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America Is Broken, What Now?

October 22, 2011 by Contributor filed under Columns, Sustainable Planet 1 Comment

This is a guest column from John Robb originally posted on October 18, 2011. Robb is an author, an entrepreneur, a former USAF pilot in special operations and author of the book Brave New War, in April 2007. Robb proposed a new theory of warfare in his book called “open source warfare” which made the cover of Nature magazine (one of the world’s two most prestigious science magazines, the other being Science). He was named one of the “Best and Brightest” by Esquire Magazine, and invited to speak at a plethora of venues (the DoD, CIA, NSA, NIC, Highlands Forum, Center for Biosecurity, and many more).

I founded Sustainable Loudoun after having come to the same conclusions as Robb and we fully endorse the resilient community approach. However there is one difficulty with the implementation of local resilience having to do with external forced and Robb alludes to this. A small community cannot maintain isolation from undermining forces. A West Virginia holler would make an ideal setting for a resilient community however these have been poisoned by the coal mining industry. Resilient communities in the Louisiana Bayou are being destroyed by the fossil fuel industry and fertilizer runoff from Midwestern farms up to a thousand miles away. Closer to home Pittsylvania County, Virginia is threatened by the nuclear power industry in the same way as the communities surrounding Fukushima. While it is necessary to establish isolated sustainable resilient communities it is not sufficient. It is also necessary for those communities to organize cooperate and defend each other’s survival.

John Robb
http://globalguerrillas.typepad.com/globalguerrillas/

The US is broken. In the years after WW2 the US made tangible the American dream. It did so through by connecting incomes to improvements in productivity. Simply: If you do more work per hour, your income should go up (see chart).

The result was a decentralization of economic decision making on a scale never seen before in the history of the world.

It was AMAZING. Tens of millions of financially prosperous households making decisions on what they should buy and invest in. Most of what America still is today was built during that period.

Unfortunately, in the mid-70’s that changed. The connection between productivity and income growth was severed. Incomes stalled while the price of living in the US continued to rise (in particular, the costs of housing, health care and education went through the roof). If the wealth of improved productivity didn’t go to American households, where did all the wealth go? Most of the profits from that added productivity went to Wall Street. Some went to the US government, although given a shrinking tax base, they mostly borrowed from Wall Street to increase their spending.

  • The reason for Wall Street’s claim? In reality it was pure short sighted greed, but at the time it was argued that smart decision makers on Wall Street could allocate capital better than tens of millions of American households. It’s only in retrospect that we know how wrong that argument was not only false, but the opposite. Wall Street, and the rest of the global financial system that replaced it, was simply another form of central planning. The result of this central planning was a little different than we saw in the Soviet Union. In our case, Wall Street just gambled it away and spent it on lavish lifestyles (complete with the arrogance to claim they actually earned it).
  • What was the US government doing while incomes flat-lined? Like most governments, it was on a march to centralize and expand control, but it was argued as an attempt to ensure positive outcomes. We now know that this couldn’t be done in a huge dynamic economy without slowing, damaging, and distorting the very economy it was meant to improve (think in terms of how endless student loans drove rapid tuition inflation). In our case, the government kept growing, but borrowed the money for its expansion from Wall Street. It borrowed and borrowed until it became so indebted its now at risk of default.

Where are we now?

  • Our incomes aren’t just stagnating, they are sinking (and quickly). Unemployment is at 17 percent (traditional measure). House prices are sinking. We are going bankrupt.
  • The US government is nearly bankrupt (joining most of the countries in the developed world).
  • The central planners on Wall Street, unable to restrain their impulse to gamble (as opposed to invest) with our collective wealth, have put the entire financial system on the edge of bankruptcy.

There isn’t much to do but watch the US lead the global economic system into a long running depression. Worse, since both Wall Street and the government are now the same corrupt entity (nearly everywhere, ask the Irish), it will mean lots of bad things, including lots of very nasty political upheaval.

We can protest it by joining the Tea Party to slow down government spending, or you can join Occupy to attempt to slow down Wall Street’s gambling binge. While, my optimism leads me to hold out some hope for both movements to do some good, my skepticism says they don’t have a chance against a corrupt elite.

Regardless, your best opportunity is to start something new.

Start small. Build a resilient community.

Connect that community to other resilient communities. Make new currencies. Make new markets. Produce locally. Trade, barter, connect. Run things simply, locally, in a way that works to improve the lives of you and your neighbors. In short: thrive.

If there are enough resilient communities in place, we should be able to not only replicate the good things about the life we have now, but add many, many more. We’ll live better, safer, in a social and economic environment we can actually have a say in running.

Also of interest:
http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v1.pdf
http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html?DCMP=OTC-rss&nsref=online-news

1 comment

  1. Carol says:

    Wow. Just saw this article. Depressing.

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