Friday, March 14, 2008

The Third Wave: The coming crash

Actual photo from the last Great Depression
Photo (c)1937 by Margaret Bourke-White

All signs are that the United States is headed straight into an economic meltdown and a second Great Depression, and inquiring minds everywhere are asking when this coming economic crash will hit and what it will be like.

As to the first question, the gold standard of economic gurus - Nouriel Roubini - has predicted the Third Wave (a surfer term meaning "the Big One") for August-September of this year (Source). As for the second question, we do in fact have a good model for the coming living conditions in the history of the last Great Depression, which lasted from 1929 until 1940, and were eleven years of pure hell. See the Great Depression timeline at: Timeline.

The average unemployment rate during the whole period of the Great Depression was roughly 17% nationally, rising to 30+% in selected areas - the South, Appalachia, and the Midwest. Depending on where one lived, that was one person in five to one-in-three unemployed and unemployable. At the beginning of WWII, the rate was still 17%. The Great Depression was a world-wide event; with the possible exception of sub-Saharan Africa, no nation on earth was exempt. During those years, some 80% of the population dropped off the tax rolls! (Ibid)

The naked numbers are misleading, though, because in America the Midwest was also in the midst of a 100-year drought which combined with high winds and poor cultivation techniques to desertify hundreds of thousands of acres of the Midwest (creating the "black blizzards" of the Dust Bowl) and drove millions of farmers off their land, resulting in the great Okie migration to California. 50% of family farms failed during this time.

California then became the breadbasket for America, but at near-starvation wages for the laborers. My father (then a teenager) made $5 a day picking potatoes and other crops, which is backbreaking labor, and not for the old or infirm. That source of labor income is mostly gone now because of highly mechanized harvesting techniques, although stoop labor is still required for vegetables such as lettuce, berries, potatoes, etc. (The West coast is the source of beets, potatoes, apples, berries, leaf vegetables, carrots, strawberries, oranges, peas, etc from the Imperial Valley in Southern California up to the apple trees in Washington State and the potato fields of Idaho). Wheat and corn are Midwestern crops and almost entirely mechanized, but heavily dependent on fuel prices, so expect shortages of bread and maybe ration cards. Danger point: about half of today's American shopping cart is filled with products from overseas. Source.

Presently, harvesting in the West is principally done by Mexican migrant labor, with a smattering of low-rent whites, so one of the effects of the depression will be the instant roundup, incarceration and/or deportation of the present immigrant population in California and the Southwest, expanding to a national effort (that's what the "concentration camps" were built for; the roundup plans are already on the books). This will be a massive undertaking, so look for job opportunities in "law enforcement." Anyone caught in public speaking Spanish will probably be shot, beaten or hung on the spot by vigilante groups.

The coming depression may not be quite as severe as the last one, but it will still be bad. Most Americans will still have a job, but at reduced wages and benefits; they will pay more (sometimes a lot more) for critical items like food and gas, including heating and cooking fuels. Electricity prices will fluctuate wildly depending on what is generating your electric (hydro, gas or coal). The South will become almost unlivable as the air conditioners are turned off one by one. Most airlines will go the way of the dodo, and take Boeing and McDonald Douglas with them. This is not good, as Boeing is the largest exporter of American manufactured goods in the country.

Psychologically, almost everyone will suffer severe depression caused by job anxiety and constant worry brought on by the loss of cultural stability (Source). The mainstream media will be full of happy news that no one will believe. Well, the remaining sane people, anyway. As a happy side note, the Great Depression led directly to the explosion of the movie-making industry, as millions flocked to cheap movie houses ("Air Conditioned Inside!") as people sought escape from the reality-hell they were living in with the fantasy world of big screen Fred Astaire/Ginger Rogers fantasy land. In the new depression, Hollywood will continued to provide fantasy escape entertainment, but "reality TV" will be a non-starter.

There will be inner-city riots that will not and cannot be put down, with acres and acres of burned business districts. The six o'clock news will cover these extensively, but in no particular depth, per usual. (History as such does not exist to the people who bring you the "news").

Local banks failed at a rate of about 600 per year during the Depression; expect the same this time, so, local bankers will be chased down and subjected to kangaroo trials by angry citizens, then hung or exiled. Large roving gangs of unemployed youth (black, white, brown and yellow) will cause untold mayhem. There will be curfews everywhere.

During the Great Depression the Constitution was still in effect and presidential and congressional elections were still held as scheduled. However, Bush will still be in office when the Crash hits, and since the Constitution has been nullified in its entirety under his regime, there is the strong possibility that he will declare war on Iran, suspend the November elections, declare martial law, and resume the draft. In that case - and barring a military coup - expect riots everywhere (Source).

Short of that, there will be actual martial law in selected places, although functioning military authority will be limited to large population centers - the rural countryside will be mainly pest-free - as our military is mostly overseas and will take ages to bring back en mass. Don't expect to see many tanks in the street in any case: they're all in Germany or Kuwait (Source).

On the personal level, if you're Joe Sixpack, you have zero savings (in fact, the average American savings rate is zero), so to pay your rent you will attempt to sell your plasma TV, your DVD players, your PlayStation, and your gun collection piecemeal (but keep the shot gun and the .45) and try to trade the XLT monster truck for a Jap import, and good luck on that. The waiting lines for bankruptcy court will be around the block, and you will probably have to pimp your daughters to pay the lawyer's fees anyway.

Hospitals will close, but individual doctors may treat your cancer in exchange for freshly-killed poultry. Expect an uptick in sales of The Idiot's Guide to Self-Dentistry.

The majority of the unemployed will spend their days in line at the state welfare office. Unemployment insurance is a state function, and, as most states are near broke right now, they will run out of money very fast. The more enterprising among us will then go out and stand on the sidewalk and sell pencils, if they can afford to buy any. Technically, a city or state cannot go "bankrupt" under present US law, but they can and do run out of cash. Then they "reorganize" (Source: Still, when you're broke, you're broke. Then it's boiled shoe leather time, although I know personally and for a fact that there are people right now eating road kill.

Optimistic estimates are that this period of "economic instability" will be short-lived, but that's probably the result of the same wildly optimistic dreamland pseudo-thinking that got us into this mess in the first place. Realistically, I would guess that you can expect the same ten to eleven years of chaos and social disruption as the first Great Depression, which we really only got out of when we entered World War II. Think about that one, real hard.

The good news is that all the conditions are in place for a socialist revolution. You can expect heavily-armed resistance.

Life will not be easy after the crash, and you probably won't die as a direct result of it, but you will definitely be living a vastly reduced lifestyle in economic, cultural and political terms. And if you think I'm kidding, you're an idiot and deserve everything you get. I sure as hell didn't make you hock your house or max out your credit line to buy a fucking $3,000 plasma digital High Definition TV set to watch "American Idol." You did.

Good night and good luck.

Monday, March 10, 2008

Get ready for the resource wars

Time is running out for us all.

We live in a dangerous moment of history. Irony of ironies, Americans in the near future may be conscripted en mass into the armed forces as America declares resource wars on the rest of the world in order to escape the consequences of the two Iraq wars, which now include a second Great Depression (breaking news).

If you're now scratching your head pondering what I'm talking about, consider Obama's or Clinton's refusal to state unequivocally that we will pull ALL of our troops out of the Middle East now. While the invasion of Iraq was in part at the instigation of the neoconservative cabal in their support of the racist policies of the Zionists (fundamentalists) of Eretz Israel, for the Eastern elite who rule us (and the oil cowboys of the Southwest) it was always about the oil. Cheap oil, easy-to-get sweet crude oil, a resource that is about to get real scarce all too soon. The phenomenon is call "Peak Oil."

Peak Oil has been a fact of life for some time, as even Dick Cheney cops to. And while it sounds good to the American public that we went into Iraq to remove a terrible dictator, it really doesn't sit well with Joe Q Public that our fair Republic often throws its weight around for purely economic and selfish reasons.

In all fairness, if the subject of Peak Oil were spoken of more honestly by the oil conglomerates and the politicians, Americans at large might have a better idea of the seriousness of the issue and plan accordingly. They might even stop buying 4-ton Hummers and Cadillac Escalades that get 10 MPG. But they have been coddled and spoon-fed the fairy tale of a glorious consumerist future - mostly involving huge SUVs and endless highways to a perfect suburbia - for so long that there's little room left in their greedy ignorant heads for the real world, a world rapidly running out of easy-to-get cheap oil. Not to mention that for the most part, most Americans don't even know that the rest of the world exists, except as a "resource."

But not everybody is an idiot or uninformed, and that includes Hillary Clinton and Barack Obama. They both know that the end of cheap oil is upon us, and it behooves America to hang on to all the oil-producing territories that we can, for as long as we can, and also to grab all the new oil territories we can, the sooner the better. Russia's Vladimir Putin knows that, too, which is why we're starting to see headlines like the following in the foreign press - but not the US press, because there is no such thing as an end to cheap oil in the dreamland of the American mainstream media.
Climate change may spark conflict with Russia, EU told
Alert over scramble for control of energy resources in the Arctic
Ian Traynor in Brussels
The Guardian, Monday March 10 2008

European governments have been told to plan for an era of conflict over energy resources, with global warming likely to trigger a dangerous contest between Russia and the west for the vast mineral riches of the Arctic.

A report from the EU's top two foreign policy officials to the 27 heads of government gathering in Brussels for a summit this week warns that "significant potential conflicts" are likely in the decades ahead as a result of "intensified competition over access to, and control over, energy resources".


The officials single out the impact of the thawing Arctic and its emergence as a potential flashpoint of rival claims, pointing to the Kremlin's grab for the Arctic last year when President Vladimir Putin hailed as heroes a team of scientists who planted a Russian flag on the Arctic seabed.

Developments in the Arctic had "potential consequences for international stability and European security interests".[i.e., resource wars]

"The rapid melting of the polar ice caps, in particular the Arctic, is opening up new waterways and international trade routes," the report notes. "The increased accessibility of the enormous hydrocarbon resources in the Arctic region is changing the geostrategic dynamics of the region."

The report also stresses the volatility of the regions that hold large mineral deposits and predicts greater destabilisation in central Asia and the Middle East as a result of global warming
This "scramble for resources" and the warnings of conflicts from government agencies put the lie to the arguments of the deniers of global warming, inasmuch as there would be no scramble if the resources - oil - were still plentiful elsewhere.

Cheap oil is indeed running out but global warming is affording an opportunity for a race for resources in previously inaccessible regions. The greed of stock-jobbers and our mindless preoccupation with McMansions in suburbs that can only be accessed by giant, luxury trucks masquerading as family vehicles have blown apart the economic stability of the markets of the world. Americans are pigs who can't stop eating, consuming fully half of the world's resources while the average Third World person lives on less than a dollar a day. George Kennan is considered to be the most important foreign policy analyst of the last century; as the architect of the Cold War policy of containment of the USSR, he put it in no uncertain terms:

"We have about 50% of the world's wealth, but only 6.3% of its population . . . In this situation we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security."[1]

These are soft and weasely words, but words that point to inevitable resource wars, unless we stop our gluttonous energy consumption now.

The warming climate and the end of cheap oil is a recipe for a bloody future for everybody, and we have no one but ourselves to blame.

Happy motoring, indeed.


[1] George F. Kennan, "PPS/23: Review of Current Trends in U.S. Foreign Policy." First published in Foreign Relations of the United States, 1948, Vol. 1, 509-529, it has been reprinted in Thomas H. Entzold and John Lewis Gaddis, eds., Documents on American Policy and Strategy, 1945-1950 (New York: Columbia University Press), 226-28; the quoted passage is at 226-27.

Sunday, March 09, 2008

US misses Al-Qaida, kills cows instead

Tomahawk TLAM missiles (as seen here in a submarine launch)
cost about $600,000 each.

This is pretty sick:

US fails a fourth time to hit al-Qa'ida suspect in Somalia / Web
By Steve Bloomfield in Nairobi
Sunday, 9 March 2008

A US missile strike in Somalia, aimed at a man described by the Pentagon as a "known al-Qa'ida terrorist", succeeded only in hurting six civilians and killing three cows and a calf, the IoS has learned.

The rest of the story: UK Independent

Edited 3/11/08