Fighting the Problem



Humans are experts at making the wrong moves at the right time and vice-versa, to fading left instead of jumping right, or doing something when nothing would be best; of jumping to erroneous conclusions and then doubling-down on them, to solving problems by creating larger, more complex problems, of letting problems multiply and fester by not discussing them at all.

Humans are experts: our 5,000 year history is marked by follies and missed opportunities, wars and revolutions, bubbles and depressions, failed- or insane leaders and false messiahs, evolutionary change on the outside that alters nothing on the inside. Advances in one- or another area of human endeavor are matched by degradation everywhere else: “They made a desert and called it peace.” The product of our efforts is waste, our ‘good’ is entropy. We endure famines brought about by agriculture also droughts and floods. There is disease, war and death: we never learn. At the bottom is vanity, overreach and ambition. We have enough but we want more or someone in charge wants more for himself and makes false promises and the citizens believe there is something in it for them.

Because this is to be asserted in general of men, that they are ungrateful, fickle, false, cowardly, covetous, and as long as you succeed they are yours entirely; they will offer you their blood, property, life and children, as is said above, when the need is far distant; but when it approaches they turn against you.

— Machiavelli

The solution to every problem for economists and managers is more of something. Now we have more pestilence, everyone knows about it, so the pestilence gives us the most ‘more’ we have likely ever had on so many levels, including the ‘more’ where we get the exactly what we don’t want. We’re surprised about this because all of our industrial endeavors since the 18th century have succeeded in bringing back from the future the material and credit we need while pushing into the future our costs. It never occurred to anyone that the future would inevitably arrive by way of the simple passage of time, that the shiny, new present at our feet would be strip mined of material and credit and stuffed with centuries of unmet expenses: we’re surprised and cry out ‘WHY US’ like biblical Israelites. “Let my people go!” pleads Moses.

“Okay,” sez God, playing the hangman standing on the gallows, fingering the rope, “enjoy your flight!”

Our pestilence (and it is ours) hits us below the business- or economic belt, taking away the precious scale that makes our interconnected, debt-based extraction regime function. We cannot distribute First-Law related costs. People cannot take on the debts of billionaires and tycoons. Resource capital cannot be strip mined, if it can the outgoing products must sit in inventory because they cannot be shipped or made use of. We have a supply shock because of a shortage of workers, and a demand shock because we have a shortage of customers. The scale erodes and trust vanishes both cause and effect. The pestilence exposes our systems as fragile, the managers as pathological liars and cheats, out for themselves and criminally incompetent. Because customers are unwilling to interact with each other and with vendors, there is no peer pressure except to escape the now dangerous economic activities; marketing is confounded, contradictory and otherwise useless, fashion — which drives everything modern — is short-circuited. We cannot have done any better to injure ourselves with purpose.

The pestilence is ‘ours’ because it would have never bothered us if we had left it alone. It resided perhaps for millions or tens of millions of years in some undisturbed corner of nature. But we humans are never satisfied. We view nature and creatures as property to be made use of and exploited in any way that pleases us, that we can annihilate it for entertainment purposes without considering nature can do the same thing to us for no purpose at all.

Now that we own it the next step is to figure out what to do with it. Like all our other big troubles, we can overcome our pestilence problem quickly enough by simply deciding to do so. For example, we can solve overpopulation by deciding to have fewer babies. We can reduce resource-capital throughputs by deciding to do something different with our time; by getting rid of status signaling toys like cars and jet vacations. We can decide to reduce meat consumption, or consumption overall; to borrow less and put our national finances in order. Making decisions is not difficult once the need to do is is recognized. Likewise, the first step to defeating our pestilence is to take it seriously. This means turning away from normalcy bias, the blasé unconcern and arrogance that accompanies our sense of mastery over everything. Whether we like it or not, we are animals, hairless monkeys born into- and a part of the natural world. In our haste to degrade nature, we’ve degraded ourselves at the same time, which turns out to be another thing we can decide not to do.

We also need to stop fretting over the ‘economy’ which has become little more than the cycling of dead money from one banker’s hand to the next while wasting valuable capital. Right now the world’s job description has changed: it is for everyone to stay home away from others to reduce the ruinous destructive power of our newest toy. The world’s managers job is to decide to solve the problem rather than denying- or minimizing it.

After deciding, the next step is to follow a simple plan which has already been shown to work: test, track and isolate. Infected individuals are identified by testing, they’re isolated until they recover on their own, and treated when they can’t. Persons in contact with the victim are tracked and tested themselves. People are kept indoors under lockdown until the outlines of the pestilence can be drawn by testing. Right now, public health administrators in most countries are ‘flying blind’ not knowing how many are infected and where they might be located, learning only when large numbers of cases emerge. In a few days afterward the flood of the sick becomes an overwhelming tsunami leaving medics to triage out those who have no hope of accessing treatment.

Identifying victims requires only an inexpensive pharmaceutical test kit and the manpower to administer it. The key is to act decisively without hesitation, when the number of cases is relatively small and the need for treatment does not crash the medical services. Rapid response would allow time to work in our favor as victims recover, treatment and isolation of infected persons would leave a diminished supply of hosts, the pestilence would retreat. Time is short: the disease expands exponentially faster than managers can decide.

Our pestilence is a world product, no strategy can be entirely effective unless it is universally applied. Every place in the world must do the same thing in a coordinated manner, to test, track, isolate and treat. For more than two countries to agree on anything then act on the agreement is a monstrous task. If one or two countries here or there follows the test regime successfully (like South Korea, China, Taiwan), their populations can be reinfected by travelers. Because the pestilence emerged in one person in one place in one city in one country then spread around the world in what seems like an instant, it can emerge later from another individual person, in a single place in some other country and spread from there. For the duration, a component of efforts vs our pestilence will be vigilance and the determination to act when- and wherever the virus reappears.

My best advice I can offer is to stay away from other people. When the bosses encourage you to go out and have fun, shop or go back to work or school, ignore them.

These same bosses are downplaying the pestilence. There will be severe consequences for this, something that moderns are not used to. We’re poorly trained and have faulty instincts.

Keep your head because the casualty count will be cruel.

The losses themselves will exact a heavy cost on individuals, families, communities and the greater economy. This is a mass-casualty event.

The greatest blow is likely to fall on the global south, in the great population centers, Pakistan, India, Indonesia, Nigeria and similar places, countries where tens of millions live in slums, where there are few places for individuals to retreat to, where sanitation is non-existent and medical care for the well to do, only.

The period of greatest danger to Americans is from now until the end of June, after which time everyone keeping their distance will have had an effect. Plan for a long siege. After then the danger will recede somewhat but not disappear. Vigilance will be required, be aware that a constant state of alert will also be psychologically grueling. Effects will be minimized by following the test, track and treat strategy but many places (like the US and UK) will not follow or will deem it too late to start.

The virus has torn down the facade of our economy, revealing the various, interlocking Ponzi schemes within. The governments and central banks are doing whatever they can to recreate illusions by throwing borrowed trillions in all directions. However the worth of Ponzi assets is declining faster than The establishment’s rescue efforts can replace. At the same time the mindless, panicky response undermines confidence in the cure in a self-amplifying cycle of asset declines, interventions, recalibrations of prices then more declines. In a way, the markets are now pricing the competence of our leaders and business managers. As long as they remain in charge the prices will decline … all the way to zero.

Meanwhile, petroleum prices are lower than they have been since the year 2000. America’s and the world’s long overdue practice in solving our resource depletion problems is well underway and working. Coronavirus is simply ‘Conservation by Other Means™’.

Crude crashes because customers are too broke to pay the higher price!

13 thoughts on “Fighting the Problem

  1. Bachs_bitch

    Thanks for keeping in touch with us Steve. I don’t believe it’s hyperbole to call the US govt/elites’ response to this global plague wantonly criminal, even criminally insane. Let’s run some numbers. Assuming death rate of 0.5-1% and delay between infection to death of 24 days, averaging out that is 150 infected/death. Because of the time delay, current deaths reveal an infection rate >24 days ago. The virus takes around 24 days to kill, 5 for symptoms to show, 5 to worsen, 15 or so to die in hospital. 400 deaths today means 24 days ago, 400 * 150 = 60000 infected by end of February already… 2 weeks before measures were put in place! And a doubling rate of 3 days (the rate observed), means by March 1 there were 120000, March 4 = 240000, March 7 = 480000, etc and by mid-March, over 2 million infected!

    I couldn’t agree more with the point that this is a feature, not a bug, of the system we live in and collectively maintain and rationalise to ourselves. I would also add though that the pandemic-induced lockdown has triggered, or accelarated, the recession/depression currently in progress, instead of causing it.

  2. sp gp

    It’s nice to see a post up and yes we do need to take this seriously, but honestly I think it will be gotten under control. Either that or it will burn itself out.

    The equivalent doomsday argument in the 1980s would have been that everybody will get HIV, since everybody is having sex with everyone. But that was gotten under control by anti retrovirals and “safe” sex practices (basically, watch porn instead of screwing around).

    Much more important: how can the world’s liquid energy, be priced at $20 a barrel, in the fiat currency of one nation, the United States, who can print this currency to infinity. It does not make sense! The price of oil in dollars should be relentlessly climbing and climbing, taking down the entirety of the auto and airline industries with it. I’m telling you, nobody was “broke” when oil was higher. They were all driving around their cars all over the place like mad.

    It is not possible for oil to be this low. An entirely barrel of oil for 20 measly bucks? Something is seriously wrong with the financial system, not just the real economy. A barrel should be 200, 250 or higher, with even 500 dollars reasonable.

    1. Ken Barrows

      I think your conception that everyone is having sex with everyone else in America is describing another place. Many Americans are involuntary celibate. Also, not all viruses are created equal. The coronavirus appears to be “more equal.”

    2. steve from virginia Post author

      The oil is $20+ dollars b/c nobody is buying it because everyone is inside, not driving, not using plastic junk, only a modest amount of transport, agriculture and other commercial use.

      Has the pricing regime for petroleum broken down? Everyone will get a better idea after the virus is gotten under control. In 2009 the post-crash price was around $35 which was low at the time. As business (and driving) increased (particularly in China) the price rose quickly.

      As far as ‘printing money’; the credit created today is sped into finance which is losing imaginary wealth faster than finance and central banks can print. Again, there will be more clarity when the virus fades and people (and Wall Street) get back to work. In the heat of the moment, funds will seem to flow to those at the bottom of the economic food chain. As the virus fades — which it will — that money will be spent back quickly to finance. Money in foreign hands will likewise be spent: all of the current ‘money creation’ is in the form of loans needing service and rolling over => more burdens on those at the bottom and in emerging markets.

      Corona looks to be yet another natural disaster in the lengthening tally of fires and droughts, storms and floods. It’s more abstract in many ways than these other disasters which illuminates the kinds of hidden dangers we’ve created for ourselves: we’ve always been vulnerable to infectious disease but we’ve been training ourselves to be purposefully ignorant, to over-rely on marketing and machine technology, to pretend we’ve ‘fixed’ the problem or are immune to it. We’re only just now learning (at the cost of thousands of casualties) the real cost of that reliance. What’s failed isn’t the masks or ventilators or even hospitals but the administrators whose job it is to respond in a timely way to just this kind of emergency.

      They didn’t care, they covered up the outbreak, lied about its reach and minimized its affect, pretended it’s a hoax, etc.

      1. Bachs_bitch

        China’s confirmed cases have flattened since last week and remained that way. Is that because they handled it much better than the US… or just how the pandemic will behave everywhere else after another week or so?

  3. kesar

    Hi Steve,

    I read your blog for 7 years and I your posts always give me great intellectual pleasure of meta-level analysis.
    Thank you.

    I humbly invite you and readers / commenters of this site to contribute to my personal project.
    Here is the link to my presentation:
    https://bit.ly/3bq0Pv8
    I will appreciate your input.

    All the best to all,
    kesar

  4. ellenanderson

    Hi Steve and everyone,
    It is fun to hear from long-time lurkers.
    I am too lazy to get up and shut off the NPR show that has just begun to broadcast the latest unbelievable lies from you-know-who. Actually no wait, I am going to have to shut it off – be right back.
    “Thank you President Trump for the incredible leadership….” …. the federal government wants us to believe that they are interested in “keeping us safe.” Now we know better. Of course we always ‘knew’ following Katrina and Puerto Rico. But the sight of NYC struggling for supplies while the corporations are flooded with cash is pretty stark isn’t it? Why are we rescuing the airlines? We should close them down except for emergency flights.
    Somewhere I just read that storage space for oil has run out. Is that true? What does that mean? I haven’t bought any gas or oil in the three weeks since I have been holed up with the goats and the grandchildren. I have no TV and lousy internet so I am listening to local NPR which I have not done in years. Wow neoliberalism is alive and well. No discussion of living differently.

  5. Bill Sodomsky

    “No discussion of living different.”
    Excellent observation Ellen. I believe Steve refers to that behavior as “incapable of discussing our problems.”
    The fact of the matter is, we ARE living different and that’s the way it’s going to be from now on. Oil, the great lottery of the modern age has become the great destroyer. The irony is that we are becoming awash in it as we sink beneath the waves of insurmountable debt and the price inches ever so close to zero. So much over abundance of the “Black Gold” that moored tankers have been called into service to become floating oil coffins until there’s some where to dump it. In keeping with human behavior we might just pour it into the ocean to save costs. The grand oil spill at the end of time. The final act of human hubris. What a finale!!!

    Footnote: And to put paid to our hubris, I was listening to a podcast this morning featuring one of the world’s preeminent fund managers who suggested investing in the undervalued oil tanker industry due to the oil glut. The interviewer lit up when he realized how prescient this advise wanted to know where he could get the names of these listed companies. No discussion or understanding of what floating oil coffins mean in terms of our future in the post industrial age.

  6. UnhingedBecauseLucid

    [“Humans are experts: our 5,000 year history is marked by follies and missed opportunities, wars and revolutions, bubbles and depressions, failed- or insane leaders and false messiahs, evolutionary change on the outside that alters nothing on the inside. Advances in one- or another area of human endeavor are matched by degradation everywhere else: “They made a desert and called it peace.” The product of our efforts is waste, our ‘good’ is entropy. We endure famines brought about by agriculture also droughts and floods. There is disease, war and death: we never learn. At the bottom is vanity, overreach and ambition. We have enough but we want more or someone in charge wants more for himself and makes false promises and the citizens believe there is something in it for them.”]

    Yet, I don’t — I can’t, regret the progression of knowledge and technology; I just resent the absolutely disgusting recklessness of what was wasted, what was purely grotesque, greedy vanity.
    The turning point was after WW2. It would have been possible then to have engineered something that allowed for progress if the social contract had been made a formal rite of passage in a ‘critical mass’ of nations. If the predicament had been made explicit and culturally ingrained by decree.
    I’ve posted this a few times lately; a song I think should re-emerge on the airwaves …
    [“From Wikipedia:
    Stargazer” is the fifth track from British rock band Rainbow’s 1976 album Rising. An epic song narrating the story of a wizard whose attempt to fly by constructing a tower to the stars led to the enslavement of vast numbers of people,…The song has been called a “morality tale”,[7] and its lyrics are written from the standpoint of a “slave in Egyptian times”, according to lyricist Ronnie James Dio. They relate the story of the Wizard, an astronomer who becomes “obsessed with the idea of flying” and enslaves a vast army of people to build him a tower from which he can take off and fly.[5]:70 The people hope for the day when their misery comes to an end, building the tower in harsh conditions (“In the heat and rain, with whips and chains; /just to see him fly, too many died”). In the end, the wizard climbs to the top of the tower but, instead of flying, falls down and dies: “no sound as he falls instead of rising. / Time standing still, then there’s blood on the sand”. The next song, “A Light in the Black”, continues the story of the people who have lost all purpose after the Wizard’s death “until they see the Light in the Dark”, according to Dio.[5]”]

    https://www.youtube.com/watch?v=rVXy1OhaERY&list=RDrVXy1OhaERY&start_radio=1&t=2

    I’m fine with the pursuit of knowledge, and I’d volunteer my work every goddamn day to that endeavor.
    It is a worthy accomplishment even if we never get off this fucking rock; every species at some point go extinct; mind as well use our specially evolved attribute to its fullest if any purpose is to be had; but overshoot on an economic system degenerating into a mindless, aimless ‘make work’ project is so soul-crushingly disappointing…

  7. Bachs_bitch

    Yeah the problem is reason/knowledge in the service of un-reason, not so much reason itself. Or even more fundamentally, the exercise of reason being dependent on systems and processes which were themselves irrational (greedy, violent, wasteful etc.) Virtually all modern (and actually useful) scientific activity relies on the products of industry/fossil fuels, which in turn rely on war, exploitation etc. Medicine only became really useful in the 1930s when mass-production of apparati, powdered vaccines and antibiotics became feasible.

    The dilemma is whether the apple of knowledge is worth it if you have to climb a heap of corpses to get it and then the heap inevitably collapses along with you. Maybe the priority should have been losing ignorance instead of accumulating knowledge!

  8. ellenanderson

    @bb
    Do you think that Adam should have refused that apple? After all, it came from the devil via a woman.
    It is good to see people wondering about trade offs instead of assuming that knowledge leads to progress leads to salvation.

  9. Bachs_bitch

    @Ellen, from a my (atheist) perspective the original meaning of that story is that Eve is both the means of procuring the apple, and the apple itself. Women were the first proletariat, and the first resources. They were forced to serve the goals of agricultural civilisation, and also forced to bear its products i.e. surplus men who labour, settle more land and die in wars (resource acquisition)… as well as surplus women who labour and bear the next generation of resources. The identification of womanhood with both the earth as well as bumper harvests – Gaea and Demeter – isn’t spiritual, it’s economic.

    I recently finished Silvia Federici’s ‘Caliban and the Witch’ and highly recommend it as a vital companion to an understanding of the transition from mediaeval societies to capitalist ones (the 13th-18th centuries). In short it’s an analysis of Marxian ‘primitive accumulation’, exposing both its shortcomings and developing it from a feminist angle. It reclaims that period from the basic, dim narrative we’re provided with – centuries of fiefdoms bumbling along on serf-power and superstition until the Enlightenment and capitalism happened. Instead it provides a history that jives with our knowledge of human needs and behaviors at the mass scale in the present day. Rather than being a natural next step from feudalism, capitalism was brutally imposed against hundreds of years of communal resistance. Rather than bravely opposing religion it subsumed the doctrine and authority of religious institutions. Witch hunts weren’t an unfortunate vestigial promontory of feudalism, but an essential part of the bloody campaign of societal/economic homogenisation which was vital to the project of constructing societies compatible with the needs of industrial/capitalist production. Communism in *practice* didn’t begin with Marx or accurately resemble his description of it, but was nevertheless always foundational to human life – one way or another.

  10. Bachs_bitch

    On a related note, this is a good article: https://mronline.org/2020/04/04/why-coronavirus-could-spark-a-capitalist-supernova/

    Many things both mask and counteract the falling rate of profit, turning this into a tendency that only reveals itself in times of crisis, of which the most important has been the shift of production from Europe, North America and Japan to take advantage of the much higher rates of exploitation available in low-wage countries. The falling rate of profit manifests itself in a growing reluctance of capitalists to invest in production; more and more of what they do invest in is branding, intellectual property and other parasitic and non-productive activities. This long-running capitalist investment strike is amplified by the global shift of production–boosting profits by slashing wages rather than by building new factories and deploying new technologies. This enables huge mark-ups, turbo-charging the accumulation of vast wealth for which capitalists have no productive use–hence the hypertrophy of capital.

    This, in turn, results in declining interest rates–as capitalists compete with each other to purchase financial assets, they bid up their price, and the revenue streams they generate fall in proportion–hence falling interest rates. Falling interest rates and rising asset values have created what is, for capitalist investors, the ultimate virtuous circle–they can borrow vast sums to invest in financial assets of all kinds, further inflating their ‘value’.

    Falling interest rates therefore have two fundamental consequences: the inflation of asset bubbles and the piling up of debt mountains. In fact, these are two sides of the same coin: for every debtor there is a creditor; every debt is someone else’s asset. Asset bubbles could deflate (if productivity increases), or else they will burst; economic growth could, over time, erode debt mountains, or else they will come crashing down.

    Since 2008, productivity has stagnated across the world and GDP growth has been lower than in any decade since World War II, resulting in what Nouriel Roubini has called “the mother of all asset bubbles,” while aggregate debt (the total debt of governments, corporations and households), already mountainous before the 2008 financial crash, has since then more than doubled in size. The growth of debt has been particularly pronounced in the countries of the global South. Total debt for the 30 largest of them reached $72.5tn in 2019–a 168% rise over the past 10 years, according to Bank of International Settlements data. China accounts for $43tn of this, up from $10tn a decade ago. In sum, well before coronavirus, global capitalism already had ‘underlying health issues’, it was already in intensive care.

    Global capitalism–which is more imperialist than ever, since it is both more parasitic and more reliant than ever before on the proceeds of super-exploitation in low-wage countries–is therefore inexorably heading to supernova, towards the bursting of assets bubbles and the crashing of debt mountains. Everything that imperialist central banks have done since 2008 has been designed to postpone the inevitable day of reckoning. But now that day has come.

    10-year U.S. Treasury bonds are considered the safest of havens and the ultimate benchmark against which all other debt is priced. In times of great uncertainty, investors invariably stampede out of stock markets and into the safest bond markets, so as share prices fall, bond prices–otherwise known as ‘fixed income securities’–rise. As they do, the fixed income they yield translates into a falling rate of interest. But not on March 9, when, in the midst of plummeting stock markets, 10-year U.S. Treasury bond interest rates spiked upwards. According to one bond trader, “statistically speaking, [this] should only happen every few millennia.” Even in the darkest moment of the global financial crisis, when Lehman Brothers (a big merchant bank) went bankrupt in September 2008, this did not happen.

    The immediate cause of this minor heart attack was the scale of asset-destruction in other share and bond markets, causing investors to scramble to turn their speculative investments into cash. To satisfy their demands, fund managers were obliged to sell their most easily-exchangeable assets, thereby negating their safe-haven status, and this jolted governments and central banks to take extreme action and fire their ‘big bazookas’, namely the multi-trillion dollar rescue packages–including a pledge to print money without limit to ensure the supply of cash to the markets. But this event also provided a premonition for what is down the road. In the end, dollar bills, like bond and share certificates, are just pieces of paper. As trillions more of them flood into the system, events in March 2020 bring closer the day when investors will lose faith in cash itself–and in the power of the economy and state standing behind it. Then the supernova moment will have arrived.

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