Monday, January 21, 2013

The Center Cannot Hold, Part 1

by Stephanie Osborn

This is the follow-on post to Sarah Hoyt's "Preparing for the Long Rains" blog. Once again I am splitting it into two halves due to her blog formatting versus mine.


The Center Cannot Hold, Part 1
by Sarah A. Hoyt

I was thinking this morning that there are other things that make this path we’re on uniquely dangerous in terms of preparing for bad stuff, because it’s simply impossible to guess what form the horrible stuff will take.

Here’s a grab bag at random – just off the top of my head.

We’re the largest country organized on non-authoritarian lines (yes, I know, but we’re not organized for it)…I was going to say “to risk collapse” but now that I think about it we’re just the largest country in history organized on non-authoritarian lines. For those who will protest that, go look at the constitution of the European Union. When we organize under a constitution that classifies the curvature of a banana, then we’ll be in the running. (Yes, there are a series of abuses, and we’ve been trending authoritarian and centralized since the civil war – not arguing the rightness or justness of the war, just saying it centralized and strengthened los Federales and their power – but I don’t think it’s got into the DNA of the nation, yet. Having lived here and in Europe and traveled a bit all over, Americans are still likely to tell authority to take a hike.)

I have massive faith in the American spirit. 9/11 happening anywhere else in the world would have turned NYC into well, something out of the movie "Escape from New York", instead of a place where people helped each other get through, which by and large it was. Yeah, I know there are spots where this fails, but by and large Americans look at what needs done and go, "I'll do it," instead of waiting for the duly constituted authorities.

We are being treated to a very weird financial combination. I think I know what the idiots in power are trying to do, but if it REALLY is what they’re trying to do, they are some sort of unique in the realm of dumb.

Look, I was thinking about this yesterday, in terms of what an economic collapse looks like. Portugal [Sarah was born and raised in Portugal. -Steph] sailed dangerously close to it in the mid-seventies, with inflation going insane and people panicking and buying supplies months in advance, and then hysteria about hoarders being drummed up when supplies failed to materialize. (We also had price controls then. An absolute boon for the black market.)

But no one starved and by the end of it several people were better off than they’d been, (though not those who owned real estate, due to rent freeze and not those who’d failed to acquire saleable skills – more on that later.) People who owned gold or had money in the bank, for instance. (Though how much the future prosperity came from America I don't know. I know in the eighties we joked our GDP was made in America.)

HOWEVER to my knowledge – and I’m not as exhaustively well read on it as I’d like to be, because for the last five or six years work/kid stuff has kept me from reading economics as much as I used to. (Shut up. It’s a hobby.)

I don’t know any other country where currency has been printed like ours, and yet the interest rates are held artificially low. The combination is at best daft. Inflation is already showing up, though they keep doing weird stuff to how it’s calculated. (No, I’m not going to argue that. If you buy food, you know inflation has shown up – but beyond that, because the price of fuel goes up {being paid for in devalued dollars} it pushes everything else up, because fuel is used to MAKE everything.) [Or transport it. -Steph]

A lot of the places that can, and where it’s direct, they are already raising prices/lowering sizes – restaurants; food packaging; services; prices for minor stuff like mini-golf courses.

But the lack of employment is holding salaries down. And for those of us like me, who work at a job with irregular pay and who therefore of necessity have “savings” – i.e. a big paycheck goes in bank and is slowly drawn out to supplement my husband’s salary which is our main support – are seeing those savings eaten away. By the time we need to use them, we need more of them, which we're not getting because interest rates are low.

Part 2 next week.

-Stephanie Osborn