Three Sigma Systems

I was strolling the sidewalks of downtown Santa Cruz one evening this weekend. To all appearances, life along Pacific Avenue, our “main street”, was as pleasant as ever. Then I noticed something interesting. As is the case in many American towns, quite a few commercial buildings are unoccupied, but rather than leave dark gaping holes behind the plate-glass storefronts, owners or some other business savvy people, had placed attractive objects to mask the depressing emptiness. As I peered behind these little white lies, a sense of foreboding welled up in me. As I thought about it, it was not the unoccupied buildings that disturbed me. It was the lies that were being used to deceive me into complacency.

I was reminded of Dr. Washington Dodge’s account of the Titanic’s sinking just a few short days after the tragedy:

“We had retired to our stateroom, and the noise of the collision was not at all alarming. We had just fallen asleep. My wife awakened me and said that something had happened to the ship. We went on deck and everything seemed quiet and orderly. The orchestra was playing a lively tune.

(The crew explained that) “[A]s a matter of extra precaution the women and children should be placed in the lifeboats.”

“They started to lower the lifeboats after a lapse of some minutes. There was little excitement. As the lifeboats were being launched, many of the first-cabin passengers expressed their preference of staying on the ship. The passengers were constantly being assured that there was no danger…” Read more…

I hate being scammed, no matter who is doing it, and the Toyota bashing frenzy of the past week reeks of a scam designed to undermine Toyota’s success and buoy up American car makers who are both unwilling and unable to compete on matters of substance.

Yesterday, the Wall Street Journal reported that U.S. Transportation Secretary Ray LaHood, when testifying before the House appropriations committee, was asked what advice he would give to owners of Toyotas subject to the recall, he replied,

“My advice is, if anybody owns one of these vehicles, stop driving it, take it to the Toyota dealer because they believe they have the fix for it,”

Soon after, LaHood amended his statement to the press by removing the phrase “stop driving it”, but not soon enough to prevent shares in Toyota stock from plummeting.

When it comes to defective engineering and manufacturing, nobody can hold a candle to U.S. auto manufacturers. If you don’t believe me, look up the Chevy Corvair (made Ralph Nader famous) and the Ford Pinto, both of which earned their reputations as death machines. But those headline making events were just the tip of the iceberg. In years passed, whenever I bought a new car manufactured in the U.S., I knew I was in for it. The first few months of ownership always involved battling with the dealership to get things fixed. Do you remember the “Lemon Laws“. It came into being for one reason only. U. S. manufacturers built a lot of lemons and if you could get your car classified as a lemon, the manufacturer would be required to buy it back from you. Of course getting a car classified as a lemon could get your killed.

Ford Pinto Crash Test

US Auto Recalls

Read more…

In an Op Ed piece in today’s NY Times, “Between God and a Hard Place”, James Wood makes some interesting observations about the earthquake in Haiti and God. He calls to our attention two invocations that are particularly notable—one is from Pat Robertson and the other from Barack Obama.

Pat Robertson took to his lectern to opine that the devastation wrought on the people of Haiti  was God’s retribution for the deal they cut with the Devil when overthrowing French rule. Crass but consistent, given Robertson’s observations about hurricane Katrina and legalized abortion.

Barack Obama also took to the podium to comment on the earthquake and aftermath in Haiti, and he too invoked God, saying,  “we stand in solidarity with our neighbors to the south, knowing that but for the grace of God, there we go.”

Wood’s excuses Obama for implying that we stand ahead of the Haitians in God’s good grace, suggesting that Obama was merely parroting an oft used phrase. I don’t think so.

I remember when, back in 1966, I met Joan Baez—actually had lunch with her. Nice lady. In one of her songs, I don’t remember which, she emended the saying “There but for the grace of God, go I” to “There but for fortune, go I”. I must say, blind luck rings truer.

The meaning of the phrase with “God” at its center is not difficult to divine. Baez saw this clearly. I suspect Obama is smart enough to know what he is saying as well, but he opts for “God”, either as a political expedient or worse yet, a matter of personal faith, In either case, God help us.

As we begin the year 2010, many of us resolve with sincere intentions to cast off our bad habits. But as we all know, shaking off bad habits is easier said than done. Real change requires that we dredge up from the dark abyss of our habitual minds, a new and self-critical awareness of the patterns and assumptions that have chained us to behaviors that lead us toward ruin. Only then we can start acting in less ruinous ways.

The abyss of our habitual thinking is not only a source of our individual fallibility. It also lies the heart of our fallibility as a nation of people. It’s time to examine some of our assumptions and change what we are doing for the better.

NOTE: This post really got out of hand. I wanted it to be shorter but I ran out of time.

2010 Resolve: Transform our system from one that sets people and nations against one another into one that brings people and nations together.

1: Our Worst Bad Habit

Our nation, the United States of America, was founded by a group of insurgent “terrorists” determined to throw off the religious, economic, and legal conventions imposed upon them by their mother nation.

As seen at that time, from the British point of view.

Our system was born in self-righteous violence and perhaps not surprisingly, we have continued to create and continuously improve a system that reliably and predictably produces ever increasing violence. As the timeline illustrates, in the 233 years since our founding we have been almost continuously involved in war against other nations of people.

At a minimum, we can identify about 55 distinct wars, although by some accounting the number exceeds 200. By any enumeration, our penchant for warring is clear enough, and lest you think that we make mostly wars of necessity in defense of our homeland, consider that among our wars only two, WWII and 911, represent actual attacks on upon our nation (our Revolutionary War being in itself, an insurgency instigated by us and conducted upon British colonial soil). One list  includes 35 instances of outright invasions initiated by the United States. The US Department of the Navy lists 234 instances in which the United States has “projected” its military might abroad from 1776 to 1993, excluding “covert actions”.

This does not mean that all of the wars we have been involved in were necessarily “all bad”. I mean, Hitler and his Nazi’s definitely needed some serious attitude adjustment. It just means that we do a lot of warring.

An examination of our history reveals that, with exception of the Civil War and wars against the American Indigenous peoples, the vast majority of our warring enterprises have been carried out on the soil of other nations in acts intended to acquire territory or to influence the affairs of those nations. These acts were often described as righteous moral callings, in which it was our “Manifest Destiny” to bring to ignorant and oppressed peoples the virtues of our ideas about freedom and democracy. In fact though, it seems there was usually some economic motivation lurking beneath our veneer of moral rectitude (wink, wink).

Approximate Locations of US Military Actions 1776 to Present

In addition to warring on other nations, our system also reliably and predictably produces warring among ourselves. Although our Civil War stands out in bold relief, a less obvious but clearly related war has been ongoing in our nation. This continuous, low-level conflict is one that pits race against race, haves against have-nots, and gender against gender. It seems that our system is a never-ending font of adversarialism in which there is an endless churn of victims and victimizers—an unending war between the righteous and the damned, the powerful and the powerless. One measure of the conflict within is the rate at which we imprison our fellow citizens.

Top 10 Imprisonment Rates (Relative to highest)

What is it that turns so many of our fellow citizens into criminals?

Read more…

There have been a quite few rumors that our competition will be launching decoy balloons designed to thwart your identification efforts and deny me us our $40,000 award. With only 28 hours to go before our Department of Defense launches their balloons, I am providing this CONFIDENTIAL “DoD Red-Balloon Finder’s Identification Guide.” also referred to as an R-FIG.

Read more…

Doc, it hurts when I do this!

There’s an old joke that goes like this:

A guy goes to the doctor and says, “Doctor, doctor, it hurts when I bend my arm like this. What should I do?”

The doctor answers, “Stop bending your arm like that.”

On this blog site, I have repeatedly argued against cyclical models as predictive. Now comes a new and fascinating book entitled “This Time is Different: Eight Centuries of Financial Folly“, by economists Carmen M. Reinhart and Kenneth Rogoff. The authors use newly acquired historical data to argue that the recent economic crisis is wholly unexceptional. It is merely one more financial market driven boom-bust incident in a chain of incidents going back more than 500 years.

Read more…

Would of, could of, should of…..

If I had jumped into the stock market and bet on the DOW last March, my investing friends say that I would have made a tidy sum.

As I understand it, even though unemployment continues to increase and housing prices continue to decline, in the few short months since the world economy nearly collapsed, the stock market, a leading indicator, is now promising a recovery. Apparently the DOW has been rapidly buoyed up by the stock prices of companies that specialize in financial trading. (Hey aren’t those the guys that got us into this mess in the first place?).

I suppose it makes sense. Those companies are the ones that have been given access to vast sums of taxpayer dollars at 0% interest and an implicit government guarantee that the taxpayers will bail them out again if they blow one of those too-complex-to-understand bets. With a sweetheart deal like that, who wouldn’t play some long-shots with lots of upside?

So now I am wondering if I should ante up a chunk of money to get into the game. Hey, I’m only human. My broker says yes, but the fine print still says the past is no predictor of future performance. But hey, people who are in the market are getting get richer as I write this!

Even though past performance does not predict future performance, I found this cool historical composite chart on the Internet and it got me to thinking.

The black line is the DOW circa 1928. 381 was the high and 128 was the Great Crash, which was followed a few short months later by a nice little “happy days are here again” rebound. The rest is, as they say, history. The red line is the DOW circa 2008. 14000 was the high and 7000 was our very own “great crash”. I guess 10000 is Happy Days all over again. Or is it?

Anyone want to help me out with an informed prediction?.

Happy days are here again, right?

I always argue the we are products of our time and place in history. The meaning in our lives is made up from the story we continually strive to create among others out of the raw materials handed to us by our circumstance. This morning I revisited a little book that did much to shape my life’s journey.

In his book, “Man’s Search for Meaning” , Victor Frankl, a psychiatrist and survivor of the Holocaust, remembers that in order to survive the trials of the camps….

“We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life—daily and hourly. Our answer must consist, not in talk and mediation, but in right action and in right conduct. Life ultimately means taking responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual”.

W. E. Deming spoke of meaning in terms of creating “aims”.

La Grippe

Over the past few days, Swine Flu headlines have overtaken our daily dose of dire economic predictions. Should this strain of influenza prove virulent, accusations of over-reaction by public health professionals will be quickly laid to rest. To understand why, all you need do is read the story those professionals all studied as students—-The 1918 Influenza Pandemic.

To the casual observer, the story of our distressed economy and the story of an incipient pandemic seem to be very different. They are not. Both events are a product of a way of thinking and acting based in reductionism. Both are tales of maximizing returns on investment. Both are stories in which short-term success begets long-term failure. 

Traditional medical science stands out as a premier example of the contradictions produced by failure to understand the nature of a system. A few examples:

• Maximal use of antibiotics begets increasingly resistant disease agents.

• Maximal use of pesticides begets increasingly resistant disease vectors.

• Maximal return for medical specialization begets increasing cost for general healthcare services.

• Maximal return for complex medical miracle technologies begets narrow solutions at the costs of wider solutions.

• Maximal return for pharmaceutical companies begets abundant life style drugs and  a dearth of drugs for treating those diseases that pose the real threats to human survival.

Failure to appreciate the nature of a system results in short term, results-oriented thinking, that predictably and reliably increases long-term costs.

The successes we have wrought though the use of our reductive minds have brought Earth’s 7,000,000,000 humans to the brink of a systemic collapse for which their is no immunization. It doesn’t matter what names we assign—economic depression, pandemic, climate change, pollution, or nuclear war—the influence of our enterprises are now producing chaotic shifts on a global scale. The way forward—-out of our crisis— requires that we come to terms with the nature of systems and with the inherent limitations of our method of knowing. With this knowledge, we can apply our talents toward improving the system as a whole with the aim to make a better world. This is no ideology. It is a method for doing our business better.

BTW – Hopefully Swine Flu will be no more than a blip on the radar of human history, but if developments should become more ominous, watch to see how the pandemic and the world’s economy interact as a whole.

Oligarchy = People with disproportionate power and influence

At last someone, namely Simon Johnson, former chief economist of the International Monetary Fund (IMF), has unmasked the power behind the throne that has plunged you, me, and the rest of the world into economic chaos. In his article in the May issue of Atlantic magazine, “The Quiet Coup“, Johnson draws upon his substantial experience with the IMF to lay bare the causes and consequences of the current economic debacle.

Johnson is no ideologue with an anti-capitalist axe to grind. His knowledge and experience are as practical as it gets. Since 1944, the IMF has been the world’s rescuer of last resort for developing countries teetering on the brink of economic collapse. The IMF is a quintessential ”tough love” agency in which the medicine it offers in the form of huge bailout loans are always accompanied by short-term conditions that are agonizingly painful for the nations being rescued.

In the matter-of-fact tone of a true professional, he tells us that it is now the global economy that is teetering the brink of economic collapse. The causes are the same as for developing countries, but the consequences are infinitely greater. 

“The conventional wisdom among the elite is still that the current slump ‘cannot be as bad as the Great Depression.’ This view is wrong. What we face now could, in fact, be worse than the Great Depression-because the world is now so much more interconnected and because the banking sector is now so big.”

Johnson’s article provides both examples and explanations for our situation and I suggest reading it several times to get the full impact of what he is telling us. Most importantly he attributes our current situation to the actions of real people, just like me and you.

Here’s the short version.

1.  In the ebb and flow of social interaction, some people inevitably gain economic and political advantage. The reasons and means by which such advantage occurs vary, but the luck of the draw—being in the right place at the right time—always has something to do with it.

2. People who gain economic and political advantage will act to sustain and enhance that advantage through the exercise of disproportionate power and influence. These people become an elite—an “Oligarchy“.

3. In the past, oligarchies maintained their status through the use of raw power but in our current age, they have pursued their disproportionate advantage by using information age methods and political influence to engineer a system of belief in which their advantage comes to be perceived by the rank and file population as both natural and good. The “greed is good” ethic becomes a social norm. (See my blog entry “Warrior Meritocracy“)

4. As oligarchies use their power and influence to shape public policy in ways that favor their interests, their single-minded avarice ALWAYS leads to excesses in the which the imbalances they seek to maintain precipitate systemic collapse. They kill the goose that laid their golden eggs and everyone suffers.

(W. E. Deming explained that maximizing any single aspect of the system will always sub-optimize the system as whole. Maximization is a system destroyer.)

5. To correct the imbalances that an oligarchy has created, the oligarchy must be broken up, but the members of the oligarchy will not accept that. They will use all means at their disposal to preserve their advantage and previlidge. If necessary, they will cut off their noses to spite their faces. Everyone loses!

Johnson says that because oligarchies tend to emerge in every society, people must have the political wisdom and will to regulate their system in ways the prevent oligarchies from growing too powerful and their enterprises “too big to fail”. We must manage our system with the aim to optimize the whole of our social, economic, and political relations. If we use our brains, optimization is possible.

Today, Johnson tells us, we are in the midst of a collapse. The people who constitute our current oligarchy are using every tool in their kit  to maintain their advantage by obfuscating causes and solutions. If they prevail, the current collapse will become a disaster of unprecedented proportions.

The solution? Break up the oligarchy now. Nationalize the banks. Break them into smaller units. Regulate risk taking in finance. Use progressive taxation to mitigate the accumulation of undue power and influence. 

In his words…

“A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true.”

“Wall Street’s seductive power extended even (or especially) to finance and economics professors, historically confined to the cramped offices of universities and the pursuit of Nobel Prizes.”

“As more and more of the rich made their money in finance, the cult of finance seeped into the culture at large.”

“Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.”

(OR).

“Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.”

It’s as simple as that.

(I have added Mr. Johnson’s blog site to my links section in the sidebar of this blog.)

For more of my thoughts on this subject, read my posts: “Economists have Led us Down the Wrong Path“, “Three Sigma Bubble? Nonsense!”, “Business Cycles – The Greatest Con Never Told“, “That’s Entertainment“, “Idiots Guide to Economic Stimulus“, “Greenspan’s Tooth Fairy”  and  ”Financial Crisis not a Mystery – Churning your Money“, 

Sketch from my journal - Herat

In 1972 I traveled overland from Europe to Afghanistan. I was on my way to India to get enlightened. I took the Orient Express to Istanbul, crossed the Bosporus straits by boat, and boarded another very slow train across Turkey and Iran. The tracks ended in Mashhad, Iran and from that point forward, I was relegated to jitney min-vans and vintage school buses painted blue and festooned with roof-racks and hand-holds for those passengers forced to ride on the outside.

While in Afghanistan, I was waylaid for six months, first by illness, then by curiosity.

During my convalescence in Herat, I was taken in by an Afghan family. They befriended me, nursed me back to health, and guided me. Their religion required that they do this, but I sensed no coercion in their acts of kindness, only joy. We played music and sang. I drew pictures of my home in California. They laughed with incredulity at my sketches of cities, freeways, and amusement parks. This was before satellite TV and the Internet had bridged the divide with the West.

Once I was able, I continued my travels, first across a vast and harsh desert to Kandahar, then upward toward Kabul, and finally into the mountains of the north. My twenty year old mind was unable to grasp the immensity of the land, but an impression of the people seeped into me. They were unlike any I had known.

In Kabul, and to a lesser extent in Kandahar and Herat, it appeared that the people lived in accordance with the familiar rhythms of commerce—open markets, roll-doored shops, hagglers and money changers. But, as one Afghan told me, the capital city of Kabul is the capital of Kabul. Nothing more. A true city-state. The commerciality of  Afghan cities was a thin veneer that merely overlaid the profoundly nomadic culture that was very evident outside the narrow boundaries of Afghan cities.

Outside those tiny and tenuous islets of commercial chaos I saw a timeless culture-scape of nomadism.  The vastness of the land was crisscrossed with worn tracks of caravans moving, always moving, for thousands of years across thousands of miles. Occasionally distant black tents, rippling in the heat, marked temporary encampments, but when morning came, I always saw the long lines of tribal people, camels, horses, and flocks of angora sheep, marching slowly and steadily—a timeless trekking—always moving. Along their nomadic paths, I saw many ancient cities and forts made of mud—their ghostly shapes melting back into the desert sands—empires once dreamt, now going, going, gone.

I saw that these people possessed only those things that could travel with them—a few implements of domestic life and weapons, weapons, weapons. Knives and guns were much coveted and admired. My leather encased Buck knife was always a conversation starter.

A curious man offered his muzzle-loaded gun to me and indicated an interest in my Buck knife. We exchanged weapons. The man and his companions gathered to inspect and admire the Buck’s stainless steel blade and folding mechanism. I feigned interest in the man’s ancient gun. Once the ritual was over, everyone relaxed. We enjoyed our bowls of rice and dates, shared smiles, drew pictures on the dirt floor, and exchanged a few simple words.

It’s hard to explain in words, but I developed a deep appreciation for these people. As a vagabond—a fellow nomad—my encounters with them were framed in their well practiced rituals of respect, deference, and mutual admiration. There was something noble about it. I sensed that I was granted status as a matter of course. To lose it would require some disgraceful act on my part. As long as I showed respect and behaved with honor, they would consider me a friend to be supported, protected, and defended. But if I were to become an enemy by behaving dishonorably and disrespectfully, they would slit my throat without a second thought.

President Obama is in a precarious position. Without a political center, tribal Afghanistan is a land in which the practical matters governing day to day life reign supreme. To the Afghan people, the hardships of nomadic life are trivial when compared with the hardships wrought by greed, duplicity, and betrayal between men. In Afghanistan, it’s always personal.

Obama has not yet squandered the respect granted as a matter of course by the tribal people of Afghanistan. Should he do so, he will not be able to regain his status as an honorable man. Obama should adopt a policy of respectful engagement and relations of honor as a best strategy. I suggest that he will do best if he elects to proceed slowly, slowly, like a fellow nomadic traveler. With patience, he and his emissaries can leverage the rituals of friendship, loyalty, and honor that are a way of life in that vast tribal culture-scape.

Late last night my local PBS station (KQED) rebroadcast the episode of American Experience entitled “The Crash of 1929″. Originally produced in the mid-1990s, the film is regarded as the most authoritative video account of the Crash of 1929. Even though it was produced more than a decade ago, the story it tells bears an amazingly uncanny resemblance to current events. If you haven’t seen it or need a refresher, this is must see TV for our time.

CLICK THE IMAGE BELOW TO WATCH IT ONLINE NOW.

"In 1929...EVERYBODY WAS PLAYING THE GAME."

The Internet, magazines, radio, and television are awash with punditry of professional and amateur economists. The one worthwhile message that might be gleaned from Conor Clarke’s interview with Robert Shiller is that out of the corner of his eye, Shiller himself hints at an important truth. When it comes to economic theory, the emperor has no clothes.

Download Two decades ago, Deming foresaw the crisis.

Economic theory has a dubious history as science. Created as an apologetic to rationalize the inequitable distribution of material wealth and social power, this so called science begs its own questions by seeking to explain observations of the relative distribution of wealth and power in society as though these observations represented some external, natural laws of human behavior. But human behavior is not governed by the laws of nature. It is governed by the beliefs, theories, and methods we create. We are the ones who make the choices that relegate ourselves to the jungle or to a society organized in ways that allow everyone to win.

Human interactions, including those things economists attempt to tease out from the whole of social behavior, cannot be addressed in the same fashion as the study of planetary motions, drifting continents, and colliding atoms. The complexity of social interaction presents mathematically intractable equations that make weather prediction simple by comparison.

Economists are not the only ones who anoint themselves with the authority of science and then place the cart firmly before the horse, but in the affairs of modern society, they are among the most pernicious.

There is a glimmer of light in Shiller’s observation that economists, (along with other scientistic shamans), are confronted with perverse incentives that drive them toward a tunneled vision of specialization. Such reductionism enhances authority, gleans promotions, and mystifies lay audiences, but in terms of understanding, it is worse than useless. It is harmful.

A new theoretical approach is required to begin to reverse the disastrous tampering effects that are being produced by scientistic reduction of social systems. This new paradigm must:

1. Acknowledge that the whole of society cannot be reduced to some set of discrete parts that can be understood in isolation from one another. In other words, there is no “economy” in isolation from the whole our our social enterprise.

2. Recognize that our society is a whole cloth in which both rational calculation and irrational behavior take place in our time and our place in history—our history’s technological, political, economic, philosophical, and normative state.

3. Understand that the intractable complexity of our social system is exponentially increased by the fact that the system creates its own weather which in turn, feeds upon itself, producing its own torments, doldrums, and calms.

4. Recognize that the principle of self-creation produces a circumstance in which naturalistic forces of evolutionary transformation are overwhelmed by sudden and often violent clashes of ideas, polities, and self-interested stakeholders. Aim to channel that energy and put it to useful work.

5. Adopt a methodology of social action that aims to bring our system into a state of control and that moves forward in creating desirable outcomes by aiming to optimize the system and continually improve.

It is time that our conversation be turned to some more innovative ways of questioning. As Albert Einstein famously said, “You cannot solve a problem from the same level in which it was created.”

There’s a lot of confusion about what an economic system is. Some of us think it grows on trees. Others think we create and manage our economic system.

- The vision of economic systems growing on trees is sort of a survival of the fittest mind set. In this view, we know who is “fittest” by whoever “wins”, whatever that means at any given moment. No value need be created in this view. All that is necessary is to “win”.

- The vision an economic system we create and manage is one in which, when you or I create some value in the form of a service or product, we expect to receive fair compensation for our efforts. When you or I receive some service or product, we expect to give some fair compensation to the creators of those services or products. Value must be created in this view.

Most people mix these two visions into a stinky potpourri in which nothing makes sense. Sometimes the rules of the first apply. Sometimes the rules of the second view apply. In practice, for a period of about 30 years we have increasingly leaned toward the survival of the fittest view. In our minds we imagine that we are all engaged in a grand poker game.

Imagine this…

We all sit down to the poker table and agree to the rules.

• We know that skill and luck will determine who wins any given hand.

• We also know that as play proceeds, some players will gain an advantage over other players by amassing more chips than others.

• Those who amass more chips do so by luck, statistical awareness, cunning, deception, and if they can get away with it, cheating.

• As play proceeds, those who gain an advantage are able to buy hands by simply bankrupting the players who are down, but when they do this, players are forced to drop out. Game over.

• To keep the losers in the game—to continue amassing more wealth—the winners must STIMULATE the losers to ante up more of their residual wealth.

In the late 80’s and early 90’s the poker game STIMULUS was deregulation of pension money. Instead of holding that money in guaranteed, and therefore conservatively held investments, your retirement savings were put into play using 401K accounts so the poker game could continue. This created the DOT.COM boom and shortly thereafter, bust. Retirement funds gone.

Game over? Nope.

In the late 90’s the the poker game STIMULUS was created by the Fed’s artificially lowered interests rates that allowed losers to borrow on future earnings. The game continued in an unabashed orgy of consumption led by the housing boom, and shortly thereafter, housing bust. Borrowed money gone. Indentured servitude assured.

Game over? Nope.

Today, our government is using the money taxpayers have put into the system to STIMULATE the poker game again. Since we have no money and can no longer borrow, the money to keep the game going is being bled from our nation’s future—the nation our children will inherit.

Game over.

Solution? Walk away from the table!

If you are following the news closely, you are well aware that life as we have known it, is at at an end. What we are witnessing is the breakdown of the "The Crap Cycle".

1. The middle-class is almost broke and can’t pay back the money they borrowed to buy crappy houses, crappy cars, and tons if useless crappy stuff, so greedy lenders are becoming socialists, begging for welfare checks so they won’t lose their jobs that pay them big salaries with which they buy big houses, big cars, and more and more crap.

2. The American people, with wallets empty and credit gone, are no longer buying crap and are discovering that they can actually do without all of the crap they used to consume out of fear and boredom.

3. Those who sell crap to mindless consumers are going out of business and the low-wage jobs people had working for the people who sell the crap, are going away, so even fewer people have money to buy more crap.

4. People who used to throw away broken crap are now fixing the crap they have to keep it working longer, so they no longer have the idle time to watch TV advertisements that tell them to buy more crap.

5. People in the business of collecting and reselling used up crap and other garbage are losing their jobs because people have stopped buying the crap they used to buy and throw away, so the amount of crappy waste polluting the planet is decreasing and the used crap collectors are losing their jobs and they too don’t have money to buy more crap.

6. People who have lost their jobs and money no longer commute to jobs making and selling crap, and no longer drive to malls to buy more crap, so greenhouse gas emissions are going down and global warning caused by a crap-filled atmosphere, is slowing.

7. People who are going broke can no longer pay taxes, causing cuts in defense budgets, so we are building fewer weapons crap that needs to be field tested in needless attacks on small, helpless nations who have way less crap then us.

8. People are afraid of going completely broke so instead of buying crap they are saving what little cash they have, which is increasing personal wealth at the expense of greedy corporations, so people have less and less crap but more and more wealth.

9. Crazy nations like Suadi Arabia, who sell us oil, are losing their grip on us because we don’t need more and more oil to commute to jobs making crap and to fuel crap making engines.

10. Nations like China, whose economies are built on building more and more crap for crappy third-world wages are slowing down because we aren’t buying as much crap, so they are polluting less, thus making the world greener and greener.

The "greed is good" model of social interaction is collapsing and with it, the crap-cycle. More and more, people are left with nothing to do but good work creating valuable products and services that people actually need and that don’t harm the planet. Greed is fast becoming a ticket to prison or, if not that, then at least  a ticket to Hell. Clearly, if we fail to bailout the greediest among us, life as we have known it is surely doomed. Then what will we do?

Feel free to add to my list of ten horrific indicators of the crap-cycle breakdown.