“Imagine that you are creating a fabric of human destiny with the object of making men happy in the end, giving them peace and rest at last, but that it was essential and inevitable to torture to death only one tiny creature - that baby beating its breast with its fist, for instance - and to found that edifice on its unavenged tears, would you consent to be the architect on those conditions? Tell me, and tell the truth?”
- Fyodor Dostoyevsky, Brothers Karamazov
Religion is the opiate of the masses. - Karl Marx
Religion does three things quite effectively: Divides people, Controls people, Deludes people. - Carlespie Mary Alice McKinney
An atheist is a man who has no invisible means of support. - John Buchan
I contend that we are both atheists. I just believe in one fewer god than you do. When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours. - Stephen Roberts
In Christianity neither morality nor religion come into contact with reality at any point. - Friedrich Nietzsche
Atheism leaves a man to sense, to philosophy, to natural piety, to laws, to reputation; all of which may be guides to an outward moral virtue, even if religion vanished; but religious superstition dismounts all these and erects an absolute monarchy in the minds of men. - Francis Bacon
Calling Atheism a religion is like calling bald a hair color. - Don Hirschberg
The God of the Old Testament is arguably the most unpleasant character in all fiction: jealous and proud of it; a petty, unjust, unforgiving control-freak; a vindictive, bloodthirsty ethnic cleanser; a misogynistic, homophobic, racist, infanticidal, genocidal, filicidal, pestilential, megalomaniacal, sadomasochistic, capriciously malevolent bully. - Richard Dawkins
Which is it, is man one of God’s blunders or is God one of man’s? - Friedrich Nietzsche
Pray: To ask that the laws of the universe be annulled on behalf of a single petitioner confessedly unworthy.
– Ambrose Bierce
Huxley, Friedman and Roosevelt
Perhaps the deepest truth I know of, is an utterance that comes to us long lost from an English novelist of the 19th Century by the name of Aldous Huxley, who said “That men do not learn very much from the lessons of history is the most important of all the lessons that History has to teach.” Today we live in a literal proof of a society misunderstanding of the profound nature of this observation, at least economically speaking. In 1929, on the day the stock market crashed, the headline of Variety read, Wall Street Lays an Egg. Thats timid compared to whats already been said about today’s circumstances. The fact is though, Variety like today’s media, has it all wrong.
It was the economist Milton Friedman who best summed up the cause of our present-day economic woes with his thoughts on what caused the Great Depression, saying “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy,” Change came from an usher as desperate as were the times. Just four short years later, in his 1933 campaign speech, Roosevelt said, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” And try they did.
Day in the Life
Such brute force as proposed there, howsoever, will serve ill the very different America of today. How different is it? In some ways very different, in others respects not at all.
- Food Shortages: The Tri-State Observer reports that the US has no remaining grain reserves…
According to the May 1, 2008 CCC inventory report there are only 24.1 million bushels of wheat in inventory, so after this sale there will be only 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief. Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The o°©nly thing left in the entire CCC inventory will be 2.7 million bushels of wheat which is about enough wheat to make 1?2 of a loaf of bread for each of the 300 million people in America.”
Here is a direct link to that report.
- Energy Crisis: Fox News asks, “Are We at Risk of a Global Recession Because of Oil?”
- Environmental and Natural Disasters: Some of these Oil spills, Ozone depletion, Earthquake related Tsunamis, a European heatwave that killed over 37,000 in 2003, and Hurricane Katrina just to name a few.
It sounds as if I’m describing doomsday but I’m not. I’m describing today, the 1930s, the 1970s, and I might as well be describing any day at random. The fact is these things happened before and will again. And Huxley’s lesson will continue to escape most of us just as it has done and will continue to do.
Not everyone comes as late to History class fortunately, some realize this and try and find new, more useful ways to look at the past. And some manage to apply what they learn. Current Macroeconomic theory suggests consumers and businesses of Great Depression era relied on cheap credit. Consumers did so purchasing goods, while businesses did so investing in production. This economic behavior fueled rapid, short-term economic growth, creating swells of debt. When prices deflated, growth essentially collapsed. As the corporations and consumers both defaulted on loans, unclaimed, full inventories further deflated prices. The corporations laid off workers reducing consumer spending, eventually creating a kind of self-sustaining cycle, and later the wave of defaults shook banks. Confidence plummeted in corporations, the markets, and finally the banks themselves, creating a ‘run on the bank.’ This suggests a way to look at today.
Today, we face very alike conditions. A systemic networked banking system creates investment banks such as Bear Stearns, called “too big to fail”, that require 30 billion dollar rescues when the same debt-fueled growth cycle causes just their collapse. And while that may have plugged one very apparent hole, the overall cycle will continue.
Starting in 2003 until sometime in 2007, the economy saw the same sort of rapid, short-term growth across a majority of markets, favoring housing, equities and derivatives, relying on the same kind of cheap, plentiful credit used prior to the Great Depression. Today different from the 1930s, that cheap credit has been delivered by sharing the debt amongst banks and further wrapped up as derivatives securities — this, and inter-bank lending creates the systemic connection between banks potentially making them too big to fail.
Before long though, debt-fueled growth causes confidence scares; loans come to term and defaults drive the flow of money out of lenders and spenders and into things like commodities, where the cycle enters the next phase. The new and higher commodity prices push down the equities and other securities and raise costs. The whole tree begins to poison, spreading one branch at a time.
Back to the Future
The future cannot be known but the past is not as limited. Thus, I feel confident in the future I see ahead, so mindful of the past. I say next, we’ll begin to hear about other lenders, spenders and connected investment vehicles; as CNN has only just put it, there are more perils ahead. Problems will crop up with automobile loans and students loans as well the securities that are related. The government may step in or reduced auto sales might help ease certain energy prices; the oil bubble might burst, leaving just food and other inflation to deal with. The student loan market is already drying up though and the government is already getting involved.
Despite the panic in the markets and all the volatility, I’m confident, though I realize quite sadly, to know our future, we needn’t look into any sort of crystal ball, but instead right where Huxley would suggest, using eyes focused backward in time.
“There are many unattractive aspects to prison too. But one aspect most advocates won’t realize is, a prison is just a domain like any other. Except prisons are by very definition domains which aggregate criminal social activity. Thus, one undeniable aspect is, they operate as super-nodes of criminal behavior; hubs for knowledge-transfer and viral information exchange like universities, hospitals or military bases — only in this case its all of the criminal sort and subversive to society. This of course benefits the criminals as you can imagine, so while you put the worst minds together, they communicate, now in consort, to nodes that freely redistribute within the whole system, in the form of visitors.”
New Category… My Quotes. Why repeat things? Post ‘em, reference ‘em, be done with it. First up, explaining the results of Drake Equation…
“To explain the results of the Drake equation to other people — especially people who understand the Fermi Paradox — I would say, consider first that life as we know it, is rather small relative to the scale of the Universe. And second, that there are forgotten factors in the Drake equation, things like time, or the distribution of civilizations over such a factor as time or even space. So, because life as we know it hasn’t evolved on the scale of the Universe and has only ever thrived on the planetary scale, it is unlikely given the results of the Drake Equation, given observations like the Fermi Paradox, given existing physics, and given the size of the known Universe, that we shall come to contact some alien intelligence of a form of life as we know it. Though, I believe of all that rubbish… the greatest constraint is really philosophical and it is in how we define things like alien, intelligence and life.”
From Scienceblogs, a quote I must not let you miss, showing an interesting turn of conversation. Check it out the full beast here. Terse and lovely, the turn goes…
The other thing we evolutionary biologists don’t do enough of, and this stems from the previous point, is make an emotional and moral case for the study of evolution. Last night, I concluded my talk with a quote from Dover, PA creationist school board member William Cunningham, who declared, “Two thousand years ago someone died on a cross. Can’t someone take a stand for him?”
My response was, “In the last two minutes, someone died from a bacterial infection. We take a stand for him.”
It was Marcus Aurelius who said “Each thing is of like form from everlasting and comes round again in its cycle.” Looking toward our future in this age of industrial and technological super-boom, maybe whats looming just ahead, is the justice of a balance only nature must keep. In other words, the eventual, equally unrelenting… Super-bust. Its a topic I’ll continue to discuss from a variety of perspectives going forward. The content shown below is mostly reiterated from here, it describes how something just like this can happen, only with our financial structure.
Financial speculator and billionaire, George Soros states in his FT.com commentary: “the current crisis is the
culmination of a super-boom that has lasted for more than 60 years.” In June’s Higher Rates Reflect Default Risk we described the end of the last credit boom: “In 1928, the U.S. Treasury Bond similarly broke out of the channel and rose to a higher yield. This coincided with the end of ‘easy’ money which forced the deleveraging of the economy and concluded with the financial crisis of 1929-1932.” Compare the two Treasury Bond Yield charts below. In 2005-2006 higher bond rates “broke out of the channel” and inflicted damage on the housing market. This marked “the end of ‘easy’ money.” Similarly since 2006, there has also been a flight to quality.
George Soros explains what happens next: “if federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term
bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.” As we described last June, we expect 10 year Treasury Bonds to be sold for cash in the panic, just as occurred at the end of the last credit cycle. Billionaire investor Julian Robertson agrees. As he revealed to Fortune: “the biggest bet that Robertson has in his own portfolio at the moment” is “long the price of two-year Treasury and short the price of the ten-year Treasury.”
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