I’ve been thinking obsessively the past month about the economy and the danger signs I saw back in the spring about another economic meltdown. Because I’m not an economist I wasn’t exactly sure how or why this would occur. A feeling and some astrological back-up to that intuition was all I had to go on. But patterns I’ve been seeing have started to become clearer about how and why the breakdown will occur. The pieces: 1. Because the US (and the world) has been so divided – left and right – the 2008 meltdown was only given a band-aid remedy. After the crash of 1929, and the subsequent Great Depression that ensued, massive sweeping changes were made to protect the US from another financial meltdown. These measures where based on a relatively simple principle most kids learn subconsciously from the game of Monopoly. Money could not be coagulated into the hands of a very few or it would choke the entire economy. This idea was worn down over time by the false equivalency to communism. Communism of course was equated with the enemy and everything evil. Generations of Americans grew up under the shadow of nuclear annihilation under the threat of the Communists. While the enmity was real the understanding of their alternate system was flawed for a number of reasons. The first being the faultiness of the Soviet’s governance of that system. Allowing a few people to control all the resources (in their case the government – in our case corporations and wealthy plutocrats) led to exactly what one would expect a corruption of power. I don’t need to repeat the adage we all know so I won’t. During most of the mid-century however we did not have “pure capitalism” in fact we had a system much closer to Europe’s because FDR played a huge hand in resetting up these countries constitutions after WWII. For all intents and purposes we had a socialist democracy where their was a social net set-up for the poorest people. The wealthy paid 90% tax, unions were strong and protected the rights of workers and college was close to free (and for many Pluto in Leo’s their college loans were never repaid – making their education a gift from the US government.) The economy from the end of WWII until the 1970s was stable and incredibly strong. And then the unraveling began. Greed. The wealthy got tired of being merely wealthy among the throngs of upstart middle-classers. That wasn’t a high enough place to be I guess just wealthy – not enough one has to not just have most of the nuts but all the nuts – mad squirrel disease as I like to call it – the pathological need to acquire everything. It simply wouldn’t do to live in a society where everyone was doing really well and perhaps your osn or daughter would go to harvard next to a factory workers son and then fall in love. Dear me the entire social fabric was falling apart due to those scary middle-class hippie kids who had no regard for the social order. Conservatives decided to fight back. It was a double edge insult to their lifestyle and threatened everything they valued. Hence the fight to come after the glow of the 1960s. But back to… The failure of both systems – Communism and Capitalism – greed. Neither take this fundamental human pathology into account. And although the 80s tried to sell us on the idea of greed being good and a pure marketplace where corporations would magically police themselves – anyone who has even the tiniest bit of street smarts and/or understanding of human psychology knows that a fox should never be guarding a hen house as the old saying goes. We can’t expect to put a freshly baked box of cookies next to a hungry toddler – leave him to guard it indefinitely and expect to come back to find none missing. Especially if we continue to do this and there are no repercussions when the toddler starts taking them. Eventually the kid doesn’t think about it anymore and it just becomes a given that stealing from the pile is part of what you do. Taking regulations away and dismantling unions allows corporations and wall street to go unchecked. Just like our Democracy has been set-up to have checks and balances (which we are now seeing needs some modern adjustments) so power was never put entirely in one individual or groups hands for fear of corruption – the same holds even more true for the resources of the earth. Historically those who control the resources control the power. We saw the end of soviet communism and thought we had “won.” But in reality the very thing that crushed their system will crush ours but it will come from the private side rather than the government side since our government has become a side show to the real power allowed to run amok via the Supreme Court’s rulings on everything from not counting votes to Citizens United to their ruling on the most recent Hobby Lobby case allowing corporation shareholders’ religious preferences to trump everyone else in the corporation – whereby creating a surf-like relationship between corporate heads and their employees. (If you look at it ideologically without the divisive sunglasses of pro-life vs. pro-choice – one can clearly see it as a crack in the protection of the individual’s rights vs. corporate rights – there are more cases than this which I could point to having to do with intellectual property that also give more latitude to corporations and less to private individuals so it’s not just this case I’m going on here but that’s a whole other post.) I used to refer to the pathological sort of greed (found in the one percent of the human population) as “mad squirrel disease.” But I’ve come to realize it’s actually more sinister than that just look at the Koch Brothers. Now let me break it down in real time rather than history: 1. We have a low wage service based economy. Since Nixon opened trade relations with China the lions share of jobs shifted from factories to service as China took on manufacturing. With the advent of the Internet the 1990s economy had the advantage of a strong intellectual property economy fortifying the service economy. Things like Napster started a trend toward an everything-is-free trend which eroded intellectual property for everyone except large corporations and eventually led the feed cycle to an almost exclusive service based economy. Other than construction, the small manufacturing sector, small percentages of actual farmers (2%), nearly all jobs are related to serving whether that is being a doctor, teacher, law enforcer, IT specialist, waiter, clerk, accountant, real estate agent or financial broker – these jobs only exist to serve. The safest jobs during a major downturn are those connected to the community like police officer and perhaps even doctor due to need. But a serious downturn or depression would ELIMINATE the need for nearly ALL OTHER JOBS. Food, shelter and basic needs are all people spend money on in a major downturn or depression. This would choke people’s ability to spend on anything except the necessities which we are seeing in slow motion right now despite all the BS about the stock market. The reason the low wage part is such an aggregant (CEOs and wealthy 1 percenters take notice) is the inability for people (which is a huge percentage of people) to buy goods and services and the inevitability of that huge percentage of people to slip into abject poverty and out of the economy completely if a major downturn/depression were to occur. Now that the social net is broken the devastation of economic free fall would be truly horrifying. 2. We thought we solved the problem. The 2008 meltdown was an opportunity to right the boat but we didn’t take it. We put up a slipshod band-aid that will eventually bleed out and slip off. The bail out was the right thing to do at the time BUT IT SHOULD HAVE BEEN FOLLOWED UP BY REAL REFORM! The banks should have had to pay back the money with interest and they should have reinstated old monopoly regulations and broken them apart. In fact all the mergers and acquisitions and centralizing of corporate power should be reversed if we are to survive a global financial meltdown. The reason being if all the dinosaurs are roped together and one falls down – they all fall down. If one dinosaur falls down and dies, well it just goes back into the life cycle. An economy can happily recover after the death of one giant. It can even thrive as its broken apart into smaller pieces and redistributed but if the thing is so massive as to encompass the earth and all its people, well, then it’s not survivable. Instead of diversifying everything and locking down the hatches by cracking down on criminal behavior and kicking Wall Street out of the country’s financial governance, we gave the dinosaur a big meal, slapped a bandage on him and ignored the whole thing. In the mean time the country became extremely divided and entropy set into politics. Anything that could or should have done couldn’t be done. Alas we have a serious problem about to unfold. 3. Global connectivity: that which has been sown must be reaped… We have a global economy. Corporations are making record profits connecting to markets everywhere. Yeay! If your a shareholder or CEO of one of those corporations. Well, at least that has been the case. All those new people around the world mean new costumers right? Right? Yeah and new liabilities. Just as we tanked the world economy with our housing bubble, guess what can happen if theirs a bubble in say China? Hmm… coincidentally their is a bubble in China a HUGE BUBBLE. Two words. Ghost Cities. Heard of them? This bubble will make our bubble look like we did it with a piece of chewing gum. Terrifying when it bursts and it will. The epicenter of this seems extremely volatile when I tap into this I get very scared. It feels like intense chaos, violence and its tentacles are everywhere. The growing middle-class in China had no other thing to invest their newly won money in except real estate so… they built whole cities, infrastructures, shopping malls, parks, malls where no human (other than the builders) ever set foot and still haven’t set foot. They have a unique conundrum. Those who can afford to live in these new cities live elsewhere thereby displacing the poor villagers who had lived on that land and since these cities have no industry (although their are buildings there to house industry) no humans come to live in them. They are like bodies without souls. Dead. Still born without hope of life. The final component: 4) War All the conflicts going on around the world are heating up in key places. More than just losing the war in Iraq and Afghanistan – both unwinnable from the get go – we’ve shown the world we no longer have any moral authority (think torture and blowing off the geneva convention rules without any public prosecutions.) We also have a broken military unable to take on anything else after a decade of war. We have been left weak, morally, physically, economically and spiritually. Our own land torn apart by the left – right divide which has only served to hand over more power to the few leaving the masses poorer and fighting one another for scraps without a real understanding of how we’ve all been hornswaggled. So what does this mean for us? It means a real correction. We didn’t head our chance at a warning. The 2008 warning shot was forgotten as soon as the ringing in our ears wore off. It’s unfortunate that we have to learn the hard way but I’m very afraid we will have to learn the hard way. While I don’t think what hits us will look exactly like the last Great Depression it will be close. This will be the second dip we’ve all been waiting for. And it will require REAL CHANGES. Let’s hope that the next president has the ovaries to get something done. Many blessings, Denise
*Update I just saw a comment from Marie about a Forbes article related to this topic. I didn’t include the issues they address in it in my assessment but everything stated there is definitely another factor that I hadn’t thought about except for its relation to consumer debt. The stock market, in my opinion, has been running on the fuel of its own farts for as long as I can remember. It’s a closed loop that has taken off from any grounding it once had in reality. Check out the link she posted.
I looked @ another website that called Eris Nibiru….now that’s a name I am very familiar with.