Obama's America (Part 2)

A couple of days ago I wrote a post assigning a considerable portion of the blame for the Baltimore riots to President Obama in part because of his administration's economic policies that have increased wealth inequality and done nothing to help financially stressed working class Americans. Thus I would be remiss if were I to fail to mention the latest way that Obama is determined to make matters even worse and to set himself up to be showered with hundreds of millions of dollars in corporate largesse consultancies, speaking fees and book advances upon his retirement from office. I'm talking, of course, about the Trans-Pacific "Free" Trade Agreement, the opposition to which is being spearheaded by Senators Sherrod Brown and Elizabeth Warren, and includes some strange bedfellows:

The Obama administration has been negotiating the TPP deal since the early days of his presidency. Democrats and a bloc of House Republicans lead by Rep. Walter Jones (N.C.) are concerned that the pact -- which has not been finalized -- will exacerbate income inequality and undermine U.S. authority to write its own regulations, while Obama and Republican leaders say the deal will help all Americans by boosting economic growth. The U.S. Chamber of Commerce and other top corporate lobbying groups support the deal, while environmentalists, organized labor and many Tea Party organizations are opposed. Warren and Brown said that corporate support for the deal shouldn't be surprising.

"Executives of the country's biggest corporations and their lobbyists already have had significant opportunities not only to read [the TPP text], but to shape its terms," the letter reads. "The Administration’s 28 trade advisory committees on different aspects of the TPP have a combined 566 members, and 480 of those members, or 85%, are senior corporate executives or industry lobbyists. Many of the advisory committees -- including those on chemicals and pharmaceuticals, textiles and clothing, and services and finance -- are made up entirely of industry representatives."

So here we have the great President Hopey-Changey, who rode into office in part because of a tsunami of disgust with Wall Street and the abuses of corporate America, looking to cement his legacy by pushing through one last big "fuck you" to the tens of millions of middle class, working class and young voters who placed their hopes in him. This, of course, despite twenty-plus years of evidence that "free" trade enriches the top 10% of the population at the expense of everyone else. What more evidence do you need that the man is a fucking sociopathic monster?

Here we also see the most direct evidence yet of why America is being turned into a virtual police state, which is docilely accepted by most of the population to the point where even Baltimore's black female mayor was throwing around the word "thug," without making any attempt to differentiate between the protestors who were expressing their First Amendment rights and the rioters who were looting and burning cars. This is why all of our electronic communications are being monitored and why police forces all over the country are being outfitted with all the surplus military hardware they can handle. Those in charge know their policies are going to cause greater and greater public outrage as economic desperation worsens and more and more people begin to realize that they have no future.

All of this wouldn't be possible had the Democratic Party not sold its own constituents down the river a long time ago. So is America's liberal party going support its two most progressive Senators and stand firm against their own president? Not hardly...as usual they are more worried about the political fallout than all the lives that would be ground up and spit out by the agreement:

Democrats have been wringing their hands about the potential damage the dispute on Capitol Hill could do to the party, particularly as the 2016 elections get into gear -- a concern that is only compounded by the vitriol now being exchanged between two of its most prominent figures. Democratic presidential front-runner Hillary Clinton has largely avoided addressing TPP in the early stages of her campaign.

Yeah, I'll just bet Hillary is trying to avoid saying anything about this issue, given that it was her fucking husband who pushed through NAFTA and GATT and started America down the "free" trade road to hell.


Bonus: "Hell ain't half full"...so there's plenty of room for Obama

Obama's America

I'll admit that by titling this post as I have and tying it to the riots in Baltimore I'm running this risk of being misunderstood. First of all, lets keep what's happening in perspective. Compared to the LA riots after the initial Rodney King trial, or the many conflagrations that consumed American inner cities during the 1960s, what happened today is like a firecracker going off next to a keg of dynamite. A few cops got injured, a few stored got looted and few cars were burned. By comparison, the LA riots resulted in 53 deaths and over 2000 injuries.

Secondly, I have no doubt that there are plenty of white bigots and racists who are already blaming the president for what they are seeing on their teevee screens. And while I agree with them that a large share of the blame DOES reside with our feckless commender-in-chief, it certainly is NOT for the reasons they think: namely that this is all part of the "socialist-communist-muslim" Obama's "plan" to "undermine" America and turn it over to the Islamic State...or something equally ridiculous.

No, Obama deserves much of the blame for plenty of other reasons. It was, after all, his 2008 campaign that raised the hopes and dreams of black Americans and led them to foolishly believe that having one of their own in the White House would mean they would finally have someone in a position of high power who understood the very real institutional barriers still preventing them from achieving economic parity with whites. It was Obama himself who then deliberately sold out those hopes and dreams by not lifting a finger to help black America (or anyone else who isn't rich) once in office. Obama's administration has presided over an even greater spread of wealth inequality between the rich (mostly white men) and everyone else (blacks included), and his so-called economic recovery has benefitted only about the top 10% of the population, while the lower 90% finds itself more economically stressed than at any time since the Great Depression. Obama has also greatly contributed to this country's culture of violence and the idea that settling disputes requires guns, bombs, missiles and predator drones aimed at non-whites overseas who refuse to to accept American hegemony over the planet.

But finally and most importantly, Obama and his administration has stood around with its thumb up its ass while police killing incident after police killing incident has occurred without any attempt to have his Department of Justice forcefully step in with aggressive civil rights prosecutions--as Daddy Bush did after the Rodney King trial not guilty verdict. Time after time, from George Zimmerman to Darren Wilson and now on to a steady onslaught of cases, cops and cop wannabees have been killing young black men in cold blood without being punished while Obama has done nothing except for what he's best at--running his fucking mouth. Conversely to what the racists and bigots think, it is my contention that Obama's presence in the White House actually served as a distraction that PREVENTED this kind of rioting from breaking out sooner. Eventually, however, as incident after incident unfolded the pressure was going to inevitably increase to the boiling point.

In his seventh year in office, we have reached the point where Obama's America is finally approaching maturity. Thanks to the hopes he raised in order to con his way into the Oval Office and his complete subservience to a corporate America he no doubt hopes will make him a very rich man upon leaving office (as it has the Clintons), the fault lines that were already there are deepening and widening ever so slowly to the point where we are now feeling the first minor tremors presaging a potential future major earthquake that will shake our body politic to its foundations. For awhile now those tremors could be heard in the increasingly hateful right-wing rhetoric being employed against blacks, gays, Muslims and the poor. And as of today, they can now be seen in the looted stores and burning police cars dotting the streets of downtown Baltimore.

Bonus: "There was a shooting...police on my back"

Peak Oil vs The Military-Industrial Complex

I just wanted to point out to my readers an excellent essay just published by Tom Engelhardt on his TomDispatch blog that seamlessly weaves together post-9/11 trends, including militarization of local police departments, NSA surveillance, the war on terror, wealth inequality and the corrosive effects of big money on American politics. Englehardt, who has been a strong antiwar voice since the buildup to the Iraq War, concludes thusly:

In sum, we, the people, are ever less in control of anything. The police are increasingly not “ours,” nor are the NSA and its colleague outfits “our” intelligence agencies, nor are the wars we are fighting “our” wars, nor the elections in which we vote “our” elections. This is a country walking back nothing as it heads into a heavily militarized future. In the process, an everyday American world is being brought into existence that, by past standards, will seem extreme indeed. In other words, in the years to come an ever-less recognizable American way of life will quite expectably be setting in the west. Don’t be shocked.

Shocked? Hardly. In fact, to a point I agree with Engelhardt whole-heartedly--it is utterly hopeless to expect that America will ever willingly change course from its current trajectory. Ah, but that's the one little thing he's missing: willingly. Because sooner or later the ever-militarizing American future is going to run headlong into the increasingly imminent danger presented by Peak Oil (and resource depletion in general) and the somewhat less imminent but still rapidly encroaching danger of environment degradation and climate change. In short, it will be the physical forces of nature rather than politics which will eventually be America's nemesis.

So how long it that going to take? Well, dear reader, if I knew the answer to that question I would immediately abandon this blog, take the money I've saved up over my lifetime and bet the markets accordingly.

In hindsight, we can now say the peaking of conventional crude oil in the middle of the last decade almost caused a worldwide economic heart attack in the fall of 2008 (via electronic bank runs) that was only halted by the bailouts and trillions of phantom dollars being conjured up and injected by the central banks into the world financial system. At the same time, the initial Peak Oil-related explosion in world oil prices caused an all out effort to exploit unconventional oil and gas through the tar sands, fracking and deepwater drilling that had not previously been economically viable. I think it is safe to say that without all that unconventional production, we'd already be well into the backside of Hubbert's Curve and the catastrophic economic collapse many Peak Oilers anticipated back in 2008 would already be well underway.

So where does that leave us? Well, instead of oil being increasingly scarce and gasoline shooting to $10 or more a gallon domestically (as so often breathlessly predicted), we instead have a bizarre situation in which the price of the world's most important resource is now dramatically whipsawing up and down while the central bankers continue to inject their largess into the financial system. Given the insane levels of debt, sovereign and otherwise, all over the world all that is preventing if not collapse at least extreme economic chaos is continued faith in the system. And that faith in the system remains unshakable for the vast majority of the population. Not surprising, really. What other choice do they have?

What we're left with is a horrible situation in which those of us who oppose America's ever more unjust big business, war and empire policies (and, relatedly, abhor the massive destruction being wrought upon the natural environment) are left with the grim realization that the only way those policies will ever be reversed is via a worldwide economic collapse that will ultimately result in the deaths of hundreds of millions if not billions of people. And it WILL be a worldwide collapse--the global economy is far too interconnected to enable any country to escape it once it really gets rolling. The most chilling sights I saw on my cruise were the numerous giant container ship docks we anchored near and the continuous stream of such ships transiting the canal, piled high as they were with all manner of boxed up goods. Seeing that massive volume up close served as a reminder that it is virtually impossible for anyone these days to truly "unplug" from it all.

That said, anyone with any sense should not be actively rooting for economic collapse (though I'll admit I can certainly understand why one might be tempted to do so). But as Tom Engelhardt so conclusively spells out, even without a collapse in the near term future that future is going to be quite grim indeed.


Bonus: "Hubris and greed...let the fossil fuels burn. No way to keep the wings in flight...when the turbine engines don't move"

No One Wants to Host the Olympic Games Anymore

image: the ruins of the former Olympic Village, Athens, Greece

File under: Nobody Could Have Predicted.

Who's going to host the Winter Olympic Games in 2022? We're down to two finalists and this is all so exciting!

Exciting, that is, until you find out the two finalists are the last ones standing because no other city in the world wants to host the games.

Oslo, Norway announced yesterday that it was dropping its bid to host the 2022 Winter Games. Oslo was the third city — after Krakow, Poland and Stockholm, Sweden — to submit a bid and later cancel it after either public opposition or an inability to secure the combination of public and private funding necessary to stage the event. St. Mortiz, Switzerland and Munich, Germany both considered submitting bids, but the people of those cities voted against it in referenda.

So instead of taking place in a snowy, mountainous country packed with some of the world's greatest winter athletes and ranked No. 1 on the United Nation's Human Development Index, the games will be held in either Almaty, Kazakhstan or Beijing, China — two nations known for their poor records on human rights, free speech, and corruption. Beijing doesn't even have ski mountains.

Gee, and might there be another reason so many bidders are pulling out?

How we got here is pretty simple: Hosting the games has become such a massive, expensive, and unpopular chore that it's getting harder to convince anybody to do it.

Who really wants to deal with the massively unpopular International Olympic Committee (IOC), the Switzerland-based governing body that's notorious for its corruption, general awfulness, and insistence on being treated like royalty through the bidding and hosting process? Andrew Jennings of the Nation called its 100-or-so members "ideal candidates for a perp walk" and "a foul band reeking of corruption" that's overseen an Olympic bidding process that functions like an elaborate, bribe-tainted courting ritual.

So, with an utterly corrupt bidding process, potential bidders being financially strapped, voters in (still nominally democratic) countries firmly opposed to the huge costs involved, who among the world community might still be interested in hosting the Olympics?

...it's possible that we're moving toward a state of Olympic affairs in which the most eager bidders and biggest spenders are autocratic and oligarchic nations. For them, the Olympics offers a convenient way for the wealthy to further enrich themselves, for the powerful to consolidate their power, and for governments and leaders to parade their influence and relevance in front of their own citizens, and the world.

Berlin 1936 anyone...anyone? That worked out pretty well as I recall in tamping down Germany's growing lust for another major war.

But don't worry, Olympics fans, there is at least ONE major world capital interesting in hosting the 2024 Summer Games:

The effort to bring the 2024 Olympics to the Washington, D.C. region took another big step Thursday.

Local nonprofit DC 2024 launched its public website around 8 a.m. The site is one of the first public efforts to build widespread support for the Olympics bid.

"Today's announcement that a leadership team has been formed for Washington 2024 means that our region's bid to host the Olympic and Paralympic games has kicked into full gear," said Arlington County Board Chair Jay Fisette. "...We agree with Washington 2024 that this is an historic opportunity for our region to be part of the Olympic Movement."

That's right folks, it's YOUR imperial capital! Which, come to think of it, fits the definition quite well of an oligarchic city looking for "a convenient way for the wealthy to further enrich themselves, for the powerful to consolidate their power, and for (the) government and leader to parade their influence and relevance in front of their own citizens, and the world."

I really can't wait.


Bonus: Sorry, Lola, you can't run fast enough to escape this fiasco

Where I Stand on Economic Collapse These Days

Well, damn, here it is nearly two full years since my unfortunate enforced break from blogging and the economic collapse that had been one of my favorite subjects hasn't happened yet--nor does it appear to be at all imminent. In fairness to me, back during the epic debates about slow versus fast crash circa 2008-2009 in online Peak Oil forums, particularly the old Life After the Oil Crash forum, I was firmly in the camp with the slow crashers, stating at the time that I thought America (and by extension the modern Western world) would limp along until some time in the middle to late 2020s before the bottom really fell out. I still see no reason to alter that prediction, though I will admit that the oil industry has been far more successful in exploiting so-called "tight" oil fields like Bakken than I ever expected. Thanks largely to oil shale exploitation and fracking, America is right now experiencing an oil "boom" that has the cornucopians confidently predicting that we will soon surpass Saudi Arabia and Russia as the world's top oil producer.

Other Peak Oil writers such as John Michael Greer have done a terrific job of explaining why the fracking industry is just another massive economic bubble waiting to pop and kick the economy in the balls once again. I won't rehash all of their excellent work, other than to point out that if fracking was really going to "save" a highly hydrocarbon dependent economy built on the premise of cheap oil forever, how come gasoline has been priced at well over $3.00 a gallon for several years now?

I mentioned in yesterday's post that the first minute cracks are beginning to appear in the foundation of America's body politic that are indicators of a coming political disintegration such as James Howard Kunstler first suggested in The Long Emergency. And if one casts their gaze overseas, one can see even more evidence that political disintegration is becoming even more of a word wide issue as more and more nation-states, many with artificial borders created by the Western imperial powers in the previous century, are beginning to break down or otherwise fail.

Somalia turned out to leading indicator by collapsing into total anarchy back in the early 1990s. Congo followed suit a few years later with a multisided, internal war starting after it's despicable dictator, Mobutu Sese Seko, fell in 1997 that was so deadly it claimed the lives of millions and has even been referred to as the Great War for Africa. Moving forward, South Sudan finally separated itself from the fanatical Islamic freaks running the show up in Khartoum, only to almost immediately disintegrate into its own nasty little civil war. Ukraine is in flames as ethnic Russian separatists battle that country's puppet NATO government for the right to succeed, and now ISIS has risen up from the wastelands of Syria and Iraq to erase the border between those two countries as it battles for control of both of them. Heck, even Scotland is about to take a vote as to whether to become independent from the UK and as of this writing the outcome is expected to be very close one way or the other.

What every one of these conflicts have in common is that each are fueled by the desire of a whole lot of people to not want to be governed by anyone who is not of the same ethnicity, tribe or religion (or even a different sect within the same religion) as they are. Can't we all just "get along?" that great philosopher and poet, Rodney King, once supposedly asked. Sorry, Rodney, but the answer would appear to be, "fuck no."

For me the most interesting recent development here at home was that public opinion poll a couple of months ago which showed that Americans were at their most politically divided since just before the Civil War (or the War of Northern Aggression for you Southern patriots/separatists out there). Which I know is true, but I nevertheless have to shake my head in amazement at just how successful the power elite's divide-and-conquer strategy has been in this country since Reagan first got elected 34 years ago.

It's quite brilliant, really. For a generation-and-a-half, wages and quality of life in this country have been under relentless assault by a tiny group of billionaires and Wall Street tycoons who use their fortunes and control of the vast media empires to manipulate the election of a combination of rabid Republicans and compliant corporatist Democrats. This unholy cabal has done a brilliant job of manipulating everyone not in their own tax bracket into getting all foaming at the mouth about issues such as gay marriage, the pledge of allegiance, flag burning, abortion, contraception, etc., that they personally couldn't give a flying fuck about just so long as there is no political interference in their efforts to offshore jobs, slash wages, cut benefits and pauperize virtually every American worker but for a small cadre they need to carry out their bidding. Every once in awhile I get the perverse desire to stand up and slowly applaud at the sheer successful audacity of it all.

But it won't last forever. Sooner or later the scum that has risen to take total control of America will begin to lose their grip, mostly because they are so damn greedy that they don't seem to realize that a smarter strategy that would allow the party to last a bit longer would be to temper the looting of the economy ever so slightly and throw a few more crumbs to the lumpen proletariat. Thanks to their mass media lapdogs the idiots are compliantly eating the scraps out of their hands, but what happens when all the idiots have their flat screen teevees repossessed?

Given the above, I'm starting to believe that America may pull itself apart politically even before oil production plummets, although all the NSA spying and militarization of local police departments prove that the elites are going to do everything they can short of sharing the wealth to prevent it from happening. Thus am I standing by my prediction of the mid-to-late 2020s as a likely dates for collapse to really be underway, which would put it happening just after the end of Hillary's second term.

And if I'm wrong and the cancer hasn't yet come back and killed me, you can feel free to drop by here and mock me all you want.


Bonus: "It's shite being Scottish."

Why Raising the Retirement Age is No Solution to the Pension Crisis

American International Group Inc. CEO Robert Benmosche created quite a stir last week when he suggested that to alleviate the growing crisis caused by lack of adequate funding for pensions in America and Europe the retirement age needs to be raised to 70 or even 80 years of age. Benmosche’s “reasoning” was that doing so would “make pensions, medical services more affordable” and “keep people working longer and will take that burden off of the youth."

Once again, we see a prominent business “leader” who is spewing nonsensical gibberish because he doesn’t understand that we have entered the Age of Limits. Benmosche’s mistaken assumption is the same one being made by politicians and economists all across the political spectrum—that sooner or later exponential growth is somehow going to return to the western economies and allow us to keep our unsustainable economies functioning as they have indefinitely.

Are pensions and government old age benefit plans like Medicare and Social Security in a dire financial crisis? Certainly. Is supporting the older generations in retirement one of the biggest financial burdens facing young adults these days? Absolutely. But here’s the problem that Benmosche seems completely blind to: if you raise the retirement age and force older adults to work longer, there will be even fewer decent paying jobs available for the younger generations.

I’ve made reference several times before to Laurence J. Kotlikoff and Scott Burns’s prophetic 2004 book, The Coming Generational Storm, in which the authors warned that the shrinking of the ratio between working age adults and retirees was going to cause a long term financial crisis in public and private retirement programs of every type. The book was published during the height of the go-go housing bubble years when for most people the idea of such a looming fiscal crisis was incomprehensible. A mere eight years later, thanks to the financial crisis of 2008 combined with the effects of peak oil and resource depletion, the Category 5 generational storm is coming ashore much faster than even Kotlikoff and Burns anticipated.

In America, the total number of jobs peaked in December 2007 and remains several million below that figure after a couple of years of anemic job growth. Even if the phony “recovery,” propped up by the insane easing and interest rate policies of the Federal Reserve and the unsustainable levels of federal government deficit spending, allows the economy to remain in its current state of aimless malaise and not crash again, it will take America many more years just to get the number of jobs back to where it was four-and-a-half years ago. Moreover, many of the newly created jobs pay far less and have fewer benefits of those that were destroyed during the financial crisis.

In the Age of Limits, raising the retirement age and reducing the number of jobs available for young adults would have a negative ripple effect all through the economy. Most importantly, the younger generation will not be able to afford to buy houses, thus placing even more downward pressure on an already cratering housing market. The young adults also will not be able to afford to buy much in the way of consumer goods, which is really bad news as the basic marketing strategy for most companies is to get consumers hooked on their products when they are young and make money off of them throughout their working lives. Even more ominously, already falling birthrates will become even more depressed as young adults, particularly the college educated, defer marriage and childbirth, meaning that an already critical demographic crisis will be exacerbated and the ratio of those of working age to retirees will fall even more dramatically in the future.

So what is the solution to all of this? The only way we could even hope to address this crisis is if everyone—young, old and middle aged—recognizes that we have entered the Age of Limits and that we all need to lower our expectations and greatly reduce our level of consumption and energy usage. At this time, however, I see no evidence that such a realization is ever going to take hold among any more than a very tiny fraction of the population. As a result of this lack of awareness and refusal to acknowledge reality, the generational storm is going to continue to increase in ferocity, and by the time it finally passes decades from now it will have completely washed away our unsustainable fossil fuel based way of life.

Q: What Happened to the Economic Recovery? A: There Never WAS a "Recovery"

Sometimes the stupidity that spews forth regarding the economy is so strong that it literally makes my head hurt. Case in point was a story published on Thursday by Talking Points Memo with the title, "What Happened to the Economic Recovery?" I should have ignored it and just gone about my business as I no doubt would have been happier that way, but because TPM is a opinion and investigative journalism site that represents mainstream liberal and progressive "thinking" I just couldn't help myself.

Things started off on the wrong foot right out of the gate in the first paragraph:

For several months starting late last year, it looked like Morning in America was finally back upon us. Unemployment claims were dropping dramatically, businesses were adding hundreds of thousands of jobs, and it looked like the country was in the midst of a self-sustaining economic recovery.

Morning in America? Even putting aside the recent zombie hysteria, the last four years have looked to anyone who is actually paying attention to be closer to Dawn of the Dead. It's been a "zombie recovery," propped up by the insane loose money policies of the Federal reserve combined with an unsustainable level of federal deficit spending.

So why the laughable reference to the tired old Reagan campaign bromide?

Some economists saw a boom coming. They believed years of depressed economic activity had created a huge pent-up demand for automobiles, housing, and other major purchases. The spending dam was about to burst. This is the business-cycle theory of how recessions end on their own. Eventually, stuff needs to be replaced.

I guess "some economists" missed the rather glaring data which has shown that American households literally lost trillions of dollars in home equity and stock values in the wake of the 2008 crash, and that overall employment levels remain mired well below the December 2007 peak. The basic rule is so simple that I can't believe I have to say it: people can't spend money if they don't have money to spend and are not creditworthy enough to borrow it. No doubt the brief boomlet probably represented some still employed people making previously deferred purchases, but quite obviously there are not enough such people to make the "recovery" sustainable.

So, who are these "some economists" and why did they blow this call so dramatically?

But the surge didn’t last, and just as quickly as the economy grew, it slowed back down again.

Now one of the forecasters who publicly predicted a sustainable recovery says a combination of economic headwinds and poor timing pre-empted a turn toward high growth. More importantly, he no longer believes the ingredients for swift growth exist to turn the country around quickly.

“The factors are still there but my confidence that they’ll come together and burst into a big ramp up and drive the economy into equilibrium — I’m much less sure about that now,” said Karl Smith, an economist at University of North Carolina at Chapel Hill’s School of Government, and author of the blog Modeled Behavior in a Wednesday telephone interview.

A few months back, Smith believed the economy was poised for a breakthrough. Rents were soaring, as were used car prices — both signs of pent-up demand — and that presaged a simultaneous boom in new car sales and apartment development. It didn’t quite sync up.

“What I think I missed was how fast multi-family housing would be able to ramp up,” Smith admits. “it was at a much gentler pace than I thought … So that’s been delayed. We’ve seen maybe a 60 or 70 percent rise, but we’re not back to the level we were before the crisis despite the huge number of renters we have.”

But to really make the transition from slow to rapid growth, many economic waves have to crest simultaneously.

Excuse me, but RENTS were soaring and USED car prices were rising? THAT'S what led dimwitted economist Karl Smith to predict a strong recovery? Has this moron been asleep for the past 30 years? Americans don't rent apartments and buy used cars when they are feeling flush, they BUY HOUSES and BRAND NEW CARS, preferably McMansions and big ol' gas guzzling Minivans and SUVs. Instead of these trends portending a recovery, they more likely indicated a segment of financially stressed but still employed workers, perhaps those that found lower paying jobs after having been laid off and spending time on unemployment, permanently lowering their expectations. And THAT doesn't signal a recovery but much more trouble ahead for the economy.

But don't worry, Smith has a handy set of excuses for why he was wrong:

Outside forces didn’t help. State and local government worker layoffs continued, the crisis in Europe re-emerged, and Fed officials signaled weak commitment to fostering the recovery.

“As things started to pick up in the beginning of the year, [Fed officials] started talking about how they may have to raise rates earlier,” Smith said. “That did give a sense to people in the financial markets that credit could really start tightening. That could be part of the reason why housing and apartments had a harder time finding financing. I don’t think everything was going to be great if that hadn’t happened, but they contributed another headwind. It was shockingly unhelpful.”

Absent some new catalyst, Smith says it’s hard to imagine the economy will jumpstart itself.

“The European situation is only going to be a headwind in the opposite direction, so we’d need a bigger kick.”

I realize that as a lonely blogger sitting on the couch in my basement I am but a mere pimple on TPM's ass, but nevertheless I would like to offer them some advice. The next time they decide to do an article about the state of the economy, they might be much better served if they didn't completely rely on an interview with a supposed expert who just admitted that he doesn't have a clue as to what the fuck he's talking about.


Bonus: The real morning in America

Nazi Germany’s Example and the Future of America (Part 2)

In the first part of this essay last Friday, I briefly recounted the history of Nazi Germany’s final years and how Hitler’s government managed to stave off collapse well past the point where the world war became a hopeless quest by marshalling all of the resources still available to the nation. The takeaway is that even though the inevitability of eventual collapse may have been as apparent to any rational observer then as it should be in America today, when it comes to extending the status quo for as long as humanly possible, rationality usually finds itself locked out in the cold.

In part two, I would like to examine what life is like for an average citizen living under a regime that is beginning to see its delusions of grandeur crumbling into dust. Once again, we can look to Hitler’s Germany for clues as to what our own future may well hold. Many people with only a superficial grasp of Nazi Germany’s history seem to have the idea that Hitler simply took power, snapped his fingers, and unleashed the Holocaust. The reality, however, is far more complex. Though life for Germany’s Jews was certainly precarious once Hitler was appointed Chancellor in 1933, their situation in fact only slowly deteriorated and it was not until 1942—more than two years after World War Two began—that the Final Solution became the official policy of the German government. In fact, by the time Reinhard Heydrich called the Wannsee Conference in January of that year, sealing their fate once and for all, the tide of war was already beginning to turn inexorably against the Nazis.

The lesson here is again fairly simple: governments become more repressive during times of national crisis, and that repression increases as the situation becomes more desperate. Looking back at some of the greatest assaults on individual liberties throughout American history—the Alien and Sedition Acts in the late 1790s, the suspension of Habeas Corpus during the Civil War, the imprisonment of antiwar protestors during World War I, the Palmer raids during the first wave of Red scares, the internment of Japanese-Americans during World War II, the McCarthy hearings early in the Cold War, the Kent State shootings when the Vietnam War had become a hopeless quagmire and waterboarding, rendition, and warrantless wiretapping during the “War” on Terror—shows that they all occurred at a time when America was either actively at war or feared it was about to be attacked.

What is even more illustrative than the Holocaust in the case of Nazi Germany is the repression the regime unleashed against many Aryan Germans once defeat became inevitable. The Nazi regime was built on terror, of course, and many communists, labor unionists, Social Democrats and others deemed “undesirable” were rounded up after Hitler’s ascension to power to be beaten and tortured in the first concentration camps. What is less well remembered is that after the regime had successfully placed its boot heel on the necks of the German populace, many of the concentration camp inmates were released, and by the late 1930s, only a relatively small number of Germans were still suffering “indefinite detention.”

The fact is, if you were a non-Nazi “Good German” during this time—law abiding, able bodied, willing to work and not too vociferous in your complaints about the nation’s leadership—the first seven years or so of Hitler’s rule must have seemed like a glorious time to be alive. Even after Hitler launched the war and chronic shortages of nearly every consumer good became endemic, for awhile you could at least take national pride in the seemingly never ending stream of German military successes. In fact, unless you were one of the unlucky souls slogging it out in the brutal combat of the eastern front, it was only after the defeat at Stalingrad and the appearance of American and Royal Air Force bombers overhead with relentless regularity that your quality of life really began to suffer.

The Nazi leadership was not blind to this importance of morale on the home front. Because one of the key memes used by Hitler during his rise to power was the so-called “stab in the back,” when the “traitors” supposedly turned on Kaiser Wilhelm at the end of World War One, the SS’s intelligence service was forever monitoring the mood of the population, determined to stamp out any such “insurrection” before it had a chance to threaten the regime. By 1944, an ill-advised casual joke told about Der Fuhrer overheard by the wrong person could result in its teller being swiftly bundled off to a concentration camp.

Worse still, by early 1945 when the Russian tanks were already closing in on Berlin, fervent Nazis took to the streets and began summarily hanging anyone they considered to be a “defeatist” or a “deserter.” One might view their actions in light of the looming total defeat as insanity, but they did ensure that the German people continued to at least passively accept the regime right up until the very moment when their own city or town was “liberated” by the Allies.

Just as many Nazis refused to accept the approaching reality that their nation had been totally defeated in war, most Americans today refuse to accept that our “way of life” is not only negotiable but in fact completely unsustainable and already unraveling. From this perspective, it is hard not to hear someone spout the idiotic phrase, “Drill, baby, drill” without thinking of how it in spirit resembles the “Horst Wessel Song.”

While it is hyperbolic to say that America is already an authoritarian regime, it is not too difficult to see where the trends of this past decade are heading. As our economic decline continues we can expect that there will be a corresponding increase in the curtailment of individual liberties. The supreme irony is that as growing energy restraints force the Pentagon to begin dismantling its overseas empire of military bases, political repression will likely be increasing here at home.

That doesn’t mean, however, that you should expect to wake up one day and see a squadron of jackboots goose-stepping down your street. When overt repression finally comes to American streets and towns beyond putting down Occupy protests it will more likely be, as we are starting to see already, in the form of electronic monitoring, internal check points and surveillance drones, augmented by a healthy number of informants planted among the citizenry. Don’t be surprised if “hoarding” gets placed on the list of “subversive” activities, which is all the more reason preppers would be well advised to keep their activities as low key as possible.

The most amusing thing about many Americans’ messianic belief in our “exceptionalism” is the idea that this country is somehow different in behavior than any other nation-state or empire in world history despite all of the evidence to the contrary. As the reality of our predicament becomes more and more undeniable in the coming years, we’re about to find out that many of us have merely been “Good Germans” all along and that being so won’t save us from inclusion in the eventual Gotterdammerung.


Bonus: From my You Tube channel - A cool song about domestic spying (yes, really)

Nazi Germany’s Example and the Future of America (Part 1)

I’ve always been an avid history buff, with a particular fascination for the peculiar and tragic trajectory of Germany during the years 1919-1945. Part of it has to do with my German heritage, but there’s also a voyeuristic aspect to it—I mean, how can one’s attention NOT be drawn to the spectacle of history’s greatest national train wreck?

Despite my obsession with all things National Socialist, however, I usually try to avoid making Nazi Germany analogies when writing about current events. It’s been my experience that most people who make such comparisons have no more than a superficial understanding of Adolf Hitler and his movement, and throwing out the charge that someone you disagree with is a Nazi is the quickest way to shut down any reasoned debate. For example, no American leader that has appeared on the scene as yet (no, not even George W. Bush) has earned being mentioned in the same breath with Hitler, and those who engage in such frivolous name calling never seem to notice that a modern day Gestapo doesn’t then immediately break down their door and haul them off to a concentration camp, as WOULD likely happen if we really were experiencing the second coming of the Third Reich.

Nevertheless, there actually are some parallels that can be usefully examined between Hitler’s twelve year reign and what is happening in America today. First and foremost is the prevailing attitude of “exceptionalism” that exists among the respective ruling classes of each country. The Germans of the 1930s really believed that Germany’s destiny was to rule most of Europe if not the world, and in their hubris they failed to recognize that however much the Nazi regime was able through extensive propaganda and intimidation to stifle dissent and get the vast majority of the population working towards that goal, Germany’s geopolitical situation—particularly the fact that a lion’s share of the world’s known oil reserves at the time were controlled by its two biggest potential enemies—was in fact going to make such a conquest impossible.

America today, of course, faces a much subtler but no less limiting reality—that the worldwide production of oil and other resources needed to continue growing our mammoth-sized economy and hence maintain our global military hegemony is peaking and soon to go into irreversible decline. Just as the Germans stubbornly refused to acknowledge that the combined economic and military might of the U.S. and the U.S.S.R. was going to be impossible for their nation to defeat in a global conflict, America’s “leaders” today are just as determined that maintaining a military presence on every continent and in every ocean is not a policy subject to natural limits.

Though obviously much shorter lived, the German empire built by the Nazis followed a trajectory very similar to our own. Germany in the 1930s went through a period of rapid expansion not all that dissimilar to how America aggressively conquered a continent and then began expanding its reach overseas. The amount of physical territory acquired by Germany didn’t actually peak until 1942, at the time of its greatest advance on the eastern front but well beyond the point where its battlefield successes were going to be sustainable in the long run. Likewise, America’s “Operation Barbarossa” moment came in the wake of 9/11 when the Bush administration decided to double down on America’s planetary hegemony by launching two wars of choice in the Middle East while simultaneously expanding both our military presence around the globe and the national security state here at home. Ten years later, the national debt has nearly tripled in size and we have already passed the point where our “successes” at expanding the reach of the empire during the War on Terror will be sustainable in the long run.

For purposes of this discussion, however, it is far more telling to examine what happened in Germany once it should have become obvious to even the most thickheaded Nazi that the country was dangerously overextended and a day of reckoning was rapidly approaching. By early 1943, Stalingrad had been recaptured by the Soviets, all but sealing the eventual fate of the German armies on the eastern front. U.S. and British planes were making frequent appearances in the skies above German cities, wreaking havoc with their bombing raids. Later during that same year, allied armies also invaded Italy, causing the government of Germany’s most important European ally to collapse. Any realistic analysis of the military situation at that point would have concluded that Germany’s prospects of winning the war were hopeless and the Nazi regime was doomed despite the fact that the country still controlled a vast amount of territory.

And yet, under new Armaments Minister Albert Speer the years 1943 and 1944 were the most productive for Germany in terms of producing munitions for the war effort, despite the frequent air raids that battered the factories and killed and maimed many of those who worked in them. How did the Germans accomplish this? Resorting to slave labor was part of the answer, but more importantly, despite its increasingly hopeless situation the Nazi government was able to marshal all the nation’s remaining resources into preventing collapse for as long as it could possibly be prevented.

The lesson for those of us in the reality based community who are reading the many indicators pointing towards a future collapse of the United States is quite apparent: governments that find themselves backed into a corner are capable of putting forth extraordinary efforts in attempting to stave off the inevitable. There has been a lot of speculation that one day the whole system is just going to lock up—gas stations will run dry, the supermarket shelves will be quickly emptied and the electrical grid will stop functioning—causing mass panic, especially in the cities. The experience of the Germans who lived through the Nazi period shows that such an overnight unraveling is extremely unlikely and that a government that still has resources available to it will use those resources to prevent a fast collapse at all costs, even if the effort merely prolongs the agony.

Make no mistake—it might be the Nazi Germany equivalent of early 1943 in America today, but on the whole our country still has a tremendous amount of resources available to it. Even if foreign supplies of oil were cut off completely, there would be enough domestic production (to say nothing of Canadian production) to support a functioning government. The nation is also still blessed with a huge amount of agricultural land, meaning that mass starvation is unlikely so long as the government can ensure that enough of the remaining oil supplies are dedicated to food production.

Obviously, such a scenario would require a greatly reduced standard of living on the part of the average American, something we would not expect to happen without considerable domestic unrest. How the American government is likely to react to that eventuality and deal with a discontented population will be the subject of part two of this essay to be published on Monday.


Bonus: From my You Tube Channel - "Don't want to live vicariously...in a virtual reality...shopping malls and prison walls all look the same to me"

Metals Thefts Spike More Than 450 Percent In Baltimore County

This is a good companion to the story I posted Sunday about the 70,000 pounds of copper wiring being stolen from a Seattle light rail system. Here is a local Maryland radio station with the details:

Baltimore County Police have set up a special team to investigate the spike in thefts of metals.

Chief Jim Johnson has created a Metals Theft Team. He tells WBAL Radio that since 2009, there has been a more than 450 percent increase in metal thefts in the county.

Johnson says aluminum bleachers, poles and products are also been stolen, dismantled and scrapped.

"What we have experienced in the past is a lone individual perhaps stealing a few pounds of copper. Today, we are seeing a more sophisticated network of copper thieves and middle men holding the copper and watching for an increased copper commodity price on the global market and they then move the products," says Johnson.

The police department has teamed up with BGE to try and create more awareness around the theft of metals. Chief Johnson says BGE is now going to paint their copper wires lime green color to make it more identifiable when it is moved through a scrap processor.

Chief Johnson says the police department is receiving cooperation from scrap metal processors in the area.

He says that four years ago copper was going for about $2.50 a pound compared to the last year when it reached $4.80 a pound.

Johnson says its expensive for owners to replace copper gutters for example if those are stolen from a home.

The police department is asking residents to take photos of their metals items around the house that may be stolen to help if authorities are called to investigate. In addition he says citizens can watch out for any suspicious activity involving trucks and scrap metal.

Chief Johnson says the issue is not just local but on a national level.

Sounds to me than in its increasing economic desperation, this country is literally tearing itself apart.

Collapse Is All Around Us

My Blogger colleague over at The Hipcrime Vocab wrote an outstanding piece back on April 29th called, "What If A Collapse Happened And Nobody Noticed?" basically asserting that those in the reality based community who have been patiently waiting around for the collapse to begin should instead just take a good look around them. The whole post is fairly lengthy and well worth reading in its entirety, but concludes thusly:

People often wonder if the Romans knew at the time that their society was collapsing. Even if some intelligent and literate Romans did recognize it, could they have done anything about it? We who know better at least know that we are on our own to deal with this. You know the truth. You don't have to flee to a bunker, and you don't have to die off either (of course we all will someday, but that's a different story...). Don't wait for politicians to tell you the truth about austerity, because they never will. You can see that this engineered collapse is exactly what we've been fearing all this time. No reason to fear the collapse-look around, you're already living though it even as you read these words, and you're presumably still here. Take a deep breath. Relax. Have a beer. Listen to some music. No Zombies Required.

It's a point I've been trying to make around here, but don't think I have ever expressed nearly as well in a single post. It also got me motivated to get off my behind and do something I've been meaning to do for awhile now. Namely, go and document the evidence of collapse that lies right outside my own doorstep.

But first, a little background. I live in Fairfax County, Virginia, a well-to-do suburban burg that lies just west of the Capital Beltway outside Washington, DC. Fairfax County has long sat near the top of the list of wealthiest counties in the country on a per capita income basis. Thanks to the close proximity of the federal government, to say nothing of being the headquarters for a galaxy of Beltway Bandit government contract companies, unemployment around here has remained well below the national average all through the Great Recession, and home values didn't take nearly the hit locally that they have elsewhere. If one is living around here and is particularly numbed by the desensitizing effects of the Hologram, one might actually be forgiven for not recognizing that there is anything unusually bad going on with the economy right now.

Yet the little signs of economic collapse ARE there. All you have to do is open your eyes to them. For instance, one would think a jurisdiction as wealthy as Fairfax County would have little trouble keeping its roadways and public spaces in good order, but one would be wrong about that. Since 2008, the overall condition of the streets and roads around here has deteriorated considerably. More dramatically, the county apparently no longer has the money to keep the medians well mowed. I've lived here for 20 years, and prior to four years ago the grassy center strips were always immaculately kept, maintaining an appearance befitting a large upper middle class enclave.

To show you what I mean, this past weekend I left my house and walked exactly one block out of my subdivision and onto the main roadway that passes by our community. The following series of pictures documents what I see everyday whenever I leave to go anywhere:

What you are looking at in the photograph above is waist high weeds that have been allowed to grow completely unkempt on the roadway median. And this is not some rural highway, but basically a four lane divided street running through the middle of a residential neighborhood. Note the two houses visible on the left. Those are two brand new, hideously ugly McMansions that have been built just in the last year--the second of which is still under construction. My guess is that each of them probably cost around three quarters of a million dollars despite being placed on quarter acre lots right on the main roadway. What you see in the picture is not an aberration, but is instead typical of how similar roadways now appear all over Fairfax County.

For this second shot, I merely turned around and faced the other way. Here you can see the deplorable condition of the street surface, in which the county has now taken to literally putting patches on top of patches. This street has not been resurfaced in a at least 10 years, and this is what is happening as a result. It also is not an aberration. Although there is still street resurfacing going on in Fairfax County, these days it isn't happening nearly fast enough to keep up with the widespread deterioration of the roadways.

This last shot gives some perspective as to just how high the weeds on the median really are...basically up to above the hood level of the car passing on the opposite side of the roadway. This problem is so bad that there are actually intersections where you have to be careful when making a left hand turn because you can't easily see the oncoming traffic. That's not to say the county won't have this mess mowed at some point this year. Last summer, I think they actually did it twice when the weeds got really bad, and each time left huge mounds of clippings strewn everywhere afterwards.

Again, prior to 2008, you never saw any of this. The medians were mowed probably about as regularly as most people mow their own front lawns. I should also again emphasize that this is happening in a community that has a huge tax base and a very high property tax rate. I can only imagining what is happening in the less affluent areas of the country.

So there you have it...evidence of collapse documented with about ten minutes worth of effort on my part. It took more than twice that amount of time for me to write this post. I will bet that everyone who reads this will upon reflection now notice similar examples where they are. For it should be pretty obvious by now that collapse is not some distant future event, but something that is already happening all around us, every single day.


Bonus: "Crazy guy with a matted beard standing on the corner...shouting out 'End Times Are Here!' but nobody notices...but I can hear him loud and clear"

Thieves Steal Four Miles Of Copper Wire From Seattle Light Rail Line

I've posted stories here before about copper thefts, but this one really takes the cake. Here is the Seattle PI.com with the details:

Thieves stole 70,000 pounds of copper cable from Sound Transit's Link light rail line between Tukwila and Sea-Tac Airport, the agency reported Friday.

Thieves ripped the wire from inside an elevated guideway that supports the tracks, probably over the last several months. From end-to-end, about four miles of cable was stolen, Sound Transit spokesman Bruce Gray said.

"This isn't something that would have been done overnight," Gray said. "Whoever did this knew what they were going after and had some sophisticated knowledge of how to get in."

The wire runs along the guideway's hollow interior to protect it from low-level electrical current that strays from the rails, and directs it to the ground. The current would otherwise corrode the structure's rebar over time, Gray said.

Grounding for the train's power line is run separately. At no time was train service affected or the public in danger, Gray said.

Maintenance workers discovered the missing wire Thursday during track inspections. One worker noticed something out of place and went for a closer look.

While workers walk the tracks twice a week for inspection, the guideway's interior is inspected only once a year, Gray said. Thieves took advantage of that.

"There could be trains running overhead and track walkers out on top and they would never know someone was inside," Gray said.

The stolen wire probably was cut into segments of two or three feet in length, he said.

Make no mistake about it, this is the type of crime that happens to a society undergoing collapse. Whatever else you might say about whomever committed this crime, they are nothing if not industrious. It took a lot of hard work to pull this off. People clever enough and hardworking enough to get away with such a scheme wouldn't be risking going to prison like this if there was a more gainful way for them to make a living.


Bonus: "The sound of a train not running has been keeping me awake"

Retired Couples Need $240,000 Just To Cover Health Care Costs

Here is a good companion story to the one I posted yesterday about how nearly half of all Americans have no retirement savings. The Consumerist has the details:

If you and your loved one are looking down the road toward living out your golden years together, be prepared to have a pile of cash stashed away to cover your medical bills.

Fidelity Investments has released its annual projection on health care costs for retirees and calculated that a couple retiring now will need $240,000 to get through their remaining decades. That's an increase from last year's projection of $230,000.

The bank had cut the number for the 2011 report, citing portions of the Affordable Care Act that should reduce seniors' out-of-pocket expenses for prescription drugs. But Fidelity says medical costs are still going up, thus the rebound from last year's unprecedented dip.

"As long as health care cost trends exceed personal income growth and economic growth, health care will still be a growing burden for the country as a whole and for individuals," says Sunit Patel, a senior vice president for benefits consulting at Fidelity.

Let's see, the average couple is going to need nearly a quarter of a million dollars to cover their health care costs in retirement, and yet half of all American adults have no retirement savings of any kind, let alone for health care.

This will not end well.


Bonus: From my You Tube channel, "Doctor, my eyes...Tell me what is wrong...Was I unwise to leave them open for so long?"

49% Of Americans Aren't Saving For Retirement

From the No Shit, Sherlock Network CNN, here comes a report that shows just how dire our collective long term economic predicament really is:

America has a serious problem saving for retirement.

About 49% of Americans say they aren't contributing to any retirement plan, according to a new survey conducted by LIMRA, a trade association for the financial services industry.

"The findings from this survey were disturbing, given that people will increasingly need to rely on their personal savings to make ends meet in retirement," said Matthew Drinkwater, associate managing director at LIMRA's retirement research division.

People ages 18 to 34 are the least likely to be saving, with 56% reporting that they are not currently contributing to a retirement plan like an IRA or a 401(k).

"In order to have the adequate savings necessary to meet their financial needs in retirement -- which could last 20 or more years -- it is critical that these individuals begin saving systematically early in their working years," Drinkwater said.

So what is the reason that so many people are being so neglectful in preparing for their future?

Nearly half of consumers said they aren't planning to contribute to an IRA because they can't afford to, and only a quarter of Americans have worked with a financial professional to plan for retirement, the survey found.

In order to "work with a financial professional to plan for retirement" you gotta have something to plan WITH. If you don't have jack shit, you can't very well make a plan with it. What's maddening is just how much difficulty the mainstream media seems to have in grasping this basic concept.

The Type 2 Diabetes Epidemic Among Young People Is A Calamity Just Waiting To Happen

At first glance, this story that appeared on CBS News over the weekend seems to be yet another depressing reflection on just how few people seem to give a damn that their unhealthy lifestyles are not only slowly killing them but their children as well:

There is a growing epidemic among American children, and now there is a new recommendation on how hundreds of thousands of those kids should be treated.

The problem is type 2 diabetes, and it is a problem that is confounding more doctors, families, and health care professionals every day.

CBS News correspondent Tony Guida reports type 2 diabetes was never seen in young people as recently as 15 years ago. Now it's occurring with alarming frequency. Doctors know that a major risk factor is obesity. Beyond that, they were mostly in the dark about this disease.

"Very little is known about the right way to both prevent it and treat it," said Dr. Robin Goland.

A new study out today in the New England Journal of Medicine finds that the standard treatment for type 2 diabetes in children is ineffective because the commonly prescribed drug Metaformin - effective in adults - has a high failure rate in children. Still, a combination of two diabetes drugs is far more effective in treating young people.

"Two drugs right off the bat, that's an important finding," Goland said.

It is important because type 2 diabetes appears to be more aggressive in young people between the ages of 10 and 17, putting them at great risk for life-threatening illnesses typically associated with seniors.

"We want them to grow up and have healthy lives and not be having heart attacks and strokes at terribly young ages," Goland said.

When it comes to preventing type 2 diabetes, more exercise and a healthier diet are key, but doctors know young peoples' habits are tough to change.

"The first surprise that we saw was, number one, how incredibly difficult it was to effect lifestyle change in these children, in these youth that have type 2 diabetes," said Dr. Kenneth Copeland.

Well, of course it is going to be difficult to effect a lifestyle change in those children. If their parents aren't willing to MAKE them change their habits, its a hopeless cause. Right here I could get up on my soapbox about parental responsibilities and and our mindless teevee-dominated culture that has created a generation of fat, slovenly couch potatoes and blah, blah, blah. If you're looking for that kind of commentary, read Karl Denninger's take.

Instead, I'll boil my reaction down to one very simple observation: what in the hell is going to happen to these kids and their parents when our unsustainable health care system starts to break down within probably the next few years? Not to mention that when energy prices become prohibitively expensive, suddenly these wheezing, waddling fools won't be able to rely on their cars and all of the gadgets that make their lives so effort free. I don't think it takes too much imagination to realize that there are many millions of people who are going to be is deep trouble from a health standpoint long before the collapse finally comes.


Bonus: "I hope that you got fat...'cause if you got really, really fat, you might just want to see me come back"

"My Faith Based Retirement"

Since it is Sunday, I'm going to take a break this morning from writing a longer post and instead allow op-ed columnist Joe Nocera do the talking from a column published on Friday in the New York Times:

My 60th birthday is less than a week and a half away, and if there is one thing I can say with certainty it’s that 60 is not the new 50.

My body creaks and groans. My eyes aren’t what they used to be. I don’t sleep as soundly as I did just a few years ago. Lately, I’ve been seeing a lot of doctors, just to make sure everything still more or less works.

I’ve also found myself with a sudden urge to get my house in order — just, you know, in case. Insurance, wills, that sort of thing. Sixty is when you stop pretending you’re going to live forever. You’re officially old. Or at least old-ish.

The only thing I haven’t dealt with on my to-do checklist is retirement planning. The reason is simple: I’m not planning to retire. More accurately, I can’t retire. My 401(k) plan, which was supposed to take care of my retirement, is in tatters.

Like millions of other aging baby boomers, I first began putting money into a tax-deferred retirement account a few years after they were legislated into existence in the late 1970s. The great bull market, which began in 1982, was just gearing up. As a young journalist, I couldn’t afford to invest a lot of money, but my account grew as the market rose, and the bull market gave me an inflated sense of my investing skills.

I became such an enthusiast of the new investing culture that I wrote my first book, in the mid-1990s, about what I called “the democratization of money.” It was only right, I argued, that the little guy have the same access to the markets as the wealthy. In the book, I didn’t make much of the decline of pensions. After all, we were in the middle of the tech bubble by then. What fun!

The bull market ended with the bursting of that bubble in 2000. My tech-laden portfolio was cut in half. A half-dozen years later, I got divorced, cutting my 401(k) in half again. A few years after that, I bought a house that needed some costly renovations. Since my retirement account was now hopelessly inadequate for actual retirement, I reasoned that I might as well get some use out of the money while I could. So I threw another chunk of my 401(k) at the renovation. That’s where I stand today.

When I related my tale recently to Teresa Ghilarducci, a behavioral economist at The New School who studies retirement and investor behavior, she let out the kind of sigh that made it clear that she had heard it all before. The sad truth, she told me, is that I’m the rule, not the exception. “People have income shock, like divorce or loss of a job or a health crisis,” and those crises tend to drain retirement accounts, she said.

But even putting income shocks aside, she said, most human beings lack the skill and emotional wherewithal to be good investors. Linking investing and retirement has turned out to be a recipe for disaster.

“People tend to be overconfident about their own abilities,” said Ghilarducci. “They tend to focus on the short term rather than thinking about long-term consequences. And they tend to think that whatever the current trend is will always be the trend. That is why people buy high and sell low.”

Because I don't want to reprint the entire article, I'll now flash forward to the money quote, so to speak:

What, then, will people do when they retire? I asked Ghilarducci. “Their retirement plan is faith based,” she replied. “They have faith that it will somehow work out.”

In yesterday's post, I asserted that people who have bought houses in the past couple of years in the mistaken belief that the "bottom was in" on the housing market are like sheep being led to the slaughter because of their blind optimism. This column makes it plainly apparent just how widespread the problem really is. Obviously, I don't know Joe Nocera, but if he is writing op-ed pieces for the New York Times he must be a pretty smart guy. If he got tripped up by his own stupid blind faith, what hope is the for the average mope?


Bonus: I may end up linking to every song on this album before its all over

Housing Crash Porn: One Million More Suckers Now Underwater

It is an established fact that one of the biggest drivers for the insane monetary policies of the Federal Reserve since the financial crash of 2008 was trying to save the crashing housing market. The Fed's zero interest rate policy has driven mortgage rates to historical lows below 4%, while the bank bailouts were designed, in part, to give lenders the capital to continue making home loans so the market wouldn't implode completely. The results have been, shall we say, less than impressive given that home sales and home prices remain mired near their post crash lows.

As if record low mortgage rates were not enough to entice buyers back into the market, in the media there have been repeated calls that "the bottom is in" on housing as a means of trying to convince people that they are no longer risk of losing money on their "investment." So how is the second part of the strategy to save the housing industry working out? Not too well, actually. Here is Reuters with the details:

More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame.

That figure, provided to Reuters by tracking firm CoreLogic, represents about one out of 10 home loans made during that period.

It is a sobering indication the U.S. housing market remains deeply troubled, with home values still falling in many parts of the country, and raises the question of whether low-down payment loans backed by the FHA are putting another generation of buyers at risk.

As of December 2011, the latest figures available, 31 percent of the U.S. home loans that were in negative equity - in which the outstanding loan balance exceeds the value of the home - were FHA-insured mortgages, according to CoreLogic.

Many borrowers, particularly since late 2010, thought they were buying at the bottom of a housing market that had already suffered steep declines, but have been caught out by a continued fall in prices in wide swaths of America.

Even for loans taken out in December - less than four months ago and the last month for which data is available - nearly 44,000 borrowers, or about 7.5 percent of the total, now find themselves under water.

"The overwhelming majority of the U.S. is still seeing home prices decline," said CoreLogic senior economist Sam Khater. "Many borrowers continue to be quickly wiped out."

The problem is not uniform around the country. In some areas, such as Washington, D.C., Miami and parts of northern California, prices are on the rise.

CoreLogic predicts the overall U.S. housing market will finally bottom out this year.

And the number of homeowners falling under water each month has decreased significantly since the peak of the financial crisis in 2008 and early 2009.

Still, Khater said, since October 2010 average home prices have fallen 7.4 percent. Overall, CoreLogic data shows that 11.1 million, or 22.8 percent, of U.S. residential properties with a mortgage are in negative equity, unchanged from the summer of 2010.

According to the S&P/Case-Shiller 20-city composite index, which tracks home values in 20 major U.S. metropolitan areas, U.S. home prices were down 3.5 percent in February from a year earlier and are now at their lowest level since late 2002. Over the past 12 months, 15 of the 20 major metropolitan areas monitored saw declines.

We in the reality-based community have, of course, been warning for years that anyone who believed the hype from the politicians, the media and corporate America about the phantom housing recovery were like sheep waiting to get sheared. Meet one of the lambs:

Jason Opalka took out an FHA-backed loan on his two-bedroom property in the suburbs of Orlando, Florida, in August 2010. He was helped by Certified Mortgage Planners of Orlando, who negotiated the FHA-backed loan with the lender, Freedom Mortgage, based in New Jersey.

Opalka was refinancing another FHA-backed loan he had obtained in 2008, for $196,000, then at an interest rate of over 6 percent.

Under the refinancing, he borrowed $192,278 at an interest rate of 4.5 percent. Opalka, looking at the paperwork, is still surprised at the down payment he had to make in 2010, for a property valued at the time for little more than the loan was worth and in which he had almost no equity.

His down payment was just $3,000 - or about 1.5 percent of the total loan.

Less than two years later, local real estate estimates now value Opalka's home at no more than $110,000.

"I'm at least $80,000 under water," Opalka told Reuters. "We never expected to go under water. We never expected prices to fall like they have. We definitely didn't see this coming. If I'd known this, we probably would have rented."

Just how many times do people have to get beaten over the head after listening to the mainstream media before they finally wake up and realize that they are being played for suckers? It is bad enough that the snake oil is being peddled by the real estate industry. You would expect that, and if you have any common sense you won't trust a Realtor or a mortgage broker any more than you would a used car salesman. But having the federal government be complicit in the scam just makes it all the worse.

We have arrived at the point where all of the biggest frauds preying upon working and middle class families are now a combined effort of the banks, big corporations and the federal government. Mortgages and student loans are just two of the largest such swindles--and they very much tie in together since those who have been saddled with large amounts of the latter can hardly afford to take out one of the former, even at these insanely low interest rates.

How any impartial observer can look at what is happening in these sectors as not realize that a huge crackup is coming is beyond my puny powers of comprehension. Interest rates cannot fall much farther, and when they do finally start to rise, they are going to kill what little does remain of the housing market. Anyone inclined to believe the latest call from just this past week that "the bottom is in" and is planning to buy a house is a sheep not only about the be sheared but eventually slaughtered.


Bonus: The lambs are lying down on Broadway...and every other street in the U.S.

Great Recession Porn: Illegal Mexican Immigrants Are Going Home

When your mind isn't clouded by partisan politics or rigid ideological dogma, it is easy to apply common sense about any given issue. I have been saying for many years that the most effective way to combat the problem of illegal immigration is not to demonize the poor souls crossing the border in hopes of a brighter economic future, but to instead vigorously prosecute the corporations who hire them. At a time of high structural unemployment, it is even more unforgivable that American employers refuse to pay a living wage and instead undercut American workers by hiring illegal aliens. And I've never bought into the bullshit that there are jobs that "Americans won't do." Offer a decent wage and see what happens. Will prices go up? Sure, but people in this Spoiled Rotten Nation buy way too much shit they don't need anyway.

Until recently, I had no evidence to back up my theories about the economic driver for illegal immigration because U.S. government policy was solidly behind the corporations and their nefarious schemes to destroy the working and middle class wage structure in this country. Which was the real reason, incidentally, that President George Bush the Lesser infuriated the nativists in his own party by not backing draconian anti-immigration laws. Yeah, a real humanitarian, that asshole.

But now, as the lingering effects of the Great Recession are dragging on, the data is trickling in that support my position. Here is the Atlantic Wire with the story:

A new study says that for the first time since the Great Depression, there may be fewer Mexican immigrants coming into the United States than there are moving from the United States back to Mexico. According to the Pew Research Center, the net migration between the U.S. and Mexico over the last five years was essentially zero, and the downward trend suggests that flow of both legal and illegal immigrants may have actually reversed back toward Mexico.

There are many possible reasons to explain the decline, but the most obvious one would seem to be the struggling U.S. economy, which has cost millions of available jobs, particularly in construction and in the South, where recent immigrants generally thrive. There have also been big increases in enforcement, deportations, and border security, although the report also says that arrests of illegal immigrants trying to cross the border has actually plummeted by nearly 75%. Whether that's because fewer people want to come here or they just don't think it's worth the risk is hard to pin down, but the number of folks willing to take the chance is definitely declining.

Given the continued hysteria over illegal immigrants and how demographic shifts might change the country in the future, many Americans might be shocked to learn that the shift is actually heading in the other direction. There have been several state laws just within the last couple of years that were passed on the premise that illegal immigration was out of control, even as the population of Mexican immigrants is apparently lower than it has been in decades. (Some might argue that the news laws are responsible for that, but the trend was clearly in place even before they were passed.) The Supreme Court will actually hear arguments this week about the harsh Arizona law that has been at the center of the debate for the last couple years, but this new evidence may put the crackdown in a new light, since the problem it was intended to resolve may not actually exist.

Gee...dry up the pool of available jobs and the illegal immigrants stop coming to America. Who would have ever thunk it? So much for the ridiculous idea that the immigrants come here to have babies who become American citizens just so they can collect welfare benefits. I daresay the average Mexican migrant farm worker is far better acquainted with what it means to perform hard labor than your average brain dead dittohead.

Consider this story one of the strongest indicators yet that America is experiencing an ongoing slow motion economic collapse. When the world's poor, tired, huddled masses no longer see our country as a great and glorious land of opportunity, but instead decide that being destitute back at home where they at least have a family and social support structure is better than being here where they are reviled just for trying to earn a meager living, the end cannot be all that many years away.


Bonus: Arlo Guthrie covers his legendary father