Yesterday, we talked about WHAT capital is.
It’s applied human skill — whether whittling intricate ceremonial fetishes or calculating quantum permutations at the Event Horizon of a Black Hole, everything else in the Universe is free. Applied human skill is the only capital. And, that capital creates our “economies,” or “economy” depending how macro you want to go with it.
I don’t know whether you’ve ever had truck with a possum — say a possum who sneaks in through the cat door to chow down on the free dried catfood in your kitchen — but possums have a famous survival skill they use (after making a nasty little display with their weird, prehistoric teeth) which is simply playing dead.
Now, a lot of people — especially economists and political pundits — like to opine that our economy is playing possum. Or that we are “broke,” and therefore can’t put out marsh fires (like the one in Louisiana choking New Orleans with smoke, today). No: we have the human capital. We just aren’t distributing it correctly.
The fundamental problem with the economy is that it is the parrot in the Monty Python sketch:
dead parrot (not a Norwegian Blue)
The engine of the American economy post-WWII was the automobile industry. The Japanese targeted it, and, combined with Detroit’s arrogance, by the 1973 “Energy Crisis” that engine stopped revving. American presidents Ford, Carter and Reagan all tried to goose the “economy” with little result. The “rust belt” of great midwestern manufacturing states was in decline, and nothing new was coming along to take its place.
The computer industry appeared out of the garages of unemployed hardware and software designers, mostly in San Francisco’s Silicon Valley, but also in the high-tech hub around Boston, etc. THAT was the new engine that began to shoulder the burden as the old industrial base declined.
In the 1990s, the Internet and the explosion of information technology produced the largest expansion of the economy ever seen in US history, and a strange series of confidence games, ripoffs and phony money-swaps that ended in 2001 with the collapse of the “bubble.”
From 2001 to 2009, the old “energy crisis” was ignored, and the entire expansion of the “economy” seemingly consisted of mortgage refinancing and outsourcing of the old industrial base, and, tragically, the NEW industrial base, so that when the 2008 collapse occurred, it was a rickety Tower of Babble unsupported by any REAL human capital. The magic money evaporated and here we are.
But economists and governments, pundits and politicians keep prodding and poking the old economy, hoping to wake it up: cash for clunkers (goose autos), home mortgage deductions (goose housing), etcetera.
We have fought two (and, arguably three) wars since 1990 over our oil addiction, and we’re still looking at the same problem that has stared us in the face since 1973: the gasoline-powered automobile is a dinosaur, global warming or not. Sadly, the oil barons have so much magic money invested in the human economy that they are as unwilling to accept the deadliness of their product (as a long-term proposition) as the tobacco industry was. Alas, the tobacco industry NEVER had the kind of un-self-conscious influence that the carbon industry does.
But they waggle and wobble and garble and gritch about the economy, and all those hoary heads continue to circle the possum, suggesting different ways of prodding it, different sticks and approaches to waking the varmint up.
They miss one all-important fact:
The possum is not playing dead. The possum IS dead.
That’s the dead parrot of the Monty Python sketch. And that’s the problem.
Mr. Praline: Never mind that, my lad. I wish to complain about this parrot what I purchased not half an hour ago from this very boutique.
Pet Shop Owner: Oh yes, the, uh, the Norwegian Blue…What’s,uh…What’s wrong with it?
Mr. Praline: I’ll tell you what’s wrong with it, my lad. ‘E’s dead, that’s what’s wrong with it!
Owner: No, no, ‘e’s uh,…he’s resting.
Mr. Praline: Look, matey, I know a dead parrot when I see one, and I’m looking at one right now.
Owner: No no he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!
Mr. Praline: The plumage don’t enter into it. It’s stone dead.
Owner: Nononono, no, no! ‘E’s resting!
Mr. Praline: All right then, if he’s restin’, I’ll wake him up! (shouting at the cage) ‘Ello, Mister Polly Parrot! I’ve got a lovely fresh cuttle fish for you if you
Alas, the parrot is no more responsive than our dead possum.
Let me go a little macro on you:
The old economy is dead. (To use that most-overused and despised buzzword of common parlance as a substitute for actual thought: it was not “sustainable.”)
The new economy has not yet appeared, and the Third Industrial Revolution (Alvin Toffler’s “Third Wave” arguably) is wreaking havoc on our human capital. THAT is the issue. Fix that and you fix the economy. Don’t fix it and the economy don’t get fixed. Fix the HUMAN capital and the “real” money and the “magic money” will take care of themselves.
You can kick and prod and poke and poozle until your poozler is sore, but that possum is not waking up.
So, what ought we to do about it?
Good question. Answers tomorrow.