March 10, 2002,
Thomas Friedman of the New York Times calls it "a foul wind. . . blowing through the Arab-Muslim World." It's the odor of bloodlust as the Mideast careens toward all-out war. The Muslim masses want it. Friedman says the true Muslim moderates must now do everything possible to prevent that from happening. It would be nice, but Tom is whistling past the graveyard for the Times' genteel readers. It has gone beyond that. Not a single Muslim leader nor all of them put together -- Arafat, Mubarak, young King Abdullah of Jordan, or Prince Abdullah of Saudi Arabia, or Basaar al-Assad of Syria, or god-help-us Saddam Hussein or Muhammar Qadaffi -- can stop the trajectory of events now arcing toward war.
The Prince Abdullah "peace plan" -- A.) return to pre-1967 borders plus B.) free movement and access for Palestinians within Israel -- sounded immediately like a cynical fantasy to me, a way of saying (insincerely) "we tried to help. . . ." The Palestinians themselves came close to achieving most of part A through the Oslo process, but then Chairman Arafat blew it at the last moment by refusing to sign the protocols (proving himself to be incontrovertably an unreliable negotiating partner). The argument against part B is eighteen months of Palestinian suicide bombers blowing up cafes, buses, schools, and pizza parlors.
I don't believe that anybody -- Muslim or otherwise -- can stop the Palestinian attacks currently underway. They are determined to drag the rest of the Muslim world into a war against Israel, and they may succeed because Friedman is right, that the Muslim masses see this as their golden moment to destroy Israel for once and for all. It may be completely delusional on their part, but that would not necessarily stop them. My guess is that the Israeli government -- including even the moderates -- see Israel as, indeed, at the edge of a fight for the nation's life, and that no power on earth will induce them to pull back from meeting each Palestinian act of aggression with ferocious counter-attacks. The rocketing of Arafat's Gaza headquarters -- empty now that he is bottled up in Ramallah -- ought to be a clear signal to him (and the world) that the next suicide bomb will result in Arafat's death.
Were a conventional catastrophic escalation to occur, the Israeli military is capable of defeating the armies of its immediate neighbors: Syria, Egypt, Saudi Arabia, and Jordan (though I do not believe their governments want to engage Israel in a big hot war). Who knows what Iraq might do. Or Iran. Who knows what kind of biological or nuclear devices militant Islam is capable of setting off in Israel in the days ahead. It may not be necessary for the other Muslim governments to engage their official militaries against Israel. The masses themselves might just conveniently bypass their governments, travel to Israel by any means necessary, jihad-style, by Toyota or on foot or by camel, armed with the stock-in-trade of asymmetrical warfare, small arms, kalashnikov automatic rifles, shoulder-launched rockets and grenades, and join the Palestinians in what would turn out to be a horrendous urban insurrection.
I am not convinced that the US can accomplish anything besides acting as a horrified bystander.
Even in a conventional war scenario -- governments against governments using soldiers and advanced weaponry -- it is hard to imagine any role that the US might play. We are a powerful nation, but we're not omnipotent.
March 5, 2002,
Seen on the boob tube this morning at the YMCA locker room: commercial for a new Cheetos cracker product, this one stamped out to look like a little orange basketball. Screen shows stereotypical couch-potato slob lounging before the TV gobbling the product. Voice-over says: "You may not be in shape for basketball, but they are [the Cheetos]."
Next, story about AndreaYates, the Texas woman who drowned all of her children. Her defense is apparently going to be that she drowned them in order to hurry them up to heaven because they were in danger of being overtaken by Satan. Oh, okay. We understand now. We'll call this the Sunbelt defense from now on, in honor of a part of the country where it is often too hot to think.
Next item: the crematory owner in Georgia who is accused of failing to carry out his business obligations is claiming in his defense that the crematory equipment was broken. Well, I guess that explains those 300+ bodies strewn over 16 acres. Next case. . . . By the way, the state of Georgia is spending half a million dollars a day at the site rescuing the dead.
Meanwhile, watch that stock market rocket up. Maybe Satan is in the mood to buy.
March 3, 2002,
The delusion has now blossomed, like one of those great stinking tropical flowers, that 1.) there never really was a recession, 2.) that the equity markets bottomed last September, 3.) that all the problems and distortions have been wrung out of the US economy, and 4.)that another national shopping binge will commence at any moment. In other words, that everything has no returned to "normal."
I don't think so.
The malinvestments that remain to be "worked out" of the US economic system go way beyond the failures of Enron and Global Crossing. In fact, they are way beyond the fate of individual companies. They are structural and they will not be worked out without the nation going through a frightening wringer.
1. Financial institutions are overextended in abstract speculative "casino style" trading instruments: hedges, swaps, options, in attempts to take advantage of the fluctuating values in currencies and spreads in interest rates -- all exacerbated by the velocity of global currency movements. Institutional debt as well as personal debt remain at catastrophic levels, pegged to a hallucinated pool of global capital that coul vanish at the mouse-click of a single electronic transfer.
2. We remain fatally dependent on oil imports and now find ourselves trapped in a hermetic and vicious cycle based on that dependence, which works as follows: as prices rise, the US economy gets battered (because the price of oil affects everything we do). As our economic activity slows in response to rising oil prices, demand for oil eases (we use 25 percent of world production), the price for oil drops and Americans can spend proportionately more money on other things (happy meals, admissions to DisneyWorld). As economic activity picks up, due to cheaper oil, demand for it rises along with price. Our so-called economy appears to recover for a while, but the increased price of oil shoves us into another down cycle. This situation will only get progressively worse because we are crossing the frontier into a post-peak oil production world (See Kenneth Deffeyes: The Coming Global Oil Crisis, Princeton University Press, 2001 ). This means that the oscillations between price swings are apt to grow wider -- and my guess is that we will reach a breaking point -- far sooner than most people realize -- at which many elements of US life cease to function as expected. Which leads to a consideration of the following.
3. The suburban clusterfuck. We're stuck with the infrastructure of daily living that can only operate on the basis of cheap oil, and absolutely reliable supplies of it at absolutely reliable steady prices. Oscillations in price alone, without supply interruptions, will cripple the systems that comprise our way of life: compulsory commuting, WalMart's Warehouse on wheels, etc. Hence, when you next hop in the car and go out to the highway strip, what you are seeing is not just an array of ugly discount marts and fry pits amid excessive pavings, you are seeing a fantastic spectacle of malinvestment -- you're seeing the wealth of your nation squandered on junk buildings that have no future. The same might be said of your house. There will be few buyers for these things when their disutility becomes obvious. It will happend very quickly. Most Americans will be shocked. And the question naturally arises: how are we going to conduct daily life when it does happen?
The answer is that the US is going to be significantly impoverished as well as disabled. A lot of things won't work. Ask yourself how the Sunbelt will work when air-conditioning is no longer cheap? Some classes of Americans are going to get crushed economically when this happens. They're going to be pissed off, especially at their elected officials. Let's hope that we are not at war in several places.
In the meantime, don't believe everything you see on CNN.
February 25, 2002
Lying in the bathtub Saturday evening before going to the movies -- to sooth my disintegrating left hip -- I was struck by one of the truly good things about America: the Priarie Home Companion with Garrison Keilor. It's a genuine work of art, perhaps the best thing this country has produced since 1975, and it's been there every Saturday night like a beloved uncle. Keilor is both truly wise and above average funny. Plus he's got great taste in music. Heck, the guy even sings pretty well himself. Won't somebody give him a prize??
In contrast, this morning I went into the YMCA as usual at 7:00 and there on the TV hanging in the locker room were Katie Couric, the $60 million media whore, and her sidekick Matt Lauer, the Ward Cleaver of infotainment. They were still blowing smoke up America's ass about the Olympics -- brought to you by NBC.
Hence, today's big question: does America have enough smoke up its ass? Isn't it getting dizzy??
February 21, 2002
History lesson intermission. This is worth reproducing in full because it's so rich. From Rainbow's End, the Crash of 1929 by Maury Klein (Oxford University Press, 2001). [Note that dollar figures might be multiplied by 100 to approximate roughly their value today, based on the fact that you could buy a steak dinner in 1930 for 35 cents.]While Charley Mitchell [head of National City Bank] labored to repair the damage to his bank and his reputation, Albert Wiggen [head of Chase National] followed an artfully designed and superbly executed path of deceit through these turbulent months. Where Mitchell borrowed heavily in a vain effort to shore up the price of National City Bank stock, Wiggen saw a rare opportunitiy for profit in selling short the shares of Chase National Bank. That he was chief executive of the institution in which he was dealing seemed to bother him not at all. He began going short in Chase as early as September 23 and continued right through the crash. By November 4, his Shermar Corporation [a front for his personal trading] had sold 42,5096 shares of Chase National stock for nearly $10.6 million, During November and December he borrowed $8 million from Chase National to help cover these short sales even though he and his family had enough shares to have served that purpose.
By the time Wiggen closed out this operation on Dec 11, he had amassed profits exceeding $4 million. Through an elaborate series of transactions utilizing his Canadian as well as American companies, he managed to avoid paying any taxes on this windfall. Some of his sales had been to the bank itself, which had obligingly loaned him both the stock to cover his short sales and then funds to buy the stock. Asked later whether he thought such dealings were sound or ethical, he replied in his wonderfully cryptic way, "I think it is highly desirable that the officers of the bank should be interested in the stock of the bank."By the way, the foregoing does not mean that I am against capitalism, which I do not regard as an "ism," anyway, but rather a set of natural laws governing the behavior of accumulated value.
February 20, 2002
If the current countdown to meltdown on Wall Street and prelude to Great Depression II is anything like the 1929 slide into Great Depression I, then there are bound to be plenty of corporate martyrs out there desperately buying their own company stocks with borrowed funds to keep up the appearance of normality, and even rascals shorting their own company stock to make a buck while their own companies go down. The things you can do with financial abstractions are amazing, but they are not magical, not supernatural, and I think we're about to find out exactly what those natural limits are. The markets as depicted in indexes like the Dow and Nasdaq are reaching a critical point and my guess is that the Dow has commenced a luge run that will take it to the 7000 range before the middle of the summer, with the Nasdaq bobsledding to under 1000.
What are the outlines of Great Depression II? One will be the rather sickening recognition by the public that the basis of our economy has been shifted to a deeply unbalanced juggernaut of suburban sprawl creation -- the little vinyl and chipboard houses that are supposed to represent the Average American's life savings, and all the grotesque furnishings for the sprawl lifestyle, including the fry pits, the discount chainstore boxes, the carwash kingdoms, and enough free parking for God's own fleet of SUV's.
A world of pain awaits those who have ridden the housing bubble -- the last bubble -- into the sunset of DiTech home equity loans. Ready for the greatest fire-sale of repossessed badly-built houses that the world has ever seen? It's coming to your subdivision. All you mayors and town councilmen who turned the highways in-and-out of your municipality into discount retail clusterfucks into order to benefit from those alluring ratables: prepare yourselves for a fiesta of abandonment and revenue loss.
Our economy is a joke. We outsourced most of our manufacturing while everybody at home was lost in narcotic raptures of cappucino and bargain shopping. Our food growing system would collapse overnight without ultra-cheap oil. We've eliminated the merchant class from 99 percent of small-town America. You can't even call your insurance company on the phone and talk to a live human being.
We are heading into an economic shitstorm and the world has become a much more unfriendly place since last summer. The trouble we face at home is going to be complicated by a lot of grievances and sore feelings on the part of people who had unreal expectations about what the world owed them.
Meanwhile Israel and the Palestinians are ramping up to an all-out war.
A tough month lies ahead.
February 14, 2002
It's a good thing. Vice President Dick Cheney will shortly make a tour of the Middle East to notify the governments there that the US intends to take Sadaam Hussein down to Chinatown. Cheney will not be asking for their permission or even their assistance to go forward with this initiative, but informing them that now is the time for comment and helpful suggestions. The US is in the position of having to make up for twenty years of doing nothing when American soldiers, foreign bases, embassies and ships have been attacked (the Marine barracks in Lebanon, the embassies in Kenya and Tanzania, the USS Cole). International maniacs have operated with a free hand. The 9/11 attacks, being acts of war, obviously changed that.
What disturbs me now is the probability that the US may try to accomplish the eviction of Sadaam using proxies, surrogates, and video warfare gimmicks. The US government has been allergic to the idea that military action can produce casualties. Our tactics are geared to remote control action -- cruise missiles, drone planes, smart bombs. This apparently worked in Ahghanistan because of the country's inherent wretchedness and anarchy. The Taliban wasn't a government so much as a gang in possession of the ruins of a nation. I doubt that I am alone in wondering whether the US can accomplish anything like that sort of easy victory in Iraq.
Anyway, the objective in Iraq is not just to shoot Sadaam in the head, but to take physical possession of his science projects -- the nuclear experiments, the germ labs, the nerve gas stockpiles, the rocket assembly facilities, etc. We wouldn't be threatening Sadaam if it weren't for these things. We have in the past and continue in the present to leave unmolested all kinds of rancid despots and murdering thugs, and we would have left this one in place too if he had fully cooperated with UN inspectors three years ago.
But American soldiers are going to have to penetrate the heart of Iraq on the ground in order to disarm it, and we'd better be psychologically prepared to take casualties.
Robert Kaplan makes the interesting point in the current issue of the Atlantic Monthly that before long, American relations with a de-Sadaamized Iraq and de-mullahfied Iran could be much friendlier, since both countries have large populations of young people who are sick of living in police states. Meanwhile, Kaplan says, Egypt, Saudi Arabia, Syria, and Pakistan are apt to slide into militant Islamic despotism, creating a new set of problems. Ultimately, he says, radical Islam will burn out due to its sheer administrative incompetence -- its proven inability to run a state or an economy.
Here's some unrelated good news: It appears that Governor Howard Dean of Vermont is getting ready to run for President. Dean, a three-term Democratic governor, is a medical doctor who will be running just as the Amercian medical system is about to crash and burn. Dean is a good, smart man and a very straight talker. He will compare favorably to George W. Bush.
February 8, 2002
They started today and I'm already sick of the winter olympics. I was in the YMCA locker room at 7:00am pulling on swimming trunks when NBC showed tape of the torch-lighting ceremony. (There's a boob-tube suspended from the ceiling, of course.) The ultimate torchbearer was somebody in a wheelchair. I am certainly not against disabled people, but I am against the gross sentimentality of my culture having to remind ourselves every five minutes what kind and wonderful people we are by pandering to the disabled. Later today when President Bush visits Salt Lake City, he'll toss in a snootful of political vainglory to top off the sentimentality and the national self-esteem-o-meter will pop its mainspring.
What's wrong with a little ceremonial nationalism? Well, despite all the strutting and tough talk, this country is really not serious about addressing the demands of the 21st Century. All we really want to do is keep having a party -- with an added layer of police protection to keep the thugs out. Meanwhile, we have a national living arrangement (the United Parking Lot) that does not have a future, we're addicted to resources that are under the control of our enemies, we're doing nothing to reestablish a comprehensive passenger rail network, we have a Ponzi economy based on bad debt, and, in the words of Neil Postman, we're entertaining ourselves to death.
An NPR report this morning said that a US Olympic team spokesman stated they were determined to win a minimum of 20 gold medals this year. I had to really wonder: who gives a fuck? Why should anyone care whether we win any medals? Is it not noble enough just to participate? Will winning medals in luge help to revive local economies that have been crippled by WalMart and Home Depot? Will it bring back towns whose manufacturing base has been "outsourced" to Malaysia? Will it help a child learn how to speak English competently? Will it prevent another work-place massacre?
Another thing about the NPR report bugged me. They interviewed a couple of female skiers and they sounded like men. This is not a comment on the their sexual preferences, because I don't care about their activities in bed. What bothered me is that winning in sports is the essence of male childishness. Its bad enough that American men are not grown up and responsible enough to face the real problems of American life in 2002. Do women now have to emulate that behavior?
The olympics are darker than you think. This nation is really in trouble.
February 5, 2002
Did anyone else catch Senator Peter Fitzgerald (R- Ill) on C-SPAN last night? Fitzgerald came out and said point blank that his laborious review of Enron's practices and balance sheets convinced him that the company was nothing more than a plain old Ponzi scheme. He made the point three times in ten minutes, and for those who didn't get it, he explained that a Ponzi scheme was the same as a pyramid scheme. Fitzgerald, 42, ranking Republican member of the Senate commerce committee, worked as a banking and finance lawyer before he entered politics. He remarked that Enron CEO Kenneth Lay must have been "the most out-to-lunch" corporate chief ever to preside over such an obviously shifty operation. The great mystery, Fitzgerald said, was how all the "firewalls" of financial oversight -- the SEC, the accounting profession, the consulting attorneys, the Wall Street analysts -- all failed utterly to comprehend the enormity of Enron's financial shenanigans. Senator Fitzgerald appeared determined to find out just how they did all fail. If the hearings go forward in this spirit, the ensuing revelations about how corporate finance is conducted these days is liable to slam the stock market. Fasten your seat belts, it's going to be a bumpy ride.
February 4, 2002
Apologies to readers of this page for the recent interruption of service.
The distant company that this website is parked in, Interliant, sold it's customer base to a company called Interland. The sites then "migrated" to a different server farm. In the process, the transfer protocol settings were all changed and I was not informed to change the settings on my site management program, Dreamweaver 2 by Macromedia (the program sucks, but I paid over $300 for it two years ago -- and now Macromedia doesn't even offer tech support for it anymore).
All of this carries lessons in the dangers of "over-investment in complexity with diminishing returns," as Joseph Tainter puts it so well. Diminishing returns is one of the principal determinants of a clusterfuck nation.
February 2, 2002
Whether you like President Bush or not, the fact is that American life is on a collision course with other cultures who will soon (if not already) have the ability to project their own will in weapons of mass destruction. Radical Islam will have atomic weapons sooner rather than later, and the means to propel them increasingly long distances. Somewhere in Asia (or elsewhere) somebody is boiling up a fresh vat of anthrax, or smallpox, or botulin, or sarin. What are we going to do about that, exactly?
I'm not of the school that thinks we should just lie back and chill until somebody lobs a nuclear missile into a "western" target (whether that means Tel Aviv or a US Military base in Turkey or downtown Indianapolis.) Remember, our engineers designed precision-guided long-range missles long before the computer revolution. I've got to think that programming such a missile given today's miniaturized electronics and powerful market computers would be a piece of cake, and the propulsion system can't be more complicated either. Anyway, one would also have to assume that there are"readymades" already available from the leaky arsenals of the former Soviet Union, including Ukraine, a nation which is arguably in worse shape than Russia, with a very large supply of nukes and the vehicles they ride on.
So what are we going to do?
I don't know. But I hope the US military and its intelligence adjuncts have a few ideas. It may mean that the US has to engage in what would have to be called acts of war -- penetrating the borders of sovereign nations and disarming them in some way or other. But then, we're officially at war anyway, and if the "enemy" seems a little phantasmagoric right now -- terrorists and their protectors -- then the categories can be more precisely defined. Does this sound reckless and dangerous? Is it less reckless and dangerous to lie back and do nothing? Those are questions that ought to be addressed in the public discussion. I don't blame George W. Bush for bringing up the subject.
On the bright side of American life, a cheerful report on NPR this morning. Viz, little Champlain College in Burlington Vermont has eliminated varsity sports in favor of a robust program of intramural sports, fitness, and adventure/travel for the whole student body. About sixty students were participating in varsity team sports. The student body of this small private college is about 2,500. What a good example this is for our nation.
In the same spirit, I wish President Bush had addressed our "homeland defense" needs of working to build a decent passenger rail system and promoting SmartGrowth and New Urbanist strategies for creating denser, walkable communities in this country, because that is the only real way that we are going to get the cheap oil monkey off our backs. More drilling, new car engines, prayer. . . none of these things are going to save the Houstons and Atlantas. But organizing American life around traditional neighborhoods, towns, and cities linked by public transit would make a difference.
America, please get your head out of your ass.
January 22
Developments worth paying attention to today:-- Middle East moves closer to war. Shooting in central Jeruselum. Hamas organization declares "all-out war on Israel." Reports of 8,000 rockets under Syrian control in Lebanon, including 300 long-range weapons in the hands of Iranian Revolutionary Guards, some with bio-warheads. Will Israel conduct pre-emptive strikes?
-- Kmart tanks, declares bankruptcy (as predicted here). Last straw is Kmart's failure to pay $78million to food jobber, Fleming Industries, supplier of Cheez Doodles and other food-crap sold in Kmart stores. Creditors lining up are JP Morgan, into Kmart for 1.5 billion, bondholders who are owed $4.5 billion, and trade creditors, who are owed $2 billion to $3 billion. The bankruptcy gives Kmart the ability to break leases on hundreds of stores and close them up. Company flaks claim that Kmart will emerge from this clusterfuck "a stronger company." I say, they're dreaming. The blue light special will soon be on Kmart's remaining inventory and store fixtures.
-- New reports that Enron has continued a massive shredding operation as recently as last week.
January 21, 2001
Mistakes were made department:
Ken Johnson, a spokesman for the House energy and commerce investigations committee, said: "It is becoming clear to us that people at both Andersen and Enron tried to hide the company's financial problems. If that happened, there is a very good possibility that some crimes were committed. The deeper we dig, the uglier this gets."
He was speaking as it emerged that Kenneth Lay, the chairman and chief executive of Enron, was urging employees to buy more shares in the energy trading giant just two months before it collapsed into bankruptcy. In an online forum with employees on September 26, Lay told workers to "talk up the stock and talk positively about Enron to your family and friends".
It's reassuring to know that federal officials aren't deaf, dumb, and blind. Stay tuned now for the Ken Lay federal racketeering trail coming sometime in 2003.
As Robert Hunter at SmartMoney has pointed out: Enron's limited partners included the big hitters of Wall Street insiders -- JP Morgan, Merrill lynch, AON, Credit Suisse First Boston, Dresdner Bank and others. Yet, we're expected to believe that they had no inkling about the shenanigans in Enron's Ponzi network of 600-odd off-shore money-laundering subsidiaries.
"What's striking is how long Enron was able to get away with these transgressions without someone blowing the whistle. People at Wall Street's biggest firms had intimate knowledge of these dealings, yet no one said a word," says Hunter. "Wall Street can keep a secret far better than anyone could have imagined. How many other secrets is it keeping?"January 17, 2001
Yesterday I had the great adventure of going to our local AMTRAK station, kind of a trip down memory lane to what life in the former Soviet Union must have been like.
First a few explanatory notes. The fact that my town, Saratoga Springs, NY, even has train service is amazing, considering the condition of America's passenger rail system. We are on the line that runs from New York City to Montreal. Now, one problem with this line is that the track-bed north of Albany is in wretched condition so the trains are always badly delayed (sometimes by hours) coming into Saratoga either southbound from Montreal or northbound from Albany. Consequently, we cannot use Saratoga as a point of departure. So, if I have to go to New York City or Washington, I depart from the Albany/Rennsslaer station. But I sometimes buy the tickets at the Saratoga Station, which was my mission yesterday.
Well, first of all there is the station itself, out in the boonies on the ragged western edge of our town (there was a magnificent station nearer the center of town until about 1965). The new station looks like the Former Soviet Museum of Prosthetic Limbs, a flat-roofed , one story, monstrosity clad in monkeyshit yellow brick with mingy little industrial windows. The bricks are starting to spall out now in places and the doors and windows have acquired such a patina of auto emissions that the glass is no longer transparent. Evidently, the station's exterior had not been cleaned since Nelson Rockefeller grabbed his last voter by the hair.
The waiting room is really something to behold, kind of hybrid between an industrial meat storage locker and a county penitentiary, all greenish tiles on the walls to head level (grimy sheetrock above) and fractured gray linoleum on the floor. There is one ancient wooden bench apparently salvaged from the old station, certainly once graceful, but now battered and carved up with grafitti. There is a rich pallette of fugitive oders wafting through the place, ranging from (what else?) vomit to urine to Double-Bubble Bubble Gum, with overtones of ammonia and toilet mints.
Behind a battered ticket grill the sole employee puttered about, a man about forty wearing the kind of Kmart shirt and tie ensemble that look like they were designed to be worn by chimpanzees in variety acts -- you know, the collar too large and bunched up around the neck, the tie knot almost as big as an apple turnover. He had a very earnest manner though he was noticabley walleyed. I may have been his sole customer that day, maybe even the whole week.
I then set about ordering up two sets of tickets: one round trip from Albany to Washington, D.C., and another round-trip from Albany to New York City. Simon & Schuster was sending me out on a couple of publicity gigs over the next two weeks. These simple transactions took no less than a half hour to complete. It took the clerk fifteen minutes alone to get the schedule off what looked like an ancient 286-model computer. (Why he didn't have a printed timetable, I can't say.) Running the credit card took ten minutes, and then it took five minutes for him to determine that there was no utility on his computer for producing receipts (I wanted one so my publisher would reimburse me for the tickets.) Apparently, I was the only person who had ever asked for a receipt there. Anyway, based on this performance, we can estimate that an AMTRAK clerk could sell tickets to 16 passengers during the course of one 8-hour shift -- assuming he had no other duties, which I wouldn't assume since he was the only person in the station, so he probably had to wrangle whatever freight came in on the single northbound p.m. train, and perhaps mop the bathroom floor, too. Good thing there wasn't a rush on for tickets.
I felt for the guy, though. He was struggling in his own small way to keep the pathetic project of passenger rail alive in America. It must have been demoralizing to work in the vomity decrepitating station. I'd already finished a decent day's work, so I didn't feel agitated over the ridiculous procedure. But the little adventure did reinforce my notion that we are rapidly becoming the Bulgaria of the West.
One other little note on a completely different topic today. I happened to tune into a pop music station on the radio this morning. Am I the only person in America who has noticed that a lot of rap music sounds uncannily like nursery rhymes? What's up with that??
January 16, 2001
What fascinates me about the Enron catastrophe is how it is a perfect metaphor to describe the larger American economy. A few sharpies get together and take a boring old economy gas pipeline company -- which actually did real things like move boring natural gas from wells in one part of North America to customers in other parts of North America -- and they transform that boring company into a sexy, "innovative," new economy, financial-and-information services company, and they borrow huge sums of money from formerly reputable investment banks like JP Morgan, and they assign that borrowed money to mysterious categories (subsidiary companies), and they gamble it on monetary spreads (hedges, arbitrages), and they broker imagined commodities (weather, broadband assignments), and they create an impression of tremendous business activity, driving up the share price their stock, which, once elevated, they reward their executives with, which, at the stock's height the executives all cash in on, and the board of directors, and the company's auditors, and the securities analysts, and the institutional monitors (SEC, etc), all go along with the idea that this is a real company doing real things -- and then the whole hallucinated structure dissolves in a mass of bankruptcy, recrimination, and personal financial ruin.
That's called a clusterfuck, and that's what the rest of our economy is like, too.
January 15, 2002
One of my pet theories in recent years is that the USA is trying like hell to become the Bulgaria of the West. The telephone companies seem to be leading the way. Last week, trying to firm up a lecture committment, I attempted to get the telephone number for Mount Holyoke College. I called AT&T's directory assistance line for area code 413 (western Massachusetts).
"What town is this listing, sir?"
"Hell, I dunno. Holyoke, Springfield, something like that."
"Not showing anything for it, sir."
"It's somewhere in the 413 area, I promise you."
"Maybe so, but we need the exact town."
"This is a major institution: Mount Holyoke College."
"That may be, sir, but I can't get a listing without the name of the town it's in."
"You don't have a main reference database for the 413 area code?"
"No sir, it's just by town."
"You could put the whole goddam telephone directory of the United States on a single goddam Pentium Three home computer and cross reference it by town, zip-code, and mean annual rainfall."
"That may be, sir."
"But you can't get me the phone number of a major college in a dinky rural backwater of New England."
"We go by the name of the town."
I went through two layers of supervisors, and they could not find the number either.
Finally, I went to the Google search engine on the internet and typed in Mount Holyoke College. Three seconds later, a link to a website came up with the college's phone number on the home page. By the way, the name of the town was South Hadley. Like, I should have known. . . .
I went through a similar Chinese fire drill the next night, on the road in a hotel in Birmingham, Alabama. I attempted to use my AT &T calling card to call my wife back in upstate New York. AT&Ts automated call router kept sending me to "calling card verification" limbo. Eventually I managed to get a supervisor. She "straightened it all out" and placed the call for me (at an extra charge for the hands-on service). The automated router booted me back into "calling card verification" limbo. Meanwhile, the live supervisor had vamoosed. Finally, I complained loudly enough that another live supervisor 1.) stayed on the line while I was booted into "verification" limbo; 2.) got me out of it. 3.) placed the call to my wife, 4.) didn't attach a surcharge, and 5.) apologized for her company's moronic computer program. Length of transaction: 25 minutes. (Length of call to wife: eleven minutes.)
January 7, 2002
There's a big joker waiting to be played in the US economy: the Euro. What if a substantial amount of foreign investment now residing in squishy US equity and debt markets decides over the next year or so to move into Euro-denominated capital markets? I'll tell you what will happen. GAME OVER in the US. Our markets tank and we have ourselves a nice dollar-denominated currency crisis.
Europe is not heaven on earth, and it's seen some nasty action in recent history, but right now the major players over in the Old World are behaving a whole lot saner than we are. In case you haven't noticed, they don't have DiTech 125 percent Dream Loans over in France, Germany, Spain, Holland, and Italy. They haven't hocked their lives on the basis of a home equity bubble. In Europe, someone who is a poor credit risk does not get loans. Their central bank interest rates are not heading down to zero. Ordinary citizens do not buy groceries on their credit cards. They have big corporations, but they haven't destroyed local commerce. They even grow better food for themselves than we do.
Though they have plenty of automobiles in Euroland, the Euroites have not allowed a wholesale trashing of their cities. The excellent condition of their cities, big and small, has left them prepared for the rigors of the 21st century, when the cheap oil era comes to an end. They will have an armature for daily life. Ten years from now, we will be stuck with the dysfunctional suburbanoid clusterfucks of Houston and Atlanta. The Europeans will have habitable, walkable, beautiful places to live and do business without a slavish dependency on cars.
January 3, 2002
Rumors rumbling out of Wall Street (specifically out of Prudential Securities, as reported by the LA Times) portray Kmart in whirling around the drain (WAD) mode. Kmart stock fell 13 percent to a 30-year low yesterday. This is the second time in ten years that the Troy, Michigan based chain retailer has been in WAD mode. It escaped during the mid-90s with major expansions of some units into "superstores" and closures of others. For the next several years it rode the tsunami of the strong dollar / cheap import / credit card binge economy. Now that American citizens have binged themselves into insolvency, and with the US landscape grossly over-built for big box retail, the gruesome work-out begins.
A couple of curious details stand out. The LA Times story depicts Kmart as "dogged by dirty stores." Eeeuuuuwwww. . . . As if fighting commercial highway traffic for miles past all the fry pits and muffler shops and parking lagoons and other ghastly infrastructure of the world's highest standard of living to trudge the aisles of a poorly-lighted agoraphobia-inducing merchandise warehouse wasn't bad enough. The other detail was "poor merchandise control." Which means, I suppose, that Kmart doesn't have a clue what the fuck is coming in the back door and what's going out the front door -- which points to a very deep and troublesome aspect of the chain retail business, namely that the success of such an operation depends on the esprit-de-corps of miserably low-paid locals with no stake in the business beyond their pitiful weekly paychecks.
Well, the weakest members in the wooley rhinoceros herd may go down first, but the wooly rhino species of national chain retail is going down. WalMart may have a jazzier computer-driven inventory control system, but they employ the same kind of local peons that Kmart does, and calling them "associates" or "grand poobahs" will make little difference in the not-so-long run.. Big Box is going down to Chinatown. If you are a young person with a bent toward business, think about how you might work to reorganize commerce at a local and regional level. Your fellow citizens are going to need it, and you will get rich doing it.January 2, 2002,
The West made it through the New Year holiday without a bombing or an assault on a public monument. A most curious thing, and I do not know what to make of it. Western leaders (that is, Blair and Bush) twisted the arms of the Indian and Pakistani leaders so they might back off from the world's first nuclear exchange.
Okay then. In this somewhat pregnant interval, I'll offer a short list of the trends that the world will be facing in the new year. This is not a set of predicitions, just notes on what we ought to be paying attention to.
-- A US economy in deep transition. The consumer sleepwalk may be over. I don't know about you, but we have a lifetime's worth of manufactured stuff in our household. We don't need another damn thing, not a keychain, not a corkscrew, not an electric pencil sharpener, certainly not another coffee machine. There is so much stuff in America that you could run an economy on yard sales for five years. And it may happen! Even poor peoplein the US have amazing amounts of stuff. What draws my attention especially is the potential for a tremendous unwinding of mis-investment in 2002, especially as the national retail chains move past the holiday frenzy into the likely wasteland of mid-winter. First they will practically give merhandise away. Then there will come a time when even drastic 70 % off sales will not draw the shoppers in. Then it's desperate retrenchment, closing of stores, bankruptcy, and finally the abandonment of suburban property. I think we'll see a lot of this in '02. The collapsing bond market is a harbinger of severe structural problems going as far as the loss of confidence in the US dollar and capital flight -- probably into Euro-denominated investments. And what kind of havoc awaits in the wreck of Enron and its Number One enabler JP Morgan? I could go on, but I'd prefer to just point to my conclusion for what it is worth: the destination of the American economic transition probably lies in the direction of re-localizing economic activity. The "global economy" was a set of temporary relationships based on special conditions, not a permanent institution, and it is unraveling fast. We are going to have to re-imagine and rebuild local economies in America, and it ain't gonna be easy because the inertia of the past fifty years is tremendous.
-- Global politics. Perhaps New Years went off without an explosion, but I doubt we've seen the end of political mischief, especially emanating out of our collision with Islam. Osama is on the loose and what happens when he pops up at Mecca in March? Afghanistan cost us at least $100 billion -- and they were hardly a nation in any meaningful military sense. The bottom line globablly is that there are vast, swelling populations in the regions of the world least able to support them, and every day there are legions more young men with nothing to do and no hope. They will express themselves, even if that means merely expressing their hormones in senseless violence. America can't afford $100 billion a year in international policing. Something else to watch: the situation in Mexico. As the US economy melts down in a goo of "consumer" non-performance, Mexico's economy will slip into desperation and disorder, meaining possibly revolution. During the last Mexican revolution, 1915, almost a third of Mexico's population escaped the chaos to El Norte.
-- Global climate change. Weird weather may have more to do with politics and economics in '02 than all the turbaned maniacs between Algiers and Manilla. We've had very weird weather in the Northeast -- almost no rain since the springtime and now no snow on the ground (despite the localized "lake effect" blizzard in Buffalo). We got zilch over here by the Vermont border. Pretty soon these abnormalities will be experienced both here and around the world as water problems. Two days ago our housekeeper told me that her shallow well (called a "point" well hereabouts) is dangerously close to running dry. Her neighbor IS dry. The world bank has said many times that the wars of the future will be fought over water.
-- The march of disease. The New York Times ran a pretty startling piece Sunday about the rise of AIDS in China. Some people I respect tell me that AIDS will become the sole preoccupation of the world within the next ten years. Other news stories in the past 30 days detail the mutations occuring in US AIDS cases in which patients are no longer responding to the much-touted HIV drug cocktail. The virus is moving. We are also, incidentally, overdue for a major influenza event of the type that started on a Kansas pig farm in 1918 and ended up killing half a million people in the US alone before 1920.
-- Then there is our old friend, the oil problem. I have obviously detatched this from the global politics category, but it is part of that thread. We have done not a goddam thing in the past half year to clarify our social and economic future vis-a-vis our addiction to oil (and the fact that most of the oil left in the world belongs to people who hate us). We don't want to hear it. Anyway, gas at the pump has never been cheaper -- an anomoly that many Americans mistake for a permanent condition. The need to prepare for a less car-dependent living arrangement is simply not on the national radar screen. The price we pay for this wilfull ignorance may be political disorder so intense that the nation could dissolve into faction-driven regional conflict. And sooner rather than later. I hear blather every day about how we are going to be saved by cheap oil from the Russians or by new pipelines running out of Khazakstan. Forget it.
December 28, 2001
If Osama bin Laden was killed during the furious American bombing assaults on Tora Bora, then he is headed for martyr central. But, speaking from the strictly academic angle, isn't it at least equally heroic for the mythic figure to slip away from near-certain destruction to fight another day? This now appears to be the case with ObL and it is looking more and more as if George Ure's prediction weeks ago may be correct: that ObL will lie low in friendly quarters out of Afghanistan until the time of the Hajj in mid-March, 2002, when multitudes of Muslim pilgrims converge at Mecca in Saudi Arabia. Then, ObL will appear before them, exhorting them to jihad against the west and its miserable servling friends.
Osama may be a villain, but he's no fool, as evidenced in yesterday's latest videotape. He says that America is fragile. I agree. Our insane Ponzi economy is running on credit card fumes. He says that America can be run off its rails by applying a little more exogenous economic stress. I agree. Ironically, ObL is articulating the terms of a national emergency (here in the USA) that Americans themselves are obdurately unwilling to entertain.
I came across an interesting phrase this morning in Erik Davis's wonderfully-written recent book "Techgnosis: Myth, Magic, and Mysticism in the Age of Information." The phrase is "consensus trance," coined by psychologist Charles Tart. This consensus trance is what keeps Americans in the groove of our car-crazed consumer clusterfuck. The consensus trance supports the exceedingly unrewarding living arrangement of Suburban Nation. The consensus trance keeps us convinced that this is the only possible American Dream.
ObL is the proverbial two-by-four making contact upside America's head. Evidently it takes such a villain to awaken the sleepers from their consensus trance.
December 21, 2001
It's hard to escape the dogged feeling that this holiday season may be the last merry interlude in America for quite a ways ahead.
We are victorious in Afghanistan. I"ve maintained that it was imperitive to put the Taliban out of business as a matter of global political hygeine. But we stand victorious in a wretched and miserable land beset by unprecedented drought, with poor prospects for becoming a nation (at a time when forces are in motion to dissolve nations worldwide). I say this not to diss the US effort there, which I repeat, was a necessary action, but to suggest that much greater challenges and darker adversities lie ahead.
I don't know what the inner councils of our government -- Rumsfeld, Powell, Wolfowitz, Rice et. al. -- may be thinking about the Middle East, but the American public is definitely unprepared for the almost certain rigors and vicissitudes ahead. We are perhaps one putsch away from a long and severe global oil market disruption. The Saud family's days are numbered and, believe it or not, a regime could replace them which takes a keener interest in punishing the United States than continuing to rake in our dollars. It is only a matter of time, anyway, before other Muslim states put pressure on whatever government rules the Arabian peninsula to cease cordial relations with the US.
The American public has no idea how fragile the surface "normality" of our national life is. What will the citizens of Atlanta and Orlando do when the oil supply chains lie broken? What will life in Houston be like without cheap air conditioning? What happens to an economy that has come to be based on recreational shopping when the party comes to an end?
It seems to me that the imminent collapse of the Argentine government and financial infrastructure will likely be the event that accelerates the American unwinding. It can only further undermine a system of abstract scams already straining under the Enron collapse and the NASDAQ fiasco that preceded it.
So what we face is both a collapse within of our hallucinated economy, the accompanying failureof our car-dependant living arrangement, and the dangers posed by a resourceful and determined set of foreign enemies who will be delighted to take advantage of American hardship.
December 20, 2001
Circumstances conspired to get me into the gym early enough this morning to catch Katie Couric hovering above the treadmills and eliptical training machines. Katie, you surely know, is co-host of NBC's Today Show, and this week the network announced that she has been rehired for a few more years for $60 Million. What does Katie actually to for that? She hypes movies. Hello Meg Ryan. Tell us about your new. . . product. Tomorrow Russell Crowe. Now, I've never been keen on socialist ideology, but Katie Couric's salary is a simple social injustice. Perhaps the myrmidons of the media industry are so hermetically sealed from the clusterfuck reality of American life that they believe the public is titilated by the thought of Katie Couric's fabulous wealth. It seems to me, though, that they made a mistake announcing the deal publically. Even the old geezers hanging around the gutter of the slow lane in the YMCA pool were indignant about Katie's millions. I hear the distant rumble of social unrest.
Came across another teeny-weeny sign that we are nearing a tipping point in culture and politics. Over in the supermarket the other day, I discovered that Heinz is putting out a new line of entertainment ketchups. One is bright purple and the other is bright green, in plastic squeeze bottles. I suppose America's morbidly obese children are insufficiently amused by their regular cavalcade of dull brownish hamburgers and boring ochre french fries.December 16, 2001
Whether Osama is or is not in that Tora Bora hidey hole we will surely find out at any moment. If he is, then he is about to be martyrized -- because the chance that the US wants to put on the spectacle of an Osama murder trial (even a military tribunal version) is about the same as the chance that Emeril Legasse will become the next Secretary General of the United Nations. If he's in there, I still see Osama getting the Che Guevera treatment: news pool photo op on a cold slab followed by incineration. But he'll still be a martyr.
Meanwhile, animadversions are flying between India and Pakistan, following a suicide storming of the Indian Parliment late last week (Twelve dead). It is hard to imagine India not taking some kind of retaliatory action against Pakistan, even though it could provoke both a nuclear exchange and / or the meltdown of Pakistan into anarchy (with those much-talked-about eleven nuclear warheads up for grabs).
Back in Israel / Palestine, we now have the pitiful (and dangerous) spectacle of Arafat begging to re-start peace talks with an Israeli government that has declared him "irrelevent" -- and rightly so, since he has proved absolutely impotent to control the level of violence emanating from the Palestinian side of the conflict. Over in Egypt, Hosni Mubarak is making noises to the effect that the Israelis are provoking a major war in the region. It's hard to tell whether the Egyptian president's utterances are designed for home consumption, but I do think that events in Israel are headed in an ominous direction, perhaps inexorably so. We repeat what we asserted last year: Israel's military can probably wipe up the floor with most of its regional adversaries.
Anyway, here at home the US still faces the prospect of an economic meltdown of our own. All the wishful thinking in the world will not stop nature from wringing out the debt-hobbled American economy with its tragic dependence on recreational shopping, tourism, excessive motoring and the accompanying addiction to imported oil. We are going down the path to a long and harsh period of austerity, whether Wal-Mart and Michael Eisner like it or not, and we are not prepared. After Christmas, we are going to see a retail work-out that will make your heads spin, including (Kunstler predicts) the tanking of some major national chains. Duck and cover.
December 10, 2001
Reports are flying around the wires and the Net that Osama and his comrades are "fighting for their lives" in the crags and defiles of Tora Bora, and that may be so. A story emanating from Russian TV news has one of Osama's several wives, Sabiha, 45, saying that Osama intends to have his sons shoot him on a live TV feed to the al-Jazeera TV network, based in Gulf state Qatar -- and that this will be a signal for al Qaeda operatives in London, Paris, and Rome to blow up some monuments. Far-fetched? Perhaps. But more likely, in the anticlimactic tradition of Real History, he'll just be shot by anonymous foot-soldiers, his lifeless body will be lugged like a meat puppet to a provincial morgue, Che Guevera style, photographed on the slab once for the news pool, and finally cremated and dispersed so as to avoid the creation of a pilgrimage site.
But web commentator George Ure (Urban Survival.com) proffers an interesting alternative scenario. He theorizes that Osama will be "taken into custody" by a state friendly to him, where he will cool his heels and write a book -- a la Hitler at Landsberg Prison -- exhorting Islam to rise everywhere against western infidels. Then, he will make a startling live appearance at Mecca at the time of the Hajj, and electrify all of Islam with a call to arms. Pretty weird huh?
Personally, I'd be a bit surprised if Osama had not managed to slip out of Afghanistan somehow long before the military noose began to tighten. The guy has the means to hire any means of transport from a camel to Gulfstream jet, and there are at least a few places in the world that would more or less have to let him in. It is inconceivable to me that the US Military has not by now captured at least a few people who knew of Osama's fairly recent whereabouts, or, at least, whether he remains in Afghanistan at all -- which would mean that the action in Tora Bora is about netting only his underling and henchmen. If the mystery is not cleared up within the next few days, then I believe it would be safe to assume that Osama has slipped through the net.
December 4, 2001
Energy Secretary Spencer Abraham has joined the chorus of those touting Russia as America's new energy savior. This ought to be seen for what it is: a PR move designed to blow smoke up the world's ass. On top of the problems asociated with Russian petroleum exporting mentioned in the Dec.3rd clusterfuck chronicle (location of fields, difficulty of running pipelines across contested lands, etc.) there are two additional obstacles to Russia ever developing into a replacement for OPEC. These relate to the business end of developing the Russian oil infrastucture, and they are as follows: Russia has not developed a meaningful body of property law, meaning that contracts cannot be enforced; and Russia has not developed coherent banking institutions, meaning that financial transactions cannoit be depended on. Russia is not going to rescue us from the problems we have developed around the larger issue of our addiction to cheap oil.
December 3, 2001
The public imagination seems torn right now between the attempt to maintain a sense of emergency -- America Strikes Back ! -- and the even deeper wish to return to the "normality" of consume-o-rama as Christmas approaches.
I, for one, do not believe that our ridiculous Blow-Mart economy is going to "bounce back" in 2002. The amount of money hemorrhaging out of government and business by the hour is out of this world, starting with the billion dollars a day that it costs to prosecute the operations in Afghanistan. Much of the "money" created by the Federal Reserve in the banking credit chain the past decade is now being sucked into that black hole of America's New War including everything from million-dollar cruise missles to the x-number of extra security guards per shift required by (take your pick) nuclear power stations, bridges, tunnels, port facilities, oil refineries, reservoirs, airports, government offices at all levels. . . . I haven't heard anybody in the news media question the notion that all this money can be drained out of the US economy at the same time that we are supposed to continue an orgy of spending on credit of one sort or another.
Meanwhile, the network of relations we call "the global economy" is suffering conventional strains that were already evident before 9/11, namely saturated markets and excess capacity. Do you need a computer running at 1.5 gigahertz, or is that 800 mh Pentium III you bought last February enough for word processing and tweaking your family snapshots? How many T shirts can you fit in your dresser drawers?? I was at the ragged edge of the third world last week, Nassau, the Bahamas, and they were selling T shirts at 3 for $10. Half the world has too much stuff and the other half of the world is too poor to buy any stuff. The additional problem of mis-investments that typically occur during booms is painfully evident here in the stupendous amount of crap strewn over the American landscape -- the redundant strip malls, power centers, discount marts and related shopping infrastructure that will soon be eating itself alive as the customers thin out.
Another interesting notion has cropped up the past few weeks, emanating mainly from The New York Times, viz: that Russia is going to save our asses in the petroleum department by taking the place of OPEC (mainly Saudi Arabia) in the future. This is pure wishful bullshit for several reasons. One is: what would prevent Russia from jerking the US around once we transfered our oil addiction from the Arabs to them?? Hello. . .? Remember Russia, a.k.a the former Soviet Union, our chief geopolitical antagonist from 1945 to 1990. Two, getting oil out of Russia (and it's former soviet possessions Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) by pipelines not yet even built could easily become a logistical nightmare, these being the most remote reaches of central Asia and some of the most contested real estate in the world these days. And three, Russia may have deeper petroleum reserves than the US, but world peak production is less than a decade away in any case, meaning whether we are economically dependant on OPEC or Russia or Lichtenstein will be academic sooner rather than later.
Anyway, the suicide bombings in Israel this weekend may turn out to be the most momentous events since the attacks of 9/11.
Stay tuned. I promise not to go on vacation again for while.