Iron Sunrise Over America

[arendt]

This is an essay about our economic situation. There is nothing in this essay that hasn't been said before. It has been said forty years ago, in the abstract:

One of the most expensive things an economy can buy is economic trial, error, and development. "Expensive" of course does not mean "wasteful"...

when the development of a formerly strong economy is neglected, so much capital becomes available for unproductive purposes that it is almost an embarrassment. People are hard put to devise ways to use it. The society seems extraordinarily affluent for a time, and in a way it is. For the society is economizing on one of the most expensive things it might buy. All sorts of philanthropies, extravagances, and displays of vainglory become possible.

- Jane Jacobs, "The Economy of Cities" (1969)

The situation has been remarked upon recently by the corporate media as a matter of fact, just part of the normal market cycle:

...the declining dollar is a significant factor. The decline is the result of years of large and growing U.S. trade deficits that should have caused the exchange rate to adjust years ago but didn't because so many of our trading partners in Asia and the Middle East were intent on linking their currencies to the dollar. In the process of maintaining those dollar pegs and reinvesting those surpluses in Treasury bonds and Fannie Mae and Freddie Mac securities, they created a surfeit of cheap credit that spawned all those bubbles.

Now that the process is reversing itself, the overvalued dollar is being repriced.

- Stephen Pearlstein, "The Mirage Economy", Washington Post, May 28, 2008

A less sanguine view of the situation is presented by environmentally and economically aware writers (often called "Cassandras" for being realistic):

Notice how many of the things we had in 1933 are gone now. Our cities, with a few exceptions, are imploded husks. Our small towns and small cities (Schenectady, home of G.E.!) are gutted, especially in terms of locally-owned business. Our passenger rail system is worse than anything a Soviet ministry might produce (while the airline industry that replaced it is dying of a kind of financial hemorrhagic fever). Our local transit hardly exists anymore. Family farms have all but disappeared. We have plenty of manpower earnestly eager to become American Idols (but certainly not for heavy labor). Our oil industry now supplies only a fraction of the world's daily supply (and not even enough for half of our own needs).

- James Kuntsler, "Anxious Hiatus" (5/26/08)

And last, but not least, politically aware writers have dared to point out that these actions are NOT natural and have dared to place the blame on the culprits:

What has overtaken America's working people is not a natural disaster like "globalization," and not even some kind of societal atavism in which countries regress mysteriously to their 19th-century selves. This is a man-made catastrophe, a result that proceeded directly from the deliberate beatdown of organized labor and the wrecking of the liberal state.

It is, in other words, a political disaster, with tax cuts, trade agreements, deregulatory measures, and enforcement decisions all finely crafted to benefit one part of society and leave the rest behind.

- Thomas Frank, "Our Great Economic U-Turn" (WSJ, 5/14/08)
http://online.wsj.com/article/SB121072656227790335.html

What follows, then, is merely my personal sci-fi metaphor for the awful fate that has overtaken America. I am strongly in the unnatural/Cassandra camp. So, pop a Paxil, and "let's roll".

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just outside the expanding light cone of the present a star died, iron-bombed.

Something—some exotic force of unnatural origin—twisted a knot in space, enclosing the heart of a stellar furnace. A huge loop of superstrings twisted askew, expanding and contracting until the core of the star floated adrift in a pocket universe where the timelike dimension was rolled shut on the scale of the Planck length...An enormous span of time reeled past within the pocket universe, while outside a handful of seconds ticked by. From the perspective of the drifting core, the rest of the universe appeared to recede to infinity...The stellar core cooled and contracted, dimming...by the end of the process, a billion trillion years down the line, the star was a single crystal of iron crushed down into a sphere a few thousand kilometers in diameter...

Then the external force that had created the pocket universe went into reverse, snapping shut the pocket and dropping the dense spherical crystal into the hole at the core of the star, less than thirty seconds after the bomb had gone off. And the gates of hell opened. When the guts were scooped out of the star and replaced with a tiny cannonball of cold degenerate matter, the outer layers of the star, held away from the core by radiation pressure, began to collapse inward across a gap of roughly a quarter million kilometers of cold vacuum. The outer shell rushed in fast, accelerating in the grip of a stellar gravity well...Then the hammerblow of the implosion front reached the core . . .

The hammerfall was a spherical shock wave of hydrogen plasma..., by the time it slammed into the crystal of iron at the heart of the murdered star it was traveling at almost 2 percent of lightspeed. When it struck, a tenth of the gravitational potential energy of the star was converted into radiation in a matter of seconds. Fusion restarted, exotic reactions taking place as even the iron core began to soak up nuclei, building heavier and hotter and less stable intermediaries. In less than ten seconds, the star burned through a visible percentage of its fuel, enough to keep the fires banked for a billion years. ...a respectable shock front, almost a hundredth as potent as a supernova, rebounded from the core.

A huge pulse of neutrinos erupted outward, carrying away much of the energy from the prompt fusion burn...they deposited a good chunk of their energy in the roiling bubble of foggy plasma that had replaced the photosphere...The dying star flashed a brilliant X-ray pulse like a trillion hydrogen bombs detonating in concert: and the neutrino pulse rolled out at the speed of light.

- Charles Stross, "Iron Sunrise"

It is hard to comprehend the sustained level of upper class loathing of FDR and the middle class his policies brought into being. Sickeningly, the evidence shows that that class is willing to snuff out the entire US economy to be rid of those uppity laboring folks and pointy-headed policy wonks. From the minute that they October Surprised Carter out of the White House (a Carter who willingly appointed the first economic Darth Vader: Paul Volcker and willingly deregulated the S&Ls), the GOP executed their murderous strategy of "money uber alles".

To follow the star metaphor, from 1945 to 1980 America's middle class economy was a robust, "main sequence" star, burning its fuel at a steady rate. There were good jobs at good wages, mass production and energy production were "on shore" and well-regulated, the government represented people more than ever before.

But since 1980, the GOP "iron bombers" have created a series of financial bubbles which artificially carved the core out of the economy and accelerated the concentration of wealth in the top 1%. The good jobs were sent to sweatshops overseas, and the increased profits from that off-shoring went into the pockets of the stock manipulating elites. The growing vacuum at the manufacturing core of the economy manifested itself as increasing middle class indebtedness. But, there was a lot of distance for the day-to-day "surface" economy to fall through that debt vacuum, before it hit bottom.

Meanwhile, the lack of investment in the real economy was matched by a concomitant increase in extravagance, just as Jane Jacobs predicted. Corporate execs blew millions on birthday parties and tens of millions on trophy homes. For thirty years, the cut-off financial core concentrated wealth to the point where billionaires had enough cash to buy the mass media and the political process entirely. Meanwhile, the suckers in the middle class bought fat, sloppy McMansions and fat, sloppy SUVs - mostly on credit. For twenty years, we head a one-time blowoff of assets. Everyone looked great and partied hard.

In keeping with Charles Stross's estimate, we have burned through over 9 Trillion dollars of assets during the Bush regime nova event - a substantial fraction of America's total financial assets, past and future. Finally, within the last year, the shockwave of US economic implosion has finally begun to impact upon the "crystalline" economic core of concentrated finance and wealth. All the bullshit valuation of sub-prime mortgages has vaporized like a stellar photosphere, irradiated by the hard impact of economic reality upon the financial core. Now, the over-leveraged US banks and brokerages are coughing up real assets to sovereign wealth funds. This is the equivalent of a nova star ejecting the heavy elements from its core.

As James Kunstler enumerated, America doesn't make anything anymore (except trouble). When the afterglow of the "party at the end of the universe" fades, it is going to get very dark in America - because we don't have the means to rebuild our factories.

But, the elites will be just fine, thank you. The iron sunrise they engineered is in the process of blowing the American middle class to atoms. (You think its a little dangerous now? Give it a moment, and it will become lethal.) Meanwhile, the elites have banked enough from the mass looting of the economy over the last thirty years to wall themselves off, and buy enough loyal guards to protect them in the coming continent-sized Haiti that they will construct. If necessary, they will move to their overseas houses until the radiation levels in America subside, secure in their crystalline core of looted assets.

Welcome to crime on a planetary scale.

arendt