Wednesday, January 5, 2011

America’s 10 Worst Years Start Right Now.

America’s 10 worst years start right now
Commentary: 2011-2020: Rich get richer, market crashes, empire ends.

SAN LUIS OBISPO, Calif. (MarketWatch) — Dateline December 2020. Let’s look back on the 2011-2020 decade, at what historians call the “Worst Decade in American History.” Totally predictable, totally denied.

Back in January 2011 we made 10 predictions of a chain of events that would reach a critical mass and consume America in a torrent of creative destruction, crippling capitalism and other outmoded institutions, forcing new power players to step out of shadows and assume leadership in a time of extreme crisis.Now we see how they came true.

“The U.S. economy appears to be coming apart at the seams,” Columbia Professor Robert Lieberman warned back then in the Foreign Affairs Journal. “Unemployment remains at nearly 10%, the highest level in almost 30 years. A long trend of “ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top 1% has increased from roughly 8% in the 1960s to more than 20% today. … a level of economic inequality not seen in the United States since the eve of the Great Depression.”

As the decade opened in 2011 we were being conned again, like before the 2008 meltdown — by the same crooks we bailed out. We should have forgotten all Wall Street’s hoopla about a 2011 bull market with the Dow rocketing to 15,000. We should have thought long-term. We knew Wall Street lost an inflation-adjusted 20% of our money the previous decade. We should have known they would lose another 20% by 2020.

The “Gilded Age” bubble from a decade ago ended in a crash worse than 1929, and left us on the brink of a Great Depression 2. We ended up with a decade of increasing battles between the haves and have-nots, where there is no longer room for “compromise” between the two ideologies destroying America from within.

We could have seen that coming, too, as Lieberman warned of class warfare a decade ago: “Income inequality in the United States is higher than in any other advanced industrial democracy … It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power.”

“The Gap,” the divide, the greed, the entitlements, the hostilities are now so entrenched that “negotiations” are impossible and only a catastrophic 1929-style collapse of our self-destructive capitalism and a descent into economic hell will force America to restructure.

Here’s how we got here over the last 10 years:

2011. Wall Street’s super-rich spend billions to control Washington
Thanks to the conservative takeover of America’s so-called democracy the past three decades, from Reagan to Obama, our activist Supreme Court delivered the coup de grace into America’s psyche in 2010, overturning long-established precedent and giving rich owners of zombie corporations absolute rights of live humans, a decision that would have gotten a failing grade in my constitutional law class at the University of Virginia. It set up Wall Street’s super-rich in 2011 as they advanced their takeover.

2012. Super-Rich gain absolute power over Washington
The bizarre decision, which essentially legalized political bribery, led to billions passing through lobbyists to politicians in all parties, with one goal: A guarantee that all politicians (President, Congress, Fed, regulators and state governments), all adhere to Reaganomics and the ideology that money talks and wealth rules.

As a result, America was no longer a democracy by 2012, not even a plutocracy. Our middle class rapidly spiraled down into third-world status, while the rich get richer and the gap between the richest and the rest widened. Worse, the 2012 presidential race became irrelevant, because money corrupts all in Washington and Obama was already a puppet of America’s super-rich conspiracy.

2013. Pentagon’s WWIII global commodity wars accelerate for 2020 peak
Back during the Bush II presidency, Fortune analyzed a classified Pentagon report that predicted “climate could change radically and fast. That would be the mother of all national security issues.” Billions more people will increase unrest across the world, creating “massive droughts, turning farmland into dust bowls and forests to ashes.”

As a result, “by 2020 there is little doubt that something drastic is happening ... an old pattern could emerge; warfare defining human life,” confronting political leaders everywhere with the reality of our civilization collapsing, even the end of life on the planet. This was the year the hard evidence materialized.

2014. Global population bubble accelerating, wasting commodities
By now it had become clear that America’s Conspiracy of the Super-Rich was draining trillions from middle-class taxpayers. They see global population growth (exploding more than 100 million annually) not as a drain on scarce resources but only as a way to get richer through their obsession with free-market “globalization.”

They ignore the coming 2050 tragedies when global population is 9 billion, dwarfing America’s 400 million, and all are demanding more of the Earth’s limited, non-renewable commodity resources, and demanding payback from America’s long failure to heed warnings of environmentalists like Bill McKibben: “Act now, we’re told, if we want to save the planet from a climate catastrophe. Trouble is, it might be too late. The science is settled, and the damage has already begun.”

2015. Gilded Age globalization implodes America’s Global Empire
Around the time of the Pentagon’s WWIII prediction, historian Kevin Phillips warned in “Wealth & Democracy:’ “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.”

Similarly, financial historian Niall Ferguson, author of “Colossus: The Rise and Fall of The American Empire,” warned that we deceive ourselves, thinking “about the political process in seasonal, cyclical terms.” By 2015 most agreed America has was past its peak.

2016. Wall Street capitalism self-destructs, crashes, mass bankruptcies
“But what if history is not cyclical and slow-moving but arrhythmic, asks Ferguson. “What if collapse does not arrive over a number of centuries but comes suddenly,” too rapid to respond in time. Unfortunately, in our blind greed we refuse to hear “Irrational Exuberance” author Robert Shiller’s warning that “we recently lived through two epidemics of excessive financial optimism … are close to a third episode … another meltdown ... another depression.”

Once again, our leaders ignored history. Ignored Jared Diamond’s earlier warning in “Collapse:” “One of the disturbing facts of history is that so many civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.” The 2016 elections changed nothing.

2017. Middle-class revolution: Buffett’s rich class loses, overthrown
The seeds were planted years ago. Warren Buffett saw the revolution coming: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

By 2017 it had exploded into a new Civil War as all hell broke loose after the 2016 presidential election. The growing income gap popped Wall Street’s bubble for the third time in the 21st century, the economy collapsed, riots spread against another bailout of too-greedy-to-fail Wall Street banks. A class rebellion ignited.

2018. Reaganomics capitalism collapses, Glass-Steagall reinstated
Diamond says he’s a “cautious optimist,” our leaders need “the courage to practice long-term thinking, and make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions.” Deaf, they still fail to act.

The “Crisis of 2018” triggered a cultural revolution, a jarring wake-up call. History warns that most leaders are driven by short-term self-interest not long-term public interests, especially politicians bankrolled by billionaires who can’t see past quarterly earnings, year-end bonuses, the next election. This catastrophe may have finally woken us up.

2019. WWIII commodity wars spread, cost trillions, kill hundreds of millions
Over $30 trillion in federal, state and local debt, plus spending half our budget on the Pentagon’s war machine, finally overwhelmed America’s fiscal policy and the world’s bond markets in 2019.

Unfortunately, the growing number of commodity wars ignited by an accelerating global population and decline in the world’s scarce resources also forced a total rethinking of the balance between spending to contain external threats and a rapid deterioration of social-program needs: employment, retirement, education, health care.

2020. Patriarchy ends: male dominance declines, women leaders rise
Back in 2011 it seemed clear that patriarchy, male dominance world culture, politics and economics throughout history, would collapse all by itself, without women engaging in any direct war, any “battle of the sexes” to defeat men at their own game. But in 2020, women may be our only salvation.

Dr. Jean Bolen, author of “The Millionth Circle” and a leader in organizing the United Nation’s 2015 Conference on Women, challenged women to confront males and put an “end to patriarchy,” because only women can “save the world.” Others like Gloria Feldt, author of “No Excuses: 9 Ways Women Can Change How We Think About Power,” are preparing a new generation of leaders.

Four decades ago my law school class had five women, today across America, women are a majority in most professional schools. Soon they will be called upon.

Why are male leaders failing America in government, business and finance? Jeremy Grantham’s firm GMO manages $96 billion. He predicted the meltdown, said it best in early 2008: American’s leaders are all “impatient ... management types who focus on what they are doing this quarter or this annual budget.”

Real leadership “requires more people with a historical perspective who are more thoughtful and more right-brained ... but we end up with an army of left-brained immediate doers. So it’s more or less guaranteed that every time we get an outlying, obscure event that has never happened before in history, they are always to miss it,” as in 2000, 2008 and again this decade.

Could we change the future?
In post-capitalism, post-patriarchy America, women will emerge from the ashes of “The Worst Decade in American History: 2011-2020.” Women leaders will emerge not just because the males’ short-term brains are sabotaging America’s long-term needs, but because the female brain has naturally evolved for long-term thinking.

Brain research tells us that 75% of men are left-brain short-term thinkers. Conversely, 75% of women tend to have strong right-brain traits: forward-thinkers, more awareness of the future, the big picture, with a strong sense of long-term benefits and consequences, peacemakers.

In future columns we’ll dig more into the role of women as the new leaders in a post-capitalism, post-patriarchy America. But for now, take these 10 predictions seriously, invest wisely, defensively, and don’t be misled by Wall Street’s happy talk