Monday, June 18, 2012

Drachma Drama

Summer has always been the slow news time, as everyone vacates the various capitols and boardrooms, and heads for the Hamptons or the Riviera for a little R&R. Unfortunately, the global financial overreach (driven on by MBAs and financial hustlers who liked to talk about the "velocity of money," while pursuing One More Deal like it was the Great White Whale) isn't taking a vacation, and its unsavory cousin, Peak Oil, is threatening to show up on the doorstep at any day.

The idea of elections is a curious thing. Each person casts a vote for who and what they want to be ruled by. Often, it's a little like children being given a choice between brussel sprouts or cooked cabbage for dinner. Neither is all that appetizing, but the crucial point that is missed is that the child has their own mind, and would prefer ice cream over either vegetable. In their mind, if they're being given the authority to make a choice, they should also be given the authority to determine what choices they can make.

Likewise with voting. Greece was grappling with the ideas of voting, democracy, and civics in an age when most of the rest of Europe had yet to form any kind of national identity. These are not people who are giddy with the idea of electoral participation, but inevitably see it as either an obstacle or vehicle to where their vision of society needs to be, depending on which side of the vote they're on. People tend to forget that if fifty-one percent of the people vote a certain way on an issue, forty-nine percent are voting the other way and are not going to be happy about "losing." (witness the hard feelings over the 2000 American election for president, which is still brought up now and then by Democrats)

The forty-nine percent isn't going to go away in Greece any time soon. While it's all but gone from American memories, Greece was the scene of a nasty civil war between the left and the right in the wake of World War 2. Given that the hard left was busy reasserting itself during the electoral process, it's not all that hard to imagine that they're not going to quietly fade back into the woodwork, given that their recent rise was due in part to what was seen as unfavorable conditions being placed on Greece in the first place.

In truth, reading over the various post-election reports seems almost like talking to a person who has decided against divorce "for the sake of the children," or some other abstract reason. The antagonism is still there, Greeks are not happy, and it's going to be a matter of time before things get shaken up again and divorcing the rest of Europe begins to once more look like a good move. The only difference is that the next time around, the discussion probably isn't going to be as civilized, since the opinion of Europe is going to be that Greece has tacitly agreed to maintaining its position as part of Europe and will be expected to fulfill that agreement.

The elections still really don't address the looming problem, however, of financial overshoot by most governments. We seem to be moving from the idea that a government is sound if it takes in more than it spends to the idea that a government is sound if it can find someone to let it run up a tab. In America, the discussion is no longer about "reducing the debt," but "reducing the deficit," as if running up only 1.1 trillion a year of new debt is somehow vastly better than running up 1.3 trillion a year. There is only so much wealth to go around in the world, so much land to be developed and resources to be exploited.

At the end of the day, there's all kinds of financial structures which have been built up on the idea of unlimited growth, and a whole percentage of the population that has been carried forth on that idea, and now the limits are being felt. The decision to have Greece stay in the Eurozone is occurring in the context of a new global recession which is being darkly hinted at, but people are not noticing yet, still surrounded by their gadgets and illusions. Having Greece remain in Europe with another downturn may eventually become a moot point when another wave of financial disaster hits, like what housing did in 2008. What's next? Global currencies themselves? They may be pegged to each other for the most part, but if people quit accepting them in favor of hard goods, for example, then all bets are off.

Greece still seems to end up being a microcosm of what most people still seem to be thinking these days all over the globe. Keep the party going a little longer, keep pretending that there's even a party going on. The problem is that the food and booze ran out a long time ago and all people are left with now is a stomach full of greasy food and a pounding headache. The prospect of waking up to a newer, uglier day still has yet to cross their minds.


  1. You got that right, Mr. Leibowitz. Even the knowing pray for a little extension, for not one of them is ever done with preparations. Yet, the child must be born. Already labor pains are staggering, and soon something has to give. The day is near.

    Do you know what happens if a laboring mother fights against birth? You get precipitate delivery -- or dire complications.


    1. Well said. The can kicking down the road is way way over with; the can has been kicked into a corner and all the kicking does now is bounce the can around the corner and it doesn't go anywhere. It is simply amazing to me how desparately everyone wants to hang onto this 'growth' concept. Easy to understand, I suppose, since that is all most of us alive today have ever known. But what if, for once, we all decided to take the bull by the horns, take our lumps and work at managing this 'comprehensive compressive contraction' (J. Kunstler, 2012) instead of letting it manage us? Well...the answer is that the wealthy elite are the ones hanging on; the concept that all the shrewdly acquired 'wealth' they garnered by cleaver investments and the unsustainable practice of compound interest have let them down. I quote Mr. Kunstler again: in the end their will those those with a lot of money that isn't worth anything and those with no money. And which is an illusion?

    2. Your analogy is correct -- the longer people stay in the "unlimited growth" and "perpetual consumption" mindset, the worse the adjustment is going to be. What makes more sense? Another high-dollar family vacation or retrofitting one's home to off-the-grid heating and cooling or permaculture? Worse, many people are not even in a position to make those changes, to speak nothing of government and business that is paralyzed by being locked into an unsustainable model.

      The math isn't difficult -- around 7 billion people on a world that can naturally sustain around 200 million. Our population is 30-40 times what the planet can sustain naturally. Some people will point out that you could put everyone in the state of Texas and have the same population density as New York City, or some other garbage stat like that, but it doesn't change the issue of food production, sanitation, health care, and so on.

  2. Much as the world needs a "reset", I wouldn't hold my breath waiting for one. More importantly, I wouldn't risk getting caught short of fiat by going all in on beans,guns and gold.

    The governments plan is clear; use force to wring ever more from the populace in an effort to sustain the status quo and keep the big banks alive.

    It's amazing when one thinks about it. NO government really plans to pay off their debt. Ever. It's like that prospect is totally off the table and the new definition of debt is not being able to refinance to make interest payments.

    The question is --- will the world ever return to living within a budget or will governments instead just increase tyranny to extract whatever is necessary for their spending.

    1. Those are some complex questions being raised. "Ed," another frequent commenter and reader, tends to view collapse as being a steady decline punctuated by events that either temporarily halt or increase the speed of decline.

      If you take American debt, as a back of the envelope calculation, if we ended the deficit and began to pay off the debt at the rate of $100 billion a year, it would take around 150 years, not factoring in interest or any economic fluctuations or adjustments. We don't even bother to think in those terms, so deficit reduction is the order of the day. It's really not even a political issue -- is avoiding bankruptcy political at all?

      If I remember correctly, Rome tended to ramp up the wealth extraction from the populace toward the end of the Empire, trying to prop up the central government at the expense of the provinces. I imagine we'll probably see the same sort of thing at some point, like a plant shedding leaves in a drought, trying to keep only that which is necessary.

      I mostly agree about prudence when it comes to "prepping." The European Dark Ages lasted for around 600-800 years, depending on your measure of when it started and when it ended. Obviously, the spectre of rising crime rates, inability to find food at times, the need for medical care, etc, means that we also don't want to NOT take some precautions, but I think that mental agility and personal skill building will have as much impact as anything else. "Survival," be it in the middle of Alaska, a war, or a business, has as much to do with a person's outlook and actions as it does with anything material. Dealing with the descent into the global Dark Age is going to involve not going along with the herd, not acting without reason, and not betting too heavily on one strategy or another. Regardless of political or social appearances, going all-in with material goods and preparations makes a person a tempting target for thieves.

  3. To me the country isn't focusing on the problem, like 'getting the housing market going again', or drill, dril, dril. Things aren'r working, and it can't be fixed by tweaking it. Society needs major reorganizatioon.

    If the country was working, the federal government wouldn't be a military dictatorship, we wouldn't have a police state, there wouldn't be millions of long term unemployed.

    One of the main things I would suggest is, get out of the past already! By that I mean this obsession with pop culture crap. Does anybody need to see the Beach Boys in concert again? Is there an old t.v. show that hasn't been brought back or made into a movie? Eveything from The Munsters to Dallas to Miami Vice has been brought back.

    We're drowning in the pop crap from the past. That and paying pro athletes millions in cities that can't even afford to keep the lights on.