Prescription for (Killing) the Planet

Prescription for the Planet was written by Tom Blees and published in 2008. It was recommended to me, with a strong sense of urgency, by a couple friends. It is written in a very compelling style, which is too bad because it suckers people into the kind of wishing thinking for which we’ve become infamous in this country.

Indeed, Prescription for the Planet promises to save the planet. But instead, it develops a prescription for furthering the industrial economy and therefore killing the planet. Saving? Killing? Apparently some people think these words are synonymous.

Ultimately, Blees’ plan boils down to two “solutions,” both of them extremely suspect. First, he claims we can we can ramp up production of renewable energy systems and also fourth-generation nuclear reactors to keep the power on. Indeed, Blees claims our lives depend on electricity. As such, he dismisses the first two million years of the human experience. If our lives depend on electricity, it’s because we’ve abandoned a viable, durable set of living arrangements in exchange for endless opportunities to destroy the living planet. Second, Blees promotes the notion that boron-powered automobiles will keep us on the highways. And he thinks that’d be a good thing. After all, boron seems to be essentially limitless on this world. Just as crude oil seemed, not so long ago.

First, let’s consider and dismiss Blees’ electrical option. Figures on energy supply and efficiency are readily available for renewable systems, so it is relatively simple to evaluate Blees’ map to determine whether “alternative” energy sources can fill the void at the scale of a world with nearly seven billion people.

They can’t. And it’s not even close. I don’t know a single energy-literate individual who thinks we can replace fossil fuels with alternatives by 2030. Most people who write about energy issues have concluded we’ll be firmly in the post-industrial Stone Age well before 2030. I’ll not run the numbers here because I’ve run them many times already, and so have a lot of people a lot smarter than me. But I’ll start by picking a few nits, then I’ll move on to the big-picture moral issues we try so hard to avoid in our national conversations.

And, I’ve written about one kajillion times, all electrical power is derived from oil, even nuclear power. We use plenty of oil to transport nuclear materials (even the stuff Blees discusses). And also for maintaining the grid. And then there’s the massive mountain of concrete needed to build cooling towers for nuclear power plants. As a result, nuclear plants become carbon neutral only after about 20 years in operation, at which point we start shutting them down for safety reasons.

And what about those cars? Building a planet’s worth of boron-powered cars will require a lot of oil. My Prius uses less energy than the cars Blees writes about, but it still requires more energy to construct than a Hummer. I seriously doubt we have enough oil in the world to make enough cars to replace the U.S. fleet, much less get a billion Chinese cars on the road. And then there’s the issue of financing, in a world where credit is drying up faster than Lake Mead. Who will be able to buy a $40,000 car with cash?

If all goes according to Blees’ plan, the first fourth-generation nuclear power plant will be producing electricity in 2015. I strongly suspect, and hope, that we’ll be in the new Dark Age by then. This Dark Age will cause much suffering and death among industrial humans. And I think it’s our only chance to save the living planet, and our own species.

Further along Blees’ road to ruin, by 2020 plasma energy will fulfill 5% of our energy “needs” and boron-powered cars will be filling the roads. I cannot imagine a scenario in which we will avoid landing in the post-industrial Stone Age by then.

And even further along the route of Blees’ nuclear wet dreams, we’ll have all the nuke plants we need to satisfy the world’s demand for electricity by 2050. If we come even remotely close to that goal, there will be no humans on the planet to use the electricity. The latest (ultra-conservative) projections indicate extinction of our species by mid-century.

And that’s just the small stuff. The moral issues are much more daunting.

The further we go into ecological overshoot, the worse the outcome will be for every species on the planet, including our own. Maintaining the ability to produce more cars, and more babies, is a prescription for the planet, all right: a prescription for disaster. There are limits to growth. I strongly suspect they’re driven, in this country, by the price of oil. If not, rarity of other materials will force our hand.

Hopefully, our hand will be forced in time to prevent our extinction. It won’t happen, though, if we return to the American lifestyle of happy motoring. We certainly do not need to export car culture, and its many attendant consequence, to other nations.

Meanwhile, against Blees’ backdrop of fourth-generation nuclear ambitions, Barack Obama is pushing for an older version of nuclear dreams. He’s committing serious bling to build nuclear reactors in all the wrong places, ignoring the fact that nuclear power is the twentieth century’s most expensive technological failure. Even Time magazine knows this bet won’t pay off, that the nuclear dream is really a nightmare. Even as Obama pursues failed technology in the homeland –- while denying other countries the same option — he wants to maintain or expand our nuclear arsenal in the name of security (sic).

Fortunately, the next great economic crash is right around the corner. After the China bubble pops, the human population bubble surely will follow. It’s time to grow accustomed to chaos as an everyday event.

As usual, you can count on me for the good news associated with life in the doomosphere. Soon enough, we won’t be threatening the entire living planet with extinction via carbon dioxide emissions. Or by flooding the atmosphere with methane. Soon enough, we won’t be spending all your hard-earned tax money on oil, much less on securing that oil at the point of a bazooka. Soon enough, Afghanistan will be a distant memory instead of a broad expanse of imperial killing fields. Soon enough, Obusha will not be able to order the massacre of civilians on a whim. Soon enough, the world’s largest companies will not be able to cause $2.2 trillion worth environmental degradation each year. On the other hand, it’s time you started thinking about how to spend your own money, while sellers still think it has inherent value.

I know my message is not the one desired by industrial humans. We want our children to have more stuff than we had. Instead of more stuff, I want them to have more of the living planet, if only to insure their own survival (and that of our species). In contrast, Obama’s dream is the same as Ronald Reagan’s dream: economic growth at all costs, including obedience at home, oppression abroad, and the devastation of the planet and all non-Americans (with the possible exception of Israelis).

Western civilization is omnicidal. We need to stop murdering the living planet on which we depend, instead of attempting to extend the reach of western civilization. And we’re running out of time. Fortunately, the conquest of the living planet has turned into a war. And now, finally, this war has two sides. Which side are you on?


This essay is permalinked at Island Breath.

Comments 60

  • You know, I am as much a sucker for doomertainment as the next guy, but I’m afraid I must object to all this panic-mongering. Who says that a warming trend of 4 degrees will kills us? As far as I know, and I have looked hard, there were hippos in the Thames and elephants in London 100,000 years ago. Some 8,000 ya it was so warm that pond turtles and water chestnuts thrived in northern Scandinavia. Did the methane blow? It must have, at various points, yet the planet live on. The gulf stream shut down, yet the planet lived on. And our ancestors with it.

    Now I am not underestimating the problems our overshoot (et al) will bring sometime soon. But do we really have to rave like lunatics when anyone who looks at the history of the species and the planet knows it has gone through some hard-to-coceive-of changes? It kills a lot of credibility for our unciv gang. When Toba blew 71,000 years ago, there was a 6 year winter. A huge die-off. Yet some of our ancestors survived.

    So while I agree that salvation by technology is BS… I would appreciate more even-handed projections. Nobody really knows… and I would like to retain some sanity while trying to figure out what’s next and what I can do to maybe make some difference. I imagine same with others. I share your anger. All the same… have a little mercy, Guy. And check your prehistory.

    I may be a little hard on you here, and if so, I apologize. I think it matters how we get the message out. The utility of increasingly ghastly forecasts seems to me overrated.

  • vera, if I understand correctly, the last time the planet was 4 C warmer than it is now, snakes the size of yellow school buses filled tropical forests and the largest mammal was the size of a shrew … because that’s the largest mammal that could thermoregulate well enough to survive.

    Could be, though, that our brilliance and ability to adapt will allow us to sneak through 4 C and the attendant misery … and then 6 C and 7 C almost certain to come by century’s end. But, unlike most people I meet, I’d just as soon not give it a try. I’d rather we terminate the experiment now, just in case we still have time to save our species (and a few others).

  • I think that Vera is seriously misconstruing what “doomers” say. Few predict actual extinction of our entire species, though that is absolutely within a plausible worst case scenario.

    In my mind, our civilization as we know it and have lived it is going down like a stone. I do expect a very significant human die-off. The prospects of a stable human population over even twenty years from now in my view is nil. It cannot happen in the context of the resource depletion that we face and which is unavoidable from several indisputable standpoints.

    Those who suggest otherwise are operating on the faith that man’s trajectory over the past 150 years can possibly continue, but it simply cannot.

    The economic crisis that continues to be falsely reported in mainstream media is a by-product of the resource crises. And I believe that the world elite know it — they are trying to siphon off as much of the existing wealth of mankind as they can now through financial speculation as opposed to what used to do the trick — work. Economist Michael Hudson has spelled it out in graphic detail, and in the latest edition of Rolling Stone magazine there is a lengthy article explaining the nature and the specifics of the Wall Street chicanery that is impoverishing the Middle Class of America even as we speak and as the “dumb as rocks” Tea Party set try to defend their own throat-slitting.

    Sorry Vera, but the situation is probably even worse than has been described here and certainly far worse than the mainstream media presents.

    But we have not crossed the “horizon” of history from which we cannot see our way back to what was previously considered normal. The masses are now looking backwards in history, as encouraged by Obama and both political parties, and using a defunct frame of reference to interpret emerging realities. The public is still not being told the truth about Peak Oil and Peak Everything and still hopes that old-fashioned economic growth will reverse one more economic cycle to their advantage.

    But it simply cannot happen that way. Obama is continuing to work hard to avert panic. He is as deceptive as ever, even as his screwball medical program favoring the for-profit insurance industry threatens to crumble underfoot through passage of high-risk premiums even before his health plan is officially rejected.

    The government of the US is paralyzed. The only thing it can do at all is wage war and spend money wastefully into the coffers of those who least need it.

    Prosperity is slipping through American fingers like quicksilver, but a lot of amassed debt made it possible for a nice comfy ride to last for a good while. The accounting process is underway and countless Americans are finding out that their mortgages are under water, their credit cards are maxed out, their jobs are disappearing along with benefits such as health care, and their children are graduating from universities with zero to few prospects for a meaningful career or even short-term income in many cases.

    Doom is all around, but people are instructed to “don’t worry, be happy”. If people faced reality, doom would have already given way to gloom. But gloom leads to panic and we are better off as a civilization avoiding violent anarchy for as long as possible. But it is around the bend.

    But within all that doom and gloom, if you stand in the right place for a few seconds you can still occasinally bask in some temporary or reflected sunshine and convince yourself that all is okay. The perfect storm has not hit yet.

    The rumblings out of Washington towards Iran should be very frightening to everyone. The demonization of Iran is a way of getting Americans prepared for another war of aggression. This war could very well provide the tipping point that doomers righly dread. When Hillary Clinton spouts absolute BS that Iran is becoming a military dictatorship she is building American fear based on outright prevarication. She is trying to drag us by the nost to a devastating war. And the American public is too stupid to question anything because fear is the greatest motivator around.

    The time between now and summer will be continuously fascinating, as we watch the great unraveling proceed. There are many factors at play simultaneously internationally that it is impossible to predict which lever will get pushed, which ball will bounce and rebound, which crisis will emerge. But we know for a fact that the situation is unstable, unsustainable, very dangerous and in flux.

    The good news is that Dick Cheney had heart pains this afternoon. Perhaps the Devil is ready to call him home.

  • Stan, I’m confused. I thought Dick Cheney was the devil. How can he call himself home?

  • Could be… but we still have a ways to go to match 8,000 ya. And even if humans go and giant snakes are back, that still is a long way from the planet dying, nah?

    And I suppose… there is always the hope that Gaia will change her mind and bring on another ice age. We are about due…

    What really got me riled is… I feel like I am living back in Calvin’s day when the preachers scared the beejeezus out of people with their sermons of hellfire and damnation. Your post… when I read it, I felt as though I had been assaulted. And I am wanting fair play. More and more I see the scary outbursts of the doomersphere as perhaps a desperate ploy to manipulate us into… something different. But that manipulation then in itself seems like more of the same, you know, civ and its cruelties…

    Thank you for your even response. Much appreciated.

  • vera, if I’m using terror — and I’m trying hard not to do that — it’s to encourage action away from civilization, not toward it

  • Stan, I grok all that. And I went on Guy’s links… I thought it was overwrought in terms of the species dying in midcentury and the planet getting destroyed by us. Do you have a link for the Rolling Stone article? I went to Hudson’s site but does not seem to be listed. I tend to go with some version of slower descent than yours… staircase-like, bump, bump, bump. There are still resources around. Shame they are being wasted on wars, kleptocrats, and pretend games. I guess America has become one large Potemkin’s village, eh?

    Guy, I am figuring… we gotta embody another way of being in this world than what civ taught us. Screw terror… let’s draw people away with awesome amounts of lovingkindness … despite it all.

    As for population, I actually was foolish enough to hang onto hope that there is a way yet to do something. I got embroiled in a bunch of heated conversations recently, some about Haiti, some more generally, on that subject. I have felt utter despair over people’s unwillingness to try to think outside the box on this topic, and their kneejerk vilification of the few voices that speak in a different key. Even those willing to converse about it just can’t wrap their minds around “intensification of food production in response to increased population leads to yet more increased population.” Absolutely will not brook that idea. The food crankers have it. So… I figure… that’s that. Even if something could have been done logistically, the body politic will not stand for it.

    Still, the snow outside has fluffed up the trees into a fairytale world. Gotta go and feel and play. :-)

  • I am on the side of your new artiodactyl ungulates.

  • The relevant expression, I expect, is “bottleneck.”

    Those geniuses at Tomorrow’s Table, Vera, (I especially liked the Kiwi who wants to genetically manipulate pests, yet admits to an almost irrational hatred of parasites and a crippling phobia of spiders) only want to ‘alleviate suffering.’ Of course, they want to do it via human cleverness, which got us here in the first place. And not a one admitted to the petty detail that the massive industrial agriculture they support is entirely dependant on petroleum, to breed and sow and fertilize, and protect from pests, and harvest and process, and distribute and preserve. All that to get another billion squeezed onto the planet, ready to breed.

    But bottlenecks occur among species, and we are at core another species, not some dukes set here by a wise supernatural deity. I’m with Guy on this; tough love is in order. People refuse to pay attention, even within the span of their lifetime, to the changes already underway. Partly it’s that they find reality threatening, and so why not retreat to a virtual reality? Partly it’s the confidence that human cleverness at problem-solving will win out yet again…that’s a huge factor, imo, and has been for millennia now; we find ways to push the goal down the field and buy time. Yay for us. Go, team.

    Time is about up; our numbers approach the bottleneck. Either we find a way to cull or it’ll be done for us, by the natural systems we think ourselves above. Pointing it out in unsparing terms is a kindness, a dash of cold water in the face.

    And those snakes the size of a schoolbus will take millennia to develop, once the smoke clears and the methane dissipates.

  • “I’ve written about one kajillion times, all electrical power is derived from oil, even nuclear power. We use plenty of oil to transport nuclear materials (even the stuff Blees discusses). And also for maintaining the grid. And then there’s the massive mountain of concrete needed to build cooling towers for nuclear power plants. As a result, nuclear plants become carbon neutral only after about 20 years in operation”

    You are grossly dishonest. Repeat yourself till you die, if you like.

    The “mountain of concrete” is energetically paid for in a nuclear plant’s first week of operation (

  • G.R.L. Cowan, this is from your source: “… it takes an estimated 5 years for a silicon solar panel to generate a net energy gain, while a nuclear power plant can take 20 years or longer, according to Helen Caldicott.” Thanks for supporting the point I was making, even if you had to resort to name-calling along the way.

  • Indeed, Guy.

    And, not that I disagree with you, but it’s worth noting that you (and I) are writing this on a piece of equipment that is an integral part of that “omnicidal technology.”

    I don’t think the roots of the culture of omnicide are located in any single place. They’re distributed through our culture.

    The thing is, those roots, those seeds, must have already existed in our culture from the beginning, in order to be able to sprout into their current form. I don’t think they were “planted” along the way. I think they were always present, like anything, just needing ideal conditions for their growth.

    What happened? How did “hard work” turn into “entitlement?” How did the earth-consciousness of the small farmer turn into the money-consciousness of modern agribusiness?

    Some values were (are) allowed to be stressed, while others were (are) allowed to be suppressed. How did those allowances occur, or how were those allowances coerced?

    This, I think, is the appropriate starting-point. Starting from a discussion of right/wrong tacitly concedes the ground that supports the undesirable state. Once conceded, it is the “dominant system.”

    Now (still) the dominant system, any energy put into it, is used by it (not singularly, but in a distributed fashion) to further its cause.

    The “antagonist” must fight against an “agon.” There must be a hero for the villain to fight.

    I think these are clues to the way out. Any argument that relies on something other – especially any argument that relies on reference to the current (read, dominant) paradigm – will only be used by the current paradigm.

  • The Wall Street Journal assures us that economic growth and prosperity
    depends upon an expanding population.Their anthrocentric bias–what I call species prejudice calls for the destruction of the planet in the name of economic “success”.

    They also actively promote the political party whose mantra is”guns,gays and God”

    We are to be ruled by selfish,ignorant barbarians.If they were logically consistent they should also tell us that the earth is flat.

    Frank Mezek

  • Guy,

    Mr. Cowan was not actually referring to the article “World Energy Plan Triage” he linked to. He was referring to a comment he (Mr. Cowan) made regarding the March 2004 Bill Moore article. His comments make it clear that he is a nuclear power tool. For example, he notes that an admittedly very large explosion in Iran of a run-away 50 car train filled with sulfur, fertilizer, and petrol was much worse than the Chernobyl nuclear event. Hmm, let me see, 180 dead (mostly fire fighters), 350 injured in Iran vs. 56 immediate deaths, 4,000 event caused cancer deaths, 800,000 exposed to unacceptable levels of radioactivity, and 336,000 permanently resettled by Chernobyl. Yup, Iran wins, 180 to 56.

    Michael Irving

  • Vertalio, I am trying to steer the discussion on Tomorrow’s Table to ag now, and its problems. However, I don’t think I will get very far, as they have all along been very skittish regarding modernity, basically having formed a wagon ring around it and brooking no questioning. Maybe I can poke a spike into one of them wagon wheels?

    Frank, it was when I realized that civ’s economic prosperity depends on growing populations that I understood why we are constantly being lied about the pop problem and why any action on it is constantly evaded. That is the crux.

    Vertalio, maybe so about the tough love. I tend to think that civ itself provides plenty of terror, and so will the ongoing collapse, without us needing to add to it. In any case, for us fellow travelers, the terror tactic seems just to act to make each other miserable. Look at Kunstler. His posts have degenerated into one message repeated over and over, peppered with hate mongering against rednecks, southerners, and assorted tattooed masses… spiked with panic mongering. I actually went and checked his links to the claim the U.S. stands before imminent food shortages. They linked to other panic mongers. It did not bear out. He does not even have the respect for his audience to do some research before posting such stuff. I really like hanging here because the message and the discussions make a lot of sense on all sorts of levels! :)

  • I meant to type anthropocentric above.

    Can someone tell me how to get spell check?

  • I’m so very sorry, Guy. If I’d known the quality of your trolls, I’d have started out as one, so you could convert me to collapsitarianism. Oh well.

    Josh- that was wise. I totally agree; we have to corrupt the system from within, as it does to things like the 60’s counterculture, now shilling cars and football.
    Look! Bright shiny green thing!
    I assume you’ve been thinking about this. Keep talking.

    vera, they hardly want to discuss reality at TT, only reality as a challenge to be solved by our superior intelligence. The world holds little beauty for them, I fear. Let’s hope they don’t crush all the magic before long.

    Oh, and Frank- the earth is flat. Look out your window.
    Also, it’s snowing here, which means the earth is cooling again.

  • Man, I love this site. If I could just get somebody I know to believe me, to read this stuff. Like a voice in the wilderness. I have reached the point I cannot connect with anyone anymore. It is BAU and I look at them and I know what is about to happen and it is surreal. I was listening to my girlfriend’s 27 year old daughter talking to someone on her cell a few months back. Going on about how in 10 years when the kids are older she is going to take time off from work and go back to school and get her masters, blah, blah, blah. And I wanted to tell her, you are not going to recognize this place in 10 years, much less carry on with your silly plans. Sorry for the rant…

  • John Leslie, perhaps you can coerce your friends into reading Slate, where Warren Buffett’s long-time partner at Berkshire Hathaway, Charlie Monger, says the U.S. economy is dead under the headline, “Basically, it’s over.” Or maybe they’ll listen to historian Niall Ferguson, who concludes, in the latest issue of Foreign Affairs, we’re one downgrade away from the end of American Empire. My point, of course, is that I have plenty of company in pointing out how close we are to the end of the industrial age. Most others don’t see this as a good thing, of course, so my “take” on the issue is admittedly abnormal. But at this late juncture in the industrial era you need not delve into counter-culture publications and conspiracy-theory aficionados to know where we’re headed.

  • On a marginally related note, for those readers who pay attention to the comments here, I’ll be speaking in Goodyear, Arizona on 22 March 2010 at 10:00 a.m. and in Sedona, Arizona on 7 April at 6:30 p.m. Details about both events are posted here.

  • @Guy

    You said, “…if I’m using terror — and I’m trying hard not to do that — it’s to encourage action away from civilization, not toward it.”

    It’s this kind of revealing comment that really detracts from your overall perspective. I mean, what’s next?! Are the “doomers” gonna start flying planes into skyscrapers to get their message across?


  • rynsa, I do not understand. I’ve described the immorality of imperialism here and here, and provided a 10-step plan for bringing down American Empire here. But I’ve not ventured into terror (or even terrorism). Please explain. Thanks.

  • Rynsa, did you read what Guy was responding to? I was complaining about all the panic-mongering in the doomersphere. That a pretty long shot from encouraging terrorism. Besides, we don’t have to encourage it… the system is darn good at it as it is…

  • vera,

    oh my god! a ‘troll’ with his own website!


  • To Vera —

    The latest Rolling Stone article by Matt T. was on the breaking news blog for several days. I can’t find it now.

    The fundamental point that I was trying to make, and I think Guy agrees, is that the earth (Gaia) will remain and will have life, unless a very worst case scenario transpires. The problem is that if we are there in a foreseeable period of time, the organization of the planet in terms of human civilizations and in terms of operating ecoystems and biosystems will be different, if not unrecognizable to us, even today in 2010. this is the meta-scale view. On the micro-scale, we may see familiar things if we are alive as one-hundred year olds, but the feel will be completely different. But the earth is alive, resilient, and over time will heal and vegetation in moist areas will be the first to heal. More could be said, but that is the main point I was trying to make.

    Many bad things will be gone and that is a plus…

    Stan Moore

  • Matt,

    Holy cow! The word “gibbering” comes to mind, which is what I was doing by the time I finished checking out your link. Well actually I had to skim most of it because it was making me too crazy to actually think too hard about what he was saying. Some of my comments might well have met his definition of what a doomer like me would say when faced with the “truth” he was dispensing.

    Thanks, it was a yuck.

    Michael Irving

  • Michael

    he is a peak oiler/debt/civ/finance/growth type,
    just not your regular doomer ie marauding zombie hordes

    that article/link was a rant as he suggested it was,

    his other essays are far more measured and thoughtful
    albeit contrary to the shrill expressed on LATOC and
    MCR in my humble opinion

  • an interesting essay on the death of capitalism by 2012

    but this guy has not included other possible factors, such as a big earthquake (long overdue for LA/or SF), a Katrina-like storm hits Houston or Miami, a flash war with China results in cyber attacks bringing down the electrical grid, a major war over a US attack on Iran, major crop failure, emerging virus hits,

    There are LOTS of things that could happen to exacerbate and provide a tipping point beyond the obvious ones already staring us in the face

  • Hey, I actually like that “of two minds” guy. Here is a good link; most of the stuff he recommends is right on the money. He is a techno-optimist, and thinks that the technologies to deal with the energy problem is already available. [Yeah! It’s the water wheel! ;)] Apart from that… good stuff.

    He says: The future will be more humane, more liveable and more fun than the tottering, rapacious status quo Empire of “eternal growth, rising consumption and never-ending debt-serfdom.”

    Nice to hear. Who knows, it could happen.

  • The most egregious example of evil empire is the story of how Hawaii was stolen.

    A small group of greedy,rapacious,
    criminal American businessmen bribed the local marine detachment to
    provide the muscle to concoct a private,commercial coup to overthrow
    the Hawaiian government.

    Frank Mezek

  • The Aussie blogger seems to be a romantic with a rose-colored view of the world in some ways. What happened in New Orleans when the power went down and the people could not find food and water? Some sat and waited for help, suffering quietly and with some dignity. Some looted the storefronts.

    What happened in Haiti recently? Same thing. Those who had means took advantage of them. Some rioted and looted.

    What happened in Berkeley in the 1960’s when middle-class to affluent white students protested for the right to say what they wanted to say? They were beaten by police and dragged off to jail.

    What happened in San Francisco in the 1940’s and in many other places when unions went on strike to protest poor wages and bad working conditions? White middle-class men were beaten by police with billy clubs and dragged off to jail.

    What happened at Kent State University when white middle-class students protested the Vietnam War. National Guardsmen opened fire, killing at least four students.

    What happened in Europe the past couple of years when gasoline prices got high enough that truckers could not make a living? Strikes, riots, police violence.

    In the foreseeable future, we will enter an unprecedented period of history where the US Federal Government itself and local and state governments may collapse due to collapse of the economic system that pays salaries to government employees. Even now in many towns around the country, including northern California, police departments are laying off personnel, school teachers and administrators are receiving pink slips, and even universities are closing classes, consolidating facilities and staff and hunkering down for the predictable, worse hard times expected.

    But even those agencies are not expecting what will REALLY happen, which is general collapse.

    We cannot predict on a fine scale of time and space what will happen everywhere, but we know the entire social, governmental and survival framework of our civilization is poised for collapse.

    In some places government services may last longer than others. In some places, anarchy may be the order of the day. In some places people may stay civilized, as long as they have something to eat and something to do.

    I think there will be local insurrections in many places for a limited period of time. They will not end because of a return to the civilization that is being lost. They will end because people will die off, be killed, or move from one place to another.

    Anyone who has food and water or other necessities could fall victim to someone who wants it. There will be no 911 emergency telephone services eventually. There will be no hospital emergency rooms and there will be no police ready to take your calls.

    Some people would die before they would steal. And they will. Some people would kill themselves before they would kill an animal for food or a human for protection. They will.

    Our current system is not sustainable at the meta-scale. Period. Equilibrium at that scale must be reached. The laws of thermodynamics are irrefutable and unavoidable. The laws of human nature are a bit more flexible, but life will ultimately be a question of survival. Look at Leningrad during WWII. Look at the Donner Pass tragedy during pioneer times. Look at the Andersonville prison camp during the Civil War. Look at Rwanda, Darfur, Fallujah. Resource wars kill people, and people will be fighting over scarce remaining resources as never before until the resources match the population.

    And some will pray to their Gods for help. Good luck! Countless civilizations over history went down along with their gods.

  • Matt,

    Thanks for the Culture Change link. Interesting reading.

    Michael Irving

  • People all over Europe are getting restless and scared, as shown in the article below. Why? The whole world paradigm of prosperity and relentless growth is no longer possible due to the constraints of finite and depleting resources — particularly cheap energy. Europeans are heavily taxed to maintain their social welfare states, and many are losing jobs and unable to afford their accustomed lifestyles, even with state provision of medical care, retirement, education, etc. And US-style financial shenanigans have caused banks and financial institutions to bankrupt entire economies, while transferring immense sums from public treasuries to the elite — just like in the US. It is just a matter of time before things get REALLY ugly:

    Europe’s winter of discontent

    Strikes threaten to cause paralysis as workers reject government attempts to cut spending and wages

    By Sean O’Grady, Economics Editor

    Wednesday, 24 February 2010

    A wave of industrial and social unrest is building across Europe as workers resist attempts by governments and private companies to impose austerity policies, drive down wages and rescue some nations from near-bankruptcy.

    Huge protest rallies took place in cities across Spain last night; today a general strike could paralyse Greece while industrial action at French airports and oil plants as well as the narrowly averted stoppage at Germany’s Lufthansa promise to be just the start of the greatest demonstration of public unrest seen on the continent since the revolutionary fervour of 1968. Europe’s industrial economy is not clear of recession yet either and with unemployment rising and demands for austerity growing, Europe’s workers are becoming increasingly restive.

    Italy’s beleaguered car giant Fiat abruptly suspended production across all its Italian plants this week, laying off a workforce of 30,000 people for two weeks and further closures are forecast for next month.

    There are signs meanwhile that confidence is sagging under the weight of unrelenting media gloom about the Greek crisis. The Governor of the Bank of England, Mervyn King, voiced his concern that Europe’s recovery has now “stalled”, a development with grim repercussions for the British economy. The much-feared “double dip” recession seems to be becoming inevitable.

    By far the most extensive disruption today will be in Greece, a eurozone member state, where there have already been wildcat strikes and loud protests against the Prime Minister George Papandreou’s efforts to rein in Greece’s yawning budget deficit, the worst in the eurozone. Communist party-backed protesters tried to blockade the Athens stock market yesterday and strikers will today close down air, rail and maritime transport networks, their anger stirred by draconian cuts to welfare benefits.

    The action will also shut schools, government offices and courtrooms, with disruption to banks, hospitals and state-owned companies. A strike by journalists is also planned, which promises to add to the mounting sense of chaos. In a tragic-comic touch, Greece’s tax inspectors also took industrial action against their governments attempts to fix its finances.

    John Monks, secretary general of the European Trades Union Confederation, warned yesterday that unions across the EU were pushing back against austerity plans that were “socially unacceptable” and which would only exacerbate the recession by fuelling unemployment.

    Analysts say that Greece ought to be able to raise about €3bn (£2.6bn) in the markets this week, albeit at high interest rates of more than 5 per cent. A much bigger challenge will be to find the €25bn in April and May that Athens is due to repay on maturing bonds, short-term bills and interest payments. The next crunch for Greece will be when Mr Papandreou has to meet fellow EU leaders on 16 March to convince them he is making progress towards slashing the deficit.

    But now Spain – another of the so-called “PIIGS” group of heavily indebted nations comprising Portugal, Italy, Ireland, Greece and Spain – is also facing determined resistance to the Zapatero government’s attempts to get Spanish public finances on track. Many observers fear a Spanish budget crisis much more than a Greek one, simply because the Spanish economy is about five times larger than Greece’s, and even the resources of the richer eurozone members, principally Germany, may be insufficient to save her.

    In any case, constitutional and political obstacles to bailouts in Germany show no sign of being removed, adding to the underlying strains that are destabilising the single currency area.

    Across Spain’s major cities last night, trade unionists led protest rallies against plans to raise the retirement age to 67. Evening rallies were taking place in Madrid, Barcelona and Valencia, with organisers hoping up to 50,000 would turn out in the capital alone. Protests will spread to the rest of the country later this week.

    If anything, Spain’s economic troubles may be even more intractable than those in Greece. Like Britain, Spain’s economy was driven by a property bubble during t he boom years, and the ensuing slump ha s been more severe than in most of the rest of the eurozone, including Greece. Figures last week showed that Spain is yet to emerge from recession, and faces the social and economic cost of 20 per cent unemployment and a jobless rate among the young of 35 per cent, the highest in the eurozone.

    The democratic strains in nations that had been ruled, well within living memory, by fascist leaders or the military are growing.

    During the relatively benign economic conditions that marked the first decade of the euro, fast growing economies such as Spain were able to enjoy the advantages of currency union, such as low interest rates, but allowed their prices and costs to gradually rise, leaving their economies uncompetitive by comparison with nations such as Germany. Traditionally, that cumulative build-up of cost and price differences would be dealt with by devaluation of the currency, but membership of the euro removes that flexibility. Thus Ireland, Greece , Spain and others are undergoing what economists euphemistically call “internal devaluation”, slashing wages and costs and, if necessary, allowing unemployment to climb to record highs. The problem raised by the Nobel prize-winning economist Joseph Stiglitz among others, is that those deflationary polices threaten to shrink their economies even more, triggering an even more urgent budget crisis as tax revenues collapse and unemployment payments rise.

    A further issue undermining the markets’ confidence in the ability of these governments to deliver is the absence of any kind of Treasury-style function in the eurozone, to complement the European Central Bank: Cross-border bailouts were made illegal by the Maastricht Treaty and that rule has been carried over to the current Lisbon Treaty.

    At the last summit of European leaders in Brussels, President Nicolas Sarkozy revived French demands for “European economic governance” to deal permanently with budget crises, in effect a eurozone Treasury department, but Chancellor Angela Merkel of Germany only agreed to such a development provided it involved all 27 EU states, effectively neutralising the French proposal and insulating the German public finances from possible contamination. Distressed nations such as Greece will probably be left with little choice but to approach the IMF for assistance – a humiliating defeat for those ambitious for European political and economic integration.

    The mood around Europe


    Strikes called by French oil refinery workers and air-traffic controllers are threatening to bring nationwide travel chaos. Neither dispute is a direct consequence of the global economic crisis – the French economy is recovering from recession more rapidly than its neighbours – but unemployment remains high (10 per cent, with 450,000 jobs lost in 2009) and the government fears the spread of labour militancy. As a result, the President Nicolas Sarkozy – elected two years ago with a mandate to be tougher on unions – has all but supported the union side in the refinery strike. The French oil company Total wants to close its refinery at Dunkirk. A strike among Total unions spread this week to other refinery workers. To prevent France from running out of petrol at the pumps by the end of next week, President Sarkozy called in the head of the Total yesterday and demanded – and received – guarantees that there would be no more refinery closures or cutbacks for five years. The strike action appeared to be breaking up last night. Meanwhile, French domestic and foreign flights were severely disrupted as air-traffic controllers walked off the job yesterday for four days. They are protesting against plans to merge the French air traffic control agency, DGAC, with those in Germany, the Benelux and Switzerland.One flight in two was cancelled at Orly and one in four at Charles de Gaulle airport, Paris. Even more cancellations are expected in the next three days, compounding the problems caused by air crew strikes in Britain and Germany.Overall, French worker reaction to the recession has been prudent and pragmatic. The government fears, however, that an uneasy truce may soon break down as job cuts in the public sector begin to bite.

    John Lichfield


    A potentially devastating strike by Lufthansa’s 4,500 pilots was called off at the last minute after the pilots’ union agreed to resume pay negotiations with the airline, but social and economic discontent continues to simmer in the EU’s biggest economy.

    Faced with a record €100bn (£88bn) debt, falling exports and the prospect of having to bail out bankrupt EU partners, Chancellor Angela Merkel’s coalition is struggling to find remedies capable of sustaining electoral support. Leading commentators have complained that a Greek bailout would contravene the terms under which Germany agreed to ditch the mark for the euro at the beginning of the decade. “The Germans are angry,” said Elmar Brok, one of Mrs Merkel’s conservatives, “first we had to bail out our own banks, now we have to help Greece.” Germany’s record deficit and a nearly 20 per cent drop in eurozone exports have sparked protracted infighting between the ruling Conservatives and Liberals over tax cuts and social-security benefits.

    Tony Paterson


    Today, public – and private – sector employees are expected to walk off the job and take to the streets in protest at harsh austerity measures. The nationwide strike is expected to bring air, rail and maritime transport services to a halt. Schools, state-run offices and public courts will be shut, while banks and hospitals will be operating with skeleton staff.

    “The strike should be a big success and should paralyse the entire country,” said Vangelis Moutafis, the general secretary of the General Confederation of Labour union (GSEE), one of the two unions organising the protests.

    Hundreds of enraged workers blocked the Athens bourse yesterday in the latest show of swelling unrest against the reforms enforced by the beleaguered government in its bid to fix a deficit crisis imperilling the financial future of much of Europe. Protesters stormed the Athens bourse ahead of trading, unfurling red-and-white banners that read “The rich must pay for the crisis”, but trading was not disrupted.

    The protest stunt came as delegations from the EU and the International Monetary Fund began talks with Athens on the government’s plan to rein in spending. A chronic violator of EU budget rules, Greece is under intense pressure to slash a bloated budget deficit of 12.7 per cent, the worst in the eurozone.

    Today’s strike is the second major show of industrial action in less than a month, testing the government’s strength in pushing through its belt-tightening measures in the face of stiff opposition from the unions. Last week, the EU warned Greece that it would press for more austerity measures if Athens showed no tangible signs of progress in putting its finances in order by mid-March.

    Anthee Carassava

  • “Protesters stormed the Athens bourse ahead of trading, unfurling red-and-white banners that read “The rich must pay for the crisis””

    Yeah! Can they make’em?

  • Derrick Jensen (a doomer) looks at hope in a new article below. It might be considered a bit of a downer, but could be transformed into empowerment if h.o.p.e. symbolizes “heaving our passivity ecstatically”.

    Beyond Hope

    by Derreck Jensen. Originally published in Orion magazine.

    THE MOST COMMON WORDS I hear spoken by any environmentalists anywhere are, We’re fucked. Most of these environmentalists are fighting desperately, using whatever tools they have—or rather whatever legal tools they have, which means whatever tools those in power grant them the right to use, which means whatever tools will be ultimately ineffective—to try to protect some piece of ground, to try to stop the manufacture or release of poisons, to try to stop civilized humans from tormenting some group of plants or animals. Sometimes they’re reduced to trying to protect just one tree.
    Here’s how John Osborn, an extraordinary activist and friend, sums up his reasons for doing the work: “As things become increasingly chaotic, I want to make sure some doors remain open. If grizzly bears are still alive in twenty, thirty, and forty years, they may still be alive in fifty. If they’re gone in twenty, they’ll be gone forever.”
    But no matter what environmentalists do, our best efforts are insufficient. We’re losing badly, on every front. Those in power are hell-bent on destroying the planet, and most people don’t care.
    Frankly, I don’t have much hope. But I think that’s a good thing. Hope is what keeps us chained to the system, the conglomerate of people and ideas and ideals that is causing the destruction of the Earth.
    To start, there is the false hope that suddenly somehow the system may inexplicably change. Or technology will save us. Or the Great Mother. Or beings from Alpha Centauri. Or Jesus Christ. Or Santa Claus. All of these false hopes lead to inaction, or at least to ineffectiveness. One reason my mother stayed with my abusive father was that there were no battered women’s shelters in the ‘50s and ‘60s, but another was her false hope that he would change. False hopes bind us to unlivable situations, and blind us to real possibilities.
    Does anyone really believe that Weyerhaeuser is going to stop deforesting because we ask nicely? Does anyone really believe that Monsanto will stop Monsantoing because we ask nicely? If only we get a Democrat in the White House, things will be okay. If only we pass this or that piece of legislation, things will be okay. If only we defeat this or that piece of legislation, things will be okay. Nonsense. Things will not be okay. They are already not okay, and they’re getting worse. Rapidly.
    But it isn’t only false hopes that keep those who go along enchained. It is hope itself. Hope, we are told, is our beacon in the dark. It is our light at the end of a long, dark tunnel. It is the beam of light that makes its way into our prison cells. It is our reason for persevering, our protection against despair (which must be avoided at all costs). How can we continue if we do not have hope?
    We’ve all been taught that hope in some future condition—like hope in some future heaven—is and must be our refuge in current sorrow. I’m sure you remember the story of Pandora. She was given a tightly sealed box and was told never to open it. But, being curious, she did, and out flew plagues, sorrow, and mischief, probably not in that order. Too late she clamped down the lid. Only one thing remained in the box: hope. Hope, the story goes, was the only good the casket held among many evils, and it remains to this day mankind’s sole comfort in misfortune. No mention here of action being a comfort in misfortune, or of actually doing something to alleviate or eliminate one’s misfortune.
    The more I understand hope, the more I realize that all along it deserved to be in the box with the plagues, sorrow, and mischief; that it serves the needs of those in power as surely as belief in a distant heaven; that hope is really nothing more than a secular way of keeping us in line.
    Hope is, in fact, a curse, a bane. I say this not only because of the lovely Buddhist saying “Hope and fear chase each other’s tails,” not only because hope leads us away from the present, away from who and where we are right now and toward some imaginary future state. I say this because of what hope is.
    More or less all of us yammer on more or less endlessly about hope. You wouldn’t believe—or maybe you would—how many magazine editors have asked me to write about the apocalypse, then enjoined me to leave readers with a sense of hope. But what, precisely, is hope? At a talk I gave last spring, someone asked me to define it. I turned the question back on the audience, and here’s the definition we all came up with: hope is a longing for a future condition over which you have no agency; it means you are essentially powerless.
    I’m not, for example, going to say I hope I eat something tomorrow. I just will. I don’t hope I take another breath right now, nor that I finish writing this sentence. I just do them. On the other hand, I do hope that the next time I get on a plane, it doesn’t crash. To hope for some result means you have given up any agency concerning it. Many people say they hope the dominant culture stops destroying the world. By saying that, they’ve assumed that the destruction will continue, at least in the short term, and they’ve stepped away from their own ability to participate in stopping it.
    I do not hope coho salmon survive. I will do whatever it takes to make sure the dominant culture doesn’t drive them extinct. If coho want to leave us because they don’t like how they’re being treated—and who could blame them?—I will say goodbye, and I will miss them, but if they do not want to leave, I will not allow civilization to kill them off.
    When we realize the degree of agency we actually do have, we no longer have to “hope” at all. We simply do the work. We make sure salmon survive. We make sure prairie dogs survive. We make sure grizzlies survive. We do whatever it takes.
    When we stop hoping for external assistance, when we stop hoping that the awful situation we’re in will somehow resolve itself, when we stop hoping the situation will somehow not get worse, then we are finally free—truly free—to honestly start working to resolve it. I would say that when hope dies, action begins.
    PEOPLE SOMETIMES ASK ME, “If things are so bad, why don’t you just kill yourself?” The answer is that life is really, really good. I am a complex enough being that I can hold in my heart the understanding that we are really, really fucked, and at the same time that life is really, really good. I am full of rage, sorrow, joy, love, hate, despair, happiness, satisfaction, dissatisfaction, and a thousand other feelings. We are really fucked. Life is still really good.
    Many people are afraid to feel despair. They fear that if they allow themselves to perceive how desperate our situation really is, they must then be perpetually miserable. They forget that it is possible to feel many things at once. They also forget that despair is an entirely appropriate response to a desperate situation. Many people probably also fear that if they allow themselves to perceive how desperate things are, they may be forced to do something about it.
    Another question people sometimes ask me is, “If things are so bad, why don’t you just party?” Well, the first answer is that I don’t really like to party. The second is that I’m already having a great deal of fun. I love my life. I love life. This is true for most activists I know. We are doing what we love, fighting for what (and whom) we love.
    I have no patience for those who use our desperate situation as an excuse for inaction. I’ve learned that if you deprive most of these people of that particular excuse they just find another, then another, then another. The use of this excuse to justify inaction—the use of any excuse to justify inaction—reveals nothing more nor less than an incapacity to love.
    At one of my recent talks someone stood up during the Q and A and announced that the only reason people ever become activists is to feel better about themselves. Effectiveness really doesn’t matter, he said, and it’s egotistical to think it does.
    I told him I disagreed.
    Doesn’t activism make you feel good? he asked.
    Of course, I said, but that’s not why I do it. If I only want to feel good, I can just masturbate. But I want to accomplish something in the real world.
    Because I’m in love. With salmon, with trees outside my window, with baby lampreys living in sandy streambottoms, with slender salamanders crawling through the duff. And if you love, you act to defend your beloved. Of course results matter to you, but they don’t determine whether or not you make the effort. You don’t simply hope your beloved survives and thrives. You do what it takes. If my love doesn’t cause me to protect those I love, it’s not love.
    A WONDERFUL THING happens when you give up on hope, which is that you realize you never needed it in the first place. You realize that giving up on hope didn’t kill you. It didn’t even make you less effective. In fact it made you more effective, because you ceased relying on someone or something else to solve your problems—you ceased hoping your problems would somehow get solved through the magical assistance of God, the Great Mother, the Sierra Club, valiant tree-sitters, brave salmon, or even the Earth itself—and you just began doing whatever it takes to solve those problems yourself.
    When you give up on hope, something even better happens than it not killing you, which is that in some sense it does kill you. You die. And there’s a wonderful thing about being dead, which is that they—those in power—cannot really touch you anymore. Not through promises, not through threats, not through violence itself. Once you’re dead in this way, you can still sing, you can still dance, you can still make love, you can still fight like hell—you can still live because you are still alive, more alive in fact than ever before. You come to realize that when hope died, the you who died with the hope was not you, but was the you who depended on those who exploit you, the you who believed that those who exploit you will somehow stop on their own, the you who believed in the mythologies propagated by those who exploit you in order to facilitate that exploitation. The socially constructed you died. The civilized you died. The manufactured, fabricated, stamped, molded you died. The victim died.
    And who is left when that you dies? You are left. Animal you. Naked you. Vulnerable (and invulnerable) you. Mortal you. Survivor you. The you who thinks not what the culture taught you to think but what you think. The you who feels not what the culture taught you to feel but what you feel. The you who is not who the culture taught you to be but who you are. The you who can say yes, the you who can say no. The you who is a part of the land where you live. The you who will fight (or not) to defend your family. The you who will fight (or not) to defend those you love. The you who will fight (or not) to defend the land upon which your life and the lives of those you love depends. The you whose morality is not based on what you have been taught by the culture that is killing the planet, killing you, but on your own animal feelings of love and connection to your family, your friends, your landbase—not to your family as self-identified civilized beings but as animals who require a landbase, animals who are being killed by chemicals, animals who have been formed and deformed to fit the needs of the culture.
    When you give up on hope—when you are dead in this way, and by so being are really alive—you make yourself no longer vulnerable to the cooption of rationality and fear that Nazis inflicted on Jews and others, that abusers like my father inflict on their victims, that the dominant culture inflicts on all of us. Or is it rather the case that these exploiters frame physical, social, and emotional circumstances such that victims perceive themselves as having no choice but to inflict this cooption on themselves?
    But when you give up on hope, this exploiter/victim relationship is broken. You become like the Jews who participated in the Warsaw Ghetto Uprising.
    When you give up on hope, you turn away from fear.
    And when you quit relying on hope, and instead begin to protect the people, things, and places you love, you become very dangerous indeed to those in power.
    In case you’re wondering, that’s a very good thing.

  • Matt,

    Again, I thank you, this time because it brought me to Chellis Glendinning’s “Letters from Amok: The State of the World in Pen and Ink.”

    “Deep down, the body and the psyche know how to heal…is it possible that people all across their beleaguered planet know how to re-inhabit life?”

    Big question.

    Michael Irving

  • Although I define hope differently than Derrick Jensen — and we’ve corresponded about the difference — we generally agree on just about everything else. If you haven’t read Endgame, I strongly recommend it. His recent pieces in Orion echo his comprehensive analysis in his magnus opus.

  • young Stanley,

    thanks for the ‘news’ report, we dont get the papers here :)

    I do not have a rose coloured view of the world.
    I am interested in a variety of opinions, thats is all.
    As we all should be. Posting a link here does not mean I necessarily agree with everything that has been said – it is interesting none the less. This surely goes without saying.

    Perhaps what you are noticing is is a cultural divide between Aussies and the US. I think we are more ambivalent, contrary, and open. Where as you are guys tend to be more strident, decisive, definitive, ‘can do’ and almost evangelical in your position/opinion. These are attractive characteristics I might add. We tend to think more like the Brits. I might add I am from Melbourne, our character and sensibility
    is not I believe typical of the national character. One of our
    much loved prime ministers said once that ‘anglo saxons need cold weather to think’ – a back hand reference to the drongo/red necks of the north. Who perhaps view the world in black and white.

    The two links I posted were somewhat contrary to each other,
    that was for you :)

    If you read some Keith Farnish and other british authors, you notice that they use language differently and are for eg somewhat more self deprecating that your average americano.

    Linguistics is a big subject, and no doubt has had a tremendous influence on our enviro predicament and our mental blind spots

    take it easy Stanley, sounds like you need to get outside
    and get some exercise :)

    if you need any personal training tips, I am more happy to help out

    Michael, big question, yes!

  • Stan- Thanks for that Jensen essay. I loved it.

    “….the largest mammal was the size of a shrew … because that’s the largest mammal that could thermoregulate well enough to survive.”

    Yes, at a 4C rise. A couple of things I was wondering about that…being hairless, I guess I assume we can stand a bit more heat than the hairy, although in the long run we may need to sacrifice some brain size. That being said, is it likely that an increase in water vapor will help shield tender skins from direct sunlight? Or does it act as a lens, or make no difference? We can reduce our exposure to extra heat by evolving back towards nocturnality, in the meanwhile developing extensions to mimic that. Gardening in the moonlight sounds romantic, and most mammal predation comes then too, so we’d minimize those losses. Assuming any mammals survive. I’d guess a month of sleeping days and waking nights would acclimate our eyes somewhat…although we’d eventually lose the color sight it took so long to evolve, and become slower-paced.

    But given a 4C rise, we’re going to be gardening different plants than we do now. We might be able to spend more time awake eves, but the trees and veges won’t. Is anyone extrapolating what crops might thrive in the Anthropocene (I always hoped it’d be called the Homocene, but hey), given the extra warmth? Do we in the temperate zones just start with slightly more tropical varieties now, and see if they live? Do we trust in Monsanto to solve it for us? Many do, it seems…

    Micheal- “Deep down, the body and the psyche know how to heal…is it possible that people all across their beleaguered planet know how to re-inhabit life?”

    Maybe not consciously, but we’re only some few millennia removed from the wild. Given the shocks to the cultural awareness promised in the near future, I’ve hope we can regain much that we never lost, only veneered over. One caveat; we learned most everything of value then from other creatures…what to eat, how to hunt, how to fight, build shelter, what tools are, maybe even uses of fire…and those creatures no longer exist in the world we’ve ‘created’. Eventually they’ll return, in some forms, but for a while we’ll be mostly on our own. That’s not a plus.
    But anything we can do in the interim to give them space; to protect wilderness, actual wilderness, seems to me the greatest gift to the future we can leave.

  • I am wondering… my electric company is making a big deal of some development in southern NM doing the solar steam turbine thing. Then they’ll send it to Colorado… it does not make sense, except for keeping things centralized. Do personal small household turbines make sense to tide us over for some time? I am thinking that maybe such tech, if it were doable and low investment, could cushion the descent for some people at least in the sunny west. Even if only a few households in a community had them… (?)

  • Stan,

    Thanks for the Jensen article. It was a good reminder. Hope is the enemy. Hope is the excuse for inaction. Dashed hope is also the excuse for inaction. Only without hope are we truly free to act.

    Of course I do not know Derrick Jensen, however, I do know the friend, John Osborn, he mentions in the article. John would often remind us that “endless pressure, endlessly applied” was what got things done. I don’t know if he had hope but I do know that he felt that if he didn’t do it, it would not get done. So he got up every morning and did what he had to do. And he knew that the next morning he would get up and do it again.

    Michael Irving

  • vera, I’m a big fan of decentralized energy systems even if they are scattered throughout a community. We have solar, but micro-hydro is a great option many places. Ditto for wind. Storage is a critical limitation on all these systems. But even if a community had electricity for a few days each month, it was greatly alleviate menial tasks (e.g., grinding grains, building furniture).

  • Storage would become more difficult yet, absent the modern manufacturing capability. But local and passive substitutes like, as you both mention, micro-hydro, tidal, wind, with buildings sunk into the earth, and whatnot, might provide enough occasional bursts of power to keep things muddling along afa manufacture of local tools and goods and processing local foods.
    But I’m not looking forward to hand-making my first handsaw, I must say.

  • vertalio, I don’t know the answers to your many good questions: “being hairless, I guess I assume we can stand a bit more heat than the hairy, although in the long run we may need to sacrifice some brain size. That being said, is it likely that an increase in water vapor will help shield tender skins from direct sunlight? Or does it act as a lens, or make no difference? Is anyone extrapolating what crops might thrive in the Anthropocene, given the extra warmth? Do we in the temperate zones just start with slightly more tropical varieties now, and see if they live? Do we trust in Monsanto to solve it for us?”

    But I’d rather not find out. And, as nearly as I can tell, there’s one way out of this box. Seems we’re on our way, as even the mainstream media are figuring out. And they’re even figuring out Dubya lied about 9/11. Oh, my … what could be next from the paragons of investigative journalism in the mainstream media? Might they finally notice American-style capitalism is dead? Or that Greece is amateur hour compared to the U.S. and its forthcoming default? Maybe they’ll get on-board with the promotion of farmland as a personal investment, or a serious discussion of post-peak economics. But I wouldn’t hold my breath. After all, we have to count on behind-the-scenes blogs and Hustler to bring us the real news (the latter regarding acts of treason within the Bush administration, as if that’s a surprise).

  • Guy,
    Good point about distributed electrical generation. As I mentioned some time ago I am worried (wondering) about how to generate electricity during a winter like this one where, thanks to El Nino, we’ve had very few sunny days. Of course a person can live without electricity, I’ve been without for more than a year before, but I like having it. But your point about having power a few days a month and using it for the important things that electricity does so well is a good one. Setting up a lifestyle that mimics the 19th century 25 days a month but also allows for 21st century things to be done for the other 5 or 6 days would not be too difficult here. Pumping water is a problem with a normal sized pressure tank that requires a 24/7 hook-up to the electrical grid. But a cistern with a solar pump working slowly 5 or 6 days a month to keep the cistern topped off would take care of it. Of course fast showers and an outhouse would be de rigor. There would be work-arounds for everything else too. I might even have to go back to my typewriter, a dictionary, and snail mail (but boy would I miss spell check).


  • Americans had better wrap their minds around a completely different paradigm of lifestyle and energy use. The present system is unsustainable for the long term. Intermittent electricity may sound awful on today’s standards, but in the longterm it may seem luxurious.

    The Iraqis twenty years ago or less had electricity 24/7/365. It is far different for them now in a desert land where refrigeration makes an enormous difference between comfort and misery. Many Iraqis would be thrilled to have power 6 hours per day.

    Decentralized energy would be an enormous step towards real democracy in the US. I’ll let you figure that one out, but check Amory Lovins on that one. Lovins’ book “Natural Capitalism” is available online and the late David Brower called it the most important new book he had seen in ages (and then Brower dropped dead). I am not sure of the ultimate implementation of each technology in Lovins’ book, which is available for reading and downloading on the Web, but it does paint a picture of an industrial, capitalist society that eliminates waste, reprocesses raw and manufactured materials, emphasizes massive efficiency, accounts for environmental costs and the true value of the raw materials and services that are provided without obvious financial cost by nature, and shows some real life examples of the implementation of these concepts around the world. On the downside, I have never seen Amory Lovins, a physicist/environmentalist, tacitly acknowledge Peak Oil, though he does so in a roundabout way.

    Even now, community scale wind farms are being built and implemented. It was announced yesterday that the Saudis are engaged in solar energy development with the electricity to be exported for sale. 30,000 solar panels are proposed for the Mohave Desert in California. A lot of things are happening, and many will work on the small scale and intermediate time frame. But the current scale of industrial high energy driven mass consumption with growth and prosperity is doomed as we have lived it. We simply cannot scale up all the alternate technologies and methodologies to keep the current system going at our current populations and lifestyle levels. That is a certainty.

    But, if a major war killed half of mankind, or a pestilence swept the world like the smallpox epidemic of 1914-1918, or some engineered diasaster depleted the human population in short order, then the existing system coule probably be maintained a while longer, though it would be unwise because of the runaway climate change phenomenon that needs to be prevented by stopping all greenhouse gases now.

    So here we are, not knowing exactly how the cards will be played or how the dominoes will fall exactly. But change is natural and unavoidable and the primary question remains whether we are wise enough to eschew fantasies of retaining the old and working now to prepare for the new.

  • I was surprised a couple weeks ago when John Michael Greer admitted we’re nearing the end of the industrial age. Add Joe Bageant’s latest post to the chorus of recent converts. Bageant has long pointed out the the U.S. industrial economy was circling the drain, but he never previously thought economic issues would influence his lifestyle. He’s had a change of heart, and now recognizes the Coriolis Force is picking up steam.

    The evidence behind economic collapse continues to mount with every passing hour. The recovery of the U.S. economy has been revealed as an illusion, economists continue to be surprised about every single piece of “bad” news on the economic front including the ongoing decline in the housing market (hey, gang, read a blog instead of the New York Times), the Financial Times sees 50 Greeces, Ben Bernanke warns the Fed will not play into Obama’s hyper-inflationary strategy (leaving default as the only option) even as credit continues to dry up, the world’s oil refineries are losing money as they try to process dirty oil, and the industrial world’s vaunted infrastructure continues to fall apart. The U.S. Secretary of Energy is saying we must decrease energy use (duh — that’s what peak oil means, Dr. Chu).

    Oil prices are rising again, and triple-digit oil is right around the corner. Maybe that’ll do the trick, finally.

    Finally, somebody is calling out Dubya on his 9/11 lies. Stunningly, it’s the ultra-conservative Washington Times.

  • Here is a picture of the solar turbine I was talking about. It may be *the* prime possibility for a Scavenger Age, for a dry sunny climate.

  • vera, do you know if this device is available yet, of if plans have been released to the public?

  • Here is their website, Guy.
    As I understand it, they have not made the plans available, nor are they interested in anything beyond third world applications. (I would not be surprised if their funding depends on keeping it elsewhere.)

    However, I have heard that the factor e farm in Kansas has been working on it on their end as well, and they are committed to the open source paradigm.

  • Guy,
    Here is another article on Vera’s generator with a little more info.

    An exciting idea.

    Michael Irving

  • Guy,
    Here is another article on Vera’s generator with a little more info.

    A great idea for DIY generation.

    Michael Irving

  • Wall Street’s Bailout Hustle

    by Matt Taibbi

    Global Research, February 28, 2010
    Rolling Stone – 2010-02-17

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    Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash

    On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.

    The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.

    Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”

    Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.

    Goldman wasn’t alone. The nation’s six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. “What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?” asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

    Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America’s populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what’s the difference if some fat cat in New York pockets $20 million instead of $10 million?

    The only reason such apathy exists, however, is because there’s still a widespread misunderstanding of how exactly Wall Street “earns” its money, with emphasis on the quotation marks around “earns.” The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street’s eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its “performance” was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

    The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.

    The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they’re back conniving and playing speculative long shots in force — only this time with the full financial support of the U.S. government. In the process, they’re rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before.

    That’s why this bonus business isn’t merely a matter of getting upset about whether or not Lloyd Blankfein buys himself one tropical island or two on his next birthday. The reality is that the post-bailout era in which Goldman thrived has turned out to be a chaotic frenzy of high-stakes con-artistry, with taxpayers and clients bilked out of billions using a dizzying array of old-school hustles that, but for their ponderous complexity, would have fit well in slick grifter movies like The Sting and Matchstick Men. There’s even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn’t call the cops is known as the “Cool Off.”

    To appreciate how all of these (sometimes brilliant) schemes work is to understand the difference between earning money and taking scores, and to realize that the profits these banks are posting don’t so much represent national growth and recovery, but something closer to the losses one would report after a theft or a car crash. Many Americans instinctively understand this to be true — but, much like when your wife does it with your 300-pound plumber in the kids’ playroom, knowing it and actually watching the whole scene from start to finish are two very different things. In that spirit, a brief history of the best 18 months of grifting this country has ever seen:


    By now, most people who have followed the financial crisis know that the bailout of AIG was actually a bailout of AIG’s “counterparties” — the big banks like Goldman to whom the insurance giant owed billions when it went belly up.

    What is less understood is that the bailout of AIG counter-parties like Goldman and Société Générale, a French bank, actually began before the collapse of AIG, before the Federal Reserve paid them so much as a dollar. Nor is it understood that these counterparties actually accelerated the wreck of AIG in what was, ironically, something very like the old insurance scam known as “Swoop and Squat,” in which a target car is trapped between two perpetrator vehicles and wrecked, with the mark in the game being the target’s insurance company — in this case, the government.

    This may sound far-fetched, but the financial crisis of 2008 was very much caused by a perverse series of legal incentives that often made failed investments worth more than thriving ones. Our economy was like a town where everyone has juicy insurance policies on their neighbors’ cars and houses. In such a town, the driving will be suspiciously bad, and there will be a lot of fires.

    AIG was the ultimate example of this dynamic. At the height of the housing boom, Goldman was selling billions in bundled mortgage-backed securities — often toxic crap of the no-money-down, no-identification-needed variety of home loan — to various institutional suckers like pensions and insurance companies, who frequently thought they were buying investment-grade instruments. At the same time, in a glaring example of the perverse incentives that existed and still exist, Goldman was also betting against those same sorts of securities — a practice that one government investigator compared to “selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars.”

    Goldman often “insured” some of this garbage with AIG, using a virtually unregulated form of pseudo-insurance called credit-default swaps. Thanks in large part to deregulation pushed by Bob Rubin, former chairman of Goldman, and Treasury secretary under Bill Clinton, AIG wasn’t required to actually have the capital to pay off the deals. As a result, banks like Goldman bought more than $440 billion worth of this bogus insurance from AIG, a huge blind bet that the taxpayer ended up having to eat.

    Thus, when the housing bubble went crazy, Goldman made money coming and going. They made money selling the crap mortgages, and they made money by collecting on the bogus insurance from AIG when the crap mortgages flopped.

    Still, the trick for Goldman was: how to collect the insurance money. As AIG headed into a tailspin that fateful summer of 2008, it looked like the beleaguered firm wasn’t going to have the money to pay off the bogus insurance. So Goldman and other banks began demanding that AIG provide them with cash collateral. In the 15 months leading up to the collapse of AIG, Goldman received $5.9 billion in collateral. Société Générale, a bank holding lots of mortgage-backed crap originally underwritten by Goldman, received $5.5 billion. These collateral demands squeezing AIG from two sides were the “Swoop and Squat” that ultimately crashed the firm. “It put the company into a liquidity crisis,” says Eric Dinallo, who was intimately involved in the AIG bailout as head of the New York State Insurance Department.

    It was a brilliant move. When a company like AIG is about to die, it isn’t supposed to hand over big hunks of assets to a single creditor like Goldman; it’s supposed to equitably distribute whatever assets it has left among all its creditors. Had AIG gone bankrupt, Goldman would have likely lost much of the $5.9 billion that it pocketed as collateral. “Any bankruptcy court that saw those collateral payments would have declined that transaction as a fraudulent conveyance,” says Barry Ritholtz, the author of Bailout Nation. Instead, Goldman and the other counterparties got their money out in advance — putting a torch to what was left of AIG. Fans of the movie Goodfellas will recall Henry Hill and Tommy DeVito taking the same approach to the Bamboo Lounge nightclub they’d been gouging. Roll the Ray Liotta narration: “Finally, when there’s nothing left, when you can’t borrow another buck . . . you bust the joint out. You light a match.”

    And why not? After all, according to the terms of the bailout deal struck when AIG was taken over by the state in September 2008, Goldman was paid 100 cents on the dollar on an additional $12.9 billion it was owed by AIG — again, money it almost certainly would not have seen a fraction of had AIG proceeded to a normal bankruptcy. Along with the collateral it pocketed, that’s $19 billion in pure cash that Goldman would not have “earned” without massive state intervention. How’s that $13.4 billion in 2009 profits looking now? And that doesn’t even include the direct bailouts of Goldman Sachs and other big banks, which began in earnest after the collapse of AIG.


    In the usual “DollarStore” or “Big Store” scam — popularized in movies like The Sting — a huge cast of con artists is hired to create a whole fake environment into which the unsuspecting mark walks and gets robbed over and over again. A warehouse is converted into a makeshift casino or off-track betting parlor, the fool walks in with money, leaves without it.

    The two key elements to the Dollar Store scam are the whiz-bang theatrical redecorating job and the fact that everyone is in on it except the mark. In this case, a pair of investment banks were dressed up to look like commercial banks overnight, and it was the taxpayer who walked in and lost his shirt, confused by the appearance of what looked like real Federal Reserve officials minding the store.

    Less than a week after the AIG bailout, Goldman and another investment bank, Morgan Stanley, applied for, and received, federal permission to become bank holding companies — a move that would make them eligible for much greater federal support. The stock prices of both firms were cratering, and there was talk that either or both might go the way of Lehman Brothers, another once-mighty investment bank that just a week earlier had disappeared from the face of the earth under the weight of its toxic assets. By law, a five-day waiting period was required for such a conversion — but the two banks got them overnight, with final approval actually coming only five days after the AIG bailout.

    Why did they need those federal bank charters? This question is the key to understanding the entire bailout era — because this Dollar Store scam was the big one. Institutions that were, in reality, high-risk gambling houses were allowed to masquerade as conservative commercial banks. As a result of this new designation, they were given access to a virtually endless tap of “free money” by unsuspecting taxpayers. The $10 billion that Goldman received under the better-known TARP bailout was chump change in comparison to the smorgasbord of direct and indirect aid it qualified for as a commercial bank.

    When Goldman Sachs and Morgan Stanley got their federal bank charters, they joined Bank of America, Citigroup, J.P. Morgan Chase and the other banking titans who could go to the Fed and borrow massive amounts of money at interest rates that, thanks to the aggressive rate-cutting policies of Fed chief Ben Bernanke during the crisis, soon sank to zero percent. The ability to go to the Fed and borrow big at next to no interest was what saved Goldman, Morgan Stanley and other banks from death in the fall of 2008. “They had no other way to raise capital at that moment, meaning they were on the brink of insolvency,” says Nomi Prins, a former managing director at Goldman Sachs. “The Fed was the only shot.”

    In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve.

    “You’re borrowing at zero, putting it out there at two or three percent, with hundreds of billions of dollars — man, you can make a lot of money that way,” says the manager of one prominent hedge fund. “It’s free money.” Which goes a long way to explaining Goldman’s enormous profits last year. But all that free money was amplified by another scam:


    At one point or another, pretty much everyone who takes drugs has been burned by this one, also known as the “Rocks in the Box” scam or, in its more elaborate variations, the “Jamaican Switch.” Someone sells you what looks like an eightball of coke in a baggie, you get home and, you dumbass, it’s baby powder.

    The scam’s name comes from the Middle Ages, when some fool would be sold a bound and gagged pig that he would see being put into a bag; he’d miss the switch, then get home and find a tied-up cat in there instead. Hence the expression “Don’t let the cat out of the bag.”

    The “Pig in the Poke” scam is another key to the entire bailout era. After the crash of the housing bubble — the largest asset bubble in history — the economy was suddenly flooded with securities backed by failing or near-failing home loans. In the cleanup phase after that bubble burst, the whole game was to get taxpayers, clients and shareholders to buy these worthless cats, but at pig prices.

    One of the first times we saw the scam appear was in September 2008, right around the time that AIG was imploding. That was when the Fed changed some of its collateral rules, meaning banks that could once borrow only against sound collateral, like Treasury bills or AAA-rated corporate bonds, could now borrow against pretty much anything — including some of the mortgage-backed sewage that got us into this mess in the first place. In other words, banks that once had to show a real pig to borrow from the Fed could now show up with a cat and get pig money. “All of a sudden, banks were allowed to post absolute shit to the Fed’s balance sheet,” says the manager of the prominent hedge fund.

    The Fed spelled it out on September 14th, 2008, when it changed the collateral rules for one of its first bailout facilities — the Primary Dealer Credit Facility, or PDCF. The Fed’s own write-up described the changes: “With the Fed’s action, all the kinds of collateral then in use . . . including non-investment-grade securities and equities . . . became eligible for pledge in the PDCF.”

    Translation: We now accept cats.

    The Pig in the Poke also came into play in April of last year, when Congress pushed a little-known agency called the Financial Accounting Standards Board, or FASB, to change the so-called “mark-to-market” accounting rules. Until this rule change, banks had to assign a real-market price to all of their assets. If they had a balance sheet full of securities they had bought at $3 that were now only worth $1, they had to figure their year-end accounting using that $1 value. In other words, if you were the dope who bought a cat instead of a pig, you couldn’t invite your shareholders to a slate of pork dinners come year-end accounting time.

    But last April, FASB changed all that. From now on, it announced, banks could avoid reporting losses on some of their crappy cat investments simply by declaring that they would “more likely than not” hold on to them until they recovered their pig value. In short, the banks didn’t even have to actually hold on to the toxic shit they owned — they just had to sort of promise to hold on to it.

    That’s why the “profit” numbers of a lot of these banks are really a joke. In many cases, we have absolutely no idea how many cats are in their proverbial bag. What they call “profits” might really be profits, only minus undeclared millions or billions in losses.

    “They’re hiding all this stuff from their shareholders,” says Ritholtz, who was disgusted that the banks lobbied for the rule changes. “Now, suddenly banks that were happy to mark to market on the way up don’t have to mark to market on the way down.”


    One of the great innovations of Victor Lustig, the legendary Depression-era con man who wrote the famous “Ten Commandments for Con Men,” was a thing called the “Rumanian Box.” This was a little machine that a mark would put a blank piece of paper into, only to see real currency come out the other side. The brilliant Lustig sold this Rumanian Box over and over again for vast sums — but he’s been outdone by the modern barons of Wall Street, who managed to get themselves a real Rumanian Box.

    How they accomplished this is a story that by itself highlights the challenge of placing this era in any kind of historical context of known financial crime. What the banks did was something that was never — and never could have been — thought of before. They took so much money from the government, and then did so little with it, that the state was forced to start printing new cash to throw at them. Even the great Lustig in his wildest, horniest dreams could never have dreamed up this one.

    The setup: By early 2009, the banks had already replenished themselves with billions if not trillions in bailout money. It wasn’t just the $700 billion in TARP cash, the free money provided by the Fed, and the untold losses obscured by accounting tricks. Another new rule allowed banks to collect interest on the cash they were required by law to keep in reserve accounts at the Fed — meaning the state was now compensating the banks simply for guaranteeing their own solvency. And a new federal operation called the Temporary Liquidity Guarantee Program let insolvent and near-insolvent banks dispense with their deservedly ruined credit profiles and borrow on a clean slate, with FDIC backing. Goldman borrowed $29 billion on the government’s good name, J.P. Morgan Chase $38 billion, and Bank of America $44 billion. “TLGP,” says Prins, the former Goldman manager, “was a big one.”

    Collectively, all this largesse was worth trillions. The idea behind the flood of money, from the government’s standpoint, was to spark a national recovery: We refill the banks’ balance sheets, and they, in turn, start to lend money again, recharging the economy and producing jobs. “The banks were fast approaching insolvency,” says Rep. Paul Kanjorski, a vocal critic of Wall Street who nevertheless defends the initial decision to bail out the banks. “It was vitally important that we recapitalize these institutions.”

    But here’s the thing. Despite all these trillions in government rescues, despite the Fed slashing interest rates down to nothing and showering the banks with mountains of guarantees, Goldman and its friends had still not jump-started lending again by the first quarter of 2009. That’s where those nuclear-powered balls of Lloyd Blankfein came into play, as Goldman and other banks basically threatened to pick up their bailout billions and go home if the government didn’t fork over more cash — a lot more. “Even if the Fed could make interest rates negative, that wouldn’t necessarily help,” warned Goldman’s chief domestic economist, Jan Hatzius. “We’re in a deep recession mainly because the private sector, for a variety of reasons, has decided to save a lot more.”

    Translation: You can lower interest rates all you want, but we’re still not fucking lending the bailout money to anyone in this economy. Until the government agreed to hand over even more goodies, the banks opted to join the rest of the “private sector” and “save” the taxpayer aid they had received — in the form of bonuses and compensation.

    The ploy worked. In March of last year, the Fed sharply expanded a radical new program called quantitative easing, which effectively operated as a real-live Rumanian Box. The government put stacks of paper in one side, and out came $1.2 trillion “real” dollars.

    The government used some of that freshly printed money to prop itself up by purchasing Treasury bonds — a desperation move, since Washington’s demand for cash was so great post-Clusterfuck ’08 that even the Chinese couldn’t buy U.S. debt fast enough to keep America afloat. But the Fed used most of the new cash to buy mortgage-backed securities in an effort to spur home lending — instantly creating a massive market for major banks.

    And what did the banks do with the proceeds? Among other things, they bought Treasury bonds, essentially lending the money back to the government, at interest. The money that came out of the magic Rumanian Box went from the government back to the government, with Wall Street stepping into the circle just long enough to get paid. And once quantitative easing ends, as it is scheduled to do in March, the flow of money for home loans will once again grind to a halt. The Mortgage Bankers Association expects the number of new residential mortgages to plunge by 40 percent this year.


    All of that Rumanian box paper was made even more valuable by running it through the next stage of the grift. Michael Masters, one of the country’s leading experts on commodities trading, compares this part of the scam to the poker game in the Bill Murray comedy Stripes. “It’s like that scene where John Candy leans over to the guy who’s new at poker and says, ‘Let me see your cards,’ then starts giving him advice,” Masters says. “He looks at the hand, and the guy has bad cards, and he’s like, ‘Bluff me, come on! If it were me, I’d bet everything!’ That’s what it’s like. It’s like they’re looking at your cards as they give you advice.”

    In more ways than one can count, the economy in the bailout era turned into a “Big Mitt,” the con man’s name for a rigged poker game. Everybody was indeed looking at everyone else’s cards, in many cases with state sanction. Only taxpayers and clients were left out of the loop.

    At the same time the Fed and the Treasury were making massive, earthshaking moves like quantitative easing and TARP, they were also consulting regularly with private advisory boards that include every major player on Wall Street. The Treasury Borrowing Advisory Committee has a J.P. Morgan executive as its chairman and a Goldman executive as its vice chairman, while the board advising the Fed includes bankers from Capital One and Bank of New York Mellon. That means that, in addition to getting great gobs of free money, the banks were also getting clear signals about when they were getting that money, making it possible to position themselves to make the appropriate investments.

    One of the best examples of the banks blatantly gambling, and winning, on government moves was the Public-Private Investment Program, or PPIP. In this bizarre scheme cooked up by goofball-geek Treasury Secretary Tim Geithner, the government loaned money to hedge funds and other private investors to buy up the absolutely most toxic horseshit on the market — the same kind of high-risk, high-yield mortgages that were most responsible for triggering the financial chain reaction in the fall of 2008. These satanic deals were the basic currency of the bubble: Jobless dope fiends bought houses with no money down, and the big banks wrapped those mortgages into securities and then sold them off to pensions and other suckers as investment-grade deals. The whole point of the PPIP was to get private investors to relieve the banks of these dangerous assets before they hurt any more innocent bystanders.

    But what did the banks do instead, once they got wind of the PPIP? They started buying that worthless crap again, presumably to sell back to the government at inflated prices! In the third quarter of last year, Goldman, Morgan Stanley, Citigroup and Bank of America combined to add $3.36 billion of exactly this horseshit to their balance sheets.

    This brazen decision to gouge the taxpayer startled even hardened market observers. According to Michael Schlachter of the investment firm Wilshire Associates, it was “absolutely ridiculous” that the banks that were supposed to be reducing their exposure to these volatile instruments were instead loading up on them in order to make a quick buck. “Some of them created this mess,” he said, “and they are making a killing undoing it.”


    Here’s the thing about our current economy. When Goldman and Morgan Stanley transformed overnight from investment banks into commercial banks, we were told this would mean a new era of “significantly tighter regulations and much closer supervision by bank examiners,” as The New York Times put it the very next day. In reality, however, the conversion of Goldman and Morgan Stanley simply completed the dangerous concentration of power and wealth that began in 1999, when Congress repealed the Glass-Steagall Act — the Depression-era law that had prevented the merger of insurance firms, commercial banks and investment houses. Wall Street and the government became one giant dope house, where a few major players share valuable information between conflicted departments the way junkies share needles.

    One of the most common practices is a thing called front-running, which is really no different from the old “Wire” con, another scam popularized in The Sting. But instead of intercepting a telegraph wire in order to bet on racetrack results ahead of the crowd, what Wall Street does is make bets ahead of valuable information they obtain in the course of everyday business.

    Say you’re working for the commodities desk of a big investment bank, and a major client — a pension fund, perhaps — calls you up and asks you to buy a billion dollars of oil futures for them. Once you place that huge order, the price of those futures is almost guaranteed to go up. If the guy in charge of asset management a few desks down from you somehow finds out about that, he can make a fortune for the bank by betting ahead of that client of yours. The deal would be instantaneous and undetectable, and it would offer huge profits. Your own client would lose money, of course — he’d end up paying a higher price for the oil futures he ordered, because you would have driven up the price. But that doesn’t keep banks from screwing their own customers in this very way.

    The scam is so blatant that Goldman Sachs actually warns its clients that something along these lines might happen to them. In the disclosure section at the back of a research paper the bank issued on January 15th, Goldman advises clients to buy some dubious high-yield bonds while admitting that the bank itself may bet against those same shitty bonds. “Our salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research,” the disclosure reads. “Our asset-management area, our proprietary-trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.”

    Banks like Goldman admit this stuff openly, despite the fact that there are securities laws that require banks to engage in “fair dealing with customers” and prohibit analysts from issuing opinions that are at odds with what they really think. And yet here they are, saying flat-out that they may be issuing an opinion at odds with what they really think.

    To help them screw their own clients, the major investment banks employ high-speed computer programs that can glimpse orders from investors before the deals are processed and then make trades on behalf of the banks at speeds of fractions of a second. None of them will admit it, but everybody knows what this computerized trading — known as “flash trading” — really is. “Flash trading is nothing more than computerized front-running,” says the prominent hedge-fund manager. The SEC voted to ban flash trading in September, but five months later it has yet to issue a regulation to put a stop to the practice.

    Over the summer, Goldman suffered an embarrassment on that score when one of its employees, a Russian named Sergey Aleynikov, allegedly stole the bank’s computerized trading code. In a court proceeding after Aleynikov’s arrest, Assistant U.S. Attorney Joseph Facciponti reported that “the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

    Six months after a federal prosecutor admitted in open court that the Goldman trading program could be used to unfairly manipulate markets, the bank released its annual numbers. Among the notable details was the fact that a staggering 76 percent of its revenue came from trading, both for its clients and for its own account. “That is much, much higher than any other bank,” says Prins, the former Goldman managing director. “If I were a client and I saw that they were making this much money from trading, I would question how badly I was getting screwed.”

    Why big institutional investors like pension funds continually come to Wall Street to get raped is the million-dollar question that many experienced observers puzzle over. Goldman’s own explanation for this phenomenon is comedy of the highest order. In testimony before a government panel in January, Blankfein was confronted about his firm’s practice of betting against the same sorts of investments it sells to clients. His response: “These are the professional investors who want this exposure.”

    In other words, our clients are big boys, so screw ’em if they’re dumb enough to take the sucker bets I’m offering.


    Not many con men are good enough or brazen enough to con the same victim twice in a row, but the few who try have a name for this excellent sport: reloading. The usual way to reload on a repeat victim (called an “addict” in grifter parlance) is to rope him into trying to get back the money he just lost. This is exactly what started to happen late last year.

    It’s important to remember that the housing bubble itself was a classic confidence game — the Ponzi scheme. The Ponzi scheme is any scam in which old investors must be continually paid off with money from new investors to keep up what appear to be high rates of investment return. Residential housing was never as valuable as it seemed during the bubble; the soaring home values were instead a reflection of a continual upward rush of new investors in mortgage-backed securities, a rush that finally collapsed in 2008.

    But by the end of 2009, the unimaginable was happening: The bubble was re-inflating. A bailout policy that was designed to help us get out from under the bursting of the largest asset bubble in history inadvertently produced exactly the opposite result, as all that government-fueled capital suddenly began flowing into the most dangerous and destructive investments all over again. Wall Street was going for the reload.

    A lot of this was the government’s own fault, of course. By slashing interest rates to zero and flooding the market with money, the Fed was replicating the historic mistake that Alan Greenspan had made not once, but twice, before the tech bubble in the early 1990s and before the housing bubble in the early 2000s. By making sure that traditionally safe investments like CDs and savings accounts earned basically nothing, thanks to rock-bottom interest rates, investors were forced to go elsewhere to search for moneymaking opportunities.

    Now we’re in the same situation all over again, only far worse. Wall Street is flooded with government money, and interest rates that are not just low but flat are pushing investors to seek out more “creative” opportunities. (It’s “Greenspan times 10,” jokes one hedge-fund trader.) Some of that money could be put to use on Main Street, of course, backing the efforts of investment-worthy entrepreneurs. But that’s not what our modern Wall Street is built to do. “They don’t seem to want to lend to small and medium-sized business,” says Rep. Brad Sherman, who serves on the House Financial Services Committee. “What they want to invest in is marketable securities. And the definition of small and medium-sized businesses, for the most part, is that they don’t have marketable securities. They have bank loans.”

    In other words, unless you’re dealing with the stock of a major, publicly traded company, or a giant pile of home mortgages, or the bonds of a large corporation, or a foreign currency, or oil futures, or some country’s debt, or anything else that can be rapidly traded back and forth in huge numbers, factory-style, by big banks, you’re not really on Wall Street’s radar.

    So with small business out of the picture, and the safe stuff not worth looking at thanks to the Fed’s low interest rates, where did Wall Street go? Right back into the shit that got us here.

    One trader, who asked not to be identified, recounts a story of what happened with his hedge fund this past fall. His firm wanted to short — that is, bet against — all the crap toxic bonds that were suddenly in vogue again. The fund’s analysts had examined the fundamentals of these instruments and concluded that they were absolutely not good investments.

    So they took a short position. One month passed, and they lost money. Another month passed — same thing. Finally, the trader just shrugged and decided to change course and buy.

    “I said, ‘Fuck it, let’s make some money,'” he recalls. “I absolutely did not believe in the fundamentals of any of this stuff. However, I can get on the bandwagon, just so long as I know when to jump out of the car before it goes off the damn cliff!”

    This is the very definition of bubble economics — betting on crowd behavior instead of on fundamentals. It’s old investors betting on the arrival of new ones, with the value of the underlying thing itself being irrelevant. And this behavior is being driven, no surprise, by the biggest firms on Wall Street.

    The research report published by Goldman Sachs on January 15th underlines this sort of thinking. Goldman issued a strong recommendation to buy exactly the sort of high-yield toxic crap our hedge-fund guy was, by then, driving rapidly toward the cliff. “Summarizing our views,” the bank wrote, “we expect robust flows . . . to dominate fundamentals.” In other words: This stuff is crap, but everyone’s buying it in an awfully robust way, so you should too. Just like tech stocks in 1999, and mortgage-backed securities in 2006.

    To sum up, this is what Lloyd Blankfein meant by “performance”: Take massive sums of money from the government, sit on it until the government starts printing trillions of dollars in a desperate attempt to restart the economy, buy even more toxic assets to sell back to the government at inflated prices — and then, when all else fails, start driving us all toward the cliff again with a frank and open endorsement of bubble economics. I mean, shit — who wouldn’t deserve billions in bonuses for doing all that?

    Con artists have a word for the inability of their victims to accept that they’ve been scammed. They call it the “True Believer Syndrome.” That’s sort of where we are, in a state of nagging disbelief about the real problem on Wall Street. It isn’t so much that we have inadequate rules or incompetent regulators, although both of these things are certainly true. The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.

    That’s why the biggest gift the bankers got in the bailout was not fiscal but psychological. “The most valuable part of the bailout,” says Rep. Sherman, “was the implicit guarantee that they’re Too Big to Fail.” Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create. “It’s evidence,” says Rep. Kanjorski, “that they still don’t get it.”

    More to the point, the fact that we haven’t done much of anything to change the rules and behavior of Wall Street shows that we still don’t get it. Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload.

    From Issue 1099 — March 4, 2010

    Global Research Articles by Matt Taibbi

  • hence the need for regulation,
    and perhaps a non-fractional banking system

    the fractional banking system is pure ‘puffery’
    – the creation of money/debt/inflation and bubbles

    where are the ratings agencys in all this? (Moodys etc)

    you guys should be rioting about now…

    no mention of GS involvement with Greece

    our government would have let the companies in question go bankrupt,
    which they have done several times in the last decade –
    with insurance companies and brokerages etc

    sell them (AIG and others) worthless toxic securities/’assets’ and then bet (take out insurance policies with the same company – CDS)
    that the purchaser will go bankrupt –
    and then the tax payer becomes the guarantor – brilliant!

    Blankfein is a genius, its a wonder the guy has not been strung up

    your government is weak

  • I am convinced that Americans are just plumb scared that if they make any non-BAU moves, any at all, even so much as twitch, the whole house of cards will come down… and they are dead set on praying for the debt economy to continue just a bit longer… just so that the problems can be shuffled off onto the next guy, the next gen.

    Where do you live, Matt?
    Our government is not weak. It has been taken over in a coup. It’s morphed into the tool of the Infestors.

  • vera

    the cultural and ‘intellectual’ capital of Australia – Melbourne

  • Ah. I wish I was far away from the U.S. too. I hear it’s raining fish in Oz…