Tuesday, January 25, 2011

The Five Stages

Great Charles Hugh Smith piece (actually from a guest writer).

Here's a taste:
Reading Charles Hugh Smith’s “Cry in the Wilderness” for Individual Solutions ( As Public Policy Fixes Are Impossible, Focus on Individual Solutions) to our present crisis, I’m struck by the Kubler-Ross model. You know the one:


She doesn’t say how long each stage takes, but in a body the size of a nation, it must take a very long time indeed.

Is there anybody out there who doesn’t know the financial system is broken? That home prices need to fall at least 30%--if not 50%--more? That Social Security is already in deficit? That they won’t be retiring in the manner in which they’ve desired?

And the solutions, Oh, the solutions!

1.More borrowing
2.More lending
3.More spending
4.More lying, cheating, and stealing
5.More government orders
6.More expansion

More of everything we’ve done that got us here. Is there anyone who doesn’t know you can’t solve a debt-and-spending problem with debt-and-spending?

So why is it still going on?

This is the wonder of Denial, of lying to ourselves, or in the American parlance, of Bull----. Bull---- is different from lying in that it isn’t technically untrue, but it’s effectively untrue. Second requirement is that it’s invariably selling something, getting you to do something for the bull------- —power or money. Third is that everyone knows that it’s bull----. They know it’s a lie, but they’re willing to be complicit in the lie anyway, for their own reasons. Like all Cons, Bull---- can never work without the complicit help of the so-called “victim.”

The only reason all these things can still go on is Denial.


I was at a Tea Party meeting (I know, I’ve already admitted it) where one of the participants asked, “Are you willing to give up Social Security?”

“What?” I asked stupidly.

“If you cut these taxes and reduce government, it’ll end Social Security. I want to know who here is willing to have their own check cut.”

I stared, staggered at the obviousness of this simple statement.

“Sir,” I stuttered, “It’s already gone. There IS no Social Security. You’d be lucky to get checks for even two more years.”

My words did not compute so I let it slide, turning to other subjects.

The unsustainable nature of the numbers surrounding Social Security and Medicaid have been obvious since the Baby Boom generation was done being born in 1966. The scam was fully apparent by at least the (non)re-structuring of withholdings with the Greenspan-Boskin Commission in 1983—and at least by 1984, as even the increased revenues were spent, with nothing saved.

It would be self-evident that it wouldn’t matter in any case, since an entire nation cannot buy special pixie dust through its whole life without driving the price up—not Stocks, not Bonds, not even gold—and then sell it through their whole retirement without driving the price of that asset back down to zero again. That is, you can’t all put $10 into a hat, and have everyone pull $20 back out. That’s what Social Security, 401k privatization, the Stock Market, Investors, all propose to do.

Since 1983, there have been commissions every few years, headlines in every major newspaper, including most recently G.W. Bush’s front-page quote,

“There Is No Trust Fund.”

I mean, exactly what kind of warning were you looking for? Do they have to come to your house and shake you by the ankles?

Moving into the new decade, we find ourselves with a $1,600,000 Million deficit --per year--and the now-common knowledge that Social Security doesn’t exist—it’s just a budget item that is paid like any other: through borrowing. Borrowing on top of that $1.6 Trillion. Per Year.

And you STILL think that you have something to lose? That there’s the slightest chance Social Security will be paid?

…And I’m not following the arcana of the way governments reliably o ver-promise and default in history from Weimar to France, the close examples of Russia in 1997 and Argentina in 2001, that in 1776 Adam Smith had already declared “No government ever pays off their debts,” or any of the other second-level study that is easily found.

Now that’s denial.

Denial kills.

So what’s my point with this?

Would you rather, as with NJ Governor Christie, be told that there is no money in the known universe to pay what is owed in pensions, on bonds, in stocks, or in real goods, and thereby be able to adjust your life accordingly? Or would you rather, like GM Union workers and Enron employees, wake up one day and find that you have no pension whatsoever, but since you didn’t expect it, lose both house and pension at 70 because hadn’t saved on your own either?

Here’s some help: one way you’ll have a retirement, however modest, and the other way you’ll be eating dog food under a bridge in East L.A. That’s what lying does. Lying to others or yourself. That’s why there is a thing called “morality,” and that’s why it’s wrong.

But this is the bull---- we still tell ourselves, 5, 10, 30 years after the truth is obvious, and this the bull---- they’ll continue to sell you—with your own stolen money—until you stop buying it.

Which leads me to Part Two.

What comes after Denial?

That’s right, Anger, and this country will rip itself apart with recriminations and blame. Blame the Left, Blame the Right; Blame the rich, Blame the poor; blame the insiders, blame the outsiders; blame the government, blame the anti-government; blame the old people who set it up, blame the young who won’t pay for it. Blame, acrimony, anger…and violence. In these still-rosy times perhaps you might have seen what I’m talking about.

Who’s really to blame? Well, people who broke the law—especially that highest law, the Constitution—need to be tried and punished, and in keeping with that law, with real charges, real evidence and by a jury of their peers. There’s plenty of room for that. But what does that do? They only committed the crimes we allowed them to with our own sloth and indifference, with the same immorality we’ve let spring up in ourselves.

We’re to blame. And being responsible, now we’re the ones who are about to take the inevitable consequences of our own immoral and irresponsible actions. There don’t need to be any trials for us: our punishment is already certain. But in the midst of that Anger and Blame, history says there will be wrenching in-fighting between groups, violence, and often even insurrections and war.

What’s next on history’s Kubler-Ross model?


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