Decline of the Empire

Long Open Thread

I'll put this open thread up and keep it open for any comments DOTE readers might want to make on topics of interest over the next five weeks. If you find useful links, put them here. If you want to complain about the state of the world, do it here. Play nice.

I will make occasional remarks or post links of interest here.

Directly below, the Coen Brothers sum up the Human Condition in two scenes from Burn After Reading.

And here's something serious to watch, Jeremy Jackson's Brave New Ocean lecture (1:28:13)

"...Rachel Carson (an environmental writer in the 1950s) offered solutions but ... the problem is that more than half a century later, the problems haven't changed..."

DOTE Goes Off The Air

Naturally, I reserved the last day to say goodbye.

Yesterday I found humanity not guilty by reason of insanity — humans are non compos mentis, which means "not of sound mind and hence not (legally) responsible; mentally incompetent"

Although yesterday's post focused on tragedy, you won't be able to bear the suffering unless you also remember that the human situation is also Dark Comedy. Humor is your best defense against the slings and arrows of outrageous fortune on this planet.

First, some housekeeping.

1,612,639 Lifetime Pageviews
1253 Pageviews/Day
1528 Total Posts
8966 Total Comments

Today is the 1288^th day since the beginning of DOTE time

You can see that DOTE traffic peaked some time ago. I've been below the average pageviews/day (1253) for some time now. But that's enough of that. Here's what I'm going to do now.

• I'll keep the website up indefinitely.
• I will organize some of the content and publish some links posts when I get around to it.
• I will publish some longer stuff on a monthly basis (probably). Look back in early September.
• I may put all DOTE posts on a CD which would be available for small fee.
• If the shit hits the fan in the next few years, I will resume publishing for a while. I don't expect that to happen. I believe there will be continuing decay of the usual sort.

I don't have to reiterate what I've tried to do on this blog. You already know. I am a writer of non-fiction, unvarnished with Obligatory Hope.

To those who lashed out at me for daring to tell them the truth about themselves and the Human Prospect, I have nothing to say.

To those whose generous support, either through supportive messages or donations, helped keep DOTE going, I am eternally grateful. I have friends all over the world, and you have a friend in Pittsburgh, although I will probably never meet you.

Uhmm .... this is hard. Bear with me.

It's always a sad day when something we love or want or need dies. But death is a part of life, and I had reached the end of the line on DOTE.  I could feel it. I've had no regrets since I announced my decision to quit my daily writing. I'm addicted to writing, and you know me—I can't shut the fuck up—so you will be able to read other things by me in the future if you want to.

I did this for love of wisdom. I didn't do it for money. I wasn't trying to sell you anything. It was always in the back of my mind that you might be learning something here, perhaps learning to see Homo sapiens with fresh eyes. I urged you to take off the blinders and see the world anew. I hoped you didn't mind.

I wanted readers who were willing to join me on the journey into "consciousness" (for lack of a better word). I did not want readers who were deluded or crazy or wanted to fight me tooth & nail every step of the way. Those people dropped out anyway, or I pushed them out.

Again, words can not express the gratitude and affection I feel toward those who did join me on that journey, who stuck with it right to the bitter end.

I'll quote from an older post in which I was asking for your support. I was referring to George Clooney's movie about Ed Murrow's stand against McCarthyism in the early 1950s.

Murrow (actor David Strathairn) was talking about television, which was in the early stages of becoming the weapon of mass destruction it is today. The remarks Murrow made in the 1950s also apply to the internet this year, or any other year for that matter.

This instrument can teach, it can illuminate; yes, and it can even inspire. But it can do so only to the extent that humans are determined to use it for those ends.

Otherwise, it is merely wires and lights in a box.

So from me to you, even though it is 9:00 AM in Pittsburgh, but also bearing in mind that it will soon be cocktail time in the UK, I will quote Ed Murrow, a person of real integrity of a type which hardly exists anymore. Murrow lived in a time when it was still possible to take the world seriously.

Good Night and Good Luck

Blameless — Humans Just Can't Help Themselves

Dear fellow-sufferers,

It was pretty easy for me to write this blog over the last 42 months. Aside from whatever talent I might have, the reason it was easy to write DOTE was that once I began to remove myself from the largely unconscious world humans live in, and started looking at human behavior from the perspective of a true outsider, it became easier and easier to deconstruct the Human Condition.

For example, take that Elon Musk post I wrote earlier this week. I just whipped that out, it was like falling off a log, because from where I was sitting this hopeless techno-optimist's money-making schemes are ludicrous. I was simply describing what was in plain sight for your benefit. To me, Elon and others like him simply look ridiculous, especially in the context of the enormous, self-created problems humans face in the 21st century.

Now, if my perspective on the Human Condition is "correct" in some sense, and my view of Human Nature is also "correct" in some sense, and by writing DOTE itself I have (for myself) confirmed the "correctness" of those views over and over again, it follows that humans are very limited animals. Their behavior is heavily constrained in ways which they can not possibly begin to fathom. This is a necessary outcome of the deterministic outlook I sketched out in my posts about the reality of the unconscious and Flatland. And although my views are easily falsifiable, they have not been falsified by anything I've seen.

For example, and mark my words, there is geo-engineering in your future. Wait for it.

It also follows that my running commentary on human folly is necessarily invisible to humans in the general case. And it has been. DOTE has no natural constituents,  unlike liberal websites, investment/economics websites, social media websites, doomer websites, and all the rest.

However, if humans can only make very limited choices and their behavior is thus so heavily constrained, as I first outlined in my Free Will post, it also follows that humans are not to blame for the absurd or wantonly cruel and destructive things they do.

In short, humans are largely blameless because they just can't help themselves. After all, from my perspective they are not making choices; they are simply acting out their nature—Homo sapiens is a species, so what you see is what you get.

So what I have described on DOTE over these last 42 months is a classic Ancient Greek tragedy, where a figuratively "blind" person pursues his inevitable Fate or destiny (harmartia). Oedipus  unknowingly kills his father and marries his mother, thus bringing disaster down upon his city and family.

Briefly, there are three broad classes of unconscious people.

• the completely, hopelessly unconscious (e.g. Elon Musk)
• the mostly unconscious
• the partially conscious

Of those in the first group, nothing more can be said, and certainly nothing can be done. Of those in the very small third group, you know who you are—Realists (but not emotionally distraught and thus terminallly confused doomers), or people coming to grips with the Human Condition, or people who have glimpsed the ongoing human tragedy, or people who are not waiting for (hoping for?) "the collapse" but who know that eventually in the 21st century it will come because it's an inevitable outcome of human overreach.

The second group, those who are mostly unconscious, is more interesting. This group includes standard pro-growth environmentalists or "liberals" in the classic sense—basically, anybody, regardless of some inevitable political persuasion, who believes deeply in the secular religion called Progress. This group is especially tragic in the sense outlined above because it seems to me that these types do know, albeit unconsciously, that human action (e.g. pursuing endless growth) is destroying the biosphere and, ultimately, will destroy Homo sapiens itself. They are killing their children, or their children's children, and can do nothing about it.

But these "good" people are unable to bring these "suicidal instincts" into consciousness, and thus they are destined to destroy themselves even as they yean for a better world which will always be unavailable to them.

Now, if humans are "blameless" because they can only think (using the term loosely) and behave in very limited ways, it also follows that it is a bit unfair for me to rub their noses in it over and over again. And I have certainly done that over these last 42 months.

Still, I think it had to be done, even though, necessarily, it does no good. But carrying on seems to me like beating a dead horse, and I have grown weary of beating that horse. And also remember that you can lead that horse to water, which I did, but you can not make it drink. And now we know why.

This doesn't mean I will be eager to hang around with humans in the future. After all, they can be cruel, they are certainly untrustworthy, and you never know when some form of human shit will hit the fan you're standing in front of. In the end, they don't know what they're doing or why they're doing it. I've seen that over and over again, both in my personal life and the larger public life I write about.

Tomorrow is the last day.

People are tricky
You can't afford to show
Anything risky, anything they don't know
The moment you try
Kiss it goodbye

 

Does A Bear Shit In The Woods?

When you're born into this world, you are given a ticket to the Freak Show, and when you are born in America, you get a front row seat
  — George Carlin

The point of today's post is simple, probably deceptively so.

Steve Hargreaves of CNN Money is asking Are big banks driving up commodity prices?

OK, I can hear some of you laughing.  Wipe that smirk off your face! — this is not a laughing matter

From oil to electricity to metals, big banks, hedge funds and other "non-users" now own a large chunk of the world's resources.

That banks are allowed to own physical commodities — as opposed to purely financial assets like futures contracts — is a relatively new phenomenon.

In 2003, the Federal Reserve, which regulates investment banks, decided there was little risk to consumers or markets if the banks were allowed to own the commodities themselves.

But now critics are questioning whether that activity is distorting markets and driving up prices.

Critics? As you will see below, this report is "fair and balanced," as all such reports in the-world-made-by-humans must be.

"These activities threaten to undermine the fundamental policy objectives that underlie the principle of separating banking from commerce," Saule Omarova, a law professor at the University of North Carolina at Chapel Hill's School of Law, wrote in a paper last year.

Omarova will be among four people testifying at a Senate hearing Tuesday on the impact banks are having on the commodities markets.

This comes on the heels of several reports of banks accused of hoarding commodities and driving up prices...

And The New York Times recently reported that Goldman Sachs  is driving up the price of everything from soda cans to cars, by stockpiling its customers' aluminum in Detroit warehouses. By shuffling the metal between warehouses that it owns, Goldman is able to collect more rent for housing the metal, while complying with complex commodities laws.

Big banks are accused of driving up the cost of everything from aluminum cans to gasoline.

Let's skip the details. The details don't matter. I don't care about the details. I don't care about "complex commodities laws." Let's focus on the question of interest: are big banks driving up commodity prices? I will answer that question with a few questions of my own.

Is the Pope Catholic?

Does the Pope wear a funny hat?

Is the ocean salty?

Is the sky blue?

And so on. Confused humans will say you can't jump to conclusions! You've got to be fair here! You need to weigh and balance the evidence!

No, I don't.

In fact, I know with great certainty that commodity price manipulation by the Big Banks is far worse than the fairly surfacy stuff I can see.

And why don't I need to be "fair" to Big Bankers and those trading commodities at the Big Banks? Because I know how humans behave generally, and I also know that among humans, commodity traders at Goldman Sachs and other "investment banks" are the scum of the Earth. Those assholes would run over their own grandmother to make a buck. They belong in the 4th circle (for the greedy) of Dante's Inferno.

And because I know about these humans, it is easy to imagine how the Federal Reserve, in 2003, "decided" that there was little risk to consumers or markets if the banks were allowed to own the commodities themselves. How it was that central bankers rationalized that particular decision is of no interest to me. If humans are unable to see the obvious dangers of scumbags at the Big Banks trading in markets in which they own substantial assets, I can not help them. It's a no-brainer, literally.

Yet, here we are. Humans find themselves in this same place again and again and again ... the list is infinite. At the appropriate level of observation and understanding, there is no need for Congressional hearings, and later, another "settlement" with the outgunned  and compliant SEC, where those charged with prosecuting the Big Banks will later retire from "public service" and go to work for the Big Law Firms representing the Big Banks.

How did things get to this point? I'm not talking about the historical details, for example this one—

Commercial banks are prohibited from owning trading assets, but the two former investment banks argued that their commodity activities are permitted under a "grandfathering" clause in a 1997 law that effectively scrapped much of the Glass-Steagel act separating the commercial and investment banks.

As I said, studying the details of this particular fall from grace is a waste of time. I want to talk briefly about how I myself got to this point.

About four years ago in 2009, a Big Personal Shift began for me which (at that time) was about 20 years in the making. It didn't happen all at once, as with an epiphany. Rather, it was a process which continues to this day and culminated in the posts I've written on DOTE over the last 18 months or so. I believe those later posts are much sharper and clearer than the posts I wrote earlier back in 2010 and 2011.

But back to 2009. I was disgusted with human beings, but this time I did not remain stuck in that disgust and my other emotional reactions to human shenanigans. No, this time I started asking some very specific, tough questions, although they were vaguely formulated at the time. Questions like these—

Why (in my mind) was I still occasionally defending human fuck-ups and dividing up what humans do into "good" behavior and "bad" behavior?

Why did I still occasionally divide the world up into "good guys" and "bad guys", coming down hard on one side of various questions (as in today's example)?

Why was some part of me still clinging to Obligatory Hope and good outcomes?

Why was I still occasionally playing these perpetual, futile human games (like this commodity price manipulation/investigation of same game)?

And so on. It took a while, but I got to the point where I could see both sides of any human struggle and I could also see that both sides were almost always equally fucked up. In an ideal world, I'd like to see lots of things, things like strict separation of commodity trading and ownership by the Big Money Boys. But preventing bad outcomes like that one is like trying to stop a glacier from moving forward by standing in front of it. Why do such parasites always exist? Why do human beings always tolerate the existence of parasites ripping them off? Those are better questions.

I saw that the Human Condition, by and large, was all of a piece, it was a unified whole. There was a thing called Human Nature and I was staring right at it. There was no avoiding seeing it anymore. I now call this mess Flatland.

I resolved to start telling the Awful Truth after these "revelations" hit me and I had fully absorbed the obvious lessons they contained. No more game playing for me, for example this nonsense from the CNN Money article.

Even in cases where banks can own the commodity, like electricity, many think their involvement is a good thing.

While there may be some cases of banks behaving badly, on the whole, more players has meant lower and stable prices for consumers, [some people] argue.

"From over 30 year of experience, I can tell you that the introduction of more buyers and sellers has been beneficial," said Susan Court, an analyst at SJC Energy Consultants specializing in FERC issues. "It makes for a more liquid market."

I got better at telling the Awful Truth over time. There wasn't much of a pre-defined vocabulary for me to draw upon. I had to invent it as I went along.

So I don't want to argue about whether Big Banks are driving up commodity prices. The answer is as plain as the nose on your face. Only a blind man could not see it. Only a self-deluding big-brained bipedal primate which will never get a clue could possibly think the answer is complex, nuanced, worthy of study, requires hearings before Congress, and so on.

Summing up, the question on the table is are big banks driving up commodity prices?

Once the expected corruption kicked into high gear, which was inevitable, the self-evident answer was, and always will be—

Does a bear shit in the woods?

You might be surprised to learn how many questions this simple, sarcastic retort answers.

 

Elon Musk, High Tech Wonder Boy

It's like a persistent, annoying itch. If I go two weeks without trashing a techno-optimist, the itch become unbearable. I've got scratch it. So here we go, one last time. Let's conclude with a splendid specimen.

Elon Musk is in the news. Actually, let me rephrase that. Elon Musk always needs to be in the news and so he is. When the human brain-wiring gods were putting little Elon together, they overdid it a bit. Actually, quite a bit.

Here we go again.

Last week, the entrepreneur and engineer behind Tesla and SpaceX, Elon Musk, sent the Twitter-sphere into a frenzy when he announced that he would release his plan for a revolutionary new transportation system on August 12th.

Musk calls this system the "Hyperloop."

He describes it as a cross between "a Concorde, a railgun, and an air hockey table."

No one knows exactly what the Hyperloop is, but every since Musk first mentioned it, people have been speculating. Last week, a Twitter user with the handle @John_Gardi tweeted a diagram that Elon Musk pronounced "the closest I've seen anyone guess so far."

The diagram, which you can see [below], shows a looped tube in which vehicles like train cars appear to be being propelled along by air traveling at many hundreds of miles per hour. At the ends of the loop, the cars move out of the air column, decelerate, and then stop in "stations," where they pick up and discharge people. When more people have embarked, the cars are then accelerated to the speed of the air column with magnets, and then they whizz off toward the other end of the loop.

John Gardi's "best guess" about Elon Musk's Hyperloop. The Wonder Boy says "it will be able to whisk you between San Francisco and Los Angeles, and other similar city pairs, in 30 minutes." Click to enlarge.

We must wait until August 12th to fully grasp the depth and scope of this undefined bullshit, but I will be off the air then, so I thought I'd take a look now.

But before we look very briefly at the physics, may I make a few common sense observations?

• Elon Musk's Tesla makes electric cars only rich people can afford to buy.
• Elon Musk's Space X plans to colonize Mars. It will cost you $500,000 to ride the rocket. Elon was quoted as saying that this price is "affordable."
• What kind of people need to travel between San Franciso and Los Angeles in 30 minutes? People like Elon Musk do. 

So what do you think riding the Hyperloop will cost you if the Boy Wonder's latest "pipe dream" (literally!) comes to fruition? Elon has a silent mantra he likes to chant in the shower, by the pool, in his car, in bed, at the office, during sex, and everywhere he goes—

SHOW ME THE PUBLICITY ...  SHOW ME THE MONEY ...  SHOW ME THE PULICITY ... SHOW ME THE MONEY ...  SHOW ME THE PUBLICITY ...

Kind of hypnotic, isn't it?

OK, let's look at the physics. Russell Brandon of The Verge speculates about how Elon Musk's Hyperloop might actually work.

The problem [of friction, drag] could be solved by sucking all the air out of the tube and leaving the cars to travel through a vacuum. "If you have a vacuum in a tube, then you have zero drag," says George Maise, fluid dynamics expert at Maglev 2000. "There's no limit on the speed, really."

Musk is on record saying that the Hyperloop isn't a vacuum, but keeping a column of air traveling at nearly supersonic speeds would require a huge amount of energy to maintain — unlikely, for the kind of lightweight, solar-powered transport Musk has described.

It's a puzzle, and one we're unlikely to have any firm answers for before August.

It's a puzzle for sure — the puzzle is why this flaming narcissist hasn't been locked up to prevent him from bullshitting the gullible public ever again. On the other hand, Elon wouldn't be nearly so "successful" if humans didn't love this shit already.

The choice of Elon Musk was serendipitous during this last week of the blog, although he is often in the news

Musk nicely illustrates so many of the things I've talked about lately and since the beginning. There is the Human Conceit, which Elon exemplifies so splendidly. There is the fact that Elon is delusional (e.g. colonizing Mars), which has been a recurring theme on DOTE. And there is the double helping of unconscious drives which Elon got at birth, including but not restricted to—

• the social instincts — Elon must be ecstatic. There's lots of buzz, and it's all about Elon!
• the technological instinct
• over-the-top optimism

So when I say that Elon Musk is living well in the unconscious, which I also call Flatland, I hope you now understand what I mean by that. It's Elon's World, and we're just walking around in it.

As I said at the top, a splendid specimen. Watch the video. Elon comes off as such a humble, self-effacing guy!

 

One Last Time — A Mass Extinction In The Oceans

I wanted to talk about the oceans one more time before Friday. It is a subject near and dear to my heart. I don't so much want to talk about new scientific studies, though I will mention some, but rather I want to talk about human ignorance and avoidance of the subject.

If you do the Google query mass extinction in the oceans, you will get a cluster of articles dated to June/July, 2011. And if you do the same query on You Tube, you will see the same thing. Why is that? Because that's the last time a major scientific report was issued warning humans about a mass extinction in the oceans, outside of the stuff I have reported on in the last two years. Another journal study appeared in that time, and I reported on it, but it appears to have been trapped in the science ghetto; it did not get picked up by the AP, UPI, Reuters or the other big wire services that are the source of almost all mainstream articles about such subjects.

What can we conclude from this? That nobody cares about the incipient, ongoing mass extinction in oceans? Yes. That very few people even know about the incipient, ongoing mass extincton in the oceans? Yes. That the incipient, ongoing mass extinction in the oceans was just one more story in the daily news cycle, sort of like weekly jobs claims or Lindsay Lohan's latest embarrassment? Yes.

There was a book about a coming mass extinction published this year, although I can't find any particular focus on the dire state of the oceans in reviews of the book, or video interviews and news stories about the author—I have not read it, would not have it in my house, and certainly would not pay to read it.

The author's name is Annalee Newitz and the book is called Scatter, Adapt And Remember (excerpts from Google Books). And the first sentence of chapter 1 reads like this.

If you think that humans are destroying the planet in a way that's historically unprecedented, you're suffering from a species-level delusion of grandeur.

And here is the last few sentences of the book.

Things are going to get weird. There may be horrific disasters, and many lives will be lost.  But don’t worry. As long as we keep exploring, humanity is going to survive.

Her "point" in the opening sentence is that there have been other mass extinctions during the Phanerozic (the last 542 million years) and this is just another one. Her last sentence expresses her ineffable Hope that humans will survive the next mass extinction—it is sure to occur sometime within the next one million years!—because there are always species which survive mass extinctions. And are we humans not great? Sure we are!

But of course what makes the "6th Extinction" historically unprecedented is its astonishing rapidity. The other mass extinctions, bigger or smaller, took tens or hundreds of thousands of years, or millions of years, whereas this one is happening so quickly that it is effectively invisible on the geological time-scale. And this mass extinction is also unique because of its cause, which is us.

But that's the merely the beginning of Annalee's complete (but not surprising) inability to come to grips with the near-term consequences of human destructiveness. (See the chapter on Terraforming, by which she means geo-engineering.) I could, if I so chose, get into the details and thoroughly dispense with Ms. Newitz. You can look at this article and come to your own conclusions about the quality of her so-called "thoughts" on these matters.

I will not waste my time doing that today because I've got other fish to fry. Suffice it to say—and Annalee, please repeat after me—

There is a mass extinction under way, humans are causing it, it is centered in the oceans, and it is happening incredibly rapidly on the geological time-scale.

The point, really, is this: Annalee's mass-extinction-for-optimistic-idiots book doesn't matter because it will soon be forgotten. My articles on the incipient, ongoing, very rapid mass extinction in the oceans don't matter because they will soon be forgotten by all by a few hundred people.

More alarmingly, scientific papers like this one (and see here) don't matter because the results will never register with all but a scant few scientists who study these issues professionally. Here's the abstract, from the journal Nature Climate Change (no. 2, pages 33–37, 2012).

Climate model predictions and observations reveal regional declines in oceanic dissolved oxygen, which are probably influenced by global warming. Studies indicate ongoing dissolved oxygen depletion and vertical expansion of the oxygen minimum zone (OMZ) in the tropical northeast Atlantic Ocean. OMZ shoaling may restrict the usable habitat of billfishes and tunas to a narrow surface layer. We report a decrease in the upper ocean layer exceeding 3.5 ml l⁻¹ dissolved oxygen at a rate of ≤1 m yr⁻¹ in the tropical northeast Atlantic (0–25° N, 12–30° W), amounting to an annual habitat loss of ~5.95×10¹³ m³, or 15% for the period 1960–2010. Habitat compression and associated potential habitat loss was validated using electronic tagging data from 47 blue marlin. This phenomenon increases vulnerability to surface fishing gear for billfishes and tunas, and may be associated with a 10–50% worldwide decline of pelagic predator diversity. Further expansion of the Atlantic OMZ along with overfishing may threaten the sustainability of these valuable pelagic fisheries and marine ecosystems.

That may appear to be unfathomable goobledygook, but what it means is that hypoxia (dissolved oxygen depletion) in the upper oceans has been increasing since 1960, and this is "compressing" the habitat of the fish which were studied (tuna and billfins like blue marlin). Further expansion of the OMZ (oxygen minimum zone) "may [further] threaten the sustainablity of these valuable pelagic fisheries and marine ecosystems."

Yo! Annalee! Did you read that one?

Thus it is hard to escape the conclusion I am pissing in the wind here on DOTE, and more tragically, so are the authors of that Nature Climate Change paper.

I wrote about the dire state of the oceans because nobody else seemed to be doing it. And I love the ocean.

So ends my last oceans post on DOTE.

If that's true, why are we just sitting here???

 

The Rational Postulate In Economic Life

In an article called The Time Bernanke Got It Wrong, Floyd Norris of the New York Times gives us a wonderful quote about rational economic man, also know as Homo economicus.

In his speech last week, Mr. Bernanke cited several assessments of the Great Moderation, including the one by the Fed economists. None questioned that it was wonderful.

The Fed chairman conceded that “one cannot look back at the Great Moderation today without asking whether the sustained economic stability of the period [1983-2007] somehow promoted the excessive risk-taking that followed. The idea that this long period of calm lulled investors, financial firms and financial regulators into paying insufficient attention to building risks must have some truth in it.”

One economist who would have expected that development was Hyman Minsky [image above]. In 1995, the year before Minsky died, Steve Keen, an Australian economist, used his ideas to set forth a possibility that now seems prescient. It was published in The Journal of Post Keynesian Economics...

When I talked to Mr. Keen this week, he called my attention to the fact that Mr. Bernanke, in his 2000 book “Essays on the Great Depression,” briefly mentioned, and dismissed, both Minsky and Charles Kindleberger, author of the classic “Manias, Panics and Crashes.”

They had, Mr. Bernanke wrote, “argued for the inherent instability of the financial system but in doing so have had to depart from the assumption of rational economic behavior.”

In a footnote, he added, “I do not deny the possible importance of irrationality in economic life; however it seems that the best research strategy is to push the rationality postulate as far as it will go.”

Before I push the "rational postulate" as far it will go in the Real World, note that "the Great Moderation" properly includes (on the lower end) what I call The Bubble Era (1995-???, and see here and here). Also note that "the Great Moderation" also defines the period (up to 2007) when almost all income gains went to the wealthiest Americans, and household debt grew and grew to make up for lost income.

Now, back to the "rational postulate" and two brief case studies. These examples embrace wildly different areas of our economic life.

Case Study 1 — Student Loan Rates

I'll quote from Cheaper student loans after Senate deal, for now (CNN Money, July 19, 2013).

According to the deal, undergraduates taking out loans this fall will pay just 3.86% in interest on new loans for this school year — cheaper than the 6.8% interest rate that kicked in on July 1. The new rates would apply for loans taken out after July 1.

But student advocates don't like the deal, because rates are expected to rise in coming years.

"It's a missed opportunity, because this is going to cost students more than leaving current rates in place," said Lauren Asher, president of the Institute for College Access & Success, a nonprofit that advocates for more affordable higher education.

Under the deal, a high school senior who takes out college loans in 2017 would see interest rates as high as 7%, higher than current law. And by 2015, graduate students would pay more in interest than is set by current law...

For loans this fall, undergraduate students would pay an overall interest rate of 3.86%, comprised of the June 1 yield on the 10-year Treasury note plus 2.05% extra. Graduate students will have to pay 5.41% on loans this fall, which is 3.6% over Treasury notes auctioned on June 1.

Every year that the economy improves and interest rates rise, the Treasury notes will rise. And so would student loan rates under the new deal. However, loans for undergraduates will be capped at 8.25% and for graduates at 9.5%.

If student loan rates climb into the expected range by 2017, which is likely if the Fed raises short-term rates and stops buying T-bills, it's fair to say that we're getting into some serious usury on the part of the federal government. Why is that happening?

Over 10 years, the bill will raise $715 million that will go toward reducing deficits, all from students paying higher interest rates than current law allows.

Thus the federal government, in small part, will attempt to fix its own recklessness on the backs of students paying exorbitant (and growing) tuition costs, as opposed, say, to raising corporate tax rates to reasonable levels. In so far as $715 million is not even a drop in the federal debt bucket, why bother to force former students to pay that money? And where does all the other revenue from student loan interest go? It's certainly not all going to pay the administrative costs of federal loan programs.

It is bad enough that economic policy itself is irrational and unfair. For example, household debt levels are not considered to have an important impact on long-term growth, and nobody seemed to think America's growing income inequality was worth talking about until Occupy Wall Street brought the subject to the public's attention. (That's all over now.)

What is worse is that economic policy is not defined by economists, as bad as that would be. Economic theories are merely props for politicians who can pick and choose among such theories to rationalize and justify whatever agenda they want to carry out. In so far as that agenda often ignores the needs of nearly all of the nation's citizens and puts the desires of the monied elites front and center, can we really speak of a "rational postulate" when discussing our economic life?

How rational is it to condemn many of the nation's young people to a life of student debt slavery? Saddling young people with huge amounts of debt will certainly not further the stated goal, which is fostering economic growth. Even Henry Ford understood that he had to pay his workers a living wage if they were going to be able to buy the Model Ts they were building.

At a higher level of inquiry, given the unfairness on display here, we might ask why do complex human societies exist? Why do nominally capitalistic economies exist? Who enjoys the immense benefits of human societies and "free enterprise" economies, not in theory but in practice? These are the questions that come to mind.

Do you see anything rational, not to mention Good, in usurious student loan rates? Anything at all?

Case Study 2 — Managing Fisheries

Let us skip questions regarding the long-term destruction of marine ecosystems, and focus on the smaller question of managing fisheries to maximize the economic benefits derived therein. I'll quote from Evolutionary Changes Could Aid Fisheries (Science Daily, July 18, 2013).

Sustainable fishing practices could lead to larger fishing yields in the long run, according to a new study that models in detail how ecology and evolution affect the economics of fishing.

Evolutionary changes induced by fisheries may benefit the fishers, according to a new study published last week in the Proceedings of the National Academy of Sciences. But if fisheries are not well-managed, this potential benefit turns into economic losses, as stocks decline from overfishing and further suffer from evolution.

The bad news is that today very few fisheries are managed in a way that will lead to yield increases in the long term. While these fisheries may not be in danger of collapsing, IIASA Evolution and Ecology Program Leader Ulf Dieckmann says, "There is a big difference between preventing stocks from collapsing and managing them so as to achieve an optimal harvest."

The new study, led by 2005 IIASA YSSP participant and Peccei Award winner Anna Maria Eikeset, examines Northeast Arctic cod [image above], one of the most commercially important fisheries in the world.

It builds on a growing body of work showing that fisheries-induced evolution typically leads to faster growth and earlier maturation.

These evolutionary changes may harm a fishery, since they tend to lead to smaller adult fish and could push the animals to reproduce at too early an age, when they are not yet good at it.

On the other hand, the changes can also lead to greater reproduction and hence more fish. But nobody knew how these negative and positive effects balance out economically.

The new study shows that the balance depends on how aggressively a stock is fished: if the fish are harvested optimally, evolution helps, whereas if the fish are harvested too aggressively, evolution harms the economic interests of fishers and fishing nations.

Consequently, to reap these long-term benefits, fisheries managers must first cut back substantially on the amount of fish that are harvested today.

"Harvesting Northeast Arctic cod optimally means taking 50% less fish," says Dieckmann. "Our model shows that by making this substantial cut and waiting for the stock to rebuild, evolution and natural growth could lead to sustainable yields over 30% greater than today."

The reason "very few fisheries" are managed in a way that increases long-term economic benefits is that nearly all fisheries are exploited to maximize short-term economic benefits, and the long-term health of the fishery be damned. There are only a few exceptions where regulation of fisheries is imposed from above by governments which can impose legal action and penalties. Otherwise, humans always take a myopic, devil-may-care view of ocean resources.

Do you think that fishermen, whether they are private citizens or corporations, would change their fishing practices if only Norwegian scientist Anna Maria Eikeset got a chance to sit down and talk to them about the consequences of overfishing?

I don't think so.

Is there anything rational about how humans exploit the world's ocean fisheries? Anything at all?

When we "push the rationality hypothesis as far as it will go," to quote Ben Bernanke, we see that it doesn't go very far, not just in these case studies but in thousands of others that could be brought to bear. Floyd Norris has something interesting to say about this.

It seems to me that [Bernanke] had both Minsky and Kindleberger wrong.

Their insight was that behavior that seems perfectly rational at the time can turn out to be destructive.

As Robert J. Barbera, now the co-director of the Center for Financial Economics at Johns Hopkins University, wrote in his 2009 book, “The Cost of Capitalism,” “One of Minsky’s great insights was his anticipation of the ‘Paradox of Goldilocks.’

Because rising conviction about a benign future, in turn, evokes rising commitment to risk, the system becomes increasingly vulnerable to retrenchment, notwithstanding the fact that consensus expectations remain reasonable relative to recent history.”

Behavior that seems "perfectly rational" in the short term turns out to be destructive over the longer term. These destructive outcomes decisively undermine the imputation of rationality in our economic life.

And there is nothing rational about "rising conviction about a benign future." I call that innate Optimism. What are the risks of creating generations of student debt slaves? What are the longer term risks of overfishing the oceans? What are the risks of letting the financial system run wild for decades?

The Realist says the risks are great. The Optimist, echoing Alfred E. Neuman, says "risks? what risks?"

That's the final word on "rationality" in our economic life.

The Human Conceit

When I posted Suck-Up City yesterday, I was reminded of what I call The Human Conceit, which I mentioned in Why Doesn't Negative Information Go Viral?

Humans filter or reject negative information, as I first discussed in The Optimist's Brain. And let us not forget in this context that Ignorance Is Bliss. Humans surround themselves with positive information about themselves and their astonishing exploits. Human never tire of basking in their everlasting glory. Humans consider themselves to be the greatest thing the Universe ever produced. Humans think, albeit unconsciously, that the goal of all Creation, starting with the Big Bang, was to create them. I call this The Human Conceit, and I will post about it again before DOTE goes off the air.

Most of this human self-evaluation has nothing to do with Reality, of course, which is why I must present a lot of negative information on DOTE to provide even a tiny semblance of balance in the human view of the natural world and the artificial world they have created. As I once said in another context, the net effect of presenting this negative information is a lot like pissing in the ocean to raise the sea level.

Needless to say, highlighting negative information is not a popular thing to do...

The conceit arises out of anthropocentrism, which can be defined this way—

1. Regarding humans as the central element of the universe. 

2. Interpreting reality exclusively in terms of human values and experience

Humans think they are the greatest thing since sliced bread, the cat's meow. Well, great compared to what?

Therein lies the rub, because there are no other species, tangible Higher Powers or space aliens to tell them otherwise. In the end, of course, Nature will tell them otherwise, but that hasn't happened yet.

See my Letter To God.

We can divide the humans up into roughly three piles, those forming the elite, those in the middle, and the downtrodden. The Human Conceit is chiefly the province of the elite, and has been since the rise of complex societies.

The elite include the most "successful" humans or those humans who had "successful" ancestors. The elites always run the show in modern, complex societies. A bona fides member of the elite always believes that he or she deserves his or her success because of his or her inherent wonderfulness.

Such "success" is achieved in the strictly human terms of an anthropocentric world the elites themselves define. And there is never a dearth of toadies eager to tell those in the elite just how great they are. It's all bullshit from the vantage point of a helpless outsider looking at the social world from a suitable distance.

In my subjective opinion, the "best" human beings are never the ones running the show. These people have managed to shun the allure of money, power and status. They have humility, and not just because conventional "success" was unavailable to them.

On the other hand, show me a Big Cheese, the Big Kahuna, the Head Honcho, the Top Dog, and I will show you a hopelessly irredeemable asshole who stepped on countless people in the middle or among the downtrodden—or whose ancestors did— to attain the exalted status he or she now holds.

And who is "elite" and who is not invariably a matter of context. Does your boss act like a little Napoleon who likes to push you around? Merely because he or she can do so because you need that job? And academics are even worse. Give people a little power, and watch what happens.

Really, if Homo sapiens is a fucked-up species, and the bulk of the evidence points that way, then members of the governing elite are by and large the most fucked up among the fucked up, not counting the most dangerously insane in the middle or among the downtrodden. Think of it that way.

Thus we get the unassailable arrogance, the astonishing hubris—the Human Conceit—we see in those who run human societies in the United States, Brazil, China, Russia, or anywhere else except Finland

And as the inestimable George Carlin once said, those in the elite don't give a fuck about you. Progressives and leftists are very good on this point, but a little weak on the next one.

There is nothing to be done with these alleged "leaders" short of cutting off their heads, but that doesn't help us out much because new assholes will simply arise to replace them. That is always the outcome. There are no exceptions, it is only a matter of time.

There's no escaping the Human Condition, and Progress is a myth.

I myself will keep on searching for a heart of gold.

Have a nice weekend.

 

Suck-Up City

In so far as my forays outside of Flatland are more frustrating than rewarding and can not possibly have a salutary effect on my high blood pressure, I am going to spend the final days of this blog having fun.

I love living on a planet teeming with big-brained bipedal predators who don't know what they're doing or why they're doing it. Can't get enough of that! Ya' can't trust 'em as far as you can throw 'em. Love it, love it, love it!

Did you know there's a global coalition against corruption called Transparency International? I didn't.

I mean, c'mon! — these are human beings we're talking about here. You might as well have a global coalition against high-tech toys or stupid bullshit.

Come to think of it, why not put together a global coalition against stupid bullshit? I'm sure we could get 26 people to sign up for that.

Wait, hang on a second — George Carlin is dead. Make that 25 people

Anyway, the transparency folks found that 75% of Americans believe that Democrats and Republicans are corrupt, which only leaves us wondering about the remaining 25%. And when I saw that, I was reminded of a recent article called The Roiling Swamp of Washington (Wall Street Journal, July 12, 1013). Such articles express contempt for the contemptible, and I pride myself on the fact that when it comes to the corrupt elites running this sorry country, nobody has more contempt for them than I do.

The writer Andrew Ferguson (of The Weekly Standard) is sarcastic throughout, which is only appropriate to the subject.

Last week, the Washington Post's gossip columnists called Mark Leibovich's "This Town" a "takedown of insider Washington," and insider Washington—also known to the author as The Club, The Political Class, Suck-Up City and more—has been doing its best to be scandalized.

It's harder than it sounds.

Yes, it is. And I quote — Leibovich's  new book "This Town" describes Washington as a city that is "hopelessly interconnected," with "beautifully busy people constantly writing the story of their own lives."

Mr. Leibovich, said the Post, takes "sharp-eyed digs at the rich and famous" as well as the rich and not-famous. (Every member of Washington's political class is, by any common standard, at least rich.)

We get social-climbing hostesses throwing sumptuous, pointless parties; Reagan-era mastodons making millions as political consultants doing God knows what; and journalists, such as NBC's Andrea Mitchell, who can scarcely turn around without head-butting a conflict of interest.

[sucking up, image above — President Obama with Ed Henry (then of CNN), press secretary Robert Gibbs and NBC's Brian Williams, 2009]

It turns out, moreover, that all those idealistic dreamers who followed Barack Obama to Washington have abandoned government work after a few years and landed nice, cushy jobs with non-idealistic corporations. They're just sick about it.

One White House press officer produced a 33-point memo about Valerie Jarrett titled 'The Magic of Valerie.'

So the evidence is in. Washington is a roiling swamp of narcissism, hypocrisy, insincerity and money-grubbing.

We can thank Mr. Leibovich, a New York Times reporter, for making the case in such vivid ways, even some he may not be aware of.

Let's skip the bulk of the review and get right to the meat. How does Mr. Leibovich make his case in ways which he may not be aware of?

I'm sure some of you have already come up with the answer — he's sucking up too!

Mr. Leibovich is a fine writer and a wide-awake reporter. He's also a great big pussycat.

[Magical Valerie, image left]

He comes off less an observer of Suck-Up City than someone the suckees have pressed into service. He takes care to identify powerful hostesses as "lovely"; one even "looks fabulous in a bikini." A logrolling pair of sleazy party hacks turned lobbyists appear as lovable "good-time guys," and in-the-tank reporters are described boldly as "fierce, smart, and tenacious."

No one but a fully immersed insider could write a sentence as follows: "It's always a thrill to score the invite to Ben and Sally's." These bits of bogus flattery are presumably intended to keep the author just this side of his friendly sources' good nature—if they have one. The invites will keep coming.

If, as the Post claimed, some of Mr. Leibovich's "digs" are "sharp-eyed"—well, he kids because he loves. Washington has always enjoyed the brave speaker of truth to power, the satirist confronting the powers that be, who, in turn, think he's just the cutest little thing. The tradition of naughty, naughty boys runs from the piano-pounding Mark Russell to the late Art Buchwald up to the still-breathing Post columnist Dana Milbank. The mere presence of such declawed mascots serves chiefly to reassure the political class. How insular and corrupt could we really be, they may ask themselves, when we employ our own Shakespearean Fools to berate us for our insularity and corruption?

Mr. Leibovich settles comfortably in this line...

For whatever reason, he has chosen to be just a naughty boy, bravely brandishing his peashooter and aiming two clicks off target so that no one important gets stung.

Sucking up, status-seeking, sycophancy, ass-kissing, toadying — call it what you will, you know they're all doing it. They just can't help themselves!

Yesterday I included this type of behavior in the "social instincts." But that's such a dry term, dontcha think?

But then, Ferguson spoils our fun. He notes that the Real Problem is that the Roiling Swamp is merely a glorified extortion racket, which it is.

But the real problem with "This Town" isn't its triviality or phony-baloney fearlessness. It's the flattened view of politics that Mr. Leibovich shares with other members of The Club, their near-total lack of interest in the ideas that are supposed to shape the political arrangements of a contentious but self-governing country...

A near-total lack of interest in the ideas which are supposed to shape... Right, they're too busy partying, sucking-up and jostling for position.

No, Washington is unique because its human pageant is played out entirely on someone else's dime.

Mr. Leibovich isn't the first professional observer to notice that Washington's economy is from top to bottom parasitic, but he is one of the first not to be especially bothered by it.

The money that Suck-Up City sucks up is wealth created by the productive labor of faraway citizens who send it to the capital under penalty of law, according to whatever pretenses the political class can get away with, and that is then passed around as transaction fees.

Moneymaking Washington-style is a many-layered version of the ditch digger who shovels across your front yard and then demands you pay him to fill up the hole...

That's the extortion racket.

Though always a derivative enterprise, journalism might be expected to stand as at least a partial check on the unappetizing spectacle. Instead, in Washington, journalism is the most dubious trade of all—leeches fastened upon leeches.

Leeches upon leeches — meet the Washington press corps!

Why write about "social instincts" when you can see the real thing in action?

Here's some more magic. It's all about transparency.

 

Flatland — A "Good Enough" Theory Of Human Cognition

During these last days I promised to explain a few things ... here goes nothing.

Without much ado, I give you the simplest possible, abstract view of how I think the human mind works. This is the "good enough" theory of Human Nature I've referred to many times in the past. Such a theory is the sine qua non of understanding human behavior and the eventual fate of our species Homo sapiens.

I have a private vocabulary to describe the phenomena I write about. I call the simple, "good enough" theory of mind Flatland, loosely based on the book by Edwin Abbott. Speaking metaphorically, humans seem to live within a highly constrained "2-dimensional" space (defined in the graphic below) from which there is rarely any kind of escape.

Escaping Flatland implies an expansion of consciousness/awareness into "3-dimensional" space where Flatland itself becomes partly visible. Clearly, you can not explain what a 3-dimensional space looks like to a person who lives entirely in 2 dimensions. This metaphor seems to capture much of my experience of writing DOTE, and also explains this blog's lack of reach.

Reading certain comments on this blog, or looking over something I intended to write about, I would say to myself "so and so lives in Flatland."  But then again, who doesn't? — at least to one extent or another.

Welcome to Flatland! This simple schema leaves out lots of stuff (e.g. language, sensory data processing, low-level anatomical functions like breathing, etc.). I'm interested in explaining the stuff I've discussed on DOTE. The list of drives which reside in the unconscious may be too long, or not long enough. Click to enlarge.

Notes

1.  You may be saying "this theory way too simplistic!"  Well, of course it is, dummy! You've got to start somewhere. God only knows how the interplay between the unconscious and awareness actually works, or where consciousness comes from (see below). Neuroscientists don't know, and neither does anybody else.

2.  The key observation is that information/control only flows one way—from the unconscious into awareness, and not the other way around (text in lower left above). This is the fundamental human flaw. This simple theory attempts to explain all the problems I pointed out in my recent post The Reality Of The Unconscious.

3. The existence of various unconscious drives can only be inferred by close, unbiased observation of human behavior. This is much harder to do than it is to say. Needless to say, the workings of the unconscious are opaque to awareness. See my post Seeing The Signal In The Noise.

4.  Such an "architecture" could only arise by means of standard evolutionary processes working over the period of idiosyncratic brain expansion (encephalization) in the human animal—our lineage among the hominins—which occurred over (at least) the last 2.5 million years. If you think about it, you will quickly conclude that there is a fundamental integration problem regarding awareness and the unconscious. In short, these two mind components are poorly integrated in accordance with the observations in note #2 above.

5.  If this "architecture" of the mind is conceptually correct, it implies that consciousness itself (awareness, the Ego, the sense of self) arose as an evolutionarily useful byproduct of bigger, better connected, unconscious brains. If that were so, we would expect to observe the basic illusion that awareness is running the show, whereas it is actually the poor dependent in a master/slave relationship.

6.  This theory is easily falsifiable. Take my two "favorite" (and related) disasters, anthropogenic climate change and wanton destruction of marine ecoystems. To falsify Flatland, we would have to see something like this—

• Humans generally change their behavior such that they stop overfishing the oceans and putting so much carbon dioxide into the atmosphere. 
• Humans generally become aware that their behavior is driving a mass extinction, and manage to come to the sensible conclusion that this is not a good thing.
• Humans generally abandon the illusion that technology solves all problems (the hammer and nail problem) and gravitate toward behavioral solutions instead. Humans manage to overcome the technological instinct.
• Humans consciously reject "growth instincts" governing population and consumption. These instincts, along with the rest of the Flatland mess, will probably lead to the (near?) extinction of Homo sapiens within the next few centuries.
• Humans generally abandon their apparently innate Optimism and start assessing risks realistically. See my post DOTE Has No Natural Constituency and follow the links therein.

And so on, considering everything I have said over the last 42 months. I would love to be proved wrong.

7.  If you look at complex interactions between various components of the unconscious, apparent, resultant complexity in human behaviors and beliefs grows very fast, very quickly. In fact, the resultant complexity is identical to the God-Awful Mess we call the Human Condition. For example, the Technological Instinct + innate Optimism = Matt Ridley or Elon Musk or Ray Kurzweil (or any of the other techo-optimists I have ridiculed on this blog). Or we get plans to live on Mars. Look at any of my Mars posts or my techno-optimism posts. Why do you think young people walk around all day with their heads buried in smart phones? It's their social instincts at work. And when you tap into those, you're sure to make money! And isn't making money what it's all about? (See growth, survival, etc.)

That's enough to chew on for today.

You may be thinking what the fuck do I have control over?

You can choose what to eat for breakfast (or maybe not ).

If you find this kind of Determinism depressing, be sure to look at my post Mysteries Of The Human Brain. If that doesn't make you laugh, nothing will.

I first used the hilarious video below in The Astounding World Of The Future.

It never gets old