Economic Dreams - Economic Nightmares

Cassandras Tire of Repetitive Stories of Gloom and Doom

For the few who tune into my musings, you may have noticed that I'm not posting much lately. This will likely continue for some time. The Epicurean Dealmaker summed up a shared blogging problem nicely yesterday. It was fun to be a Cassandra when no one would do so. But now we Cassandras grow weary of all the fuss and bother when it appears so late in the game — perhaps too late to avoid severe recession and pain. Preventive medicine would have been best, but would-be regulators were not be be seen for all the same reasons they were absent in the 1920s run-up to disaster.

So now we wait to see what will be done (amid all the talk) in the wake of the credit-crunch disaster that began last August. Later we may have more to talk about, but for now this blog will likely just track potential, much-need regulatory changes and the many stumbling blocks in the path to decent regulations (or institutional change for self-policing) as per: leverage, margin and reserve requirements, executive compensations, firewalls between managers and accountants, auditors, and insurance brokers, etc. Here is the ever-eloquent Epicurean Dealmaker:

Admit it, now, how many of you are enthralled to pick up your morning newspaper to read the 337th story this month on the subprime/mortgage/CDO/CDS/auction rate security crisis du jour and whether it is a) over, b) just getting started, or c) all Ben Bernanke's fault? Even the perma-bearish Bloggers of the Apocalypse, like Nouriel Roubini and pals, have become tired and tiresome to read; now, in what should be their hour of glory. They were a lot more fun to listen to when the party was in full swing, and their jeremiads carried the desperate tang of Cassandras who know they are right but can get no-one to listen.

Meanwhile, the rest of us soldier on, heads down, with appropriately downcast and guilty expressions painted on our faces to show that we, too, realize we were at fault in this and therefore should not be sacrificed on the General Altar of Economic Contrition. Even the profiles of potential villains of the month we read nowadays, like those of mortgage meltdown lottery winner John Paulson and evil-genius-turned-bumbling-oaf Stephen Feinberg, carry all the gustatory excitement of cold mashed potatoes on a dirty plate. Who cares?

It is against this cheerless background that your Dedicated Correspondent finds it difficult to lift the proverbial pen and dash off yet another scintillating missive from the frontiers of Vanity, Hubris, and Financial Shenanigans. …

But I have high hopes that this condition is merely temporary. Neither economic recession—whether in progress, merely looming, or just a figment of anti-capitalist scaremongers—nor a newly discovered probity and sobriety among the Captains of Finance and Industry can persuade me that Human Folly has been repealed in perpetuum. I am unshakeable in my belief that there are individuals out there, right now, who are planning their own apotheosis and subsequent self-immolation on the field of Mammon with such a grandeur and flair that my very fingertips tingle with excitement. I promise you, Faithful Readers, that as soon as they lumber out I will set forth, quill and keyboard in hand, to puncture their pomposity and skewer their self-regard as of old.

In the meantime, I can do little more than paraphrase the Immortal Bard:

"An ass, an ass! My kingdom for an ass!"

Speaking of John Paulson and Stephen Feinberg, here they are again, compliments of Andrew Samwick: Top ten hedge fund managers with the highest personal earnings in 2007

Moving Back to Fundamentals: End of Speculative Excess?

It won't happen easily and won't happen soon, but let's hope 'Hellasios' at Sudden Debt and 'Reality' at Financial Reality have it right that the age of financial excess is over. Joseph Stiglitz once called it "a form of looting". Both are suggesting that once this long-term train wreck is over, we will have learned a lesson from the excesses of the 70s through the present and will then be ready to return to those more stable days and ways of yesteryear'. Hellasious:

It's About Fundamentals, Again, Hellasious, Sudden Debt, Jan 22: …

• Western consumers will revert to spending within their means. It is possible that they will cut even further, in order to repair their overstretched household balance sheets. Saving rates will rise in the US and EU.
• Fiscal policy "boost" initiatives that are based solely on tax cuts/rebates will be proven ineffective, as the bulk of the money will be saved instead of spent.
• The BRIC economies will suffer from slowdowns induced by overcapacity and bad business loans.
• Credit crunch and risk aversion will spread to more sectors and more economies — it will become a wider global phenomenon.
• Interest rate cuts will bring western economies closer to ZIRP and liquidity holes, instead of inducing credit expansion and consumer-lead growth.
• We will see significant further deflation in asset prices, and may even see bouts of deflation for consumer goods, brought upon by excess capacity.
• Commodity prices may decline, particularly where marginal demand is directly tied to robust economic growth conditions (energy, metals, etc.).

In the days, weeks and months to come it may become very tempting to misinterpret the temporary gyrations of share indices, thinking them guides to future economic activity. I believe times are changing, back to when real economic fundamentals determine asset and commodity prices instead of the other way around. The cart is going back behind the horse, where it properly belongs.

We should keep our eyes fixed on the real economy "horse", instead of the market "cart". Some economists and policy setters had become very lazy of late, thinking the Dow told all. It doesn't, and it's high time they started earning their keep honestly, once again…

Note that Hellasious prefaced his remarks with a heavy dose of skepticism:: "How are things going to proceed from here? What follows is my personal opinion which, as all views of the future, should be taken with properly-sized doses of skepticism (jumbo-pack recommended)." Indeed, it is very hard not to be skeptical given the past decades of excess, greed, speculation, corruption and more. Still, we have to think forward and try hard to be optimistic about what needs to be built in the wake of this nightmare we've been living through. To 'Reality':

Bottom Picking, Financial Reality, Jan 21: … Asset markets are crumbling. First the housing market, then the credit markets, and finally the stock and commodity markets. The "real economy" will follow.

There will be bounces and big rallies in all of these markets at various times. Gurus and analysts will swing between depression and euphoria, just like everyone else. But the mood swings are only for trading. The real issue is the establishment of a sound basis for future growth, which is what is needed for the return of investment, as against speculation. We need to see:

• A healthy environment for, and a respect for, work and saving. The economy is sick because it has been overdosing on credit. People need to return to making what they spend and spending less than they make. Personal savings rates well north of 10%.
• A return to responsible lending practices, where borrowers have "skin in the game" and are not being fooled by "teaser" rates, and lenders have a reasonable expectation of being repaid.
• A reduction in the burden of government, which spends 44% of U.S. GDP in non-productive ways, like wars.
• Acknowledgment by the monetary authorities around the world that they cannot manage the economy and a sincere commitment to stop trying.
• A return to historical compensation practices, so that income inequality is reduced and daylight robbery by corporate executives, the financial industry, lawyers, doctors, politicians and government employees is brought to an end. The "Second Gilded Age" must come to an end.
• Reform of the inbred and non-responsive political system, so that is not just a spoils system but a government of the people, by the people and for the people.
• Share prices that offer the prospect of a return on investment based on dividends and growth, not illusion and speculation. This includes the end of option-based employee compensation that is a hidden tax on shareholders.
• The return of inventory levels of housing back to normal, that is in the 6-month's supply or less. And the same for the glut of commercial space which is just now starting to become apparent.
• Substantial reductions in the financial services industry, including banks, brokerages, hedge funds, mutual funds, real estate agents, mortgage brokers, attorneys, planners and all the other financial parasites. We need to see bankers driving taxis (and we will, count on it).
• Substantial reduction of the hidden tax on business otherwise known as the plaintiff's bar. Way too much money flows into the hands of 'trial lawyers' without any redeeming social benefit.

A reader at Financial Reality noted that their list looked like a letter to Santa Claus. So be it. If ever we are to rid ourselves of the "party on" attitude that has been a hallmark of American existence — and the antithesis of sustainability — there is no better time than in the wake of the likely nightmare now unfolding before us.

Marx and Engels' Insights into Globalization

Today while looking for scraps of evidence to finish my income taxes, I stumbled into a copy of Marx and Engels' The Communist Manifesto, written in 1848. Some time back I must have dropped the little book into a basket in a corner. As I will do just about anything to avoid dealing with taxes, I re-read it. What amazed me was the parallels Marx and Engels (and others?) drew between the mid 1800s and today's globalization.

To illustrate, let's condense a bit of Chapter I, "Bourgeois and Proletarians". In addition to condensing, I will embed a few notes to highlight particular points of similarity that I find noteworthy. For those who don't know, I'm drawn to post-Keynsian thought. Still, I find the Marx and Engels' circumstantial descriptions of mid-century 1800s too compellingly similar to what we are seeing today to not share their view with you. At the end I point to some books that may help others see why "free market" capitialsim isn't the end-all, be-all some make it out to be. Marx and Engels:

[Bourgeois and Proletarians:] The history of all hitherto existing society is the history of class struggles. … Our epoch [and continuing until today], the epoch of the bourgeoisie, possesses … this distinctive feature: It has simplified the class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, directly facing each other—bourgeoise [ruling classes under capitalism] and proletariat [the working classes]. …

Modern industry has established the world market, for which the discovery of America [and most recently the opening of China and India] paved the way. This market has given an immense development to commerce, to navigation, to communication [or has been aided an abetted by such immense developments,. Which comes first, chicken or egg?]. … [I]n proportion as industry [and] commerce extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed in the background every class handed down form the Middle Ages. …

Each step in the development of the bourgeoisie was accompanied by a corresponding political advantage of that class. [Remember Warren Buffet's 2004 remark, "If class warfare is being waged in America, my class is winning."] [T]he bourgeoisie has at last … conqured for itself … exclusive political sway. …

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound men to his "natural superiors." and has left no other bond between man and man than naked self interest, than callous "cash payment." It has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value. And in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom—Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

The bourgeoisie has stripped of its halo every occupation hitherto honored and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage-laborers.

The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation. [For a modern-day version see, e.g. Gary Becker's "household production function" and related literature. For a contemporary view similar to that of Marx and Engel's see, e.g. economic imperialism] …

Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all the is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life and his relations with his kind [now when all is reified into "commodity"].

The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establishes connections everywhere.

The bourgeoisie has through its exploitation of the world markets given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural….

The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralised the means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralisation. Independent, or but loosely connected provinces, with separate interests, laws, governments, and systems of taxation, became lumped together into one nation, with one government, one code of laws, one national class-interest, one frontier, and one customs-tariff. ….

… Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. … [Rendering an] epidemic of over-production. … The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented. …

Why was The Communist Manifesto kicking around my house? Years ago, my good friend and then co-worker Hank was finishing his PhD in Economics at the University of Utah, curiously then and now a hot-bed of Marxian thought. [Note: It proves curious the the U of U Econ Department leans left, since Utah is a bright red Republican stronghold.]

Hank and I used to spend many an hour debating economics, me from my Milton Friedman-influenced libertarian perspective, and Hank from a Marx/Engels' leftest perspective. Hank has since moved, as he says, "from Marx to Mastercard", and is now comfortably running a growing business. I, on the other hand, and in large part due to Hank's insights, have moved considerably in the direction of what might be called the "new left" despite the political incorrectness of the label.

Here are some of my favorite books — that some argue lean "left of center" as well. They have proved their worth to me in helping figure out where we might go from here, faced with similar conditions to those Marx and Engels saw long ago. Coincidentally these books help debunk today's round of "free market fundamentalism" that seems too pervasive these days.

Deborah Stone. 2002. Policy Paradox: The Art of Political Decision Making (revised edition).
Margaret Jane Radin. 1996. Contested Commodities
Thomas Prugh. 1995. Natural Capital and Human Economic Survival
James G. March. 1994. A Primer on Decision Making: How Decisions Happen
Elizabeth Anderson. 1993. Value in Ethics and Economics
Andrew Bard Schmookler. 1993. The Illusion of Choice: How the Market Economy Shapes Our Destiny
Herman E. Daly and John B. Cobb. 1989. For the Common Good
Robert L. Heilbroner. 1988. Behind the Veil of Economics
Mark Sagoff. 1988. The Economy of the Earth: Philosophy, Law and the Environment
Andrew Sayer. 1984. Method in Social Science: A Realist Approach
E.F. Schumacher. 1977. A Guide for the Perplexed
E.F. Schumacher. 1973. Small is Beautiful: Economics as if People Mattered

If these books don't shed light on where we might go next, maybe I'll once again have to retreat to the desperation of Kurt Vonnegut Jr.'s Player Piano saga. I found Vonnegut's books helpful, long ago, to counteract the propaganda I was getting from business school when studying or my MBA. But that is a story for another time/place.

Those Who Think They Know: A personal reflection

I've spent my adult life wondering about and studying the state of the US economy. When I was in college in the late 60s and early 70s times seemed "interesting," but no more so than they had been for decades, perhaps forever. The 60s just weren't the 50s and that's all I'd seen up to that time. Vietnam, student unrest, and all stood in sharp contrast to the seemingly tranquil homogenous 50s. When I graduated in 1972 I remembered wondering what I might do for a living. The advice I got then was, go back to school, the economy is not strong and jobs are few. So I went back to school and stayed there until about 1980.

During graduate studies in the 70s I didn't bother much with the economy, other that what an MBA student in a second- or third-tier business school might. When I finally decided to get a 'real job,' after completing my MBA and most of the stuff necessary for a PhD in forestry and economics, I once-again pondered the fate of the economy when choosing between a job with Weyerhaeuser and the US Forest Service. I chose the Forest Service, wondering whether we would be able to pay off enough of our home before the economy imploded. We financed our home with sweat equity and a bit of a bridge loan from parents and the folks we bought the fixer-upper from. Interest rates were almost 14% when we bought our home. The economy did not implode—although the commodity markets did, and the fellow who took the job at Weyerhaeuser was out of a job a short nine months after he took it.

Environmentalism Without Government: Good or Bad Idea?

As I was looking through the RGE Economics blog rollup (see sidebar) today I found this dandy at the Ludwig von Mises Institute blog: “Environmentalism without Government” by Tibor R. Machan. I should have quit then and there, but I didn’t. I read the article knowing what to expect. Still, I was surprised by the narrowly focused reasoning and conclusions.

Maybe it’s the literature and commentary I read and watch. Or maybe it’s true that we polarizing, turning everything into good v. evil, right v. wrong, etc. I always thought that we were transcending that tendency. I thought a decade ago that we were moving into the space of both/and rather than either/or?

Maybe it’s just too scary to admit that some things just don’t sort out into convenient taxonomic form. Maybe it’s too scary to admit that some problems are wicked enough that they can’t be solved without society and politics. Or maybe we are now so dumbed-down by TV that we have little capability to deal with complexity, nuance, ambiguity, and so on.

Markets are fine for what they do. I hope we can find means to adequately bound them, and keep them from doing more environmental and social harm than good. Voluntary cooperative efforts are also good, but limited in application. Machan see the world differently. He begins with, and pretty much ends with:

A free market, capitalist, exchange, political, economic system is far more environmentally friendly than any statist system, including the welfare state, socialism (whether democratic or centrally planned), or fascism. To demonstrate this, I would like to engage in some conjectural history, that is, to imagine how the world might be different had government never intervened to protect the environment but rather left all matters to property owners to sort out.

Most of us sometimes engage in conjuring up a utopian fantasyland. My usual fantasyland is that of organizational cultures along the lines of organizational learning and betterment in public and private institutions. Machan’s fantasyland is to conjure up a utopian scene where government gets the hell out of the way, allowing markets to work unfettered magic on all fronts. If markets aren’t to be the solution, then perchance all of us can find the will to work up what Machan calls “a great variety of voluntary cooperative efforts.”

Both of us would be more credible, I suspect, if we would offer up dark side scenarios, counter arguments to accompany our cheerleading. For my organizational learning stuff, it would be good to recognize that people, particularly those who seek power in public and private bureaucracies, tend to thwart the noble intentions and simple schemes often described by learning organization theorists. (See, e.g the collective works of Chris Argyris and Donald Schön, who advocate organizational learning, but go to great lengths to explain how very hard it is to get people to change behavior).

In Machan’s case it would be good to note that only a handful of practicing economists believe in the unfettered goodness voluntary cooperative efforts, free markets and private property rights as end-all, be-all solutions to every social problem. Most economists believe that markets work and do much good, but have to be bounded by the norms and customs of the cultures they work in. Similarly for cooperative efforts. They are good, but hard to effect. I suspect that Ronald Coase was right in that transaction costs tend to make cooperation on all, all the time, a bit difficult. Most economists also believe that there is a role in all this for government. Unless I misread Frederich Hayek (von Mises’ Austrian sidekick) he too held out a role for government.

None of this would be even of passing interest, except that Machan’s views are shared by high-level Bush Administration officials. If the views are unnecessarily narrow or off-base, then we all ought to stand up and take note. It could be that contrary views like those of Richard Behan (Plundered Promise: Capitalism, Politics, and the Fate of the Public Lands) and David Bollier ( Silent Theft: The Private Plunder of our Common Wealth) deserve more attention both in the press and in governance.

Governmental practices ought to be moving us toward sustainability both in terms of awareness and actions to get us on a path toward it. If indeed we need more environmental awareness and action both at the individual and institutional level, as both Machan and I believe, then we should be talking more about this and just maybe a little less about how we can chase yield and make our individual pocketbooks fatter.

Where do we go from here? Scenarios

I’m a believer in scenario planning, wherein one refrains from locking into any one future. Instead of using planning to build “plans,” as most bureaucracies do, scenario planners use planning to do two simple things: to rehash the past, and to rehearse the future.

The trick with scenario planning is to lay out several plausible scenarios and use them in the rehashing and rehearsing. Here are four scenarios, laid out tentatively so that we can play with them (and add to them or abandon some) in this blog.

Continuity: Soft-Landing Escape from the USA-China “Dance of Death”
“In the continuity view, the recent experience of longer expansions, more volatile financial markets, and possible increases in the growth rate of underlying productivity are seen, for the most part, as simply reflecting the specific configuration of exogenous shocks hitting economies against the background of a broadly unchanged set of structural relationships.” http://www.csfb.com/home/research_and_commentary/html/docs/34705687.pdf

Hard-Crash Replay of the 1920s-1940s
The hard-crash view relies on theories of continued long-wave cycles of optimism followed by irrational exuberance, followed by irrational pessimism, followed by pessimism, followed by optimism, and so on. Human psychology, human politics, and human economics go hand in glove: cycles will continue. There will be differences in each wave to be sure, but don’t bet on “new economy" thinking. Consider writings of the great economists, and don’t leave out Joseph Schumpeter, John Kenneth Galbraith, and Hyman Minsky.

See: Doug Noland’s Conundrums, 5/20/2005 – Scroll Down two-thirds of the way to subheader, Marshall Auerbach’s 'Bretton Woods II' is not a Monetary System, it’s an Excuse, 5/24/2005, and Marshall Auerbach’s Debt Trap Dynamics: Time To Think The Unthinkable, 2/15/2005.

Snippet from "Debt Trap Dynamics":

So the problem is likely to get worse, which could ultimately lead to “solutions” that prove highly disruptive to the existing system of multilateral trade and cooperation which has developed over the past several generations. A resort to out and out military force cannot ultimately be ruled out.

New-Environment: Frothy Replay of the late 1800s
“The new-environment view emphasizes endogenous forces in the system rather than external shocks, and it stresses the conjunction of three factors taking shape over the last decade or so: liberalized financial markets, low and stable inflation – underpinned by higher credibility of central banks’ anti-inflation commitment – and positive supply-side developments.” http://www.csfb.com/home/research_and_commentary/html/docs/34705687.pdf

Stagflation Replay of the 1960s – 1970s
“1960s and early 1970s: excessively easy US monetary and fiscal policy leading ultimately to a global liquidity overhang, substantial spikes in commodity prices and inflation, followed by stagflation.”
http://www.csfb.com/home/research_and_commentary/html/docs/34705687.pdf

My dream is for some form of continuity, some magic to pull us through and beyond "Bretton Woods II." My nightmare is that we are not set up well politically to deal with the type imbalances that existed just before both World War One and World War Two. Things could get wild indeed.

A Schizophrenic Beginning

As I wandered through downtown Denver this week I marveled at the wonders of modern engineering and finance reflected in the high-rise cityscape. I did the same in San Diego last year. I did the same in Portland long ago before a slowdown in the early 80s wiped out many people’s dreams in that area.

One part of me wants to believe that this wonderful party fueled by what Alan Greenspan and others call the “wealth effect” will continue. The working poor will be helped by the growth and development boon. The well-healed will continue to pour assets into the worlds financial reservoirs, the reservoirs will be periodically drawn down to finance new growth, and we will continue to rock-on!

Another part of me cringes. Only too recently have I reread John Kenneth Galbraith’s The Great Crash 1929, and compared and contrasted that era to ours. Many of the macro blogs I attend to are quite shrill as to future prospects for what they call a “hard landing scenario.” Others hold out hope for a “Stagflation,” a long, grinding, cooling-off that is in many ways a metered-out hard landing. Is stagflation a codeword for a ‘secular bear market’? Others think that we are likely to find a better way forward, that the world's players are smarter now and will not let the "unthinkable" happen again.

I’m schizophrenic. But I lean toward thinking that this can’t last. That the US economy has been kited once again, and moved into Ponzi finance as per Hyman Minsky’s prediction (and separately John Galbraith’s prediction).

This blog will chronicle my attempts to decipher the workings of complex and politically wicked systems in terms of geopolitics, macroeconomics, and international finance. These are my hobby areas, and if I add any value at all here it might be to point people to where the real pros are writing (via the blogs and knowledge bases I reference in the sidebar, and reference in posts). This blog will also chronicle my attempts to come to terms with the various disciplines and sub disciplines of economic thought and what they contribute to (and sometimes take away from) our collective wisdom.

Amid this mostly geopolitical chatter, I will also sprinkle-in some of my thoughts on what used to be called natural resource economics. Some of us are now loathe to call it natural resource economics. We feel our practice might be better titled ecological economics. According to the International Society for Ecological Economics it is best understood as a cross-disciplinary discussion between economists, ecologists, and others as to our prospects to move from “growth and development” to “sustainability” as a cultural guidelight. Ecological economics is my professional home turf, though here too I will always be merely a humble student.

Both my geopolitics thinking and my ecological economics thinking are guided by complex systems thinking. The often cited “butterfly effect” in complex systems theory gives me hope that my gloomier scenario musings may indeed not be the future that unfolds before us. Indeed the future, short and longer term may be very bright. But that same butterfly effect may play out perversely and we might end up with a theocratic nightmare order the likes of which none but the wildest of our writers have envisioned.

So my humble chronicles begin.