Staring Into the Abyss

So sorry, but “you’ll own nothing and be miserable–oops, we mean happy, yes, deliriously happy” doesn’t count as a solution.

The global economy is perched on the edge of an abyss, and averting our gaze doesn’t actually lessen the risk, it increases it because problems which aren’t faced directly and addressed directly fester and rot the system from within.

This is why we’re collectively staring into the abyss: all the big problems have been dismissed, ignored or papered over with PR-happy-talk “solutions” that only make the problem worse. There are three basic techniques that our “leadership” (public and private) have used to avoid dealing directly with our pressing problems:

1. Appear to address the problems by doing more of what’s failed spectacularly.

2. Propose magical-thinking happy-happy technological “solutions” that are appealing but impractical.

3. Keep the status quo glued together to maximize quick-buck gains for the elite while guaranteeing long-term catastrophe for the entire society / economy.

Doing more of what’s failed spectacularly is one of the phrases you’ve seen here over the years. This generates an illusion of control because the tried-and-true Band-Aid makes it look like the problem is being addressed. Since doing more of what’s failed spectacularly doesn’t break the system immediately, everyone incorrectly assumes it’s benign or actually helping.

The Federal Reserve’s blowing of serial speculative credit-asset bubbles is a good example. With the bogus goal of generating a “wealth effect” that only rewards the already-rich, the Fed has exacerbated socially fatal neofeudal inequality and created guaranteed-to-pop bubbles that each collapsed with devastating consequences for the credulous who believed the Fed’s poisonous assurances that a) this isn’t a bubble and b) bubbles never pop.

The Fed’s “solution”–blowing an even bigger bubble to paper over the catastrophic losses when the previous bubble popped–has finally reached the endgame: three bubbles and you’re out (2000, 2008-09 and 2021-22). Sorry to disappoint the beneficiaries of the three Fed bubbles, but there won’t be a fourth bubble. Bubbles don’t inflate at the bottom of the abyss.

Magical thinking abounds in finance, energy and and economic policy. Examples include substituting nuclear power for hydrocarbons, conveniently sidestepping the reality that we’d need to build a new reactor a week for years to make a difference, and the really inconvenient reality that the U.S. has built a grand total of two new reactors in the past 25 years and the world has a few dozen under construction–a scale roughly 1/100th of what’s needed.

In finance, magical thinking appears across the entire spectrum from the fanciful delusions of Modern Monetary Theory (we can’t go broke because we can always print more money–uh, sure, that will work just fine, guaranteed) to the Fed’s “if we just make the already-rich even richer while bankrupting the bottom 90%, everything will work out just peachy.” Peachy for whom? That question is never answered because the billionaires are so charmingly bashful.

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