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MAHB on bad assumptions

by on January 5, 2010

Here is the text of this week’s posting. Please post comments below by clicking on the comments link. These are moderated so your comment will not post immediately.

The continued failure to agree, much less to act, threatens global society with further crop-damaging global heating and an assault on supplies of water for agriculture, as well as inundation of coastal civilization. Climate disruption will also contribute to the loss of both biodiversity and the crucial natural services other organisms help to provide. Add to this deleterious changes in land use, also helping to hobble food production, and the release of synthetic chemicals that are toxifying Earth from pole to pole, and the need for effective, rapid international action on humanity’s environmental predicament is clear. That is especially true since accompanying such assaults on civilization are the growing possibilities of vast pandemics and more resource wars, conceivably nuclear. Even a regional nuclear war between India and Pakistan could end civilization through its impacts on climate and the global economy.

It is clearly time to take a hard look at the false assumptions used by institutions avoiding the growing possibility that global civilization will collapse, just as regional civilizations have fallen throughout history. Institutions do not recognize the seriousness of the problem and do not have the historical memory to connect past collapses with the present predicament. Many fundamental assumptions must be reexamined and overhauled if we are to meet the challenges ahead.


From → core ideas

  1. Paul Ehrlich permalink

    The nonsensical fundamental assumption that most comes to my mind today, after the Xmas season and watching the news on how to make the U.S. economy “recover” (i.e., continue wrecking humanity’s life-support systems), is that increasing consumption among the already rich is an unalloyed good. It is not clear that there is even time to close the culture gap that makes almost all politicians and economists, as well as the corporate executives who control the mass media, believe this. How could they believe anything else? After going thru U.S. education systems they remain nearly totally ignorant of how the world works. One can, for example, get a bachelor’s degree and then a doctorate at the best university in the world (Stanford) and remain clueless about science in general and environmental science in particular. And thanks to well-financed corporate efforts, the environment “deniers” have been very successful at confusing the uneducated and further reducing the confidence the public has in even the most well-established aspects of science (which, of course, always are to some degree uncertain).

    Anyone got any ideas of what to do?.

    • I agree with the blog and with Paul. Economics is another religion, complete with the “invisible hand” of the free market, that tells us overpopulation is an opportunity rather than a problem. Corporations are acolytes of this nonsense, as are universities, by necessity. Follow the money . . .

      To me, we have a very long road to crawl out of the ignorance of our culture. We will need to bite the hands of many people and institutions that feed us. However, the first step is to peel away the layers of insanity we have inherited. The first step, at the core, is to recognize our observer bias in systems thinking. If we postulate the meta-system of humanity or the planet in a rational context, we have already doomed ourselves. We are not rational creatures. Our history shows that we are quirky, moody, irritable, creative sweethearts. While we are capable of great, great insight, we are equally capable of great, great stupidity – and most of us won’t know which one we are acting on until years later.

      So, our meta-systems need to incorporate our human nature – our propensity towards assumptions and other forms of observer bias – and all the points at which goofy stuff can enter into our otherwise systemic, scientific views. Another word for this is “humility.” I see humility at the core of MAHB and that is why I am participating. This collection of people really does understand the enormity of the challenge!

      So, to sum up my contribution, the answer starts with recognition of our primate nature – species consciousness – not because we are capable of becoming fully rational creatures – but because we must survive in spite of our human nature. We all know that totalitarian forces will emerge, along with famine and wars, if we allow the incessant chattering of our fellow primates to collapse our ecosystems/economy.

    • Alice Sprickman permalink

      No ideas about these insufferable adults, but I do believe that humans can be taught from their early years to think in a much more objective fashion when confronted with problems to be solved whether it is one that affects them very directly or one that is confronting a group with which they are affiliated. When I look at Science curriculums from public schools, it seems apparent that two fundamentals in the scientific process that need to be raised to a higher level: (1) nothing is simple or alternatively, everything is complex and therefore time and thought consuming; (2) nothing is ever absolute e.g. +/-x% means something or someone is ruled out of the decision (and will appear again at some future time).
      It seems to me that these two fundamental principles need to be fundamental in our teaching and in our lives. Instead, we glamorize the Harry Potters of the world by stating that all will be achieved if we just believe (in what is not that clear).
      Do we have time to implement a different framework in education?
      Do we have adults who are capable of doing it?

  2. The assumption that looms largest for me is that we can’t change because it means collapsing the current system and nothing is there to replace it.

    Second, and quite different, is the idea that humans and nature are separate. We don’t have much vocabulary for the place where they overlap. We need to “manage” the mutual dependency without names for the nexus.

    • I think that ancient human traditions gave us many names for the nexus between humans and nature, as does anthropology.

      Religions, science and political ideology have insisted that humans separate from our biological nature. All that we lack is the will to disobey these cultural forces and to stop being consumerist pigeons in a Skinnerian experiment run amok.

  3. Earon, some examples?

    • Traditional cultures define the “natural system” through creation myths, mystery, esoteric realms, gods and goddesses, poetry, and other metaphorical language. Deep ecology presents definitions, also, giving us a sense of perspective for that which science lacks a precise understanding. Yet, the distorted scientific approach that prevails in our culture seems to have devolved an attitude that nothing exists except that which science has proven. Therefore, science can not fathom the unknown and reduces our field of vision to that which people in the dominant culture can all agree upon. There was no way to know that human activity could effect our global climate until decades afterwards. Yet, original peoples “knew” for hundreds of years that european settlers were disrupting the very fabric of nature.

      When I talk about nature, I see a web of life. I see humans as one of countless species on this planet. I see all beings, sentient and otherwise, as interconnected. This interconnectedness is not dependent upon scientific verification, but upon knowing the larger patterns in our natural world – we just “know” that there are impacts and linkages galore, and that we may upset unseen balances in countless ways. Nature is thus a wondrous phenomenon that we seek to leave undisturbed, rather than a pool of resources to exploit.

      Therefore, the vocabulary is there, but the definitions have been changed to protect the dominant culture. Science, religion and politics have pushed out the old definitions of reality and inserted new definitions based upon assumptions that have led to our unsustainable culture. I am not opposed to science, but simply see some of the vast assumptions that underlie its applications in our culture.

  4. Please consider the neo-classical economics practiced in our time as pathological growth resulting from a handful of bad assumptions, as a virulent disease spreading rampantly in the human community that may not be ‘discovered’, diagnosed and treated until it is too late to do anything about it.

    Hey Fed, What’s Going On?

    By Eric Jackson

    12/30/09 – 06:05 AM EST

    Last week, Canadian hedge fund manager Eric Sprott published a white paper titled, “Is it all just a Ponzi scheme?” . The document digs into who is actually purchasing the recent Federal Reserve U.S. Treasury auctions and concludes that the biggest new buyer this year vs. last year is actually the U.S. government. Hence the Ponzi scheme allusion: One arm of the federal government is running huge deficits and quantitative easing programs that are being financed in part by another arm of that government. How can this story not get more attention from others in the press, in politics, or in the market?

    Sprott is an unapologetic bear. He and David Rosenberg must hang out in the same coffee shops of Toronto and share notes. Therefore, his views regularly get dismissed by some with a rosier view of life. At some point, if you’re a relentless bear — like Roubini, Rogers, Rosenberg, Abelson, and probably Whitney now — people stop listening to your content.

    “This is the ‘end-of-the-world’ guy again,” you think, “I know what he’s about and don’t have to listen.” Yet, Sprott is also Canada’s most successful hedge fund manager and clearly someone who does his homework. Here’s his argument about what’s gone on with the Fed and Treasury purchases this year.

    In order to fund bigger deficits, the U.S. government in 2009 has had to sell three times the amount of debt it issued in 2008. That amounts to an extra $1.89 trillion in debt sales as of December, according to the U.S. Treasury.

    So who is buying these additional issuances? According to the Fed’s own disclosures, foreign buyers have stepped up their purchases, but only by an additional 23% over 2008 levels. The Fed itself has increased its purchases by 60% from last year. The third group, which has increased its debt purchases from $90 billion in 2008 to $680 billion this year, if it keeps on its current trajectory, is “other investors.”

    And who are these other investors? Sprott identifies that $528 billion of the $680 billion for this category was for Treasury purchases made by “the Household Sector.” It turns out that this sub-grouping isn’t actual households buying Treasuries but a general catch-all sub-category for any residuals left over from the other categories.

    Specifically quoting the Fed’s definition of this sub-category: “The amounts of Treasury securities held by all other sectors, obtained from asset data reported by the companies or institutions themselves, are subtracted from total Treasury securities outstanding, obtained from the Monthly Treasury Statement of Receipts and Outlays of the United States Government and the balance is assigned to the household sector.” In other words, it’s not clear who is making these additional $528 billion in purchases this year — or roughly 28% of the total.

    Sprott’s conclusion is that it’s the Fed itself that is responsible for these purchases and he then makes the link between this and running a giant Ponzi scheme. Sprott, to back up his assertion, also notes that Bill Gross — who is no longer purchasing U.S. Treasuries for the world’s largest mutual fund — has referred to the U.S. as a “ponzi-style economy.”

    It bothers me that a sole hedge fund manager is connecting these dots, rather than other journalists, politicians, regulators, or other market actors. Fed Chairman Ben Bernanke has yet to be held accountable for what’s going on with these purchases. The Fed’s own data here is sufficient to call out for a more explicit explanation of what’s going on.

    We endlessly hear about Ron Paul’s quixotic campaign to “audit the Fed.” Yet, where is he on this issue that’s already in plain sight, not requiring any additional audit? It gives me little confidence that even if he’s granted special powers to go in and examine what’s going on at the Fed, he will be able to first identify and then correct problems that warrant attention.

    Growing up, we all watched Mike Wallace go after crime and corruption on “60 Minutes,” but no equivalent to him exists today in the business press. “60 Minutes” itself, when it does cover economic news, covers it either in an overly simplistic way that plays to “Joe Main Street” but doesn’t lead to any changes. Examples are the TV news magazine’s “expose” on credit default swaps or a chummy Steve Kroft interview with President Obama.

    We assume the New York Times, the Wall Street Journal or Barron’s will turn up the kinds of interesting data that Sprott did and turn it into a Page One story until it gets rectified in some way. But even these fabled institutions have missed this story.

    I don’t care if the economy is in a fragile state: Taxpayers deserve to know what’s really going on. We’re after truth here. Market actors are grown-ups actually. They should know exactly what’s on the books of Citigroup(C Quote), Wells Fargo(WFC Quote) and what’s going on at the Fed.

    These types of self-dealing shenanigans are the stuff that stunk up Enron. And now we have the whiff of it happening at the Federal Reserve and no one’s taken a look at this?

    We live in an age in which we all piously pronounce, after the fact, that it was obvious Dubai and Greece were going to blow up. We all knew housing was a bubble. We denounce Alan Greenspan as having been way behind the curve. Yet where were those criticisms before the fact?

    No doubt that if trouble comes next year which relates back to Fed self-dealing, we’ll all say, “Oh yeah, we talked about that possibility last Christmas, remember? Yeah, we all knew something wasn’t right.”

    This is human rationalization, but not foresight. We lack the courage and the will to talk about this stuff now in the moment and actually force the Fed to account for itself.

    Instead, we look away while the Fed tries to reflate this economy like a beat-up old bicycle in the back garage. We all hope the Fed’s efforts work and since we don’t have any better ideas we shrug our shoulders and get back to our day jobs.

    It worries me though that no matter how much you try to keep reflating a bicycle wheel with holes in it it still has the holes.

    • Good, but very disturbing, insight, Steven. The Federal Reserve turns out to be the elite’s Wizard of Oz. We don’t dare pull back the curtain for fear of the scheme being discovered.

      Yet, I don’t think that we need to keep this secret. What we will learn if we reveal the deceptions and schemes that are destroying our planet, is that we do have courage, intelligence and heart. Recognizing the problems that exist will empower us to make important changes that will actually help to bring back meaning into our lives. Yes, things will change. But they are already changing – in disastrous ways that are entirely out of our control. The super wealthy and the powerful politicians will find ways to protect themselves, but the rest of us are at the mercy of nature.

      I also think that the Annie Leonard’s “Story of Stuff” paints a clear picture of how we humans, and multinational corporations who have no mandate except to produce quarterly profits, are literally burning/consuming our planet. They produce things we really don’t need, often don’t even want, and exploit other people’s resources around the globe.

      Why are we afraid to pull back the curtain? Our lives have gotten comfortable and we’d rather not have to give up much of the stuff and privilege we now have. (We are addicted to our lifestyles). Yet, we can keep most of it if we only create a massive program towards sustainable renewable alternative energy. As long as we quake and tremble at the Titans of Wall Street/Federal Reserve System, we continue to allow the ponzi scheme to play out. In the end, everything will collapse and there will be massive disaster and disorder – unless we act like responsible adults now – and plan a way out of the feeding frenzy on this planet’s resources and less developed economies in which the elites of our species have been indulging.

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