Paul B. Farrell: SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, they predicted doomsday three years ago. Listen: “Over the last 30 years, we have built a financial system that threatens to topple our global economic order,” wrote Simon Johnson and Peter Boone. “We have let an unsustainable and crazy ‘doomsday cycle’ infiltrate our economic system.”
This doomsday “cycle will not run forever … The destructive power of the down cycle will overwhelm the restorative ability of the government, just like it did in 1929-31.” In 2008 “we came remarkably close to another Great Depression. Next time, we may not be so lucky.”
That was 2009. Since then Johnson, former IMF chief economist, co-wrote last year’s bestseller “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown” and the new “White House Burning.”
Other new books echo the same doomsday warning: Peter Schiff’s “The Real Crash: America’s Coming Bankruptcy” … Paul Krugman’s “End This Depression Now” … James Rickards’s “Currency Wars” … Philip Coogan’s “Paper Promises” … Joseph Stiglitz, “The Price of Inequity” … Ian Bremmer, “Every Nation For Itself,” and other reminders of doomsday.
Folks, the “next time” is here. Our luck is running out. And unfortunately, our leaders in both parties are blinded by an obsession to win an election. Ergo, they will fail to act in time.
Hot news: Global economic meltdown, a rapidly spreading virus
Today’s headlines are flashing like neon signs on the Vegas Strip … The Economist: “Playing With Fire” … Wall Street Journal: “Threat Spreads Across Europe” … L.A. Times: “Fiscal Cliff may Threaten U.S. Recovery. … Time, “The Jobless Generation: How to Get Them Jobs Before…They Erupt in Fury.” … Foreign Policy: “12 Signs of the Europocalypse” … Newsweek: “The Gathering Eurostorm Could Come to American Shores” … Gary Shilling’s Insight: “Semi-Annual U.S. Economic Report: So Far, So Bad.”
And into this accelerating meltdown mess, USA Today added these sobering facts, “Families’ Wealth Dives 39%, Richest Gained 2%.”
But we all know neither party will fix these core economic issues driving the Doomsday Cycle. Not this summer. Not after the elections. And we all know why. America’s leaders on both sides are so psychologically blinded by personal ambition they’ve lost all touch with reality, no longer see what’s best for all Americans.
Yes, “an unsustainable and crazy Doomsday Cycle has infiltrated our economic system,” Johnson and Boone wrote in their 2009 article in “CentrePiece,” a publication of the London School of Economics.
Worse, it’s been accelerating since 2008. And by failing to act in a timely way, politicians in both parties will let the “destructive power of the down cycle overwhelm the restorative ability of the government, just like it did in 1929-31, very much like a Second Great Depression.”
Politics? Irrelevant. Who wins? Irrelevant. Money rules America
Seriously, folks, the elections are relevant. Totally. Oh, both sides pretend it matters. But it no longer matters who’s president. Or who’s in Congress. Money runs America. And when it comes to the public interest, money is not just greedy, but myopic, narcissistic and deaf. Money from Wall Street bankers, Corporate CEOs, the Super Rich and their army of 261,000 highly paid mercenary lobbyists. They hedge, place bets on both sides. Democracy is dead.
Back in early 2011 we predicted the decade ahead. Read “America’s 10 worst years start right now.”
Earlier the 2000 dot-com crash. And for three years we warned of the 2008 credit meltdown. In 2009 we saw the bull rally. The rest of the decade? Tough times, austerity. So far we’re on course. Here’s what I saw ahead of time:
Beginning in “2012. The Super Rich gain absolute power over Washington. That bizarre Supreme Court decision legalized political bribery. Now billions pass through lobbyists to politicians in all parties, with one goal: A guarantee that all politicians, President, Congress, Fed, regulators and state governments, adhere to the ideology that money talks and wealth rules. Our middle class is in a rapid spiral down into third-world status, while the rich get richer and the gap between the richest and the rest widens.”
Yes, we’re rapidly setting up conditions for a New No-Growth Economics coming after the Doomsday Cycle. We now know classical economics is fatally flawed: The future of capitalism is tied to a Myth of Perpetual Growth, a bankrupt, wishful-thinking premise that’s destroying America from within.
Prepare yourself for long austerity. You should use these 20 rules to help minimize the danger. What’s ahead is “just like in 1929-31 … like a Second Great Depression.”
New No-Growth Economics: 20 new rules for after the collapse
So what’s next? Here’s our manifesto for the New No-Growth Economics, 20 rules, trends and principles that will emerge after Wall Street and the American economy get hit by another bigger meltdown, totally predictable in today’s blind, self-destructive political drama, a meltdown bigger than 2000 and 2008 combined. Twenty principles guiding our survival. Read more on the New No-Growth Economics manifesto.
Here’s a short-version of what you must expect if you want to save yourself from the worst of today’s Doomsday Cycle:
1. Population control is absolutely essential. Experts warn Planet Earth can support about five billion people. We have 7 billion, heading for 10 billion by 2050. The Myth of Perpetual Growth is capitalist voodoo, outstripping resources, guaranteed suicide.
2. Worst-case-scenario, population grows to 10 billion, disasters. Population explodes to 10 billion. Non-renewable resources are exhausted as if from six Earths. Widespread global wars, starvation, poverty, pandemics, and other disasters could reduce population.
3. Next worst-case scenario: Population not cut back to 5 billion. Still too many people. Revolutions are wake-up calls to abandon capitalism and classical economics.
4. Population control must eventually become worldwide economic policy. Yes, even with the Vatican, conservatives, scientists. Well before 2050 deniers who will be shocked by the reality of accelerating catastrophes threatening the planet and human existence.
5. Mass denial ends in aftermath of global catastrophes . But what’ll shock the world’s collective conscience? The tipping point? Global pandemics? Poverty? Starvation? Terrorist nuclear wars? Our collective brain is still trapped in mass denial, refusing to prepare. We may not know what will awaken the world. But we’re certain a big one is dead ahead.
6. Revolutions end Super Rich capitalism. Rapidly increasing class warfare over inequalities will fuel new regional revolutions as unemployed youth demand reforms.
7. Wall Street’s too-greedy-to-fail banks will become public utilities. Once powerful banks are forced to put the public interest ahead of stockholder interests.
8. Commodity pricing shifts from markets to international agreements.
9. New regulations end quants’ casino and derivatives gambling.
10. Fed monetary policy no longer dominated by Wall Street banks.
11. Quants, behavioral scientists shift, to work for the real economy.
12. Post collapse, oil takes lead developing alternative energy.
13. No-compromise politics ends, cooperation essential to survival.
14. Conservatives return to center as rigid minority rule ends.
15. Inequality gap declines. After a global collapse even the Super Rich will wake up to the reality that their blind focus on perpetual growth of wealth is destroying their base.
16. Lobbyists no longer use Washington as their private anarchy.
17. Our global imperialism ends along with Pentagon’s blank checks.
18. Rebirth of a powerful, new democratic United Nations.
19. Climate-change deniers disappear as reality becomes obvious.
20. Dawning of a new global era, the New No-Growth Economy: The long-term survival of all nations on Earth depends on a bold, radical new way of thinking. We have no choice: Cooperate, live in peace.
Or we seal our own fate by self-destructing a threatened planet and a fragile civilization. Let’s encourage optimism, positive solutions, after austerity.