Now that I am back to blogging, I have had to play catchup on what new ideas and events I have missed these past 6 months by swearing off the sheer effort involved in trying to glean clues about the political and economic and social direction of a society that had not done what Tootle the Train was compelled to do: Stay on the track no matter what. Our society was off the track and since there was little I could do to change the situation, to hell with it. My goal in my blog had not really been to change society because the likelihood of that was minimal. My chief goal was to try to tease out the factors in what appeared to me to be a collapse of our society and for me, writing has always been the way I have used to arrive at understanding. The other task has been a self education involving the study of history,anthropology, sociology and economics, all subjects I had minimal exposure to when I was in college and medical school. In a real sense I am a prisoner of my biases and the books and authors that I have studied the past several years as I have been constructing my weltanschauung. In many blogs I have laid my lash across pusillanimous politicians, incompetent and delusional economists and the greedy corporate empires who have driven our train off the track to the brink of collapse. As any reader of this blog has perhaps noted, I have said that we are in a depression, not a recession. The distinction of whether it is a "D" or an "R" is of course a matter of how deep and how long it lasts. Some authors have said a depression is a 10% drop in GDP coupled with high unemployment lasting for more than a few years. Officially, which is to say looking at official government statistics, our GDP which is said to be in the $14 Trillion range has not dropped 10% or $1.4 Trillion. But government statistics on for example, unemployment are bogus and are deliberately bogus because if true statistics were given, the true magnitude of this downturn would be obvious to all. Unemployment is normally reported as U-3 unemployment, which is anyone who is unemployed who has sought employment within the last 30 days. If you gave up looking for a job, if you are underemployed or part time worker, you are not counted as unemployed. Government statistics say 9.5% is our unemployment rate when the real number is likely nearly double that. The U-6 unemployment figure attempts to estimate these other uncounted workers and is estimated at nearly 18%. GDP figures are suspect as well. GDP includes government spending as well as private spending, services and consumption. Our current deficit is about $1.4 Trillion which is 10% of our GDP. That money was borrowed and injected into the economy. Had it not been injected, our GDP would have been smaller, perhaps 10% smaller. That would meet the criteria for a depression. Whether we are in a recession or a depression or a double dip recession is of only incidental interest to me. My concern is whether this depression leads to a societal collapse. Depressions can lead to economic hardships and collapse of economic activity but most economic depressions eventually end. The downturn becomes an upturn. The depressions of 1857, 1873 and 1929 all eventually turned. But the depression preceding the the Harappan Civilization in India in 1700 BC, the Roman collapse in 470 AD, or the Mayan collapse around 900 AD were economic depressions that became societal collapses. The details of these collapses with the exception of the Roman collapse are sketchy and records are scant. Great civilizations do have a life span. They rise and fall. Once a civilization reaches a critical inflection point, it falls. Are we in the West nearing such a point? If we are, how long would it take before it became obvious? Could it happen within a matter of months or years or would it likely take the form of a stair step decline over many years? There is of course no way to know whether this depression will or even should proceed to a full scale collapse but I was taken by the words of Harvard economic historian Niall Ferguson who appeared on a panel with David Gergen and Mort Zuckerman at the Aspen Ideas Festival this summer. I will provide a link to the hour long video. Ferguson contends that collapse can happen suddenly. He cites historical data, complexity or systems theory, chaos theory, and a newer rogue brand of economics:complexity economics to show how an economic and political system in apparent equilibrium can can change to disequilibrium in a New York minute. I will attempt to explain key features of complexity economics in a future blog when I have studied it in more detail. Here is the link to the Aspen Conference:
http://www.aspeninstitute.org/video/aif-2010-financial-crisis-will-it-lead-americas-decline.
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