Can Capitalism Save America?

It helps to remember that DJ T-Rump is not in charge.  He is a showman, not a true leader.  Things he says are contradicted with impunity by his direct reports in their public comments and their discussions with leaders outside the U.S. The people making the real decisions are those he has brought in as cabinet members and advisers.

His chief strategist, Stephen K. Bannon, is a particularly intriguing example since his worldview is strongly influenced by the same theory I have referenced several times in this blog - the secular cycle of history as explained in The Fourth Turning by William Strauss and Neil Howe. In a Washington Post article that points out Bannon's affinity to this construct, Howe includes a very succinct explanation of the book's main idea.

The Fourth Turning is geared to the cycle of changing generations as each couple of decades pass. The four cyclic turnings are all driven by the recurring generational archetypes that repeat in what Strauss and Howe claimed to be a discernable pattern. "The Nomads" (Generation X) are now in charge of the machinery of operating the nation while "the Prophets" (Baby Boomers) take their last hurrah with Trumpism and a whole range of dissenting movements. Long-ignored Gen-Xers are not terribly concerned with pleasing their elders. They will only subject themselves to the direction set by Baby Boomer elders when it makes sense for them.

By Marc Escanuelas

For the Gen-Xers standing at the controls, rules are made to be broken. If they see that breaking away from the U.S.A. is a better option than maintaining allegiance, they will veer their states toward secession, (though it certainly helps to have opposition Boomer elders like Jerry Brown in charge of your state when you choose that course). In his WaPo article, Howe writes that in our fourth turning crisis, "rising regionalism ... could lead to the fragmentation of major political entities..." A fourth turning can end in glory or debasement. Sad to say, I foresee the more apocalyptic outcome of this fourth turning.

My view is that rather than capitalism rectifying the mistakes of our elder generations, the forces at play in this round appear to exceed capitalism's capacity for lifting our nation to its former heights. Financial catastrophe, militarism, terrorism, peak oil, and Gaia are all breathing down our necks. It is beyond me how we can expect to be in a 20-year "high" a decade from now, united or not. In a more global view, I see c.2030 as the tipping point to the Age of Limits.

A documentary film by Bannon, "Generation Zero," takes the viewer through the U.S.'s most recent secular cycle. It is clear from this film that he and I look at the world through a similar lens. What's more, Bannon and I were both junior officers on ships in the Indian Ocean in preparation for Operation Eagle Claw - the failed 1980 Iran hostage rescue mission. For both he and I, that failure has been a source of long-lasting sorrow (though our ships had departed the area a month before the mission flew). That experience has led us to take offenses by the Iranian government more personally than the average American. In my case, being retired, there is little I can do now, but for National Security Councilman Bannon, sweet revenge is within reach.

Watching "Generation Zero" was better than listening to a lecture, since the endless string of narrators were accompanied by catchy video stills and clips, but Bannon's metronymic presentation feels like watching an hour-and-a-half long professional ping-pong game. The film gets into the aspects most relevant to our current struggles at about 1 hr. 22 min. The upshot of the film is that our fourth turning crisis will require a cleansing of the excess baggage that prevents the capitalist state from fulfilling the American dream. Howe calls it "the creative destruction of public institutions, something every society periodically requires to clear out what is obsolete." Bannon calls it "the deconstruction of the administrative state."

"Generation Zero" ends with a 1796 quote from Edmund Burke that resonates with the idea of a fractured nation coming out of our fourth turning:

Though plunged in an abyss of disaster, some states have suddenly emerged. They have begun a new course, and in the depths of their calamity, and on the very ruins of their country, have laid the foundation of a towering and durable greatness.

I don't know if, after our current fourth turning, there is any prospect of towering and durable greatness or if we will even still be a country.

Escape from Trumpism

Aside from the devastating effect on liberal Californians of seeing Trump win the presidency, another big influence on the rise of their secession movement was the 'leave' vote in Great Britain that triggered Brexit. Some of the same elements of populism that drove the UK's decision are also at play in the YesCalifornia campaign. Perversely, it was Trump's populist appeal to the working class that vaulted him to power after they had been sorely neglected under recent neo-liberal administrations. In an article published last August, Marxist Martin Jacques described how neo-liberalism is in its death throes, with Trump as an example of how class inequality is now the main issue:

[Trump's] arguments mark a radical break with the neoliberal, hyper-globalisation ideology that has reigned since the early 1980s and with the foreign policy orthodoxy of most of the postwar period... But Trump is no man of the left. He is a populist of the right. He has launched a racist and xenophobic attack on Muslims and on Mexicans. Trump’s appeal is to a white working class that feels it has been cheated by the big corporations, undermined by Hispanic immigration, and often resentful towards African-Americans...

Jacques' predictions for what would happen to the our country with Trump as POTUS were strikingly dire:

A Trump America would mark a descent into authoritarianism characterised by abuse, scapegoating, discrimination, racism, arbitrariness and violence; America would become a deeply polarised and divided society.

We are already seeing plentiful instances of those predictions coming true. Note that Jacques describes several manifestations of the process of descending into authoritarianism. We may not have an authoritarian government yet, but we are headed there quickly.

Stephen K. Bannon's cryptic mandate for "deconstruction of the administrative state" is shorthand for the federal government washing its hands of social responsibilities, but enlarging its control of whatever the President considers threats to national security (both internal and external). Trump's gaffe at calling the deportation surge a military operation was just what you would expect of a militarist. Enter, the security state. Nigel Farage, former leader of the Brexit campaign and a Bannon fan, noted that these ideas are what Bannon would like to see adopted "across the West."

Meanwhile, the neo-liberal Democrats have decided to take their fight to Congress, rather than waste all their energy protesting Trump directly. In shouting matches at numerous Republican Congressional town halls they hope to hold their Representatives and Senators to the neo-lib standard, rather than follow Trump in his version of economic nationalism. Their playbook is the Indivisible Guide, which explains its purpose thusly, "We believe that the next four years depend on Americans across the country standing indivisible against the Trump agenda." Ironically, in these townhalls, the Indivisible movement manifests America becoming "a deeply polarised and divided society," as predicted by Jacques.

Photo by Markus Tacker

It is interesting that while the Trump victory is seen as America's Brexit, there is little anticipation of Calexit or the 49 other potential exits brewing in the country. That, too, would be a sure fulfillment of becoming a "deeply ... divided society." Calexit and others that follow will not be a populist response to the failure of neo-liberalism, but an escape from Trumpism. The Green Party would do well to concentrate on formulating agendas tailored to individual states and to participate in the revolutions occurring at that level.

Califoreignia Dreamin'

In order for America to emerge from the fourth turning as a federation of confederations, the transition will need to begin soon. Due to our crisis of presidential leadership, it is suddenly conceivable that the watershed event triggering a complete geopolitical realignment of these United States is now before us.

Photo by Roman Avdagić

That event would be the passage of a ballot measure aiming for California to secede from the union. Once California passes their measure, the secessionist urge will snowball to include several more states. Depending on the popularity and success of the YesCalifornia movement, there are several other states with long-standing secessionist movements likely to follow suit. These include Hawaii, Texas, Vermont, and New Hampshire, all being spurred on by the election of DJ T-Rump. Washington, D.C. will not be able to prevent these departures because there is no component of the U.S. military that will agree to take up arms against any of the states, especially California. Especially under this Commander and Cheat.

As the states peal off, natural alliances will form with compatible neighbors. Eventually, some will consolidate into confederations. There is already some interest by Oregon and Washington to make common cause with California in backtracking America's manifest destiny. There is no telling which states will comprise the U.S.A. once the dominoes have fallen, but states are the natural level of fragmentation since they already perform most of the same functions as their parent government. We may end up being the Divided States of America, but more likely we will become just a less perfect union, with a semi-authoritative coordinating body like the Organization of American States.

The YesCalifornia blue book provides answers to many questions regarding their initiative. The nine main points on their homepage bear some resemblance to positions taken by the Green Party, e.g. shrink the military budget, provide universal health care, protect the environment, and extend access to immigrants. Or, YesCalifornia may morph into something more in the image of Peter Thiel, though he doesn't have much time before they put the measure on the 2018 ballot followed by a plebiscite to finalize the divorce by March 2019.

Plans for the California's national Independence Day fireworks are rumored to include their own damn satellite rocket.

Of Choke Points and Checkpoints

Of the 55,710 bridges in the U.S. that need structural reinforcement, only about 1,700 are on interstate highways. That is only 3% of the 56,448 interstate highway bridges. Another 10,000 or so (18% of all interstate bridges) are inadequate for the role they should be able to perform, e.g. they lack capacity. These typically result in traffic choke points.

Photo by Daniel Mennerich

The interstate highway system was built over several decades beginning in the mid-1950's. Back then, its bridges were built to last about 50 years, so the first refurbishment/replacement cycle began about a decade ago and will roll on for the majority of this century. If we were to keep pace with repairs of deficient bridges, deteriorating roads, and anticipated traffic growth on interstates, the maintenance cost would be about $1 trillion over a 30-year period.

DJ T-Rump wants to spend that amount over ten years to upgrade all vital U.S. infrastructure. If $33 billion per year of that $1 trillion is spent on interstates, then a ten-year program would include $670 billion for other areas of infrastructure, e.g. airports, telecommunications, pipelines, docks, and waterways. Which infrastructure to upgrade would be partly determined by builders, who might be asked to pay 18% of the cost to upgrade the systems, later recouping their 18% and more through tolls/usage fees. If the builders foresee insufficient usage, they won't risk bidding the job because their profits depend on the tolls they would collect from users.

One sticky wicket in this scheme is that, according to Ed Rendell, a chairman of the advocacy group Building America's Future, only about 500 of the country's structurally deficient bridges can be tolled. Even assuming all of those are on interstates, 500 is less than one-third of the 1,700 dying interstate bridges. Additionally, Congress would have to repeal a law that precludes charging tolls on interstates. Assuming they would do that, more of the cost to maintain interstate highways would fall on users particularly, rather than on gasoline and diesel purchasers in general, since much of the cost today is funded by fuel taxes. The growing number of hybrid and electric vehicle owners would thus join the rest of us in being charged their fair share of maintaining the system.

The market-driven selection of interstate bridge repairs means that some bridges would not be chosen for repair resulting in abandoned routes, shifting interstate travel to other roadways, and causing choke points. In effect, those choke points could serve as points of entry to regions with toll collection sensors tracking folks' comings and goings. Placed well enough before the choke points, these sensors could alert law enforcement of subjects of interest and facilitate arrests or detentions. These tolled choke points could also serve as border checkpoints, setting the boundaries for our future federated states.

When the Green Party takes over in four to eight years, they may try to magnify the choke point effect . The Green Party favors reduced driving and reversing the practice of more and more road construction. They also want to see more truck freight shifted to rail, which is more fuel-efficient. Cutting down on interstate access would support these objectives. Taken together, using market forces to inform construction decisions and charging directly for usage are steps that should reduce frivolous road trips and expansion of the interstate system. They may also facilitate the shift to a more regionalized economy and possibly even a federated polity.

Consequences of Tearing up the Social Contract

President Donald T Rump's fixation with turning our nation into America, Inc. will spell the end of our current Constitution and lead to a decentralized government more akin to a federation. Several indicators of the direction he is leading us are already popping up. By taking his time with staffing the White House, freezing hiring across most of the federal government, cutting federal regulations, keeping subordinates poorly informed, and hiring a kakistocracy of hatchet-men and -women as heads of departments, President T Rump is weakening the federal government's power both intentionally and inadvertently. During his reign, we can expect to see reductions in government provision of health care, education, food, and housing, all of which will mainly affect the poor. Environmental problems, which Rump largely plans to ignore, will also disproportionately affect poor communities. Little else will remain of the government under T Rump than a security state for conducting commerce.

As President T Rump aggregates all the remaining power of the federal government into a national security state, coercion will be the only tool left in his bag. The vulnerability of the federal government stems not only from a chaotic and unbalanced executive branch, but also from the inward-looking legislature that hangs its hope for the continued consent of the governed on trickle-down economics, i.e. raw capitalism, i.e. catering to the 1%. Even if Congress stirs from their supinity and exercises the 25th Amendment or Rump throws in the towel, the momentum of government's social influence will have been disrupted enough by his term to keep it subdued for years. Congress's days are numbered. Another major episode of the continuing financial crisis would give Rump an opportunity to dissolve that body and introduce a new Constitution. The public won't mind, either, because we have all been waiting for him to drain the swamp, which includes driving out all the alligators lurking in the halls of Congress.

By Faron Kee

Law and order, ever more elusive economic growth, and foreign wars will only work so long to hold the country together. If the various bodies of the federal government were serving the populace well, we could stay united indefinitely, but an authoritarian government that is too poor or powerless to be of any use will be rejected by the masses. In its place, states and regional bodies will come to assume some of the essential roles previously played by the feds. The evaporation of federal relevance will assist in the transition of the U.S. to a federation of independent regions as we exit the fourth turning sometime in the 2020's. It is impossible to predict what those regions will be, but Joel Kotkin has taken a stab at it. Our Constitutional crisis will probably take many years to recover from. As a writer, T Rump will be a poor replacement for T Jefferson.

Stepping on the Gas toward a Clean Energy Future

In a more regionalized economy, the distributed nature of renewable electrical power sources will be helpful to maintaining grid stability. That will be especially important if the country's current three grid system is broken up along regional lines. Base load generation, from thermal, hydro, and nuclear plants will be reduced within the smaller grids because of reductions in fossil fuel usage. The net effect will be less stable electrical grids, but owners of facility/building power sources will enjoy more reliable power than those who are grid-dependent.

Photo by Chuck Coker

The reason fossil fuel usage may decrease is that industry and society are waking up to the imperative of reducing carbon emissions. In a sign that the economics now favor a shift to renewable power, even influential Republicans are lobbying for measures to push for a clean energy economy. Meeting with the head of President Donald T Rump's National Economic Council Gary Cohn, former Secretary of State James Baker represented the Climate Leadership Council (CLC) in their call for a carbon tax, which even T.,Rex supported when he was at Exxon. Maybe Dr. James Hansen and the Citizen's Climate Lobby (CCL) have been clever enough to make the august team of Republicans on the CLC believe that this proposal is their own idea, but it is good to know that there is some bilateral support for it.

The proposal is coming early enough in the ramp-up of the Rump administration that it could be put into play by Cohn, formerly President of Goldman-Sachs which recently made a case to investors that a low-carbon economy is likely (driven largely by disruptive technologies in the electrical and transportation sectors). If it gets no play there, Congress has been hearing a lot about the idea from CCL and will probably be hearing from CLC now, too. The carbon tax could become a Republican-sponsored bill that Congress would be willing to force on the administration. Donald T Rump, in turn, could use an agreement to sign the bill as a bargaining chip to eliminate the Clean Power Plan and other EPA regulations, thereby saving face. Additionally, he would be able take credit for sticking to our Paris Treaty obligations, thus saving him the trouble and international censure from backing out.

For you and I, this carbon tax would mean more income (rebates) but, also equally more expensive energy. Burning fuel, either directly or indirectly, will be like maintaining a smoking habit. The taxes forcing tobacco prices to be so high are quite enough to deter people who know the value of a buck. If the government could also stop subsidizing fossil fuels, they would really be convincing, but that's probably too much to ask.

Making America Small Again

President tRump's intentions for improving the economy may actually include some useful preparation for the "high" of our first turning which is due to begin in about a decade. Assuming this next turning will entail a less complex, more fragmented society, rather than the Great America tRump is shooting for, the @RealGreatDivider may accidentally usher us into a transition to smallness.

Smallness, in this case, refers to the size of corporations. With trade wars and import taxes in the offing, U.S.-owned international manufacturers are going to suffer some setbacks. While these will cost jobs at home, especially in the South and Midwest, small domestic manufacturers will gain opportunities to fill the home market demand for various goods/substitutes at more competitive prices. The big company jobs lost in the process may shift to smaller companies, especially if layoffs provoke more entrepreneurship.

Photo by Jo Morcom

The Small Business Administration will have to play an outsized role in perpetuating that shift to some 700,000 small businesses created every year. Someone who started and ran an outlandish enterprise like World Wrestling Entertainment (WWE) could be just right for the job. As one of the few women cabinet officials, former boss of wrestlers Linda McMahon is a good match for the other showman in the room.

Not that tRump, himself, isn't pro-small business. The Apprentice cast its competitors in entrepreneurial roles and tRump ostensibly selected winners. Picking talent; it's what he does. So far, he has made a point to reduce regulatory burdens on small businesses and to improve their financial situation through efforts to eliminate Obamacare and increase access to loans. Realizing how intent tRump is on encouraging entrepreneurship even helps explain why he felt compelled to ask for prayers for Arnold Schwarzenegger. Celebrity Apprentice symbolizes the way forward - we need a few million successful "apprentices" in order for small businesses to make up for the disruptions tRump is creating.

Whether these steps will be sufficient to avoid a recession in the next year or two is doubtful


but, it may make something of a recovery possible to a more regional or local, sustainable society. By then, we will be able to kiss tRump good-bye and welcome our country's new Green leaders.

Coming Apart at the Seams

The financial system is commonly seen as the point of origin in scenarios that postulate societal breakdown. Its precarious condition is one of the big causes of our ongoing long emergency. If the wrong thread is pulled in the financial system, the whole fabric of civilization could come unraveled pretty quickly.

When one of those threads was pulled out in 2007, the U.S. and other governments went into crisis mode in order to patch up and reinforce damaged areas. One of the reinforcements was a 2,300-page law known as Dodd-Frank which bankers have wheedled and whined against for the past six years and now have a so-called President who is willing to accommodate them in reforming it. In doing so, tRump could loosen the binding behind the crazy quilt of the financial system. After eliminating safeguards, Congress will try to pass a watered-down version of Dodd-Frank or a new manifestation of Glass-Steagall, but as with the ACA, tRump appears to be mainly in demolition mode. The question is, how far can the financial industry stretch a weakened fabric before splitting the seams?

Splitting of those seams along national boundaries may contribute to fulfilling tRump's isolationist ideals, but, even if the financial fabric remains intact, the likely result of gutting Dodd-Frank is more oligopolization of the financial industry. Lip service is being paid to improving the lot of communities and consumers, (and tRump's friends with "nice businesses") but the Consumer Financial Protection Bureau looks like it will be weakened by the reforms. The argument that Dodd-Frank is disproportionately hurting community banks is weak since that sector has been dwindling ever since 1984, probably due to the same oligopolistic environment that this change would magnify.

Rolling back Dodd-Frank requirements for bank liquidity increases the chances that another bail-out will be necessary to prevent a total meltdown. Strengthening Wall Street banks is the opposite of the direction taken in the Green Party platform. The Green Party solution for banking reform wouldn't merely dismantle a set of rules and replace them with other more or less constraining rules. It would break up the big banks and create a more competitive environment, leveling the playing field for community banks and credit unions.The Green platform has this to say about bail-outs:

Oppose the federal government being the final guarantor of speculative investments. During a financial crisis, if the federal government and/or a central bank must provide relief, it should be given in an equal manner and at the most local level possible, so that benefits are equitably dispersed and burdens are equitably borne. So rather than pouring trillions of dollars into the banking system, they should have provided direct mortgage relief to homeowners suffering the most from the housing bubble and negotiated with lenders to provide partial loan forgiveness.

That would not be possible in the current environment because the global financial system is rife with derivatives making the failure of a major bank unthinkable. The tRumpist reforms would aggravate this further by eliminating the Volcker Rule that limits speculation using a bank's capital. As with Obamacare, the Republicans vow that their replacement version will do a better job at what Dodd-Frank promised, but such promises strain credibility.

Photo by Beverly

Thanks to tRump and the Republicans, it looks like America will suffer an even greater economic divide before people wake up to the better way offered by the Green Party. Instead of playing along by trying to regulate TBTF banks, we should try to break them up before they hurt people again. If we don't dismantle these financial behemoths first, capitalists, in an orgy of greed, will cause it to all come crashing down.

The Greens are Batting Clean-up

If the political pendulum does loft the Green Party to prominence by 2024, it will not be all that glorious. We will have a big mess to clean up.

The ascent of the Green Party, though beautiful to lovers of nature and humanity, will mark a reversal from the myth of perpetual progress that took hold as the industrial and information ages rolled on. Not that the Green Party is terribly Luddite (their platform lauds high speed computing, advanced telecommunications, and the space program, but circumscribes nanotechnology due to several unknown risks). Yet, the Greens' ideology is nowhere near as sanguine over homo sapiens' capacity to evolve as, say, the Singularitarians'.

What the Green's are keen on is sustainability, which will be precious after we finish ravaging the land, sea, and sky in our final turning of this secular cycle. Our current trajectory will put us in poor stead for the start of the next one. As we wrap up the fourth turning, we are likely to undergo disintegration rather than reorganization, fragmentation rather than evolution, ending up with a less rather than a more complex society. Greens favor a more agrarian society, rather than the heavily industrial agriculture that now dominates. Foreseeing the inevitable collapse ahead, they see some disintegration as desirable, though it ultimately diffuses their power structure. The way it is going, however, we will have a lot of pieces to pick up once we take over.

Photo by Michele Bighignoli

The tipping point for this crash landing is likely to come from one or more of the five causes of collapse identified by Jared Diamond. The trumpists are driving each one of these (more or less) in the wrong direction:

• Environmental Damage - ignoring scientists, gutting agencies, and revoking regulations will accelerate damage to ecosystems which are already under duress.

• Climate Change - denial and cancelling our part of the Paris agreement will put the world well over the 2 degree temperature increase. With the ice caps melting, the positive feedback from permafrost methane releases could already be enough to make our own contribution negligible.

• Hostile Neighbors - Mexico is not happy with us, will be charged somehow for the border wall, and will lose some or all of NAFTA provisions.

• The End of Help and Support from Friendly Neighbors - Canada is not aligned with tRump's rejection of Muslims. Were he to pay Canada a visit, as is customary on a President's first foreign trip, he would be besieged with protesters. The way tRump has been abusing other allies, he will likely piss off Trudeau in short order.

• The Failure of Leaders to Find Constructive Responses to Problems and to Give Meaning to a New Reality - Make America Great Again is a regressive theme, not compatible with the new reality of limited resources and growth. 

The point is, if anything is important at this stage in our history, it is that we smooth our descent and transition to a sustainable path in as many ways possible, all the while resolving the ongoing crisis. TRump is wholly focused on a resolution of the crisis at the expense of sustainability, while aggravating all of the major factors leading to our society's near-term collapse. He will be remembered as a scourge on our civilization.