These are just a few commonly held ideas, not all compatible with one another or with reality as we know it. Depending on point of view, we find ourselves favoring or opposing some aspect of something we call capitalism, with sometimes radical swings in the underlying reasoning of our political philosophy — we being Americans, generally. And across the world, the same questions come up time and again: one nation’s democratic marketplace, rising tide that lifts all boats, is seen from a poorer nation as an upgraded feudalism, a new age of empire.

What about pragmatism? Capitalism is the best way we know, the idea goes, to achieve the best results for the largest number of people, so it is a pragmatist ethic. Or… capitalism is an efficient, “organic” model of wealth distribution: the market distributes wealth “efficiently”, because individual players in a free market make all their own interested choices about where they should send their capital in order to extract the benefits, the goods and services, they seek or require.

This is perhaps the truest statement about the potential virtues of capitalism, or what are widely accepted to be virtues any capitalist system should aim to embody. But, in practice, a system that privileges capital over cause often does so by giving special privileges to those who hold the capital, not to those who seek it, or who are laboring intensely in the harshest conditions to earn a share of it.

Capitalism is the enemy of communism: this idea is almost universally held, but actually, it refers to one of the biggest grey areas in the history of social philosophy. As a matter of social ethics, communism cannot really emerge in its Marxist form, as a philosophical approach to economics, unless it emerges within a capitalist society. Marx specifically says so: communism is not suited to old-style agrarian societies, because only the industrial societies, where democracy and capitalism have taken root, have the kind of civil structures able to reward the actions of collective bargaining organizations.

Hence the violent tendencies of many Marxist factions around the world: even in the US, there was violence during the heyday of 19th-century unionizing, but in the US, a dynamic, open democracy allowed for collective bargaining to achieve nearly all of the major socialist innovations the world has seen (the weekend, the paid vacation, the 40-hour work-week, over-time pay, the end to child labor).

Does this make the US a socialist or a Marxist country? No. It means that in the capitalist system, underpinned by the most experienced modern democratic system, the United States found efficient ways to achieve major social-policy goals of Marxist philosophy, without undermining or uprooting the capitalist system. Several European nations have now followed that example and gone further (Sweden is a commonly used example), but they remain democratic, capitalist societies.

Michael Moore has argued that capitalism is “legalized greed”, a view held by both critics and proponents, rooted in the idea that the most pragmatic approach to economics is to let vice have its purpose, and let self-interest power the mill. This idea is partly about social darwinism, partly about a near cynical approach to human freedom, or if you’re Michael Moore, it’s about the reasons why capitalism needs to be curtailed by democratically determined regulations.

Moore argues that what we now call capitalism needs to be cast aside in exchange for a different kind of market system in which democratic processes allow the citizenry to guide the hand of economic influence. But whether one agrees that capitalism is legalized greed or an organic model of resource allocation, it remains true that it is only as virtuous as those who apply it to the circumstances of human experience.

Capitalism, the same as any -ism, is not a hard-and-fast, unchanging object or species; it is a conceptual realm whose qualities vary as applied. It is what we make of it and only as virtuous or democratic as we shape it to be. Because capitalism, as a tendency, as a philosophical urge, operates among and across the lived realities of a society, it is only as democratic as its interrelationship with those realities.

Capitalism that fosters and cooperates with, protects and serves democratic processes and principles can be democratic in both purpose and in practice, but capitalism that interferes with, obstructs, undermines and abuses democratic processes and principles tends to be undemocratic in both its purpose and its practice.

It is a false choice that would have us choose between capitalism and morality, or between the service of profit and allegiance to the liberties and worth of individual human beings as a socio-economic priority. It is a false choice that asks us to choose between naked laissez-faire capitalism, unfettered by any social conscience and the crushing political bind of a planned economy in which no one is allowed to seek personal gain.

Capitalism is about privileging the flow of capital through society. It works better when those who do not have access to capital are able to come in contact with it, acquire some of it, and capitalize on their own merits, expanding their economic reach. That cycle must, however, be both persistent and pervasive. The freedom to seek personal gain and to innovate must share space with the need to ensure that human dignity is not eroded and free people subject to strategies of indenture.

The pastoral letter on a Catholic approach to economics, Economic Justice for All, makes clear that it is not only unnecessary, but unreasonable, to hand over the navigation of our economic policy to purely profit-driven considerations that ignore ethical accountability, erode community bonds and disrupt the human quality of human existence within our society.

In the preface to the 2006 edition of the pastoral letter, the United States Conference of Catholic Bishops writes that:

… the measure of our economy is not only what it produces, but also how it touches human life, whether it protects or undermines the dignity of the human person, and how it promotes the common good.

In order to support and expand on that idea, they then offered five principles that must inspire the direction of major economic policy choices:

• The economy exists to serve the human person, not the other way around.
• Economic life should be shaped by moral principles and ethical norms.
• Economic choices should be measured by whether they enhance or threaten human life, human dignity and human rights.
• A fundamental concern must be support for the family and the well-being of children.
• The moral measure of any economy is how the weakest are faring.

How the weakest are faring… a great and successful market economy must find a way to protect against starvation, deprivation, homelessness, and lack of access to quality medical attention when needed. Indeed, an economy in which the human person is made subservient to the imperatives of an economic machinery of resource allocation is totalitarian and not democratic, though one can imagine plenty of examples where something called ‘capitalism’ has this effect.

To protect the human rights and the human dignity of the individual, a democratic society must establish meaningful checks on the unfettered application of raw power through accumulated wealth. A social conscience must be part of a democratic society’s application of capitalism as an economic paradigm, or the primal urges of the marketplace will allow for distortions of the economic landscape, the rise of monolithic power structures, the blocking of dynamic resource flows, and the erosion of democratic freedoms and quality of life.

For this very reason, the American system has been a brilliant example of a free, democratic society, in which capitalism has fought its fight, but major achievements in the history and advancement of social justice have come, through democratic processes and the free assembly —Constitutionally guaranteed— of free people, demanding that capital not sideline the citizen.

Capitalism is not democracy, though the two can be mutually nourishing. And capitalism is not unfettered economic aggression. It is not imperialism, though it can be used to effect a kind of imperial control of resources and social patterns. It is not an ethos, not a way of measuring whether we are good or bad, right or wrong.

Capitalism is an idea, a way of looking at the priorities of a society, and the diffusion of power throughout a political system. It is a conceptual realm, in which pirates and villains compete with saints and public servants, where control competes with creativity, where concentration of wealth competes with discovery and the opening of new terrain.

The capitalist imperative is not to amass the most wealth imaginable, but to effect the most practical outcome for the most dynamic society possible. This will always be to the benefit of those with the most access to capital, even if their actual wealth is not as high as it might be in a less democratic setting.

In order to achieve that most dynamic society possible, however, virtually nothing is as vital as ensuring that the human individual, at all levels and across the entire range of that society, be as empowered, as capable, as free and as worldly a being as possible. Any one human individual that lacks the skills, the agility, the rights or the freedom, to choose a better, more dynamic and broadly beneficial path, slows the entire process of adaptation and makes the whole system more sluggish, less dynamic, less able.

This is where capitalism and democracy have their most vibrant and nourishing interaction, in their potential to adequately shape the dynamics of markets —for resource distribution, pricing, quality of the human contribution and reach of human mobility— in such a way that the human individual becomes society’s greatest asset, both economically of high value and socio-politically of primary worth and reliability.

No amount of stripping away of individual rights or the terrains of individual liberty will make a capitalist system more vibrant. On the contrary, such measures help to foster the concentration of wealth, but those concentrations have a sclerotic effect on the economy broadly and tend to pressure democratic systems in such a way that they must over-react or give way.

The idea of the ‘automatic’ in human affairs is an extremely dangerous fallacy —l’automaticité as a functional problem in French ethical and/or political philosophy. It presumes to be able to rule out nearly all human elements of any relationship: free choice, and by extension human error, the interrelationship of people in a community, or across a market. It dehumanizes for the sake of intellectual convenience, or in the case of banks, for the convenience of using accounting methods that ignore risk.

Though the ‘marketplace’ is the most efficient way of turning a sum of money into more than it started out being, and the marketplace is made up of human beings with human relationships, subject to the whims of timing, collective direction, the emotional cascades that dominate trends in trading and the rules set forth by major institutions (like the banks), the banks have sought to siphon as much wealth as possible out of the marketplace, while totally disregarding the humanity of the millions of players whose lives become the source of their profits.

So what’s the solution? Isn’t the automaticity of repayment part of what motivates banks to lend freely, as they have over the last decade? And aren’t the banks reminding us, day after day, by way of indirect protests against legislative action, complaints about the stifling effects of regulation, and over the last year their relentless devotion to the rigors of the not-lending marketplace, that they need such added motivation to do what it is that most behooves banks, which is to lend and hold debt as future income? (Why deprive ourselves of future income by falsely claiming it as past income?)

What can be done to make an institution founded on lending break its apparent addiction to not lending? The answer just might be in treating people like people, building human relationships that are not authoritarian in their zeal or fictional in their assumptions. The legislation passed by Congress and signed into law by Pres. Obama, in May, known as the Credit Card-holders’ Bill of Rights or the Credit Card Accountability, Responsibility and Disclosure Act of 2009, sought to make those ‘adjustments’ that would require more human relations between banks and borrowers, but it is just a start.

It should be noted, the entire nation has colluded in the grand delusion, letting the banks pretend that by making a loan and selling the loan, somehow the same profits it acquired would also be acquired by the buyers of the loan, and the borrowers would also locate the needed additional wealth to compensate everyone, in the time allotted. That conceptualization of lending and wealth-generation allowed for the delusion that new money could be made almost out of thin air, just by willing it.

A loan became a “product”, and the product could then be sold, over the counter, and morph from wealth projected to product sold to new wealth generated, eventually becoming an “engine” of economic growth. But with such a high percentage of all loans falling into this category of renamed, rehashed, and re-imagined value bases, the “engine” effect was getting too much like an effect and less and less like a genuine engine producing substantive thrust.

The idea of wealth replaced actual wealth. There was a bubble. There was a correction. We are living in the aftermath of the correction. But it is necessary to understand how widespread this financial market bubble was and what philosophy about the creation of wealth allowed for it to get so far beyond sustainable, or substantiable, expansion. The idea that by way of repackaging debt, new wealth would automatically emerge, underpinned an entire philosophy about how banking could be something new, something different, a break from the past.

But it was not the past from which these innovative finances were breaking; it was reality, the measure of the concrete, the measurable, the comprehensible. Money is abstract enough as it is: paper or coin that represents value, formerly backed by silver or gold, now just a currency with value against other currencies. So to craft whole new terrains of complex abstraction, within which money appears to do amazing new things, perform new functions, is to stretch the bounds of lived reality.

Here’s another way to look at it. Banks are required, at least in the US, to keep a certain amount of capital in reserve, to guard against losses and cover obligations to pay out withdrawals to account-holders. In the process of assessing the fallout of the 2008 credit freeze, banks that were taking money from the federal government were found to have inadequate capital in reserve: they had been using investments, bundled assets and projected earnings as “capital in reserve”, which they were not.

This fictionalization of the banking business has many causes, over many years, and cannot be attributed to a single individual, a single idea, or any one point of departure. But at some point, innovative thinking and the generation of valuable financial derivatives morphed into a fictionalization of value, in which there simply was not and could not be enough value generated, in a short enough period of time, to sustain the claims of value being made by those institutions generating and selling off the bundled assets, derivatives and exotics.

So, we can say, the fiction of automatic wealth is bankrupting the US. Yes, even today, even as we are in recovery. Because fictionalized finances found their way into the long-term investment strategies of major institutions, including state governments. California is now broke. Banks have refused to continue accepting IOUs from the state, and the state government now has to shut down one day a week. California, the world’s 5th largest economy, lost billions when the markets seized up and hemorrhaged wealth last year.

It is the second time in a decade that California fell head over heels into a massive swindle. The Enron debacle nearly bankrupted the state, because the power-trading giant had allegedly colluded with other power companies in California to fix prices, forcing the governor to sign an agreement to buy power at many times market rates for up to ten years. Arnold Schwarzenegger came to power in the wake of that collapse, and now the end of his second term is seeing another collapse, brought on by huge losses caused by a financial system whose claims of real value were simply not real.

The entangling of state pensions plans and other long-term investments with the esoteric workings of the financial system is a natural consequence of a mindset in which every player has a right to earn, and to profit, via financial investment. The problem is, someone generally has to lose wealth in order for someone else to gain substantially, so the more players involved, the more risk —one might think— that more players will wind up losing. Creative strategies have to be adopted to prevent this, or at least to make it look like it will not occur.

The math might change altogether. A 30-year mortgage, which may or may not ever be repaid at its highest projected value, is counted as an asset. The lender claims to in fact hold that wealth now. $500,000 was just paid out, but in fact, the bank will claim to hold the $500,000, plus all the accumulated future interest. It does not, in fact, have the money, but it says it does. And it makes this questionable logic look viable by selling the debt.

With most commodities, this works, because the risk of lower value is taken on by the buyer, and such is the speculation that comes with buying and selling commodities. At some point, there will be a buyer who has to know the risk is mounting and he may never see a higher price than he paid. But with debt, the value of the loan is fixed: the borrower will not in fact pay more than the highest amount allowable under the loan agreement.

So once the bank sells the debt at the highest price it can, the buyer is very likely never to see a higher price or a return on investment. To get around this, debt holdings were “bundled”. Or rather, they were fragmented, then recombined. So the $500,000 plus interest becomes 5,000 $100 values, each with potential accumulated interest, and each with a speculative price that might actually go up. The money multiplies, and the buyer has some confidence that this speculative commodity will in fact yield a higher price than what he pays for it.

But the problem remains the same: the underlying loan will never be worth more than the monetary value assigned to it in the initial loan agreement. At some point, someone somewhere will be holding debt, which they “bought” at a very high price, which will either be repaid at the initial agreed (lower) value, or not be repaid at all, because in fact the wealth necessary for the borrower to successfully repay the loan never materialized at all.

Imagine this happening hundreds of thousands of times across the financial system, then millions, over several years. Imagine people with fixed-rate mortgages, able to repay, refinancing their homes in order to get access to more wealth, buying into new loans that work in this way, so that a majority of all loans were in fact of this kind. Banks were long past the critical mass on unsustainable debt when the house of cards started to wobble last summer.

What happened between the spring and the fall of 2008 was that a scenario some economists had predicted for years actually became apparent and apparently inevitable: there simply was not enough real wealth in the world to sustain the claims of value being made by the financial sector as a whole: too many outstanding mortgages were in fact unpayable as it was, let alone in a world where repayment depends on a financial system with exorbitant growth levels and where wages are expanding too slowly —actually declining by $2,000 per household from 2000 to 2008— and cost of living skyrocketing — namely food, fuel, healthcare and credit.

We are still working our way out of the labyrinth of that fictionalized financial world. But it’s important to recognize the underlying big picture conceptualizations of wealth that led to the mess we are in. The idea that wealth can automatically materialize from cunning manipulations, or even from what might be essentially nothing more than a shift in vocabulary, is dangerous and must be guarded against.

Automaticity is a tempting idea: it periodically takes hold of and distorts entire political systems. It is the logic behind building ever more destructive weapons —logic that the use of brute force will automatically compel our enemies to respond as we wish— and of prejudice of all kinds —if a stereotype can be applied to an entire group, then why not pin the blame for all our ills on that group—, and so the logic of automaticity is at the root of some of the most massive and widespread suffering in human history.

In banking, it has led to millions of bankruptcies and home foreclosures, millions of layoffs, a frozen credit industry. A lack of government response may have allowed the nation to slide into a long economic depression, by many economists’ forecasts. So the lesson has to be: wealth is not generated automatically by any flip of the wrist, by any sleight of hand, by any cunning financial innovation; it emerges, over time, from real evolutions within the economy as a whole, and has to correspond to measurable real-world value.

Banks are no more entitled to an automatic unending expansion of the wealth they hold or claim to hold than is any one individual. Banks are no more virtuous than any borrower, when they make claims about future wealth projections. The virtue is in the human element, which is expressed by the measurable wealth construct, the figures that are not purely figurative but actually correspond to lived reality.

We must remember that banks are made up of human beings, just as the market landscape of borrowers and investors is made up of human beings. Ideas are tools we use to serve our purposes, but they cannot be bought and sold independent of the human world in which they function; innovative financial instruments must operate on the human scale, so that investors know they are not handing over real wealth in exchange for unsustainable wealth claims.

The group CarbonAided, which helps inform, and provide guidance for implementing carbon offsets, is now seeking to establish means by which carbon offsetting can produce real-world benefits for marginalized and poor communities in developing countries. Breaking the cycle of bad carbon practice the world over requires this step be taken, and the logic of doing it through carbon offsetting is that developing countries can be brought up to speed on emissions reductions by the same process that helps developed industrial countries break their bad habits.

The UN’s Millennium Development Goals (MDG) are a set of parameters set up by UN agencies, in conjunction with governments and NGOs, that aim to improve the lot of the world’s poorest people and thus help to resolve percolating crises of international scope and reduce the temptations of conflict and the risks to public health that result from scarcity and deprivation. The MDG have been difficult to meet, in part because the richer nations have treated them like a gift to the poor, an extracurricular activity whose return-on-investment they don’t know how to measure.

The MDG aim to achieve bold priorities by the year 2015: to end poverty and hunger, achieve universal education, gender equality, child health and maternal health, effectively combat HIV/AIDS, improve treatment and impede its spread, achieve viable environmental sustainability and standards of global partnership that allow the world’s nations to work together in a credible and energetic way to resolve these issues.

A shift in the carbon waste-scape could assist in changing the dynamics related to poverty, education, maternal and child health, environmental sustainability and if implemented in the right ways, be helpful in fostering global partnership. As CarbonAided artfully explains:

For example, by substituting a clean biogas cooker for an open wood fire, the air in the kitchen is transformed from an un-breathable smog which, according to the World Health Organisation is responsible for the deaths of 1.5 million women and children each year. Not only does this address the health MDG but since the women no longer have to spend hours gathering fuel wood from increasing distances they can become involved in income generating activities to reduce their poverty. Children released from fuel gathering are able to go to school. An improved energy supply also allows food to be cooked in a more healthy way thus reducing hunger. 4 MDGs are thus addressed by this type of project as well as the significant reduction in carbon and other GHG emissions.

Elimination of a cause of mass death and chronic ill-health by way of one specific, targetting program that can fit into carbon offsetting protocols, allows developed nations’ industrial activity to improve health, reduce hunger, improve education, even promote gender equality. And in the process, total global emissions are reduced, moving the world toward a healthier and more sustainable future.

One of the key factors of carbon offsetting that has spurred skeptics to doubt its practicality is the need to find creative ways to achieve real-world carbon-emissions reductions, substantial enough to offset existing emissions. Fields like the airline transport industry have traditionally adhered to the notion that their industry cannot effectively participate in emissions reductions, because they have no choice but to burn carbon-based fuels in massive quantities.

But carbon offsetting options are expanding widely, and efforts to reduce the use of carbon-based fuels and promote public health and better practice in poor countries mean there is a global menu of options to choose from, to achieve 100% carbon offsets by backing such projects. Making sure irreplaceable emissions, in the short run, correspond to real-world offsets that reduce emissions and improve standards of living elsewhere mean that burgeoning networks of sustainable development projects can help major industry reduce their net carbon footprint to zero.

The Swiss firm Solar Impulse is also building the world’s first solar-powered airplane, which would be entirely emissions free. Airlines can devote funding to such projects or place advance orders, in order to prepare for a future in which they will require fewer offsets to reach a zero net carbon footprint. In the meantime, efforts to reduce carbon emissions worldwide help slow global climate destabilization, which itself also poses more of a threat to the world’s poor than to the richest nations, for geographical and eco-economic reasons.

In India, one group working with CarbonAided, the Hassan Rural Biogas Project, has developed a mechanism for addressing the issues discussed above, related to home cooking fuel and resulting pollutants and time-consumption, but which also reduces the negative impact of farming practices on the local environment and can reduce the spread of chronic poverty:

The farmers’ situation is also not good. Because of the indiscriminate use of chemical fertilizers and pesticides the expenditure on agriculture has gone up and the land fertility has come down resulting in lower yields. The use of chemical fertilizers has made the land barren and the water retention capacity of the land has come down drastically.

To change this situation, S K G Sangha, have developed a system called ‘Composite vermicompost bio reactor. This system consists of two main parts. One part is a family size bio reactor producing clean gas which can be used for cooking and lighting and the other one is a vermicompost production unit producing high quality fertiliser.

While the composite vermicompost bio reactor system improves the quality of home cooking fuel, and exhaust, it also produces high-grade organic fertilizers. Roughly 50% of the fertilizer produced can be used on the family’s own land, to replace harsh chemical fertilizers that lead to toxic contaminants accumulating in the soil over time and running off into drinking water.

The rest of the fertilizer can be sold at market, providing a steady stream of income for the women, improving their conditions and helping the family to combat chronic poverty and better their own future. Such generative economic strategies mean carbon offsetting aimed at improving conditions in the developing world can help eliminate some of the most serious obstacles to long-term improvements in energy and environmental practice.

We are often told it is the borrower who is responsible for all choices involved in any lending relationship. Taken dispassionately, this seems an odd analysis, considering the relationship cannot begin if the lender does not voluntarily choose to lend to that particular borrower. Banks argue that they attempt to allow credit to “flow” to as many borrowers as possible, in the interest of the general welfare, but that they must impose strict disincentives on borrowing beyond one’s means, such as penalties and aggressively escalating punitive interest rates for borrowers with poor credit or who fail to pay on time, even once.

Again, this sounds reasonable at first blush, but when we look at the mathematics involved —and the banks claim to have no real role in any of this other than mastery of the mathematics—, we tend to find that the banks’

system of rates, plus fees, plus penalties, is not designed to keep the credit relationship healthy, but rather to keep it as unhealthy as possible for the borrower. The goal is quite visibly to extract the maximum amount of interest over the longest possible period of time, from the borrower, period.

That maximum amount of interest over the longest possible period of time is then counted by the lending bank as an “asset”, a future amount of profit or concrete wealth it expects to receive. The problem is: there comes a moment at which rates of interest are so high that the legitimacy of related transactions becomes mathematically unsustainable. The loan cannot be paid back by the borrower.

The borrower may have the information necessary to calculate how much a single dollar borrowed on a credit card may cost over time, even to plot out a “worst case scenario”, but the language of credit card contracts is deliberately structured to give the borrower a rosier picture of the service being provided and to downplay the likelihood that the average borrower might fall afoul of the credit contract’s punitive measures.

It is the banks that structure the credit card plans and design them so that the least able to pay will be trapped into paying the highest rates of interest over the longest period of time. This is a gamble, and clearly one in which the banks are running the greatest risk of not achieving their projected return on a given credit investment.

Usury —the charging of unpayable and irrational rates of return on loans— is a crime, because in real terms, such loans cannot be enforced except through violence and extortion. Legalized usury, through the banks, is in part a fraudulent claim of future income, because there is no way to secure the full amount of the return claimed as inevitable, or even probable, repayment by the lending institution.

Adjustable rate mortgages were misused in much the same way: where they have a very legitimate place in the financial and credit markets, ARMs were taken advantage of by banks in order to claim far higher than sustainable rates of return on genuinely risky investments. This sort of exaggerated claim of future wealth is akin to a bank “borrowing too much” or “getting in over its head”. Abuse of lending markets has led to banks becoming deadbeats, but so far, they have refused to take the blame for making not just bad bets, but false bets based on mathematically impossible claims.

In this environment, credit cards became little more than an excuse for major US banks to ignore the mathematics behind their financial projections and justify impossible-to-repay interest assessments against troubled borrowers. That there was some legal justification for such behavior does not mean it was fiscally responsible behavior, or that it should have any place in an ethical banking culture.

Regulators should have been on the heels of every bank with such impossible-to-repay rates on credit cards and mortgages, but they were distracted by the fact that such accounts had been resold and bundled and turned into surprisingly lucrative “investment packages” or “financial instruments”. While regulators understood that certain lending relationships were unsustainable at the profit margins claimed, it appeared to many that financial speculation would more than cover any such risk, and would turn those bad bets into windfall profits.

But repayment is necessary to sustain the notion of profitability from compounded financial investment in high-interest loans —credit cards, mortgages or otherwise—, and when massive numbers of credit defaults started occurring simultaneously, the house of cards, as it were, started to come apart.

The system of legalized usury that had taken root in the US banking system was built on a foundation of good intentions, to make credit available to more people and therefore to expand the buying power of a vast middle class. The problem is that the lending policies used to enable this were not designed to achieve that laudable goal, but rather to force consumers into devoting ever larger percentages of their income to debt repayment.

This had a consequent crippling effect on the real sustainable buying power of the average consumer or household and began impacting, very seriously, the degree to which individuals would be able to make free personal choices about not just their spending habits, but their personal lives. Higher debt obligation means less freedom of choice in employment; one is driven by a need to cover costs.

Higher debt obligation also means that one’s private property is less one’s own. Consumers were encouraged to cover their escalating expenses by borrowing more. By refinancing a home mortgage, for example, or opening a second, third, fourth or fifth credit card account. Aggressive borrowers were seen as lucrative investments by major banks, so they kept sending more pre-approved credit cards by mail.

In hindsight, it’s easier to see how similar this behavior was to a loan-shark spotting a poor desperate soul whom he could subject to chronic indenture. But at the time, the “everybody’s doing it” mentality dampened the alarm bells some analysts, some politicians and some consumer advocates were sounding. The regulators missed the boat, and the evolution of legalized usury got too far along to be reversed simply by force of will or on ethical grounds.

The entire financial system came to be rooted in untenable claims about exorbitant future revenues to be derived from lending and from resale and reinvestment in lending relationships. Yet the banks wanted as little to do with borrowers as possible. Minimal to zero communication with borrowers regarding their needs, regarding emerging signs of difficulty, was sought. Banks treated every human soul that borrowed as a font of unending repayment at escalating rates of return.

The engineering of the system was so radicalized that credit bureaus were encouraged to issue lower credit scores to people who paid off all credit card bills in full every month, accumulating no interest and therefore serving as less profit for banks. The system was no longer about credit worthiness or ability to pay; it was structured entirely around profit-extraction potential.

This is one area regulators will be looking into, should banks fail to take the necessary steps to curb their predatory lending practices and institute reforms that might help avoid another rash of consumer bankruptcies and corresponding home foreclosures this year. This is why Pres. Obama called on the nation’s largest banks to voluntarily institute sweeping reforms to their credit card systems, because the credit card system has come to signify a grave threat to near-term economic recovery and long-term prosperity.

Nearly $1 trillion in outstanding credit card debt may prove to be the next credit default meltdown, causing a vast ripple effect throughout the US and international banking systems. Last fall, Business Week reported that “The consumer debt bomb is already beginning to spread shrapnel through the financial markets,” and that “Credit card companies were unable to collect $41 billion in credit card debt in 2008 and are expected to lose another $96 billion in 2009?.

Should those projections for 2009 become a reality —and they are more likely to become reality due to escalating job losses and the refusal of banks to act to prevent foreclosures and bankruptcies—, the current recession would deepen, as record numbers of consumers file for bankruptcy, lose their homes, and are impacted by wave after wave of further layoffs, spurred by businesses’ inability to borrow from banks trying to prevent further losses by not lending.

Proposals linked to Pres. Obama’s call for a return to reason and to fair treatment in consumer lending include:

1. Strong consumer protections against “any time, any reason” credit card rate hikes.
2. “Plain Jane” credit card statements, especially regarding how fees are structured. The President went out of his way at his White House speech to warn card companies about hiding big fees in the “fine print”.
3. A central, online platform where card customers can compare credit card terms from competing vendors.
4. More regulations and oversight on credit card companies. Somewhat cryptically, Obama allowed that card companies should be able to earn a “reasonable” profit – but no word on what “reasonable” means.

In March, credit card delinquencies reached 8.5%, the highest national rate since 1984, a sign that inaction to reform credit card policies is hurting banks’ own ability to recover the money lent. A column by Jay Hancock, calling for “an end to the credit card madness”, warns in bold terms that:

Here is the less-known, conservative argument: Credit card complexity prevents users from making rational decisions about borrowing and spending, thus hurting the economy; Congress must intervene to make the system understandable.

Unfortunately, Congress might not take either course. Bills in the House and Senate would end the worst abuses but do little to stop stalker lending or cut the fine print.

Credit card practices are so out of control that even legislation that consumer groups see as a huge step (”Great news on the credit card front!”says Consumers Union) would leave plenty of room for trouble.

Pres. Obama’s call for bold credit card policy reform —including rate reductions and strict limits on the freedom of banks to arbitrarily raise rates— has led to Congress moving to debate and vote on legislation for the much needed ‘Credit Cardholders’ Bill of Rights’. Reuters reports that US lawmakers in the House of Representatives are planning to bring that legislation to a vote as early as this Thursday. Strict new regulations would be imposed, and credit card issuing banks would have until 2010 to implement the reforms.

• Originally published at CafeSentido.com, 29 April 2009

Until now, and even in the midst of the current ongoing energy debate, we are accustomed to viewing the onset of renewable energy sources and the interests of petroleum companies as diametrically opposed and politically incompatible. That idea is now easily seen as what it is: an ideological assumption based on a world-view informed by too few facts and too little understanding of complex interrelationships among resources, natural systems, and economic activity.

Petroleum derivatives are a necessary part of human society, as we have adapted to having plastics and other derivatives serve fundamental needs (medicine is just one example) that go far beyond the luxury use of automotive fueling. And so, we need to consider as a matter of public policy and of the long-term viability of petroleum-based businesses, that this resource cannot be allowed to be exhausted by burning, whether or not there are environmental considerations.

We need to get beyond the unjustified and adolescent way of thinking that tells us that the most profitable companies on the planet need a helping hand via taxes, or kid-glove regulatory treatment, in order to find a way to operate. They are vital for society’s functioning as we now know it, but so are the public transit systems, the postal services, the social programs, the educational facilities and the civil engineering projects that we routinely starve of funds out of a misplaced sense of imposed responsibility.

The oil companies are fully grown and can take care of themselves. They are vulnerable, yes, to severe swings in markets that set prices for a very volatile commodity, but they are also insulated from this by their unique right to adjust prices at all times, accordingly, with very little risk of investigation into the motives for the price changes or fines for overcharging. In short, the oil industry is highly profitable, highly privileged, and is engaged in plenty of activities that are not so destructive to the environment as combustible fuels.

As such, they need to —as a matter of corporate responsibility to future planning— adjust the energy segment of their business to clean fuels, turning the market for clean fuels into a high-value, low-cost, profitable economic engine, and resign themselves to the fact that for purposes of economic, environmental and social sustainability, petroleum resources must be dedicated to uses other than combustible fuels.

Once that adjustment is made, we will be able to look at the market for hydrocarbon resources more intelligently, with a better idea of what is and what is not appropriate, sustainable, and justifiable, as market activity. We may be able to curb some of the volatility, reduce the risk of hydrocarbon-related political and military conflicts, and speed society’s adaptation to a greener, more sustainable economic footing. It is not a question of whether, but of whether or not it is done too late.

• Originally published 20 March 2009, at TheHotSpring.com

Stimulus means spending, and that’s why it’s a gamble. It can mean spending by issuing cash tax-credit payouts, which consumers can then use as they please (this will likely lead only to the paying of already existing bills, which tends to be less stimulative, especially when banks are not issuing new credit freely). It can mean spending on public works, which will spur industrial output and is likely the most serious motivator of job-creation.

But stimulus spending can also come in the form of tax cuts. Republicans and self-professed “fiscal conservatives” like to say that tax cuts are the opposite of spending, but they are, in a way, a more expensive form of government spending. Tax cuts are a transfer of wealth from the government back to the people; they amount to an opportunity cost to the government, meaning there will be lower revenues in the future with which to fund government programs.

If everyone involved is honest about it, the aim of reducing the funding available for government programs is almost always part of a hard-line push for large tax cuts — not stimulus or the right of the individual to spend as he or she chooses. Reference: the single-party Republican reign from, 2002 through 2007, saw the most massive expansion of “pork-barrel spending” in history, and George W. Bush’s budgets were not only by far the most expensive in history, but led to more national debt than all 42 presidents before him combined.

Tax cuts are potentially “more expensive” for a number of reasons: reduced future revenue, the actual immediate payout in the first year, the fact that they are often accompanied by continuing “credits” and the reductive multiplier effect of limited federal funding to key areas where social capital accumulates, like the educational system or the standard of living of the elderly.

Tax cuts also lead directly to increased government borrowing, a cost that will have to be paid by future generations —ironically, this is one of the injustices of which proponents of massive “tax relief” accuse those who favor spending on public works and social programs— which will thus have a real economic cost, incurred from the past borrowing of underfunded government.

In point of fact, not one Republican administration in recent decades has reduced the overall federal budget, despite claims about “reducing government”. The biggest reduction in the “size” of government, in terms of personnel and number of overlapping departments was the “Reinventing Government” project initiated by the Clinton White House and overseen by then VP Al Gore. Under George W. Bush, perhaps the most radically tax-cut oriented president, budgets ballooned and deficits soared out of control.

So, tax cuts are not strictly stimulative; they are strictly a way of moving money, over the long term, from one part of the economy to another, while hampering (sometimes severely) the government’s ability to act on behalf of the people in times of crisis or to build social capital for the future. This can impede the ability of government to respond to natural disasters, like Hurricane Katrina, or to devote the necessary resources to a massive military undertaking, like the war in Iraq, far more expensive than planned, but still understaffed from the outset.

The “Obama plan”, as so many are now calling it, and which the president himself is now passionately advocating and defending is only loosely Obama’s at all. He laid out a series of precepts he wanted Congressional action on “economic recovery and reinvestment” to follow, and the legislation was crafted largely by Democrats in the House of Representatives, with the Senate offering some changes and some increases in the amount to be spent.

He personally has sought the counsel and the collaboration of Republican leaders, and has pushed to include some Republican proposals in the House Democrats’ draft of the legislation, which Republicans seem to have ignored once they opted for total opposition. Pres. Obama has delivered on his promise to make the process of economic recovery an open and inclusive process where citizens, multiple parties, business and academics, can all have their say and argue for specific changes.

Republicans who seek to oppose the new president, either on the grounds of strict fiscal conservatism (which they believe rules out large government initiatives of this kind) or because they feel they can seize a moment of national crisis to blame him for a mess that has nothing to do with him and thereby dampen the public enthusiasm he has inspired, will have to tread carefully, because the high stakes of the moment, and the degree to which they have underestimated both the man and the resonance of his message, mean they may hit the wrong note and pin themselves with the charge of pointless obstructionism when they can least afford it.

The Republican party has opted for a deliberate and impassioned rejuvenation of their time-tested argument that tax cuts are the best medicine for economic output, no matter the circumstances, no matter how little they are “targeted” to the problem. Word is the agreement being hashed out, as a “gang of 20″ seeks to reduce the Senate’s stimulus plan from $920 billion to $780 billion, by cutting funding and making the bill 42% tax cuts, will take out a lot of education-directed spending.

House Speaker Nancy Pelosi, the most powerful member of Congress and 3rd in line to the presidency, has said those cuts will “do violence to the future” and analysts suspect the House Democrats will not accept such cuts. The irony is that studies show clearly that one dollar of education spending produces a higher long-term return than one dollar of tax relief, a clear signal of the effect on overall wealth-generation and economic output.

Stimulus is necessary, or the banking system will continue to move as slowly as the complex range of fears riddling the system will allow, and recovery will be long in coming. But talk about town is now that the Republican party seeks to “blow the house up” or sabotage the entire concept of stimulus spending. Rep. Sessions (R-TX) suggested his party should take a cue from the Taliban “to disrupt and change a person’s entire processes”, presumably a reference to Congressional efficacy or the will of voters.

Moody’s reports that one dollar of “non-refundable tax rebates” tends to produce $1.02 in “economic activity”. Meanwhile, every dollar spent on infrastructure creates $1.59 in economic activity. While the minority wants to cut social spending even where food stamps and aid to those who are too poor to pay taxes would be excluded, food stamps are reported to produce $1.73 in economic activity, one of the highest known single direct ways of producing economic stimulus.

So spending is more efficient at bringing economic stimulus, but it may take longer for the money involved in that spending to reach the demographic of voters who contribute the majority of the Republican party’s campaign funding. Could that be the reason for opposing the most rational economic stimulus program proposed since the recession began more than a year ago? It could, but for now, we only have the evidence that the party truly believes that doing less and producing less stimulus would be “more stimulative”.

“We’ve gone from a lunar world, where we measured everything in terms of days, weeks and months, to a transactional world, where every single transaction has to be part of your decision-making process.” — Colin Powell, 14 December 2008

TheHotSpring.com :: Each information transaction, sometimes as exemplary, sometimes as single element added to a sweeping aggregate of historical sway, is a precedent, which can motivate, influence or redirect the push of future happenstance. And, we must take note, every transaction involving matter or energy contains information, traces of a history of its coming into being, and generates a “footprint”, a trace of its appearance and its transition into something beyond the transactional moment.

The information age gives us a vast wealth of knowledge, or of a kind of knowledge, what we take to be knowledge, about the world, hints which are also indicators, though not predictors, indicators because they play a role in expressing current interest, embedded in human activity, and so in framing future expressions of human interest.

A transactional cosmology sees an interplay of resources, overlapping vectors of sometimes disparate knowledge-sets and creed-assertions, a vital climate of investment, of beings into beings, of cultures into cultures, of histories into histories, of methods into methods, willpower into willpower, communicty into community, potential into potential, outcome into outcome.

Such a cosmology allows us to see occurrence, progression, insistence, persistence, even entropy and erosion, as non-linear, making possible a fuller, more precise understanding of how things come to be and what we can do to urge better results into being. The resilience of vital life-supporting webs of persistent transaction, for instance, can be seen to underpin all transactions across the web of incident, recombination and dissolution, we claim as our own, as the human world.

“Transaction” is not merely a reference to commercial exchange, to the monetary fabric of traditional economics, to guesses about what people intend or demand from an interactive world of community and human moral regulation and creative expresssion: it is, more deeply, more comprehensively, a way of approaching the dynamics of ecological interchange, of web-dynamics, of the immensity of competing and overlapping social fabrics that promote or diminish the strengths of the individual in her environment.

Time —as we have measured it traditionally— is dictatorial, linear, categorized and categorizing in the extreme. Yesterday cannot be today. The 19th century cannot be the 21st. It is impossible for 31 December 1999 to fall on a Thursday, because it fell on a Friday. Saturday was the year 2000.

The idea of time, our preconceptions about how it feels, how it moves, what it intends, what it is helpless to do to be different, our customary way of talking about time, could have caused global calamity, if certain precautions were not taken to avoid the glitches that should have accompanied the inevitable arrival of Y2K. Some potential remedies explored included infecting computers on a massive scale with “virus” codes that would turn back their clocks, possibly doing it while presenting to the end-user a proper date.

Time is, ultimately, illusion. It is real, but it is about perspective, not about plunging along a straight line down, down, down into the dark, unknowable future. It is an impression, it is a representation of our senses, and their combined experience of the process of receiving one impression after another, in sequence, which in our awareness says time is passing.

A better way to look at the question of time is by way of synthesis and entropy, or entropy and what R. Buckminster fuller called anti-entropy. There are ways of applying knowledge to the reality surrounding us, so that we prevent, or put off a given instance of entropy, and conserve or remake something of the order of things that gives us our experience.

Entropy is the breakdown of systems. Organs are systems made up of cells, which are made up of molecular and chemical phenomena working together to create a more or less harmonious whole. At the organic scale, those systems collaborate to provide for the metabolic integrity of an organism, a being whose combined functions are provided for by the component organs, at an unconscious level, beyond our will or control.

But we know enough about the systems of the body to push back the onset of catastrophic entropy. We can prevent the heart from breaking down permanently. Within a narrow window of opportunity, a few minutes usually. We can “restore” brain function, if we do the right thing, quickly enough, to prevent its structure from being disassembled by lack of inter-organic activity and chemical impulse.

The body is a transactional phenomenon. The mind is transactional, its speed and health rooted, we think, in the efficiency with which its neural structure can produce “connections” across synapses, making patterns that appear to us as conscious awareness of specific realities. The metabolic functions of the body, processing energy inputs and expending energy, are transactional, infusing the body’s tissues with shares of energy corresponding to factors too numerous and variable to count.

So, there is a direct impact on our way of contemplating human health and related issues, from adopting a transactional cosmology. But beyond human health, human interaction, obviously, and our interactions with the natural environment, which includes —as a massive assemblage of those interactions— the built environment as medium, the expansion of our economic examinations to an ecological level, must be a major component of our work to fashion a world more balanced, more resilient in the face of the pressures we exert.

• For more on the Hyper-convergence media paradigm
• For more on Generative economics

It may be that “a few bad apples” got the ball rolling on what has turned into a massive international financial disaster. Or, it may be that a few bad apples got their names in lights, while the entire system conspired unwittingly in a spectacular collapse. Either way, the best expression of the problem might be to say that markets have stopped working, in part, because they have been comprehensively modified to stop working like markets.

With capital vanishing, nearly $7 trillion in stock losses in just a few months, and banks refusing to lend even the tens of billions they were given precisely to lubricate the lending process, we are facing a crisis of confidence and an inability to conceptualize shared interest. The idea that self-interest motivates markets somehow developed, irresponsibly, into the idea that self-interest is more important than the functionality of market dynamics.

With ever-larger banking interests concentrating power in fewer and fewer hands, they also began to rely on mystical assumptions about the wealth-generating power of certain financial risks. The obscurity of those financial gambles, the need to believe in their power of wealth-expansion, allowed financial institutions to use questionable deals, with even more questionable projected rates of return, to paper-over already measurable under-performance, both in their own businesses and in the markets generally.

The underlying problem in the system —which allowed banking institutions to hide bad debt in bundled assets, and resell it to trading partners who may not have been given full disclosure on the unsustainable nature of much of the underlying debt— is transparency. A fierce individualist ideology led to a convenient clouding over of the reporting mechanisms intended to make financial institutions more ethical, more stable, and more useful to those outside their walls.

One of the major innovations that could take place —either by collaborative effort now in a time of crisis, or over time, as everyday operators within markets work to adopt the most intelligent organizational tools— would be a vast network of open information, regarding the management of investment funds, securitized loan holdings, and lending practices at a given institution.

This system need not reveal any personal private information about individual investors or bank customers, but would be made available to the public so that the maximum possible amount of information be searchable for anyone wishing to vet the claims of in-house analysts. Part of the goal would be to facilitate the proliferation of new smart-reporting economic databases, and to allow competing points of view on the most complex investment-backup schemes to have an open hearing, as based on credible information.

One of the side-effects of this sort of banking transparency network would be to reduce the motivation for wrongdoing, be it small manipulations or distortions on a grand scale, because by its nature, the system would privilege the more reliable sources of information. Banks with better reporting would be considered superior institutions, in terms of viability and therefore smart investment choices. Grandiose claims would be far less relevant, because they would be measured by their truthfulness, not their dimension.

For many reasons, this may seem like pie in the sky; for one: we don’t know what sort of computing technology could do the work necessary to parse such large volumes of information in a timely fashion. But computer speeds are accelerating rapidly, with the Roadrunner super-computer at Los Alamos achieving petaflop speeds —one thousand trillion calculations per second— and nano-chemical computing on the horizon, potentially magnifying the processing power of traditional microprocessors by thousands or even millions of times.

And, that’s still without touching on the controversial topic of quantum computing, in which everyday substances —like 12 ounces of coffee— can be turned into massive computational neural nets capable of working out problems that require trillions of calculations instantly. The complications there are too many to go into at present, and there is no reliable quantum computer that can be applied to something with so many legal implications as a banking system, at the moment, but the work is ongoing.

Cloud computing may be the first major speed-related improvement that can allow the beginnings of a true banking transparency network. This is a major undertaking, and will require a daunting philosophical shift for many in the financial industry, but armed with computers working at thousands of times today’s computers’ top speeds, spread out over a dispersed cloud-computing network, it would be possible to optimize processing speed, memory allocation, memory recall, informational back-up, time-keeping and matrix cross-referencing.

Bringing all those functions into a central reporting scheme, to make the transparency network a staple of financial regulation, that requires little aggressive intervention but provides significant meat for economists and analysts to chew on, and incentivizes the truth-telling component of in-house reports, could yield a major revolution in financial services and in the stability of banking institutions.

A secondary benefit from this system would be the ability of journalists to judge what sort of projects are getting traction at what institutions — for instance, is hypothetical Bank Q investing heavily in renewable resources, while volatility in the oil sector is hurting some of its competitors? The openness of the information would be a way of allowing the private sector to actually police private banks, without that “voluntary due diligence” being a joke compared to blood-and-guts regulation.

Stability, innovation, long-term thinking, would all be elevated by such a process, as markets begin to organize themselves around more reliable information and more complex, but verifiable, calculations of actual worth, investment strategy and wealth-creation. No longer would major banks complain that they cannot get behind needed investments —like green infrastructure— because key analysts or their rivals won’t understand it and will portray them as dubious actors.

Their financial credentials will be on display and verifiable, and they will not be tempted to or required by circumstance to concoct grossly irresponsible fictions to substantiate their claims about messianic speculation schemes. Such frauds will not only be hard to hide, they will be obviously counter-productive from the outset. Hard work on projects worth completing will be a better measure of financial wisdom, and the mystique of markets might again be found in their functionality, not in their metaphysics.

• Originally published as part of The Hot Spring’s Quipu Economic Forum

The Dust Bowl of the 1930s resulted from a misguided atomized over-exploitation of arable land. Ancient Sumerian civilization collapsed entirely because excesses of irrigation coupled with poor planning raised soil salinity to levels toxic to agriculture. At the end of the 20th century, global industrial activity had come to far outstrip the available resources feeding into it, and our global economy had come to depend on increasing demand and increasing output to feed unsustainable rates of increasing growth, across the planet.

Something had to give. The mathematics of the whole big picture had come to rest on the assumption that already over-stressed basic resources could expand along with economic expansion. They could not. We may now be seeing just the beginning of this realignment of economic expectations, forced by circumstance.

As major resource scarcity spreads, with China losing ever more arable land to encroaching northwestern deserts and road building in the industrial east, as China’s exploding demand for petroleum, steel, copper, water, meat and grains, put pressure on world markets and pushes the cost of basic goods like food staples ever higher across the world, as the unsustainable demand for fuel moves the US corn belt to shift to cropping for ethanol —as much as 40% of world corn exports are from Iowa, which now devotes 18% of harvest to bio-ethanol—, we are experiencing the natural results of an economy that hinges on hyper-exploitation of resources. The correction, when fully upon us, may yet be far more severe than the 2008 credit-freeze crisis.

Hyper-exploitation is a doctrine: it underpins public policy, government spending, security policy and the philosophical arguments for and against deregulation and the trickle-down theory of economic growth as related to tax policy. It requires that we believe in unstated, unproven modes of natural replenishment; it is a proposition that all things can be tapped, moved, transformed and spent, infinitely, because somehow, the market will set all the right limits and excesses will never be so severe as to ignore the laws of nature.

It is, for this reason, dangerous, because it not only is a doctrine that requires us to use more of the vital resources we require than can be replaced at sustainable levels, it moves us deeper into the vice of living on borrowed time. The result is that we must periodically learn the lesson that borrowed time cannot be financed, that we must pay the full price when it comes due, and our unprecedented resource depletion will leave us, quite simply, without the level of supply required to sustain our standard of living.

Already, wealthy governments are moving to take over cropland in poor countries in order to shore up their own food supplies, as the food security crisis spreads throughout the world, affecting even the wealthiest economies. The fear is that this over-consumption now extending to land use in poor foreign states may lead to a wave of mass starvation throughout the developing world, sparking conflicts and threatening the integrity of the international system as such.

According to the Guardian’s Julian Borger:

“In the context of arable land sales, this is unprecedented,” Atkin said. “We’re used to seeing 100,000-hectare sales. This is more than 10 times as much.”

At a food security summit in Rome, in June, there was agreement to channel more investment and development aid to African farmers to help them respond to higher prices by producing more. But governments and corporations in some cash-rich but land-poor states, mostly in the Middle East, have opted not to wait for world markets to respond and are trying to guarantee their own long-term access to food by buying up land in poorer countries.

India and Bangladesh are constantly disputing river water resources that both countries depend on for basic sustenance for tens of millions of people. Ethiopia, Sudan and Egypt are gripped by a struggle over control of the Nile’s water, with the river running dry at the Nile delta on the Mediterranean during some seasons. The Colorado River in the US has failed to reach the sea and is seeing its flow through the Grand Canyon significantly reduced, as states in the Colorado River Basin dispute claims on the river’s water.

Hyper-exploitation even extends to the use of natural resources like water as dumping grounds. The level of toxic chemicals and plastic polymer byproducts now found in ocean water the world over has reached alarming levels, threatening vast ecosystems and undermining the health of human beings and wildlife in most of the world. Drinking water across the US was found to be contaminated by high levels of pharmaceuticals earlier this year, raising the specter of as yet unknown potential harm to public health, over the long term.

High levels of contaminant emissions or toxic dumping are an abusive use of natural resources we often overlook —like air, land, water and forest cover— in our quest for combustible fuels, industrial-scale production and economies of scale we hope will reduce costs, even if they also increase the risk to our long-term economic and physical health and wellbeing. We are now facing a structural economic crisis, which requires us to reformulate and rebuild our economic model, at the most basic levels, a process which will be more or less painful, depending on how seriously we commit to getting it done and done right.

Seasonal photography, by Café Sentido editor J.E. Robertson, a visual essay about a season of historic, urgent & uneasy change

A “wave election”, with public sentiment clearly moving in a new direction, calling for principled governance, with a new focus on progressive aims… economic crisis, having built up over a decade, hidden in the esoteric workings of financial instruments reliant on advanced physics for mathematical proof of viability, worsened by unprincipled exaggerations and manipulations… the potential for a major swing in global opinions about the meaning of political systems… the climate is ripe for change, and we now face the problem of conceptualizing change, in order to see and understand its implementation.

We are emerging from a period of over-accustomed abundance, in which there was never supposed to be any doubt in the popular consciousness that generalized prosperity had reached a mythic level of sustainable undeniability; circumstance could not turn it back. That there was little real structural planning for sustainability was ignored. Economists, politicians, accounting firms, major banking institutions, and governments across the world, ignored the clear signs that flaws in the flow of matter and energy through an increasingly globalized economy were being obscured by convenient assumptions and poorly underpinned strategies.

Moments of exquisite beauty, of reverence for the mystery of the natural marketplace, became pervasive: the worship of plenty was so far-reaching, it seemed to be assumed that fashion icons could hold a philosophical stable center by waxing poetic about baroque ostentation. The bawdy glitz of Las Vegas, the all-at-once beaming-up of skyscrapers in Dubai, a quixotic-hubristic race to colonize the Moon, were hallmarks of the ’98-’08 balloon economy.

Meanwhile, the land of abundance was yellowing at the edges, the rich foliage of its temperate heartland was fading: the state of Ohio reached beyond 25% of the entire population officially on food stamps. Bankruptcies hit their highest level since laws were tightened in 2005. The fading of excess into a tired dream from an era of blind ambition meant we began to see that vast treasures could be diminished to a faint reserve of solace, scattered like guarded oases across the economic landscape.

Property values dropped. Oil prices soared. Banks pushed to cover unsustainable debt by 1) adding more unsustainable debt to their portfolios, and 2) using Congress to legislate against individual consumer bankruptcies. In August, home foreclosure filings again hit an all-time high —not the first record-setting month of 2008—, revealing a shocking level of underlying economic malaise. The dawn of an era of scaled-back expectations, of limited budgets, of belt-tightening and solemn fireside chats, had arrived.

As if every flaw and pitfall built into our way of functioning were invisible to even the most well-trained eyes, we basked in the golden distractions of a notion of manifest destiny, as if history were paying us its due for having imagined prosperity, suffered for it, and brought it into being. We thought nothing of the responsibility that comes with using with such endless hunger the resources available to us.

But the signs of a new “gilded age” were visible and were seeping into the consciousness of concerned observers. The problem was, however, what to do to forestall the onset of institutional chaos, an economic quagmire, the emotional unraveling of markets which had become the backbone of our projected fortunes. The political climate was calling for good news, not for good ideas, and so we collaborated in putting off awareness of what was in store.

Now, words like “depression” are on the winds of mass culture. John Steinbeck’s dustbowl epic The Grapes of Wrath is again a popular seller, not just for high-school required-reading lists. As a nation, we now face the problem of wanting to find warmth and solace, economically and spiritually, in a time of silver-cold rushing waters and a gathering storm of painful, forced change. In times of unwanted struggle, at the root of our basic humanity, we ask how much light and warmth we can derive from a bankside campfire, around which we tell the hopeful stories of a better day to come.

A thread running through those stories was the epic struggle of the 2008 election season, which began in earnest in the fall of 2006, officially during the first months of 2007, and led to an entire year of neverending dialogue about all things political, legislative, presidential and economic. The election was like a campfire culture that sprung up in cities and towns across North America and the world, in which people at the individual level, disenchanted by years, or decades, of political disappointments, began to think something new might be in the offing… an example of community-based leadership.

Yet the singular truth of the moment, related to that adage that “all politics is local” —what we learned from the need of so many to interact on a high plane of social discourse, of civic involvement— was that the individual will, the nature of one’s ability to grasp and to face difficulty, would be the root of recovery. If left on the open sands of desolation, the individual will could be strong, could be noble and definite, and yet falter; but coming together, negotiating around a campfire mentality of solemn devotion to a shared vision of liberty and prosperity, that individual will could be something more, something both brilliant and effective, part of a vibrant declaration of intent.

Admittedly, we could ask ourselves: can we direct our best efforts by way of “tried and true” mechanisms for steering the ship of state? Are the old ideas now out of touch, out of date, aged, brittle, risky? The ancient dichotomy between central planning and laissez-faire had been rusted over and abandoned; the split between social conservatives and economic progressives had withered; the logic of political confrontation was wearing thin. Something new was bursting on the scene.

As if to illustrate that a free people freely reinvents itself, and charts a new course, at will, with special vigor in the hardest of times, political strategy became a liability and complex examination of the facts and the future course of a people at last became the fashion. Clarity of thought before prejudice; hope and determination before fear and division; a sea change coming over the political culture of a deeply divided nation, struggling to find its way.

With the logic of edges, of the far edge of aspirational capitalism, the far-edge of binary politics, the far-edge of belief in ideals, combining to threaten the capacity of individuals, communities and political entities to envision a future of possibility, a logic of horizons grew up in the midst of concern and even panic. We saw that there could be a root structure deep enough to keep us from falling over the edge, into the deep of unsettled failings. We could reach the horizon and beyond.

The white of clear light, the blue of nourishing waters, the red of whole forest-scapes clamoring for a few last waves of warmth before winter: a dizzying but reassuring landscape of old growth entities, ideals and genuine concerns, informed our rudderless drift. Somehow, there might be another way, aside from sliding with the momentum of unstable ground, down into the waiting abyss; there might be the root-structure necessary for a fertile regrowth of economic and spiritual fortunes.

What may come next, what policies are precisely appropriate, what the existential value of competing political philosophies might be, if inclusion or exclusion are wise or perilous, became topics for discussion. Political discourse became a kind of heating oil to warm the spaces between living, working and fretting about impending upheavals, despite the persistent injection of wisps of hysterical fear-mongering. The space of political debate expanded into vastly divergent realms of life and culture, became a warmer, more habitable space.

As a nation, the United States of America has swelled from a band of small colonial villages to a continent-wide solid-state political union. Its history of democracy and humanist values has been fraught with dangerous threads of injustice, bias, hardship, combat and hypocrisy, yet its cultural thrust has been continually to move toward more openness, more inclusiveness, more equality and shared opportunity. The fall of 2008 was a season in which it became reasonable to most people to express concern that in fundamental ways, the nation had veered from that steady course, and needed new direction.

Like a pointilist composite of brushstrokes, the concept of new direction, together with the heat and light of economic distress, the urgency of concern about the security of one’s family’s wellbeing, the genuine worry that communities could spin apart or basic economic structures be allowed to decay, we found humanity seeking stalwart examples, straight arrows, a view of the land beyond the woody time of doubting.

Letting the old assumptions fall to earth, we seek a path to the other side. It could fairly be said there is a new atomization of the structure of society, a new decentralization of the tools of governance, in that politically, the vast center of American politics has summoned forth a style of campaign and a style of leadership that speaks to small entities across a vast narrative of history.

Local organizers moved thousands to volunteer, and the process of a general awakening about the difference between media-fomented cognitive dissonance and fact-based examination of safe passage to the spot beyond the horizon, refit the mechanisms of political discourse, and put control together with principle, in the hearts and minds of voters, citizens, actual people out across the landscape. The “conditions on the ground” became apparent, because a composite sketch of the emotional landscape, the moral and political priorities of a people, was better able to be drawn, from a debate about quality of ideas, as ideas and as practiced.

The old-model social-spending paradigm, as a way of competing with the “supply-side” fund-the-investors paradigm, shifted, and has been replaced by a complex ecosystemic mindset, which conceives of economic processes not as simple ‘expansion’, but part of a fabric of growth processes, a cultivation of longer-term potential for sustained abundance. A generative economics coalesced out of a host of strategies competing for absolute dominance of the political center.

If we could make something real and fecund out of the bewildering tangle of disappointments and excesses, if we could apply that reality like a ritual medicine to the workings of the collective mind, we could perhaps discover that amid the fallen visions and the dying embers of collapse, there is an already-existing road out of the wilderness, back to the heart of what we are as human beings. Generative economics is part of that renewed aspirational style, that desire to defy difficulty and the encroaching gloom, and seed the sustainable future, with what we have at our disposal now, in the present.

The startling array of concerns, perils, styles, ideas, crises, and best efforts, flowing together, could seem at times an unwieldy array of competing claims on our attention or our faith. But somehow, maybe because there is no other way, the future as seen from the real danger of extreme crisis comes to include illuminated approaches, that bridge gaps, heal fractures, draw from pools of shared awareness and reorient the mind to craft a more intelligent way forward.

There is a basic parallel between the growth of the individual mind, the salvage of a desolate spirit, and the process to which democracy, as a way of life and on the plane of ideals, of necessity, tends. The ability to reinvent a problem, so it can be better dealt with, to reinvent a social environment, so it can better adapt, to reinvent the meaning of government or principle or hope or failure, the ability to redefine crisis, is stitched into the process of changing a government, casting a vote for a philosophy about the future.

So, asking your forgiveness for the indulgent streak running through this essay, I return to the original question: what will this turning bring? We can see a new boldness, a feeling that somehow, it is necessary to filter the foreground from the background noise, to make a sincere effort at renewal, to put faith in actual human beings to do right by their fellow citizens.

We should see, coming into being, in coming months and years, new political coalitions, new social organizations, visions that seed the cultural landscape for improvement, working to ensure that the lessons for democracy that we now have at hand can actually be remembered, examined, and practiced. This is a time in which the aspirational and the factual can actually be seen coming together, in which we have given ourselves room to breathe, because we have trusted in the possibility of working to bring the real substance of a better day into being.