Acid Test Results - A Post Mortem

What happened to change and hope?

When Obama was inaugurated I posted my thoughts about the likelihood of the Obama administration doing the right things: This is the acid test. In it I said "If Obama can't pull it off, no one can I suspect."

Obama was clearly a different kind of politician, or at least seemed so in contrast to the other candidates and the previous administration. I think a large majority of us looked upon his election as a real relief. My own thoughts were that now we might have someone who would dare to tell the truth about climate change and energy depletion and would use the bully pulpit to promote real action. Of course I realized that the vast majority of people who supported Obama had something a little different in mind. For them the issue was getting the economy going again, ending the wars, and basically returning to that seemingly prosperous time of the late 1990s. The majority wanted and believed in business as usual (BAU) only colored green somehow. I just wanted him to address the fact that we would never go back to BAU, even green. The days of cheap energy were over and the sooner this was acknowledged the sooner we start to take actions that might spare us the worst possible outcomes. I reserved the right to be skeptical, of course. That is why I called it the 'acid test'.

In Feb. I revisited the situation in The acid test revisited. There I gave the President good marks for choosing the right problems to tackle, but had to slam him for his objectives. My greatest fears were being rekindled by his appointments to key economic positions. As is now all too apparent the positions taken by, Treasury Secretary Geithner, National Economic Council Director Lawrence Summers, and the other White House minions, along with keeping Federal Reserve Chairman Ben Bernanke in place have led to a crises in the real American economy — not the bankers and Wall Street jockeys mind you — with real unemployment at something close to 17% (the government statistics ignore those who have given up looking for jobs).

Actually I reported the final results of the acid test back in August: Is Obama passing the acid test? I pretty much wrote him off since the stimulus package was clearly designed to help the fat cats and not very geared toward the would-be working stiffs who were losing their homes. Now some thoughts on the post mortem of American politics and governance

Broken political process, broken governance process

The skill set needed to win elections isn't the same skill set needed to govern. That is the great flaw in the American political framework. Whereas partisan politics are useful for sorting out the issues and debating the qualities of candidates during primaries, bringing the same partisanship (based on pure ideology) to the Senate floor is completely wrong. Governors need to be more like scientists, look at and use the best evidence available to debate legislation. Then there is the situation with lobbyists. Once upon a time, lobbyists sort of did provide legislators with information. Unfortunately as TV campaigning became more expensive and lobbyists started providing more than information the whole process broke down. Getting elected meant collecting lots of money. And it was the monied interests who could field the best promoters/lobbyists. Now the game the politicians have to play is completely different from what it should have been.

One of Obama's campaign promises was to do something about K Street. He could certainly ban the lobbyists from the White House. That would be a start. But it never happened. Indeed what we've witnessed in the on-going saga of health care reform is an elevated role for lobbyists in the process. Sure Obama may argue that looking for a compromise on multiple issues, like the public option, will require all parties cooperation and he would, perhaps, assert that he has to invite the various business interests to the table to hash things out. But is that really true, or is it just convenient?

Obama promised change; change we could believe in. Today there are quite a few dissatisfied folks who have yet to see any results of change. Right now it still looks like the fat cats rule and are going to increase the disparity in incomes between the rich and everybody else.

I suspect it is all part of an intentional illusion, designed to lull the public into waiting just a few more years until the real shit hits the fan. We have been fed the story that if we can just get the economy going again, all will be well. But it is crap.

Trying to restore to a growth-oriented, consumer-based economy is impossible. Growth and consumption depend on cheap energy flowing through. And we have long passed the point at which net energy flow is growing faster than we can produce assets. Indeed, for all we know net energy flow could now be in decline. We don't measure it in any meaningful way. Everyone in the energy business has focused on gross oil production and oil prices. But it is the net flow that powers the economy, that drives the production of wealth. And with the peaking of net energy from all sources without a substantial and expensive crash build-out of an alternative energy infrastructure, we will never be able to recover the flowthroughs needed. Ever.

The old economy is never coming back. We might restore some segments of the old economy, as now the bankers and Wall Streeters seem to be doing OK. But it will be very spotty and short-lived. The financial system is ultimately based on the real asset economy even if it has become over abstracted from its basis. So even if the banks are reporting profits now, even if the stock market is up, it won't be for long. You can't create wealth without increasing energy flow. It is just that simple.

And Obama seems oblivious to this. All of his financial advisers are oblivious. The majority of citizens are oblivious. The corporate giants are oblivious. Or maybe instead of going to regular school and learning some basic science all of these people went to Hogwarts and learned magic. Maybe I and my colleagues are the only ones who don't know that you really can have a free lunch; that you really can make something out of nothing.

An alternative hypothesis, one that keeps the illusion of hope alive, is that Obama IS aware and is blocked by potent forces that prevent him from telling the people the truth. It is easy to imagine the power brokers (Bilderberg conspiracy anyone?) using Obama as a perfect puppet, keeping the people filled with hope while all of the remaining wealth is confiscated by the rich and powerful. Because some of these power brokers must know the truth. It is just high school physics for god's sake. What would you do if you were a master of the universe and if you knew the world as we've known it was coming to an end; that all the wealth that would ever be created would soon be all there was? If word got out there would be a concerted attempt to hoard. There would be violent competition for the spoils. The only way to prevent that would be to keep everybody hoping for a better outcome by telling them that such an outcome was still feasible. Then by the time it became clear to all that it wasn't, it would be too late.

These ideas are floating around even now. It is pretty damn hard to explain the failures of governance and the disappointment in Obama without invoking some kind of conspiracy theory. Most people already succumb to the feeling that their lives are fated (ill in this case).

Personally I don't know. I don't have an explanation. I just know that we are still headed at pellmell speed toward a gigantic cliff and there is no attempt to even test the brakes let alone push the brake peddle to the floor. We are either in the hands of conspirators or the hands of idiots (or as I fear, idiotic conspirators!) But then, I'm the one who has been claiming all along that humans are just not very sapient after all.

Comments

[GaryA]

I fear Obama is the US version of Tony Blair. Apologies Tony B.lair....All the progressive hope and spin were nothing but an electroral ploy and a continuation of the neoliberal policies of Thatcher. Not just a continuation an intensification, nu-labour under blair (and now Brown) have taken worship of marketology and elites to heights even maggie would have hesisted to impliment.
I actually met Blair before he became PM in '93 presenting medals at the Ferryhill wild boar x-country run. I reluctantly shook his hand while thinking what a phoney charachter he was- my instincts were spot on.
Who knows if obama can emiulate Blairs level of betrayal and abject surrender to corporate interests- he is heading on that road.
Somewhere along the line politicians forgot they are there to serve not 'govern' Its that ideology of control and domination( measuring, targeting blame culture) over areas where politics does not belong -education & health for a start-which contributes to the crumbling tower of civilisation before us.
Actually Gordon Brown recently had the only decent idea of his life-unlike Blair who never had one- and that was the necessity for a global Tobin tax on all financial transactions to plough back some of the stolen monies from the banks and speculators. Needless to say half the worlds governments Including the US rejected it outright...vested interests rule ok.
Any objective observer of todays insane world would be flabberghasted- after the greatest financial crash in history they cant even manage to impose a 0.05% tax on the planetmongering shagwits responsible for it!..
It is beyond any kind of rational comment and the eventual siesmic crash of this civilisation is one of the most certain facts of the 21st century.

[Florifulgurator]

Methinks Obama is quite a change. Perhaps I'm too young (and a German anyway), only being aware of U.S. presidents since Reagan. The change, it looks too me, is that you got a serious and intelligent president, all of a sudden. He's so ummm unamerican (with most U.S. congressional faces I immediately associate either plastic or alzheimer - not with Obama).

And remember, he's no scientist. Our chancellor Merkel got a PhD in physics - still I feel Obama got no less grasp of physical reality than Mrs Merkel.

There is of course the problem of political reality. How to get rid of folks like Geithner and Summers? I fear the only way is to let them hit the wall, like Greenspan (poor ol' man). How else to make obvious there's a wall ahead? Nobody wants to see it - so they need to hit it. Hominids...

Yeah, it's more a hope of mine that Obama is thinking thus. More plausibly he employed these guys because he had no alternative. Politics...

[George Mobus]

Flor,

Hope springs eternal. Until you amass sufficient evidence that it is unwarranted.

Obama has played his knowledge cards and we see now his hand is not a winner. Either he really doesn't understand the dangers of a consumer-based economy with growth as the modus operandi, or he is in the pay of those who profit. Either way we are screwed.

George

[Jason]

I'm rather surprised at your optimism. No big change could have delivered in any case as all the pieces were already committed in the game -- the only possible good thing Obama could have done was to become the most hated man in America and guarantee himself a single term _at most_, by ruining all the vested interests and bailing out the people instead of the banks, then preparing the economy for a downturn rather than than an upswing, being prudent, etc.

It wasn't impossible I suppose. You're correct that governing and garnering votes require two different skillsets, but there's no reason why a single person shouldn't possess both. The point is that Obama does not.

As far as explanations go, simple deludedness (=asapience) will do fine as it always has with human beings. People are unable to imagine an economy in which growth doesn't happen, mostly through having hypnotized themselves repeatedly into believing it impossible. If, via deflation, the absolute elite manage to hold onto their wealth at the expense of the middle class, that is when you can up the probability of dictatorship.

When you say this:

"The financial system is ultimately based on the real asset economy even if it has become over abstracted from its basis."

... it made me wonder again whether you have followed the work of John Michael Greer over at www.archdruidreport.blogspot.com -- he's arguing this week for a set of financial indicators that could actually demonstrate this state of affairs to anyone able to read a graph.

Meanwhile, I wondered if you had seen this:

http://unews.utah.edu/p/?r=112009-1

... Tim Garrett at the University of Utah just showed that wealth production is linked to energy at a constant rate throughout world history, kind of interesting.

Sorry to ramble!

[George Mobus]

Jason,

What optimism???

As to possession of skill sets. I still think that being a vote-getter in the climate of politics in the US and being a leader in the face of insurmountable odds really are mutually exclusive. Once, long ago, an Abe Lincoln could do the job. But he didn't have big corporations and K-street to deal with. To get votes today for almost any national office, you have to sell your soul. I can't help but feel that the old saying 'fools rush in where wise men fear to tread' applies.

Asapience! I like it.

I have read some of Greer's work when it shows up on The Energy Bulletin. I just don't have time to scan the horizon the way I wish I could. Greer did recommend one of my posts not to long ago. My blog hit count soared that day!

And that Utah news was great. I e-mailed Charlie Hall as soon as I scanned it. Here is a kindred spirit so thank you so much for posting the link.

Ramble on! You've hit some jewels!

George

[Jason]

Uh-oh you've encouraged me now. :)