At
the start of each new year it is traditional to
assess the prospects for the year ahead and
consider what near term trends portend for the
shape of the future. For several reasons, we are
late in getting to this task for 2008. (See End
Note One.)
One
way to get a handle on where the year is headed
is to do a quick shuffle through the ripped
newspapers and download printouts that have
stacked up over the 10 weeks ending in
mid-February. Such an exercise yields the
condensed essence of “news” as reported by
MainStream Media. For an overview of how and why
MainStream Media “news” varies from reality
see THE
ESTATES MATRIX.
From
mid-December to mid-February there have been
three distinct generations of MainStream Media
news:
Chickens
Coming Home to Roost
A
review the first “resource” pile from
MainStream Media reports from the middle of
December through the middle of January yields
several trends beyond the self-serving media
over-exposure of topics which seem to be
coordinated with advertising, especially
full-page color “issue” advertising. (See
“WaPo
Ads,” 27 Feb 2008 at the Bacons
Rebellion blog.)
Here
are some of the most important topics:
-
Residential
and commercial land and building values are
losing speculative bloat. This is not the
short- term “pop” of a punctured balloon
but rather the continuing “whoosh” of a
giant blimp – 60 years in the making. The
speculative blimp is imploding due to
millions of small holes. Upon closer
inspection, oversized, badly located housing
and scattered commercial properties are down
dramatically, while the values of well
located dwellings and commercial properties
are retaining their value.
-
Oil
and gasoline prices are up, reflecting the
reality that should have guided Agency and
Enterprise actions for the past 35 years.
That reality is? Reserves of
easy-to-access petroleum are running out and
there are NO cheap, environmentally-
friendly replacements. There are two causes
for optimism: massive conservation and
functional human settlement patterns.
For
those concerned with the shape of the future,
the first reaction to these trends must be:
“This is great news!”
Why
“great” news? The result of years of
overheated “economic growth” driven by cheap
oil, cheap credit, speculation and Mass
OverConsumption has been to generate three
interlocked Crises:
The
Mobility and Access Crisis. Congestion,
delay and transport system constipation are
growing daily in every New Urban Region due to
the unsustainable imBalance between the capacity
of transport systems and the travel demand
generated by dysfunctional human settlement
patterns. The rising cost of fuel, decaying
infrastructure and Business-As-Usual
obliviousness have exacerbated the negative
slope of the unsustainable trajectory of
Mobility and Access over the past three-plus
decades. (Thirty-three of the 115 The
Shape of the Future columns published to
date deal primarily with this crisis.)
The
Affordable and Accessible Housing Crisis.
The tragic lack of “workforce” housing in
the world’s most prosperous nation-state is
due to the fact that it has been more profitable
to build the wrong size house in the wrong
location than to build housing for those who
need it most and build it in functional
locations. Without Access, all new housing is
part of the problem, not part of the solution.
The crisis has been exacerbated by land
speculation, government subsidies and bailouts,
delusional mortgage lending practices of
deregulated financial Enterprises and misguided
federally chartered mortgage bundlers.
“Trickle-down” works for irrigation, it does
not work for shelter. (Eight of the 115 The
Shape of the Future columns published to
date primarily focus on this crisis.)
The
Helter Skelter Crisis. This Crisis is the
culmination of the unsustainable trajectories of
many parameters of First World society with the
US of A leading the way. These trends include
unsustainable energy consumption, widening
wealth gap, inadequate health care, growing
personal and public debt, deteriorating
infrastructure, ballooning foreign trade
deficit, etc. This crisis is the direct (and
indirect) result of dysfunctional settlement
human patterns, dysfunctional governance
structure and the fundamental shift of the
relationship between humans as consumers and
investors and humans as citizens. The later
fundamental shift is what Robert Reich calls “supercapitalism.”
(Most of the 115 The Shape of the Future
columns to date address this crisis. See End
Note Two.)
A
primary reason for these three
mutually-reinforcing Crises is that each of
the periodic recessions since 1973 has been
put in the rear-view mirror by citizens
driving new cars to new houses.
The
headlines from mid-December to early-January
suggested that the drivers of these three
crises, and of human settlement pattern
dysfunction in general, may be ripe for
Fundamental Change.
A
Pause to Achieve Balance
The
Mobility and Access Crisis, The Affordable and
Accessible Housing Crisis and The Helter Skelter
Crisis drive contemporary First World
civilization into unsustainable economic, social
and physical trajectories. We discuss the
issue of a sustainable trajectory for
civilization in our column “The
Whale on the Beach,” 28 Aug 2006, and the
Backgrounder “A
New Metric for Citizen Well Being,” 10 Dec
2006.
For
a clear articulation of the reasons for the
trajectory of the economy since the mid-70's,see
Robert Reich’s book "Supercapitalism: The
Transformation of Business, Democracy, and
Everyday Life." (Again see End Note Two.)
As
a result, citizens need time to take stock of
where they are and where they will be without
Fundamental Change in human settlement pattern
and Fundamental Change in governance structure.
A
slowdown would provide time for citizens to
understand the need to create Balance.
At
S/P we stress the need for citizens to create a Balance
of J / H / S / R / A at Village-scale,
Community-scale and Regional-scale.
Citizens must achieve the appropriate level of Balance
at Regional, Community, Village,
Neighborhood, Cluster and Dooryard
levels. Balance is different at each
scale but Balance at every scale is
essential for a sustainable trajectory for
civilization. (First- time readers please see GLOSSARY
for the definitions of the boldface words in
this paragraph and the boldface words in the
next paragraph.)
With
time to consider the consequences of the current
trajectory and the alternatives, Households,
Agencies, Enterprises and Institutions
will have the opportunity to move jobs and homes
closer together to eliminate “the commute.” Enterprises,
Agencies and Institutions will
move Services, Recreation, and Amenity
closer to the new nexus to put, as EYA.com
advertises, “life within walking
distance.”
With
a slowdown, citizens will not have to buy a new
house in a new “subdivision” to have a great
place to live. They can use sweat equity, not
speculation, to improve the value of their
property and the quality of their lives. They
can fix up an existing dwelling and at the same
time contribute to the Dooryard, Cluster and
Neighborhood which are the most important
barometers of real property value and real
quality of life if a democracy with a market
economy is to be preserved. They can buy a new
dwelling in a recycled subdivision or in a
reconfigured Dooryard, Cluster or Neighborhood.
This is the message of PROPERTY DYNAMICS.
There
is already far more land devoted to (and
speculatively held for) urban land uses than
citizens can sustainably support at minimum
levels of intensity. For the reasons spelled out
by Christopher Leinberger in “The Next
Slum?” – and many other reasons explored in The
Shape of the Future columns – there
are clear indications that citizens are ready to
take more intelligent actions with respect to
settlement pattern decisions. (See “Sub-Prime
Lending and the Slums of Tomorrow” and End
Note Three.)
Beyond
human settlement patterns, there is a
desperate need for a Balance between resources
and consumption.
A
“slowdown” will reduce Mass OverConsumption
and increase self-reliance, a key ingredient of
safety and happiness. A slowdown will enhance
conservation and reduce the demand for renewable
and nonrenewable energy and other resources.
The
time and resource savings from more functional
human settlement patterns will facilitate
fundamental economic, social and physical
changes. One example would be the
re-transition to one job per Household,
especially in Households where children are
being raised.
One
important goal of a more rational pace of
consumption will be Balanced Regional economies.
Searching the Globe for the cheapest prices and
for the investments that return the highest
short-term yield makes a few very rich. However,
society (aka, the life of citizens) is becoming
much more poor. This is true for the vast
majority of the citizens in the US of A as well
as in other First World nation-states. This
reality is documented by every economic, social
and physical measure other than gross
consumption and gadget accumulation. Robert
Reich documents this in Supercapitalism.
Some
citizens in some nation-states are doing
better than citizens in the US of A – but
not much better when compared to how well off
a few are at the top of the economic food
chain in every nation-state.
The
current trajectory is not just “bad” from a
moral perspective, it is bad from economic,
social and physical perspectives.
It
will be impossible to maintain democracies
with market economies under these conditions
for the reasons spelled out in THE
ESTATES MATRIX.
Of
course it would have been far better to make
intelligent changes in the economic, social and
physical trajectory of the US of A back in 1973.
In October of that year, the OPEC Oil Embargo
made it clear that it would be prudent, no, it
would be imperative, to make Fundamental
Changes.
Some
of us did take actions in 1973 but most did not.
Many of those who did make Fundamental Changes
in our lives at that time soon got tired of
being worker bees while most of the population,
cheered on by Agencies and Enterprises, played
the grasshopper role.
Oh
well, a lot of us had a great time over the last
35 years, right? A lot of us have really nice
cars and really big houses – a lot nicer and a
lot bigger than we would have had if citizens
had followed more intelligent personal and
collective strategies. But how much nicer? We
will explore this issue further in a future
shape of the future column.
Of
course, there are a lot more of “us” now. It
is important to remember that a far larger
percentage of “us” were “well off” in
1973 than is the case in 2008. That is why the
current trajectory is not compatible with
sustaining democracies with market economies.
Not
All of the Year's News Was Grounds for Cheering
Looking
again at that stack of mid-December thru early
January rips and prints, not all the news was
pleasant:
-
The
continuing fall of the dollar on the
international market is now negatively
impacting citizens and Enterprises. (In
1973, merchants in Paris and London accepted
payment in dollars, merchants in New York
now accept payment in Euros)
None
of these headlines are “good” news for
Business As Usual or for the majority of
citizens in the US of A. While “everyone” is
not directly impacted, the vast majority suffer
indirect consequences of the spreading economic
and financial blight.
Hey,
What Happened?
The
total package of economic, social and physical
“news” spanning the end of 2007 to early
2008 is radically different than what one saw in
MainStream Media just a few months before. (See
End Note
Four.)
A
short time ago, Agency, Enterprise and
Institutional economists were saying and
MainStream Media was reporting that:
-
Continued
“economic expansion” was on a solid
footing because “the fundamentals” were
sound
-
The
housing “bubble” would have little
impact on the broader economy
Even
talking heads with Cassandra and contrarian
reputations suggested that the bottom would not
fall out of the economy until after the
Fall 2008 federal elections.
Recent
trends put the spotlight on nearly a decade of
very bad “political” (aka, policy)
decisions. Current reality makes “leaders”
look like fools and have given rise to demands
for, and now promises of, “CHANGE.” No one
has any real idea what “change” might mean
other than it would result in radically
different decisions than those made over the
last decade. Not many are willing to admit yet
that the problem is really rooted in the
decisions made over the last three and a half
decades, not just the last one.
By
the end of February, when this column was
prepared, the surprising stories have become
everyday occurrences. On the road to a rational
course of action, a good opening question to ask
is:
How
effective is the Regional, nation-state and
global economic early warning system?
There
were plenty of indicators that foretold a shift
long before it was “news.” Scattered
dwellings started to deflate in the Fall of
2006, not the Fall of 2007. During the 2007-2008
Holiday season when MainStream Media was full of
speculation about consumer spending, it was very
clear to customers that retail outlets – brick
and mortar and virtual – as well as parcel
delivery services, had excess capacity.
As
to a “slowdown” in the wider economy, we
have asked merchants, craftspersons, health care
and personal service providers: “When did you
see a change on the horizon in your business?”
The
answer was almost always: “September.”
Sometimes it was earlier. The 2007 trade deficit
did not set a record for the sixth year in a row
because consumers were already buying less.
Even
in a consumer-driven (aka, Mass OverConsumption-
dependent) economy, citizens seem to have a
sixth sense about the economy – not unlike
some animals that provide an early warning of an
earthquake, tsunami or volcanic eruption before
it hits.
It
is fair to ask: Does the MainStream Media
provide good information, much less an early
warning system, or is it just a spigot to feed
slop so that consumers will stay at the trough
of Mass OverConsumption as long as possible?
We explore why citizens do not get the
information they need to make intelligent
decisions in the voting booth and in the market
place in THE
ESTATES MATRIX:
Citizens
are fed the economic “news” that
Enterprises and Agency leaders want them to
hear, not the truth.
If
it were upholding its Fourth Estate
responsibility, the first thing MainStream Media
would be telling citizens is that Mass
OverConsumption is not sustainable. We profile
the inadequate measures of economic health such
as “productivity,” and “Gross National
Product” in The Shape of the Future.
S/P calls for a new basis for measuring citizen
safety and happiness in the Backgrounder “A
New Metric for Citizen Well Being,”
Moving
to Pile Two -- Addiction Stimulants
What
does one find in the mid-January time frame? The
unsustainable trends in...
-
Energy
consumption
-
Trade
imbalance
-
Growth
of the federal deficit
-
Reality
of the holiday sales
-
Loss
of value of the dollar vis a vis the Euro,
the Yen other currencies
-
Loss
of capital value of Enterprises and property
-
Deflating
Enterprise profit projections
...become
dominant in the “news.”
These
trends, piled on top of the residential and
commercial real estate deflation and financial
sector woes, became too ominous to ignore.
In
a flash the headlines shifted from trends and
factoids to discussion of “rescue” and
economic stimulus to prevent a
“recession.”
Economic
stimulus by Agencies can be a good thing, but
only if intelligent actions stimulate the right
things. Increasing consumer consumption and
propping up Autonomobiles and McMansions only
makes the fundamental problems worse. The
current pseudo economic stimulus is what Robert
Samuelson calls “Lollipop Economics.” (See End
Note Five.)
The
stimulus package Congress and the White House
quickly agreed to is “Lollipop Economics”
because an artificial stimulus is only window
dressing when the “fundamentals” are Swiss
cheese.
By
the way, where is the MainStream Media on the
topic of stimulus? Just where you would expect
from them to be if you read THE
ESTATES MATRIX. The lead editorial for
Saturday 19, January 2008, in WaPo
suggests that “everyone” agrees the economy
needs a government boost. If citizens understood
reality, they would not all agree. It is clear
that even now “everyone” does not agree;
even some of WaPo’s own columnists do
not agree. (See End
Note Six).
And
Then Pile Three
What
does the stack from late January thru
mid-February tell us? A sampling of headlines
over a five-day period say it all:
“Economy
Lost 17,000 Jobs as Slump Widened: Drop First
Since ‘03: Gain Was Forecast,” Neil Irwin, WaPo,
2 February 2008.
“U.S.
Concern Over Economy Is Highest in Years: Public
Skeptical of Stimulus Package,” Michael
Abramowitz and Jon Cohen, WaPo, 4
February 2008.
“Fed’s
Rate Cuts Bring No Relief for Consumers’
Credit Card Bills,” Nancy Trejos, WaPo,
4 February 2008.
By
the way, Steven Pearlstein does a great job of
describing why the Federal Reserve Bank cut
interest rates when it was cheap credit that got
the financial sector into a crisis in the first
place. It was not to help consumers, it was to
bail out big financial institutions.
(See
End Note
Seven.)
Back
to the headlines:
“Housing
Crisis Casts a Cloud Over Sun Belt: In
Once-Booming Areas, Help Could Be Too Little,
Too Late,” Michael A. Fletcher, WaPo, 5
February 2008.
“Downturn
Shows Up on Main Street: Dow Drops 370 After Key
Index Shows Damage to Service Sector,” Neil
Irwin and Tomoeh Murakami Tse, WaPo, 6
February 2008.
It
is not just the US of A that is hurting:
“Asian
Exporters Feel U.S. Pain: Alternative Markets
Sought to Compensate,” Abiana Eunjung Cha, WaPo,
6 February 2008.
And
it is not just shelter (the Affordable and
Accessible Housing Crisis) that is taking a hit
but also Autonomobiles (the Mobility and Access
Crisis):
“Repo
Lots Filled as Millions in Default” Chris
Woodyard USA Today, 14 February 2008.
“From
Foreclosure Signs to Auto Repo Lots: Easy Credit
Gives Way to High Consumer Debt and Defaults;
Unpaid Auto Loans, Credit Card Bills Stack
Up,” David Cho and Nancy Trejos, WaPo,
18 February 2008.
And
then there are those who point out that the real
economic news for the vast majority of the
citizens in the US of A has not been good for
decades:
“The
Boom Was a Bust for Ordinary People: For Many,
the Economy Went Stale Long Ago," Barbara
Ehrenreich, WaPo, 3 February 2008.
In
"Supercapitalism: The Transformation of
Business, Democracy, and Everyday Life,"
Robert Reich provides all the big picture
numbers one needs to understand how right
Ehrenreich really is. (Again see End
Note Two and the MainStream Media spin in APPENDIX
ONE.)
In
The Shape of the Future the plight
of those in the bottom half of the economic food
chain is documented up to 2000. The current
status of the top five percent and the bottom 95
percent is summarized in PROPERTY DYNAMICS
(PART TWO of ACTION PROGRAM,
forthcoming).
Big
D
With
all the talk of economic downturn and
speculation that the economy is already in
recession, it is important to look at both the
big “R” and the big “D.”
Recession
– negative economic growth – is one thing
and not really a bad thing for the vast
majority. That is especially true, given the
need to achieve Balance noted above.
Let
us be very clear: A growing number of citizens
understand the need for humans to achieve a
dramatically smaller ecological footprint. At
the same time, there is not two percent of the
population that thinks a Recession is a
“good” idea. (See End
Note Eight.)
At
this point, those who would admit to being in
favor of a Recession are primarily bottom
feeders. They hold that opinion because they
think they have a scheme to make a lot of money
from others' pain. Even Exonomists and the likes
of Herman Daly (“Beyond Growth: The Economics
of Sustainable Development”) are unlikely to
advocate a recession at this time.
While
the economy has not done well for the bottom two
thirds of the economic food chain by most
measures over the past decade, many citizens
think they have somehow benefited by the orgy of
Mass OverConsumption and that with a little
tinkering they can get back on the gravy train
that was raising all boats before the mid-'70s.
While
a recession might not be that bad, a
depression, on the other hand, is a bad
thing.
An
economy in depression is rife with abject
poverty, citizens die of starvation, child
mortality rates spike, life spans are
dramatically shortened, resources are
misappropriated, wasted and lost.
The
last thing anyone wants is citizens going around
scared and depressed about the prospect of a depression.
But what if, after careful consideration,
contemporary First World society needs a nice
long recession?
Will
Agency action seeking to achieve unsustainable
economic objectives result in catastrophe?
How
do nation-states get to a controlled recession
without sliding into a depression?
Will
“leaders” pursue “economic growth” and
instead of achieving a long period for
readjustment (the “R” word) push the economy
and society into Depression?
Supercapitalism
and Agency-controlled investment from
non-democratic (and anti-democratic) governance
structures could be the economic equivalent of
physical terrorism in this context.
Without
an economic strategy with which the majority
agree there is no chance of maintaining
democracy with a market economy.
Is
a Good Strategy for 1929 Intelligent in 2008?
The
widely held view among economists who have
studied the issue is that in the late '20s and
early 30s there was a lot of speculative
exuberance left over from the Roaring '20s. The
failure of Agencies in the US of A and elsewhere
to be sufficiently concerned about the potential
of a recession, and their failure to take action
to prevent a recession, led to the Great
Depression. Some of these same economists also
suggest that the “lost decade” of Japanese
economic stagnation in the 90s was due to
failure to aggressively address what might have
been just a mild recession.
Who
is the leading scholar in this area of economic
history? Ben S. Bernanke, the current chairman
of the Federal Reserve. Pearlstein and others
have made these points. (Again see End
Note Seven.)
Let
us assume that a major problem in 1929 was a
failure to take the prospect of recession
seriously and that this inaction did contribute
to the Great Depression. The question now is:
Will taking the recession “seriously” under
dramatically different circumstances thus push
the global economy into a depression?
To
answer this question citizens – and not just
Agency, Enterprise and Institutional economists
and lobbyists, for reasons spelled out in THE
ESTATES MATRIX, must take a long look at
population, consumption, resources,
expectations, abilities and the current status
of the Estates of society. Even a summary of
such a consideration is beyond the scope of this
column, but here are a few observations:
Population:
The world population in 1930 was about two billion;
in 1970 it was about 3.6 billion; and in 2008
about 6.6 billion. In other words, the world
population has nearly doubled since most should
have known that Fundamental Change was
essential.
In
the US of A, where one might expect the most
intelligent response to future realities, the
population was about 122 million in 1930; in
1970 it was about 200 million and in 2008 is
about 304 million. In other words, the
U.S. population has increased by about 100 million
residents since the 1973 Oil Embargo. Instead of
following the trend in other First World
industrialized nation-states toward population
stability – the trajectory the US of A was on
until the early 1990s – the US of A has
established programs and incentives (or has
failed to take actions) that collectively have
increased the population and vastly increased
projections for future population growth.
Agency
and Enterprise actions and inactions include
permitting the immigration of those with high
skills who will work for less (e.g. doctors and
denizens of high-tech) and those with low skills
who will work for much less, especially in the
service sector, that citizens will not do
without higher economic and social incentives.
About 11 million have entered the nation-state
illegally to take advantage of employment
opportunities.
Consumption:
Measures of consumption that impact human
settlement patterns include Vehicle Miles
Traveled – up about 150 percent or 4.5 times
the rate of population growth. While energy
consumption per-capita has been relatively
constant since 1973, the growth of population
has increased energy consumption by about 40
percent. Vast amounts of energy is wasted
in transmission and distribution to
dysfunctional human settlement patterns.
Most
important efficiencies in the industrial,
commercial and residential sectors' use of
energy have been offset by increases consumption
by the transport sector.
The
Gross Domestic Product has grown from $4.4 trillion
in 1973 to $14 trillion in 2007 -- almost 10
times the population growth. The monetary costs
in personal debt and nation-state debt to
achieve this “prosperity” is considerable.
The current national debt is $9.3 trillion.
The current balance of payments deficit is
around $700 billion. Some at the top of the food
chain are much better off due to this
“growth” but most citizens are not. (See APPENDIX
ONE: DISORIENTING “NEWS” ON CITIZEN WELL
BEING.)
Reich
cites a chilling statistic: Three families: the
Waltons (Wal*Mart), the Gates (Microsoft) and
the Buffets (Berkshire Hathaway) have net worth
roughly equal to the total of the 120 million
citizens at the bottom of the economic food
chain in the US of A. If these at the bottom of
the economic food chain lived in one
nation-state it would be the 11th largest in the
world – bigger than Mexico. This is the worth
of just three families.
Resources:
Levels of consumption have depleted domestic
supplies and shifted to those in the US of A to
import dependence for many goods and services
including the vast majority of the fuel for
Mobility and Access.
One
does not even need to read the annual State of
the World by the Worldwatch Institute (Lester
Brown, et. al) to understand the deteriorating
status of fresh water, forests, marine life and
the dwindling stocks of many metals and other
materials. Cheap oil is, of course, gone.
As pointed out in “Whale
on the Beach,” 28 August 2006, citizens of
the US of A have burned through natural capital
at an alarming rate and have little of lasting
value to show for it. There is even less left
for future generations to meet their needs. (See
End Note
Nine.)
Expectations:
Never in the history of human economic activity
has an economy been so dependent upon consumer
consumption. Over 70 percent of the current
economy consists of consumer consumption. This
is a far different world than in 1929 when a
relatively few could turn on and off large
sectors of the economy. This new reality puts
the US of A and the First World in completely
uncharted water: The next economic downturn may
not be a mild recession that “everyone”
expects to end soon.
Thanks
to the flow of misinformation from both Agencies
and Enterprises, citizens expect that the future
involves continued “growth” and that they
are correct in expecting to be better off in the
years ahead, especially if they buy and consume
more and more accessories of the “good life”
and vote for “me.” (Again see End
Note Two.)
The
stock and commodities markets have morphed to
become gambling venues with far more and far
different participants than when “the
market” crashed in 1929. At this point every
item of bad news is met with a promise of a
bailout and the promise of a bailout spurs more
speculative buying. (See End
Note Ten.)
Abilities:
The last time the US of A weathered a depression,
most citizens still lived in small urban places
and on farms. The vast majority of the
population, if given a knife, a match and a live
chicken, would not go hungry. Now most (85
percent) live and work in New Urban Regions and
are dependent on a global supply chain for
almost everything.
When
something bad happens, like a South Florida
blackout, they call 911 and hope someone will
help them. Citizens have few tools to help
themselves and are subject to forces and
decisions about which they have no understanding
and no control. (See “Down
Memory Lane with Katrina,” 5 September
2005, and “Second
Stroll with Katrina,” 4 September 2007.)
Most
citizens depend on the Autonomobile for Mobility
and Access (See THE
PROBLEM WITH CARS) and thus on imported oil.
Status
of the Estates: The overarching building
blocks of civilization have been morphing over
the last seven hundred years and at this point
few recognize the categories of the four Estates
or the relationships between them. (See THE
ESTATES MATRIX.)
The
question we have asked over and over and over in
a hundred different ways for the past 20 years,
from the Fall of 1988 to Spring of 2008:
Will
the Households, Agencies, Enterprises and
Institutions have the resources left after
decades of profligate waste and the
agglomeration of dysfunctional human
settlement patterns to create Balance or will
the Washington- Baltimore New Urban Region
become “Bangladesh on the Potomac?”
We
do not have the answers but in APPENDIX
TWO: A WINDOW ON COMPLEXITY there is a
sketch that suggests just how hard it will be to
turn around the gravy train.
How
Long
How
long will it take to turn around the gravy train
if citizens are fortunate enough to have a nice
long recession to restructure the economy and
with it social and physical life?
A
recent story by Emily Wax filed from Lakshman
Jhula, India, may hold the answer. Her article
is “Overcoming Caste: For Those Working to
Build an Integrated India, ‘Hope Starts and
Ends With the Schools’.”
Our
guess is that it will take about as long in the
US of A to get rid of the idea that a
sustainable future depends on “growth” as it
will to wipe out the caste system in India.
Perhaps 40 years. And, as we point out in The
Shape of the Future, it will depend on
citizen education. (See End
Note Eleven.)
--
March 5, 2008
End
Notes
(1).
We had to get THE
ESTATES MATRIX wrapped up. There were
Holiday festivities, some interRegional travel
– and the time to recover from the inevitable
bout with Severe Acute Air Travel Syndrome (SAATS).
Then there was the “death” of Rail to Dulles
and the need to get THE
PROBLEM WITH CARS into publication ... the
list goes on. For prior year end summaries
see: “Smoke
and Shadows,” 13 January 2003, “Summing
Up,” 15 December 2003, “A
Summing Up,” 13 December 2004, "The
Devil’s Dance,” 3 January 2006, and “Can’t
Take This – Not Another Day!”, 8 January
2007.
(2).
Reich, Robert. "Supercapitalism: The
Transformation of Business, Democracy, and
Everyday Life," Knopf, NY 2007.
Unfortunately, this book fails to articulate the
locational and spacial impacts of the changes in
Agencies, Enterprises and Institutions spelled
out in THE ESTATES MATRIX, this masking the need
for Fundamental Change in human settlement
patterns. Reich also implies that there
are viable solutions without Fundamental Change
in governance structure. The book does
articulate very well, however, the conflict that
humans face in their roles as consumers and
investors vis-a-vis their roles as citizens.
The
future of democracies with market economies
depends upon resolving the conflict between
humans as consumers and investors and humans as
citizens, as Reich points out. In an forthcoming
column we will explore why Reich’s book will
never be “popular.”
If
anyone thinks Reich is off base with his
analysis of humans as customers and investors vs
their roll as citizens (consumption vs safety
and happiness) or why the current trajectory of
society is toward dysfunction and the end of
democracies with market economies, they need to
read THE ESTATES MATRIX with more care.
Vyse,
Stuart. "Going Broke: Why Americans Can’t
Hold on to Their Money," Oxford University
Press ads another dimension to the picture.
(3).
Leinberger, Christopher B., “The Next
Slum?” The Atlantic Online March 2008.
(4).
We are talking about MainStream Media. EMR
and others have been saying these sorts of
headlines would be the inevitable consequence of
continued Mass OverConsumption and dysfunctional
human settlement patterns for years, in fact for
35 years – 1973 to 2008.
(5).
“Lollipop Economics: The Limits of What
Politicians Can Do” Robert J. Samuelson, WaPo,
16 January 2007. Alan Berue at Brookings
suggests that stimulus should focus on
innovation, intellect and infrastructure. Few,
as yet, see the key issue is settlement
patterns.
(6).
The lead editorial for Saturday 19 January
2008 in WaPo is titled “Calculating the
Stimulus”: Everyone agrees the economy
needs a government boost – but the devil lies
in the details.” (Emphasis added) A careful
reading of the editorial finds that the
“details” are how to get the stimulus money
to those who will spend it right away so that
the consumer-driven economy (and advertising)
will charge ahead for a while longer.
The
real issues are far more complex. Harold
Meyerson makes a number of important points in
“A Different Recession: The Old Remedies
Won’t Work This Time,” WaPo, 16 January
2007. Steven E. Landsburg (“Why the
Stimulus Shouldn’t Stimulate You”) and
Andrew A. Samwick (“A Better Way to Deal With
Downturns”) also make good points in WaPo’s
Outlook for 27 January. What does WaPo
do to muddy the waters? It runs a full
page ad by the National Association of Home
Builders with the punch line, “The Economy
Starts and Stops with Housing.” Jim Bacon
pointed out that on 7 February the owners of WaPo
made the former vice president of advertising
the new “Media Chief and Publisher” of the
paper in “Who
Will Report the News? WaPo Gets New
Publisher.” [Add Link]
(7).
Pearlstein, Steven, “Only When the Bubble
Bursts” 23 January 2008.
(8).
Two percent is pretty small group given the
fact that ten percent think the world is flat
and fourteen percent cannot find the US of A on
a world map.
(9).
Richard Register of Ecocity Builders puts it
this way in “Enduring Civilization:” “God
help us when the unemployment lines get as long
as they were during the Great Depression because
this time we won’t have the vast oil deposits,
broad forests, full aquifers and seas rich with
life to bail us out.”
(10).
“Word of Bailout Plan Reverses Stocks In
Last Half-Hour of Trading” (Dow Jones down 130
“rallies” to go up 97 on 22 February)
Markets Report, 23 February 2008 WaPo.
(11).
Forty years is the time it takes for those now
in the fourth grade to become the leading
generation. See Wax, Emily, Washington
Post Foreign Service, “Overcoming Caste: For
Those Working to Build an Integrated India,
‘Hope Starts and Ends With the Schools,’”
20 January 2008, WaPo. Also See The
Shape of the Future Chapters 31 and 32.
In
his work with elementary school students,
Patrick Kane has found that in the third, fourth
and fifth grade students have an inherent
ability to understand the basics of evolving
functional human settlement patterns. In
just a few years they have been convinced by
peers, advertising, their parents and MainStream
Media, that Business As Usual is the only path
to secure the things they think they need and
want.
Appendix
One
Disorienting
"News" On Citizen Well Being
THE
ESTATES MATRIX documents why citizens are not
getting the information they need to make
intelligent decisions in the voting booth and in
the marketplace. In the context of the
“Good News: What MainStream Media Is, and Is
Not, Telling Us,” we examine one story from
the business sections of WaPo for 28 February
2008.
Placement
The
story by Michael A. Fletcher takes up five
columns above the fold with the headline in
letters .55 inches high “An Upside for the
Middle Class.” The story with picture and
graphics covers about half the first page of the
business section. The story shares the front
page with four other stories:
-
“Fannie
Mae Reports $3.56 Billion Loss”
-
“Bernanke
Signals Rate Cuts On Concern About the
Economy”
-
“E.U.
Slaps Third Fine on Microsoft”
-
“Frustration
of the Format Wars” (HD DVD vs Blu-Ray)
It
is very clear that “the middle class is doing
just fine” in spite of all this bad news is
the “message” the editors want
“business” readers to take away from
exposure to WaPo on 28 February 2008.
Graphics
The
five-column color picture shows the shoes and
legs of people who are presumed to be happy
shoppers by the fact they are carrying shopping
bags. The caption reads: “Though
their debts have multiplied [true, see below],
shoppers today buy more items than they use to
[true, see below], often for lower prices [true,
see below], and have more leisure time to do it
[may not be true, see below].”
A
bar graph with data from 1989 and 2004
accompanies the story on page one and is
intended to bolster the rosy perspective of
those in the middle of the economic food chain
by documenting a rise in net worth of $24,300 in
constant dollars over the period for the median
Household. Upon closer inspection:
1989
was a bottom-of-the-trough year for housing –
we tried to sell a house in 1989 and were
offered less than we had paid for it in early
1988. 2004 was not the top of the recent
housing bubble but was on the way. In
other words, choosing 1989 and 2004 is an
attempt to cherry pick data to paint a rosy
picture. Also 2004 was three-plus years ago.
That was then, this is now.
The
$24,300 gain in median family net worth in the
graph comes primarily from growth in pension
funds and home value.
Hello!
Since 2004, stock markets, which include pension
funds, have lost trillions of dollars and may
well lose more. Houses are being foreclosed at
record rates, values are down and are predicted
to go down farther. Without those two
“upsides” the median family value would be a
loss of $52,200 from 1989 to 2004.
Much
of the increase in “financial and
non-financial assets” which is the other big
“gain” in the graph during the 1989-2004
period also may have disappeared. The loss of
value of new cars in the first year and the
deflation of electronic equipment that is
replaced with “newer and better” is
astounding in a
“throw-away-the-old-and-buy-a-new,
better-one” in Mass OverConsumptive society.
This churn, of course, accounts for much of the
increase in “debt” and “credit card
balance” that is on the negative side of the
ledger in the WaPo graphic.
A
companion graph illustrates the percentage
change in productivity (+ 28.6%) and wages (+
4.4%) from 1989 to 2004. Add Cost of Living and
this would be a much better measure of how
citizens fared during that period – and in
fact since the mid '70s. The whole concept of
measuring well being by “productivity” is
questioned in The Shape of the Future.
Also see “Whale
on the Beach,” 28 August 2006.
The
Story Line
The
story opens with reference to the fact that
presidential candidates in both the Elephant
Clan and the Donkey Clan are citing the problems
faced by those who are not at the top of the
economic food chain. The author provides a list
of the commonly noted negatives:
“...
flattening wages, rising income inequity,
increasing consumer debt, soaring health-care
costs, spiraling energy prices and, now,
declining home values.”
These
trends are not challenged but then the story
diverts on a man-bites-dog tangent intended to
let “the informed reader” know that things
are really not that bad. There are several
experts quoted in the story. Stephen Rose
is “labor economist” who is “writing a
book.” He admits the economic picture for
those in the middle is a “mixed picture.” It
turns out that Rose helps develop Donkey Clan
strategies and has done research that cautions
prospective candidates that stirring up “class
warfare” was not a way to win pre 2006
elections. We do not know what his new book
might say but two recent papers published for
Rose by the Progressive Policy Institute (April
2006) and the Democratic Leadership Council
(July 2006) document that at that time attacking
“class difference” was not helpful for the
Donkey Clan candidates studied.
It
does not take much insight to realize that
these studies were carried out before the
November 2006 elections and the November 2007
elections in Virginia.
The
bottom line is that Rose is cited because he is
a Donkey Clan supporter. He was chosen to
“balance” quotes from Elephant Clan
supporters in pure He Said / She Said fashion.
Rose was quoted in spite of the fact that
apparently he does not have much to say about
the economic, social or physical well being of
those in the middle of the economic food chain
in 2008. His expertise is in creating
“winning” (50.1 percent) strategies.
Let
us look again at the picture caption, which
along with the headline set the tone for the
story: “Though their debts have
multiplied, shoppers today buy more items
today than they used to, often for lower
prices, and have more leisure time,
to do it.” Considering one of these items at a
time:
“Debts
have multiplied”: No one disagrees with
this. Is more debt a good thing for the growing
number who now cannot pay their bills?
“Buy
more items than they used to” Again,
absolutely true. The recent past consumption
levels of goods and service by US of A citizens
far exceed any other nation-state. Further these
levels of consumption far exceed any other
society that has ever existed. However, is Mass
OverConsumption a good thing for those in the
middle of the economic food chain given the
rising cost of resources, the trade deficit, the
declining value of the dollar, etc?
“Often
for lower prices”: This is also true and
to understand why, see “Learning From Big
Boxes” which is Part III (forthcoming) of THE
PROBLEM WITH CARS and EMR’s review of
Supercapitalism: The transformation of Business,
Democracy and Everyday Life (forthcoming). It
turns out lower prices per se are also not
necessarily a good thing.
“Have
more leisure time”: This will come as a
great surprise to the Running As Hard As They
Cans. This assertion, it turns out is the
lynchpin of the story. Except for “more
leisure,” all the “good points” turn out
to be bad for the vast majority in 2008.
A
study on the topic of increased leisure is
jumped on by another “labor economist,” this
one at the Heritage Foundation. The Heritage
Foundation is a cheer leader for Business As
Usual and one of the key “happy, rich donors
are good for the Institution” Organizations
profiled in THE ESTATES MATRIX.
The
study in question is a 2006 working paper by
Mark Aguiar and Erik Hurst titled “Measuring
Trends in Leisure: The Allocation of Time over
Five Decades” published by the Federal Reserve
Bank of Boston.
In
this paper what is the main overlooked issue is?
You guessed it:
The
impact on daily activities of dysfunctional
human settlement patterns.
The
measures of “market work” and “home
production work” both include “travel
time” – a reflection of dysfunctional human
settlement patterns. However, the authors rely
on survey participants to estimate travel time.
We have found that from the neighbor next door
to scientifically screened panels, citizens
invariably underestimate travel time. No one is
willing to admit that they spend as much time as
they really do getting to work, getting from the
soccer game to the dance lesson and back...
There
are other holes in this type of survey. How many
will admit that they wasted four hours last
night in front of a television set because they
were too exhausted to do anything else? Add to
these specifics the decision about allocating
child care time by the researchers in this study
and there is room for a lot more fudging than
the six to eight hours a week of “additional
leisure time” they found from 1965 to 2003.
Whatever
an arcane formula applied to four sets of survey
data (with different questions being asked of
different people each decade) might conclude,
how many (other than retirees) agree that they
have much more time to undertake actions of
their own choosing than they did 10, 20 or 30
years ago?
We
will leave it to readers to come to their own
conclusions after they download and read the 61
pages of text and tables. However, there are a
lot of red flags that should temper any
conclusions about the growth of “real”
leisure.”
The
bottom line is that any suggestion that citizens
have more leisure time apparently rests on very
weak evidence and runs counter to what citizens
believe is the case. Whether citizens could
theoretically avoid the advertisements and the
gadgets or not, they do not do it. The question
seems to boil down to a need to explore the
nature of “happiness” as noted below not an
abstract “increase in leisure” calculation.
Editors'
Cut
On
page four of the same business section on 28
February there is a report that Post Co. Profits
are down by 11 percent. If consumers
believe the economy is going downhill, they may
well cut (and they are cutting)
consumption, which will hurt advertising and
thus WaPo revenue. No business side
staffer has to walk into the newsroom to tell
the editors, much less the reporters, that they
need to do whatever they can to maintain
“consumer confidence” to avoid further
layoffs. One way to do that is to show that
there are “two sides” to the issue of how
badly off those in the middle of the economic
food chain really are.
What
better way to put this issue on the front page
of the business section than He Said / She
Said (aka, balanced) Journalism?
Oh
yes, there is the issue of Vocabulary too: The
use of the term “Middle Class” is confusing
because what most think of as the “Middle
Class” disappeared since 1950, especially
since 1973. This issue is explored in THE
ESTATES MATRIX and will examine it further in
THE ESTATES MATRIX v 2.0, forthcoming.
With
these perspectives in mind, we suggest you read
(reread) the WaPo story. Is the coverage
of this important topic a blatant attempt to
confuse the issues or is it an inept attempt to
provide information? You decide. But does it
matter? As documented in THE ESTATES MATRIX,
“journalists” have no choice but to spout
support for continued Mass OverConsumption.
As
noted above, the real question is how to define
and deliver “happiness.” Or not. See "Against
Happiness: In Praise of Melancholy,"
by Eric G. Wilson.
A
brief, ongoing review of the literature suggests
there are a lot of questions to be answered.
Business-As-Usual advocates are sure everyone is
really happy with Mass OverConsumption. That is
what WaPo is selling and hopes consumer buy it.
With constrained resources Mass OverConsumption
is not the answer. Stay tuned.
Appendix
Two
A
Window on Complexity - While It Will Be Hard to
Achieve a Sustainable Trajectory for the Economy
Given the Embedded Bias Toward Growth and
Expansion
Texas
is the focus of the oil and gas industry in the
US of A and the Houston Chronicle keeps
tabs on oil and gas news. On a recent trip, we
observed clear evidence of reasons the current
trajectory of civilization is unsustainable and
why it will be hard to achieve a sustainable
trajectory.
In
December of last year, Congress passed and the
President signed “The Energy Independence and
Security Act of 2007.” For the first time in
years, federal legislation mandates an increase
in fuel efficiency for cars and light trucks.
The legislation also mandates increased levels
of ethanol production.
Except
for the blatant foolishness put forth by:
-
The
title of the legislation
-
The
fact that ethanol may not be a good way to
use the US of A’s agricultural capacity
-
The
fact that biomass may cause more harm than
good
...
this legislation might be seen by some as a good
thing.
What
is very clear is that the legislation is good
thing from one perspective: The business models
of oil and gas companies are geared toward
growth in consumption, aka, Mass OverConsumption.
The passage of the federal legislation suggests
there might be “downturn” in consumption.
What
does the oil and gas industry think about a
reduction in consumption? The headlines on the
front page and the jump page of a 7 January 2008
article by Brett Clanton in the Houston
Chronicle says it all:
“New laws leave oil refiners uncertain:
Some rethink (refinery) expansion as
legislation aims to reduce gas use / Refiners:
Unclear demand may push more projects off
table.”
There
are 140 gasoline refineries in the US of A
according to Clanton, and there has not been a
new refinery built in the past 30 years. There
will have to be new investment to upgrade
existing refineries to keep them producing and
to meet growing demand even for the legislation
to have the desired effect. However, as the
story documents, if legislation has the
potential to reduce the rate of growth, the
companies will not risk billions to expand
capacity. On the one hand you cannot blame
refiners for being concerned, on the other hand,
it is clear that continuing the present
trajectory is a non-starter.
Environmental
and “consumer advocate” Institutions are
quick to criticize the refiners for
intentionally limiting capacity to insure high
prices and high profits.
Let
us step back and consider another perspective.
One does not have to go to Cuba or Haiti to see
that old, fuel-inefficient (and grossly
polluting) cars can be kept on the road for
decades. Just go to Heartland, US of A.
Used vehicles find a retirement home in Urban
Support Regions with high unemployment and low
income levels.
Let
us assume there is an economic downturn and few
of the new fuel- efficient vehicles find their
way onto the roadways. Citizens will then be
trapped in dysfunctional, fuel inefficient
settlement patterns that demand the use of
Autonomobiles. Old cars would be the only
alternative for Mobility and Access. And here is
the catch: Because the refiners bet on lower
consumption, there would not be enough gasoline
even for reduced total travel. Under this
scenario there would be the worst of all
possible worlds: Reduced supplies of fuel with
high prices and gas guzzling old cars.
This
is the tip of the iceberg: The entire economy is
based on more and more citizens consuming more
and more goods and services. That is not a
sustainable trajectory, but it is the model
Enterprises are forced to adopt as suggested by
THE ESTATES MATRIX for the reasons spelled out
by Robert Reich’s in "Supercapitalism."
Now
tell us again why more intelligent action was
not taken in October 1973 by the “leaders”
of Agencies, Enterprises and Institutions?
|