Dawn of Deflation
Global deflation is underway. I’ve linked to some sites in recent posts that I spend all too much time reading, especially The Automatic Earth and The Daily Reckoning, two of the more insightful pessimistic financial writers. Today Russia is reeling from massive capital flight, threatening to set off new panics and bank runs, similar to what they went through in the late 1990s. The blatant theft of public wealth going down in the U.S. is really breathtaking, what with AIG, and the newly minted banks like American Express, Goldman Sachs, and Morgan Stanley all queueing up to drink deeply at the public trough. This whole bailout scenario is so cynical–basically it’s a bunch of millionaires rushing to fill their pockets at the U.S. Treasury before the rules change or anyone demands any real accountability, getting ready for the global Depression that is unfolding slowly but surely every day. Huge debt rollovers scheduled for December 1 and dates in the year to come ensure that many more bankruptcies will be announced soon.
Notably the big three carmakers are going down. I say, good! But of course the people who will be hit hardest are the autoworkers and especially their pensioners, and all the folks who depend on autoworkers-as-shoppers, all of whom will be left high and dry, while the big rollers who ran these companies into the ground will surely waltz off with millions in golden parachutes. It’s astonishing how myopic the United Autoworkers has been all these years, and I have to credit Mark Brenner of Labor Notes who was very good on Democracy Now! this morning, calling out the union for its lack of independence vis-a-vis the industry, marching in lockstop behind the ecocidal agenda of SUVs and minivans. Brenner called for government subsidies to be withheld from the car companies unless it was sure to be used to move the transportation system away from private gas-powered vehicles. Fat chance! Obama and his advisors, along with the Democratic congress, are painfully conservative and unimaginative about how big the problems are, and how dramatically the priorities have to shift immediately.
Circuit City has gone bankrupt, many more retailers to follow soon. Commercial real estate corporations will fall too, as the malls empty out, which Circuit City is only the beginning of… A crazy percentage of people in the U.S. now have negative equity in their homes, as the prices are falling below what is owed to the banks. Predictions of mass layoffs are spreading, with numbers like 2 million in the UK and 10 million in the US to be disemployed in the next year. All the 3rd quarter numbers were really bad, and worse will follow when the 4th quarter numbers are revealed some months from now. Oil is falling below $60/barrel, and prices on most commodities in the world are plunging too.
This is what deflation looks like. We haven’t lived through a real deflation since before WWII, so few of us have any idea of what we might be in for… One guy who wrote sensibly about the collapse of the old Soviet Union, and then compared it to what’s happening in the U.S. in his book “Reinventing Collapse,” is Dimitry Orlov. He’s got a list of the five stages of collapse that we are well into, on Google Docs here. (via Global Guerrillas) His vision of social collapse underscores why I want to stay in San Francisco, come what may. For all the rising tension and racism and horrible distribution of wealth we have here, there are still many more people willing to try to work together, to work things out, to engage in mutual aid and solidarity, than I would find in most places, urban or rural.
Last weekend we tried to take an Oceanic Society trip to the Farallones Islands, but we were turned back by heaving seas at Point Bonita. Here’s Adriana in the Golden Gate at the back of the boat, with the big waves and heavy winds well behind us as we steam back to port.
So, since our trip was aborted, we had the day unprogrammed. We went with the friends we’d joined for the boat trip to Hawk Hill at the top of the Marin Headlands and then spent the afternoon walking around the lagoon at Rodeo Beach. Here are a few shots from Hawk Hill, first the obvious shot of the Golden Gate Bridge and the city behind it, then the view due south across the Golden Gate towards the west side of SF, and finally the view north/northwest of Gerbode Valley in its late fall beauty. To think that this valley was supposed to be turned into a city of 30,000 called Marincello in the 1960s! Thanks to our predecessors for not going through with such a grimly suburban vision…
I’ve been sitting and computering all too much lately. Laziness has defeated my usual habit of riding to the top of Twin Peaks, at least weekly, so I was happy that I made it up the hill today before going to the Farmers’ Market and buying my last load of great tomatoes for this season. Here I am at the top in my typical shot, with a hazy, sultry city behind me…
Well, we are still awaiting final results on local elections, but it looks like we raised our taxes, elected the more progressive of city supervisors (versus the toadies of downtown who were backed by a $600,000 campaign) even in districts where you might not expect that outcome, and succumbed once again to the $6 million campaign of PG&E to thwart any effort to finally comply with federal law passed in 1913 and reaffirmed by 8-1 vote of U.S. Supreme Court in 1941, but never enforced or lived up to… Prop H, which would have made it possible to evaluate expropriating PG&E if we couldn’t get to the high standards of renewable energy the initiative promoted any other way, went down in flames after a sickening, blatantly false and manipulative campaign… it would be hard to describe how much I hate those PG&E motherfuckers!