A Way Out?


The picture is by Gina de Gorna, and is called 'Escape'

Sometimes, when trapped, people grasp at the flimsiest of things; vistaed hopes, as the poet once put it. In keeping with this blog's somewhat sketchy resolution to try to avoid gloom, however, I attempted yesterday to see if there were ways out of the western decline and recession that we seem locked into, regardless of what false statistics of recovery we indulge in soon.

In part, I was inspired by a commentary from Berenike in the post below. She mentioned her granny, and how she sees her news through a cognitive filter. It's been a cliche amongst many here on my blog, for instance, that peak oil, implying oil volatility and the eventual recognition that cheap oil is gone forever, will soon have serious effects on food, transportation and credit markets.

What if one squinted a bit, though? If oil, because of demand from India and China and the difficulty of supplying at viable prices, actually encouraged us to deal with global imbalances?

One of the main background features of the present crisis, for instance, is the accumulation of capital and savings in export-oriented Asian economies, and the dependence of western ones on borrowing and consumption. This cannot be corrected via exchange rate changes, because the Asians use the dollar and euro for their own transactions, and because they hold the debt and have no interest in seeing dollar repayments fall. The west cannot persuade the Asians to inflate their economies or to spend their surpluses; the west cannot seem to bring itself to cut its consumption and start saving and repaying sensibly.

What if rising oil prices and the creation of ASEAN + 1, the Asian free trade area, on January 1 changes that? Higher transportation costs could mean more production nearer to home. In Europe and America, this would mean slightly higher prices, less disposable income, more social ownership of natural monopolies, and more concentration on local markets; in Asia, investment in roads, bridges and infrastructure from those surpluses. Without a crash or a trade war.

It's a consummation devoutly to be wished. However, the possibility that expensive oil wouldn't be a bullet but a discipline is only one of the possibilities that start to show themselves once you allow yourself to be a little more hopeful. The crash of the global warming scam, detailed here and on other blogs with much greater detail, rules out a new, wasteful derivative market. The crash of the old one has left governments in charge of the banks that overleveraged themselves.

But what if the consequence is not stunned silliness, but a real effort to tie lending banks to solid, conservative principles and to free investment banks for their own frolics? Then we could have what I once characterised as a jungle for the cokeheads, into which we could throw a few steaks occasionally, whilst we concentrated on rebuilding things in the clearing and using the taxes. The world seems fairly near to a Tobin tax, which (after the provisions of the International Convention on the Law of the Sea) would be the second global tax that we could put to some useful purpose.

Thirdly, the Americans seem to be rediscovering federalism. One of the points missed about Massachusetts the other day, was that the Bay State (thanks in part to Mitt Romney) might have better healthcare than anything DC contemplated and didn't want the statist scheme. I say 'might'; it is an explanation. The point, however, is that, rather than just face bankruptcy singly or absorption into federal schemes, the bulk of the plural components that make up the west's engine might reform themselves.

All helpful. The vast canker of a stupid and sneaky media-political class, educated beyond moral limits by the vapid nostrums of political science courses when they were young and drunk, still sits quite heavily on us. But arrogant, credit-fuelled, atheistic, and statist social construction is being consumed all around us, every day, and people are beginning to see a way out of a terrible depression, without war.

Even in Iran, and for that matter across other countries, the internet, the mobile telephone, the force of small business and international trade, and the subversion that always come when people realise that brains are connected to backbones is beginning to make global governing classes very worried indeed. Mobile telephones can now deliver books. Think of what you could do if you put Hobbes or Locke or Washington or St Augustine in the palm of a person in a state-masked prison.....

What if we were not trapped in a depression, run by a banking oligarchy aided and abetted by a political-media class active only in their own interest and doomed to stupid media, poor education, and a panicked and fearful world worshipping the State? What if they don't get their Persian crusade?

What if we found a way out?

Alternatively, of course, as with the painting, I could simply be wandering further along a jetty to nowhere and whistling because the weather is a bit better. That, I suppose, is what makes life interesting. It's been a while since I saw it--did anyone actually survive the Great Escape?