07.29.11

Old Mr. Urban Slum

Posted in Imminent Catastrophe at 8:33 am by George Smith

Pine View Farm again points out a diverting read, this one in the Asia Times by old Mr. Urban Slum himself, Mike Davis. Ever since DD has been in southern California, Davis has been semi-famous for his role as the teller of the stories on how everything will slowly collapse. (From the perspective of someone monitoring urban decay in SoCal.)

And entropy being what it is, along with current trends, who am I to argue?

In any case, in my estimation Davis probably peaked about seven years ago, a little too far ahead of the best downhill slope we’re seeing now.

But he still easily gets in some good lines:

As a result, like the Phoenicians in the Bible, we’ll sacrifice our children (and their schoolteachers) to Moloch, now called Deficit. The bloodbath in the public sector, together with an abrupt shutoff of unemployment benefits, will negatively multiply through the demand side of the economy until joblessness is in teenage digits and Lady Gaga is singing Brother, Can You Spare a Dime?

Lest we forget, we also live in a globalized economy where Americans are the consumers of last resort and the dollar is still the safe haven for the planet’s hoarded surplus value. The new recession that the Republicans are engineering with such impunity will instantly put into doubt all three pillars of McWorld, each already shakier than generally imagined: American consumption, European stability, and Chinese growth.

It’s not difficult to see that if the Republicans worsen the economy significantly with a debt ceiling crack-up, the resulting lay-offs and even more hardship in the US will ripple across the Pacific to Chinese manufacturing. Again. Like in 2008. Because we buy all their shit, in fact – it’s all we can buy, y’know.

Davis also gets into China’s business adoption of predatory US practices in shadow banking, over-leveraged lending and housing bubble creation. (Since I mentioned James K. Galbraith’s Predator State book yesterday, it’s worth citing again. In Galbraith’s discussion of China’s controlled economy he argued it could easily fall prey to the same predatory financial behavior that has destroyed the US middle class and the government’s ability to effectively do what government is supposed to do in big advanced nations.)

Davis sees an impending collision between a China bubble and the Republicans taking the US economy over the cliff. Almost everyone dies in a fiery wreck, like in a trio of teen hot car novels he read as a child.

Fascinating.

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