Signs of the Economic Apocalypse 11-28-05

From Signs of the Times 11-28-05:

Gold closed at $497.10 an ounce on Friday, up 2.2% from $486.40 at the previous week’s close. The dollar closed at 0.8547 euros, up 0.6% from 0.8495 the week before. The euro closed at 1.1700 dollars compared to $1.1772 at the end of the previous week. Gold in euros, then, would be 424.87 euros an ounce, up 2.8% from 413.18 euros the Friday before. Oil closed at $58.03 a barrel, up 1.4% from $57.21 at the end of the previous week. Oil in euros would be 49.60 a barrel, up 2.1% from 48.60 the week before. The gold/oil ratio closed at 8.57 up 0.8% from 8.50 at the end of the previous week. The yield on the ten-year U.S. Treasury note closed at 4.44%, down six basis points from 4.50 the Friday before. In U.S. stocks, the Dow closed at 10,931.62, up 1.5% from the previous week’s 10,766.33. The NASDAQ closed at 2,263.01, up 2.5% from 2,227.07 the Friday before.

The week ended strong for the U.S. economic numbers partly due to a strong gain in Friday-after-Thanksgiving retail sales over the same day last year:

Weekend Sales Jump 22% to $27.8 Billion, NRF Says

Nov. 27 (Bloomberg) -- U.S. retail sales jumped 22 percent to $27.8 billion during the post-Thanksgiving weekend, as shoppers flocked to stores to buy electronics, clothing and books, the National Retail Federation said.

Shoppers spent an average $302.81, the Washington-based trade group said today in a statement. It said 145 million shoppers went to stores and the Internet, as retailers offered substantial discounts.

The statement followed positive reports from retailers as they offered giveaways and price cuts to generate the 6 percent holiday sales growth forecast by the NRF. Wal-Mart Stores Inc., the world's largest retailer, said yesterday that November comparable-store sales at its U.S. outlets rose about 4.3 percent, helped by a strong start to the holiday shopping season.

“Even though many retailers saw strong sales this past weekend, companies will not be basking in their success,'' said Tracy Mullin, the NRF's chief executive. “Stores are already warming up for the next four weeks because the holiday season is far from over.''

In a separate statement issued yesterday, Visa USA said retail spending on Visa credit and debit cards rose 12 percent on the Friday after Thanksgiving, led by purchases of electronics and computers. Research-company ShopperTrak RCT Corp. said sales on Black Friday were little changed from a record set a year earlier. The day after Thanksgiving got its name because it's when many retailers were said to become profitable for the year.

Consumers were shopping for a variety of merchandise, with the electronics category showing the largest year-over-year jump, the NRF said. About 37 percent of shoppers bought in that category, up from 33 percent a year ago, it said.

Once again, we see generally good short term numbers together with a frightening longer-term situation. Last week, for example, saw the announcement Monday of cutbacks at General Motors of some 30,000 employees. Coming on the heels of layoffs at Ford and the problems of Delphi Auto Parts, it is becoming clear that we are seeing more than just a cyclical downturn in U.S. auto manufacturing, we are seeing the complete restructuring of the economic landscape and of the whole social contract in the United States:

GM job cuts will devastate North American cities

By Joseph Kay and Barry Grey23 November 2005

General Motors’ plan to eliminate 30,000 hourly jobs by 2008, announced Monday in Detroit, will have devastating consequences for cities in the United States and Canada, and its ripple effects will hit working class communities throughout the two countries. The closure of twelve facilities will reduce the auto maker’s manufacturing jobs in North America by nearly a third.

Taken together with hourly and salaried job cuts already announced this year by GM, Ford and the auto parts makers Delphi and Visteon, Monday’s announcement brings the total of auto jobs targeted for destruction to 60,000, and this does not take into account the impact of Ford’s downsizing plan, to be made public in January. The number two US auto maker has made clear that it intends to eliminate thousands of jobs and permanently close a number of factories.

Since 2000, more than 100,000 hourly and salaried automotive jobs have been eliminated in the US. The latest GM cuts are part of a longer-term trend in which corporations have wiped out jobs that once provided a relatively stable livelihood for manufacturing workers. Through major struggles in the 1930s and into the post-war period, workers were able to win concessions in pay and benefits. This was particularly the case in the auto industry.

For the past quarter century, beginning with the Chrysler bailout of 1979-80, the auto companies have been downsizing their work forces, closing plants, and using the prospect of unemployment as a club to impose wage concessions and chip away at health and pension benefits, as well as previously established improvements in working conditions.

They have been assisted by the United Auto Workers union, which has collaborated in the destruction of jobs and the undermining of wages and benefits in order to boost the competitiveness of the US auto companies against their European and Asian rivals.

This process has reached a new stage, marked by the decision of Delphi, which was spun off by General Motors in 1999 and remains GM’s main parts supplier, to file for bankruptcy protection and demand pay cuts of 60 percent. The company is also demanding sweeping cuts in health benefits and pensions, and plans to eliminate 24,000—or nearly two thirds—of its US hourly work force.

…The measures announced on Monday will be only the beginning for GM workers. On Tuesday, the company’s stock fell for the second straight day, as analysts on Wall Street made clear that the cuts would not be sufficient to satisfy banks and investors.

Ron Tadross of Bank of America continued to give GM stock a “sell” rating, saying he still anticipated the company to end up in bankruptcy. John Casesa of Merrill Lynch said, “It will likely get worse before it gets better. We believe GM’s announced restructuring plan is only the first step in the long process.”

The downsizing of the US auto industry has already produced socially catastrophic consequences in parts of the country, particularly in Michigan, the historical center of automobile production. The Detroit Free Press on Tuesday cited an astonishing statistic, noting that, according to US census data, “Michigan’s median household income has fallen by $9,914—19 percent—between 1999 and 2004, more than any other state.”

This figure crystallizes a historic decline in working class living standards—one that precedes the impact of the new and more drastic assault on jobs and wages.
Giving a sense of the mood among GM workers in the region, the newspaper quoted Robert Paulk, an hourly worker at the Tech Center in Warren, Michigan, who said, “There are a lot of people that are really mad. They think this is the thing that revolutions are made of.”

…The city of Flint is slated to lose over 700 jobs with the shutdown of the Flint North engine line in 2008. The Flint North complex once employed 20,000 workers, including the Buick City complex that closed in 1999. The number of active GM workers in the city has declined from a peak of over 80,000 to just a few thousand today.

Flint will also be hit by Delphi’s plans to close its Flint East plant, which employs 3,400 people. The company has already shut down production at its Flint West plant.

Once known as “Vehicle City,” Flint has become a ghost of its former self. Over a quarter of the population, including nearly 38 percent of children under 18, live below the poverty line. The official unemployment rate stands at 12 percent. Both of these figures—comparable to those found in Detroit—understate the devastation that has overcome the city in the past two decades.

Another Michigan city to be hit by the plant closings is Lansing. The Lansing Metal Centre, which employs 1,360, is slotted to be shut down by 2007, and the Lansing Craft Centre, which employs 450 workers, will close by 2007. Nearly 3,000 jobs were eliminated when the Lansing Car Assembly plant was shut down last year.

Also in the Midwest, GM is planning on eliminating the third shift at its SUV plant in Moraine, Ohio in 2006, a move that is expected to cost 1,000 jobs.

Thousands of jobs will be lost in southeastern Ontario, Canada. GM announced that it will close its Oshawa No. 2 plant by 2008, eliminating 2,500 jobs. It will also eliminate a shift at its No.1 plant, leading to a loss of an additional 1,000 jobs. About 140 jobs will be lost with the shutdown of a parts plant in St. Catharines, Ontario.

An article in the Toronto Globe and Mail on Tuesday noted that the entire economy of the region will suffer. “About half of Canada’s critical auto parts industry lies exposed to the shock waves emanating from the planned closing,” the newspaper reported. According to the article, GM contracts are responsible for half of the 100,000 jobs in the Canadian auto parts industry. An estimated 12,000 jobs in the parts industry may be eliminated as a result of the job cuts at GM.

The economic impact will extend beyond these parts jobs to wider sections of the economy. “Jan Myers, chief economist for Canadian Manufactures & Exporters,” the Globe and Mail reported, “estimates that about nine jobs are created directly in Canada for every auto assembly position. That means the sector generates about 20 to 25 per cent of the total jobs in Canadian manufacturing.”

Outside of the US Midwest and Canada, several major plants will be closed in southern states. GM will sharply scale back production at its Saturn plant in Spring Hill, Tennessee, resulting in some 1,500 job losses. Over 2,500 jobs will be eliminated in Oklahoma City, Oklahoma when a plant there is closed in 2006. And 3,000 workers will lose their jobs in Doraville, Georgia, just outside of Atlanta.

Furthermore, it is hard to get too excited about retail sales numbers in the United States when you think about where the money is coming from: unsustainable debt from an inflated real estate market. Here’s Peter Schiff on the housing bubble:

Contributing to the housing mania is the artificial boost to consumer spending (80% U.S. GDP,) the bubble itself has produced. This acts as a self-perpetuating, “virtuous” circle where increased consumer spending drives housing prices higher, which in turn provides the impetus for still more consumer spending. Through the wealth effect, growing home equity both increases the willingness of homeowners to spend while reducing their perceived need to save. The bubble mentality is “why save when my house is doing it for me.” In the past being a homeowner increased the need to save, as inherent in homeownership are costly repairs. Today homebuyers not only do not need any savings to buy a house, they no longer need any to maintain one either. Is it any wonder that our national savings rate is negative, homeownerships so wide-spread, and real estate prices are so high?

The impetus to spend is not simply the result of a state of mind. The ability to cash out equity enables homeowners to convert paper appreciation into real purchasing power. However, since this extra purchasing power was not derived from legitimate increases in American productivity, the result has been a massive, unsustainable, and completely unprecedented rise in our nation’s trade deficit.

In addition, lower interest rates, and the proliferation of adjustable rate mortgages, have allowed homeowners to temporarily suppress mortgage payments, freeing up additional income for discretionary spending. This temporary boost to consumer spending has been a “shot in the arm” to the economy, increasing employment, incomes, housing demand and home prices, enabling additional cash-out refinancing, and thus perpetuating the cycle.

In Europe, on the other hand, consumer spending has begun to fall, as European consumers seem to still have some grasp of reality:

Consumers set to spend less across Europe
By Elizabeth Rigby in London and Ralph Atkins in Frankfurt
November 22 2005

Signs of a squeeze on Europe’s consumers increased on Tuesday as France and Germany reported slowdowns in household spending and a consultancy said retailers faced difficult trading this Christmas.

The figures highlight the fragility of the recent pick-up in economic activity in the 12-nation eurozone and will sharpen concern over the likely impact of the European Central Bank’s signalled interest rate rise.

The bad news for retailers comes in a report from Deloitte, the business advisory firm, which said spending on gifts was expected to dip by an average 3 per cent year-on-year across nine European countries. In Germany spending on gifts was projected to tumble 9 per cent. Of the nine countries surveyed, only in Ireland and Spain are shoppers expected to increase spending on presents.

Gilles Goldenberg, partner at Deloitte, said: “Spending was growing year-on-year until 2003 but since then there has been a change which seems to be turning into a trend. European consumers were told that 2005 would be a good . . . they were sold a recovery that has not taken place. The anticipation for 2006 is gloomy and spending power is perceived to be reduced.”

Mr Goldenberg said Europeans were anticipating a drop in disposable incomes on the back of low wage increases and rising household costs, echoing comments last week by Mervyn King, governor of the Bank of England. He said spending in the UK was being squeezed by higher taxes and the cost of “boring” items such as petrol and mortgages.

In France household spending on manufactured goods fell 0.6 per cent in October against a 0.3 per cent fall the previous month, although overall the three months to September had seen robust growth.

In Germany household consumption fell by 0.2 per cent in the three months to September, the third consecutive quarterly contraction. Erik Nielsen at Goldman Sachs, said: “While companies are cash-rich and boosting profits, real incomes have not seen much improvement and have been hit by higher oil prices. The recovery is really fragile and I can’t really see it taking root across the eurozone without private consumption.”

The European Central Bank’s decision to press ahead with a rate increase next month was indicated by Jean-Claude Trichet, ECB president, last week.
The move prompted speculation that he had been bounced into exerting his authority by signs of disagreement among members of its 18-strong governing council.

Jean-Marc Lucas at BNP Paribas, said French consumption was expected to slow in the fourth quarter. He said that with no sign of an improvement in wages, spending patterns would depend, crucially, on whether consumers used savings instead.

Deloitte’s survey, which covered 7,000 consumers, said 49 per cent of Europeans believed their economies were in recession.

The contrast in consumer psychology between the United States and Europe couldn’t be clearer. European see low wage increases, troubling political storms on the horizon with the French riots, and real danger of a world war breaking out in the Middle East, and they cut back on spending a bit. Maybe they begin to think about using their savings. But Europeans have maintained social memory about real and complete devastation in the twentieth century and have felt an anxious need to save even during good times. United States consumers see widespread wage cuts and the massive export of middle-class jobs yet they are able to increase spending. In the United States, we have gone through our savings a long time ago and have been borrowing on our inflated houses to maintain consumer spending. Oddly enough, this spending in the United States may no longer be based on optimism but on fatalism. Polls have shown that most in the United States think the economy is getting worse and the country is on the wrong track. Why not enjoy things while we can, seems to be the attitude. Fear and uncertainty seem to make Europeans save and North Americans spend. As we saw last week, though, the plans made for the majority of the people on both continents by the elite seem to be the same: serfs in a new, high- tech capitalist feudalism.

Signs of the Economic Apocalypse 11-21-05

From Signs of the Times 11-21-05:

Gold closed at 486.40 dollars an ounce on Friday, up 3.5% from $470.00 for the week. The dollar closed at 0.8495 euros Friday, down 0.4% from 0.8531 the previous Friday. The euro, then, closed at 1.1772 dollars, up from $1.1722 the week before. Gold in euros, then, would be 413.18 euros an ounce, up 3.0% from 400.96 at the previous Friday’s close. Oil closed at $57.21 a barrel, down 0.6% from $57.53 the week before. Oil in euros would be 48.60 euros a barrel, down 1.0% from 49.08 the week before. The gold/oil ratio closed at 8.50, up 4.0% from 8.17 at the previous Friday’s close. In the U.S. stock market, the Dow closed at 10,766.33 on Friday, up 0.8% from 10,686.04 for the week. The NASDAQ closed at 2,227.07 up 1.1% from 2,202.47 the Friday before. The yield on the ten-year U.S. Treasury note was 4.50% down seven basis points from 4.57 at the previous week’s close.

Except for the continued rise in gold, it was again a pretty good week for the U.S. imperial economy with oil down, stocks up and the dollar preserving recent gains against the euro. On the other hand, there are more and more troubling reports in the mainstream media about housing and the triple deficits. Fear and pessimism regarding the future compete with a somewhat prosperous present to give an eerie air of unreality about the U.S. economy. A quote from the new Flashman book by George MacDonald Fraser sums it up:

You can always tell when something is coming to an end. You know, by the way events are shaping, that it can’t last much longer, but you think there are still a few days or weeks to go . . . and that’s the moment when it finishes with a sudden bang that you didn’t expect.

This week USA today ran the following article on the front page. Note the disaster metaphor:

A ‘fiscal hurricane’ on the horizon

By Richard Wolf, USA TODAY

WASHINGTON — The comptroller general of the United States is explaining over eggs how the nation’s finances are going to hell.

“We face a demographic tsunami” that “will never recede,” David Walker tells a group of reporters. He runs through a long list of fiscal challenges, led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades.

The breakfast conversation remains somber for most of an hour. Then one reporter smiles and asks, “Aren’t you depressed in the morning?”

Sadly, it’s no laughing matter. To hear Walker, the nation’s top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is “worse than advertised,” he says. It has a “broken business model.” It faces deficits in its budget, its balance of payments, its savings — and its leadership.

Walker’s not the only one saying it. As Congress and the White House struggle to trim up to $50 billion from the federal budget over five years — just 3% of the $1.6 trillion in deficits projected for that period — budget experts say the nation soon could face its worst fiscal crisis since at least 1983, when Social Security bordered on bankruptcy.

Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon.

From the political left and right, budget watchdogs are warning of fiscal trouble:

•Douglas Holtz-Eakin, director of the non-partisan Congressional Budget Office, dispassionately arms 535 members of Congress with his agency’s stark projections. Barring action, he admits to being “terrified” about the budget deficit in coming decades. That’s when an aging population, health care inflation and advanced medical technology will create a perfect storm of spiraling costs.

•Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, sees a future of unfunded promises, trade imbalances, too few workers and too many retirees. She envisions a stock market dive, lost assets and a lower standard of living.

•Kent Conrad, a Democratic senator from North Dakota, points to the nation’s $7.9 trillion debt, rising by about $600 billion a year. That, he notes, is before the baby boom retires. “We’re not preparing for what we all know is to come,” he says. “We’re all sleepwalking through this period.”

•Stuart Butler of the conservative Heritage Foundation projects a period from now until 2050 in which tax revenue stays stable as a share of the economy but Medicare, Medicaid and Social Security spending soars. To avoid big tax increases, he says the government has to “renegotiate” the social contracts it made with its citizens.

•Alice Rivlin and Isabel Sawhill of the centrist Brookings Institution put their pessimism into a book titled Restoring Fiscal Sanity. Rivlin, who became the first director of the Congressional Budget Office in 1974, says it will take an “economic scare” such as the 1987 stock market crash to spur action. Sawhill likens the growing gulf between what the government spends and takes in to a “Category 6 fiscal hurricane.”

‘The Fiscal Wake-Up Tour’

They are the preachers of doom and gloom. Liberals and conservatives, Democrats and Republicans, they are trying to be heard above the ka-ching of the cash register as it tallies the cost of government benefits and tax cuts, Iraq and Hurricane Katrina. To raise their profile in recent months, several have traveled together to places such as Richmond, Va., and Minneapolis for what they call a “Fiscal Wake-Up Tour.”

Leon Panetta, former White House budget director and chief of staff to President Clinton, calls them “disciples of balanced budgets. ... And at some point, they’ll be proven right.”

So USA today is telling us we need to expect much less from government. Here’s the New York Times, in an article about the impact of General Motors’s problems on a forty-nine year old auto worker’s family, telling us not to expect anything from corporations:

For a G.M. Family, the American Dream Vanishes

By Danny Hakim

Flint, Mich. - Four generations of the Roy family relied on General Motors for their prosperity.

Over more than seven decades, the company’s wages bought the Roys homes, cars and once-unimaginable comforts, while G.M.’s enviable medical and pension benefits have kept them secure in their retirements.

But the G.M. That was once an unassailable symbol of the nation’s industrial might is a shadow of its former self, and the post-World War II promise of blue-collar factory work being a secure path to the American dream has faded with it.

After a long slide, it now looks like the end of an era. “General Motors, when I got in there, it was like I’d died and went to heaven,” said Jerry Roy, 49 – who started at G.M. In 1977 and now works on an assembly line at a plant operated by Delphi, the bankrupt former G.M. Parts unit that was spun off in 1999.

When Mr. Roy was hired at G.M., nearly three decades ago, his salary more than doubled from his job at a local supermarket. He traded in his five-year-old Buick for a new Chevy and since then he has done well enough to buy a pleasant house on a lake near Flint.

But now he faces the prospect of either losing his job or accepting a sharp pay cut. And for those coming after him, “it’s just sad that it’s ending, that it looks like this,” he said. In his hometown, he added, “all these places that used to be factories are now just parking lots.”

Those factories supported the Roy family for generations.

Jerry’s great-grandfather, John Westley Roy, came to Michigan from Missouri in 1931, in the depths of the Depression. He built a home five blocks north of a plant operated by General Motors’ AC Delco division and worked there for a decade before he was injured and retired to a farm.

Mr. Roy’s grandfather, Edward, worked at the Delco plant during the war, when it was converted into a machine-gun plant: he would tell a story about a day one of the guns came off a mount and began shooting holes in the wall of a cafeteria.

Mr. Roy’s father, Gerald, started at G.M.’s Fisher Body unit in 1951, was laid off after a year and a half, and then got a job in 1954 at AC Delco. Gerald’s sister, uncle and future wife, Delores, worked at the plant.

The elder Mr. Roy remembers the 1950’s and ‘60’s as a golden era, when everything seemed possible.

“There were three shifts – they worked around the clock,” he said of the AC Delco plant, adding, “you’d go in there and you couldn’t even hardly walk.”

Buoyed by such prosperity, the auto industry was the pioneer in advancing what became the American model for the social contract between workers and their employees – from the $5 a day Henry Ford offered workers in 1914 to the all-inclusive health care and pension benefits that became a mainstay of the vast expansion of the middle class in the second half of the 20th century.

In many ways, it was not the government but Detroit and other major industries, at the prodding of their unions, that created the American-style social safety net, and helped foster the shared prosperity that is now fracturing.

“The days when blue-collar work could be passed on down the family line, those days are over,” said Gary N. Chaison, a professor of labor relations at Clark University in Worcester, Mass. “Where you did have automobile plants, it was always looked at as an elite job. It was hard work, but good, steady work, with wonderful benefits and good solid pay, and you were in the upper middle class.”

Now, with G.M. And other domestic automakers and suppliers fighting to survive brutal global competition, Detroit is planning to cut even more manufacturing jobs. At the same time, the industry is moving to rewrite or even tear up its labor contracts in a bid to turn itself around by drastically reducing both wages and benefits. Today, Mr. Roy and Gerald, 71, who once helped him get his job, are both preparing to make sacrifices.

…Not only is the company seeking to cut two-thirds of its 34,000 hourly workers in the United States, it wants to cut wages to as little as $10 an hour from as much as $30.

…Delphi is also seeking major cuts in the health care and pension benefits of retirees, though under the terms of the spinoff of Delphi, G.M. Would have to assume much of those costs, setting up a further quandary because simply dumping troubles on G.M., its largest customer, is not necessarily palatable to Delphi or the union.

Delphi plans as well to do more of what it has been doing since its spin-off, by continuing to shift thousands of jobs overseas. An internal memo obtained earlier in November by The Detroit News listed the Flint plant where Jerry Roy works among factories intended for closing. Delphi has called the memo incomplete and preliminary.

Delphi puts the choices facing Detroit and its workers in starkest relief. G.M., at least so far, has sought a more compromising approach, in large part because automakers face slightly less-onerous competitive dynamics than their suppliers.

In early November , U.A.W. Members reluctantly agreed to allow the company to shave $15 billion, or nearly 20 percent, from its retiree health care liability. The elder Mr. Roy and other retirees will now be required to pay monthly premiums, deductibles and co-payments for medical services for the first time, with costs of as much as $752 a year.

For his part, Gerald Roy is more worried for his son Jerry than himself.

“What worries me the most, or bothers me the most, is him working for 28 years for G.M. And he might lose his retirement,” he said.

But the Roys are the lucky ones. Gerald and his wife, Delores, another G.M. Retiree, are healthy and not on medication, and their son is single and does not have any children. They are both aware that the good life that auto work has afforded their family for four generations, and for hundreds of thousands of other families in Michigan and elsewhere across the country, is ending.

Indeed, others face more difficult times.

“We’re going to have to make a choice between what bill to pay, whether to go to the doctor,” said Larry Mathews, who works at the same Delphi plant as Mr. Roy and is also the editor of The Sparkler, a paper for plant workers. If the pay cuts go through, Mr. Mathews said he would no longer be able to afford his son’s college tuition.

“I know I’m going to have to call my son at Central Michigan and tell him to come home,” he said. “I bet those executives don’t have to make those calls.”

Like Gerald Roy, Mr. Mathews’s father retired from G.M. At a time when the bond between the company and its workers was still strong. Mr. Mathews’s father died from an asbestos-related illness stemming from his plant work. Even so, Mr. Mathews said his father, who became ill in his late seventies, refused to sue.

“He said, ‘This place paid for everything I got today; I’m not going to sue them now,’ “ Mr. Mathews recalled.

But now, Mr. Mathews makes clear that he has no desire for his own son to continue the family tradition.

…Not that anyone has much chance of getting a job at these companies anymore. Wages are less important because the industry is so much more efficient than it used to be and has already cut so many jobs.

G.M. Plans to cut its blue-collar work force even further, though, to 86,000 Americans nationwide by the end of 2008, about the same number of people it once employed in Flint alone in the 1970’s. At its peak, G.M. Employed more than 600,000 Americans.

“Frankly in our business, the progress in improving productivity has been dramatic,” Mr. Wagoner said. “Over a 10-year period, we have gone from a ballpark of 40-plus hours a vehicle in assembly to 20-plus hours a vehicle.”

Benefits are another matter. G.M. Pays about $1,500 per car assembled in the United States for health care, more than it spends on steel.

More than steel? How terrible! I would hope they pay more for employee health care than they do for steel. Notice they don’t say, “for a little more than what they spend on steel, a basic commodity, they are able to provide health care for all their employees and retirees.”

Even with the coming cuts for retirees, the elder Mr. Roy is not concerned; he is actually more worried about paying heating bills for the large house he built two years ago, abutting woods just outside Flint.

…But his son Jerry, knowing that his job may disappear and that his pay is likely to shrink no matter where he ends up, faces much greater uncertainty.

“What can you do?” Jerry asked. “People survive somehow, regardless of what happens. I mean, it’s sad, I could cry all night, but I’ll figure out a way to get by – somehow.”

Turning to Europe, whenever a country has the misfortune to be ruled by a “grand coalition” the one benefit is that the mask of there being any real political “opposition” in a bourgeois democracy is taken off. In Germany, where, in recent elections, a majority voted against any cutbacks in social benefits, a grand coalition has been imposed on the country for the purpose of ramming through anti-labor measures under the cover of “competition” and “efficiency.”

German coalition government accord: a declaration of war on working people

By Dietmar Henning

19 November 2005

On November 14 the party congresses of the Social Democratic Party (SPD), Christian Democratic Union (CDU) and Christian Social Union (CSU), who make up Germany’s new “grand coalition” government, voted in favour of an agreement that had been made public just two days previously. It is titled: “Together for Germany—with courage and humanity.” Its contents represent a declaration of war on working people—in both an economic and political sense.

Both the SPD and CDU/CSU rejected initial criticism of the accord by referring to the “compromises” which had to be made. This was how it had to be in a grand coalition, they claimed. The election result allowed no other possibility. This is an outright lie. In the coalition accord, two parties which lost support in the election have agreed to the type of right-wing, antisocial program that was clearly rejected on September 18 by the large majority of German voters.

… Next year the coalition plans to radically transform the German system of health and nursing insurance. Both sides want to “impartially” examine the different models. They have already agreed amongst themselves, however, that in the future private insurance provision will play an increasing role in the German insurance system.

Labour policy

The thrust of the coalition accord is most clearly to be seen in its labour policy. The initial period of a employer-employee relationship is to be extended to two years. This represents a major step towards a “hire and fire” jobs system whereby in these first two years the employer can terminate an employee’s job with two weeks’ notice and without having to provide a reason. As the document suggests, all those elements in the field of employment policy which are “ineffective and inefficient will be abolished.”

…All in all, the SPD and right-wing union parties want to save €4 billion annually from unemployment allowances which, they claim, have “gotten out of control.” Parental support for their older children is to be cut and the considerable cuts in unemployment payments are to take place as part of a campaign against alleged “abuse” of the payments system.

The recent brochure produced by the outgoing economic and employment minister Wolfgang Clement (SPD) “against abuse, spongers and self-service in the welfare state,” in which the unemployed are referred to as “parasites”—language also used by the Nazis against its opponents—is to be the ideological basis for this campaign against the most deprived social layers. Measures giving the authorities the right to check the data of unemployed persons—via pension savings, health insurance companies and banks—to determine “cases of abuse” are to be intensified and such checks can be carried out four times annually.

According to the plans of the grand coalition, the unemployed are to be transformed into an enormous army of cheap labour lacking any basic rights. New measures will expand the field of cheap wage work. Unemployed Germans will be forced to replace low-wage workers from eastern Europe who currently assist with the asparagus or fruit harvest.

…An Intensified “Agenda 2010”

The policy of the grand coalition which emerges is an intensified version of the Agenda 2010 introduced by the coalition government of the SPD and Green Party, led by chancellor Gerhard Schröder, that has just been voted out of office—i.e., a huge redistribution of wealth from the poor to the rich.

…The coalition accord officially departs from the conception that politics can regulate fundamental social issues and secure the elementary needs of the population. There is no attempt to make the case that the grand coalition can address and overcome Germany’s most pressing social problem—mass unemployment. The agreement is exclusively concerned with the reorganisation of the state budget in the interests of big business.

There is not a trace of the postwar social reformist doctrine which argued that capitalism or the free-market economy was capable of reconciling opposed social interests. The words “social free-market economy” appear just once in the 191-page contract—in the heading “The right politics for a social free-market economy.”

In an insightful commentary on the agreement, the Süddeutsche Zeitung noted: “The political pragmatism, which here comes to light and which will probably characterise the future government, follows a logic which is equally paradoxical and full of consequences.... Every policy which dedicates itself to the economic and social crisis can in the foreseeable future only be an organisation of asymmetries. No political prescription will be able to prevent the ever dramatic gap between circumstances of income and wealth, no one is capable of stopping the increasing fragmentation of society, never mind the asymmetries between rich and poor countries, which is the source for the enormous worldwide pressure for redistribution.”

This represents a rejection of any form of democracy. If “the ever dramatic gap between circumstances of income and wealth” cannot be remedied then there is also no basis for the maintenance of democracy. Such politics can only be implemented with authoritarian forms of rule.

It is no coincidence that Germany’s recent early election to the Bundestag was arranged as a sort of state putsch—following pressure from business groups and through abuse of the constitution. The declaration of war on the working population contained in the coalition agreement is the direct result of this illegitimate early election.

Armament of the state and the dismantling of democratic rights

The grand coalition is itself very conscious of the potential impact of its plans and is preparing accordingly for coming confrontations with the population. Democratic rights are being restricted and the state apparatus beefed up. Germany’s security and police services are to be expanded. In this respect the new government can draw on the antidemocratic measures introduced by the SPD-Green government and its interior minister, Otto Schily (SPD).

The anti-terror laws introduced after the attacks of September 11 2001, have been re-examined and, as the contract indicates, will be expanded.

…The use of German armed forces for domestic purposes is assured. Here, however, the coalitionists are waiting for an appropriate judgement by the Federal Constitutional Court. If Germany’s highest court decides in favour of the domestic use of the army, then moves will immediately be made to change the German constitution, which currently prevents such a development.

Germany’s leading police authority, the Federal Criminal Investigation Office, is to be allowed to enforce so-called preventive anti-terror measures, which activity until now was the province of Germany’s regional state police. German legal circles are also involved in these changes, which include the introduction of a controversial regulation allowing the judiciary to award reduced sentences to criminals who implicate others. In 1999 a SPD-Green party government refused to renew this measure, which was originally introduced in the 1970s by the state in its campaign against Red Army anarchists.

Now those from the SPD involved in the coalition negotiations have thrown their constitutional doubts to the wind and agreed to the reintroduction of the regulation.

In light of the youth rebellion currently taking place in France one feature of the coalition agreement is particularly remarkable. Not only can the psychologically ill and incurable sexual criminals be locked up in “preventive detention,” i.e., with no time limit on their detention; the SPD and CDU/CSU union politicians have decided to expand this barbaric regulation to young people: “A condition for its imposition [indefinite detention] will be based on the special danger represented by the culprit.” In fact, this ruling opens floodgates that will be hard to close, allowing the state to lock away juvenile offenders for years or even decades.

This is frightening. German business seems to have taken control of the country and pushed it, against the will of the people, into the arms of the U.S./Neocon, global capital, cheap-labor alliance. Similar moves are afoot in France where riots conveniently broke out across the country leading to the resuscitation of the political fortunes of a previously discredited tool of the neocons, Nicholas Sarkozy. This is similar to how political reaction was begun in the United States in the late nineteen sixties, when riots were ignited (it now appears that the sparks that ignited those riots were struck by agent provocateurs—you can see the civil rights leaders of the time laughing ruefully about that now in PBS documentaries) leading to the ascendance of the previously discredited Richard Nixon. We even have Jean-Marie LePen playing George Wallace to Sarkozy’s Nixon:

France’s state of emergency—Sarkozy threatens mass deportations

By Antoine Lerougetel 12 November 2005

Jean-Marie Le Pen, leader of the neo-fascist National Front, who received 18 percent of the vote in the runoff for the presidency in 2002, has enthusiastically endorsed Sarkozy’s actions. He said that he was “very appreciative of the permanent tribute being paid to [him] by Messrs Villiers [Philippe de Villiers, ultra-conservative Catholic monarchist] and Sarkozy, by taking up the slogans and the proposals of the National Front, and thus braving official monolithic thinking.”

Sarkozy has gained the ascendancy over the old Gaullists round Chirac, and wrested the chairmanship of the party from the president’s supporters through extreme law-and-order and anti-labour policies and calculatedly insulting denunciations of the youth of the council estates. His harsh crackdown on illegal immigrants has also been a means of attempting to poach Le Pen’s supporters. As the youth riots flared up, he faced criticism from the Chirac-Villepin camp for having provoked the youth by referring to them as “scum” and “gangrene.”

…By imposing a state of emergency, the French ruling elite has moved toward police-state measures. It recognizes that reducing the living standards and rights of workers to make French big business competitive on the globalised world market requires assaulting democratic rights and legal niceties.

All over the formerly (at least relatively) “free world,” measures have been put in place to allow for indefinite detention, the military to be used for domestic pacification, controls on movements of people and goods in “emergencies,” and to weaken worker rights and strengthen corporate powers at the same time as wealth is being funneled upwards to a wealthy super-elite. Why is this happening so fast, right now?

Signs of the Economic Apocalypse 11-14-05

From Signs of the Times 11-14-05:

The dollar closed at 0.8531 euros on Friday, up 0.8% from 0.8464 on the previous Friday. That put the euro at 1.1722 dollars, compared to $1.1815 the week before. Gold rebounded, closing at 470.00 dollars an ounce, up 2.6% from $458.00 at the previous week’s close. Gold in euros broke the 400 barrier, closing at 400.96 euros an ounce, up 3.4% from 387.64 the Friday before. Oil closed at 57.53 dollars a barrel, down 5.3% from $60.58 the week before. Oil in euros would be 49.08 euros a barrel at Friday’s close, down 4.5% compared to 51.27 for the previous week. The gold/oil ratio closed at 8.17 up 8.1% from 7.56 the week before. In the U.S stock market, the Dow Jones Industrial Average closed at 10,686.04, up 1.5% from 10,530.76 at the previous Friday’s close. The NASDAQ closed at 2,202.47, up 1.5% 2,169.43. The yield on the ten-year U.S. Treasury note closed at 4.57%, down nine basis points from 4.66 the week before.

The past week contained good financial news for the United States imperial economy despite storm clouds on the horizon. Oil prices are down, the dollar is gaining ground on the euro and stocks were up (though still down for the year). Could it be that the plummeting of Bush’s popularity to a new low of 37% is seen by global investors as a sign that there is some sanity in the United States? Of course the euro is not helped by the French riots, but one would think that U.S. financial indicators would have been disturbed at the revolt against neoliberal imperialism in Argentina the week before, but I guess not.

No deal in Argentina

Americas summit ends in debacle for Bush
By Bill Van Auken

7 November 2005

President Bush left Argentina Saturday after failing to achieve an agreement on reopening talks on forming a hemisphere-wide Free Trade Area of the Americas (FTAA). The Fourth Summit of the Americas turned into a debacle for the US administration, with rioting in the streets of Mar del Plata, mass repudiation of Bush by the Argentine people and open defiance of US policies on the part of South America’s principal economic powers.

“I am a bit surprised,” Bush told Argentine President Néstor Kirchner as he departed the country, the Argentine daily Pagina 12 reported. “Something happened here that I hadn’t foreseen.”

US officials indicated that they were taken aback by Kirchner’s speech, which denounced the role of the International Monetary Fund and US-backed policies in provoking the catastrophic economic collapse of December 2001 from which millions of Argentines have yet to recover.

“Kirchner’s speech was very disappointing,” a US diplomat told the Argentine daily Clarín. “He kept talking to his people. The truth is his harshness surprised me.”

The “harshness” of the Argentine president, however, was a pale reflection of the mass hatred exhibited by the Argentine people towards Bush, whose presence in the country provoked not only the demonstrations and rioting in Mar del Plata, but strikes by teachers and public employees throughout the country.

…Venezuelan President Hugo Chavez, who voiced the most intransigent opposition to the trade pact and participated in a mass anti-Bush rally held during the summit, gloated over the US administration’s defeat. “The great loser today was George W. Bush,” Chavez told the press after Bush’s departure. “The man went away wounded. You could see defeat on his face.”

In other good news for investors to grab onto, retail sales increased in the United States. Looking deeper though there is some troubling news there as well. With growing gaps between rich and poor in the United States, there is no such thing as the average consumer, if there ever was one. We now see analysts who look at the retail sales distinguishing between rich and poor retailing:

Last week, retailers reported October same stores sales that were stronger than analysts’ estimates. The ICSC’s tally of chain store sales increased 4.4%. This was on top of a 4.1% gain last October, which was the strongest month during the second-half of 2005. With retail sales only increasing 1.8% last November, it is likely that retailers will post strong growth in November. November will benefit from Halloween falling on a Monday, since retailers generally close the monthly books on the last Sunday of each month. The ICSC also noted that total sales increased 10.8%, which is the largest increase since June this year. The average monthly gain in total sales has been 10.1% this year. This follows an average gain of 9.7% last year.

Most retailers reported that same store sales were driven mostly by average ticket size and the number of transactions increased less and declined at a few retailers. This was most evident in retailers that sell to lower-income consumers. Dollar General said that it noticed a “payroll cycle,” meaning sales were stronger on days on the days workers typically get paid. This is another indication that lower-income households continued to struggle during the month. Conversely, according to the ICSC survey, luxury retailers were one of the best performing categories, along with wholesales clubs and footwear.

As we can see with the retail data, the rich in the United States are doing very well. Why should they worry if the U.S. consumer market dies if the end game has been reached and a relative few can control everything in a high-tech feudalism? Can it be that retail sales in the United States can remain strong with a wave of bankruptcies and asset deflation on the horizon? Can the rich pick up the consuming slack from the poor and formerly middle-class? We may be entering a period of reverse Fordism. Once again the workers will not be able to afford what they produce and the rich will overconsume all over the place.

Wall Street bonuses expected to soar again in 2005

As jobs and wages decline

By Joseph Kay

10 November 2005
Bonuses on Wall Street are expected to soar this year according to two reports released this week. These bonuses make up the bulk of compensation for top executives and managers of banks and brokerages and are rising as a result of frenzied activity in the hedge funds and mergers and acquisitions markets, as well as sharp increases in energy prices.

An article in the Wall Street Journal on November 8 reported that Wall Street executives are expecting a “bonus bonanza” this year. According to the Journal, citing data from a report to be released by the executive search firm Options Group, compensation is expected to increase by 20 percent, with some bankers and traders expecting even higher windfalls.

The Journal reported, “Investment bankers, who arrange mergers and stock offerings for corporations... are expected to be among the Street’s biggest winners this year, with compensation rising 20% to 25% on average, according to the study. For an investment banker at the managing director level, a senior post on Wall Street, that will translate into an average pay package of between $2.2 million to $3.3 million this year. A global head of investment banking could pull in on average anywhere between $7 million and $10 million.”

Fueled by a surfeit of cash in corporate coffers and relatively low interest rates worldwide, global merger and acquisition volume surged to $2.3 trillion by the beginning of November. This is the most active merger and acquisition market since 2000, at the peak of the US stock market bubble when such activity reached record highs. Mergers and acquisitions are often accompanied by cuts in labor costs, including layoffs, for which executives reward themselves as well as their advisors and bankers on Wall Street.

Another factor behind the surge in Wall Street bonuses is the sharp increase in energy prices, which has hurt consumers but has translated into gains for commodity traders as well as the energy companies themselves. The Journal reported that bonuses for commodity traders could increase by an average of 30 percent over 2004. It quotes Options Group co-founder Michael Karp as noting, “There was lots of volatility in this area and a lot of people made a lot of money here.”

Citing a report put out by Johnson Associates Inc., a compensation consulting firm, the New York Times reported November 8 a somewhat lower increase for investment bankers, of between 10 and 20 percent.

The Times noted, however, “The big winners could be traders involved in commodities and energy, in particular, proprietary traders who deal in those two high-octane growth areas. They could receive pay increases of 40 percent to 50 percent,” the newspaper wrote, “with some walking away with $15 million to $20 million each, according to one investment banking executive who is prohibited by his firm from commenting on compensation issues.”

Big gains are also expected among those who are engaged in the booming hedge fund trading sector. Hedge funds have become a principal tool for wealthy investors, with assets of about $1 trillion. The funds have seen increases in asset value of about 17 percent annually in recent years. They are a highly speculative branch of the securities trading market, usually employing computer models to extract profits from temporary fluctuations in the stock and derivatives markets.

…Living standards for a tiny section comprising the Wall Street elite are booming. Julian Niccolini, managing partner of the Four Season’s Restaurant in New York, explained to the Journal the impact of the Wall Street bonanza from his own perspective: “It’s white-truffle season and people are paying as much as $180 for a main course. The economy seems to be going in the right direction and I think this is the most money people have ever had.”

Well, the most money that some people have ever had. Indeed compensation on Wall Street has seen a substantial recovery since declines in 2001 and 2002, though average compensation has not yet reached the peaks of the stock market boom of the late 1990s and 2000. However, the much-touted economic recovery of the past two years has not led to gains for the broad majority of the population.

There has been no substantial improvement in the jobs market over the past two years. The remaining sectors of the economy that have had relatively high-paying and secure jobs—such as the auto and the airline industries—are seeing a sustained assault on wages and benefits.

According to a US Census Bureau report released on August 30, the number of Americans living in poverty increased in 2004 by 1.1 million. The poverty rate, now 12.7 percent of the population (37 million people), has increased for four consecutive years from 2000 to 2004. Even this figure understates the level of poverty in the US, as the official poverty level is much lower than the income required to meet basic needs.

Other figures also document the precarious financial position of growing number of Americans: rising debt levels, persistent unemployment and underemployment, rising requests for emergency food assistance and increased homelessness.

Real income has declined over the past year for most workers, who have seen stagnating or declining nominal wages together with a sharp growth in consumer prices, especially for energy. The situation is expected to get much worse as the winter months produce home heating bills that are up to 50 percent more than the already steep prices of last year.

The huge profits reported by energy companies in the past quarter—including a record $9.9 billion pulled in by ExxonMobil alone—have come directly out of the pockets of ordinary consumers who have faced mounting prices for gasoline and natural gas.

Note that high gains and high compensation are in the areas showing the most volatility, especially the hedge funds For an easily understandable explanation of hedge funds and derivatives, non-linear financial entities if there ever were one, see this article by Michael Panzner. These are vulnerable to, and contributors to, a growing volatility. As Kay wrote, they also profit, at least for a while, from that volatility. As Panzner and many others have warned, eventually the volatility overwhelms the system, causing panic and crash.

Panzner compares the situation with hedge funds now to New Orleans prior to Hurricane Katrina, in that in both cases disasters had been predicted for a long time, but the longer the disaster did not strike, the more complacency set in. What he ignores, however, is evidence in both cases that the disaster was no accident and that there are some who will benefit by it. In fact, as the above article by Joseph Kay shows, hedge funds have helped push along the concentration of wealth into fewer and fewer hands. Al Martin wrote about both things last week:

Hedge Funds In Trouble, MacroEconomics of Global Collapse & Forced Population Reduction

This is an invisible cloud and it very well may be the so-called derivative time bomb that people have been talking about for the last 10 years. So this is an attempt at the most macro-economic view possible, what’s creating this global economic malaise, as can be seen in investor confidence indices globally.

It should be noted that in many countries– Germany, Britain, Italy, some of the Asian market countries–investor confidence has reached levels frankly not seen since the Great Depression.The macro-economic phenomenon that is creating this is a long-term cycle, which started immediately after the Second World War, when the entire planet began to consume more than it produced through debt financing.

In order to pick up the global economies after the war and continue to accommodate an unrestricted population growth policy, all governments, including the United States, began to encourage the massive accumulation of debt by government, by business and industry, and by the people. After the Second World War, all governments began to encourage a massive accumulation of debt in order to push up GDP in all the nations.

So where are we? We are at the end of a very long cycle, which can no longer be sustained. And what is the implication? The end result is global economic collapse.

…But to get back to the cascading collapse of hedge funds and the money of these hedge funds which has been liquidated. The losers are a combination of high-net-worth individuals and institutional clients.

And here’s the forecast. The intermediate-term implication is an increased volatility in global equity debt and commodities markets. We can expect the current volatility to increase, not to decrease. Increased volatility is a sign of stress. Expect volatility to continue to increase, particularly over the next 3 or 4 years.

Ultimately, as volatility increases, liquidity is reduced because those who make markets, those who fund those markets, as well as the governments that back those who fund those that make the markets become nervous. That is what caused the whole Refco unraveling. Planetary economic liquidity is gradually drying up.

What central banks around the planet have been doing is covering up the huge hits that were taken in the late 1990s (from 1997 to 2002). Now look at the number of hedge fund debacles. These were multi-billion-dollar hedge fund debacles, starting with LTC (Long Term Capital), including Julian Robertson’s Tiger funds, and including Enron because Enron became a de facto hedge fund. It was no longer an energy company; it was a de facto hedge fund. And what central banks have done is provided the liquidity to hide these losses.

…Simply put, we are seeing the signs of the so-called end times. And when people say, What can be done to put us back on track? I say: Look. We’re beyond that point. So what could put us back on track? Turn the clock back 50 years and do things differently.

As we have stated before, there is no scenario now in which the planet can generate sufficient gross domestic product after 2011- 2013. After that time frame, there is no scenario under which the planet can generate sufficient gross domestic product to service the total global debt. It simply cannot be done. Even if you monetize global debt with a huge round of inflation, eventually that very inflation makes markets illiquid and no longer functioning.

…The post-World War II problem was: how to rebuild societies, how to maintain an extraordinarily high level of economic growth, how to make consumption a larger portion of each nation-state’s GDP, which we certainly have in this country. Personal consumption as a percentage of GDP is twice what it was at the end of the Second World War. The fraction is approximately the same in all other countries.

This “solution” however makes economies more subject to boom-bust cycles. That’s why we have these endless series of recessions -- booms, recessions, booms, recessions -- because you make the global economy much more tied to consumer spending than business spending. You effectively weaken the global economy because individuals are never in the position to repay ever-increasing sums of debt the way business and industry or government can. Individuals do not have the unlimited ability to borrow money.

We now add a new post-war component in the United States, and that is an organized right-wing cabal committed to fraud and committed to sapping the global capital machine, as it were. This then represents yet a further drag on the global economy.

But there are reasons behind this. I’ve been asked this question on shows before: “Why do Bushes commit frauds endlessly? Why does the Cabal exist? Why was there a military industrial complex formed after the Second World War? And why did it spawn a right-wing political cabal that consistently acts to defraud in order to consolidate wealth and power?”

There is a reason. And that is to consolidate wealth and power. They understood that post-war economics was a losing proposition, and that, in fact, eventually the planet would suffer a global economic collapse. At that point, it would be necessary to have as much of the planet’s wealth concentrated into as few hands as possible and have those few hands control whatever government, military, industrial power remains in the post-economically collapsed environment in order to begin a secondary rebuilding process.

The end result of this policy would necessitate a Global Command and Control Economy. There would be no other choice.An economically collapsed planet would force some hard solutions onto the problems of overpopulation. That is, after all, the root problem since it is the root decision that was made after the war, since it was politically impossible in all nation-states to tell the people the truth, that you’ve got to start now controlling population growth because the planet’s resources are diminishing.

The planet’s future industrial economic infrastructure, based on the remaining non-renewable and semi-renewable resources that the planet can produce, this fraction doesn’t work after you get much above 5 billion people on the planet.

This gets back to the “useless eaters” solution. How do you deal with “excess” population? In a post-economically collapsed environment, a government is not really going to be able to provide any help. Like Africa, there will be mass starvation, but it will not be only in Africa anymore, but across the entire planet. Particularly in First World countries.

And this is where conspiracy reality meets conspiracy theory. What further augments my contention about this plan: global agreements, led by the United States, were made in the mid-1970s, to use low-yield thermonuclear and other so-called containable non-conventional weapons systems for the purposes of forced population reduction in a post-economically collapsed world. In other words, even in the mid-1970s, there was a political and military recognition of reality.

The “ultimate solution” was that the economic policy set forth across the planet in a post-war environment would lead to economic collapse because it did not contain one key component: global population growth control, particularly in the industrialized nations, which consume 10, or 20, or 50 times more non-renewable resources than do citizens in Third World countries. Therefore, in the 1970s, governments became increasingly alarmed.

…How common was this understanding? It was very common at the Department of Defense. They were the ones who drew up a lot of plans for it. The State Department also was aware of it. It wasn’t any secret.In 1975, when this all came together, the then-new Gerald Ford Regime was a little disorganized in the beginning, but there really wasn’t any effort to hide this at the time.

…That’s why the Department of Defense had set up… the infamous National Programs Office… in 1975: to plan for the logistical operation targeting the mobile launch sites, etc., necessary for the use of throwing low-yield non-conventional containable munitions against high-density population targets.

And who were the prominent players in the Gerald Ford administration? Well there was Vice President Nelson Rockefeller, for example, and Secretary of State Henry Kissinger. Not to mention Chief of Staff Dick Cheney and Secretary of Defense, Donald Rumsfeld. While I don’t agree with these assumptions: that we have to reduce population, that this is reality and we have no choice, as Martin is peddling, there is a lot of evidence that those in charge are going to act as if that is the case. See David McGowan and Laura Knight-Jadczyk for more on population reduction.

Signs of the Economic Apocalypse 11-7-05

From Signs of the Times 11-7-05:

The dollar closed at 0.8464 euros on Friday, up 2.1% from the previous week's close of 0.8287. The euro, then, closed at 1.1815, compared to 1.2066 the week before. Gold also fell against the dollar, closing at 458.00 dollars an ounce, down 3.8% from 475.20. Gold in euros would be 387.64, down 1.6% from 393.83 at the previous Friday's close. Oil closed at 60.58 dollars a barrel, down 1.1% from $61.22 the week before. The gold/oil ratio saw a drop in the relative position of gold, closing at 7.56, compared to 7.76 the Friday before. The yield on the ten-year U.S. Treasury note closed at 4.66%, up nine basis points (hundredths of a percent) from 4.57% at the previous Friday's close. In the U.S. stock market, the Dow Jones Industrial Average closed at 10,530.76 on Friday, up 1.2% from 10,402.77 the week before. The NASDAQ closed at 2,169.43 on Friday up 3.8% from 2,089.88 at the end of the previous week.

The dollar strengthened last week based on higher interest rates in the United States. The euro weakened on the riot crisis in France. Combine the two and you have a 2% rise in the dollar against the euro.

Job growth was very weak in October in the United States, but most of the Mainstream Media is attributing this to the hurricanes.

Job growth weaker than expected

By Glenn Somerville

Fri Nov 4,12:49 PM ET
Only 56,000 U.S. jobs were created in October, about half the number expected as the impact of Hurricane Katrina faded, but wages grew at the strongest pace in 2-1/2 years, a government report on Friday showed.

Though the Labor Department also revised down total job growth for the two prior months, it said the October national unemployment rate eased to 5 percent from 5.1 percent, implying the job market remained solid.

"The underlying trend looks to still be in the 200,000 (jobs per month) range," said economist Joel Naroff of Naroff Economic Advisors in Holland, Pa. "And if that is correct, conditions are okay, really."

Talk about spin. The quote from the Labor Department neglects to mention that the slight drop in the unemployment rate was due to so many people giving up looking for jobs. They should call it the Job Seeking Rate.

As for Naroff's statement, the "underlying trend" refers to a mythical number of what the job growth would have been had there been no hurricanes. So you can pick any counterfactual statement and label that "underlying." How about this one: what would all the economic numbers say if Bush hadn't gotten away with stealing the last two elections?

Financial markets were whipsawed by the jobs data.

Bond and stock market participants focused initially on low job totals and hoped it meant the Federal Reserve might be more likely to halt its campaign of interest-rate rises, but later grew worried that rising wages could fire inflation.

By late morning, U.S. Treasury prices reversed course and were showing losses for fear the Fed might instead extend its rate rises, while stock prices turned down on similar concern. But bond prices later recovered modestly.

STORMS MUDDLE PICTURE

Wall Street economists had forecast that 100,000 jobs were created last month. But the figures remain hard to interpret because of the impact of hurricanes Katrina that struck the Gulf Coast in late August, Rita that followed in September and Wilma that hit Florida in October after the monthly jobs survey was completed.

As many as 400,000 people are estimated to have suffered job losses or interruptions in the Gulf Coast, though many are returning to work at rebuilding in the wake of the storms.

"The underlying economic fundamentals remain sound as has been pointed out by the Fed," said Alan Gayle, a managing director of Trusco Capital Management in Atlanta, though fourth-quarter growth may suffer if consumers spend less.

"You can't have this kind of slowing in job growth coupled with rising energy prices and not see some adverse impact on consumer spending," Gayle said.

The Labor Department revised August and September data to show that 36,000 fewer jobs were created in the two months than previously thought. It said there were 148,000 new jobs in August instead of 211,000 and that 8,000 jobs were lost in September instead of 35,000.

The Labor Department's commissioner of labor statistics, Kathleen Utgoff, said last month's softer pace of job creation could not be blamed on the hurricanes. "Rather, job growth in the remainder of the country appeared to be below trend in October," she said.

The softness in the housing market in the United States shows the contribution of both microeconomic factors (excessive household debt, lower wages and inflation) and psychological factors (fear of future, pessimism). The psychological factors are easily manipulated, so it is of some comfort that they are still attempting to put positive spin on the economic news. When they stop spinning the bad news, that will be when they pull the plug on the economy. The rise in U.S. stocks must be a signal that there is still a little money left to steal before they pull the plug. On the other hand, polls are clearly showing that the U.S. public no longer believes the positive spin. According to the New York Times:

The spike in inflation, caused largely by oil prices, seems to have soured many Americans on the economy, despite its continued growth. In a recent poll by the University of Michigan, 60 percent of people said that they expected the next five years to bring periods of widespread unemployment.

Not since 1992 have so many people given that answer. In the middle of last year, fewer than 40 percent of respondents did.

Since a consumer economy with vastly inflated paper assets is propped up by psychology, the fact that the pendulum has swung over to pessimism and fear is ominous and will likely prove self-fulfilling.

...The widening of income inequality in recent years appeared to continue last month. Workers at financial, information and professional-services companies - who tend to be highly paid - all got big raises. Raises at factories, warehouses, tourism companies, schools and health care providers were smaller.

In his testimony this week, Mr. Greenspan said the country was going through "a very marked change in the distribution of income."

Speaking of lower wages, take a look at what Northwest Airlines pilots had to settle for in their latest giveaway: a 24% cut in wages.

Northwest union in tentative labor deal

Fri Nov 4,11:29 AM ET

The union representing pilots at Northwest Airlines said it reached a tentative deal with the airline on a 24 percent pay cut that would stall the carrier's effort to have a bankruptcy court void the pilots' contract.

The Air Line Pilots Association (ALPA) said late on Thursday that the deal, which requires the approval of its members and the bankruptcy court, would reduce pilot costs for the airline by $17.9 million a month.

The concessions in the temporary deal would amount to $214.8 million a year in labor savings for the airline. That amount is 60 percent of the $358 million Northwest is seeking from nearly 5,200 pilots.

Northwest, which is restructuring in bankruptcy, has said it needs a total of $1.4 billion in annual labor savings to survive. The carrier has asked for court permission to cancel the labor contract of any employee group that has not agreed to the concessions it says are required.

The airline said on Wednesday, however, that it would delay a November 16 hearing on the request to cancel contracts until mid-January if the unions representing its pilots, flight attendants and ground workers would agree to temporary concessions equal to 60 percent of the $1.4 billion.

...In addition to cutting wages by 24 percent, ALPA said the temporary deal would cut some international flying rates, reduce sick pay to 75 percent of regular hourly pay and eliminate domestic crew meals.

...IAM said it expects Northwest to ask for a 19 percent reduction in pay and sick pay of 70 percent of regular wages.

Northwest, which filed for bankruptcy in September, has said it must reduce its labor costs to achieve $2.5 billion in overall yearly savings.

Other carriers in bankruptcy, such as UAL Corp.'s United Airlines, have used bankruptcy to extract savings from their workers that might have been impossible out of court.

Northwest, along with other major U.S. airlines, has been battered by soaring fuel costs, weak revenue and low-fare competition.

As the pay cuts and layoffs spread throughout the middle class into the highly skilled technical jobs such as airline pilots, where will the consumer debt-driven U.S. economy go? My guess is that soon the whole country will look like Detroit:

Turnaround dreams take root in Detroit

By Stefanie Murray, USA TODAY

When Hurricane Katrina destroyed much of New Orleans two months ago, another impoverished, mostly black city stepped in to help.

Detroit Mayor Kwame Kilpatrick pledged that his city would host 500 families displaced from the Gulf Coast.

The offer came as Detroit found itself facing another crisis, the latest in a half-century of problems that mirror those of New Orleans: poverty, crime, poor schools, white flight.

Most pressing now is the city's dire financial situation. The Motor City faces an accumulated $300 million budget deficit and could go broke in 2006, its auditor general warned recently. Since July 1, 500 city workers have been let go, including police and firefighters. More layoffs are possible.

The bad news comes just three months before Detroit will be on the world stage when it hosts Super Bowl XL on Feb. 5.

Detroit once was the heart of the USA's industrial might and a symbol of its blue-collar middle class, but the city has been in steep decline for decades. Detroit's population has shrunk 50% from 1.8 million in 1950 to just over 900,000 in 2004, bumping it off the list of the nation's 10 most populous cities.

"We're just as flooded as New Orleans, except we are not waving white flags from the roof," says Robin Boyle, professor of urban planning at Detroit's Wayne State University.

A near demographic twin of New Orleans, Detroit also bears the grim distinction of having the highest poverty rate of any major U.S. city: 33.6%, according to the Census Bureau. The city's unemployment rate was 12.7% in September, more than double the national rate of 5.1%.

A steady loss of automotive and other manufacturing jobs has hurt: Michigan's Department of Labor and Economic Growth estimates that since 1980, the six-county Detroit metropolitan area has lost about 83,000 jobs in what it calls the "transportation equipment manufacturing and primary metal industry sectors" - mainly autos and steel.

Many people in the city's well-heeled suburbs still view Detroit as a magnet for crime and drugs, and they come to town only to work, attend sporting events or be entertained at the city's three casinos.

"Detroit has always felt like a delinquent relative: They may embarrass you or make terrible decisions, but you're still family," says Ryan Keberly, a photographer in the suburb of Royal Oak whose blog highlights Detroit's homeless.

Hoping for a rebound

About 74,000 people work downtown, but only 5,300 people live there, a Wayne State study this summer said.

About 25% of the buildings in 140-square mile Detroit are abandoned, which is probably one of the highest such rates in the country, Boyle says. The blight is easy to see. As in many other big cities, tall buildings stud Detroit's skyline. From a distance, they seem like beacons of commerce - but some of Detroit's are vacant.

There are signs, however, of revitalization. The city last year announced an effort to raze or rehab 141 vacant buildings before the Super Bowl; redevelopment has begun at 86.

"It's not just a brick-and-mortar change," says George Jackson, head of the Detroit Economic Growth Corp., a quasi-public agency that guides development and investment in the city. "There is a spirit here now, and you can feel it."

The city is on the "cusp of the biggest turnaround in American history," says Kilpatrick, who faces a tough election Tuesday in a bid for a second four-year term.
...Some Detroit residents say the city is making progress.

"I'm not going to lie and say Detroit isn't a tough city," says Keta Hackney, 24, who works downtown at McKig Cleaners. "But it's coming around. Slowly but surely, it's coming around."

Civic leaders are mostly optimistic, if not defiant, about Detroit's future.

They point to more than 60 new businesses - at least 23 of them restaurants - and more than 800 lofts and condominiums that have opened downtown since 2003. In 2004, 924 new housing permits were issued, up from about 200 in 2001, says Walter Watkins, the city's chief development officer.

New streetscapes were built and cement silos are being razed along the historically industrial waterfront on the Detroit River to pave the way for a 5-mile walkway, a new state park, housing and retail space. Cranes and scaffolding dot downtown.
Such redevelopment is harder to spot in many residential neighborhoods, where hundreds of houses remain abandoned and crime rates are high.

A Super Bowl 'blip'

The approaching Super Bowl has spurred some investment. But revitalization and the Super Bowl "are kind of coincidental," Watkins says. Boyle calls it a "blip," one that has served as a rallying point for the city.

Detroit's three casinos, which have been open for about six years, also spark considerable traffic and city revenue, as do its three major sports venues: Comerica Park, home of Major League Baseball's Detroit Tigers; Ford Field, home of the National Football League's Lions and site of the Super Bowl; and Joe Louis Arena, home of the National Hockey League's Red Wings.

Major companies, including General Motors and Compuware, have invested heavily in downtown.

GM invested $500 million to buy and upgrade the 713-foot-tall Renaissance Center, the city's tallest structure, where it employs 6,000. Compuware spent $400 million on a headquarters for its 4,000 workers.

Adam Brook, owner of a luggage and leather goods shop downtown, agrees that things are changing. Nevertheless, despite the ongoing construction near his third-generation business, Cadillac Luggage, Brook says he can "count the number of people that walk by my window every day." He says he has barely broken even the past three years.

"What's wrong with Detroit is we have thousands of people who spend thousands of dollars here, at the casinos, but it doesn't affect me one bit," Brook says. "But hey, I love Detroit. It's the people, and what the possibilities are. It's killing me, but I love it."

As usual, this article from USA Today stresses the positive, upbeat message of hope. And why not? If the rest of the country's economy keeps growing, then eventually Detroit will rebound. But what if what's in store for the rest of the country is Detroit's fate? What will it look like? The Web site dETROITfUNK, featuring some beautiful photographs of Detroit - beautiful both because they are well-composed and because truth is beauty, and beautiful in the way all artistic depictions of ancient ruins are - can give us a sense of what's in store. In this case, you see the ruins of twentieth century industry and stately nineteenth century buildings. Not all of this photographer's work shows ruins, but enough of Detroit is in ruins that an honest look will include them. Here are a few examples:










Sometimes art can help us understand the numbers better. Bob Dylan saw this coming forty years ago. Here are a couple of verses from Desolation Row (Copyright © 1965; renewed 1993 Special Rider Music):

Desolation Row
Bob Dylan

They're selling postcards of the hanging

They're painting the passports brown

The beauty parlor is filled with sailors

The circus is in town

Here comes the blind commissioner

They've got him in a trance

One hand is tied to the tight-rope walker

The other is in his pants

And the riot squad they're restless

They need somewhere to go

As Lady and I look out tonight

From Desolation Row

…Now at midnight all the agents

And the superhuman crew

Come out and round up everyone

That knows more than they do

Then they bring them to the factory

Where the heart-attack machine

Is strapped across their shoulders

And then the kerosene

Is brought down from the castles

By insurance men who go

Check to see that nobody is escaping

To Desolation Row

The anxiety is palpable, and not just in the United States. The way in which the riots have spread in France could not have been foreseen, but are depressingly similar to the spread of the race riots in the United States in the 1960s. Those riots did not only take place in Detroit, Newark and Watts, but smaller versions of them took place in hundreds of smaller cities. The political elite were shocked and surprised; had not the country finally passed the Civil Rights Act and the Voting Rights Act? Why riot now? As can be seen by the photographs of Detroit, the consequences of those events are still playing out. One can only hope France reacts better than the United States did.

What is becoming evident to the public throughout the world is that their voice is not being heeded. Thousands took to the streets in Argentina to protest Bush and Anglo-American neo-liberalism, but those pushing these polices do not care about public opinion anymore. The Iraq War proved that. Strong majorities even in the United States oppose Bush and the neoliberal agenda, but that no longer matters and people can sense it.

The anxiety is playing out in the markets as well. Here's Al Martin:

And, in the market -- what you have seen mid-week is an unusual type of trade wherein the bonds (U.S. Treasuries) remain under severe pressure. Equities opened higher, but then were pressured lower at the same time the U.S. dollar remains slightly higher. Yet precious metals and fungible commodities, which had opened higher, came down and fell sharply in late Wednesday trades. That was led by industrial metals, by the way, and fungibles.

This is unusual economic confluence of circumstance. Interrelationships between all of these markets have all been stretched out the wrong way. The type of trade that we saw last week in the equities, the bonds, the metals and the dollars is called a depressionary trade.

A depressionary trade is when the bonds start to fall under nervousness over the U.S.'s continued ability to even service its debt. The dollar is still pushed higher under the belief that U.S. interest rates would have to be moved sharply higher in order to prevent the dollar from further rising using monetized debt.

Commodity markets, in turn, particularly industrials and fungibles, fall, in recognition that GDP is falling sharply and that the demand for industrial and fungible commodities is going to fall sharply.

We have mentioned this in the past, that industrial production and capacity utilization in the last 30 days in this country, for lack of a better word, has collapsed.

There should be no doubt of what these signs mean. We talk about them all the time, but people don't understand. Now we're seeing the results of this in the markets.

...European Central Bank (ECB) chief Roger Trichet made some remarks on Tuesday to the effect asking -- Will the Bush-Cheney Regime even continue to survive -- since all of the economic policies it is now pushing, the individual bills and amendments, are directly counter to what 80% or more of the American people want?

In other words, what there is an awakening in foreign central banks that the Bush Cheney Regime is not concerned about public opinion polls anymore. It is not even concerned with political popularity. And you have heard this all this week, the P.A.T.R.I.O.T. Acts getting thrown back in the mix.

Now, all of a sudden, we understand what the P.A.T.R.I.O.T. Acts mean. The regime doesn't have to be concerned about its political popularity anymore.

As Trichet pointed out, (and it's odd that the ECB bank chief has to point this out, since no one in the U.S. press points this out.), all of the remaining Bushonian economic policies, like the extra $70-billion tax cut for the Republican rich and the targeted estate tax elimination for the Republican rich, etc.–are designed as a last shot, as it were, in transferring as much wealth in the nation from the bottom 80% to the top 20%. Even the Bank of England has pointed this out. These foreign central banks can't understand why the American people aren't up in arms -- or don't see what this regime is doing.

... But it is unusual for this to even get in the news, for it even to be a news item. The only reason it has gotten into the news a little bit is because of the unusual size and the angst with which money has been taken out of this country this week. There is angst about it that you haven't seen before, as if there's another shoe to drop someplace. And that's exactly what the market is concerned about. It's odd: How the markets are trading is they're being roiled by a combination of all the aforementioned, but they're also trading like they're walking on eggshells, like there's another big shoe out there to drop.

Besides a possible Cheney indictment, what else could it be? We don't know what that shoe is. It's not even the Cheney possible indictment. It would have to be something bigger than that.

People think -- Oh, well, George Bush, there's still a democratic political process. Pro-Bush faction Republicans still have to bow to public pressure and what public opinion polls say. No. The Gallup-Harris poll showed that 81% of the American people wanted Hurricane Katrina and relief deficit-financed reconstruction spending paid for by budgetary reductions. How is the Regime financing this $100+ billion in spending? It is deficit-financed. No budgetary reductions, and no cut in pork.

Now, in another Business Week poll, 78% of the people are against this special $70-billion tax cut for the Republican rich for next year. Yet it's been passed. It goes on and on. 61% of the people are against the elimination of so-called targeted estate tax elimination. It's targeted, not blanket. This is a targeted elimination estate tax, only for those with a net worth above $10 million. Yet the regime has passed that.

53% of the American people want an immediate withdrawal of troop forces from Iraq, yet the Regime says we will be placing more troops in Iraq between now and the end of the year. The majority of the people want a reduction in spending on Iraq, yet the regime is going to spend $80 billion more in Iraq next year than it did last year.

It doesn't take much of a brain to understand that the regime is no longer concerned about public opinion. Why does it have to be?

We, the people, agreed with the P.A.T.R.I.O.T Acts. We, the people, gave the President of the United States the absolute power to cancel elections permanently with no interference from Congress or the Supreme Court. Can what is happening today come as any surprise to anyone? It's a natural progression. And the markets are reacting.

Could the "other shoe" for the economy have to do with the strange hysteria about Bird Flu or with some other "natural" disaster? Imagine what the travel restrictions Bush loves to talk about would mean for the economy, especially when the travel restrictions would apply to food as well as people. Add to that the possible "destruction" of millions of chickens and the economic consequences could be disastrous.

Next time you are in an airport in the United States, look at the number of business travelers. To make a single, national economy out of a continent-sized area, people and goods need to be able to move around at will. That, in turn, depends on low energy/transportation costs and freedom of movement. With rising energy prices and the growing clampdown, both of these things are at risk.

Now, in the "for what it's worth" department, we have the interesting experiments in the predictive power of web bots developed at HalfPastHuman.com. The idea is that future events seem to cast a sort of subconscious shadow backwards in time, shadows that can be identified in the collective discourse using web bot technology. The track record of this experiment has been surprisingly good. The results are summarized regularly on George Ure's web site, Urban Survival.

I can't tell you how many people have written to me this morning literally "freaked out" by the story this morning that use the precise phrase "restrictions on travel" which the web bot forecasts from http://www.halfpasthuman.com/ have been talking about for months.

First, the story: CNN is now reporting that "Sustained person-to-person spread of the bird flu or any other super-influenza strain anywhere in the world could prompt the United States to implement travel restrictions or other steps to block a brewing pandemic, say federal plans released Wednesday."

Now, the background: Since early July 2001, we have been using a proprietary software technology developed by our colleagues at http://www.halfpasthuman.com/ to learn up to 12-months in advance, what the emotional flavor of future events will be...

Besides catching significant aspects of the 9/11 attack, and the emotional flavor of events with good accuracy, the anthrax attack, the space shuttle disaster, significant aspects of the DC sniper case, a nearly precise call on the Northeast Power Outage months before it happened, the Sumatra earthquake, and more recently the quake in Pakistan which was characterized as a quake where we saw a "city sliding down a hill" - not to mention the hurricane forecast from January of this year which led to a city be "returned to the mud" (New Orleans, for sure), the comments about "restrictions on travel" have been showing up in the predictive runs for a long time - nearly a year.

Some examples, shared exclusively here with the kind permission of the software wizard and his apprentice at www.halfpasthuman.com:

• From the April 3, 2005 ALTA 405 series: "We do note though that the Terra entity has repeated references to the [rainwater] and [standstill] of earlier parts of this report, and has reinforced the image of [trucks] (waiting) in (mud) for (abundant/excessive/large) [rain clouds] to (depart). And, this section is cross linked back to the Populace entity and the issues of 'food restrictions'."
• The April 10, 2005 report continued the theme: "This 'restricted movement' period is seen as beginning this summer and stretching through to the end of the year if not beyond. While there are no indications of a general restriction, and rather merely lots of local restrictions all due to a variety of causes, we do note that the impact will be so general as to permeate the consciousness of the populace and is seen as arising in mainstream media. Within the more narrow focus of this specific data set, there are further descriptors which go to the idea of a 'fiat' imposed [period/span] of [restricted] (movement), which is then [lifted] as (redemption) of the [circumstances/set/setting/array] are (corrected). Hanging off of this set, mostly fully populated is another aspect set which shows that a [dichotomy/duality/opposition] of view point about the [incident] will form in which [government], that is, the upper echelon who imposed the movement ban, will perceive of this as just [regular/ordinary] business, and totally miss the profound change that develops from the Populace perception of the 'in situ' imposition."
• In the July (ALTA 905 series) run, things begin to come into focus a bit more: "One co-incident change is that the Populace/USofA is going to take up the cry that the 'rules are too strict'. This however is just hardly begun, when the rules are shown by our data of actually getting very much stricter in that a period of 'no movement' will be called for on a national level. While our data shows that this is a travel restriction sort of thing, it does not show any signs or indicators for terrorism or war, rather this seems to somehow be weather related. There are some small hints that disease will be referenced, but not as a primary motivator for the period of 'no movement'. We have to also note that this could easily be something on the order of a bank holiday, or a freezing of currency exchanges, as there are no clear indications that it will be a restriction imposed on the movements of humans. But clearly the data is indicating that a 'restriction of movement' will impact a large part of the population just as calls get started for the removing of the 'too strict rules'."
• In September, the ALTA 1305 series ties restrictions of travel and food: "These included the [rainstorms] seen as impediments to movement of food, as well as the now emerging summertime shakes. Leaving aside such details, we perhaps should focus on the emerging design pattern of restrictions on the availability of food and food types which is currently seen as being of long term duration within our modelspace. The entities continue to show dominating trends toward restricted food plants as we move the model through time at least as far as we are able to currently project which goes out to about February of 2006."
• Lastly, in the most recent of runs, October 29th, we see how this threat of travel restrictions will being to cast a shadow over the country in December: "The Populace/USofA entity is showing via cross links that the 'shocks' of November will lead to 'restricted movement'. This is being interpreted as that, rather than 'scarcity' as there are both appearing within the entity. The suggestion from the originating cross links is that a combination of 'secrets revealed' and a run-in with 'scarcity' will lead much of the populace of the country into a period of 'restricted movement'. This may well be indicating a very very bad holiday travel season."

...What's curious is the timing. While our friends at www.halfpasthuman.com with the future scanning technology don't have anything looking like a terrorist attack on the horizon, there continue to be troubling references in coming months to economic impacts, restrictions of travel, or some variant of that which linguistically translates to "encounter with scarcity." What drives it, we may unfortunately get a taste of before the end of the month.

The Global Upwelling

Along the same lines, our colleagues label the period we're in now (and will be for a year or so longer) as a period of growing "militancy" which will segue into a period of "conflict."

Hmm... Restrictions in the availability of food and types of food available, an "encounter with scarcity" in the near future, these things don't really sound that farfetched. The range of produce that has been available in the middle of winter in the north of the United States is not something normal in any sense. Such amazing availability of different types of food result from low energy prices. Petroleum is necessary at every level of food production, from seed to transportation to market. If the price of energy goes up sharply, and it already has, it doesn't take a web bot to see that this era of plenty will end. Of course, who needs web bots when we have George Bush's words and deeds to go by... The plans aren't secret anymore. With the PATRIOT Act, they don't have to be secret.

Then, if you add cascading personal and corporate bankruptcies to the mix as well as various natural disasters whose psychological effect will be multiplied by the media, and an unpopular war being fought despite the wishes of the public in all of the countries involved, then it is not out of the question that serious discontent will manifest itself among the public. The effects of that will surely not be good since the militarization of domestic law enforcement and disaster relief has already been put in place. Detroit, Fallujah, New Orleans, Gaza, the Paris suburbs, it is all kind of blending together, isn't it?