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.

He writes, "I’d like to see fewer government dollars shoveled out and more creative tax incentives to stimulate the private sector to catalyze new industries and new markets".

He still regards free marketism as the solution rather than the problem. investing public dollars in private enterprise vis a vis incentives doesn’t solve our problems. It creates them. People with money game any incentives system. More is lost than is gained as we create a culture of corrupt financial practices designed to exploit incentives. We reliably and predictably create a quagmire of tax codes, questionable accounting, and misdirected "innovation".

I think its time to stop worshiping the so-called "efficiency" of the free market. If the virtuous free market entrepreneur cannot stand on his own two feet, then then the power and efficiency of markets are overstated.

The inefficiencies of public enterprises are as overstated as the efficiencies of free markets. When it comes to technology development and vital projects such as war, transportation, communications, health, etc. the public enterprise is, technically speaking, capable of greater efficiency—clear aims, efficient financing, long term sustainability, inter-institutional coordination and collaboration, etc.

If we, the human race, are understood to be in a war for survival, enterprises motivated by self-interested individuals are not the best way to move forward.

Imagine this nonsense.

We are on a boat and committed to a perilous journey. Instead of organizing ourselves as a cooperative unit to operate our vessel, we decide that the rule governing our actions should be "everyman for himself". We adopt the theory that ,if every individual tries to maximize his position, our chances of weathering storms and reaching the next port will be best served.

Any fool can see that this is nonsense of the first order. We are bound to fail with such thinking.

We need to reboot for real.

The captain must study, predict, and decide upon the next port of call and the course to be navigated enroute. His job is to understand the system in order to balance risk and gain. He lives in a world of uncertainty, and his skill in study, prediction, and decision making is crucial to everyone’s survival.

The job of crew managers is to assure that the sailing crew know the aims and risks of the voyage, and that all are able to do their jobs. Management must make the system evermore predictable by reducing variation among performances and enabling continuous improvement. At sea, no crew can ever be capable enough! Management is duty bound to honesty so that the Captain always knows what his ship and crew are capable of.

The crew must continually practice and improve their skills as a unit, for in extremis, they will be tested. The crew must let the captain know, by way of management, what is done and what is doable—what’s working and what’s not working. The Captain will err without this knowledge.

The ship must become a working whole, free from fear and resentment and bound together in common purpose. The means to accomplish this must be studied by all.—leaders, managers, and workers. The effort in this regard must be never-ending. Everyone has a job to do and everyone’s life depends upon everyone else. Aboard a smooth running ship, an indescribable pride and joy are shared by all who man her. Failing this assures misery for all.

One on hand he had Albert Einstein, the grand theorist and mathematical imagineer, who as a young man ventured a sweeping view of the universe that defied our sensory experience and common sense. As the years passed and he grew wiser he took the time to study the boldness of his invention. He is quoted as having said,

“The truth of a theory is in your mind, not your eyes.”

On the other hand he had Werner Heisenberg, the experimentalist and observer of the universe on the smallest scale imaginable, who as a young man described all that he saw as flux and uncertainty. As the years passed and he grew wiser, he took the time to study the implications of his discovery. He is quoted as having said,

“What we see is not reality itself, but reality exposed to our method of questioning.”

These two great scientists—one a theorist and the other an experimentalist—spent the rest of their lives arguing their differences.

I recently had an exchange of ideas with Dr. David Deamer, a molecular biologist and acknowledged expert in the origins of life. I ventured my thoughts on the issue of the transformation from animate to inanimate, to which he replied, “You find theory interesting but I am an experimentalist. I wake up in the morning and want to go look while you waken only to what is in your mind.”

Chagrined, I ventured following thought to Dr. Deamer.

There is no looking without ideas and ideas are useless without looking. Theory and observation are woven together into a flimsy loincloth that we wear to cover our ignorance.

There’s the meat.

He likened our economy to an engine that is basically sound. It’s just that the spark plugs are fouled. (He used the word “magneto”. It wouldn’t be easy, he admitted, but if we could just get the plugs to fire, the engine could be restarted and we could get on with our economic voyage. In all truth, he explained, the crew and passengers on the lower decks of our ship were expendable. The consumption of the first class passengers would be sufficient to fuel the ship of our economy.

I like the use of analogies but Krugman could have done better. A wider angle would have revealed that engine of which he speaks is one part of a great ship in which we all sail. The keelson of our ship has been rotting away for a long time. Until recently the engine driven pumps have staved off flooding. Though the lower decks have become awash, the first class passengers have continued to dine and dance, oblivious to events below decks.

Now the rotten timbers are giving way. The ship’s hull has opened more widely to the cold sea without, and the pumps can no longer stave the inflow. The heartless sea is now overtopping the lower decks and rising fast.

The sad truth is that the ship is rotten to her core and no matter how fast we run the pumps—how fast we bail, she is going down. Our only hope is to bail faster while laying the keel for a new, and hopefully more robust vessel—one that can carry all her passengers across the seas in weather fair and foul.

His ideologically driven social engineering, and it was social engineering, was part of a free market fundamentalism that included deconstructing market regulatory instruments, eliminating regulatory tools for managing international trade, flattening progressive taxation policies, and unweaving social safety nets. But the world never stands up to salute our utopian ideas, whatever they might be.

The the ideology of free-market fundamentalism has now served up the same disastrous results as religious fundamentalism, Marxism, and Socialism. To quote from Greenspan’s testimony once again, “My ideology proved wrong”. To which I might all reply, “Sooner or later, all ideologies are proven wrong.”

With ideology like that it’s no wonder that U.S. Automakers were unable to envision practical solutions to their headlong race to self-destruction. A most excellent example was their failure to pursue hybrid vehicles.

Hybrid cars are the antithesis of "true", but they are practical. Instead of waiting for utopian solutions like hydrogen fuel cells and cold fusion, Japanese engineers designed cars that mixed and matched existing technologies in ways that maximized their best characteristics and minimized their worst. The result was to create a solution that makes things better in the here and now. Simply put, the hybrid car is a practical solution to the practical problems caused by the excessive burning of fossil fuels. Once the problem was acknowledged, all engineers needed to do was to combine well known technologies such as internal combustion engines, electric motors, batteries, new low weight materials, and palatable esthetics, into an optimized whole that does the job of transporting people, cheaper, quieter, cleaner, and funner. What’s more, once on the road toward optimizing the synthesis of these technologies, they are well on the way to learning more, inventing more, and continuously improving their solutions. Now it’s time for Americans dump the self-righteous ideological stuff to get back to their practical nature. It’s time to create a hybrid economy.

To create our hybrid economy, we must dispense with ideology and consider the practical problems and challenges inherent in human economic activity. We must acknowledge that we live in a complex, dangerous, and challenging world that will not tolerate superstitious ideological solutions and slap-dash methods.

The Crisis & What to Do About It, By George Soros

Dear George,

I enjoyed your very interesting article. It was refreshingly clear in its discussion of a subject that is intentionally obfuscated by most pundits. Your discussion of market "reflexivity" is quite good, though it is no revelation. You manage to strip away the veil of impersonal market forces, but you leave in place a veil that euphemizes the inherently destructive amorality of the marketplace. In the final analysis, marketism, whether fettered or unfettered, if a poor foundation for any social enterprise. It panders to the basest instincts of the human species. In a Darwinian sense, it selects for the lowest common denominator.

You place the beginning of the super bubble in the Reagan era, which is insofar as you go, is correct. But you do not really challenge the theory of free markets. At best, you are a revisionist who calls for more and better policemen to abate the crime that runs amuck in free markets. You suggest that regulators must be more attuned to the signals that reflect the excesses of marketeers and must also be aware of the "reflexivity" that they themselves inject into the market.

Sadly, you are suggesting no more than a rearrangement of deck chairs on the Titanic. Your solution is tantamount to building bigger walls against the ever-increasing storms that institutionalized greed and avarice must produce.

A theoretical breakthrough—a paradigmatic shift—requires much bolder step. Of course a real shift must acknowledge and provide for the enterprising nature of market actors. But this must be regarded as, and be relegated to the status of, a social epiphenomenon, that is built upon a stable foundation of sustainable social institutions that assure social actors of all sorts, predictable and equitable relations. These institutions must be a function of a social-collaborative enterprise that provides the infrastructure necessary for a society and its enterprising individuals, to move forward.

This is the "system" by which the great problems of human success can be addressed and great advances can be realized. Off the top of my head, this social enterprise must provide the society as a whole with essentials such as, access to energy, transportation, communications, healthcare, education, stable currency, and safe harbors of refuge which are insulated from the vicissitudes of epiphenomenal markets that produce, trade, and profit from the much-touted benefits of consumeristic desires (deodorants, personalized automobiles, designer clothing, custom houses, etc.)

The challenges facing the human species are too great to be left to devices of entrepreneurs who are motivated primarily by self-interest.

(Double-click to play Quicktime movie)

Explanations of current events are being proffered by the media–very complicated and uniformly WRONG! The first step is to abandon the idea of a FIX. The system and the philosophy (ideology) that sustains it, must be "dynamited out".

The first step is to "institute leadership" that eschews ideology in favor of theory and AIMS "to make a better world".

We have been sold an ideological bill of goods that postulates the inevitability of relations of inequity and constant conflict based on the intractable evil of so-called "human nature". This has become a self-fulfilling prophecy that sustains those in power, but belies the abundant evidence that the human species is intensely collaborative by nature.

For over thirty years, leadership in the United States has been rooted in an ideology of human greed and cutthroat competition. It’s time for a change.

Marc Hersch
Three Sigma Systems

- Two ongoing war’s of of adventure and still counting

- Unprecedented national deficits

- Deconstruction of service and manufacturing enterprises dedicated to creating substantive value

- Meltdown of money churning financial institutions

- Nationalization of banks

- Bailout of insurance gamblers

In one week you will be called upon to take action. Consider Deming’s words when you cast your vote.

"It is not necessary to change. Survival is not mandatory."

"Does experience help? No! Not if we are doing the wrong things."

"A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive. We can not afford the destructive effect of competition."

"We are here to make another world."