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Guest Post: Why Things Are Falling Apart... And What We Can Do About It

Tyler Durden's picture




 

Submitted by Gordon T. Long of GordonTLong.com,

To understand the reasons why our financial system, our economy and our present policies are unsustainable, we need to come to grips with two simple truths. First, the economy and government are an interconnected system. As such the party attempting to steer it does not have controlling power over it. The second fact is that “faster, better, cheaper” always wins, replacing the inefficient and unsustainable. This is the reality within which the system operates.

The present foundation of the system, and our economy, is Financialization. This is not by design but rather by Darwinian evolution. It has unfortunately, become the basic engine of consumer growth through its' leveraging of collateral into debt and phantom assets, such as derivatives and bubble valuations. The limiting fact to this system is that ever-rising debt and leverage is unsustainable, once household assets and incomes stop rising.

Uncontrolled financialization & unsound money, without historic exception, consistently leads to:

  • Malinvestment in the Private sector - In the private sector cheap money will naturally flow into high-risk, low-return investments. This leads to “McMansions in the Middle of Nowhere”
  • Crony Capitalism in the Public sector - In the public sector, crony capitalism secures low risk, high-return investments. This leads to “Bridges to Nowhere.”

The system in its present form has become too complex, fragile and insufficiently robust, that it is realistically unsustainable and un-governable. The unsustainable will collapse and be replaced by an arrangement that is sustainable. Creative destruction and “faster, better, cheaper” is the only sustainable system; the alternative is to cling to failed models until the system collapses.

"Any intelligent fool can make things bigger and more complex... It takes a touch of genius and a lot of courage to move in the opposite direction." (Albert Einstein)

Additionally, our economy and state are unsustainable for converging and disruptive systemic reasons, that go beyond the financial:

  • Demographics—our aging populace and the impossible entitlements promises made
  • Decline of Paid Work—automation and the Web are destroying more jobs than they create
  • Diminishing Returns of Centralization—the more power the State grabs, the more broken the system becomes
  • EROEI (energy returned on energy invested): energy may be abundant but expensive
  • Healthcare in Crisis—our health declines as we spend 2X more per capita than our competitors
  • The End of Consumerist Growth—if debt and income aren’t growing, neither can consumption
  • Globalization—the genii cannot be put back in the bottle

What We Can Do about It

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries… and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience  of it.” (Machiavelli, 1532)

The better choice is to embrace technological and social innovations and “faster, better, cheaper.”, since it eventually wins, regardless of our preferences.

This means GLOBALLY accepting and INNOVATIVELY moving RAPIDLY towards a DATA System:

    D- Decentralized

    A- Adaptive

    T- Transparent

    A- Accountable

We don’t get to choose, it is the natural order!

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Tue, 12/18/2012 - 16:19 | 3075842 Debtless
Debtless's picture

A watched pot never boils.

Stop watching everything and let it collapse while you're in some other room.

You can't wish it you know.

Tue, 12/18/2012 - 18:27 | 3076379 ball-and-chain
ball-and-chain's picture

The Ivy League Mafia are pretty smart.

They can keep the balls in the air for a long long time.

Look at Japan.

They got a 200 percent debt to GDP.

Yet they haven't collapsed.

I don't see a collapse in the future.

I see a death by slow cuts.

Then again, what do I know?

http://www.angrysinner.blogspot.kr/2012/12/wednesday.html

Wed, 12/19/2012 - 04:19 | 3077764 vato poco
vato poco's picture

I don't want to agree with you, B-and-C. I really, *really* want to disagree; call you a dumbass; junk your comment; all that.

Unfortunately, I think you're right. I have more respect for the integrity and IQ of the banking/political class of Japan as a nation that I do the USA.....and those sorry little scumbags have been stealing from & lying to & fucking over their own people for at least the last 20 years. (assuming we save for another time the discussion of how eagerly they used their fellow citizens as cannon fodder in their little Imperial Adventure back in the '30's and '40's.) Hell, now they got 'em embracing and/or ignoring the ongoing radiation poisoning of the entire country - mustn't lose face! Very bad to lose face! Result: the dumbshit Mr. & Mrs. Watanabes just keep right on voting. Just as if it mattered. Party 'A' for a coupla years, then Party 'B'.....never seeming to understand they're all the same guys. Who are gonna do exactly the same thing as the party they just replaced. Forever, apparently.

So if *Japan* will pull this shit for a generation and show no signs of even slowing down.......I guess we can all predict how the profoundly wise & thoughtful American voters, and the Banksters, and the Wall St. scum, and their bought-and-paid for politicians will do. Death of a thousand cuts: we're fucked.

Tue, 12/18/2012 - 21:22 | 3077084 ramacers
ramacers's picture

absolutely. the only solution is no solution. steel yourself ( if you want to hang in there), and let it go. from the ground up.

Tue, 12/18/2012 - 16:22 | 3075859 -1Delta
-1Delta's picture

 

what can we do?

 

If PPT cant do it, gun laws !

Tue, 12/18/2012 - 17:22 | 3076105 CH1
CH1's picture

what can we do?

We let the sucker crash. I wouldn't save it if I could.

We need a full flush - an utter failure of the stinking, rotten state and the stinking rotten money system that empowers it. (Or is it the other way around?)

Once people get over the insane superstition that the state is God Almighty, we have a chance.

Tue, 12/18/2012 - 20:38 | 3076952 The Alarmist
The Alarmist's picture

The best things in life have been summarised in a Bloohound Gang song ....

The roof is on fire

We don't need no water, let the motherf*cker burn,

Burn Motherf*cker, burn!

Tue, 12/18/2012 - 16:22 | 3075860 LongSoupLine
LongSoupLine's picture

Falling apart???

Shit, we're nearly at 14 fucking 50.

Thanks for the fucking recovery Bernanke you fucking cock tool.

Tue, 12/18/2012 - 21:54 | 3077157 RockyRacoon
RockyRacoon's picture

She and Dick Bove... what a pair!  Bank whores.

Tue, 12/18/2012 - 16:26 | 3075871 fonzannoon
fonzannoon's picture

Merideth Whitney says you should buy the banks. buy them bigtime. that, according to her, is what u can do about it.

Tue, 12/18/2012 - 16:26 | 3075874 Vashta Nerada
Vashta Nerada's picture

We are falling apart because honesty and morality are nearly non-existant in our society now.

Tue, 12/18/2012 - 16:43 | 3075951 JailBank
JailBank's picture

Playing by the rules in the US today just gets you ass blasted by the protected few. Look at the folks who placed money with Crorizine, they worked, they saved, they got ass blasted by a criminal that is protected at the highest levels of government.

If there is one thing the last 5 years in this country has taught us is that honesty and playing by the rules are for suckers.

Tue, 12/18/2012 - 17:26 | 3076118 CH1
CH1's picture

honesty and playing by the rules are for suckers.

Playing by the rules IS for suckers; amen to that! But I would like to hang on to that honesty bit, if only for my own sake.

Tue, 12/18/2012 - 19:37 | 3076726 JOYFUL
JOYFUL's picture

Affirmative...

Like a dog that can sniff it's quarry through 5 counties, but then rolls over when it's finally in sight, commentators in the so-called alternative media bark n bay about suitably abstract concepts like 'crony capitalism.' oligarchies, fascistic statism and the like, then roll on their back and beg for a pat when the real perps come into obvious view...

who are 'the suckers?' - that should now be clear - it's those who don't take nol kidre at Yom Kippur...and who are the 'protected few? - it's those that do. There's never been anything more hidden in plain sight~!.

Do we really need long and fabulously intricate explanations of why the West is going to hell in a handcart? Not if we are sincere in looking for the reason, and finding a way out of the train wreck! It's been the long and patiently guided project of a cabal of conspirators who find a place to hide within the cloak of the three monotheistic religions, and then spin their webs from within to ensare their hosts with the dark magic of usury banking, ideological hocus pocus, and social devolution.

Babylonian talmudists who corrupted and hijacked original torah judaism rule every aspect of your lives...failure to see through their lies and take action to preserve those who you cherish will result in their extinction or enslavement. While it's still not too late to jump out of their boiling soup pot, a few more hits on the snooze button and you will be surely well done.

Tue, 12/18/2012 - 20:22 | 3076889 shovelhead
shovelhead's picture

So, I guess that's a hold on the Hannukah gefelte fish for you, eh?

Tue, 12/18/2012 - 20:58 | 3077009 JOYFUL
JOYFUL's picture

I'll admit to a dangerous fondness for knishes.

Tue, 12/18/2012 - 17:06 | 3076028 darteaus
darteaus's picture

Without God, all things are equally permissible.

 

-- just saying

Tue, 12/18/2012 - 18:12 | 3076317 Tommy Gunner
Tommy Gunner's picture

Haven't you heard the news?  There is no such thing as god - as the late great Carlin said 'Religion is Bullshit' http://www.youtube.com/watch?v=MeSSwKffj9o

Tue, 12/18/2012 - 18:47 | 3076455 sessinpo
sessinpo's picture

With God, things are equally permissible on earth.

Freedom of will. One's judgement comes when leaves their physical being on earth.

Tue, 12/18/2012 - 22:49 | 3077331 ZeroAvatar
ZeroAvatar's picture

Ah, the 'Judgement'.  One of religion's time-tested mind-control techniques. 'Love' is a good word to use, too.  'Guilt', as a concept, works wonders, as well.  Don't forget dualism.  Need lots of cognitive dissonance if this thing's gonna work!

Tue, 12/18/2012 - 20:04 | 3076827 margaris
margaris's picture

Han Solo preaching about god.

This is just wrong.

Tue, 12/18/2012 - 22:24 | 3077251 DaveyJones
DaveyJones's picture

well he did claim to have covered the galaxy

Tue, 12/18/2012 - 17:08 | 3076038 blunderdog
blunderdog's picture

The people I interact with on any given day mostly all seem pretty decent and honest to me.  Seems it's just a few guys in really privileged positions who do the majority of the harm.  I don't think people en masse have changed so much.

Tue, 12/18/2012 - 17:30 | 3076139 CH1
CH1's picture

So long as they obey authority as a default position, they are the big problem.

The endless, small abdications of responsibility by 'normal' people cause FAR more destruction than the occasional monster.

Tue, 12/18/2012 - 18:53 | 3076481 blunderdog
blunderdog's picture

How do you know if someone is "obeying authority" though?

I don't shoplift, for example.  Is that because I'm "obeying authority," or because I'm a decent human being who doesn't want to rob my neighbors?

MOST of the time, you'll end up doing what "the authorities" want you to, but it's NOT because you're obedient--rather it's because what you PREFER to do happens to be within the sphere of actions that "they" declare acceptable.

There's nothing wrong with that.

The problem comes in when people obey authority to do things they PERSONALLY KNOW ARE HORRIBLE, and which they would never otherwise do.  You have a valid point there, but you have to pin it down pretty specifically.  Drone pilots or cops tear-gassing nonviolent protesters are decent illustrations.  Most people rarely (if ever) find themselves in circumstances like those.

Tue, 12/18/2012 - 22:27 | 3077255 DaveyJones
DaveyJones's picture

couldn't agree more

except, I can't decide which, in the end, is more evil, those who are, or those who allow it for too long.

Wed, 12/19/2012 - 08:51 | 3078004 MassDecep
MassDecep's picture

People en masse have changed!!! I mean how many go to ZH each day to learn about truthful news? How many sheeple do you talk to on a daily basis, that have their heads completely up their asses? How many idiots voted this evil jerk and his successors back in office? Come on, this whole society is begging for servitude and oppression. I don't know about you, but this weapons ban thing has me pretty nervous. I am lying awake at night wondering when they will come for the guns. How many sheeple sympathize with me.......NOT MANY!

Tue, 12/18/2012 - 17:18 | 3076091 CPL
CPL's picture

The Road

 

...The ancestral deed is thought and done,

And in a million Edens fall

A million Adams drowned in darkness,

For small is great and great is small. 

And a blind seed all.

- Edwin Muir

Tue, 12/18/2012 - 16:30 | 3075891 insanelysane
insanelysane's picture

I am confused because the Machiavelli quote from almost 500 years ago would indicate that this time is not different so why does the author say there is something that can be done.

Tue, 12/18/2012 - 17:10 | 3076046 earleflorida
earleflorida's picture

mac' only advised-- his perception of reality concerning the human psyche was just that... human nature is what it is!

ironically, he would chuckle inside his head-- that he himself, cared not for his advise... were it not for his masters sword-- but only as a creature of limited existence,  or better said, a surreal survivalist today would care about his family's next meal.  

Tue, 12/18/2012 - 17:16 | 3076082 MachoMan
MachoMan's picture

Because it's more comforting to rearrange the chairs on the deck of the titanic than procure a seat in a life raft and improvise floatation devices.

Tue, 12/18/2012 - 17:20 | 3076095 CPL
CPL's picture

Because talk is cheap.

Tue, 12/18/2012 - 18:37 | 3076350 e.blair
e.blair's picture

We are all used to the ubiquitous tiresome window dressing quotes where the author says P and then quotes some great thinker from the past who also seemed to say P.  But here, what we get is a quote from Machiavelli where he explains why it is difficult to change a corrupt regime (many profit from it while those who don't aren't willing to stick their neck out for something unfamiliar) and then just a glib assertion that there is a better way.  That's it.  No explanation for why what Machiavelli said is incorrect or doesn't apply.  I don't know if I have ever seen a more superficial confrontation with a great thinker.  They return to in the video with the same superficiality. 

Tue, 12/18/2012 - 20:14 | 3076860 CPL
CPL's picture

I would have made the video different as well.

Laser fade in

<Power guitar with 80's synth power melody>

Start a video with an introduction with a quote about individual vice, pull camera back.  

Chick in a teeny bikini bouncing around waving a sign "god is dead".

<laser beam fade out!> 

Then pull into a shot of a regional sketch of Florence Italy at the time with a tight shot on a woodblock print of one of the many fountains.fountain.  

Green screen two hotties in bikini's walking around either side of the fountain shot.

Then watch the two chicks splash each other and describe the pros and con's of post feudal empiricism followed with jello shots from their asses.

 

Oh and a spokes-dog done by snoop-dog reading the prince with a steady bass line in the background in a little circle split screen in the upper left hand corner.

...sponsored by Gatorade.

That's how you have to sell Machiavelli today

Tue, 12/18/2012 - 16:31 | 3075895 darteaus
darteaus's picture

Things are falling apart because citizens no longer believe in God, and, thus, there is no reason to obey the 10 commandments, follow the Constitution, not rip off everyone at every opportunity, etc.

Tue, 12/18/2012 - 16:34 | 3075914 blabam
blabam's picture

LOL GOD! 

Tue, 12/18/2012 - 17:54 | 3076244 CH1
CH1's picture

It's not enough to disagree; you are compelled to ridicule.

And you wonder why people say atheists are hateful.

Tue, 12/18/2012 - 18:51 | 3076468 sessinpo
sessinpo's picture

And not to say I am better. I will probably go to hell. But if blabam is to confront the Pearly Gates, I'd love to have some popcorn as Blablam explains this one. Won't be with worth an eternity in hell, but I'll get a kick out of reminding Blabam of it everyday for eternity. LOL

Tue, 12/18/2012 - 20:28 | 3076917 shovelhead
shovelhead's picture

Haha,

Eat yer heart out.

Born CATHOLIC.

Get out of jail card.

Bought those indulgences cheap many years ago.

It only hurt the first time.

Tue, 12/18/2012 - 16:47 | 3075963 Flakmeister
Flakmeister's picture

I think someone should pull the troll alarm...

Tue, 12/18/2012 - 18:52 | 3076474 sessinpo
sessinpo's picture

No need, it goes off everytime you come to ZH.

Tue, 12/18/2012 - 17:02 | 3076018 F. Bastiat
F. Bastiat's picture

It's Christianity, specifically.  The islamists belive in God, but communism with a God really isn't any better than communism without.

Tue, 12/18/2012 - 17:07 | 3076031 Spastica Rex
Spastica Rex's picture

And what about those rat bastard Quakers, huh? They call themselves Christian. What a load. And Catholics. Don't get me started on enumerating all the different groups of people who suck.

Tue, 12/18/2012 - 18:25 | 3076367 tickhound
tickhound's picture

I thank the Lord everyday for choosing me to be born into the population of 2 billion saved Christians.  30th day Adventist here with a touch of Lutheran and Catholic sprinkles. 

The rest of you?  Fucked.

Tue, 12/18/2012 - 18:31 | 3076393 Spastica Rex
Spastica Rex's picture

Oh, shit: I'm Catholic! Yeah, strike Catholics from the list I'm not going to enumerate.

Tue, 12/18/2012 - 22:30 | 3077260 DaveyJones
DaveyJones's picture

I'm a recovering Catholic

I'm on mythadone now

Tue, 12/18/2012 - 22:35 | 3077285 Spastica Rex
Spastica Rex's picture

Very good!

Careful with the mythadone; it can be a bitch if you don't follow your doctor's recommendations.

Tue, 12/18/2012 - 23:13 | 3077382 tickhound
tickhound's picture

I'm off that shit.  I re-pledged my allegiance to the Pope err King James, and I'm ready to get back to spreading some Christianity.  Where's my gun?  Who's with me? 

 

Tue, 12/18/2012 - 18:38 | 3076381 livid levity
livid levity's picture

Look up the 99 names (or titles) of Allah in the Quaran and then look up the names (or titles) of YHVH in the Bible (Old and New Testament -NKJ is my pref.)  Not describing the same "G-d"

Tue, 12/18/2012 - 18:38 | 3076422 F. Bastiat
F. Bastiat's picture

Makes sense; I've not studied it enough to be fully up to speed on Islamism. "A god" would probably be a better way to put it.

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