Friday, December 23, 2011

The head line on the payroll tax should be

"Obama forces Republicans to be Republicans." Now, bets in 6 months that it will turn out that all of the increased demand will be turned into corporate profits. Right now we have profit push inflation, combined with demand deflation. Hence, as Shaula Evans quipped to me "I don't get increased income, I get increased through put." They could have effectively just handed the money to corporations. Now, on how it was paid for...

Sunday, December 18, 2011

Twilight Nascent (2009)

It is not yet twilight of the carbon age, but, instead, that grinding late afternoon, when heat sits heavily upon even the dragonflies as they stay, seated, on their perches on the bent stems of grass and branches of lilacs, ungazingly waiting for the morsels of the air to spin too close. And so it is with us: we have not run out of day, but the day is running out underneath us. We feel the orange of dusk creeping into every highlight, and infecting every shadow, but the true enfolding dark exists only under the hedges and in the deep corners of buildings that are turned away from the sun. Some of those corners are far away: as those dying in Cayuga d'Oro, where a friend of mine is still among the missing, and some are close by, as poverty seeps into America, after being held at ebb: one American in two is poor, and one in three, in poverty. The darkness is folding the light, and enfolding us, even as the end is unfolding.

The age of soot started farther back than we would like to remember, fire was a god, and the mouth of the Gods, the Vedic Aryans called him Agni, whose Latin cognate is ignis, from which we get our word, ignite. However, for many millennia, humans could only make a local dent in the world, though those dents could be quite large when a land became stripped bare of trees. By steps, the demand for fire grew greater and hotter: bronze, iron, metallurgy, steel. But it was with the adaptation of fire to work, and then transportation that it was loose upon the world. The coming of petroleum came like a shot: wood only replaced muscle after thousands of years as an energy source, and it took coal two centuries to overtake wood, oil from the first internal combustion engine, to becoming the primary power source in America, was less than 70 years, and it has already held on for longer than coal did. The ages of petroleum were first a wild search for it, and then the colonial age, where the producers outside of the industrialized world were occupied, then the imperial era, when they were kept under captive governments, then the hegemonic age, when they were under dictatorial governments that could never the less set their own prices. We are now leaving that age. Each age had a balance to itself: the price for controlling what Yergin called "The Prize." In the hegemonic era, the key to political economy was the "red queen's race." The West had to increase the value of capital faster than the resource exporters could use free cash flow to buy it. Each side had its problem:
  • For the resource importers could never really free themselves from imports, because the power of the rulers over the ruled was precisely that there was no other way to make a living but by the grace of the ruler, whether king, or president.
  • For the west, it was that there was a narrow band of allowable growth, and much of it would be directed by the resource importers.
The deal was that they set prices, and plowed the surplus back into the developed world, which, in turn, was blocked from escaping the orbit of oil. It was a red queen's race: to keep the control of capital in the hands of westerners. Our rich, had to stay ahead of their rich. If one looks back at the direction of the policy, neo-classical thinking in economics, along with neo-imperialist politics, worked perfectly. The problem the West had was very similar to, but not the same as, the late 19th century: to keep an increasingly dissolute elite nominally in charge, while ruling over an increasingly fractious world, with increasingly mobile capital that would, left to itself, bleed all over the globe. And in the end, it will. There will be much more blood.
Looking at neo-classical policy, one can see why the West pursued tax breaks on the wealthy, corporate mergers to consolidate, and unifying the banking system: each step created a bigger hurdle to control. It is harder to get to 51% of 1 large bank, for example, than to 51% in some of several smaller banks. There were choices, but along a spectrum: export oriented balance, such as Germany and Japan, slower growth and less access to energy, in return for more state control as in France, or "Anglo-Capitalism" which was to go full throttle into finance, which as a service could be exported with lower cost to consumption, and manipulated. Each side betrayed the deal: the oil-archies funded terrorism and war, and hobbled growth by insisting on financialization, the west tried to create a bubble and burst cycle which would catch the external investors, first to rush in to the bubble for fear of being left behind, and then in the implosion. Each clean up, however, left both sides at parity again. This was because the western capitalists could have themselves bailed out with taxation and laws that pumped wealth upwards, but the resource barons, as bond holders could dictate the terms of bail outs. 

 The two sided race, however took two turns in the late hegemony. One was the collapse of the Soviet Union, which became an exporter of resource deflation in the 1990's, pushing the price of gold to its replacement cost, and the expansion of China, which exported labor deflation, while not yet creating resource inflation. The play that Clinton ran, was to keep western consumption and growth low and slow, using the need of the former Soviet Republics to get cash. The Washington consensus was to keep the dollar strong, and thus a drought around the world, and then bail out nations when needed. It was a course the required a bi-partisan discipline, which was not really present, the Republicans wanted a different play, one that would attempt to assert neo-imperial, or even neo-colonial power. And Iraq was the target. When Bush came to power, the Republican check on a Democratic President, turned into a Republican supercharger to a run away Republican administration.The play: tax cut to bail out the NASDAQ bust, run a housing "owner ship society" that pumped huge amounts of money into consumption, while starving business credit, and invade Iraq to get the oil that would run the suburban sprawl. It takes no great insight into macro-economics to know that pumping consumption over capital - and this includes building capital that can only produce consumption - at low interest rates, would lead to a financial crisis.

Friday, December 16, 2011

Hitchens Dies Too Late

One of those whose careers was cut too long, consider how much differently he would be taken, if the entire apologia for war crimes and illegal invasion wasn't sitting as blot that bleeds from the last decade of his prose. Sometimes, long life is a curse.

Saturday, December 10, 2011

How the Generation #Fail Destroyed The World

This is not a blog that engages in blogginess of the conversation, in a large part, because the conversation is now so relentlessly degraded into high school social games, that there is no point in engaging it. It is impossible that not to believe that there aren't many others who are engaged in real work, forging out into the unknown, or in real change, however, everything possible is being done to prevent them from being heard from. To who ever you are, my respect. But do realize you are going to spend your entire lives listening to incoherent bombast.

Now as to why. There is a generation in power in the developed world, and it is the most incompetent generation since the generation that created the First World War, and perhaps more incompetent. The Generation that created the Second World War was ideologically blind, but it was not, in fact, incompetent, incomptence's vestigial hand being lopped off by the economic crisis and the pressures of modernization. They were not equal to their moment, but their moment was faced with an epoch making challenge of the introduction of mass production, internal combustion, and telecommunications.

We are not able to handle even a rebalancing of the costs of these realities, let alone realities of similar import. We fret about oil depletion, but it is not depleted yet, we fret about the retiring baby boom, but they are not an unbearable burden. In all cases our problems are real, but distant, or imaginary and immediate. Right now, it is the problem of how to make it so all the world's billionaires get an equal share in the parallel world they are building for themselves. When the history of this time is written, the authors of it - because while news is written by winners, but history is written by survivors - will have unvarnished contempt for the present generation in power.

 By now the members of the Baby boom have turned away, because they, in typical self-absorbed fashion, think that "generation" means them. In some sense they are right: as the largest and most consequential component of Generation #Fail, they will deserve the lion's share of the blame. However, they are right in fearing that they will receive an even greater share of the blame, because of their size, visibility, and generational identity. They are long, while there are arguments about how long the Baby Boom is, depending on methods, biases, and country, at very minimum they run from 1944-1964, or 20 years. Longer than the Generation X that followed them, longer than the Silents who are 1930-1944, at longest.

They are also because of the very nature of the "Baby Boom" larger than both of the generations around them. Hence, to the naked eye, the present is the Baby Boom writ large. This is exacerbated by a trait that the essay will explore in some detail later: the Baby Boom has an enormous opinion of themselves. To the baby boom, they are the greatestest generationest Everest. The pinnacle of generations. This wide disparity between their sense of themselves, and their actual accomplishments, is what will be their Waterloo in history. Having taken all the credit, they are now prepared to later be assigned all of the blame.

 To answer the essential questions in order, the essay must tackle first: What is Generation #Fail? Then Who are Generation #Fail? After this Why Generation #Fail?

What is Generation #Fail?

Beginning in the early 1980's the Soviet Empire began to rattle apart, and the People's Republic of China slowly shook off Maoism and began the slow road to liberalization. In 1989 the death throes of the Soviet system began, and by 1991, it was over. There was one major transitional war, between the United States and Iraq, which was one of the most lopsided victories since the early German Blitzkriegs of 1939. An epoch, the post-World War II epoch, was over. In 1993 Bill Clinton took office, and in 1994, Newt Gingrich swept out of power the post-World War II Democratic house. In the developed world a series of new leaders took over. Clearly the beginning of an epoch, but not necessarily of a failed generation in power. There was a great deal of assertive confidence in that time, and there was no reason to believe that the present generation was going to make a mockery of itself. The triumphalism should have been a warning, when books such as "The End of History" launch careers.

Thursday, December 1, 2011

First movement of Quartet #12 completed

String Quartet #12, in E has an Allegro. This is using music that is coming out of Clockwork Cosmos.