By C H Smith
Rational Disincentives: The gradual punishment (in relative terms) and destruction of support for production, integrity and accurate accounting places people who pursue these principles at a competitive disadvantage. When deployment of capital for speculation (i.e. unearned capital gains) is taxed at half the rate of production (i.e. earned income), then productivity is disincentivized.
Unregulated “creative” accounting puts honest business at a disadvantage. Inflated earnings and hidden liabilities both make a company appear more profitable, and create competitive pressure toward collusion and deliberate fraud.
Believe it or not, the exposure of these falsehoods and a return to real economy should be the basis for optimism not pessimism. I, for one, am only too eager to leave behind the anxiety mixed with empty hedonism of a debt-driven economy. We now have a pressing need to commit to creativity, transparency, honesty, accountability, and real prosperity.
Our Greek tragedy lies not only in the economic hole our irrational binging has left us with, but the moral, physical, environmental, and character hole. It is no surprise to me that skyrocketing obesity, approval of torture, toxic products and the out-of-control cost of sick profiteering (mistakenly called health care) all happened to attend this delusional phase of our economy.
As the state and its Plutocracy fail to re-inflate capitalism’s last decade of bogus “prosperity, values may suddenly shift and old loyalties and beliefs in the system will be jettisoned in favor of more sustainable value systems.
In some cases, we might view partial collapse as the first essential step of the transformative process.
Those feeding at the trough of industry/State fiefdom will find the reduction in complexity, jobs and funding painful, but “unsustainable” means just that. Change of some sort cannot be denied, and so the choice is adaptation/evolution, devolution or collapse.
The key constraint on devolution is simple: the status quo power structure must be left intact.
Nobody will willingly surrender their power, so devolution means services and front-end expenses will be cut in order to protect back-end administrative powers. Thus public union bosses won’t be suffering any big cuts in pay or benefits, and neither will their municipal and state administration counterparts. (Of course there will be minor symbolic cuts for PR purposes.) What will be cut is part-time librarians, custodians, county park staff, etc.–the powerless people who actually serve the public.
As laid off workers’ unemployment insurance runs out (yes, even the extensions run out as the states’ UI funds drain to zero) then their lifestyles devolve/degrade: first, eating out and vacations go, then new clothing, then the second car, then college, then the house, and so on.
The middle class household might actually respond with an anger deep and hot enough to become political if their middle-class lifestyle was taken away in one swoop. But devolution insures that the process is akin to the famous analogy of the boiled frog:
A revolution occurs when great numbers of people realize that the system benefits the Powers That Be, not the citizenry,
local government will attempt to manage the degeneration of their services in such a way that the public does not realize it’s being boiled
Household/private sector examples:
1. Devolution of “storage nation”: Listings on craigslist announcing the selling/giving away of the entire contents of storage lockers will rise.
2. The number of people living in storage lockers “illegally” will rise.
3. The dumping of abandoned clothing, furniture, old computer equipment, etc. on sidewalks and public parks/byways will increase dramatically.
4. Homeless camps will appear in parks and locales which were previously considered off-limits to such public poverty.
5. Spontaneous protests (over evictions, reductions in service, public union strikes, etc.) will increase both in frequency and in the number of participants.
6. Tourism will devolve to visiting relatives and/or car camping; hotels and restaurants in tourist-dependent locales will start closing in ever increasing numbers. Only the top 10% “high-caste” professional and government-technocrat class will be able to travel overseas.
7. Houses which were snapped up in 2009 for $350,000 on the basis that they once sold for $550,00 will be auctioned for less than $200,000 in late 2010.
8. Major rock/pop concert tours will be cancelled due to low ticket sales; acts which were “guaranteed to mint millions” will cancel their tours.
9. Veterinarians will demand cash to examine pets; people will increasingly be unable to pay for costly procedures for their pets (teeth cleaning, hip replacements, chemotherapy, etc.). Vets will consolidate/close their doors. As people move/are evicted/consolidate, pets will increasingly be abandoned.
State/local government examples:
1. Citizens with numerous outstanding traffic tickets will abandon their vehicles when “booted” (locked) by cities as the cars are worth less that the fines due. Cities will start auctioning/scrapping hundreds of abandoned vehicles.
2. The number of citizens cited/arrested for unpaid moving and parking violations will rise; judges will begin dismissing the amounts due as the citizens before them have no means of paying the huge fines.
3. Government at all levels will devote increasing resources to revenue collection; new laws giving the State (all levels of government) new powers to stripmine private assets will be passed with strong support from government-dependent special-interests.
4. Government at all levels will assign or create domestic intelligence assets to the search for additional tax revenues.
5. Cities which were previously considered immune to the “recession” will declare losses and huge layoffs.
6. Local governments outside of the Rust Belt will start aggressively taking over abandoned houses as banks fail and ownership of the properties becomes ambiguous.
7. Local government fines, fees, permits and other business-related licensing will plummet, decimating what was once considered a “safe” revenue stream.
8. State and local government services will rapidly devolve: twice-a-week trash pickup will devolve to once a week; fire stations, libraries and schools will be consolidated; other services will become sporadic.
9. State and local government hikes in fees to use parks, park downtown, drop junk at the dump, get a building permit, etc. will backfire: people will stop going to parks, stop shopping downtown, start dumping junk at night on quiet streets now that the dump is too expensive and start remodeling without permits. Contrary to government expectations, revenues will actually drop faster after all these fees are raised.
10. State/county attempts to openly raise taxes will increasingly trigger tax rebellions and demonstrations; the trickle of residents leaving high-tax states and counties will grow to a flood.
Now we find ourselves in an era in which official State policy is based on a carefully constructed web of lies, deceptions, statistical legerdemain and transparent propaganda.
now we are starting an era of widespread impoverishment.
Now that false “prosperity” has imploded, we are entering a transformation of unprecedented depth and consequence.
we are finally facing the unfinished business of the postwar era: the construction of a sustainable prosperity measured by completely different metrics.
Let the experimentation, exploration, innovation and liberation from failed models begin.