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For a month,
Egypt has been a magic mirror for America to behold its own wonderfulness,
like a diorama of "Freedom and Democracy" out of a Kentucky
creationist museum. In this, our hour of national narcissism, we
imagine a replay of Bunker Hill, Valley Forge, and Yorktown - with a falafel
on top - in the streets of Cairo in order to prop up our own disintegrating
self-esteem, while committing arson on our national household.
Also conveniently forgotten for the moment - because there's nothing
dramatic about nothing happening - is that a particular corner of the Middle
East remained stable for thirty-odd years. Did we fork over $70 billion to
Hosni Mubarak during that period so he wouldn't start another war? Could be.
But it was surely money better spent than the even larger nut we dropped all
at once on AIG, Goldman Sachs, and a few other domestic fungi on the tree of
liberty back home. And we're still shoveling billions from the Federal
Reserve into a claque of Too-Big-To-Fail banks in the form of a ZIRP loan
carry trade under the pretense that they can use it to shore up their
"reserve ratios." A lot of people from New Jersey to Seattle need
their reserves shored up, too, but they can forget about running personal
ZIRP carry trade rackets out of the Fed's loan window.
Contrary to what some readers suppose, cynicism (as in, thinking
the worst of everything about everyone) is really not my bag - though comedy
is another matter. However, if ever cynicism was an appropriate response to
something, it would be the initial throes of a political revolution. The
early triumphs in and around Paris after 1789 must have been soul-stirring,
but you could forgive a casual observer who caught the scent of trouble in
the air - and what followed was a years-long dismaying merry-go-round of mis-rule that climaxed in the Reign of Terror and finally
resolved a full decade later in the crowning of another absolute monarch: the
emperor Napoleon. Gazing back at all that, it really took France nearly
a century to get its act together politically from the moment that the
governor of the Bastille surrendered his keys.
All forms of government in recent times find themselves in the same
predicament: the mismanagement of contraction. Too many people and too many
enterprises are competing for a contracting resource base. In many poor
countries it expresses itself plainly as expensive food, or no food at all
for some. The expensive food part of the story is already being felt in the
wealthier countries, too, but the contraction expresses itself more in terms
of money - many people do not have enough, or else much less than they were
used to having, and at the same time the money that does circulate seems
increasingly worthless. So we have the great debate over whether the
contraction is deflationary or inflationary.
That debate could not happen if money retained its essential
meaning as a reliable medium of exchange, but the idea of what exactly money
is, is becoming increasingly clouded everywhere as compound interest fails in
the face of contraction. And as compound interest fails - in the form of
loans that can't be repaid - the banking system implodes. This implosion has
been artfully papered over with enough accounting tricks so that many
citizens do not even perceive it as being underway. The results are
insidious: falling living standards, no role to play in the economy (that is,
a job), and a shocking array of social pathologies ranging from nearly
universal family dysfunction to men acting like babies to obscene
discrepancies in income.
The one thing that's not contracting for now is the human population,
inarguably in overshoot in relation to available resources, but population is
a lagging indicator. Some people will still have sex, and produce the results
of it, even when they're starving. But meanwhile disease and strife creep
into picture and you get the failure of public health systems, and military
misadventures over oil or water, and after a while even a lagging indicator gets
dragged into center stage. Of course, I'm persuaded that arguing about
"overpopulation" is rather silly, since we are not going to do a goshdarn thing about it in terms of policies or
protocols. (My own suggestion to make abortion retroactive has not been
greeted with enthusiasm.)
You could probably pick the next location in the Middle East
revolution derby by pitching a dart at the map. Just about all of them are
ready to go up in flames for one reason or another - that really boil down to
dwindling resources. And then, there are the various beefs, grudges, and
jealousies that could prompt conflict between them, too. Lots of folks, for
instance, are probably wondering what Hezbollah aims to do with its
impressive collection of rockets.
I don't blame poor Mr. Obama for trying to keep the lid on all this -
which is arguably a conceit in itself - since the country that he is most in
charge of whirls around a very impressive drain of hopeless debt and
vanishing prospects. But my guess is that the next big event in the center
ring of current affairs will be a First World money crisis. It is true that
the stock market only goes up. And then, one fine day, a large, angry,
long-necked bird unfurls a set of elegant black wings and goes honking off
into a red sun, and suddenly you are in a new realm where the stock market
only goes down... and certain sovereign bond rates soar with that angry
bird... and things Too-Big-To-Fail fall on their asses and fail... and
everything changes.
We read this morning that Egypt is under martial law with a suspended
constitution - a logical step, given the army takeover, but not something
that makes you want to buff up your flag lapel pin and say a prayer for the
ghost of Winston Churchill. Things are definitely in flux. Here in upstate
New York, the sap is about to run in the diseased maple trees.
James
Howard Kunstler
James Howard Kunstler’s new novel of the post-oil future, World Made By Hand, is
available at all booksellers.
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