Article 43

 

Wednesday, August 07, 2019

The Big Crash

image: dying america

It’s Not Just You. We’re Living Through The Worst Breakdown Since the 1930s
(and Our Systems and Institutions Need Radical Reinvention.)

By Umair Haque
Eudaimonia
July 29,2019

If you’re alarmed by the way things are going in the world - you should be. It feels to me as if were living through a Big Crash. What I mean by that is that the world’s great systems are broken. They cant be mended. They need to be reimagined and redesigned and reinvented. But so far - there seems to be as little will to do that as there as in insight into it.

Hence, an age of paralysis, despair, trauma, and backlash. Your anxiety is very real, it means something your gut is telling you all the above, just like mine is.

The fundamental system that’s broken is the GLOBAL ECONOMY. That’s not a surprise - America designed and invented it, and the global economy has come to reflect Americas bizarre and grotesque economic outcomes. America is now a country of a tiny number of ultra rich, who effectively own everything, and one of something very much like neo SERFS - the average American will die in debt, which means he’ll never (in net terms) own, earn, or save anything. Anything.

That shattering inequality has gone global, as a natural consequence of the global economy America built. It fought war after war and destabilized nation after nation to put together a capitalist world or at least as capitalist a world as was possible. “Free trade” deals (freedom for corporations), floating currencies, speculation, privatization, stock markets, and so forth. The consequence is that inequality is skyrocketing across the globe. But that’s an anodyne phrase. We don’t often stop to think about what it means.

What it means in hard terms is that the middle class is imploding in society after society. Even the vaunted Canadian and European middle classes, better protected by generous social contracts, are beginning to decline. The working class is fast becoming something like a caste of digital serfs, roaming from on DEMAND GIG to on demand gig, scavenging the landfill of prosperity for today’s ride, task, job, detritus.

Money is hoarded at the top. So much of it that the ultra rich, banks, and corporations literally don’t know what to do with it. All the yachts and designers wardrobes have been bought.

So they shovel it offshore, into hidden accounts, where their loot is stashed away for a rainy day. Keynes would have called all these “imbalances” in his day, they emerged between countries. In our day, they have re-emerged between classes, across countries. Because money is hoarded at the top, it doesn’t flow through the rest of the economy - and the result is stagnation for everyone else. Life becomes a bitter struggle, as your bills perpetually rise but your income doesnŗt. (Hence, incomes are flat in every rich country a fact that predicts more, not less, extremism.)

In technical terms, we might say something like - capitalism is causing a collapse of the social structure (by creating a lack of demand.) In plain English, that means that the structure of a “healthy society” a small number of rich (not extremely rich), a large, stable middle, and a small, shrinking, number of poor - all that is imploding. Instead of creating a healthy, stable, enduring middle class, optimistic about its future, securely anchored in place, instead of creating a small, ever shrinking number of poorׅthe class that global capitalism really created was a global ultra-rich (and vast armies of the precarious, broke, and powerless to serve them.)

So now society is beginning to revert to SOMETHING MUCH MORE LIKE a premodern structure a tiny number of people so wealthy they are in a different caste, and a very large number of people who serve them. Think of the days of aristocracy - the aristocrats owned more or less everything under the sun huge chunks of cities like London and Paris, huge swathes of land in the countryside, palaces that made today’s mansions - look like shanties. They gave themselves grand titles and wore ornate uniforms and created strange myths that they had noble blood to trick everyone else into believing all that was just and fair. Hence, that system prevailed for centuries.

Think of the difference between a gentle bell curve, and a pair of pincers. A neofeudal caste society what that capitalism - unable to sustain itself built, in country after country, not the kind of broad, stable social structure of shared prosperity that so much depends on. Like what? Like democracy, trust, meaning, and happiness.

As a result of the global economy failing, polities are, too. What happens when there is such tremendous inequality? The first thing that happens is that the rich who have become ultra rich try to purchase polities wholesale to defend their gains. That’s what happened in America. The ultra rich funded extremist movement after movement, to (literally) eviscerate the government, which was the only force in society that could check and restrain predatory capitalism. They succeeded. Corruption follows inequality as naturally as the moon orbits the earth.

But thats not the only way in which a broken global economy is producing a failed politics. What happens when middle classes collapse? Nationalism, authoritarianism, and fascism, all do. When people begin to live at the edge, when they are constantly teething on the razorҒs edge of mere subsistence, they become easy meat for demagogues, who blame an economys problems on anyone even more powerless still. Immigrants, refugees, gays, women Ғ anyone who is outside the in-group, the dominant tribe.

All thats a solution to the problem of stagnation. The pie is shrinking. How are we to have more ג just like we were promised? We will take some from them. Those dirty, filthy subhumans. They are the reason we are poor. If we can just cleanse ourselves of them and take all they have, too ח we will be Great Again.

It’s the story of Weimar Germany imploding into Nazi Germany. And today, it’s scarily beginning to play out across the globe. There’s America, run by literal white supremacists. There’s China, imprisoning a million people. There’s India, where an aggressive nationalism rules. Even in gentle Canada, extremists have carried whole provinces.

But none of this is a coincidence. ItҒs a consequence of middle classes who are either imploding, like in America, or who are struggling, like in India, China, and Canada. Those economies might be growingғ, its true Ԓ but they are not for anyone who isnt ultra rich at this point. Even in places like India and China, the cost of living is far outpacing gains in average income. The result is stagnation for everyone below the 90% threshold. And when economies stagnate, social structures collapse ג and the rise of extremism is as predictable as the sun coming up tomorrow. (Hence, even in places like India and China, which American economists point to as great successes, intolerance and hate and hardcore authoritarianism are beginning to rule.)

The three great problems of this century inequality, stagnation, and social collapse - are all linked in this way. The linchpin holding them all together is capitalism. The fourth and fifth great problems of this century climate change and mass extinction ח are forms of inequality and social collapse, too we still just donחt see trees and rivers and bees as members of our society, just as objects, so we dont make that mental link yet. But one day we will: we’ll say that just as capitalism ate through the middle class, it ate through the forests and oceans, too.

When we writethe history of this troubled century or at least a troubled beginning to it җ the verdict will be both clear and unanimous. Capitalism failed and failed catastrophically ח as a global economic system.

It wasnt able to produce equitable outcomes for even the countries which it “lifted up” (they did the lifting, my friends.) It wasn’t able to produce the health social structures vital for the functioning of a democracy a stable middle class, a small, shrinking number of poor - but precisely the opposite: the rich became ultra rich, the middle imploded, and the poor grew, as a new neofeudal caste society of haves and have-nots emerged. And it let democracy be bought lock, stock, and barrel by those new ultra rich, who soon enough cleverly used the institutions of democracy to destroy itself, as in Brexit or Trumpism, so they could defend their gains. As if all that werent enough to deal with, capitalism ate through the planet, too. It left the environment devastated. The climate began to change, as the planet warmed rapidly. Life as we know it began to die off. Later, weגll describe these as forms of stagnation and inequality, too for the natural world, for other beings, for all the things that we depend on.

The country that built the global economy җ its destiny shows us the fate of the rest of the world, too. No matter how rich or powerful a nation gets, if its run the way America is, the result isnt a healthy society ג its a caste society of the broke, powerless, and impoverished serving the ultra rich. And more and more nations are following precisely that path, falling like dominoes.

America was to be the bellwether for the global economy it had built. That was only natural - it was the model it wanted the world to follow. But its collapse was a microcosm of all the implosions the world was going through, too. American cities didn’t have clean water. They didn’t have decent food. It’s people lived and died in poverty - no matter how hard they worked, or how much they tried to save and invest. Its super rich decimated its polity. And in the end, the people - enough of them - turned to extremists to protect them. At this point, they were like little children - literally. They had been traumatized into infantile regression. Their adult minds weren’t working anymore. Who could blame them? Living on the edge of life and death everyday has that effect. Trauma shuts down the adult mind. And so Americans sought safety in the strong, comforting arms of extremists</aB - who told them to build concentration camps and walls and Gestapos.

American collapse teaches us the future that awaits the world at the end of the Big Crash. If we don’t reimagine and reinvent our broken system now - beginning this minute - more and more countries will end up going that route, no matter how rich or successful or powerful they ever become. If a <b>country of broke, impoverished, traumatized people, kids getting shot at school, unable to ever save a penny, whose adult minds don’t work anymore, fleeing to Trump dynasties, snarling at little immigrant babies, happily building cages to torture them in - if all that sounds like good news to you, then think again, my friend.

These are the days of the Big Crash. We had better get serious, fast, about building a better future. Because what will happens to us if we don’t crystal clear, and it’s called America.

SOURCE

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New Tariffs, Stocks Plunge, Manufacturing Falls Again And More Layoffs But Everything Is ֓Fine?

By Michael Snyder
The Economic Collapse
August 1, 2019

Things are starting to go downhill rather quickly now.  A day after the Federal Reserve cut interest rates for the first time in more than a decade, we received a whole bunch more bad economic news.  Most Americans donԒt realize it yet, but our economy is in serious trouble.  We havent seen anything like this since the last recession, but most people seem to think that since stock prices are still very high that everything must be fine.  No, everything is definitely not ғfine, and as I noted yesterday, a lot of prominent names are loudly sounding the alarm.  Many analysts are expecting things to really start breaking loose as we get deeper into the second half of this year, and what we witnessed on Thursday certainly didnԒt make the outlook any brighter.

President Trump completely shocked Wall Street when he announced that yet another round of tariffs will be imposed upon Chinese goods.  According to CNBC, these new tariffs will go into effect on September 1st.

Trump said in a series of tweets the tariff will be imposed on $300 billion worth of Chinese goods. The levy will take effect Sept. 1.

He said later in the day those levies could go up to 25%. Trumps comments came after a U.S. delegation met with Chinese trade officials earlier this week. Those were the first in-person trade talks between China and the U.S. since both countries reached a truce on the situation.

This is essentially the equivalent of a ғgut punch, and it definitely takes our trade war with China to an entirely new level.

And Trump told the press that the tariffs will remain in place until the U.S. and China agree to a deal.  THE FOLLOWING comes from Fox Business:

President Trump said on Thursday the U.S. will continue to tax China until the worlds two largest economies reach a trade agreement .

ғWhen my people came home they said we were talking. We have another meeting in September. Until such time as there is a deal we will be taxing them, he said from the White HouseԒs south lawn.

But as I have repeatedly explained to my readers, there isnt going to be an agreement any time soon.  In fact, it is extremely doubtful that we will see one before the 2020 presidential election.  Trump is not going to back down from his core demands, the Chinese will never accept them, and China would much prefer to negotiate with whoever follows Trump in the Oval Office.

So these tariffs are here to stay, China will inevitably retaliate once again, and global economic activity will suffer.

But Trump doesn’t seem alarmed.  On Thursday, he also told reporters that if China doesnt want to trade with the United States anymore ”THAT WOULD BE FINE WITH ME”

For many years China has been taking money out by the hundreds billions of dollars a year. We have rebuilt China so now it is time that we changed things around. If they didn’t want to trade with us anymore that would be fine with me. It would save us a lot of money, Trump told reporters Thursday.

Those are very strong words, and Trump actually has a point.

In the short-term, decoupling from the Chinese economy is going to be extremely painful for us.  But THE TRUTH IS that we should have never integrated our economy so deeply with Chinas economy in the first place.  The Chinese government is one of the most tyrannical regimes on the entire planet, and they have no respect for basic human rights.  Trade agreements that were extremely unfavorable for the United States allowed China to become exceedingly wealthy at our expense, and the Chinese would like to continue taking advantage of us indefinitely if they could.

So something definitely needed to be done about China, but it is going to be a really, really painful period of adjustment for the U.S. economy.

After Wall Street learned of the new tariffs on Thursday, stock prices immediately BEGAN TO PLUMMET҅

When President Donald Trump announced a new round of tariffs on Chinese imports on Thursday, the Dow was up 311 points. Then it was down nearly 300 points.

That was the biggest swing since early January.

And it certainly would not be a surprise if stock prices continued to go down.  As I noted the other day, the stock market is more primed for a crash than it has ever been before.

At this point, stock prices are completely and totally disconnected from economic reality.  As stocks hit record high after record high in July, bad economic news just kept pouring in.

Of course August certainly just started off with a bang.  On Thursday, we learned that a key measure of U.S. manufacturing activity has fallen to the LOWEST LEVEL SINCE SEPTEMBER 2009

The IHS Markit Manufacturing Purchasing Managers’ Index fell to 50.4 in July, down from 50.6 in June, driven by a weaker demand. The firm also noted managers signaled slower hiring.

In addition, Lowe’s just announced that they will be LAYING OFF THOUSANDS OF WORKERS ...

Lowe’s is laying off thousands of workers.

Layoffs will include assemblers, who put together items like grills and patio furniture. The company will also cut maintenance and facility-service jobs, such as janitors. The company said it is outsourcing those positions to third-party companies.

Lowes (LOW) declined to say exactly how many workers will be laid off. It said that workers whose jobs are being eliminated will be given transition pay and have the opportunity to apply for open roles at Lowe’s. The Wall Street Journal first reported Lowes plan.

This is the continuation of a trend that I have been tracking for months.  Big companies have been laying off workers at a level that WE HAVEN’T SEEN SINCE THE LAST RECESSION, and many believe that what we have witnessed so far is just the beginning.

Also, the trucking apocalypseӔ just continues to accelerate.  The following comes from FROM ZERO HEDGE ...

Yet another trucking company has fallen victim to the recession in freight this year, according to FreightWaves. Terrill Transportation of Livermore, California shut its doors unexpectedly on July 30. The company had been in business 25 years.

Customer Manny Bhandal, president of Bhandal Bros. Inc., said that three of his trucks arrived at Terrill on July 30 to drop off a shipment and were turned away. Kevin Terrill, president of Terrill Transportation, did not respond to FREIGHT WAVES.

If the U.S. economy really was in fineӔ shape, trucking company after trucking company would not be shutting their doors.

Sadly, instead of heeding the warning signs and using this time to get prepared for rough times ahead, most Americans are choosing to use this time to party.

And there is certainly not anything wrong with enjoying life, but we have gotten to the point where it is crystal clear that a new crisis is upon us, and most Americans are completely and utterly unprepared for what is about to happen.

I will continue to track these developments as they unfold.  We are truly in unprecedented territory, and I have a feeling that the second half of 2019 is going to be far more interesting than the first half was.

SOURCE

Posted by Elvis on 08/07/19 •
Section Revelations • Section Dying America
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