Ian Welsh, “The Depression and the Future”

From Ian Welsh’s glorious blog:

Ok, everyone’s talking about the oncoming recession. What it is is the second downleg of the depression we’ve been in since the financial crisis.

All of this has been baked in since 2009. Since January 2009, when Barack Obama announced his stimulus, which was not just too small, but put together so badly that it was evident it would not kick the economy out of the doldrums.

The stimulus would be seen to fail (it doesn’t matter how many jobs it “saved” what matters if it created a good economy.) Meanwhile Obama made it clear he had no intention of restructuring the economy, shutting down any of the major banks or of disrupting the paper for oil securitization game.

So, anyway, what’s happened since 2009 was baked into the cake. What is happening is what anyone halfway competent should have expected to happen and that includes the massive wave of austerity in the developed world, the high commodity prices, and the continued liquidation of public assets to feed private greed.

If anything it’s slightly worse than I expected. I would have hoped that some nation other than Iceland would prove to have enough guts to tell the vultures to fuck themselves, but apparently we’re all eunuchs or morons these days, and the Greeks still aren’t rioting amongst the mansions of the rich, I notice. So who cares what they think, anyway?

I suppose it’s tiresome to keep saying “I told you so”. Certainly I’m tired of it, but the point is that this could all be predicted, was all predicted (well, not all, I didn’t get the revolutions in Arab countries, though I know someone who did and the clues were there.)

Assume that what is happening is, essentially, what your lords and masters are at least ok with having happen. If they weren’t, it wouldn’t be happening. This isn’t a case of incompetence, they didn’t even try to make this stuff not happen.

The future you’ve got coming from you is a future of unconventional oil extraction: aka fracking. The play is to get back to cheapish oil and make that run for as long as it can. That is what WILL happen. That is baked into the cake. The only economy these people want to run is an petro economy.

They will do whatever it takes to run one and continue to use their position in control of legacy capital to extract rent and tax the future. There will be more controls on so-called intellectual property (a contradiction in terms if there ever was one). There will be more security theater. There will be more austerity, which means taking public assets and turning them into what appear to be revenue producing private assets.

This will go on until the last drop of cheapish conventional oil has been pumped and the last suburb built. Americans, and apparently the developed world, will do whatever is required to see this happen. They will kill whoever they have to kill. That’s what the developed world is, now. This is only compounded by stupidity like Germany going off nuclear without a clear plan of how to replace the energy. Remember, boys and girls, yes, there is blood mixed in with that oil. A lot of it.

This the future, the next goodish economy will come from unconventional extraction. Not sure how long that will last. It will come at great environmental and health costs, but Americans will give up anything to keep the petro-economy going, so, so be it.

What’s this gonna mean for you? The good jobs are going to keep getting scarcer, and if you aren’t willing to do evil (work for any insurance company, anything defense related, most good paying education jobs, most good paying healthcare jobs, virtually all financial industry jobs, etc…) then they will essentially non-existent.

Real wages after real inflation will continue to trundle down. Even inflation adjusted wages as measured by the BLS may show declines. Employment WILL NOT recover in your lifetime if you are over 40. That doesn’t mean there won’t be ups and down, but it won’t have a long sustained up. Financial markets will continue to be a rigged game, and if you want to play, realize you need to play as if the game is rigged, not as if you’re in a free market.

Unless you can pay premium, the quality of everything you buy will continue to go downhill. Want a good burger? Closing in on $8. Want a shitty fastfood burger?  $2 or less. Public transportation will get worse, more libraries will close. The cops will make less calls and be less helpful. The schools will be worse in most places and keep getting worse. Eventually Medicare will be slashed to the bone, and so will SS. Not necessarily destroyed, but so weakened they might as well be.

It’s gonna be a long 20 to 30 years folks. Does this have to be the future? In theory, no. In practice, well, yes, apparently it does.

I keep running Ian Welsh’s pieces because he is one of the finest writers currently writing. He needs to be on TV, in the newspapers or in the newsmagazines, but no wait. That will never happen. They are all owned by the rich. I have decided that I am going to limit my intake of the newspapers of the rich, the newsmagazines of the rich, the radio stations of the rich and the TV stations of the rich.

The rich are my deadly enemies. It’s a war to the death – us and them. I will fight them to the death and then I will dance on their graves forever and a day.

I really don’t understand the rich. They want to rip up the safety net? Got it, they don’t need it.

Destroy public education? Sure, their kids all go to private schools.

Close the libraries? I don’t get it. The rich don’t go to libraries?

Close all the parks? I don’t get it. The rich don’t go to parks? They have private parks and country clubs to go to?

Shut down the state and national parks and national forests? I don’t get it. The rich don’t go on vacation? They don’t go to national forests, national parks, or state parks? Someone clue me in here.

Shut down public transit? Sure, the rich don’t use it.

Destroy all funding for infrastructure? I don’t get it. The rich don’t drive on highways? They don’t drive over bridges?

The model here is Latin America. Latin America, a continent that has been wrecked by the rich from Day One. All of Latin America’s problems are due to rich rule. The public schools are wrecked – the rich won’t pay for them. The highways and infrastructure are a joke. I never understood this until I heard that the Latin American rich simply buy 4-wheel drives to drive over their shit roads. They would rather do this than pay for a road.

Libraries in ruins? No problem, the Latin American rich don’t care about libraries. So where do they get their books?

Medical care in ruins? Who cares, the Latin American rich go to private clinics.

Parks decrepit, falling apart, or closed? In Latin America, this is the case. National parks are horribly underfunded, decrepit or closed. I guess the rich just don’t care?

Even housing standards. After the glorious Pinochet (Tulio’s hero) came into Chile and afterwards, the housing standards put in by Allende were rolled back. That more buildings did not fall down in the Chilean earthquake is largely due to the housing standards that were put in by Allende.

After Pinochet, new governments rolled back these standards or mostly just looked the other way while typical Latin American capitalist criminals violated building codes. As a result, many more buildings were damaged in the earthquake than would have been otherwise. This I don’t get at all. The Latin American rich are such skinflints that they would rather skirt a building code to save a few bucks, and then risk having the building fall down or getting hurt or killed? All the personal risk is worth it to save a buck or two? What scumbags!

The Latin American rich don’t believe in hooking up their countries with electricity. Much of the country lacks power, but they don’t care. They all have generators!

Horrible pollution runs in the public water supply, but they don’t give a fuck. A cholera epidemic rages through Peru, but the rich don’t care. Why not? They all drink bottled water?

The part about the cops I get. Here in California, even the police are cutting back. They often won’t even come out. This is the case in Latin America. In Peru, the cops are so poorly paid that they often stage holdups on the road to get money. I don’t get this. Don’t the Latin American rich worry about crime. I have heard that many of them hire private bodyguards. They’d rather hire private bodyguards than pay for cops?

The Latin American rich won’t even pay for a decent military. During the Civil War in Peru, the soldiers didn’t even have proper boots or uniforms. The rich could not be bothered to pay for them. Now that’s a callous ruling class! So cheap that they won’t even fund the army that keeps them in power. “Oh well,” they figure, “The revolution will always be defeated somehow. We won’t need to pay for an army.”

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9 thoughts on “Ian Welsh, “The Depression and the Future””

  1. I use to be a huge Ian Welsh fan years ago, but then he and the other pompous writers lost objectivity as liberal fever took over. The turning point for me was the mean spiritedness prevalent when Tim Russert died. Russert was personally ravaged by the writers and posters there over the supposed influence he held in initially supporting the Iraq war, that somehow he created critical public support necessary for it to go forth. They demonized him and had zero compassion over his passing, it was sick and nuts. You would’ve thought it was Dick Cheney having faked his own death that they were reacting to. And yes, even Ian was an apologist for them, blaming Russert for what he “brought upon himself”. If Ian is reading this, I want him to personally know how negative and spiteful he got over time, and that he expressed this attitude at me when I protested. He sent me a message that was contemptuous and juvenile to the extent that even in that vile environment at agonist.com it would’ve embarrassed and undermined him. I wish I had posted it but I was too upset to consider. I just got the hell out of the agonist immediately and never went back. Most of those people are “intellectual supremests”, I don’t know how else to describe them, but it was unprecedented in my experience and they had utter disdain for all the rest of us dumbasses, anyone who didn’t share their hatred for other individuals, just people like Tim! But I seriously think they consider themselves as one of the very few people who understand how things really work, it’s just so arrogant.

  2. Close the libraries? I don’t get it. The rich don’t go to libraries?

    The tightwads in Bloomfield Hills, Michigan, the nation’s fourth wealthiest city (median family income over $200,000), have refused to fund their own library for the past 7 years. They’re so cheap they went to the Michigan Supreme Court, demanding to be allowed to use the Bloomfield Township library without paying their fair share. They demanded the use of all the library’s services, while offering to pay only for the cost of checking out books. The Township won the case, but it cost them $300,000.

    As someone said on another forum, this is like going to a restaurant and ordering a meal while expecting to pay only the wholesale price for the food and not tipping the waitstaff. It’s a really posh suburb. Auto execs and professional athletes live there. The rich are different from you and me.

  3. To Rob:

    If anything it’s slightly worse than I expected. I would have hoped that some nation other than Iceland would prove to have enough guts to tell the vultures to fuck themselves, but apparently we’re all eunuchs or morons these days, and the Greeks still aren’t rioting amongst the mansions of the rich, I notice.

    The situation with the Greeks and the Icelanders is quite different… Iceland still has it’s own currency and can print and devalue money at will… in addition basically most of the trouble was caused by private banks. The failed debt is with entities that no longer exist not sovereign nations. Greek’s debt problem was caused by excessive sovereign borrowing (and willful fraud on the part of the Greek government with the help of Goldman Sachs..) and they do not have their own central bank. The Eurozone foolishly did not provide a vehicle with which they expel a member for violating budget covenants among other things… but it would appear if Greece were to default then they would have to drop the Euro which would likely mean all pensions, insurance policies, bank accounts etc would likely be switched to their old currency the drachma causing an immediate devaluation which would heavily affect elderly Greeks. From what I have read they should be kicked out … it would cause major turmoil.. but eventually their economy would return because it would once again be considered a nice, cheap place to vacation.

    Among the EU states in trouble Ireland most closely resembles Iceland.. at least in how the trouble started… it was Irish banks that blew up their economy not excessive borrowing… legally (per Eurozone treaties..) I don’t think Ireland had to take on any of the bad debt from it’s banks. The banks would have filed for bankruptcy, which would have caused great turmoil but I suspect a much quicker rebound without this huge debt overhang.

    1. Uncle Milton, I’m banning you again. This is the third time. I keep telling you to quit pushing rightwing economics on here and you just won’t stop. I’ve been sitting here putting up with this from you for months now, and I’ve finally had it.

      I let you come back on grounds you would not do this, but you just can’t seem to help yourself. You’re like a dog with a bone, you won’t drop it.

      For Chrissake, this is a socialist blog, I don’t want a bunch of rightwingers on here.

      Once again, commenters, you can say anything you wish, but no pushing rightwing economics.

      Bye and have a good life.

  4. To Rob:

    I keep telling you to quit pushing rightwing economics on here and you just won’t stop.

    Well to clarify…

    1) I support the decision of the Islanders not to bail out their banks.
    2) I would have supported the Irish to do the same but their government opted to put in public to bail out private banks. Unwise plutocratic move in my opinion.
    3) Read up on Goldman Sachs and Greece… GS basically helped the Greek government commit fraud.. and have any Goldman people gone to jail…? Neeeyyope. As for how I would like to see the Greek situation resolved.. send some Goldman Sachs execs and Greek politicians to jail. Not sure how stable Greece would be if they defaulted… The EU has threatened to boot them out of the Euro if they did but I imagine things would eventually right themselves. When a country does not have their our currency then they inherently turn over some sovereignty to outsiders which can lead to a bad end for that country’s public. It would sort of be like California being booted out of the US, chaos at first but likely better off in the long run.

    I really don’t know why you thought my post was coming from a right wing angle. Would you like to tell me why you thought so…?

  5. The current head of Goldman Sachs actually said “We are doing God’s work..” Yes and he said it apparently without irony…stunning:
    http://www.dailyfinance.com/2009/11/09/goldman-sachs-is-doing-gods-work
    I guess G-d is a Gypsy 😉

    Note that these articles come from mainstream publications, it was that obvious. There is a good series of articles in Rolling Stone, of all places, about how bad these (and other Wall Street banks..) are….

    “Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country’s already bloated deficit.”
    http://www.spiegel.de/international/europe/0,1518,676634,00.html

    “Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.”
    http://www.nytimes.com/2010/02/14/business/global/14debt.html

  6. http://www.charlierose.com/

    His interview last nite with Morgenson her new book “Reckless Endangerment” on the banks etc.
    I caught just a little. Is she a sharp critic of the banskters and the bailout, an apologist, or somewhere in the middle?

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