most look for the past, the lucky seize the moment, the very few look round the corners

At the thinking person level, the economy is mostly a narrative line or another. Sometimes, we feel like joining narratives, yet the ideologues in charge with economic policy would have none of that. This would matter only little had the economic narratives remained constrained to the space of ideas. But economic narratives drive policy and passions, they commingle dialectically with reality.

Looking ahead, in normal times, consists of plotting the dominant narrative in some future, accounting for those kind of medium-term foreseeable changes one can come up with. Our time does not allow such comfort.

The biggest challenge to our capitalist storyline is WAR--assuming no natural cataclysm. I am not taking about war with Iran, though most any war can turn into WAR. Such capital event can be imagined as the result of tension-escalation between a overly sensitive incumbent, magnifying some real or perceived wound, and an incumbent.

I wonder if a renewal of the US Congress with new faces can bring about lawmakers who are more aware of our grassroots-vulnerabilities, -possibilities, and -opportunities. Today, most people in Congress resemble too much the Soviet Politburo in the last years of Brezhnev.

Another challenge, against which the State started preparing after 9/11, is internal unrest. Lacking a support system and facing structural unemployment for years to come, the American fabric may be wearing thin. The legalization of the illegal immigrants can fuel the State for a while longer.  Nothing is guaranteed, though.  Indeed, think of the leaked names and addresses of the illegal immigrants in the state of Utah.  For one, from Utah hail many a patriot, this being the top contributor state to the US Army.  For another, such list could only come from inside the power enforcing mechanism...  Just as Bradley Manning, who also came from inside the power enforcing mechanism.

If we make it through, the big challenge becomes in structuring a post-capitalist society. Can we get so productive and have such a progressive tax system to (sustainably) land in post-capitalism? To those wishing a return to capitalism I can only say that it's tardy late, unless we are ready to lock ourselves in and wait for about two decades until we can achieve some level of self-sustainability.

In closing, I feel like I also need to stand in for today's elites. If a new world order were to happen things might go on for a few more decades. Several managed crises will be necessary, provided that the sense of injustice won't be too high/widespread. Again, the keyword is "managed."

P.S. At a time I used to be more optimistic I authored "Open Letter, for O8." It was a 7-point summary of what I thought we needed at the time Obama and McCain were presidential candidates in 2008.  I think President Obama has done more or less about most points with one exception, Let wages converge lower;  I have to say that this is the direction we are moving towards, and the slowness of getting there is commensurate only with the size of the task itself.  No easy there! 


from paul krugman said...

Representative Paul Ryan of Wisconsin has become the Republican Party’s poster child for new ideas thanks to his “Roadmap for America’s Future,” a plan for a major overhaul of federal spending and taxes. News media coverage has been overwhelmingly favorable; on Monday, The Washington Post put a glowing profile of Mr. Ryan on its front page, portraying him as the G.O.P.’s fiscal conscience. He’s often described with phrases like “intellectually audacious.”

Mr. Ryan’s plan calls for steep cuts in both spending and taxes. He’d have you believe that the combined effect would be much lower budget deficits, and, according to that Washington Post report, he speaks about deficits “in apocalyptic terms.” And The Post also tells us that his plan would, indeed, sharply reduce the flow of red ink: “The Congressional Budget Office has estimated that Rep. Paul Ryan’s plan would cut the budget deficit in half by 2020.”

Jake Wagner from Santa Barbara, CA said...

My grandfather lived on a farm in Kansas in the 1950's. He grew his own vegetables, slaughtered his own chickens, and lived a simple life with no TV and no internet. If the federal government had vanished, he would have survived just fine on his own.

But times have changed. Individual farmers have been replaced by corporations that produce corn in huge monoculture fields that is then used to manufacture everything from waffles to soft drinks in large factories. Society has become far more complex and dependent on oil as fertilizer, as fuel for the tractors and the trucks that distribute processed food to consumers.

The new society is far more efficient, but also more complex, and complexity requires regulation, it needs courts and government services, such as schools, just to function. Higher population density has led to far more regulated lives, far less freedom.

Conservatives, such as Paul Ryan, cannot be faulted for connecting with the understandable desires for a simpler world in which government and its taxes would be unnecessary, or at least necessary. But trying to undo the complexity would lead to much lower living standards, already on a downward path as unemployment soars to 9.5% and beyond, or is it 16.5% as measured by U6? Americans can no longer afford the Republican vision.

The problem is that we cannot afford the Democratic vision either, unless we make an effort to live within the constraints imposed by natural resources. Statistics from the EIA and BP show that oil production reached a plateau of 73 million barrels per day from 2005 to 2008, and went down by 2 million barrels per day in 2009. The US is now competing with a growing economy in China for dwindling oil resources (the price of which has been kept artificially low by demand destruction during the Great Recession).

US population is growing at .9% per year, mostly due to illegal immigration and the higher fertility of illegal immigrants. Population growth of that magnitude is not sustainable for ever---when do we start controlling it? To get an idea of what this means, consider the fact that population growth of .9% per year works out to about 230,000 new US residents every month. In comparison, nonfarm payrolls in the US fell by 125,000 in June and are expected to have fallen by 60,000 in July as this is written.

It is sad to realize that not just Paul Ryan, but also President Obama, live in a dream world in which it is believed that the US has sufficient resources to grow itself out of its economic problems. A new economic paradigm is needed.

Anonymous said...

'Beck said on the air that he “wouldn’t be surprised if in our lifetime dogs and fire hoses are released or opened on us. I wouldn’t be surprised if a few of us get a billy club to the head. I wouldn’t be surprised if some of us go to jail — just like Martin Luther King did — on trumped-up charges. Tough times are coming.”' said...

I now think that Obama is also addressing the lowering of the wages issue:

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