The Perfect Storm World Simulation: Peak Oil, Climate Change, Economic Collapse

Enough economics for awhile. All two of you, besides myself, that read this blog already know what I think on that. Other facets of The Perfect Storm need some attention. I'd like to look at the big picture with an eye toward solutions.

The problem is simple: Anthropogenically-forced Climate Change (ACC), Peak Oil (PO), economic collapse, etc., are in the early stages of potentially remaking our world in ways we really would like to avoid, but there is almost nothing being done about any of it in any real sense when you consider the massive changes that are needed to deal with all these problems. If you think a bit on how long it takes to change the way a few billion people live, it's clear we have nearly run out of time to find solutions and implement them.

Robert Hirsch, et al., determined in a study done in 2005 that mitigating PO with minimal effects would require starting twenty years before the peak. Starting ten years before would lead to serious issues, but could be done. Waiting until peak would result in serious problems. Peak appears to have come in 2008.

Oops.

Then there's ACC. A recent poll of climate scientists shows they are far more worried about ACC than is generally understood. But for James Hansen, they tend to be pretty quiet and conservative in their pronouncements on climate. This is (intellectually) understandable. They are scientists and are expected to state what they can prove, not what they know to be true. But aren't we past the point of this little luxury? Are not the dire consequences of no action or too little action being taken - a world 2 to 6C warmer - too great to risk? Well, finally some are speaking out... anonymously. (Way to put your necks out there, Profs!)

World will not meet 2C warming target, climate change experts agree

Guardian poll reveals almost nine out of 10 climate experts do not
believe current political efforts will keep warming below 2C

The poll of those who follow global warming most closely exposes a widening gulf between political rhetoric and scientific opinions on climate change.

While policymakers and campaigners focus on the 2C target, 86% of the experts told the survey they did not think it would be achieved.

...60% of respondents argued that, in theory, it was still technically and
economically possible to meet

...global warming of 2C

... But 39% said the 2C target was impossible.

...84 of the 182 specialists (46%) who answered the question said it would reach 3-4C by the end of the century; 47 (26%) suggested a rise of 2-3C, while a handful said 6C or more. While 24 experts predicted a catastrophic rise of 4-5C, just 18 thought it would stay at 2C or under.

Geewillickers... You gotta see some quotes from here:

Climate change experts reveal their hopes and fears

• By 2100 I seriously fear there will be civilization collapse and chaos.
• We should also be mindful that temperature sensitivity of the planet... has been grossly underestimated... We are in extremely dangerous territory.
• Nothing short of a major restructuring of the energy generation system will see us limiting climate change to a 2C rise.

Now, don't you feel all warm and fuzzy? No? It gets worse.

To meet climate goal, cut fossil fuels use: study

The paper, published by the British journal Nature, implies only a revolution in energy use can achieve the aim of limiting warming to less than two degrees Celsius (3.8 degrees Fahrenheit) above pre-industrial levels.

To achieve the objective -- embraced by the European Union (EU) and many scientists -- means that only 1,000 billion tonnes of carbon dioxide (CO2) can be emitted between 2000 and 2050, it said.

By comparison, the world has emitted a third of that amount in just nine years.

"If we continue burning fossil fuels as we do, we will have exhausted the carbon budget in merely 20 years, and global warming will go well beyond two degrees," said the study's lead author, Malte Meinshausen of the Potsdam Institute for Climate Impact Research in Berlin.

So, how much carbon have you cut out of your life today? None? Well! We're moving right along, aren't we! Look around you. Other than cuts caused by the recession, do you see people really changing how they use energy?

Paradoxically, PO will both helping us reduce our use of Fossil Fuels and make it harder to do so. To wit:

1. Crude oil production likely peaked in 2008.
   
2. On one hand, the use of oil will fall over the next few decades. On the other, if renewable forms of energy can't replace crude oil, then tar sands and coal will. Both are much greater emitters of CO2 than crude oil is.
3. Having run out of hands, now use your feet to factor in the economic hit of declining oil production. (In both recessions in the '70's, the percentage drop in crude oil production and the drop in GDP were about the same, e.g.)
4. As the "recession" begins to abate, the economic hit from PO will most likely stop it in its tracks.
5. Investments for renewable energies will almost certainly be reduced by the economic crash.

To make matters ever-so-much better, what do Americans think about climate change? Not much.

Only 34% blame humans for global warming

Just one-out-of-three voters (34%) now believe global warming is caused by human activity, the lowest finding yet in Rasmussen Reports national surveying. However, a plurality (48%) of the Political Class believes humans are to blame.

Forty-eight percent (48%) of all likely voters attribute climate change to long-term planetary trends, while seven percent (7%) blame some other reason. Eleven percent (11%) aren’t sure.

These numbers reflect a reversal from a year ago when 47% blamed human activity while 34% said long-term planetary trends.

If you're feeling like kicking the dog or drinking your way through every bar between you and the Restaurant at the End of the Universe, hold on a second. I have a plan. Really.

Below is an e-mail (modified for this post) I sent not long ago to someone I thought, based on previous work, might be interested in modeling global solutions to The Perfect Storm. Sadly, no response. Maybe someone will stumble across it here and find a kernel of a good idea in it.

Dear X,
My wife and I have had an idea in our minds for quite some time for a massively interactive virtual reality world/MMPRPG/global climate model/global energy model/global economic model: The Perfect Storm World Simulation: Peak Oil, Climate Change, Economic Collapse.

The idea started from a simple question we, as teachers, asked ourselves: How could we do outreach on the issues of Climate Change, Peak Oil and the Economic Crash - what I call a Perfect Storm? (E.g. my blog is aperfectstormcometh.blogspot.com.) We needed something that would integrate everything we faced, but do it at the personal level and governmental level. We needed a synthesis of both to help get change going since government moves too slowly and grassroots movements alone are not going to manage the massive changes needed - though I think grassroots movements like Transition Towns, the Post-Carbon Institute and the Relocalization movement will be the primary players in the end since the changes start and end with what we do, what we buy, how we live day-to-day.

The answer was an on-line game. Rather, a live modeling project that would both inform people (nearly half of all Americans still have significant doubts about Climate Change and far less know about Peak Oil) about the issues and help find a collaborative solution.From there we brainstormed and by the time we were done had an idea that was so massively beyond our skill sets we knew we were hopelessly over matched. We envisioned something with the following components or characteristics:

- It would be huge, along the lines of MMPRPGs, but necessarily bigger than any before it. This needs to be international in scope since any solutions must also be, and must offer realistic simulations.

- It would include participation of individuals from all levels of society, i.e., gov't. officials and orgs, non-profits, NGO's and, most importantly, the public.

- It would preferably have an interface like virtual reality game.

- It would have real climate models attached, or at least data from models as part of the data so people can see climate effects of their own actions as they happen in the game.

- It would would include energy decline reality.

- It would include other resource constraints (water, fisheries, farming, etc.)

- It would include real-world economic data.

- It would allow for new models of governance, economic systems and societal structures to be tried and tested, such as Steady State economic models (1, 2, 3), barter economies, etc.

- Perhaps multiple runs/games going simultaneously, much like Global Climate Models. Maybe individuals could start up their own runs and people could jump in if they liked the parameters set by the originator?

- Perhaps dummy nodes/agents coded to model the averages for given regions/cities/countries to get the numbers up as high as possible.

Etc.

I started research on what was already out there. The RPG idea was clear enough. Such things as The Sims, SecondLife, World Without Oil, etc., already exist.

My research found possible components for other elements. Purdue University has SEAS. It has been used for gov't simulations before. The software team codes a scenario and real people are agents in the game. There are other nodes (agents) that are run as part of the model and represent people. It's been used for some disaster planning, etc. The goal, of course, is to have millions of real people actually acting in the simulations. They may already have that, but my impression is that only gov't officials and first responders actually participate. It might be a good foundation for the basic structure - or not. I *believe* they have a virtual presentation like an MMPRPG.

A second is the T21 program out of the Millennium Institute.

T21-North America User Interface Released!
Arlington, VA, October 18, 2007

The T21-North America (T21-NA) model user interface was released today. The user interface allows the model to be open, modified and simulated on any Windows-based computer.

The T21-NA model project is a collaboration with Association for the Study of Peak Oil and Gas-USA and State University of New York’s College of Environmental Science and Forestry to examine energy issues in the context of an integrated framework that incorporates the relations of the energy sector to the broader economic, social, and environmental framework. The project is part of ASPO-USA’s Global Energy Modeling project.

Their software is a package run by programmers, so far as I can tell. That is, it is not an MMPRPG-, SEAS- or Alternate Reality-style package that real people are involved in; it's based on a few people inputting what they think is important rather than real people acting as they, hopefully, would in reality. I think.

A third choice might be the World3 program used by for Limits to Growth. Delores Garcia is developing/has developed an updated version of this program:

Abstract: An updated systems model of global climate, resources, and energy extending the original World3 (“Limits to Growth”) model by inclusion of climate change and it's interaction with resources and energy. Outcomes are derived for total energy resources, human population, nutrition, consumption, economic activity and other parameters. Long-term outcomes are derived for a 1900 C.E. to 2100 C.E. time sequence, with human population decline.

The weakness here is, of course, that it is not a live simulation, but a model dependent solely on inputs from the programmer. It does, however, represent a good bit of the breadth we need as it includes energy, food production, climate, etc., as noted above, and may be the closest of the three to what we are thinking of.

It may well be that something this complex and wide-ranging needs to be built from scratch. Having worked in the documentation department of a main frame software company, I can appreciate the difficulties encountered trying to integrate software not designed to work together.

As for implementation, I'd be hoping to have this made available world-wide for free so there are no restrictions. Ideally, we'd capture the imagination of some important people and be able to make a big deal of the launch and subsequent modeling with an eye toward 1. raising awareness of how serious the times are and 2. actually modelling a solution or two that might be viable, or at least move us towards some solutions.

This approach also, and perhaps most importantly, takes the policy, research and data input out from behind the closed doors and gilt halls of TPTB and gets them into the hands of the public at large.

Time is short. People need to wake up to the serious problems we face and we need a workable solution yesterday. I believe The Perfect Storm World Simulation: Peak Oil, Climate Change, Economic Collapse can both raise awareness and model possible solution scenarios.

Cheers

Of Crashes, Failures and Bailouts - Round V: Blacker Than Ever

THIS POST IS no longer IN PROGRESS. LAST UPDATE AT 1:31 PM EDT 4/15/09

The following is excerpted from an interview in Barron's (click the title to go to the original) of William Black by Jack Willoughby. What Black says isn't so amazing. Others have said it, and far earlier. I have previously posted comments and links to The Automatic Earth (which is where I found the original article from Barron's), Karl Denninger, Peter Schiff and others saying essentially all the same things. It's that he's the one saying it. William Black has gravitas. He has the pedigree. Those who would dismiss, and have dismissed, the voices in the wilderness noted above, can't so easily do the same to William Black.

There's not really anything new here that wasn't in Of Crashes, Failures and Bailouts - Round IV, but it's all worth repeating just for emphasis.

My comments below the interview.

Barron's: Just how serious is this credit crisis? What is at stake here for the American taxpayer?

Black: ...The scale of fraud is immense...

So you are saying Democrats as well as Republicans share the blame? No one can claim the high ground?

We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure? ...Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems...

So you aren't a fan of the recently announced plan for the government to back private purchases of the toxic assets?

It is worse than a lie. Geithner... is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians. The current law mandates prompt corrective action, which means speedy resolution of insolvencies. He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent...

...It is like Gresham's law: Bad money drives out the good. Well, bad behavior drives out good behavior, without good enforcement.

...By promoting this notion of too-big-to-fail, we are allowing a pernicious influence to remain in Washington...

Summarize the problem as best you can for Barron's readers.

With most of America's biggest banks insolvent, you have, in essence, a multitrillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale.

These firms will ultimately have to be forced into receivership, the management and boards stripped of office, title, and compensation. First... a Pecora-style fact-finding mission conducted without fear or favor... Then... pursue criminal cases...

What, then, is staying the federal government's hand? Have the banks become too difficult or complex to regulate?

...to do so would force it to put some of America's biggest financial institutions into receivership... these banks are some of the most well-connected in Washington...

Can you explain your idea of control fraud, and how it applies to the current banking and the earlier thrift crisis?

Control fraud is when a seemingly legitimate corporation uses its power as a weapon to defraud or take something of value through deceit.

...These accounting frauds create huge bubbles...

Why then is there so much smoke and so little action?

...The reason we don't see it -- aren't told about it -- is that if they were honest, prompt corrective action would kick in...

You say the evidence of a breakdown in the regulatory structure comes from the fact that America avoided an earlier subprime crisis in the 1990s.

Exactly. Why had no one heard of the subprime crisis back in 1991? Because America's regulators also faced down the crisis early... the problem didn't spread -- because regulators intervened.

What needs to be done?

Well, these international behemoths need to be broken down into smaller units... And a new seriousness must be put into regulation... We just need folks who can enforce the ones already on the books.

The bank-compensation system also creates an environment that leads to mismanagement and fraud... the top 20% get the bulk of the benefits and the bottom 10% get fired... Compensation systems... discourage whistleblowing -- the most common way that frauds are found in America -- because the system draws upon the cooperation of everyone.

This whole thing isn't over. Those in government or the financial industry saying we are past the bottom and will be coming out of recession within months, or maybe the end of the year, are liars or fools. The proof is in the pudding.

Question: How can the recession end when loan defaults - of all kinds and all sectors of the economy - are still raging? Take a look at this Mortgage Reset Chart. We are currently at a lull in resets. They surge again through 2010-2011.

Which brings us to inventory. John Mauldin at Minyanville observes:

No Housing Recovery Lurks in Shadow Inventory
- The Shadow Inventory of Homes

...a strange thing is happening: We're seeing what's being called a "shadow inventory" of foreclosed homes.

The San Francisco Chronicle reports:"We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market," said Rick Sharga, vice president of RealtyTrac...

A RealtyTrac survey found that only 30% of foreclosures were listed for sale in real-estate listings, like the MLS (Multiple Listing Service). Add in homes that people would like to sell but simply can't find buyers for and must either hold or rent, and the unsold inventory numbers that are public are likely far below actual available homes.

Might some homes in foreclosure be held off the market because banks eventually want to negotiate with the homeowner? Possibly. But other surveys show that anywhere from 30%-40% of homes in the foreclosure process in many areas are actually already vacant. There's no one with whom to negotiate...

...Normally there are about 160,000 homes a year in foreclosure sales. We're now seeing 80,000 a month, or 6 times normal levels, and rising.

Second, lenders could be deferring sales to put off having to acknowledge the actual extent of their losses. "With banks in the stress they're in, I don't think they're anxious to show losses in assets on their balance sheets," one observer said.

Finally, banks may not want to flood the market with foreclosures, driving prices down even more...

But it gets worse.

And it does. He goes on to list some of the things I'm already writing here, and more. You should read the article.

And what about commercial real estate? Prices are crashing and defaults rising as we speak. Credit card debt? Credit lines are being canceled or slashed as banks look to control losses or costs. Being a good risk is now a liability: they earn no interest and/or fees from you if you don't carry a balance, yet have money out to you. Liquidity is at issue. Every bank and financial entity wants cash. They need cash. You lose.

More importantly, as Meredith Whitney has pointed out, credit cards and credit lines have been what enabled many families the flexibility to manage tricky finances. As more restrictions are placed on personal credit, the more families that will be forced into default.

Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending. Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon. While those numbers look small relative to total mortgage debt of over $10.5 trillion, credit-card debt is revolving and accordingly being paid off and drawn down over and over, creating a critical role in commerce in America.

Just six months ago, I estimated that at least $2 trillion of available credit-card lines would be expunged from the system by the end of 2010. However, today, that estimate now looks optimistic, as available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone. My revised estimates are that over $2 trillion of credit-card lines will be cut inside of 2009, and $2.7 trillion by the end of 2010.

Where is the recovery?

Global trade is still falling as can be seen in import and export numbers around the globe, which also reflects in shipping. Manufacturing - JOBS - will continue to fall in lockstep. Unemployment continues to rise even as extended benefits are running out for those early in the unemployment line. Real unemployment is now just below 20%.

Where is the recovery?

The financial sector is insolvent, but won't admit it. Housing and commercial real estate are so overbuilt squatters are taking over homes everywhere. Where the hell is the recovery supposed to come from? Foreign companies? Foreign countries? The U.S. is the consumption engine of the world. It is 20% or more of the global economy and 70% of that is consumerism. Service industries. In other words, pointless, useless and producing almost zero infrastructure/real capital. Do the math. That's 14% of the global economy that is kitsch and junk. Price/Earnings ratios are shot.

Et-flippin'-cetera.

Where is the recovery?

I call this blog A Perfect Storm Cometh. The financial unwind is only one part. Let's say we do go into recovery within the next six-to-eight months. Growth takes energy. Cheap energy. The densest energy we currently can tap cheaply and easily is oil. However, oil production is falling due to both above ground (non-geological) and below ground (geological) reasons.

The natural decline rate of crude oil production is at over 9% per year. That's over 6.5 million barrels a day. New production each year brings that number down to 6+% or 4.5 to 5 million barrels a day lost each year. Let's put that in perspective. That's a full Saudi Arabia every two years. We aren't finding anywhere near that much oil and haven't for decades. For now, the drop in production because of recession is masking the drop in production due to Peak Oil. Keeping this in mind, the recession **helps** with Peak Oil in the immediate future, but not in the longer term.

The problem is that the recession is not only reducing oil consumption, thus production, as a result of lowered demand, it is cutting future production. New wells aren't being drilled as fast. Old wells aren't being improved with technology. Expensive wells are being shut down while waiting for higher prices. IF a recovery started, it would run into the brick wall of slow-to-recover production and decline. The longer the recession (PC talk for depression, it seems) goes on, the more likely no new peak in production can be hit. The reason is simple: we have produced about half of all oil we can reasonably get to for reasonable prices. The rest is in smaller fields that are harder to reach. Consider my modified haystack analogy.

Imagine a giant haystack. Rather than the proverbial needle, in the hay are ten basketballs, 100 tennis balls and 1000 marbles. (Imagine our magic haystack keeps all objects suspended so they don't all fall to the floor.) The result?

• We will absolutely find all of the ten basketballs before we find all 100 tennis balls. Or even a majority.
• We will absolutely find all the tennis balls before we find all the marbles.
• We will find some of each from the very start.
• We will find all the basketballs in the early part of our search, say the first 25 - 40% of total time spent looking.
• The basketballs will equal a majority of all balls/marbles by volume.
  (Take a look at the Discovery/Production graph at the bottom of the blog.)

We've already found all the basketballs and a bunch of the tennis balls. We're down a few tennis balls and a bunch of marbles. Regarding production, the basketballs are going seriously flat and a bunch of tennis balls are getting flat or are empty. There's a lot of oil, but it's just not going to be possible to increase how fast we can get at it.

Where is the recovery?

Economic impacts? In the two large recessions of the 70's, GDP and oil production reflected one another, falling by similar percentages. In historical terms economic growth, food production and population have all tracked along with oil production. Both GDP and oil production are falling at this time. Again, by similar amounts. (See graphs at the bottom of this blog.)

The historic interplay of oil and economy is also seen in oil prices and recessions. Check out the graph at the beginning of the post below.

Oil Addiction and Recession

Vulnerability to oil prices helped cause this collapse

Poorly regulated real-estate lending wasn’t the only cause of the economic meltdown now gripping the industrial economies. Oil addiction also contributed.

The extraordinary rise in oil prices since 2003 has sucked hundreds of billions of dollars out of the US economy (and the Cascadian economy).High oil prices have been a contributing cause of most recessions: Since 1948, “all large oil price increases but two have been followed by recessions,” as Andrew Hoerner and Nia Robinson of Redefining Progress (RP) write (pdf). “Four of the five recessions since 1970 . . . were preceded by big jumps in oil prices.”

Oil prices are now down 4 - 6%. Fourth quarter '08 GDP was falling at an annual rate of around 6%. Coincidence? These two posts discuss the connections between oil prices and the economy.

The oil shock and recession of 2008: Part 1
The oil shock and recession of 2008: Part 2

When, not if (barring a Dark Ages-level global collapse), production declines overtake falling demand, the prices will rocket upward. Again. Price volatility should be the norm, as it has been, now and in the future.

Where is the recovery?

The third part of the Perfect Storm is Anthropogenically-driven Climate Change (ACC.).

Without going into it too far, all of the above have a negative impact on ACC. Obviously, economic limits will affect the building of "green" infrastructure as credit is tight and resources are dwindling. It is important that governments understand that the long term health and safety of their nation and people depends on not losing sight of what happens if we don't successfully transition to sustainable energies and sustainable societies.

It has been reported that climate scientists are privately far more pessimistic about the future than they are letting on. Public pronouncements parrot the 2C warming locked in even if we successfully manage Green House Gas (GHG) emissions this century. Privately, there is talk that 3C or 4C is more likely. This is very bad news, of course, which illustrates that action can't wait, but with the economy crashing and energy decline likely to keep it crashing for the next 5 to 10 years (if renewables don't ramp up, it could last decades), how are we supposed to manage the transition to a low- or no-carbon society?

The answers might be simpler - though not necessarily easy - than one might think: Just say no.

More on that later.

Cheers

Disaster Capitalism for Dummies

We are no longer waiting for The Perfect Storm to come, it is here. The outer bands are sweeping the beaches, the storm surge is lapping at the sea walls and breaches are occurring. But it's not just the economy, stupid. Keep in mind energy prices were the pin that popped the housing bubble. Keep in mind energy prices and environmental disasters drove the costs of food and fertilizer higher. This is a Perfect Storm of converging storms, large and small.

We have energy prices (at current "low" prices, they are still 3 - 4x prices in 2003) driving food, fertilizer, pesticide prices, bio-fuels creating havoc with food production, impacting funding for alternative energies, and slowing the economy.

We have weather disasters driven by Climate Change causing destruction we cannot seem to recover from (Katrina, Galveston) and reducing harvests in a number of areas, notably the US, Australia and Bangladesh.

We have the economic disaster (We *might* be in a recession? Freaking liars and/or idiots.) literally resulting in the nationalization of economies all over the globe. We have sold our nations to the bankers. All of this compounded by the wars in Iraq and Afghanistan, which had already been used as excuse to strip away our rights and freedoms, draining the coffers and dragging on the economy. Our ability to adapt to Climate Change, rebuilding as a sustainable society is deeply impacted. Global Warming is likely unstoppable simply because we will likely not be able to afford the transition.

We are in deep poop, people. The longer this goes without the We the Sheeple standing up and telling our leaders what to do, rather than being led to our own slaughter, the more likely there will be nothing but the ultra wealthy and powerful buying their custom built oases, fully staffed by Blackwater, and the rest of us baking in the sun scratching about for a few weeds to nibble on.

With regard to the Economic Storm, I don't think it can be said any better than this:

Wall Street's 'Disaster Capitalism for Dummies'

14 reasons Main Street loses big while Wall Street sabotages democracy

ARROYO GRANDE, Calif. (MarketWatch) -- Yes, we're dummies. You. Me. All 300 million of us. Clueless. We should be ashamed. We're obsessed about the slogans and rituals of "democracy," distracted by the campaign, polls, debates, rhetoric, half-truths and outright lies. McCain? Obama? Sorry to pop your bubble folks, but it no longer matters who's president.

Why? The real "game changer" already happened. Democracy has been replaced by Wall Street's new "disaster capitalism." That's the big game-changer historians will remember about 2008, masterminded by Wall Street's ultimate "Trojan Horse," Hank Paulson. Imagine: Greed, arrogance and incompetence create a massive bubble, cost trillions, and still Wall Street comes out smelling like roses, richer and more powerful!

Yes, we're idiots: While distracted by the "illusion of democracy" in the endless campaign, Congress surrendered the powers we entrusted to it with very little fight. Congress simply handed over voting power and the keys to trillions in the Treasury to Wall Street's new "Disaster Capitalists" who now control "democracy."

Why did this happen? We're in denial, clueless wimps, that's why. We let it happen. In one generation America has been transformed from a democracy into a strange new form of government, "Disaster Capitalism."

Here's how it happened:

• Three decades of influence peddling in Washington has built an army of 42,000 special-interest lobbyists representing corporations and the wealthy. Today these lobbyists manipulate America's 537 elected officials with massive campaign contributions that fund candidates who vote their agenda.
• This historic buildup accelerated under Reaganomics and went into hyperspeed under Bushonomics, both totally committed to a new disaster capitalism run privately by Wall Street and Corporate America. No-bid contracts in wars and hurricanes. A housing-credit bubble -- while secretly planning for a meltdown.
• Finally, the coup de grace: Along came the housing-credit crisis, as planned. Press and public saw a negative, a crisis. Disaster capitalists saw a huge opportunity. Yes, opportunity for big bucks and control of America. Millions of homeowners and marginal banks suffered huge losses. Taxpayers stuck with trillions in debt. But giant banks emerge intact, stronger, with virtual control over government and the power to use taxpayers' funds. They're laughing at us idiots!

Amazing isn't it, Wall Street's Disaster Capitalists screwed up, likely planned or let happen this meltdown and recession. Yet America's clueless taxpayers just reward them by giving the screw-ups massive bailouts, control over more than $2 trillion of tax money, and the power to clean up the mess they made. Oh yes, we are dummies!

This end game was planned for years in secret war rooms on Wall Street, in Corporate America, in Washington and the Forbes 400. Democracy is too cumbersome. It had to be marginalized for Disaster Capitalism to take over. Reagan, Bush and Paulson were Wall Street's "Trojan Horses."

Naomi Klein summarizes the game in "Shock Doctrine: the Rise of Disaster Capitalism." This "new economy" generates enormous profits feeding off other peoples' misery: Wars, terror attacks, natural catastrophes, poverty, trade sanctions, subprime housing meltdowns and all kinds of economic, financial and political disasters. Natural (Katrina) or manmade (Iraq), either way "disaster capitalism" creates fortunes.

So you, me and the other 300 million better get out of denial. America is no longer a democracy. Voting is irrelevant. Best case scenario: We're a plutocracy, a government ruled by the wealthy, the richest 1%, the Forbes 400, the influential wealthy elite, while the other 99% are their "servants." Meanwhile, the inflation-adjusted income of wage-earners has declined for three decades.

Worst case scenario: America's no democracy and as a result of the meltdown and the surrender of our power to Wall Street's new Disaster Capitalism we are morphing into what one WWII dictator called "corporatism," a "merger of state and corporate power," kind of like what's going on now with Goldman Sachs' ex-boss as de facto president.

Wolves in sheep's clothing

Yes, a strong charge. But like a lot of our readers, I don't like what's happening to America. I'm a patriot. I volunteered for the Marines. Served four years. Volunteered for Korea. I don't like how our freedoms, rights and value system are being subverted in the name of greed, arrogance, self-righteous intolerance and other false gods.

We know for the last eight years disaster capitalists ignored obvious warnings of a coming meltdown. They apparently planned it. They road the bull, got very rich. Now they have the ultimate disaster capitalist weapons, trillions in tax money, virtual control of government.

That's why I fear we're on the edge of a dangerous line between Wall Street's version of disaster capitalism and a toxic "merger of state and corporate power." The wolf is in sheep's clothing. Wall Street pretends we're a democracy. Yet America more closely resembles the kind of "corporatism" that Laurence W. Britt wrote about five years ago in Free Inquiry magazine.

We adapted his historical analysis of 14 key traits for today's discussion. Notice how they have a huge impact your investments and retirement:

1. Wall Street rich get first priority

Think "bailout." Wall Street's greedy con game spins out of control globally. Millions of homeowners misled, lose. Who gets hundreds of billions first? Wall Street's con men.

2. National security obsession

Think of the expansion of executive powers in the name of national security: Preemptive wars, wiretapping private citizens, Gitmo, torture; driven by a dark wealthy neocon elite.

3. Superpower with massive military

Think of our $3 trillion Iraq/Afghan War. Disaster capitalists love the thrill of military power. We outspend all nations, over half the federal budget to strut before the world.

4. Extreme nationalism

Signs are everywhere: Flags, lapel pins, "support the troops" slogans, all to get huge military budgets passed. Challenge them and you're un-American and unpatriotic.

5. Rally the masses by scapegoating enemies

Think "axis of evil," mushroom clouds, "Islamofascists," more terrorist attacks on the homeland. Propaganda creates "enemies" in the public's mind and distracts from real issues.

6. Corruption and cronyism

Think earmarks, no-bid defense contracts, paid mercenaries outnumbering military in Iraq, superlobbyist Jack Abramoff, biofuels, bridge to nowhere, millions donated to campaigns.

7. Obsession with crime

Think of prison-building as just another investment opportunity, rather than focusing on reforming our criminal justice system. Stoke irrational fear of criminals and extremists.

8. Labor and low wages

Think corporate earnings versus the wages paid to workers. No "trickling down," leaves more for tricklers: Rich insiders, stockholders. Wages dropping as CEO salaries skyrocket.

9. Contempt for human rights

Think of abuses of habeas corpus, loss of right to trial, bogus charges, plus "demonizing" the victims, all in the name of national defense and homeland security.

10. Mass media manipulation

Think of leaking false information, Joseph Wilson, Valerie Plame, Scooter Libby, Colin Powell's United Nation's testimony, Condoleezza Rice's mushroom clouds, WMDs, all to suppress the truth.

11. Obsession with sexism

Think of paternalism, antigays, antiabortion, subordinate women -- then codify the system as the law of the land reinforcing a male-dominated society, punish violators.

12. Disdain for intellectuals

Think of conservative intellectuals Francis Fukuyama and Bill Buckley. Contrast them to Sarah Palin and Joe Sixpack conservatism, Bush's funding cuts for arts and science education.

13. Religion in government

Think of all the faith-based programs versus antiscience in drug approvals, creationism vs. evolution, Ten Commandments enshrined in public buildings, public money to churches.

14. Fraudulent elections

Think of police and prosecutorial intimidation and threats to voters, challenging minority voters, ballots disappearing, party election officials committing outright fraud.

Yes, officially America is still a democracy. We have enough signs and rituals to support that illusion. But the truth is America has become a plutocracy run by and for the wealthy. And since Wall Street's Disaster Capitalism coup de grace, we are rapidly morphing into a dangerous new government.

For more, read Britt's original article, then add comments here: Was the meltdown planned by Wall Street's Disaster Capitalists?

"America has become a plutocracy run by and for the wealthy."

Indeed.

And you are not invited to partake.

More info on "Shock Doctrine" from Naomi Klein:

The Shock Doctrine, the book.


The Shock Doctrine, Short Video


The Shock Doctrine, Long Video