‘End of Growth’ Sparks Wide Discontent

The global elites’ false promise that neoliberal economics would cure all ills through the elixir of endless growth helps explain the angry nationalist movements ripping apart the West’s politics, observes ex-British diplomat Alastair Crooke.

By Alastair Crooke

Raul Ilargi Meijer, the long-standing economics commentator, has written both succinctly – and provocatively: “It’s over! The entire model our societies have been based on for at least as long as we ourselves have lived, is over! That’s why there’s Trump.

“There is no growth. There hasn’t been any real growth for years. All there is left are empty hollow sunshiny S&P stock market numbers propped up with ultra-cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all there’s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.

Donald Trump speaking with supporters at a campaign rally at Veterans Memorial Coliseum at the Arizona State Fairgrounds in Phoenix, Arizona. June 18, 2016. (Photo by Gage Skidmore)

Donald Trump speaking with supporters at a campaign rally at Veterans Memorial Coliseum at the Arizona State Fairgrounds in Phoenix, Arizona. June 18, 2016. (Photo by Gage Skidmore)

“These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But they could always ever only pull the curtain of Oz [Wizard of Oz] over people’s eyes for so long, and it’s no longer so long.

“That’s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It’s over. What has driven us for all our lives has lost both its direction and its energy.”

Meijer continues: “We are smack in the middle of the most important global development in decades, in some respects arguably even in centuries, a veritable revolution, which will continue to be the most important factor to shape the world for years to come, and I don’t see anybody talking about it. That has me puzzled.

“The development in question is the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.

“In the same way it will be the end of -almost- all traditional political parties, which have ruled their countries for decades and are already today at or near record low support levels (if you’re not clear on what’s going on, look there, look at Europe!)

“This is not a matter of what anyone, or any group of people, might want or prefer, it’s a matter of ‘forces’ that are beyond our control, that are bigger and more far-reaching than our mere opinions, even though they may be man-made.

“Tons of smart and less smart folks are breaking their heads over where Trump and Brexit and Le Pen and all these ‘new’ and scary things and people and parties originate, and they come up with little but shaky theories about how it’s all about older people, and poorer and racist and bigoted people, stupid people, people who never voted, you name it.

“But nobody seems to really know or understand. Which is odd, because it’s not that hard. That is, this all happens because growth is over. And if growth is over, so are expansion and centralization in all the myriad of shapes and forms they come in.”

Further, Meijer writes: “Global is gone as a main driving force, pan-European is gone, and whether the United States will stay united is far from a done deal. We are moving towards a mass movement of dozens of separate countries and states and societies looking inward. All of which are in some form of -impending- trouble or another.

“What makes the entire situation so hard to grasp for everyone is that nobody wants to acknowledge any of this. Even though tales of often bitter poverty emanate from all the exact same places that Trump and Brexit and Le Pen come from too.

“That the politico-econo-media machine churns out positive growth messages 24/7 goes some way towards explaining the lack of acknowledgement and self-reflection, but only some way. The rest is due to who we ourselves are. We think we deserve eternal growth.”

The End of ‘Growth’

Well, is global “growth over”?  Of course Raul Ilargi is talking “aggregate” (and there will be instances of growth within any contraction). But what is clear is that debt-driven investment and low-interest-rate policies are having less and less effect – or no effect at all – in producing growth – either in terms of domestic or trade growth, as Tyler Durden at ZeroHedge writes:

President Barack Obama runs onto a stage in Rockville, Maryland, Oct. 3, 2013 (Official White House Photo by Pete Souza)

President Barack Obama runs onto a stage in Rockville, Maryland, Oct. 3, 2013 (Official White House Photo by Pete Souza)

“After almost two years of the quantitative easing program in the Euro Area, economic figures have remained very weak. As GEFIRA details, inflation is still fluctuating near zero, while GDP growth in the region has started to slow down instead of accelerating. According to the ECB data, to generate €1.0 of GDP growth, €18.5 had to be printed in the QE, … This year, the ECB printed nearly €600 billion within the frame of asset purchase programme (QE).”

Central Banks can and do create money, but that is not the same as creating wealth or purchasing power. By channelling their credit creation through the intermediary of banks granting loans to their favored clients, Central Banks grant to one set of entities purchasing power – a purchasing power that must necessarily have been transferred from another set of entities within Europe (i.e. transferred from ordinary Europeans in the case of the ECB), who, of course will have less purchasing power, less discretionary spending income.

The devaluation of purchasing power is not so obvious (no runaway inflation), because all major currencies are devaluing more or less pari passu – and because the authorities periodically steam hammer down the price of gold, so that there is no evident standard by which people can “see” for themselves the extent of their currencies’ joint downward float.

And world trade is grinding down too, as Lambert Strether of Corrente rather elegantly explains: “Back to shipping: I started following shipping … partly because it’s fun, but more because shipping is about stuff, and tracking stuff seemed like a far more attractive way of getting a handle on ‘the economy’ than economics statistics, let alone whatever books the Wall Streeters were talking on any given day. And don’t get me started on Larry Summers.

“So what I noticed was decline, and not downward blips followed by rebounds, but decline, for months and then a year. Decline in rail, even when you back out coal and grain, and decline in demand for freight cars. Decline in trucking, and decline in the demand for trucks. Air freight wobbly. No Christmas bounce at the Pacific ports. And now we have the Hanjin debacle — all that capital tied up in stranded ships, though granted only $12 billion or so — and the universal admission that somehow “we” invested w-a-a-a-a-a-y too much money in big ships and boats, implying (I suppose) that we need to ship a lot less stuff than we thought, at least across the oceans.

“Meanwhile, and in seeming contradiction not only to a slow collapse of global trade, but to the opposition to ‘trade deals,’ warehousing is one of the few real estate bright spots, and supply chain management is an exciting field. It’s disproportionately full of sociopaths, and therefore growing and dynamic!

“And the economics statistics seem to say nothing is wrong. Consumers are the engine of the economy and they are confident. But at the end of the day, people need stuff; life is lived in the material world, even if you think you live it on your device. It’s an enigma! So what I’m seeing is a contradiction: Less stuff is moving, but the numbers say ‘this is fine.’ Am I right, here? So in what follows, I’m going to assume that numbers don’t matter, but stuff does.”

Fake Elixir

Or, to be more faux-empirical: as Bloomberg notes in A Weaker Currency is no longer the Elixir, It Once Was: “global central banks have cut policy rates 667 times since 2008, according to Bank of America. During that period, the dollar’s 10 main peers have fallen 14%, yet Group-of-Eight economies have grown an average of just 1%. Since the late 1990s, a 10% inflation-adjusted depreciation in currencies of 23 advanced economies boosted net exports by just 0.6% of GDP, according to Goldman Sachs. That compares with 1.3% of GDP in the two decades prior. U.S. trade with all nations slipped to $3.7 trillion in 2015, from $3.9 trillion in 2014.”

Chinese President Xi Jinping greets President Barack Obama upon arrival for the G20 Summit at the Hangzhou International Expo Center in Hangzhou, China, Sept. 4, 2016. (Official White House Photo by Pete Souza)

Chinese President Xi Jinping greets President Barack Obama upon arrival for the G20 Summit at the Hangzhou International Expo Center in Hangzhou, China, Sept. 4, 2016. (Official White House Photo by Pete Souza)

With “growth over,” so too is globalization: Even the Financial Times agrees, as its commentator Martin Wolf writes in his comment, The Tide of Globalisation is Turning: “Globalisation has at best stalled. Could it even go into reverse? Yes. It requires peace among the great powers … Does globalisation’s stalling matter? Yes.”

Globalization is stalling – not because of political tensions (a useful “scapegoat”), but because growth is flaccid as a result of a veritable concatenation of factors causing its arrest – and because we have entered into debt deflation that is squeezing what’s left of discretionary, consumption-available, income.  But Wolf is right. Ratcheting tensions with Russia and China will not somehow solve America’s weakening command over the global financial system – even if capital flight to the dollar might give the U.S. financial system a transient “high.”

So what might the “turning tide” of globalization actually mean? Does it mean the end of the neo-liberalist, financialized world? That is hard to say. But expect no rapid “u-turn” – and no apologies. The Great Financial Crisis of 2008 – at the time – was thought by many to mark the end to neo-liberalism.  But it never happened – instead, a period of fiscal retrenchment and austerity was imposed that contributed to a deepening distrust of the status quo, and a crisis rooted in a widespread, popular sense that “their societies” were headed in the wrong direction.

Neo-liberalism is deeply entrenched – not least in Europe’s Troika and in the Eurogroup that oversees creditor interests, and which, under European Union rules, has come to dominate E.U. financial and tax policy.

It is too early to say from whence the economic challenge to prevailing orthodoxy will come, but in Russia there is a group of prominent economists gathered together as the Stolypin Club, who are evincing a renewed interest in that old adversary of Adam Smith, Friedrich List (d. 1846), who evolved a “national system of political economy.” List upheld the (differing interests) of the nation to that of the individual. He gave prominence to the national idea, and insisted on the special requirements of each nation according to its circumstances, and especially to the degree of its development. He famously doubted the sincerity of calls to free trade from developed nations, in particular those by Britain. He was, as it were, the arch anti-globalist.

A Post-Globalism

One can see that this might well fit the current post-globalist mood. List’s acceptance of the need for a national industrial strategy and the reassertion of the role of the state as the final guarantor of social cohesion is not some whimsy pursued by a few Russian economists. It is entering the mainstream. The May government in the U.K. precisely is breaking with the neoliberal model that has ruled British politics since the 1980s – and is breaking towards a List-ian approach.

U.S. Secretary of State John Kerry sits with British Prime Minister Theresa May in the White Room No. 10 Downing Street in London, U.K., on July 19, 2016. [State Department Photo]

U.S. Secretary of State John Kerry sits with British Prime Minister Theresa May in the White Room No. 10 Downing Street in London, U.K., on July 19, 2016. [State Department Photo]

Be that as it may (whether this approach swims more widely back into fashion), the very contemporary British professor and political philosopher, John Gray has suggested the key point is: “The resurgence of the state is one of the ways in which the present time differs from the ‘new times’ diagnosed by Martin Jacques and other commentators in the 1980s. Then, it seemed national boundaries were melting away and a global free market was coming into being. It’s a prospect I never found credible.

“A globalised economy existed before 1914, but it rested on a lack of democracy. Unchecked mobility of capital and labour may raise productivity and create wealth on an unprecedented scale, but it is also highly disruptive in its impact on the lives of working people – particularly when capitalism hits one of its periodic crises. When the global market gets into grave trouble, neoliberalism is junked in order to meet a popular demand for security. That is what is happening today.

“If the tension between global capitalism and the nation state was one of the contradictions of Thatcherism, the conflict between globalization and democracy has undone the left. From Bill Clinton and Tony Blair onwards, the center-left embraced the project of a global free market with an enthusiasm as ardent as any on the right. If globalisation was at odds with social cohesion, society had to be re-engineered to become an adjunct of the market. The result was that large sections of the population were left to moulder in stagnation or poverty, some without any prospect of finding a productive place in society.”

If Gray is correct that when globalized economics strikes trouble, people will demand that the state must pay attention to their own parochial, national economic situation (and not to the utopian concerns of the centralizing élite), it suggests that just as globalization is over – so too is centralization (in all its many manifestations).

The E.U., of course, as an icon of introverted centralization, should sit up, and pay attention. Jason Cowley, the editor of the (Leftist) New Statesman says: “In any event … however you define it, [the onset of ‘New Times’] will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.”

The Problem of Self-Delusion

So, to return to Ilargi’s point, that “we are smack in the middle of the most important global development in decades … and I don’t see anybody talking about it. That has me puzzled” and to which he answers that ultimately, the “silence” is due to ourselves: “We think we deserve eternal growth.”

President Barack Obama answers questions at a press conference at Konstantinovsky Palace during the G20 Summit in Saint Petersburg, Russia, Sept. 6, 2013. (Official White House Photo by Pete Souza)

President Barack Obama answers questions at a press conference at Konstantinovsky Palace during the G20 Summit in Saint Petersburg, Russia, Sept. 6, 2013. (Official White House Photo by Pete Souza)

He is surely right that it somehow answers to the Christian meme of linear progress (material here, rather than spiritual); but more pragmatically, doesn’t “growth” underpin the whole Western financialized, global system: “it was about lifting the ‘others’ out of their poverty”?

Recall, Stephen Hadley, the former U.S. National Security Adviser to President George W. Bush, warning plainly that foreign-policy experts rather should pay careful attention to the growing public anger: that “globalization was a mistake” and that “the elites have sleep-walked the [U.S.] into danger.”

“This election isn’t just about Donald Trump,” Hadley argued. “It’s about the discontents of our democracy, and how we are going to address them … whoever is elected, will have to deal with these discontents.”

In short, if globalization is giving way to discontent, the lack of growth can undermine the whole financialized global project. Stiglitz tells us that this has been evident for the past 15 years — last month he noted that he had warned then of: “growing opposition in the developing world to globalizing reforms: It seemed a mystery: people in developing countries had been told that globalization would increase overall wellbeing. So why had so many people become so hostile to it? How can something that our political leaders – and many an economist – said would make everyone better off, be so reviled? One answer occasionally heard from the neoliberal economists who advocated for these policies is that people are better off. They just don’t know it. Their discontent is a matter for psychiatrists, not economists.”

This “new” discontent, Stiglitz now says, is extended into advanced economies. Perhaps this is what Hadley means when he says, “globalization was a mistake.” It is now threatening American financial hegemony, and therefore its political hegemony too.

Alastair Crooke is a former British diplomat who was a senior figure in British intelligence and in European Union diplomacy. He is the founder and director of the Conflicts Forum, which advocates for engagement between political Islam and the West.

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31 comments for “‘End of Growth’ Sparks Wide Discontent

  1. Sally Snyder
    October 14, 2016 at 11:21 am

    Here is an article that explains how Washington is attempting to start a new global trade cold war:

    http://viableopposition.blogspot.ca/2016/05/president-obama-united-states-and-trade.html

    The haste to sign the a key trade agreement is being driven by one factor; the pathological need for the United States to beat China at its own game.

  2. October 14, 2016 at 12:07 pm

    The real point is that Globalization was a war against the Middle Class. The Elites saw an opening where they could quite litterally strip the Middle Calss of it´s wealth. Now it has accomplished that task, and the wealth of nations is sitting in vaults in off shore banks not doing anything at all. In short the economic system since the 80s was evolved around the skimming of the economies of the world for the bennefit of a few very rich families. The problem is that they took too much out of the economies and now the natives are starting to rebel against them and their propaganda.

    Free Trade for instance was felt in the economies of North America as soon as it was signed into law. Factories started to close, the Middle Class started to dissappear. So for the last twenty years the only people left in the Middle calss are those who have not yet maxed out their credit cards. The promise of the time was that these high paying jobs would be replaced by even higher paying high value work that would lift even more people into the Middle Class. That was the lie that has been apparent from day one to those in manufacturing. Now it is even apparent to a lot of people who were considered well off and now live in poverty. It was a war against the Middle Calss and the 99% to the bennefit of the rich Elites. The Elites were actually too successful and now the 99% will only be satisfied with the blood of those Elites.

  3. October 14, 2016 at 12:12 pm

    I forgot to add. Your comment about why people are not talking about this dramatic change? It is because the mainsteam media is pointing them to a 24/7 barrage of Donald Trumps lates slips of the lip. After the election it will be focused on the Kardashians, Sports and villifying Russia and China. One problem with the strategy first used by the Romans, is that in this new application there is only the circuses, but no bread.

    • J'hon Doe II
      October 16, 2016 at 1:56 pm

      We ought not forget the psychological/behavioral science subversive war being waged against the mid to lower middle class and a rapidly enlarging homeless class.
      ::

      HENRY GIROUX: Well, I think that, you know, one of the things about the left—three things about the left disturb me, Amy. One is, they never really have taken education seriously. They think education is about schooling. I mean, what they don’t realize is that forms of domination are not just simply structural. They’re also about changing consciousness. They’re also about getting people to invest in a language in which they can recognize that the problems that we’re talking about have something to do with their lives. It means making something meaningful, to make it critical, to make it transformative.

      Secondly, it seems to me that the left is too involved in isolated issues. You know, we’ve got to bring these issues together to create a mass social movement that in some way really challenges the kind of power that we’re now confronting.
      ::
      Henry Giroux And his new book — America’s War Against Itself. Worth Our Reading

      http://www.democracynow.org/2016/10/14/is_trumps_rise_a_result_of

    • Fred Gunter
      October 17, 2016 at 6:16 pm

      Seems to me that sports are used to take our minds off our real problems, ie, debt, poverty, etc, and the Olympics was all about consumption, greed, using the athletes to promote their wares.

  4. Brad Owen
    October 14, 2016 at 12:45 pm

    I see a natural return to New Deal policies. The globalization thing was just a neo-feudal project launched by the well-heeled but hoary Old Right. The article is right to focus on “stuff” and forget the lies, damn lies, and statistics. Everyone still needs “three squares” every day. Everyone wants to be warm enough in winter, cold enough in summer, the convenience of clean cool water to drink that won’t give me “the sh*ts” everytime I drink it. the convenience of reliable plumbing to carry away the poo. Everyone wants a secure and comfortable, interesting life. I think Localism will become the new trend. Books like Wendell Berry’s “Home Economics” and “What are People For?” Jane Jacobs book “Cities and the Wealth of Nations”, R. Buckminster Fuller’s books, such as “Critical Path”, and such books as these, will be making a come-back. It was the road not chosen, back in the 70’s and early 80’s. Speaking of the Wealth of Nations; it’ll be discovered that the Wealth of all Nations everywhere, are its’ people and their creativity and productivity. The Money Power was just a method of manipulation and control, of the People, by the Hoary Old Right. There’s plenty of information out there to sufficiently answer the question “What Now?!?” The library is voluminous. It’s what I’ve been looking at for decades now, since, to me, the theme of the last 35-40 years has only been “the rise of the managerial elite; and their cruel, amoral assault upon all the rest of us.” Time to reap what they have sown.

    • J'hon Doe II
      October 16, 2016 at 2:07 pm

      Brad Owen — “I see a natural return to New Deal policies.

      The below FDR Second Presidential Term Campaign address is wonderful nostalgia, Brad Owen. We ought not forget our political roots.

      http://www.presidency.ucsb.edu/ws/?pid=15185

  5. LUCIFER
    October 14, 2016 at 2:40 pm

    Why is there NO GROWTH?

    Because people like me with PHD’s and MBAs CANNOT FIND JOBS!

    Why can we not find jobs?

    Because this is a SLAVE CULTURE!

    NO EMPLOYER SHOULD HAVE THE RIGHT TO ASK ME FOR A BACKGROUND CHECK, ESPECIALLY A CREDIT CHECK, PRIOR TO ACCEPTANCE OF AN OFFER OF EMPLOYMENT! AND THE USE OF CREDIT CHECKS FOR EMPLOYMENT AND THE USE OF ONLINE FORMS THAT ASK FOR DATES IS A WAY TO DISCRIMINATE AGAINST OLDER WORKERS THAT HAVE LOST JOBS DUE TO THE FRAUD OF BUSINESS AND TO ENSURE THAT THEY CAN “WEED OUT” OLDER WORKERS THAT COST MORE IN THE DISASTER KNOWN AS OBAMACARE!

    NO EMPLOYER SHOULD HAVE THE RIGHT TO ASK ME TO SIGN OFF ON BACKGROUND CHECKS JUST TO FILL OUT AN APPLICATION!

    THIS IS A TECHNOCRATIC DISASTER! THIS IS A SLAVE CULTURE BUILT BY ELITES FOR ELITES! TO TURN THE PEOPLE INTO SLAVES!

    So why is there NO GROWTH?!

    BECAUSE THIS IS A SLAVE CULTURE AND SLAVES DO NOT THINK AND CREATE! ESPECIALLY WITH INCOMPETENT PSYCHOPATHIC ELITE GLOBALISTS IN CHARGE THAT CARE ABOUT NO ONE BUT THEMSELVES!

    Our ancestors fought for FREEDOM – not a global government run by a BUNCH OF PSYCHOPATHS!

    Why the CAPS?

    Because I am sick and tired of reading a bunch of drivel written by people that cannot understand basic information. So let me make this as clear as I can for those of you that have the inability to connect the dots – This is not a global markets PROBLEM this is a LEGAL SLAVE PROBLEM! Its the same THROUGHOUT HISTORY WITH a DIFFERENT FACADE!

    The economy is NOT GROWING because their are MILLIONS OF US THAT ARE NOT WORKING BECAUSE WE ARE BEING DISCRIMINATED AGAINST DURING THE HIRING PROCESS! And there are MILLIONS OF US THAT HAVE LOST EVERYTHING DUE TO THE LIES OF THIS GOVERNMENT AND THE EVIL OF BUSINESSES ALL AROUND THE WORLD!

    I have applied for 1000’s of jobs over the past 3 years since I lost my job (due to my statistical discovery of the FRAUD my former employer was conducting) – I AM STILL UNEMPLOYED with the exception of minor contract work.

    WHY?

    Is it because:
    1. I am over 40?
    2. Have an MBA and a PhD?
    3. Am a woman?
    4. Used my constitutional right to file an EEOC charge and won a right to sue letter after a year of the EEOC dragging their feet and colluding with my employer to make me look bad – all the while loosing my credit (due to no job) and no unemployment benefits from my state so that I could not afford an attorney?
    5. Have a disability?
    6. Am willing to blog about the nonsense I have experienced from this government and how my rights have been stomped on by this INCOMPETENT government?

    There is NO GROWTH because people like me are not working to FIX THIS INCOMPETENCE!

    There is NO GROWTH because we have INCOMPETENT PEOPLE RUNNING THIS COUNTRY!

    There is NO GROWTH because we have a bunch of psychopaths that care only about themselves that are trying to institute a world government where everyone else is a slave.

    There is NO GROWTH because the GOD OF THIS UNIVERSE HATES THIS BEHAVIOR!

    HOW DO I KNOW?

    BECAUSE GOD TOLD ME SO – DIRECTLY.

    THAT IS A FACT.

    P.S. By the way, God hates your global monetary system which is why I don’t have any money. But I have protection that you can’t see. Please know that my death by any of your hands will ensure your destruction. I am not going to hide anymore but you should keep your distance from me. Oh, and I am 2 sides of the same coin – dark and light. My full name is Iesus A. Lucifer.
    You will have to wait to learn what the A means.

    P.P.S. And there will not be a war with Russia Hillary or you people of the Deep State. If there is, this entire planet will be destroyed. That is a fact.

    • Sam
      October 15, 2016 at 6:58 am

      Of course you are right in your major points, and on the apocalypse issue, but I would relax on the religion, which only closes the door to those of other views on that. Don’t let the injustices lead you to demand justice in the workplace, where you will meet only unethical competitors. Build a new resume of successes for the future.

  6. Evangelista
    October 14, 2016 at 8:24 pm

    Lots of words, lots of blather, lots of rhetoric, rhetorical terms, current-phrasing and standard pouf and puff and star and navel gazing.

    About the nearest to the bottom-line cause of the economic implosion all the pronouncing and proposing is trying to create a cloud around is the phrase, “we have entered into debt deflation”.

    If Mr. Crooke followed the clues step by step back through each one’s link in the chain, to where each and all chain together, he would find himself at the 2008 scramble to cover over the 2007 ‘crash’. If he dug into what caused the need to scramble, and what caused the cascade-effect of the 2007 crash he would find the key to why the crash occurred, and also the keys to why the cascading could not be stopped and why the papering-over was “required” and why, for the papering over, and refusal to admit and deal with the initiating problem (or correct the fundamental causes) there was no hope, from that day to this, that the economy could by any means be kept from going down in total destruction. All that has been done since 2007 has been to increase the problem, expand the scope of destruction and guarantee disillusionment, despair, anger, resentment and eventual violenresponsible, and all associated to them.

    For those without the time, or interest in histories of criminal enterprises, the origins of the destruction reside in criminality and confidence gaming that created pseudo-financial instruments and pseudo-insurance instruments and pseudo-securities and pseudo-ownership documents, and markets for trading, and manipulating these. The product of the creation and trading of faux, or pseudo, or synthetic multiple-copies of original articles, which provided only token definition for the false copies created a marketplace where each real token was lost in a forest of easily manufactured pseudo-synthetic copies, which had no real values, but had all been sold in exchange for real medium-of-exchange (money). For buyers having laid out real money in real transactions, in which they were sold false securities, or forgeries, or packages of “cut-newspaper” equivalents, the buyers looked for THE return.

    But with there being only one original, there was ONLY ONE real return. All of the additional copies of returns, due on pseudo, synthetic and only copy-from-a-copier backed copies had no real returns. This meant real returns due to copies sold yesterday had to be paid from copies sold today, with the real returns expected on both the yesterday and today copies having to be generated by copying again tomorrow and selling those copies.

    Of course collapse was inevitable, and so insurance policies were bought, also pseudo, usually from the buyer, who would also be the seller. The trick to make insurance one bought from ones self work was to then bundle and sell the sold policy, so that when the collapse triggered pay-out, the buyer sold to would be responsible for the paying, to the insurance buyer, the policy beneficiary who had sold the responsibility for the policy.

    A crash of this mess would have destroyed the players, but the players were placed where they could control the system, and claim that the world would end if they were destroyed, or their criminality were exposed, which would destroy their “credibility”. So, instead of a crash they negotiated “bailouts” and then a massive mainstream economy crash and massive “foreclosures” and foreclosure sales to retire the faux-instrument backed debts, and massive inflation to create money to pay for the faux instruments and fraudulent insurance payouts. in other words, the game since 2008 has been to buy up the criminally created paper, all the false and synthetic copies, as if they were real, to then, when they would be out of circulation, dispose of them, so there would be only one asset per ownership record, as before, and as real economics requires.

    Unfortunately, all the extra money created circulated, and was, and is, pseudo-value, too. Like what it replaced, only more readily negotiable, and of, of course, descending value, for which it had to be re-invested, and new investments “created”…

    The product is called a bubble. It is a global bubble. Only solid things, like energy and minerals, happening to be in the bubble are real, and today those are premium, as owners of inflated really valueless currency compete for ownership of the bits of in the bubble real.

    Meanwhile, the people burned to prevent immediate collapse, who are suffering for their being collapsed to feed the inflation are ahem, “restive”… ce sufficient to overwhelm the ‘establishment’, meaning the

    • backwardsevolution
      October 15, 2016 at 11:25 am

      Yes, bankers needed to go to jail over this, but they didn’t. Fraud as far as the eye can see.

      • October 18, 2016 at 6:03 am

        Wall Street speeches reveal the real Hillary

        http://www.veteransnewsnow.com/2016/10/11/1009859-wall-street-speeches-reveal-the-real-hillary/

        Goldman may be among the most controversial firms on Wall Street for its role in gaming the nexus between Washington and the financial business (several of its CEOs set economic policy for Republicans and Democrats alike when her husband was president) and for its risk-taking, which made Goldman a significant contributor to the 2008 financial collapse and the Great Recession that followed.

    • J'hon Doe II
      October 16, 2016 at 3:43 pm

      Your paragraphs are literary pictures of “The End of Growth”, Evangelista.

      The circulation of official documents thru a maze of financial “authorizations” got dumped into a data-driven rapids of communication condensed into bits and bites as shredded evidence of actual conspiracy to build an autocracy.

  7. John
    October 14, 2016 at 9:31 pm

    Nations around the world are saturated in too much debt to remain in a true capitalistic system. Debt growth isn’t growth !…The nations are drowning , including the great USA….. So right now the world’s socialist and the predatory capitalist are hacking out a plan…. aka trade deals…..These deals include taking over sovereign countries to capture their wealth……Hello China, Russia, Iran, Iraq, Afghanistan, Syria……..It’s the world wide hijacking at high noon….pseudo-socialism governed by predatory capitalist……HELLO !!

  8. Adrian Evitts
    October 14, 2016 at 9:41 pm

    A thoughtful article, but I disagree with the conclusion that centralisation and globalisation are over. The world’s present economic and political woes are similar to those endured in the 1930’s following the Wall Street Crash. What brought the Great Depression to an end was ultimately a global war, followed by massive reconstruction. I fear that this may be what is coming soon.

    Given that we live on a finite planet, growth quite clearly cannot go on forever. Thus periodically, there are contractions in global GDP (typically caused by war) followed by growth fuelled by reconstruction.

  9. John
    October 14, 2016 at 9:47 pm

    The American dream is actually the central bankers dream…..Pay the low and middle class citizens not a living wage…but….pay them just enough to qualify for a bank loan….do you need another pin prick or are you awake now……

  10. voxpax
    October 15, 2016 at 12:07 am

    SHARE, all of you/us, learn how to share…..

  11. quasimodo
    October 15, 2016 at 8:51 am

    The only places where endless growth is anything but polemic myth are in the fields of viruses and cancer cells, only limited by the mortality span of the hosts they feed upon. Is there a lesson here?

    • backwardsevolution
      October 15, 2016 at 11:56 pm

      Yep.

  12. Mahatma
    October 15, 2016 at 10:26 am

    I tend to take the recent talk about the demise of Neoliberal/globalization with a big pinch of salt. My issue with the broad spectrum of economics is that, left or right is its failure to address the effects of vase wealth, fortunes now far larger than anything history has ever seen. For 40 years now largely dynastic family wealth has increased dramatically through the unfettered activities of the transnational corporations they own (the tools of oligarchs are corporations) and the industries they monopolize. If globalization is as an end – what does it matter to them? How are they harmed – making money more slowly – maybe but little else.

    The vast wealth and the power it gives is already theirs. There is no discussion of taking it from them, just trying to make things better going forward. This has failed throughout history, the oligarchs simply buy their way back to the policies which favor them – and they do so rapidly. The marginally progressive programs of FDR lasted barely 50 years, the blink of an eye.

    From Stiglitz to Freedman, economics is little more than a mythology promoted to insure the safety of dynastic wealth.

    Until the dynastic and new tech fortunes are dismantled and their power neutralized the world will continue to be “Neoliberal” or some similar dogma will prevail.

    Additionally, we are at a critical point regarding technology. With the oligarchs fully in charge of digital technology and soon go be deployed far more powerful tools of blockchain and quantum computing entirely in the hands of the oligarchy giving them unheard of power to control society and individuals the future is grim indeed. The oligarchy simply says ‘so what’ about “the end” of globalization, they already have the money, and vast monopolistic power over all critical industries, where is the threat to them?

    The wealthiest family in Florence today is the same family which was richest in 1427. Dynastic wealth has a way of morphing to whatever the conditions are and have the money to buy the economic conditions which serve them. But, no one – especially economists – ever mention the destructive nature of dynastic wealth.

    • Brad Owen
      October 15, 2016 at 10:56 am

      What you say rings true. We carry parasites in our body for the whole of our lives. Some bacteria in our digestive system actually perform useful services. Perhaps changing trends reflect morphing back-and-forth from useful to toxic to useful ad infinitum? FDR was from a wealthy dynasty, established here in the 1600s; a Dutch family of colonizers; those wealthy Dutch dynasties themselves were immigrants from Venice (some of whom moved on to England under William of Orange and were openly referred to as “The New Venetian Party” in the 1700s), who, along with those Florentine dynasties, are the survivors of wealthy dynasties from the days of the ancient Roman Empire. Their Gods who give them power and reign, would be called demonic under the current religious construct (which they had a large hand in constructing). They think they control their Gods to good effect. They got it backwards; the tail does not wag the Dog or the God.

    • E Wright
      October 16, 2016 at 9:56 am

      Very well said. You only have to look at Germany to see that. Its citizens were totally crushed by WW2 but the same big names bounced back just the same.

  13. October 15, 2016 at 6:50 pm

    Okay. Most brief. Thermodynamics to modern information theory.

    Quality can grow to infinity on a finite planet.

    Health, pride of place, sanitation, water and education are among important qualities.

    Applied freedom of expression in today’s lexicon is; the focused input of distributed intelligence into a socially conscious and mutually acceptable decision.

  14. Ol' Hippy
    October 16, 2016 at 2:48 pm

    Simply put, you can’t have infinite growth on a finite planet; economic, population, pollution, etc. It’s like Humpty Dumpty will come crashing down some day soon and there will be few pieces left to put back together. If nothing else the elephant no one looks at is the global warming/poisoning/over population that will bring about the collapse and whether humans or the rest of the beautiful creatures survive is quite problematic. Economic models are fine in a classroom but the real world beckons and needs human intervention to save it from utter disaster. The feckless leaders will do nothing as long as there’s money to be made which is just paper now anyway. The only question now is ; not if but when will the final disaster kick off? Because no one has the will to do what’s needed to save Earth’s inhabitants including humans.

    • J'hon Doe II
      October 16, 2016 at 4:31 pm

      Ol’ Hippy — “Simply put, you can’t have infinite growth on a finite planet”

      Yes, you can have infinite growth on a finite planet
      if you consistently infect or blowup certain peoples
      or induce cultural warfare or impose economic sanctions
      or create laws of imprisonment or ‘arbitration’
      which favor corporations over everyday people.

      (Kissinger’s NSSM 200)

      http://spartacus-educational.com/VNchemical.htm

  15. Kreditanstalt
    October 16, 2016 at 3:59 pm

    Welcome analysis! I too thought that the article “Why there is Trump” explained a great deal. But carry it further: growth (in real, non-currency-measured terms) has possibly been “over” since as early as 1971.

    Make the connection between the continuing, ongoing, pernicious expansion of the supply of (fiat) money & credit and the destruction of net growth.

  16. J'hon Doe II
    October 16, 2016 at 5:03 pm

    Chemicalization — (the drug industry/Big Pharma)

    Like schools of fish in a net… .

    Error states of consciousness are negative thoughts most of us walk around believing about ourselves and others.
    These thoughts are untrue even though we convince ourselves they are as real as our own flesh.
    Some of those thoughts are conscious, others unconscious. They become our basis for handling life.
    As a result, these error states of consciousness block us from where we so fervently want to go.

    https://alignyourlife.wordpress.com/2014/04/16/chemicalization-ever-hear-of-it/

  17. Fast Eddy
    October 16, 2016 at 9:38 pm

    When growth ends – civilization ends.

    Growth has ended because we have run out of cheap to EXTRACT oil:

    THE PERFECT STORM (see p. 58 onwards)
    The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

    For an outstanding summary of the situation:

    Why energy prices are ultimately headed lower; what the IMF missed
    Posted on October 11, 2016 by Gail Tverberg

    We have been hearing a great deal about IMF concerns recently, after the release of its October 2016 World Economic Outlook and its Annual Meeting October 7-9. The concerns mentioned include the following:

    Too much growth in debt, with China particularly mentioned as a problem
    World economic growth seems to have slowed on a long-term basis
    Central bank intervention required to produce artificially low interest rates, to produce even this low growth
    Global international trade is no longer growing rapidly
    Economic stagnation could lead to protectionist calls

    These issues are very much related to issues that I have been writing about:

    It takes energy to make goods and services.

    It takes an increasing amount of energy consumption to create a growing amount of goods and services–in other words, growing GDP.

    This energy must be inexpensive, if it is to operate in the historical way: the economy produces good productivity growth; this productivity growth translates to wage growth; and debt levels can stay within reasonable bounds as growth occurs.

    We can’t keep producing cheap energy because what “runs out” is cheap-to-extract energy. We extract this cheap-to-extract energy first, forcing us to move on to expensive-to-extract energy.

    Eventually, we run into the problem of energy prices falling below the cost of production because of affordability issues. The wages of non-elite workers don’t keep up with the rising cost of extraction.

    Governments can try to cover up the problem with more debt at ever-lower interest rates, but eventually this doesn’t work either.

    Instead of producing higher commodity prices, the system tends to produce asset bubbles.

    Eventually, the system must collapse due to growing inefficiencies of the system. The result is likely to look much like a “Minsky Moment,” with a collapse in asset prices.

    The collapse in assets prices will lead to debt defaults, bank failures, and a lack of new loans. With fewer new loans, there will be a further decrease in demand. As a result, energy and other commodity prices can be expected to fall to new lows.

    Let me explain a few of these issues.

    More https://ourfiniteworld.com/2016/10/11/why-energy-prices-are-ultimately-headed-lower-what-the-imf-missed/

  18. Cal
    October 16, 2016 at 9:43 pm

    Globalism (on steroids) created the rise of what neoliberal like to call (bad) nationalism—-a return to the idea/desire for a “sovereign state ”.
    I saw the first signs of this in Hungary 5 years ago and been watching it spread—the protest against foreign capital and foreigners buying up much of Hungary’s industry and business. The press tried to label this as the rise of far right neo Nazis party in Hungary—but that is not what it was.
    The population was rejecting the economic ‘take over’ of Hungary by non Hungarians who had no interest in the country except what they could skim or take out of it.
    I don’t think the rejection of this Vulture Globalism is going to stop or change. Its going to keep spreading.

  19. Skooter Huk
    October 16, 2016 at 11:49 pm

    People have been writing and speaking about the end of the economic growth paradigm for a long time. There are a number of big factors involved, but the stalled global economy has mostly to do with declining net energy and population growth.

    Present day economists forgot about what earlier Physiocrats and relatively primitive peoples understood all too well, that prosperity depends on resources.

    All one had to do to see this coming was to read, or listen to a few lectures… The information has been out there for a very long time.

    Albert Bartlett
    Brian Czech
    Charles A. S. Hall
    Charles Hugh Smith
    Chris Martenson
    Chris Nelder
    Collin Campbel
    Cutler J. Cleveland
    Dennis Meadows
    Donella Meadows
    Joseph Tainter
    Garret Hardin
    George Mobus
    Herman Daly
    Howard T. Odum
    James Howard Kunstler
    Jarred Diomond
    Jason Bradford
    Jay Hansen
    Jeremy Rifkin
    John Michael Greer
    Joshua Farley
    Kenneth E. Boulding
    Kenneth S. Deffeyes
    Kent A. Klitgaard
    Lester R. Brown
    Marian King Hubbert
    Mark Lewis
    Nate Hagens
    Nicholas Georgescu Roegen
    Paul Erlich
    Richard Heinberg
    Robert T. Kauffmann
    Sharon Astyk
    Tad Patzek
    Thomas Homer Dixon
    Ugo Bardi
    William Catton Jr.

    ETC.

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