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Detoxing from the Market based Economy and why it’s Advisable

OK here we are. The FED is once again trying to get people to indulge themselves in more needless spending so as to keep the severely damaged heart of the economy from going into cardiac arrest.  This time the stimulant is call QE3. And as Ives Smith says, forgetabtoutit.

But the elephant in the room is what, if anything, these measures will achieve in terms of real economy impact. “Let them eat stocks and housing” has not been terribly successful. Even with super low rates, it has also taken massive sequestering of inventories for the housing market to have the appearance of stabilizing. We have low household formation due to young adults facing high unemployment, low paying jobs with generally short job tenures, and heavy student debt burdens. On top of that, we have generational headwinds as boomers hit retirement age and want or need to downsize. Keeping money on sale is not going to induce banks to lend more if they can’t find enough qualified borrowers. And the consumer deleveraging story is not as positive as the statistics would lead you to believe. A lot of it is involuntary, meaning driven by foreclosures. In addition, retirees also curtail their spending thanks to the fall in interest income they’ve suffered under ZIRP.

. . . . .

And where does the Fed go if a financial crisis or other shock occurs?

The Fed failed to see the crisis coming, failed to push for restructuring of consumer, particularly mortgage, debt, and is now in full bore “if the only tool you have is a hammer, every problem looks like a nail” mode. And in the crisis, the Fed was slow to act and then overdid when it finally roused itself (remember “75 is the new 25??) it looks as if the Bernanke Fed is incapable of looking at its own history.

The EU has come up with a similar plan to rescue the Euro once again.   And at Resilient Communities John Robb is a bit more blunt.

The numbers are in, the economic depression (I call it D2) that started in 2007 is still here and it’s getting worse.

This week’s numbers from the US Census Bureau show that the median household income slid another 1.5% in 2011.

That means that household incomes are 4.1% below what they were when the “recession” officially ended and 8.1% below what they were in  2007.

The news is actually worse than that.  Median household wealth has dropped a massive 39% since 2007 and it’s showing no signs of recovery (see the chart below).   In fact, household wealth today is so low, it’s 10% less than it was in 1983! 

That’s the bad news. The good news is that there is something you can do about for yourself and you community, but it won’t be easy and it won’t be much fun.  The majority of the posts I read here and elsewhere consist of economic and political palavers on how to make our market based capitalistic economies less toxic to ourselves and the planet as a whole by playing some game of political musical chairs.   The right wing especially reminds me of a crack addict or alcoholic rationalizing their dependence while the planet’s circulatory system and digestive system deteriorates.

The left is certain that by controlling their intake or firing the pushers and bartenders, all will be fine.

The obvious solution is of course the one nearly everybody does not want to look at or admit is necessary and that is to detox on the system itself. Not abruptly of course. That would cause far too much distress and few could withstand it. Throwing oneself into economic and social withdraw.   After all that was one of the points of the bank bail outs. To keep the populace from having economic withdraw and bouncing off the walls and taking to the streets in chaotic fashion.

But slowly so as to become adjusted to a new way of thinking and acting and living.

GET OUT OF DEBT ! That’s the first order of business. To begin the process of removing ones self from the dependence.  Pay off you car, credit cards and even your house if necessary.  Assuming you own one.   I do not own a house I rent. My car is payed off and I have no credit cards.

Leave the commercial banks. Join a credit union. Everyone who is in a commercial bank is supporting the Wall Street pushers and dealers.

Try to live in a modest fashion buying only what you need.

Become more resilient and self reliant and community oriented.   Forget the federal government. They have only one agenda and that is to maintain the status quo for themselves and the Wall Street dealers for as long as possible.  Buy local and live local. Find out about farmers markets and farm cooperatives and community gardens and urban farms.

Learn how to make things yourself and locate those who are making things by hand locally.  After attending the fair in Ohio we (my cousin and a friend an I) walked through the historical village in the town. In the back was a small shed where two young men were blacksmithing.  Using some old and new techniques to make replacement items for the village.  We talked for about 45 minutes and the one thing they brought up is that using these techniques, one can most time produce items of superior quality to that which is manufactured and they will last longer as well.

I will admit I am a bit biased when it comes to DIY. My father built both of our houses in Ohio and I build and/or maintain as much as I possibly can. Now in the process of learning some woodworking skills to add to my metal working and electronics skills.

Buy used locally rather than new. It’s cheaper and works just as well. People sell a lot that is perfectly good simply because it does not match their decor or some other silly ass reason.  Ditch windoz and use Linux. It’s free and constantly updated and maintained and virtually bullet proof.

Build you own computer. My sister built both of the ones she uses in her business and she is NOT a geek.

Learn about self sustaining communities that maybe nearby. None of this means returning to the 19th century or living like a nomadic tribe in Mongolia.  What it means is to become less and less dependent on a systems that is coming apart before if completely falls apart.

Now why am I writing about this ?  Because our current economic and social structure based entirely on a profit driven marketplace cannot last. In fact we are seeing it disintegrate even as I type this.   This is not just my view but that of a number of others as well.

I personally pay little attention to the “official economists” such as Krugman and Stieglitz and Dean and Riche as they are the “official voices” and are to me still in addiction.

Better to prepare yourself now rather than be thrust in to withdraw and no source of your drug to be found.



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