear is our dark secret.
This
isn't just the gnawing fear and guilt and anger of having to do without
things we'd really like, for ourselves, for our children, things the
rich elite have in obscene abundance and squander without a second
thought. This is the deeper, darker fear of soul-destroying
deprivation, hunger, desperation, not knowing where the next meal is
coming from.
This fear is rooted in two dawning realizations:
- The
economy is horrifically overextended and fragile, and the actions of
the rich and powerful elite we still allow to make reckless decisions
on our behalves are a game of chicken that, if we lose it, will plunge the world into another Great Depression, and
- We are now living hand-to-mouth
so much, even those with low six-figure incomes, that even a temporary
interruption in cash flow would be catastrophic: For the most part we
have utterly inadequate savings, and most or all of our wealth is tied
up in overpriced real estate and overpriced stocks and bonds, so we cannot afford to retire, ever.
The
rich and powerful are immunizing themselves against this risk, although
they still, mostly, deny it will happen. Using the economic power
engine shown in the chart above (described in this
earlier article), they are furiously redistributing wealth from the
poor to themselves, calling in political favours to obtain tax cuts,
government subsidies, and increased protection from creditors and
litigants, and labouring to gut social programs and creditor and legal
protection for everyone else, so that this flow of government largesse
is not threatened by demands from the poor. They are dumping their
domestic workforce in favour of faraway, cheap labourers who will have
neither the means nor the will to vent their fury on the corporatists
when Depression closes the plants and lifelines to even basic human
necessities. They are reneging on pension and health obligations,
cynically shifting worker pensions from defined benefit plans to
defined contribution plans that will be worth nothing after an economic
crash, which is precisely when they are most needed. They are urging
the governments in their back pockets to abandon already weakened and
inadequate social safety nets by declaring them bankrupt and walking
away from them. The
objective in all of this is not only to shift wealth from the poor to
the rich, but to shift risk in the event of economic collapse from the
rich to the poor.
The rest of us have either learned that
the government and corpocracy are not here to do us any favours, so we
can expect nothing from them, or are prevented by pride and a sense of
fairness from the shameless begging from politicians (described
euphemistically as 'lobbying') that corporatists use to hedge their
risks. So we don't even ask for, or expect, any insurance from the
impact of an economic depression or the inadequacy of our savings to
provide even minimal needs in our senior years.
There is nothing new in this. It happened during the era of the Robber Barons,
and again during the so-called Roaring Twenties. If you harbour the
illusion that the 1920s were a period in which the staggering affluence
of the rich was shared with the working or even middle class, read this
account, from a librarian at U. of Oregon. If the social parallels
between the 1920s and the 2000s don't make you shudder, then you're not
paying attention to what's happening here, now. The economists, in the
pay and employ of the corporatists, while still spouting their lies
that 'average' GDP has anything at all to do with human well-being,
will tell you that the technical causes of the Great Depression of the
1930s cannot recur because of technical safeguards instituted since
then.
But the primary cause of the Great Depression was not technical factors at all, but rather a crisis of confidence.
It is only public confidence, the consensus of those investing their
hard-earned money and savings, that accounts for houses that cost
$100,000 to build and another $20,000 per year to commute to and from
to work, somehow selling for, and hence being 'worth', $500,000 or
more. It is only public confidence that accounts for shares of
companies that are massively leveraged, dependent on government
subsidies, tax exemptions, and artificially suppressed interest rates,
selling crap manufactured half a world away by desperate slave labour,
financed by debt ten times larger than anything seen in the history of
the planet, imported cheap thanks to artificially suppressed oil
prices, and flogged to the public at obscene profit margins, trading at
30x earnings or more -- in other words priced on the expectation that
these already overstretched and unsustainable profits will continue to
increase by 20% or more every year forever.
Eventually
the baby boomers, a billion or more of them, will, except for a tiny
elite, be forced to realize that they cannot afford to retire, and that
they will have to work until they die, and liquidate everything they have to make ends meet, and stop buying everything except absolute necessities of life, and
become self-sufficient (since they will no longer be able to afford to
hire others to do everything for them). If you know anything about
economics, you know what happens when large numbers of people stop
spending and start liquidating their assets. Crash.
Eventually
the international game of chicken that has produced such staggering
debt and imbalance in trade will reach the point at which someone says
'uncle'. If the Chinese don't do so (because their economy and the US
economy are co-dependent), the Arab nations, realizing that their only
asset is being exhausted
by 8% per year and that to offset the fall they need both a
commensurate increase in price and a stable currency in which to price
it, probably will. If the Mideastern oil supply survives the
Bush-Cheney Crusades (there's evidence it won't), the OPEC nations will
soon start insisting on payment in a non-bankrupt currency. The Ponzi
scheme will then be over, and the first to cash in their chips will do
fine, the next will scrape by, and the remainder will be stuck with
certificates and debentures whose only value is as wallpaper. The
result is what is called a default, and it is the ultimate expression
of a crisis of confidence. What happens next is that the US dollar
becomes worthless, trade grinds to a halt, everyone whose job depends
on trade is laid off, so they stop buying, pushing demand down to the
point that price is less than cost, huge profits become huge losses,
and the whole economy shuts down. It took until 1932 before someone had
the courage to call the 'correction' what it really was.
Hence the dread. It's just a question of when.
Cash in too soon and you'll miss the last orgy of real estate and share
price rises, leaving you with a nest egg considerably smaller than it
could have been. Cash in too late and your assets will be worthless,
and you'll have no nest egg at all. As soon as a significant number of
people start cashing in, the Tipping Point is reached, and there's no
turning back. Only the worn-out lies of economists, politicians and
corporatists are delaying this inevitability. And, as I've already
explained, they've hedged their bets already.
Then the Fear of
Not Having Enough will become a reality. Search the Internet for
information on what living in the last Great Depression was like, and
you'll come up with surprisingly little. It's almost as if this period
in our history has been self-censored out of our consciousness. Maybe
there's a fear that if enough people realize how much our world today
is like the 1920s, that could make its repetition a self-fulfilling
prophecy.
So what do we do? If you do a cash-flow forecast, on
the assumption you will live to the age of 90 (likely if you've made it
this far and in the absence of a pandemic or similar disaster), there's
an extremely high likelihood you will realize you don't have enough to
retire, ever. And if retirement is still too far away for you to be of
concern, you need to prepare now to look after yourself and those you
love when we reach the Tipping Point and plunge into the next Great
Depression.
In either case, you will have to do two things:
- Get your life in order:
Cut your spending to what you absolutely need. Eliminate your debts.
Sell off assets that are extraneous, especially if they're denominated
in $US. If you're hanging on for the final surge before the bubble
bursts, watch the markets closely and be prepared to get out fast. A
lot of pessimistic economists will tell you to invest your cash only in
commodities -- gold and oil -- but I'm not so sure. I'd invest in
things that people will always need and that you yourself can use --
like agricultural land close to where you live that has not been
exhausted and that can be used to grow food (if you think this is
absurdly pessimistic, google "Victory Gardens" and read about how the
upper middle class lived in the last
Depression). Learn to be self-sufficient -- teach yourself how to do
things that you currently hire people for (like teaching your children
and looking after your own health), and how to fix things instead of
throwing them out and buying new ones or relying on others to fix them
for you.
- Learn how to make a living for yourself: As I've been (re-)writing The Natural Enterprise,
I've come to realize that sustainable entrepreneurship will be even
more important to baby boomers with a quarter-century of unfunded
'post-retirement' ahead of them, than to the young, downsized and
disenchanted the book was originally intended for. The thought of a
billion people in their fifties and sixties, set in their ways, needing
to learn, in a hurry, how to make a living for themselves, or face
poverty and even destitution, is mind-boggling, and not enough
economists are paying attention (most of them look at the 'paper
wealth' of the baby boomers and assume they'll be just fine, not
realizing that this paper wealth will disappear in a depression or even
a period of high interest rates).
In short, this dread, this
Fear of Not Having Enough, that is nagging us, those of us informed
about what is happening in this world but not rich enough to immunize
ourselves from it, is happening for a reason. We need to be the models
for the rest of society, show them what needs to be done. This will
take great courage, because we will be accused of being Chicken
Littles, or worse, of starting a stampede needlessly. Keynes, the great
student of economics, knew the Great Depression was coming but lacked
the courage to act, still waiting for the top, for his pessimism to
achieve some level of social consensus. As a result, he waited too long
and was wiped out.
Here's how Zane at Lichenology has put it:
So
on the cusp of my official mid-life...I am recalibrating and stepping
into the fullness of life. I want to serve my family and my community,
to live with attention and respect, to be humble and generous. I
believe we are entering another time in history when people will be
asked to be and do all they can. Each of us must find our rightful
place in this unfolding—we need to find the sense of wholeness from
which we can step up to our role.
We need to relearn to trust
our instincts. Preparing for events we cannot even imagine, and which
might be farther off than we fear, runs counter to accepted wisdom of
'rational' behaviour and to our human nature of acting only when we
absolutely must, when there is no other choice. The voices of dread
whispering to us, filling us with 'irrational' fears, are telling us
something important. It's time to pay attention. Others are depending
on us to show them the way.
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MADE IN CANADA
trust your
instincts 
