Saturday, April 30, 2011
Question: Are We On the Edge of Another Economic... Shock?
I ask because there appears to be some shuddering in the Economy due to the sharp rise in commodity prices, ie: food and energy. Things that people need, you see.
Just like 2008, when gasoline prices last got this high -- and predictions now are for $6 a gallon by summer, with continuing rises in food prices -- people cut back, stop buying, bring the economy more or less quickly to a halt, and if factors are dire enough, put it in reverse.
Of course an economy that relies on bubbles for "growth" is one that cannot be sustained for very long. Unfortunately, the American Economy has been relying more and more on the Bubble to carry the load ever since the days of Reagan, and it doesn't seem to be working any more.
So are we stuck? Are we going back into reverse? And is there anything to be done about it?
What happens when gas is too expensive and food is too expensive? What do people do?
Millions upon millions of Americans have been forced into poverty since this Endless Recession began and Disaster Capitalism became the operating principle of our rulers. Most of them will never get out of poverty again. Most have already adapted to their new, reduced circumstances, and they've already cut their spending back to the nub. They don't have anything more to be pillaged and plundered by the High and the Mighty.
The effects of higher energy and food prices on them will be severe, because for most of them, there are no options: it is either pay the price or go without, or both. Both is what is happening: they pay for what they must and they go without for everything else. Their physical and emotional situation deteriorates. Their lives become more and more cramped and crabbed, and their sense of despair for the Future becomes consuming. Faith may be some comfort in their distress, but there will likely be no relief for their suffering from the material world.
But there is still a large middle class to plunder, large enough anyway to make the Powers Who Rule Us salivate with the contemplation of the opportunities before them. Thus the persistent and concerted efforts -- rather successful efforts even in the face of massive opposition -- to "curtail" pay and benefits for the largest blocs of the remaining middle class, that is public employees.
And of course we can't neglect to mention the assault on the benefits for the elderly and disabled. Raising the retirement age, when it should be lowered, and cutting Social Security benefits, when they should be substantially increased, is a form of pillage by the Owners. Transformation of benefits that have been pre-paid by their users into partial subsidies to the Marketplace is a form of plunder.
The irony is that this assault on what remains of the social contract and the American Way of Life, if you will, doesn't help the Owners in mid and long term. In fact, it does just the opposite.
They've been busy stealing from one another as a kind of sport for years. Now they're plundering the rest of us, and so far, as each sector has been depleted, they've been able to move on to the next. It's all quite mindless. While there is some actual cruelty involved, mostly it's just automatic behavior. But they are running out of sectors, and once they have taken everything they can grab from everyone else -- including their peers and rivals -- they are left in the condition of Latin American grandees in the 19th Century. "Rich" by comparison to the poverty they have created all around them, but as rotten and backwards as any aristocracy there ever was.
Or think of what happened to Rome when the system of plunder and impoverishment had run its course.
That's the path we're on.
And another Economic Shock will do nothing but accelerate the process.
Individuals will have to take matters into their own hands to stall or reverse the process, and that's a task more and more Americans seem willing to take on.
The results from this application of the Shock Doctrine just might surprise us all. I know I've said that before.
[Traveling today and tomorrow, going back to California after a very active couple of weeks in New Mexico]