Building Cities of the Future

In addition to innovation hubs, building "governance hubs" by moving the capital cities to new locations would help many countries showcase their emergent economic strength. 


Creating a new high tech political management center further attracts investor capital, brings youthful foreign talent, diversifies country's vital urban zones by function, and stimulates an energetic burst of national renewal.

Before being accused that moving a political capital elsewhere is a ridiculous and impractical idea, lets look at two construction trends already occurring where function specific "micro-cities" are rapidly materializing around the world. Although these deal with finance and innovation for now, it is not too outside the box to speculate development of political micro-cities with cutting edge infrastructure to experiment in combining innovation and governance. There are already precedents for it.

Trend A: Financial Centers

It has become common practice for many "developing" countries (quotation marks since really, which country these days isn't in dire need of super rapid and constant development) to build financial downtowns from scratch that emulate southern Manhattan and City of London. Considering the 50 trillion dollar plus valuation of overall stocks floating worldwide and the similarly 50 trillion dollar plus global bond market, the temptation to attract a major slice of that fiat money is certainly understandable.

Some examples of popularly known construction efforts at more efficient capital management magnets include..

Dubai International Financial Center (although it is hard to overlook the hideous caste system slave labor used to build and run it)

Shanghai World Financial Center (Shanghai sure changed in 20 years)

Seoul International Financial Center (IFC)

Moscow International Business Center (a lot of these blatantly try to copy lower Manhattan waterfront view to appear "Western" enough for the promotional advertising photography and video)

Trend B: Innovation Hubs

The Pragmatist had previously touched upon an idea of building a true innovation hub via a concentric circle approach for an enclosed "Science Lab-Factory city" which would enable rapid reindustrialization within the Western world. This concept of a Research & Development to Prototype to Factory production assembly line city is not yet ready for prime time within popular imagination. It may eventually be attempted by some region if certain psychological obstacles are overcome. These obstacles include potential accusations of too much central planning and top down control in the beginning (even if the city is to be governed by direct democracy) and perceived regimentation that may result in creative stifling (since residential area lay out would also be a macro "human talent assembly line" within city's concentric circles). A fine line between human autonomy and desired speed of infrastructural construction/efficiency will need to be calibrated in the 21st century. Lessons from past FDRist and Soviet developmental approaches should be studied in order to create synergy of nourished individual autonomy and systems engineering approach so the former ends up aiding the latter in breakneck infrastructural efficiency rather than be stifled by it. Nobody wants to feel like a cog in the machine (even if the machine is run for the collective betterment of all versus fattening shareholder pockets).

In the meantime, rapidly developing countries are attempting to build their innovation hub micro-cities in the form of glorified and super expanded gated hybrids of commercial areas and college campuses. This creates an attractive investment showcase environment for foreign start ups, their bourgeois workers and families, and the capital necessary to sustain it all. 

In essence, we're seeing efforts to build MIT and Silicon Valley type environments from scratch and geared to specific broad clusters of industry. In fact, considering how much MIT has cooperated with these efforts, it may be time for MIT management to start thinking in terms of creating the first global technology university franchise (one may refer to this half jokingly as McDonaldsization of MIT, only in a good way...). These gated showcase cities of course have an umbilical cord both to the state and partially to their financial hub city brethren. This is absolutely necessary for now. The state should get a lot more financially involved in these projects and their supporting infrastructure since 21st century challenges simply cannot wait for usual organic business growth to provide solutions quickly enough.

Some recent examples include:

Masdar City in Abu Dhabi - A totally solar powered zero carbon footprint city and a hub for advanced green technology development.

Skolkovo in Russia - An attempt to replicate base of US technological innovation in the 1970s-1990s period from the top down and through a centrally planned effort. Even DARPA equivalent is in the works.

Now these do not begin to approach the scale of Tsukuba initiative that allowed Japan to become the most futuristic technological power on the planet in the late 20th century. Neither do they focus purely on breakneck scientific innovation and exploration like enclosed Soviet Naukograd cities did. However, these top down efforts can always be rapidly duplicated and paralleled if a very efficient design formula is found. 

It is said that college towns would become the new centers of civilization after a nuclear war due to the prevalence of labs, equipment, expert personnel, and scientific/technical manuals. Innovation hubs (even if their original design partially relies on attraction of gambling chips from transnational financial casinos of Wall Street, Hong Kong, etc.) can always be streamlined, clustered, elaborated upon, and quickly replicated if an effective and internationally and transculturally transplantable design is discovered. In a way, cities from scratch allow creation of a parallel embryonic global civilization in the shadows of the old one.

Which brings us to...

Trend C: ? -  Governance hubs as a "A Fresh Start" in the minds of the public, to create a new psychological atmosphere and sense of urgency for politicians, and encourage experimentation with Internet enabled democratic legislation. 

Creating a psychological feeling of a "fresh start" in the tired social psyches of many of the world's countries and their elites (particularly the stagnant Western world) by relocating key government buildings and functions to new governance hubs.

A number of nations have already moved their capitals around for geopolitical purposes. Most federal buildings were moved from Bonn to Berlin following Germany's reunification and recently there is even serious debate in Russia to move the political capital for the third time in a hundred years. Historically, urban decentralization has made a country stronger (one city being entertainment capital, one business, one political, one industrial, one cultural, etc). Germany is a good example of being a cluster of healthy regional capital level cities.

Notable examples of capitals being built anew from nothing are:

Brasilia, Brazil - Rapidly designed and built from scratch to be Brazil's futuristic political capital in the mid 20th century. It is closer to the center of the country than Rio, allowing better and closer geographic rule while stimulating nearby regions by opening up new trade, energy, and informational links.

Astana, Kazakhstan -  President Nursultan Nazarbayev decided to move his country's capital from Almaty to Astana in 1997. This allowed a fresh economic start to construct an architecturally modernist showcase city, create an enormous amounts of new jobs, reinvigorate an entire region of the country, and psychologically enable new thinking in officials that settled there.

Once again, capital was moved to a more central location in the country for better national consolidation (think moving key federal government functions away from tired and hated Washington DC and closer to the center of United States so USA's occupied peripheries like Texas and California don't resent being ruled from thousands of miles away). 

Real investment will flow once the world's elites see that a country has a futuristic vision for rapid growth and development that takes advantage of very capital intensive infrastructural projects that have the government elites' committed long term backing. 

Moving the nation's capital to a new more central location fed by high tech infrastructure and treasuries undivided support accomplished this. The trends of constructing financial and innovation hubs will spawn a final binding tendency that better manages the entire process holistically. Humans are primarily shaped by their environment and that includes politicians. Elderly men and women sitting in crumbling buildings hundreds of years old will not do as much innovative managerial thinking as those who legislate in a fresh high tech development (preferably one that has structures with high ceilings). 

Picking the right location for the move is a story in itself as it would stimulate unprecedented series of cultural, social, and economic ripples from the entire country.

Hoover Presidency and Obama

Hoover, a capable technocrat dealt with a deepening depression by trying to improve status quo fundamentals rather than trying to bring new fundamentals into being. Obama, a year into his presidency, does the same but worse.



Timing is everything. When a Republican held on to the presidency during 1929-1933 period of deepening international depression, half a century of Democratic party governance followed (with last vocal remnants arguably stamped out in 1994). Population's psychological association of Herbert Hoover's GOP with worst financial catastrophe in memory and inability to substantially remedy anything (during a 4 year downward spiral) was total.

These days, Hoover's name lives in infamy even though he was a brilliant and very capable micromanaging technocrat. Just like Carter, he was overseeing macro scale global decline and similarly to Carter, did not have the will to radically break from the status quo establishment modes of thinking. The reason for them not breaking with the past too rapidly is that grand declines happen over a period of years with a number of positive reversals. The gradual nature of decline allows the psyche of the political leadership to adjust to increasingly worsening reality (which would otherwise be intolerable if decline occurred in say, 2 weeks instead of 2 years). For example, after Great Crash decline of 50% from 381 to 198, the Dow recovered 33% of the losses by summer of 1930. That was the first of the great sucker rallies that continued until the ultimate bottom and socioeconomic emergency in 1933.

Hoover's administration did not have as many data metrics as exist now (concerning homelessness, hunger, etc) concerning true economic situation on main street. For guidance, they thus overly relied on the casino gambling chart for the rich (that is Dow Jones) even more than Obama administration today.

Here's how that chart looks today:

The current sucker's rally got the gambling chart up to almost 60% in 2009 from its post crash lows. Internet trading advances allow more players with better communication to participate. This means even greater potential for volatility in general (large negative and positive reversals) than in 1930s. When Hoover was in office well into the year following the collapse, his chart looked like this:

Does not look all bad right? Perhaps it looks as if some nuts and bolts need to be tightened by a gifted team of technocrats and the great bubble machine will be up and running again? Although the time for relatively radical measures (FDR style attempts to preserve capitalism) was perfect, these measures would have been politically impossible and were not seen as needed. The rest is history. As tax revenue for government to do anything increasingly dried up, Hoover had less and less tools at his disposal. His administration was in the classic gambler's dilemma of hoping for a reversal while riding an incredible wave all the way down.

The current economic depression may be even worse for United States than the last one in a number of key respects.

1) There is a lot less industrial capacity to fill up than there was in 1929

2) Unemployment after 2008 crash rose a lot quicker than after 1929 crash. By same unemployment calculation standards used in 1929, we are approaching 25% real unemployment already whereas it took 4 years in 1930s for it to get that bad then. If we mimic the Hoover era descent as well as we did the crash (half the gains gone bringing Dow back to 1996 level within months), we'll reach real unemployment of over 50% by 2012. Argentina, with half of its population below poverty line is a good recent example of what we can expect once the dollar default occurs (regardless of the form it takes).

3) Other great powers DO have often greater and often newer industrial capacity to outcompete us even if there is a political decision in Washington to use state capitalism to climb out of the depression using China-esque mercantilist system and industrial exports.

4) The government debt and budget expenditures (proportional to the size of the economy) are greater than in 1929

5) Ethnic divisions are a lot greater than in 1930s due to the number of white Americans being below 70% of population versus being over 90% in 1930s. This may hinder government acquiring enough political will to engage in real nationalist safety net provisions.

6) Modern American oligarchs are internationalists and have better means and will to move their wealth and themselves abroad if needed

My full article outlining the historical context of diminished means to climb out of the hole compared to before and some means left to Obama administration's disposal can be found here.

Obviously 80 years of technological progress means that welfare provisions will be a lot more tangible once social mindset turns towards providing them. This depression will be a lot more physically comfortable than the old one just because gadgets and developments in social sciences advanced greatly. This however does not eliminate the psychological pain born out of comparisons, thwarted expectations, interpersonal alienation (due to better communication technologies versus in person contact), and collapsing national morale of people who fancy themselves as citizens in a "superpower".

History would have been neatly repeated politically if McCain got elected. The resentment based oligarchic GOP socioeconomic structure (that Nixon first hinted on and that Reagan entrenched) collapsed under its weight in 2008 under GOP president. McCain's poor neural circuits and inability to generally surround himself with prudent people (although he did use Romney for financial advice in Sep and Oct 08) means that he would have dealt with the downward spiral even worse than Obama.

(sidenote: Of course it's possible he would be too old to care about politics as usual and would have started emulating his hero Teddy Roosevelt by turning on Wall Street. Such speculation about the "real" McCain or "real" Obama coming out when in power is useless. It's enough to keep in mind that crisis would continue deepening under the watch of another GOP leader).

It may sound ridiculous to think McCain would have accomplished even less than Obama by now but we must remember that even Hoover, the technocratic wonder boy, couldn't do much. McCain's sheer presence and belligerent posture would cause greater capital flight out of the country and quicker movement from dollar as a world reserve. Bailout to first class passengers (Wall Street) leaving the slowly sinking ship would have continued.

So now we have a rather interesting situation that just when the GOP has totally burned itself out and is in the process of disintegration, the people are associating their tangibly felt decline in living standards with the newly ascendant democratic party. Although this does not mean the democratic party will not keep winning in next elections (due to GOP infighting and shrinking economic pie with which to reward supportive factions), its potential to emerge as a monolithic long term juggernaut is greatly diminished.

Exasperation with both political wings of the oligarchy leaves people without a scapegoat for their psyche and opens the door to radicalism and rise of regional (rather than national) power centers. It remains to be seen if the key members of the international community will find it worth their resources to step in to bail United States out (to prevent potential long term geopolitical headaches stemming from social unrest in a state with many nuclear warheads and to profitably pick the bones of the country in the process). Although the bailout infusion has delayed the dollar default, it just made its consequences worse once it arrives.

On a more cheerful note, here's a political cartoon from 1930s.

Credit Rating Agencies Are Financial Weapons

World needs new international credit rating mechanism since biggest credit agencies are US based and thus are pressured to distort their reporting on Western nations. 


Also a couple words on Warren Buffet's recent moves




Moody's consideration this week to upgrade the credit rating of Burlington Northern Santa Fe is a wonderful example of why the world needs an international UN supervised credit worthiness system. The reason why BNSF's ratings may go up is because of Warren Buffet's decision to fully invest into a vast railroad network covering 2/3 of United States (stretching from the key region of Texas to China's port middleman of California). As the world's second richest man and one popularly considered to be the best investor, Buffett's moves are always carefully watched and analyzed. Although calling BNSF acquisition a possible boost to Obama's policies is a bit of a stretch, the 79 year old billionaire's purchases usually resonate deeply in the investing world.

Since Buffett's Berkshire Hathaway is a key owner of Moody's,  one of his assets is about to rate up the value of another. That would be news if such conflict of interest wasn't so common as to be the norm. What has been less noticed and talked about is Buffett's recent gradual sale of his stocks in Moody's itself. The biggest shareholder in the world's biggest credit rating agency (Moody's has 40% of this market and thus the power to acquisitions cripple entire countries through rating them down and reducing capital investment flow) decided to quietly start decoupling himself from it.

Why?

The era of investigators investigating themselves is coming to an end. Moody's, Standard & Poor's, and Fitch Ratings together control majority of the world's rating market and are all based in United States. No surprise that United States continues to have the best triple A investment rating even though its macroeconomic situation and debt resemble something seen in the third world. USA's current and former satellite nations (although Germany is moving out of its satellite status now that its ever growing public debt is protected by Euro as reserve currency) benefit the most from this political protection. Japan has been famously running a public debt for years that is far above the 60% per GDP that is generally considered the safe limit in public discussion.

We're familiar how downgrades and upgrades by US credit rating agencies have been the matter of life and death for numerous countries in the past 50 years. The quality of life for endless millions of people around the world was dependent on the "expert" analysis of these corporations and the investment money it can bring. This applies to countries that aren't colonies or special friends. Moody's couldn't logically downgrade and weaken Cold War allies regardless of their macroeconomic fundamentals. Although Japan is in the same public debt company as Zimbabwe, nobody is screaming against investing in it. Naturally, the same US gov based restraint prevented the agencies from predicting the financial collapse of 2008.

Powerful countries like China cannot enter the English speaker dominated rating market since a Chinese credit agency would be in the same position when it comes to full analysis. The mere fact that people wouldn't believe a Chinese version of Moody's yet continue to listen to the big 3 in US as if it means anything (at least in regards to rating for countries as a whole) is another demonstration of the faith based nature of economics. An argument can be made that the Western world as a whole suffered decreased economic growth due to the politically motivated self restraint of the agencies whose job is to see what's worth investing in and loaning money to. Proper introspection couldn't be achieved.

It would be ludicrous for the agencies to rate each other's effectiveness or have a US government body do so. Even finding general real numbers behind any country's macroeconomic situation from IMF, World Bank, or CIA World Factbook is impossible since these organizations serve oligarchs and governments in the Western world. If IMF wasn't disproportionately influenced by US it would have prescribed the same bitter treatment to its master as it does for many countries in the world (such as fighting large scale corruption within key economic sectors). We continue to see the ridiculous spectacle of morbidly obese countries telling everybody else to get healthier (which they actually did if one looks at anemic GDP growth in the West compared to the rest of the world).

If capitalism is to remain in the years ahead then there needs to be a very robust international UN controlled credit rating agency. It has to be under UN supervision with transparency and input from all the nations and not just be an act of creation by G20 (recent switch of world's economic control from G9 to G20 just expands the ridiculous notion of a few rich nations deciding global economic policy instead of UN).

It remains to be seen whether Buffett has the intention of fully selling off his share in Moody's (and is just doing it gradually to not cause a stir) or if he still thinks there is utility in this insanely powerful organization. As for his investment into railroads leading to and from California ports bringing Chinese goods, we will soon see if that is a sign of faith in the growth of China or US. Buffet has often said that just like a great company, a great country can survive a period of mismanagement. It may very well be that he is old enough to actually have a bit of a nationalist sentiment but any investment he makes in GE or American infrastructure may be part of a bigger picture. His investment into production of electric cars in China certainly shows he thinks Chinese may beat us in this field (and this country has a lot of natural resources to transport by Warren owned rail to the ships departing for Chinese factories).

Failure of Economics as a Science

Economics takes a wrong investigative direction. It misses the point by measuring results of ever changing policy of world's elites instead of looking at the real problem of dividing power and resources between 7 billion individual mammals.



Perhaps the most ridiculous and rather insulting concept that has risen in the modern post-religious world is one of "laws of economics". In the future, people will look back with amazement that a concept belonging in the same category of fiction as "divine right", "natural law", or "inalienable right" has managed to survive for as long as it did. Of course just like these previous illusions, this silly study of man made artificial constructs (and the resulting records and snapshots in time of these faith based constructs that are always in flux) is only "relevant" because the constructs are backed by guns, bomber planes, and thermonuclear rockets. The "experts" in these matters only hold power in so far that the giant monopoly game that is 21st century international capitalism is "strictly" adhered to by most of the global force centers (monopolies on violence that are strong states).

This "strict" adherence (to an international elite consensus on how to allocate material resources acquired through force) is not logically possible since the strong individuals who make the rules always modify and change them at will. Thus, even the concept of world's elites playing by their own rules is an impossible fiction since strict adherence is a joke. Yet, for some reason billions of people think that the experts in economics (a playground sandbox that makes an even poorer job trying to be a "real" science than sociology does) have more validity than experts on feudal slave economics hundreds of years ago.

Yes, there were always people who spent years studying symptoms of arbitrary decisions made by elites. They studied serfdom and how the papal state theocracy allocates resources. They studied dynamics of slave trade. When decades of an individual human are spent memorizing and recording the effects of social policy, the human is tempted to make the results of the study into universal eternal law. Thus we have seen academics defending for centuries theocratic/feudal/absolute monarchist slavery as an efficient natural way of allocating materials and human beings. Notice how humans are considered "resources" now just as they were in ancient Egypt.

Even today, it is tempting to think that all the world's conflicts and problems can be boiled down to disagreements on how to allocate material "scarce" resources. It is tempting to side with elites and use supercomputers and fancy graphs to find ever better more efficient way to allocate commodities and human labor. However, human beings and natural resources are not just sitting there in a petri dish to be studied and efficiently allocated. Human beings are actively trying to expand their personal power by creating new rules of the game to trick others into playing by the new rules. The study of economics is the study of an inflatable tent placed on ever shifting sand dunes. All the world's social problems and conflicts occur due to eternal and fluid power struggles between numerous mammals trying to get an edge over other mammals any way they can. We see the strong societies make rules and forcing weak societies to play by them while not following the rules themselves. This indicates that when world's elites get cornered by the rules of their own making, they will attempt to change or get rid of the game altogether.

Economics, besides not being even close to a real science like chemistry (although of course chemistry also studies patterns in shifting sand dunes and crude shapes produced by energy flow), doesn't even focus in the right direction. Only study of power dynamics between individuals combined with biology can begin to provide ideas on what arrangement can give us desired social results.

Here's a visual illustration of the difficulties we're facing. Right now all the world's people are like little spheres of power in a closed container (lets visualize it as cylindrical container for clarity). These spheres shrink and expand based on how much power an individual attains in society due to external and internal variables. The larger the sphere is, the more it rises to the top while the smaller ones sink to the bottom. Of course while the bottom of the container is full of billions of tiny spheres (those mammals making less than a dollar a day) the surface of the pile has a few thousand large spheres rubbing against each other (mammals that are economic, military, and political elites). Most individuals are biologically predisposed to try to become master over the entire world (subconsciously and consciously) by increasing personal power in all directions since it increases their chances of survival and reproduction. Most would not mind being in charge of everything, being the only sphere on the surface of the pile plugging the cylinder and preventing any from even sharing the same level as itself.

It becomes evident that the real question to resolve is one of scarcity of power. The task of economics (looking at world's elites playing monopoly table game with real human lives and constantly making rules up as they go along) to predict anything having to do with reality is a futile and silly one. People should drive these economists (modern day charlatans, useless snake oil salesmen, and king's courtiers) out of town and look towards scientists, doctors, and psychologists for solutions on how to divide power amongst humanity.

usury never changes

Throughout history, in most major civilization and religions, usury was frowned upon and often prohibited. Money changing artists and parasitic middlemen never contributed anything useful. Over thousands of years humans learned the hard way over and over again to prohibit "interest". The trade behind new world colonial expansion could never begin to be compared in "realness" to today's financial sector. The ancient world built awe inspiring mass infrastructure without links of middlemen and their material overhead. The world of the future will do so again. Now that money stopped being tangible rare items like gold and became just a fiction perpetuated by cultural inertia and charlatan salesmen, new prohibitions are needed on behavior that collapses civilization.

US Debt Default by Next Election is Required to Climb out of Economic Depression

Obama is well served to use a doomed currency to position strategic industrial sectors to receive foreign investment once US defaults on its debt. He must do so before reactionary political opposition can reorganize



The current high debt can only be resolved through a properly timed debt default, controlled bankruptcy, and mass restructuring in order to create:

1) an industrial base for post-default recovery
2) aggressive drive to court foreign investment

It is highly unlikely that American power elites will be able to successfully restructure while preserving large parts of both the political and economic architecture. That is due to 2009 economic foundations being drastically different than in 1870s, 1930s, or 1950s.

United States debt as % of GDP has been within 15 to 30 percent range from 1917 to 1930. The last time debt got that high was Civil War militarization and the following long recession of 1870s. Before that there was the high debt of political restructuring from colony unification and consolidation into nationhood in the 1780s-1790s period. The long recession of 1870s and the long depression of 1930s were both used by American elites to restructure minimal state capitalism into a more productive expansionary force. American power elites had access to cutting edge industry and used every crisis to expand hard industry and outproduce their European neighbors. Economic reversals in 1870s served to weed out the less efficient oligarchs and consolidate wealth in the hands of those that remained. Contraction in the 1930s resulted in a managed bankruptcy and then rapid filling of idled industrial capacity through mass military exports and production.

The chance to preserve a minimal state capitalism model in roughly the same form as it existed for a hundred years before 1930s was lost as soon as US engaged in a second large scale aggression on the European continent. American leadership's focus shifted from improving structural fundamentals ( and continuing to build minimal state capitalism in one country) to mass wartime economy. Repayment of debt became impossible due to the demands of producing goods (tanks, planes, bombs, artillery shells) that are used up without anything given in return. Once war began, the historically crushing debt ( that began with the banker supported war in 1917 and continued into the 1930s) could no longer be repaid through isolationism, protectionism, and exports to either the German or Soviet victors of European unification. Sustenance of minimal state capitalism now involved forceful expansion and passing down of the debt based pyramid scheme to other peoples of the world.

At the time of the disastrous US involvement in another European conflict there were two mid level state capitalist powers that were on the road that US would undertake from WW2 to the present. They were the forcefully expansionary and indebted economies of Japan and Germany. Both wanted to secure sufficient amount of natural resources and room that England, France, Russia, and America already had. This would allow them to become co-equals on the world stage in terms of pushing their economies, currencies, and exports on others. Japanese leadership knew that the energies of both United States and Soviet Union were heavily focused inwards on reforming and thus preserving their own systems. Just like Americans a world away, Soviets were trying to create domestic demand for its industries while consolidating a hybrid of maximum state capitalism with a decentralized socialist base. Japanese strategists calculated that Soviet Union would not be distracted into a destructive cycle of trying to forcefully impose its still developing system on all of Japan. Thus, they probed into Soviet border colonies around Manchuria in 1939 but were repelled with heavy losses. The mere fact that Soviets signed a gentleman's peace treaty after repulsing a Japanese attack led Tokyo to conclude that indebted isolationist Americans would be equally negotiable and prudent in a colonial skirmish. The rest is history as United States completely overreacted to border pressure on Philippines and Hawaii after only losing a couple thousand men. Thus began a change from Washington's focus on building domestic capitalism at home to internationalist Trotskyist efforts to violently spread it abroad.

The vacuum of imploding Western empires allowed the dollar to become a reserve currency and the Cold War provided a perfect excuse to export arms and further dollars around the world. The exports from American militarism propped industrial base allowed the national debt to actually get reduced by more than half by 1960s. Relentless Soviet pressure and China falling to Mao prevented Americans from being as reckless with their debt as they have become in the 1990s. In 1960s, US leadership actually began large scale provisions for social safety nets and moves towards mid level state capitalism as practiced in France and Western Germany. Many political theorists actually spoke of future convergence between evolution of US and Soviet systems. JFK/Lyndon Johnson's Christian democratic efforts towards reduction of socioeconomic inequality and increased role for the state complemented Nikita Khrushchev's liberalization efforts of restructuring and partial decentralizing. Both efforts got derailed by geopolitical needs of empire and ideological reactionaries.

One society broke first and the other rapidly overextended and actually allowed Trotskyist minimal state capitalist proponents to come to power (Cheney, Wolfowitz). The American debt as % of GDP is as great in 2009 as it was during the mass industrial production of WW2. This time around US does not have the industrial capacity (proportional to the size of its economy) necessary to even attempt managed bankruptcy like in the 1930s. Neither does US have the natural resources the way it did in 1950s and 1960s. It also does not have a Cold War equivalent to continue to distract the world and push the dollar pyramid scheme on smaller nations. The recent attempts to find a motivational ideological replacement for the Cold War (with combination of criminal investigation into religiously motivated organized crime and huffing and puffing over Putin's FDR style policies) is not just a pathetic joke but a worrying development studied in European capitals.

Volatility of the Dow Jones industrial average between 1925 to 1928 was 22%. Volatility of Dow Jones between 2005 to 2008 has been 21%.

Volatility in 2008 alone has been 40% compared to 22% in 1928. The housing bubble has reached its peak in 2005 just as it similarly reached its peak in 1925. Due to the regionally uneven speculation on housing, the inflation as well as deflation of the bubble was uneven and less observed. 2005 seems to have been the furthest extent in influence of the paper tiger superpower that is United States. Figure 1 shows that 2005 was the eye of the storm in terms of stock volatility nested between the events of dot com collapse/911 and the crash of 2008.

An economic depression does not happen overnight as desperate government efforts create repeated sucker's rallies. The high volatility (44%) in the first few years of The Great Depression made sure that the last drops of capital have been purged from the hopeful speculators before true bottom was hit. It's not difficult to imagine the present situation similarly deteriorating over the next few years considering the enormous initial swings that we've had already in the last half a year.

The ease of technological transfer of money and increased access to the stock market by the the masses allows greater pain to continue on longer as foreigners get in on the act of shorting and buying American assets. The globalization following Soviet collapse allows the current economic depression more potential for widespread economic damage than depression of the 1930s. Even China is not completely immune although much better protected than more globalized neighbors.

American leadership is reverting into the mode of trying to salvage parts of US economic and political system through top down restructuring. Unlike with the case of Gorbachev, most of the world's elites want Obama to succeed so US does not become a failed state. There are no rapidly adaptable ideological alternatives other than to have an international cooperative effort by minimal state capitalist countries to work together to make sure US restructuring and bankruptcy is gradual, peaceful, and manageable. US has already been stagnating like Soviet Union for over two decades with real wages not rising for large swaths of the population. Infrastructure is poorly maintained and remains 10-20 years behind more pragmatic hybrid nations. The intelligent and politically connected have already taken advantage of the decades long rot in the form of the finance industry (up to 40% GDP economic growth relying on financial non-producing sector). Cracking down on the money manipulators will be just as futile as Soviet attempts to stamp out the black market in the 1980s. Money manipulation is structurally hard wired into the capitalist system.

Obama is between a rock and a hard place when it comes to options and has very little room to maneuver. The default on debt is coming one way or the other but taking the proper road there can position American economy for long struggle for post-bankruptcy recovery. Obama must restructure the economy from the top down but not rapidly enough to cause a destabilizing reactionary backlash from federal, regional, and military elites. If he restructures too slowly, the stagnation worsens and gradual inflation risks becoming accelerated and then exponential. Obama must strike a balance when using a doomed currency to have the state take control of strategic industrial sectors. Default must occur before 2012 for reasons of social stability. The near future impoverishment of top 20% of educated people (who call themselves middle class) risks election of a leader more willing to dismantle the bonds of federal government rather than make American economy a more hybrid model. The mere fact that American population can be very divided over whether to support their democratic or economic way of life underlines the gentleness with which Obama must approach every step.

The population of the last major ideological power has completely internalized decades of propaganda as well as successfully had millions of foreigners internalize it as well. Even to socially conceptualize alternatives and pragmatic non-ideological approaches provokes instinctive distrust, misunderstanding, and reactionary anger. American people have been lied to and manipulated by their own politicians for so long that they cannot even imagine politicians abroad or at home who speak pragmatically and analytically. The idea of "American way of life" must not become one that borders on the religious since that risks the use of federal government for internationally dangerous purposes like increased militarism. The greatest burden since Gorbachev rests on Obama today and hopefully international leaders realize that they need to take some pressure off for the security of the world.

Best Reasons to Not Have Children: Malnutrition and Shorter Life Span?

We've all heard the financial/psychological/moral arguments on why raising children makes one's life worse and less efficient. There is however, a more sinister cost to raising even one child for 20 years. That cost is worse nutritional health and thus shorter life span. 






Lets briefly go over the first 3 arguments and see why the physiological one should be stressed the most.

-Financial-

In 2006, US Agriculture Department has found that a middle income family, with a baby, will spend $260,000 to raise the kid by the time he finishes high school. That's not taking into account economic recessions and reversals, money on college, or inflationary swings. It is very economically obvious that these types of resources can be better spent in various diversified short/long term investments. 260,000 dollars spent over 17 years can be better used to save for earlier and richer retirement, on personal professional education for better employment, or on higher rent to live in places closer to work.

Compared to real financial masochists, who spend resources to raise more than one kid, a childless person can even acquire enough extra capital to start a small business for the price of 1-3 children over 2 decades. We've heard how rearing of children hurts the poor the most but richer people also loose out on tremendous financial opportunities.

A childless person sees new options presented to him such as:
1) choice to work less
2) living in a better/pricier area
3) not be attached to one place and increase economic mobility
4) work more if desired
5) more time to be spent on talent/hobby development that might even generate wealth as time goes on.

The recent depression quickly showed how financially damaging and superfluous human breeding can be. There's been a surge of vasectomies in just the last 6 months. We can only hope vasectomy gifts become the braces equivalent for high school graduates in the future. Surely, a loving parent who wants his spawn to succeed financially, would not overlook the biggest cause of personal financial failure.

-Psychological-

The sheer amount of extra time created through a decision to go childless is enormous. Thousands of extra hours of leisure allow a person to rest/heal more, procrastinate, think, engage in pleasurable activities, and develop the self. Person's stress levels are reduced as child related anger/worry/resentment/fear disappear. Happiness, the feeling that resistance is being continuously overcome, does not come around as often with a child. The more a person wants to be a good/prudent parent, the more the person's physiological potential is stagnated through distraction. How much satisfaction does a musician or an artist lose through not developing his/her gift fully because dirty diapers have to be changed? How much productivity does a scientist lose by being awakened at night with ghastly horrid screams?

Resentment is a very damaging psychological state that produces unhealthy thoughts and attitudes. It doesn't just occur from being hurt or oppressed by a stronger entity. It can also occur from a situation one is practically stuck in. If one has put enough energy/sunken costs into a situation, then the situation becomes entrapment and increasingly difficult to disentangle from. Being compelled to anchor oneself with the same sexual partner because of a child, is very damaging to the psyche over the long term. Many peoples' self esteem is dramatically dampened since they find themselves with the same partner because of a child (long after love and sexual attraction disappeared). Sacrifice of sex (and resulting personal growth) with numerous sexual partners is more damaging than people think. Nothing shows the tiredness and loss of spirit more than elderly parents who don't even care enough anymore to try to look attractive for each other. They are worried about balancing the budget, providing for suburban large family house, and paying for their spawn's college instead of spending their wealth on relationship enhancing hedonistic pursuits.

That's not mentioning the sheer negative emotions saved if the child ever grows up to be problematic or a physiological failure. There's plenty of ways for a person to expand one's personal influence on the world. Influencing a growing organism is one of the weakest ways of doing so. If pleasure could be quantitatively measured, then the joy of seeing one's efforts successfully direct a growing organism (to one's liking) do not outweigh the pain. The sheer amount of anger, worry, stress, sadness, disappointment, resentment, shame, low self esteem cannot be made up for even if the kid grows up into a very successful adult. Positive emotions should be saved and invested during productive years so they give fruits down the line. The emotional opportunity cost of a successful child is not worth the joy of seeing the impudent elite he might become.

-Moral-

Moral arguments against child rearing are the weakest considering the powerful genetic commands we're under. However, if some people can be swayed by arbitrarily created external morality, then childlessness can easily aid in many moral goals. As the world prepares to accept the burden of 9 billion human beings by 2050s, anybody trying to convince people to be more environmentally friendly is wasting his/her time. The best way to reduce amount of non-biodegradable materials and various pollutions in the world, is to convince people to not create more polluters. A potential child (and potential generations of children stemming from him/her), is much more dangerous to the world's environment than a middle aged person winding down.

The world would be dramatically better off if there was just 1-2 billion people on it. Then every person on the planet would be able to have a plot of land and have a rather high standard of living with exponentially progressing technology. Right now, the sheer amount of poverty and resource depletion, created by excessive fertility, are constantly straining and preventing technology from catching up and really raising standards of living around the world. Poverty and lack of education building upon themselves through numerous children also destabilize the world politically, a dangerous thing in a nuclear age.

If it's not too outrageous for a person to reduce amount of children from 6 to 1-2 over a period of 100 years, then it's definitely not too outrageous to reduce amount of children from 1-2 to 0.


-Nutritional-

All of these reasons by themselves (with perhaps the exception of the moral ones), are enough to make any educated person recoil in horror from the idea of ruining one's life to such a degree. However, these reasons underline a deeper basic reason to not make one's life this inefficient and miserable. Undermining one's financial and psychological well being also undermines one's ability to gather better nutrition and live a longer life. The endless thousands upon thousands of dollars saved, can buy higher quality food for a childless person and increase physiological/mental functioning. Better nutrition and healthier empowered psyche from childless freedom mutually influence each other to propel a person to new heights of health. This new, stronger, more confident physiology allows one to really add years to one's life.

Perhaps if we start rephrasing the issue as a public health matter, the grave risk of having a child will become more evident. It's not just having a much better shot at riches but not crippling one's body, mental state, and life span.