The Great Disruption is Here

In what could be a landmark description of what is happening, Thomas Friedman wrote a fascinating column on March 7th in which he speculates on the question:

What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”

While this is certainly not a new theme, to see it so well expressed in a national newspaper op-ed represents a major step forward in our culture's attitude about the current situation in our society. It may be a key part of a growing rallying cry around the need for dramatic social change. He goes on to quote a number of experts, including Paul Gilding, an Australian environmental business expert, who coined a term for this period as “The Great Disruption.”

Thomas Friedman finishes by saying that both he and Paul Gilding are somewhat optimistic about our future given the changes that are starting to happen. As Gilding says, “When we look back, 2008 will be a momentous year in human history.” I'll add that in terms of a great transformation starting in 2008, let's not forget the single biggest transformative event of all that year, the November elections.

The top 6 largest banks

According to results compiled by the Boston Consulting Group, the top 6 largest banks in the world are now (in order):

1. Commercial Bank of China
   
2. China Construction Bank
   
3. HSBC of Britain
   
4. Bank of China
   
5. Bank of America
   
6. Citigroup of the United States
   

These results were for end of 2007. The values of the American banks have fallen since then. Say goodbye to the 20th century (and with it the American empire) and hello to the the 21st.

Updated "Sustainability or Apocalypse" Presentation

I had a chance to present an updated version of my Sustainability or Apocalypse talk at the SUNY New Paltz campus to a group of about 30 people Thursday evening. The presentation was followed by an enthusiastic audience comment period. The copy of the new updated and expanded charts is available on the link in the right hand column. The basic premise of the presentation is:

1. The rate of technological and social change this century will be even greater than in the past century, and many of our current social structures are not set up to deal with this.
   
   
2. We will also be facing a “perfect storm” of problems in the next few decades, both nationally and as a global society
   
   
3. These will be the some of the most important decades in the history of humankind, with some very big long term effects from the choices we make
   
   
4. We could usher in a era of sustainability or major turmoil. The outcome is not predetermined, but will depend on preparations we make to handle moments of opportunity and the vision we promote about what is possible and desirable.
   

Take a look and feel free to post your comments below. I am very interested in any feedback on how to improve this presenation.

The Collapse of American Power

In a recent column Paul Craig Roberts points out that

In his famous book, The Collapse of British Power (1972), Correlli Barnett reports that in the opening days of World War II Great Britain only had enough gold and foreign exchange to finance war expenditures for a few months. The British turned to the Americans to finance their ability to wage war. Barnett writes that this dependency signaled the end of British power.

The comparison to modern times is obvious. The United States had no money to finance the Afghanistan and Iraq wars and borrowed the entire amount, mainly from China and Japan. Historians may very well look back at this moment in our history as signaling the end of the American empire.

As I mentioned before, an organization is technically bankrupt when it is deep in debt and there is no foreseeable way it can ever pay off those debts. Paul Craig Roberts goes on to say

Moreover, the GAO report pointed out that the accrued liabilities of the federal government "totaled approximately $53 trillion as of September 30, 2007." No funds have been set aside against this mind boggling liability.

The US "superpower" cannot even finance its own domestic operations, much less its gratuitous wars except via the kindness of foreigners to lend it money that cannot be repaid.

The US will never repay the loans... The dollar is failing in its role as reserve currency and will soon be abandoned. When the dollar ceases to be the reserve currency, the US will no longer be able to pay its bills by borrowing more from foreigners.

By the way if you don't know who Paul Craig Roberts is, you might be tempted to think he is some sort of left wing "doom and gloom" radical who doesn't really know what he is talking about. Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. Scarry, isn't it?

More obscene behavior in Washington

I would normally object to posting of obscene material to this blog, but this hit me emotionally today in a way that I felt compelled to say something about. And for those of you who think that “obscene” is not the right word for this, I would agree only to the extent that “obscene” is not really a strong enough word.

What am I talking about? At one of the early presidential debates, Joe Biden repeated some folk wisdom his father told him. He roughly said “Don’t tell me what you claim your values are, show me your budget and I’ll tell you what your real values are”.

The new U.S. military spending proposal for Fiscal Year 2008 for the "regular" military budget, is $499 billion. This does not include the costs of the current occupation in Iraq and Afghanistan. A proposed supplemental appropriation to pay for these adds $141.7 billion bringing the total to $647.2 billion. Note that this does not include debt payment for past wars, military pensions, Veterans benefits, etc.

In years past, the U.S. military budget was greater than the military budgets of all our potential enemies combined. The new proposed U.S. military spending for FY 2008 is now larger than military spending by ALL of the other nations in the world combined.

This spending spree comes at a time when America's main enemy is not a rival superpower like the Soviet Union, but a network of terrorist groups. Yet the budget includes items like the SSN-774 Virginia attack submarine ($2.7 billion), the Trident D-5 Submarine-Launched Ballistic Missile ($1.2 billion), and Ballistic Missile Defense ($10.8 billion).

The FY 2008 military budget proposal is more than 30 times higher than all spending on State Department operations and non-military foreign aid combined.

The FY 2008 military budget is over 120 times higher than the U.S. government spends on combating global warming.

The military spending is more than the combined totals of spending on education, environmental protection, administration of justice, veteran's benefits, housing assistance, transportation, job training, agriculture, energy, and economic development.

As the poverty rate continues to climb, the FY 2008 budget proposes cuts of $13 billion in non-military related discretionary spending, including cuts of $1.4 billion from the Community Development Block Grant; $436 million from Head Start; $1.1 billion from the Low-Income Energy Assistance Program; $669 million from Special Education; and $111 million from the Child Care and Development Block Grant.

For full details on this, see:

http://www.commondreams.org/views07/0210-26.htm

I'm at a loss for words at the moment. The only one that comes to mind in "obscene", or possibly a gut wrenching primal scream. History shows that the greater an empire overextends itself, the greater the crash will be when it falls. I see no evidence that we are willing to start pulling back yet, or that there is even an acknowledgement that we are seriously overextended. Special interest groups seem to have ever increasing control over our budget process.

Mike Ignatowski

An Insightful Bush Quote

In his nationally televised speech this week, President Bush actually said something very insightful.

"In the life of all free nations, there come moments that decide the direction of a country and reveal the character of its people. We are now at such a moment."

I couldn't agree more. However, I suspect that he an I interpret this in different ways. We are now in a period where we have to make a fundamental choice about our future direction. Do we want to continue with the policies of attempting to establish military domination over the world? Or do we want to change to a policy of investing considerable effort into building a peaceful, cooperative world community? Depending on which road we decide to take, our future will be very different. This fundamental choice will reveal much about our character as a people. I only wish the politicians, news organizations, and religious leaders would talk more about it.

One of my favorite groups that are talking about it are the Network of Spiritual Progressives, and their promotion of a Global Marshal Plan. The other group is based around the Great Turning initiatives of David Korten and Joanna Macy. More on these later.

A Bankrupt Nation?

I didn't intend for this to be a purely negative blog, but since I'm on the subject of the collapsing American Empire, I couldn't resist comment on the recent article by Robert Freeman titled The Frightening Future in the Market Meltdown . He makes the following points:

• When Ronald Reagan took office, in 1981, the cumulative national debt stood at $1 trillion. Today, it approaches $9 trillion
• In 1975, personal household debt amounted to only 61% of disposable income. Today it stands at over 135%.
• Consumers have expanded mortgage debt by over $11 trillion since 2001, using mortgage equity withdrawals to purchase life styles far beyond what their incomes alone could support.
• The annual trade deficit that stood at $377 billion in 2000 now exceeds $800 billion.
• Over the past six years, this trade deficit has added a cumulative $3 trillion of debt to the economy.
• Adding up the national debt, consumer debt, and trade debt gives an increase in debt over the past six years comes to $17 trillion. (Note that any economy that borrows $17 trillion in six years can be made to look good, at least for a while. The problem is when the bills come due. )
• Lawrence Kotlikoff, writing for the Federal Reserve Bank of St. Louis, revealed last year that the U.S. actually faces $65 trillion in “unfunded liabilities,” debts it has committed to pay but for which there is no identified source of funding.

Here's a definition (from Wikipedia)

Bankruptcy - a legally declared inability or impairment of ability of an individual or organizations to pay their creditors.

It's hard to see how the U.S. can pay these obligations under any reasonable scenario. We currently have to borrow $2.5 billion every day from the rest of the world just to keep afloat, sinking further and further into debt with no improvement in the situation in sight. Based on the above data, we appear to be, by any reasonable definition, a bankrupt nation waiting for the bills to come due. Where is this argument wrong?

Overshoot and Crash - U.S. Empire and the Middle East

It is a well known phenomena in the study of nature that when a system grows beyond a sustainable level, it will eventually decline. And the farther it overshoots that sustainable level, the more dramatic the decline, or in some cases "crash" will eventually be. One of the best illustrations of this is a population of animals that grows beyond what the local food supply can support. The population will eventually decline to more sustainable levels, and the greater the population overshoot, the more dramatic the die-off will be.

This brings us to the history of empires. They inevitably grow to overshoot what the base can sustain in terms of economic and human costs, followed by a decline. Whether they gradually shrink to more sustainable levels, or dramatically crash to a shadow of their former selves depends on how far they overshoot their sustainable level, and how long they manage to deny reality before starting to make the necessary draw backs.

In the case of the American empire, we now have over 700 military bases in other countries around the world. With the cost of the Iraq war likely to exceed $1 trillion, it seems likely that we have significantly overshot what we can sustain and are headed for a decline from our current state. Whether this will be a gradual orderly roll-back or a more dramatic crash depends on whether we continue with a policy of attempting to militarily dominate the world, or realize the folly of this effort and start to change our approach. Unfortunately, it looks like we may be on a path to push our military overcommitment even farther beyond the limits of sustainability. Consider the following news from the experts at Informed Comment Global Affairs

"...[from Cheney's 2002 speech referring to the campaign to drum up support for the Iraq war beginning in Sept 2002] After all "from a marketing point of view, you don't introduce new products in August." Today I received a message from a friend who has excellent connections in Washington and whose information has often been prescient. According to this report, as in 2002, the rollout will start after Labor Day, with a big kickoff on September 11. My friend had spoken to someone in one of the leading neo-conservative institutions. He summarized what he was told this way:

They [the source's institution] have "instructions" (yes, that was the word used) from the Office of the Vice-President to roll out a campaign for war with Iran in the week after Labor Day; it will be coordinated with the American Enterprise Institute, the Wall Street Journal, the Weekly Standard, Commentary, Fox, and the usual suspects. It will be heavy sustained assault on the airwaves, designed to knock public sentiment into a position from which a war can be maintained. Evidently they don't think they'll ever get majority support for this--they want something like 35-40 percent support, which in their book is "plenty."

If you don't look forward to ruinous future for America, it's hard to think of a scarier scenario for the final months of the Cheney/Bush administration.

Another Report that we have already passed “Peak Oil”

According to a recent report ( details at http://www.csmonitor.com/2007/0806/p15s01-wmgn.htm )

The world output of oil actually already peaked in May 2005 at 74.2 million barrels a day, says Matthew Simmons, chairman of Houston-based Simmons & Company International, an investment banking firm for the energy industry…. Since then, production has fallen about 1 million barrels a day (MB/D). If that trend continues, the results for the world economy will be “so real, so devastating” that peak oil concerns will overwhelm slower-moving global warming in grabbing world attention.

Last Tuesday, the price of oil futures on the New York Mercantile Exchange set a record, rising as high as $78.40. That exceeded the previous high of $77.03 set in July 2006 at the onset of Israel’s war in Lebanon.

Oil shortages, warns Simmons, could lead to war.

"Could lead to war??" How about "Have already lead to war." The desire to have large permanent military bases in the Middle East to exercise more long term control over that area was likely one of the key motivating factors for the start of the Iraq war in 2003. I'm afraid that armed conflict over oil will be part of mankind's fate for the foreseeable future.

End of an Era?

Let's see, Wolfowitz just resigned. Jerry Falwell died. Attorney General Alberto Gonzales is about to resign. Toni Blair announced that he will be leaving office. The military is just about in an open revolt against the administration policies.

Sounds like the beginning of an end of an era to me.

The Great Turning Conference

I just returned from a wonderful three day “leadership conference” about “Navigating the Great Turning” in Columbus Ohio (http://www.greatturninggathering.org/ ). The conference featured David Korten, author of The Great Turning: From Empire to Earth Community, and David Cobb, the 2004 presidential candidate of the Green Party of the United States.

Many of the themes in the conference were based on Korten’s book The Great Turning, which made a big impression on my when I read it several months ago (for more information see http://thegreatturning.net/ ). In the book, Korten promotes the theme that the paradigm of Empire, which has dominated much of the world’s stage for 5,000+ years is no longer sustainable (if it ever was) and is collapsing. With some effort, it is being replaced by a paradigm of increased partnership relations in what Kortin refers to as the Earth Community. However, it is also possible that the collapsing Empire could be replaced by an increasingly brutal fight for dominance over other groups and access to the remaining resources. It was the goal of the conference to promote the vision of Earth Community partnerships as the alternative to the vision of Empire, and to help give people the tools and encouragement to work towards this more optimistic partnership vision of the future.

Many of these themes are contained in my presentation linked to on the right hand column of this blog (see Sustainability or Apocalypse). This analysis of events and vision of the future resonated with me personally, and with many of the religious groups represented at the conference. I would like to note that Unitarian Universalists dominated the religious representation there, in large part because they were co-sponsors of the conference. I will post more thoughts and insights from the discussions at the conference later. In the mean time, I added a link to the “Great Turning” web site to the list of links on the right column of this blog.

Zbigniew Brzezinski's Views

There are many arguments that what we do in the next few decades will strongly impact the longer term future of humanity. See my presentation on Sustainability or Apocalypse. But there may also be a much shorter range critical period that we need to be concerned about.

"If we can get through the next 20 months, there is some hope for America recovering and moving forward as a positive force in the world. However, if the war in Iraq expands to other areas of the region, especially to Iran, we could be involved in a 20 year conflict spanning Iraq, Iran, Afghanistan, and possibly Pakistan. And that will be the end of American global supremacy."

The above quote is a rough paraphrase of the comments from Zbigniew Brzezinski on The Daily Show March 14, 2007

These comments appear near the end of the segment.