Swans Commentary » swans.com May 17, 2010  



Blips #100
 From The Martian Desk


by Gilles d'Aymery





"The end of the human race will be that it will eventually die of civilization."
—Ralph Waldo Emerson (1803-1882)
"Civilization begins with order, grows with liberty, and dies with chaos."
—Will Durant (1885-1981)


(Swans - May 17, 2010)   ARE HUMAN COMPLEX SOCIETIES spinning out of control? Without sounding alarmist or suggesting imminent societal and ecological collapse -- "Life goes on." -- I wonder whether the highly interconnected systems are slowly succumbing under their own weight due to the apparent inability to invent a new system that is not based on infinite growth. Even the "experts" seem clueless in their respective fields, fixated on short-termism and career advancement, largely ignorant of the many instruments they have created, whether financial, technological, or otherwise. The systems are running full speed ahead, blindly, as no one is able to understand the myriad parts and their relations within the whole and measure the global consequences of these ever-faster moving parts, which are increasingly controlled and dominated by powerful machines that literally compute the decision making process on behalf of their initial creators who have mostly become their servants. It looks like the only domain in which humans still revel is the ideological realm, however ossified it may be. And so, we are facing an acceleration -- speed again -- of many large and small crises that taken individually look inconsequential, but when taken together present challenges that we are ignoring at our own peril.

LET ME TRY to illustrate my thoughts through a few concrete examples, all having taken place in the past month and one half.

US COAL MINE DISASTER: On April 5, the Upper Big Branch mine in Montcoal, West Virginia, in central Appalachia (one of the poorest regions in the U.S.) exploded. Twenty-nine miners died. The mine's owner, the Massey Energy Company, has an abysmal safety and environmental record that is well known, but keeps reporting record profits year after year for the benefit of management and shareholders while miners, according to the US Bureau of Labor Statistics, take home a median hourly wage of $17.75 (2008 stats). Massey is also well known for spending millions of dollars on local, state, and federal lobbying.

ASHES INVASION: On April 14, the eruption of Iceland's Eyjafjöll volcano brought the airlines to a standstill over most of the European continent, disrupting traffic for people and goods. That standstill has had reverberations or ripple effects all over the world. For instance, flower growers as far as Kenya saw their crops rot on their local tarmacs as all flights destined to the European market were cancelled. Talk about the butterfly effect!

ECOLOGICAL DISASTER: On April 20, the semi-submersible oil-drilling platform, known as the Deepwater Horizon, exploded and sunk killing 11 rig workers and injuring 17. The rig was owned by Transocean (currently, a Swiss company, but rooted in American oil craze) and operated by British Petroleum with assistance from Halliburton and Cameron. In the first quarter of 2010, BP made a $5.6 billion profit. The damages to the environment, the marine life, the birds, the coastal marshes, and human livelihood are incalculable. By the time the crisis recedes odds are it will have dwarfed the consequences of the Exxon Valdez oil spill 21 years ago. After almost one month into this ecological catastrophe, no one knows how to plug the hole located 5,000 feet under water and how many barrels are being released on a daily basis (estimates go from 5,000 to 25 or even 50,000 barrels a day). And keep in mind that hurricane season in the Gulf of Mexico begins on June 1...

NATURAL DISASTER: On May 1 and 2, torrential rains (more than 13.5 inches in two days) led to flash floods in Tennessee, Kentucky, and Mississippi. Nashville was submerged. Eighteen people died in Tennessee, six in Mississippi, and four in Kentucky. In addition, a tornado hit the western part of Tennessee, killing one person.

BOMB SCARE: Also on May 1, a media-defined naturalized American citizen "Jihadist" attempted to create civilian mayhem by leaving a Nissan SUV loaded with a poorly-assembled bomb made with propane, gasoline, fertilizer, and fireworks in the heart of New York City, Times Square, forcing the evacuation of the area and ratcheting fear in people's mind.

FINANCIAL SCARE: On May 6, the Dow Jones Industrial Average plunged over 500 points in minutes, reaching an historical record of minus 998, before somewhat rebounding. For that week, the Dow was down almost 6%. To date, no one understands what or who triggered this dramatic fall. Ironically, at the close of the session the human marionettes who stood on the podium clapping with a smile on their faces had an advertising billboard in their back that read "MINDSPEED."

MORE COAL GRIM NEWS: On May 8, two methane gas explosions in one of Russia's largest coal mines -- the Raspadskaya -- located near the West Siberian town of Mezhudechensk and partly owned by the Russian billionaire Roman Abramovich (the owner of the British Chelsea football club) killed 66 miners (as of May 13), with still 24 missing workers.

ANOTHER SUNKEN RIG: On May 12, an Indian semi-submersible rig, leased to PDVSA, the Venezuelan national oil company, sunk off the coast of Venezuela. All 95 workers were rescued. The rig, named Aban Pearl, was drilling offshore in a natural gas field.

COAL MINE REDUX: A coal mine explosion occurred in China's southwest province of Guizhou on May 13. So far, 21 miners have been killed.

MORE ASHES: Iceland's Eyjafjöll volcano is erupting again at the time of this writing and airlines flights are being jeopardized over Europe and parts of Northern Africa.

ATTACKS ON THE EURO: In my March 22 Blips #98 I noted the rumors that the rating agencies wanted to downgrade the credit-worthiness of various European countries. The rumors were confirmed in the weeks ahead when Greek bonds were eventually downgraded to junk followed by further downgrades on the Spanish and Portuguese debts. A panic ensued; a bailout arranged by the other members of the European Monetary Union (EMC, or Euro Zone) and the IMF that forced upon the Greek government a drastic program of austerity. Pressures mounted on Spain and Portugal, forcing their respective governments to also announce drastic austerity programs. Confronted with a mushrooming sovereign debt crisis, the European Union agreed to rush a Euro 750 billion plan (€440 billion of loans from euro-zone, €250 billion from the IMF, and €60 billion from an EU emergency fund) to rescue member countries in financial difficulty -- in other words, taking more debts to attempt to finance insolvent member countries' debts and save European banks that are, for the most part, the financial institutions holding those toxic assets, all the while pushing more austerity plans all over the EU. Still, in spite of these efforts, the attacks on the Euro have not abated, leading the German Chancellor to declare that the collapse of the Euro, if it happens, will lead to the failure of "Europe and the idea of European union." She could have added, "and this will be the last fire started by the arsonists [the famed 'markets'] that will burn to the ground the global financial system, with no firefighters left to extinguish it."

US ONGOING ECONOMIC TROUBLES: On May 5, Freddie Mac asked the government for an additional $10.6 billion in help after posting an $8 billion loss in the first quarter. Five days later, Fannie Mae asked for $8.4 billion after losing $13.1 billion in the first quarter. Both Freddie and Fannie, though not officially nationalized, are effectively owned by the government. They guarantee or own close to half of all residential mortgages -- about 31 million loans worth on paper over $5 trillion. As of May 15, the number of failed banks seized by the FDIC reached 72. This number can only increase dramatically due to failing commercial real estate mortgages that are concentrated in mid-sized banks. According to Elizabeth Warren, who heads the TARP Congressional Oversight Panel, about half of all those mortgages will be underwater by the end of this year. Said Warren in a March 29 interview on CNBC, "We now have 2,988 banks -- mostly mid-sized -- that have these dangerous concentrations in commercial real estate lending." She added that it will result in a "very serious problem" for the economy -- an economy that is kept afloat through huge flows of public funds. By next month the public debt will pass the $13 trillion cap. As Rolfe Winkler of Reuters wrote on his Blog Capital Zoo on May 12:

Each incremental trillion is going by so quickly, it's hardly news anymore...

$6 trillion: February 28, 2002
$7 trillion: January 15, 2004 (22.5 months)
$8 trillion: October 20, 2005 (21 months)
$9 trillion: August 31, 2007 (22 months)
$10 trillion: September 30, 2008 (13 months)
$11 trillion: March 16, 2009 (5.5 months)
$12 trillion: November 16, 2009 (8 months)
$13 trillion: May-June 2010 (6-7 months)

THE BLIND LEADING THE BLIND on the road to the proverbial cliff, that's how it looks from this observation post. The world is witnessing the burgeoning of multiple ticking-bomb crises -- ecological, financial, technical, technological -- that detonate at an ever-faster pace. In each occurrence a rescue team is sent to patch the latest hole in the hull of the global ship taking in water through multiple leaks. Next, finger pointing -- the blame game -- becomes the tune of lawmakers before creating commissions to investigate the "incident" and rushing to pass a new legislation so that the "incident" will supposedly, by miracle, "never happen again." Every commission, every committee, every legislation focus on the problem at hand without taking into consideration the overall picture, the interrelations among the multiple events. The narcoleptic body politic, affected with neoliberal sclerosis, willfully or ignorantly, closes its eyes to the root causes of the systemic failures. No one, not any one, is able, or again willing, to put two and two together. That, for instance, the unequivocal linkage between coal mine disasters (and mountain top removal, an insane, utterly destructive form of coal mining) and the insatiable, ever-growing thirst for electricity; or the direct cause-and-effect link between our mode of transportation and oil spills -- and wars; or the undeviating connection between income inequalities, poverty and debts; or interconnection between the devastation of blue fin tuna fisheries and sushi dishes and canned tuna; or, or, or... The examples abound, all symptoms of systemic failure, which the decision makers and the populace refuse to address. Instead, we are all running blissfully over the cliff, sheep-like, idiot-like -- an intellectual crime for which there is no penalty but oblivion.

THE POPULACE ITSELF is confused, kept in a constantly mediated state of fear, and angry. People hold everybody responsible -- especially the politicians and their corporate funders...everybody but themselves. So they'll vote the bums out of power and replace them with other demagogues. It just happened in the UK, Germany, and France. It may well follow course in the U.S. next November. Yet, these alienated masses refuse to face the root causes of the global crisis. They essentially mirror their representatives and bosses. To wit: An NBC News/Wall Street Journal recent poll shows that 60 percent of Americans support offshore drilling despite the occurring devastating spill. In other words, damn the consequences and let the gas-guzzling addicted crowd stick to its favorite pastime.

The elites will happily oblige since they are the principal beneficiaries of the state of affairs while the end-timers are having a field day. And those of us who do offer real, workable alternatives to this mayhem will remain ignored or accused of dangerous, treasonous radicalism.

The rat race carries on with no end in sight -- a pathetic myopia, indeed. It does not have to be the order of the future. Remember and work for the "virtue of collective action for the collective good," as the ailing Tony Judt put it so elegantly in his latest book, Ill Fares the Land.

(Believe it or not, this is my 100th Blips. I wish I could have been more optimistic on the occasion of this inconsequential milestone! I hope readers will keep following the thoughts of this Martian.)

 . . . . .

C'est la vie...

And so it goes...


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Gilles d'Aymery on Swans -- with bio. He is Swans publisher and co-editor.   (back)


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Swans -- ISSN: 1554-4915
URL for this work: http://www.swans.com/library/art16/desk100.html
Published May 17, 2010