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

Tyler Durden's picture

Submitted by Gordon T. Long of,

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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livid levity's picture

What becomes readily apparent is that the titles for Allah are antithetical to the titles for YHVH.

Sparkey's picture

Surely God or G*D which ever you prefer, is only what you think it is.

Element's picture

I'll see your God and raise you a burning-bush, let's call him 'George'.

JLee2027's picture

darteaus is correct. When morality goes the society follows.

Spastica Rex's picture

I thought the highest expression of morality was the unhindered pursuit of self interest. I read a book about it a long time ago.

darteaus's picture

Then, the female preying mantis has it about right.

F. Bastiat's picture

True, but in a world with other people you can't maximize your own self interest without leveraging the standards of morality, the rules of the road, so to speak.


"Happiness", in the Western civilization sense of it, refers to wisdom and virtue - not the primitive post-Western-civilization notions of "happiness" as the satisfaction of primitive animal instincts.

Spastica Rex's picture


As Jesus said:

Love first yourself, and don't forget to leverage the standards of morality when necessary.

F. Bastiat's picture

To keep it simple, for the masses:

"Love thy neighbor as thyself" (Lev. 19:18) = Individual Altruism

"Hope and Change" (Des. 20:08) = Egotistical Collectivism


Altruism opposes egoism.
Individualism opposes collectivism.

Four possibilities, not two.

Spastica Rex's picture

Thanks for picking two passages and conflating them to produce evidence for your world view, whatever in fact it is. It's good to break things down like this for we in the masses.

Very helpful, thanks again.

JOYFUL's picture

Even more helpful would be to focus upon what the Nazarean actually did, instead of what he supposedly said...then it becomes extremely hard to obfuscate...

I find this quote instructive...

A minute later, in an event which was to alter the course of human history, he fashioned a whip out of something he had found along the way, and drove those out of the Temple who had desecrated its holiness through their love of money and ambitious designs.

There's a time and place for everything; but the time for turning the cheek to the moneypower is long a weapon, and drive them out, of your house, for they have done just that to you!

JOYFUL's picture

dup...Great Firewall of China strikes again.

ZeroAvatar's picture

Theeeeeere it is:  DUALITY.   I knew it wouldn't take long.

debtor of last resort's picture

They believe in Blankfein. For 2012, that's enough.

F. Bastiat's picture

That's a pretty dogmatic explanation. Even more dogmatic are the atheists and marxists who virulently defend their primitive, animistic, counter-Christian superstitions.

Religion, in whatever form it's found, is one of the key differentiators of mankind.

Spastica Rex's picture

Especially Islam. And the LDS. And the Scientologists.

sessinpo's picture

Up arrow for you. In another way to say it for you atheist and liberals, it is one of the key differentiators between man and animal. Humans are masters of animals for a reason (talking about productive human purposes such as horses and oxen for farming and transportation, dogs for hunting and companionship. Chickens, pigs and cows for food).

Atheist, often without knnowing it or wanting to deny it are saying that they (the atheist) is no better then any animal on earth. And that is fine with me. You're a monkey if you want to be.

F. Bastiat's picture

Atheism's essentially a religion, at least in the absolute most primitive form of it. There are certainly myriad dogmas and rituals that go along with attempting to deny God and those dogmas and rituals must be virulently defended. As almost any atheist will do. 

Marxism, while related to atheism, is certainly a far more developed counter-Christian religion. Of course, atheism is only one tenet of marxism, but it is perhaps the most important tenet of it.

For better or worse, Christianity is a blueprint for civilization, the superstitions of Marxisim are a recipe for its destruction.

Some things really are that simple.

nmewn's picture

Some things really are that simple...+1.

It does take a lot of faith to be an atheist, they can't provide any proof for their faith ;-)

e-recep's picture

where the fuck is dogma in asking for evidence of god?? i am asking for evidence and you can't provide any. how does that make me a believer??

ZeroAvatar's picture

Wow!  You can cut the fog in your mind with a knife. Thanks for the look inside. 



Zap Powerz's picture


There is "evidence" to support/confirm/validate every single religion, political persuasion, ideology, superstition and conspiracy theory in the world.

For that reason I believe they are all as wrong as they are right, or visa versa (cant remember).

I have a personal belief system that works for me most of the time.  I would never expect anyone else to adopt my belief system.  But you see, my belief system only has to work for me and no one else.  So, for me, my belief system is perfect (for me) like yours is for you.

We are probably both as right as we are wrong.  I guess we'll find out when we are dead, or not. I dont know.

GCT's picture

Darteaus +1 for standing up for your beliefs.  I see alot of junks.  I am going to take this a tad further all and you can junk all you like.  What we have strayed from is good morals and values in society. I do not care how you learned them. The morals and values of our country, the rule of law, and for the most part the world are going into the shit hole for a long time to be honest.

Although a local church does indeed teach and preach high moral standards they too have strayed.  Almost all the commenters come here daily to read about corruption, crooked politicians and bankers that break the law with some brilliant articles and comments.  People see the system failing and make the call day and night to put the culprits in jail, we know the government wants to legally steal from a producer to give to someone else and we call it bad.  You just made a moral or value judgement based on wherever you learn them.  I honestly do not care where you learn them, but you are making a moral or value judgement 

We now live in a world if you produce your the criminal and need to sacrifice more , basically telling us we need to give up even more money to support alot of people that choose not to work because they do not have too or want too.   In my small mind it does not matter where you learn them but that you see the shit we are fed daily as mostly fraud.  I would prefer to have an honest person to dscuss issues with no matter what they believe.  Having good values and morals, and getting back to them, would actually help solve alot of these problems.


darteaus's picture

I knew I was going to get slammed, but if we can't speak our minds on ZH, why are we here?

insanelysane's picture

Long - complaining do-nothing whiners

Short - people with skills and work ethic

kaiserhoff's picture

We have twin dictators: Ben the Bald, and a wannabe Stalinist, and free markets have been revoked until further notice.  Other than that, things are just ducky.

kliguy38's picture

Sorry......they are only mid level ops. The real power resides in the owners of the Fed and you need to do some deep research to find the families. Now the power resides in their bloodlines and the names have been shuffled through marriage to some degree.

madcows's picture

How about we all just stop working and live off the system? Or, let the bots do all the trading and make us mo' money.  Or, vote ourselves a chicken in every pot, or a McMansion in every lot.  Why not rig up the Christmas lights to Unicorn farts.  Maybe hire some Mexicans to do all the work and they could pay us to sit around and get fat.  Or, go all starwars like and get me some robots to farm for water while I play with my light saber and watch scantily clad women on tv.

madcows's picture

Shit!  What?  Rollers.  Naw!  yeah.  Shit!.

Man, I ain't been pulled over in 6 months.  I bet they got SCMODS. SCMODS?  State, County, Municipal, Offender, DATA System.

Dude  DATA has been around since the Blues Brothers.  Way before gay Wesley was playing with him on the New Star Trek or you had some new world economic solution.

you want a solution?  Put the fucking bankers in jail and execute the kleptocrat politicians.  There, fixed.

Boilermaker's picture

Falling apart?!

Are you mad?  have you seen the market?  Are those sleigh bells I hear?  My statement is freakin' awesome!  I'm going to Sizzler.


Dumb ass 401(k)

akak's picture

The author repeatedly harps on the theme of "faster, better, cheaper", as if the three factors were positively correlated.  What happens, however (as is usually the case) when "faster" and "cheaper" are diametrically opposed to "better"?  In almost every facet of modern life, and much to my ongoing disgust, I continually see the first two winning out over the latter.

Tommy Gunner's picture

Harder Faster... that's what she says

livid levity's picture

There is hardly
anything in the
world that some
man can’t make a
little worse and
sell a little cheaper,
and the people
who consider price
only are this man’s
lawful prey.”
(John Ruskin, 1819-1900, English art critic and social



darteaus's picture

The olde project triangle:


Pick Two:

  1. Better
  2. Faster
  3. Cheaper
CPL's picture

And the client response:

It better be faster and cheaper.


Galway Bay's picture

That's not just the client's response.  I hear it just as often from executive management.

darteaus's picture

No problem - it just won't be better.

Undecided's picture


SEC Revokes Registration of Toronto-Based Broker and Bans Two Executives from U.S. Securities Industry for Allowing Layering
Flakmeister's picture

Things will continue along their trajectory until they can't....

Well they can't anymore for a whole bunch of reasons, though it is  primarily because we ran out of cheap oil to enable paying off all that debt from artificial demand brought forward by financialization...

Did anyone really think that a McMansion and a SUV for damn well near everyone was going to become reality?

Iam Yue2's picture


Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.

The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

W B Yeats.

Spastica Rex's picture

William Butler Yeats = +1.

Even if he was kind of a loopy fascist.

Boilermaker's picture


Watch them bang the hell out of the close here.

Honestly, who gives a flying shit now?  This is so pathetically comical and sad that it's just flat out entertainment now.

Let's go 20 handles just for shits and giggles.  You know...high of the day...buying in the close...confidence...all that fun shit.  Hell, let's just do it.

Anglo Hondo's picture

Sounds like the simplification needed is Building Bridges to the McMansion.  Then Nowhere becomes Somewhere closer.

Have I got that right?


marathonman's picture

You're definately getting outside the box. Reminds me of the Terry Tate Office Linebacker commercials back in the 90's.