"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Monday, November 23, 2009

On another front

We'll return to climategate and its lessons shortly.

Meanwhile, I know this is King of the Road bait, almost as much as if I'd mentioned Bill Maher, but James Kunstler starts the day making sense:
I'm not one of the economists that Mr. Krugman talks to (nor am I an economist). But it's sure interesting to know that the ones palavering with Mr. Krugman imagine that that the US can possibly return to an economy based on the fraudulent securitization of reckless debt. Does Mr. Krugman think that the production housing industry can resume paving over the nether exurbs with half-million-dollar houses (to be bought with no money down loans by the sheet-rockers working inside them)? Does he think all those people receiving cancellation notices from their credit card issuers are in a position to flash their plastic at the Gallerias this Friday? Or ever will be again? Is he perhaps misusing the term "recovery?" After all, that is generally taken to mean resuming a prior state, which is, in turn, presumed to be a healthy prior state. Is that what the economy of the past decade was? And, incidentally, what exactly is a "consumer?" And why, at the highest levels of journalism in this land, do we refer to citizens that way? As if the American people have no other purpose except to buy things? Or is that that the only way an "economist" can imagine them?

I'm sorry to burden the reader with so many questions, but the idiots running the mainstream news media in this land are not doing it and somebody has to.

If a "recovery" is not in the cards, then what exactly is going on out there?

What's going on in the US economy is a slow-motion convulsion from which we will emerge as a very different nation with a different economy. The wild irresponsibility of the media in pretending otherwise is only going to make the convulsion worse, more painful, more socially and politically destructive.

He then goes into lots of stuff I find dubious at best, much of it flat wrong, and sometimes quite objectionable. But the conclusion still resonates with me:
At the moment, going into Thanksgiving 2009, America's leadership has dedicated itself to worst action it could take under the circumstances: a campaign to sustain the unsustainable. This is what's embodied in the foolish term "recovery." The way we try to explain things to ourselves matters, if we don't want to be crushed by history.
Make no mistake. Geithner should get a ticker tape parade like John Glenn. Statues should be put up to him everywhere. He and Obama brought us back from what might well have been a vast and sudden catastrophe. The lack of appreciation for Geithner's achievement is absolutely grotesque. He should be strewn with medals and prizes.

And then he should be fired. Summarily dismissed. The short term crisis is brilliantly resolved, and now the core economic problem is not about restoring the status quo, but about moving to a new, sustainable arrangement. Geithner has no way of knowing how to do this. He probably doesn't even understand the problem.

1 comment:

King of the Road said...

I must bite.

Let me be clear (whom does that sound like?) - in many details on many subjects I agree with Kunstler. My gripe is that he adds little to the discussion because he's basically a broken record (dating myself). I agree that the perspective that an American or any other person should be regarded purely as a consumption engine is a travesty.

But even people who watch Nascar or buy Cheez Doodles or (horrors!) Salad Shooters are capable of dignity on occasion. And Lloyd Blankfein does not wake up each day thinking "what can I do to accelerate the decline of American civilization and maximize the number of bedrooms in my mansion in the process?"

If a collapse doesn't happen by Thanksgiving, he'll predict it by Christmas. If rampaging mobs don't burn down mansions in the Hamptons by Christmas, he'll predict it by President's day.

But, to read Kunstler a few times can be of value. To watch Maher.... not so much.

In any case, I made my Kunstler case here. I even embedded a John Lennon video, Michael.

A new way of organizing American and world society is indeed called for (see Koyaanisqatsi: Life out of Balance for what is, to me, the most compelling demonstration of this. Even my libertarian philosophy is no match for physics.

But I don't see Kunstler as helping us get there.