Once Upon A Time
One upon a time, you earned money by making goods and providing services which you then bought. You bought a house with a large deposit you saved up for. If you built, more often than not, basic services turned up much later.
Your post war government tried to immunise you against parasites (mainly landlords in those days). It underwrote private sector failures by spending to ensure that most citizens were able to live the good life.
Your government for most of this time was the conservative, mis-named Liberal party.
Your opposition was the unelectable Labor party, a product of the horrors of the British industrial revolution. It was spawned in our 1890s depression, and was prominent in the 1930s depression.
There were no Greens.
Voters, post war, demanded that governments provide full employment. They had memories of the great depression, and of war.
Menzies spent to ensure full employment, lest he be voted out. And, he almost was when unemployment nudged over 2% in 1961.
His government spent to protect local industry.
It owned a bank.
It funded public housing.
It educated to senior level, and funded the university sector.
It provided skills education for the private sector.
It funded public hospitals.
Unions and capital negotiated shares of the productivity gains.
Home ownership was high. Full employment was the norm. Energy prices were steady, and low.
Many policies were anathema to the capital interests that Menzies represented. But he was smart enough to leave things be, and to exploit a weak opposition.
There was little interest in social matters. There was no understanding of the role of dense energy and commodities in the economy. The environment was where you dumped waste. There was no concept of finite.
During the war, the US rejected Keynes's bancor, a proposed supranational currency for handling trade in an equitable manner. The US imposed its gold backed currency in lieu of the bancor, and the rest is history.
The US was a net exporter, and it owned most of the gold in the world. It was, without doubt, the wealthiest and most powerful nation on earth. But, would it use its power wisely and equitably? A nation built on slavery.
Many wars ensued, concluding with Vietnam. The world was flooded with US dollars. They were promptly exchanged for gold.
In 1971, Nixon unpegged the dollar from gold to stop the bleed. Now the US could make as many dollars as it wanted out of thin air. It had become a fiat currency backed by military might.
The rest of the world had no option but to move to floating exchange rates. They parked their idle US dollars in interest bearing treasury bonds.
How does today compare?
You've been voting neo-liberal. You've taken no interest in your democracy. Your government has followed the US into war after war. You even allowed the US and UK to change our democratically elected leader (Whitlam in 1975). Today's outcome is the culmination of 50 years of apathy.
US$20 trillion in US treasury bonds will never be repaid. That's from the horse's mouth.
The US dollar is in decline as a reserve currency. China, Russia and Iran are de-dollarising, moving back to gold and introducing an alternative payments system. The US's financial weapons are losing their potency.
Peak oil and future economic collapse are long forgotten. That happened as soon as more oil was discovered.
The environment is being orchestrated by capital. There's lots of money being made.
Few think that rampant capitalism is going away. The death throes have started.
The population has doubled to 8 billion. It guarantees that there won't be enough energy and resources in the future for anyone to live as the developed world does now.
Theft is now institutionalised. Systematised. Made legal.
A major rentier sector has grown from nothing. The finance sector.
The sheep can't make ends meet. They're 'eating credit' and other noxious stuff, like there's no tomorrow. Which might be the case if some doddering old fool presses the wrong button.
Massive tranches of household and business debt can never be repaid. We're awash with zombies banks and businesses.
Plutocrats own most of the assets. They sleep in their beds while their pockets fill with sheep money.
The technocrats have taken the rentier business to new levels. The economists, accountants, lawyers, managers et al. What a waste of resource and leadership.
Robopaths are everywhere, enforcing this, and enforcing that. There's more to do when dissidence is illegal.
The technosphere is consuming us, and we're not seeing the danger. Why would you let your kids near a screen?
You no longer earn money making stuff. The 9 car manufacturers are long gone. Those skilled jobs have been exported, replaced in part by a gig economy, and lots of bullshit jobs. We're still digging holes, but that's lost its investment appeal.
The problem with unavoidable debt and other rentier imposts is that households have little money left to spend, and businesses have few opportunities to invest. The parasites are slowly killing their host.
That's the money side but, of course, economies don't run on money.
Economies are driven by burning energy dense fuel which increasingly can't be afforded. Production and distribution costs can't go down as we run out. We used all the good, low cost oil first.
Energy cycles through depletion and discovery. But as the cost of energy increases, the surplus available for discovery reduces.
Energy is now at record depletion rates. Discovery and reserves are at record low levels.
Everyone games reserves, but they can be intuited as low. Why else would they be fracking, drilling under the sea, squeezing oil out of sand...?
It's true that new discoveries extended the lives of many economies. That's not going to happen in future for the simple reason that you can't discover something if you're not looking.
Your government no longer immunises you against parasites. The parasites have infected your government.
You don't think your government is democratic do you? Can you guess where ScoMo's orders come from?
Your government still underwrites private sector failures but not by spending to ensure that all citizens are able to live the good life. Now it's about keeping zombie banks and businesses afloat.
The joy of turkeys like ScoMo being able to create money out of thin air. What could go wrong?
Life has been going downhill since the global reserve currency turned fiat in 1971.
Your conservative government is a right wing, neo-liberal abomination lead by a nondescript little man.
Your opposition is an unelectable, neo-liberal disgrace to its heritage. I can't remember his name.
Inflation (assets) has replaced full employment (people) as the benchmark for government.
Unemployment, given the monetary power of the State, is a policy decision. ScoMo and his cronies have chosen unemployment, and the voters have accepted that.
Menzies spent to ensure full employment lest he be voted out.
ScoMo spends to defend and maintain the value of assets.
ScoMo allows loose credit while underwriting a corrupt, (undeclared) bankrupt, financial sector.
Your government no longer spends to protect local industry. Your government sold its bank, removing any chance of wrestling the payment system away from our US owned banking cartel. Foreign banks, building societies, credit unions, co-ops are marginalised.
Your government no longer funds public housing. Even though the market fails to supply.
The most indebted country on the planet enjoys the highest property values. A whole generation has been consigned to the gig economy and shared rentals or worse, to a life of unemployment and homelessness.
The university sector has been privatised. Government credit cards have been given to children to fund their educations. What could go wrong?
Your government provides skills education if you're prepared to go into debt.
Your government reluctantly funds public hospitals and schools, and medicare. The great con is that it has to borrow to provide the meagre resources that it allocates to these essential services.
Will voters ever understand that government and banks create money out of thin air? Why do they borrow their own currency if not to fool you, and to provide welfare to their business cronies?
Wake up, Jeff.
You can't create money out of thin air. You're a user of money created by crooked government and banks.
Unions are marginalised, and productivity gains have gone to capital.
Inflation adjusted wages have been in decline. Indebtedness is increasing and, more importantly, energy prices are increasing. Without a debt write-off, households and businesses will be unable to afford the energy prices that producers need to stay in business. Without affordable dense energy, economies collapse.
A debt write-off will be a temporary reprieve. Eventually, we will run out, and then, it's game over.
Hello Sun my old friend.
In between, at any time, war may intervene. Tensions are escalating as the powerful manoeuvre for what's left. ScoMo has bet that the US will secure it, and share with us.
Half of you voted for him. What do you think?