Wow! Ed, Keith, Steve. Good job! Keith, I loved your analysis.
Steve, thanks for bringing the article. Ed. Good points. I had almost
decided to leave the list again. Then Arthur put his post in yesterday and
I had heart and now this. I only have a couple of simple non-economic
and non-wall street things to add to all of these good comments. Thanks by
the way. It was a thoroughly enjoyable read this morning in between
funeral for the old people of our community with another just being rushed
to the hospital. I hate to pick up the phone these days and in this heat.
And it's the 150th anniversary of Mahler's birth who died from strep throat
at the age of fifty. Been listening to a mind that is so superior as to
wonder what has happened to humanity in the intervening years. We don't
even seem to be the same species much less culture.
Anyway here's my comments.
1. The Wall Street guys math and the invisible hand and all of that
stuff is a story. Like the Aztec story that they needed to kill one person
every day to keep the sun rising and every 52 years the world would have a
recession and be in danger of collapse and that would keep everybody on the
straight and narrow human sacrifice road to stability. The number's even
roughly the same. 52 years Aztec. 56 years Wall Street [courtesy of Mike
Hollinshead's "waves"]. If you trace 52 year cycle from December 2012
back ten cycles you get 1492. How about that! There are no coincident.
Yes math matters as the Aztecs and Mayans proved. But is the story
correct or are we just wearing the masks of the doctors to keep the smell of
the Black Death since we know it's odors that makes people sick and that's
why the Paris Sewers work right? Or is it just a story? A side point
here is about debt. His story about debt is questionable. Yes in a
market debts are generally paid but in wars countries often write off their
debt and the world goes on. Why can they do that? More about that below.
2. The big hole in everyone's theory is two fold.
a. Capital. England during Keynes day had capital, and Empire with lots
of raw materials to rape and pillage from. England today has almost none
except the cleverness of their people. Same for Japan. What is holding
up the third largest economy on the planet? "It's the people stupid!"
Sorry, I just couldn't resist. A better case would be Korea, a state the
size of New Jersey who are exporting their people like mad in every business
possible. The Koreans are the amazing people here in NYCity. From the
Arts to business to whatever, they are like beavers. And they give a
billion dollars to the arts every year! Sorry Steve, couldn't resist that
either. "Either way it is still the people and the culture stupid!"
One of the biggest mistakes about the evaluation of Bill Clinton was in this
point. Clinton had a system and Bush had a system. Clinton's system
was a growth or blossoming system. Bush's system calls Clinton's system
income redistribution. In fact, because of Clinton's believe in the
cultural potential of the people, he brought in both a surplus and he had
educational programs to help the disadvantaged. Economists called him
psychological but I would call him a pragmatic systems expert that tended
his tools and developed them with a judicious use of government funds to
grow the private sector. He had a garden. Bush let the garden grow wild
and go to seed.
That is the old European forestry model and as I have pointed out before.
It's lousy forestry and I've come to believe it is also not very good
capitalism because of the cycles. You just can't treat people like things.
In fact you can't treat your objects, tools like that if you wish to keep
and use them. This Calvinist treatment of people is not far from what I
think works but it's just enough off that it creates chaos and what
psychologists call "reaction formations" that ultimately build in resonance
until you have the whole structure dis-integrate. That's what makes the
glass break when the tenor sings.
So let me summarize: America is resource rich. It is the third largest
country in the world. It has the third largest population on the planet.
It is also lazy as shit and thinks like a dunderhead and misuses it
resources abysmally, especially the human resources. But one of
America's States is the fifth largest economy on the planet and it's so
backward that it's broke; however that backward state is also, in its
brokenness leading the world in environmental legislation.
Germany is the size of Texas. Japan is the size of California. What is
it that makes Germany so wealthy when they have so little resources?
What is it that makes Japan so rich, in spite of the blahs, when they are
the size of California with too many people and not any comparison in
natural resource capital? This is not chromatic harmony folks. This is
easy. Arithmetic.
America has hot house plants. The wealthy and it dumbs down the other 99%
of the population with cheap products. They don't even have the incentive
to find an alternative to wasting petroleum in activities that other sources
could supply. You can replace petroleum for energy but you cannot replace
petroleum for chemicals and all of the other things that keep the world
system supplied with tools. For God's sake, they are burning off that
petroleum in the gulf because they were stupid. How could you listen to
anyone who is so short sightedly stupid as to not plan those wells properly
in the first place when oil peaked in the last century?
b. Democracy and System's Design: Once you know what your tools are
and their value. The tools of:
i. Intelligence potential and
cultural capital [cultural systems that foster success and sustainability]
and
ii. Natural Resources,
then you have to have a system to develop both in a balance and a
harmonious, renewing flow that enhances freedom of the individual and the
development of their potential and individual responsibility but doesn't
allow the individual to trash the system that delivers this for everyone.
Market folks think that system is the market. If I had to live in the
market I would commit suicide. Canadians are constantly amazed that
Indian children would rather sniff glue or drink gasoline then enter their
system. The same is true for me. I would rather sniff glue and drink
gasoline and die than to become a part of the "laissez faire" worldview.
Their heaven is my hell. I am convinced that had I been these market
folks parents they would have liked my heaven more than theirs and I have
taught quite a number of market refugees over the past fifty years and have
more than anecdotal evidence to support my thesis. Once you open their
bodies and senses, all of that short term greed goes to hell.
Capitalism has its uses and so the private market should be maintained.
It is also a tremendously wasteful and banal system that creates ants who
march in lock step like the current Republicans and simply devour everything
they see and then leave. Like Oklahoma with the oil wells and my home in
Picher with the mines. I've seen it up close and it sucks. The
fragility of computers and electrical grids show that its generic standards
for products are appalling and register levels of quality that are consonant
with the quality of those buildings in China that collapsed for the same
reason as the BP well in the gulf. Human sloth and creative ignorance.
Have any of you lost your computer due to sloppy workmanship? All of your
records AND the backups? Why aren't we afraid and doing something about
an electro magnetic pulse from a sunspot? There are plenty of real
things in the environment that we need to take seriously. The market is a
made up human thing. Something we inflict on ourselves.
The one thing I will say for the Chinese is that they tend to execute people
who do such things in their system we send ours out to play in the yacht
races with their children. We really love our idle stupid rich folks.
They give us hope that one day we too can be......! Maybe a private
market is both useful and necessary as long as we create superior people not
to be trapped in its banal inanities. It's a tool not a home.
The first thing is a commitment to Democracy and the individual's right to
grow and search out the meaning of their lives in the tempo that fits with
who they are. Yes it takes all of us to do that for each other. Big
Daddy or the Hero's Journey is an illusion and a sand trap on the fairway.
The second thing is to admit each individual limitation and to come up with
some type of system for analyzing the problem from the greatest number of
perspectives and then developing a design for the system that works for
everyone. Not the greatest number. Everyone. I was in the military
but before that I am an Artist and I have seen the trash of the world become
the Beethovens and the Mozarts, the Francious Villons and yes the Bill Gates
and Warren Buffets of the world. Who would have thrown Steven Hawkings
away? It was a fluke that any of these people were rescued and you
know it. You have to have a system that doesn't do what the Denninger
said about the recessions. Not everyone is required to play the piano in
order to enjoy music. Nor should everyone be subject to learning how to
gamble in the market in order to survive. I have worked through three
small nest eggs with people, one of whom was an editor for Business Week,
and lost all three. My wife's small retirement was conservatively invested
and she did no better. All of that is gone and all we have left is the
capital between our ears. Thank God we didn't invest our lives in money
but used the real money to develop our beings. One more thing about a man
saying debts have to be paid. Only upward. Those on top never pay the
ones below them that they owe. But now I'm ranting, sorry.
Part number two is that you come up with some kind of management program
like Warfield's IM program where people sit and work out Democratically
designs for future action that can be tested and worked through and reviewed
as practice. It's not that hard. England didn't let BP work their
stupid greed on them, America did. England wouldn't tolerate the lack of
safeguards. Neither would Norway. How is the market punishing the
businesses on the Gulf of Mexico? How is the market making it OK for
the Irish to take up the slack in seafood exports lost by the Gulf?
Denninger is wrong because it is not a social system. It's a conflict or
war system and civilian casualties eventually cause the entire system to
collapse.
A serious program in each country [or in the US in each state], that designs
the various commercial and resource systems and markets them out to the
private sector and enforces a generic standard of quality is I believe, the
future of humanity. It will also have to punish politicians who must
be held to a higher standard of conduct than the other sectors because they
are so crucial as the designers of the system. Sound like an ideal
China? I don't know. John Warfield wasn't Chinese although the Chinese
have been using his system's analysis for their stuff. John wasn't
perfect. He admired von Hayek. But he was right about the need for a
very high level of generic design, far higher than the current economies of
scale produces, if the society was to move into the information age. We
don't plan ahead. We simply react. There are so many things so much
worse than a depression that we should be planning for. Asteroids, Super
volcanoes, Sun storms that wipe out the electrical grid, computer storms,
etc. that considering the market as the be all and end all of everything
just seems beneath our potential as human beings. As Leonard Bernstein
told his trumpet section in the Tchaikovsky fifth symphony, "I'm sorry
boys, you aimed too low. That was far beneath your paygrade."
So my addition is this:
First look at your capital both human and natural.
Second: consider the market as a part of the system and not THE system.
Third: Develop a coherent Democracy that enhances human Freedom but demands
growth
Fourth: Choose a management system that works to design a sensible and
quality producing
i. Local
ii. State
iii. National
iv. Regional
v. Worldwide
structure that includes individual freedom and development and considers the
values of cultural capital as a plus rather than an annoyance. America
has shown the world that destruction of cultural systems to create a society
is just the way to make a big, demanding, selfish, brutish and hectoring
childish nation. Better to have a circle of cultures that bring the
wisdom of each to the management team.
Fifth: Consider the model of the Garden as being an organic model that is
superior to the mechanical technological model because the robot must become
organic before it can achieve real thought. A world as a garden. Now
look at all of the possibilities and don't forget the Native American
gardens that gave you 70% of your common foodstuffs. Remember Monsanto
and its creation of profit through destruction and limitation is the model
of the Stock market and is supported by their current puppets on the Supreme
Court. That is the opposite of gardens. Gardens create health, not
limit harmony, charity and balance.
Sixth: Find a way to build your system on respect for each other's
histories and cultural achievements from the beginning of time. If you do
that you won't think a Depression is OK or even a panic or the loss of one
soul's personal investments.
Seventh: Admit that Laissez Faire is a religion and it's slothful and
stupid.
Reprise: Whether Krugman or Denninger, if the one we chose fails, then we
should send the people who proposed it to jail until it has worked itself
out. That way, we won't have these irresponsible shouting matches while
we are trying to think our way out of this. Also White Collar crime is
theft and it should be treated the same in spite of the puppets on the
Supreme Court. Maybe it will take the Chinese owners to come in and
straighten that out. I hope not. I don't want to be Chinese and my
soul doesn't belong to anyone but me. Thank you.
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