A Thanksgiving Story: How I Fell in Love with a Homeless Woman

In recognition of the ultimate "thing to be thankful for"--love--I present this short story (fiction).

First off you should know that I am not homeless, nor am I especially sympathetic to homeless people in general. I am definitely not one of those who make their living off the maintenance of the homeless population. Until quite recently I considered the homeless as either an urban-landscape issue to address in my profession or as a physical annoyance to be avoided. I am typical in this regard, I think, and typical in much else besides: employed by a government agency, and consumed with the usual preoccupations and solitary miseries of a single man in his mid 30s.

I think it fair, then, to state that no one could be more surprised to fall in love with a homeless woman than myself.

I can faithfully report that one falls in love with a homeless woman in the same manner as one falls in love with any other woman: your eyes meet, and some spark passes between you which is beyond easy description.

I cannot recall what she was wearing when we first met; I reckon blue jeans and a non-descript blouse of some sort; but I do remember her eyes and her face most vividly. A deep brown intelligence, alert but not entirely guarded, flashed in her eyes, and I saw something of her in those first seconds I shall never forget.

Her face reflected both her youth and the indeterminate nature of her heritage; such brown skin could be a mix of Africa, Southeast Asia, Italy, The Levant, Central America--the opaque origins and ubiquity of such a lovely brown made her exceptionally American.

Her hair was cut short, about shoulder length, and fell in a chestnut-black cascade unadorned by clips or barrettes. She asked if I would buy an issue of Street Sheet, and I gazed at her for a moment before replying, for she did not strike me as a homeless person; her gaze was too bright, and her bearing too unworn. She smiled quizzically at my pause--after all, the average person walked by without even acknowledging her existence--and I made some fumbling comment about buying a copy when I finished shopping. She nodded at this entirely banal excuse and I left her with a difficulty I could not have imagined a moment before.

It is not easy approaching complete strangers to sell them a copy of Street Sheet, for in doing so you are announcing the transparence of your vulnerability.

This account has flustered me even more than expected, for I have focused only on who and completely ignored what, when and where. She was standing outside a Walgreen's, and I was there to buy cleanser and a 9-volt battery for the defunct smoke detector in my apartment. I know this short list makes me sound like an overly cautious person, but it is more a reflection of my great laziness than an extraordinary concern about being burned to death in my sleep. The detector had stared in baleful uselessness at me for months, and more as an excuse for a bike ride than a pressing need I'd roused myself to make a list of what I could profitably buy at Walgreen's.

With the woman outside in the background of my thoughts, I found the items and picked up a Symphony chocolate bar which was on sale. Hoping she was still there, and still alone, I approached her with a dollar in hand. She turned to me in mild surprise--for how many people who excuse themselves to go shopping actually return to buy a Street Sheet-- and handed me the folded newsprint.

"You don't look like somebody who needs to do this," I blurted, and though I keenly felt the foolishness of my statement I didn't care, as it was true. She smiled thinly but made no reply, and our eyes met for what can only be described as the classic long moment. "Take care, OK"? I said, and she nodded in acknowledgement. With nothing else to say, I impulsively reached into my shopping bag and handed her the chocolate bar. Surprised, she hesitated, and I pressed the gift into her hand. Realizing that she would have no doubt preferred cash to candy, I strode away in hot embarrassment to unlock my bicycle. I then rode off, but not without gazing back at her twice.

I tried to chalk the meeting up as one of life's strange little interludes, but could not dismiss thoughts of the woman so easily. The next day I found time to ride past Walgreen's, and was disappointed to find a homeless man positioned by the glass doors, stack of Street Sheets firmly in hand. Future visits were equally fruitless, and I proceeded to cruise the standard begging spots in town on my bicycle, hoping to spot her at another venue.

Failing that, I swallowed my discomfort--or perhaps I should say outright shame--and inquired about her at the city's main women's shelter. The staffer eyed me suspiciously--after all, why would a non-homeless man be inquiring about a homeless woman unless trouble was afoot--and suggested I check at the city's co-ed shelters.

Balking at the suggestion that the object of my affection was already romantically attached--to a homeless man, no less--I resolved to ignore her advice and wait by the entrance through early evening, when the occupants returned home, as it were, before the doors were closed for the night.

As I waited--unobtrusively, I reckoned--across the street in the city park, another thought struck me and I felt a deep chagrin at my absurd persistence. Perhaps she hadn't looked like a homeless woman because she wasn't homeless; perhaps she was a shelter staffer or graduate student playing the part of a homeless woman as a research effort. This seemed possible, if not actually probable, and I almost turned away in disgust at my own pathetic hopes for romance with a fake member of society's outcasts.

Whether it was sheer stubbornness, a vengeful desire to punish my own stupidity, or perhaps a sort of prescience, I do not know, but I waited until dusk had settled over the park and the streetlights had come on. At the moment of rising to leave, I spotted her on the opposite sidewalk, making her way briskly toward the shelter's doors with a knapsack slung over her shoulder. After a brief hesitation of shock, I ran across the street, dodging a speeding bicyclist clad in bumblebee black and yellow spandex, and stopped her just shy of the entrance.

"I've been hoping to see you again," I said, and her look of confusion was a grave disappointment, for clearly she did not recognize me. "I met you the other day, in front of Walgreen's," I said helpfully, and she dutifully nodded, saying, "Oh, right." She looked more drawn down than she had that day, and I wondered if I'd built her up in my imagination. Her expression telegraphed neither recognition nor its absence, and the ambiguity of her reaction rendered me speechless. I had clearly caught her off guard, and at the end of a trying day, for I could feel her assessing her response; and at that moment I keenly regretted the entire venture of finding her.

"Well, it's lucky you found me," she said conversationally. "I've been staying at another place, but they had some problems, and I only came back here yesterday."

As she awaited my reason for seeking her, I blurted out, much less naturally than I'd planned, "I was wondering if you'd go out with me."

Her smile mixed surprise with a sort of knowing anticipation, and after a long pause she said, "So you want to go out with me."

"Yes," I replied. "Is it that strange an idea?"

Leaving my question unanswered, she shifted the knapsack to her other shoulder and asked, "What did you have in mind?"

"I don't know," I answered. "One of the usual. Lunch, a movie. . . coffee."

The tension in my chest rose as she pondered my request, and I sincerely hoped she would brush me off so I could be rid of the foolish illusions plaguing me. Instead, she looked across at the park with a wistfulness which can only be born of memory and hardship, and some reserve seemed to break inside her. "Sometimes I wish I could go on a picnic, you know, the kind with a basket, and friends. . . ." She glanced at the entrance briefly and added, "And ants, of course, lots of ants looking for crumbs."

Recognizing that the humor was shielding her heartfelt expression, I smiled and said, "Then a picnic it is."

"I didn't know we were friends already," she said with a practiced guardedness, and I shrugged, "You gotta start somewhere." She hesitated, obviously unsure of my intentions, and I said, "Down by the Marina. There's lots of kids, and people flying kites. It's nice there."

She considered me in the dimming light of day and then said, "The building where I was staying had bedbugs. A bunch of crackheads lived there and the bathrooms were disgusting. I'd saved up thirty bucks but I had to spend it on shampoos and doing all my laundry."

I stifled my dismay at her story of pillaging parasites and my mirth at so transparent an attempt to repel me; it was certainly a guaranteed repellent topic, but I refused to be set off by mere bedbugs. Besides, I reassured myself, she'd ridded herself and her clothing of the pests, and it wasn't her fault that she'd been living in such a filthy pit of wastrels. The thought also occurred to me that she'd invented the tale to test my resolve. "I'm sorry," I said lamely, and she flashed me an uneasy grin. "What I mean is, I can't bring much."

"That's OK," I said hurriedly. "It's my treat."

She gazed at me with inquisitive eyes and casually asked, "Why are you doing this?"

"Because I like you," I said honestly.

"How can you like me when we've barely met?" she pressed.

"You know how it is," I replied as easily as I could manage. "You either like somebody or you don't, and you know that in the first moment."

She was quiet and I launched my own brief interrogation. "Do you even remember me?"

"Yeah. You gave me a Symphony bar. That was nice. Of course I remember you."

"Well then, what time shall I pick you up on Saturday?"

"Say eleven o'clock," she replied briskly. "I'd rather not meet here, so I'll be in front of the library."

"If you can't make it, is there any way to get in touch with you?" I asked.

Gazing up at me, she said, "Don't worry, I'll be there."

With that, she turned to the entrance and then glanced back, catching me looking at her. As she gave me a goodbye wave and disappeared through the doors, I had the sinking feeling that she would not be standing outside the library Saturday at eleven. Well, I told myself, it was worth a try; another strange little interlude comes to an end.

Saturday dawned in an overcast fashion and I reckoned that would set the appropriate mood for my foolishly hopeful vigil at the library. I then spent several hours agonizing over the menu of the picnic, for even if I felt it unlikely that she would show up, I had to be prepared for the eventuality. Though I cannot claim to know many homeless people, I knew enough from various charitable interactions that they could be famously prickly about meals and the manner in which they were treated. The reason was obvious to all; the best defense against the indignities of charity and third-class citizenship was a spirited facade of normalcy of at least the second-class variety.

Knowing this, I designed the picnic menu to be neither so high falutin that it could only be seen as either charity or an attempt to impress, nor so plebian that it appeared to be designed specifically for steerage class diners. Tuna fish sandwiches? Perhaps she didn't like fish. Peanut butter and jelly? Too lowly and reminiscent of childhood. I settled on chicken breasts with spinach and sliced tomatoes on whole-grain bread, some red grapes and sparkling water which I flavored with orange Torani syrup. As an inside bit of humor I also included two Symphony chocolate bars for dessert. Reckoning I could navigate the dangerous waters between the Scylla of charity and the Charybdis of third-class no better than this, I set my mind to balancing my checkbook.

Of course I failed to calm my fears of rejection--so absurd, to fear rejection by a woman perched on such an insecure ledge--but she was a woman nonetheless, and one that I wanted to know.

I would like to report that I arrived at the library precisely at 10:58, calm and secure, but that would be a laughable fabrication. I arrived at 10:45 and immediately began pacing most nervously. All attempts to berate myself to serenity failed, and as my watch clicked over to 11:03 I cursed my own inability to see her rejection upfront, and my weakness for internal fantasy.

The shelter was only a few blocks away, and I reckoned she had little cause to be late. A picnic planned for two but consumed by one had a pathetic air about it, but it was better than wasting such lovingly prepared food. I was walking back to my car when someone touched my elbow, and I spun around.

"Sorry I'm late," she said in a rush. "Some bureaucratic hassles ate up my whole morning."

"That's okay," I said, mildly shocked by her prettiness and the effort she'd made to dress up. She wore a long, airy skirt of cream-colored taffeta and a matching top which reveled in her bared brown shoulders. She wore no makeup--from what I'd seen of shelters, there weren't many spots suited to applying makeup--but her expression held a lively, fresh-scrubbed energy and I was pleased to see the bright curiosity in her eyes.

"My car's over here," I said, and as we walked, a dozen questions and doubts came to my mind. "You're not a vegetarian, are you?" I asked querulously, and she shook her head. "That would be a luxury," she replied wryly. "Sometimes the only, quote, vegetable, unquote, we get is iceberg lettuce. You know how much nutrition is in iceberg lettuce?"

"Basically none," I answered, and she nodded acknowledgement, adding, "No, I take whatever I can get. The meals for a quarter worked for me, but then they closed that down. The city said the workers had to get a living wage, and the church couldn't afford that, so they closed the whole thing down."

I didn't know what to say--it certainly seemed perverse--and I was saved by the mechanics of unlocking my car. It's not an easy thing to casually inquire about life as a homeless person, and I had struggled with how to do so while preparing the picnic lunch. I ended up deciding that talking around the elephant in the room was both futile and somehow demeaning, and so as she sat quietly looking out the window I said, "You look great today."

"Thanks," she replied. "I actually borrowed this outfit. I don't have anything this nice right now."

"You looked great the other day, too," I said, and she waved away the compliment with a sort of weary rejection, saying, "Oh, sure. And what was that? Blue jeans and a T-shirt?"

"Something like that," I said uncertainly, and she smoothed the wrinkled fabric of the skirt over her knee with just the sort of self-consciousness I would have used on a borrowed tuxedo.

"You know," I said conversationally, "you don't look like someone who needs to be in a shelter. Do you mind me asking what it's all about?"

"I was hoping you'd ask," she said wryly, and I couldn't tell if it was light sarcasm or a veiled relief. Her summary was completed before we even arrived at the marina parking lot, a matter of five minutes or less. It was a typical tale of the underbelly of American life: the self-absorbed mother, the two stepfathers, the last one creepy enough to pursuade her to move in with a druggie boyfriend at 16; as a favor to the boyfriend, she'd muled a shipment of marijuana and was of course caught; an unpleasant stay in the juvenile justice system--how unpleasant could be ascertained by her acerbic use of "juvenile injustice system" to describe the proceedings and subsequent jail term--eventually dumped her on the street with a record and little else but an acquired taste for the gauzy smoothing of life's edges provided by marijuana.

I gathered it wasn't a junkie's sordid life, but more of a roller-coaster of living with boyfriends who happened to be dealers and the high-life interrupted by occasional busts which characterize that lifestyle. She was off the weed but not finding many resources for going straight; you can pick up trash all day forever, she'd commented dryly, and that's not gonna lead to anything better.

I was relieved it wasn't worse--and it could be so much worse in this land of the free, as I well knew--and I laid out the goza mat and picnic with a sense of relief that the worst was over and now we could proceed with the present. She ate the offerings with gusto, and I realized how much I liked women with appetites, women who weren't afraid to be hungry and lay right into a chicken breast sandwich with gusto. Girls about ten or eleven have no scruples about eating with gusto; they're hungry and it looks yummy, so they eat just like boys do, with a natural abandon. The fear of showing hunger comes later, along with the fear that there might be mustard smeared on your cheek; but Josie had few such prissy qualms, and I liked that in her.

She was named, she said--who knows if she'd taken the name recently, or made it up for my benefit, but I think not--after a classic jazz-rock tune. It seemed to fit her description of her parents' worldview--she wasn't named Claire or Emma, after all--and I reckoned the name fit her in being uncommon.

"How about you?" she asked as we finished off the red grapes. "What have you done with life?"

"The usual," I replied. "A career in urban planning, not as grand as I'd once hoped, and the typical number of failed romances."

"No arrests?" she asked mischievously.

"None that I can remember," I said, and I liked her sudden laugh. Reaching into the basket, I retrieved the two candy bars and handed one to her, saying, "I thought we'd celebrate with style."

"My, my," she said, examining the bar with feigned curiosity and then slowly unwrapping it. She nibbled on the chocolate, and looked rather pensively over the grass to the sparkling wavetops in the Bay. "I don't need saving, you know," she said firmly, and I was taken aback by the barely concealed hurt in her words.

Repressing my own hurt--as if that was the sum total of my interest in her, to be some gilded savior of the poor homeless--I issued a big sigh and said, "I was hoping you'd bring that up."

Her somber expression broke at my poor attempt at humor, and she appraised me with new eyes.

"I am in fact a living saint whose only interest in life is uplifting the poor and needy," I intoned, and as I'd hoped, she couldn't quite suppress a giggle. "Believe me, I surprised the Hell out of myself by inviting you on this picnic," I said with the surety of truth. "You want to know why I did?" Answering my own question, I said, "Because I like your face. I've been thinking about it, and that's what it boils down to. I like looking at you."

She was quiet and I added, "Pretty dumb, huh?"

"Not at all," she said, and I found a soaring power in those three simple words.

May you have a happy and healthy Thanksgiving-- CHS. 

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My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts. 

Thank you, Catherine M. ($5), for your most-welcome generous contribution to this site--I am greatly honored by your support and readership.

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The American Diet: Self-Destruction Never Tasted So Good

The atomized and empty consumerist Status Quo is the "monster Id" behind the American diet.

I know it may appear unduly harsh to discuss America's self-destructive dietary "monster Id" right before the Thanksgiving day feasting, but when is it more appropriate?

There are a great many disconnects between reality and what Americans believe out of convenience ("no snowflake feels responsible for the avalanche") or propaganda, but perhaps none is more visible than the disconnect between what we're collectively doing to our health with the food we consume.

The Chinese have an apt saying" "Disease comes through the mouth," meaning disease comes from what we eat.

There are several parts to the food-illness disconnect. One is that poor diet is an "individual" issue. Wrong; it will bring down the entire American Empire: Can Chronic Ill-Health Bring Down Great Nations? Yes It Can, Yes It Will (November 23, 2011)

86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.

The cost of treating heart disease and stroke in the United States is expected to triple in the next 20 years, to $818 billion, a new report says.

Here's a chart which depicts how U.S. healthcare costs are rising geometrically, far outstripping our economic competitors:

The nation cannot afford the present sickcare costs of 20% of GDP; how can it afford tripling what is spent on sickcare? Simple answer: it cannot.

The obesity epidemic can be viewed visually via this slideshow map of the U.S.:

Centers for Disease Control, U.S. Obesity Trends 1985-2007

Clearly, obesity has exploded into a pandemic in just a single generation.

Interestingly, all the usual explanations--the rise of fast foods, women joining the workforce and thus the decline of the home-cooked meal and the decline of physical labor jobs--fail to explain the dramatic increase for the reason that all these conditions were already present in 1985.

Women had already joined the workforce en masse, fast-food outlets were already on every corner and jobs requiring hard physical labor had already dwindled to a small percentage of our post-industrial, service-dominated economy.

So what is different between 1985 and the present? At least one factor is the increased consumption of sugary beverages: soda, specialty coffees, iced teas, and "juices," both the fake variety (colored sugar water with 10% actual fruit juice) and 100% juice.

This is another part of the disconnect: it is no accident that consumption of fast food, sugar-water beverages, snacks, chips and convenience packaged foods has exploded: all these "foods" have been carefully engineered to "taste good" by triggering our naturally selected desire for what is rare in Nature: salt, sugar and fat.

Please view this documentary on the science of sugar consumption:

Sugar: the Bitter Truth (University of California TV)(via R.W.)

The problem is not limited to America. Wherever the American diet goes, diabesity follows: The Sick Man of Asia: China's Health Crisis (Foreign Affairs, by Yanzhong Huang)

The essay traces out the devolution of China's once-universal if basic healthcare system for all into a U.S.-type system of full coverage for Elites and a more brutal one for everyone else: if you don't have the cash to pay for care, you die.

China has the largest population of diabetics and pre-diabetics in the world. China's diabetes rate has skyrocketed to 11% of the adult population, slightly higher than that of the U.S., while its rates of other non-communicable "lifestyle" diseases such as heart disease have also soared to U.S. levels.

China Diabetes Triples (via Joel M.) "Beijing doctor Li Guangwei sees China’s struggle with 90 million diabetes sufferers daily."

The problem is global, as the American diet of fast-food, sodas, salty-fatty-sugary snacks and prepared "convenience food" spreads throughout the world:

Next time you're in a fast food outlet or a supermarket, try to find something you can eat that won't harm you. It will be a challenge, I guarantee you.

chips: out, too much fat, too much salt

fries: out, too much fat, too much salt

sausage: out, too much fat, too much salt

fast food in general: out, too much fat, too much salt

salted nuts: out, too much salt

canned goods: out, too much salt

most cereals: out, too much salt

bottled salad dressings: out, too much salt

sports drinks: out, too much salt

pre-packaged salads: out, too much salt in the dressing

frozen meals: out, too much salt

packaged snacks: out, too much salt

packaged noodles: out, too much salt

The American diet is so unhealthy that even one serving is enough to negatively impact health: Study shows just one Egg McMuffin breakfast has adverse effect on arterial blood flow (via Ishabaka)

I have written extensively on health, fitness, diet and diabesity over the years:

Is Obesity an Inflammatory Response? (September 21, 2005)

The American Diet: Manufacturing Ill Health (April 25, 2007)

Food For Thought (May 9, 2009)

More Food for Thought: What's Behind the Obesity Epidemic? (May 13, 2009)

Improving Americans' Health, With or Without Health Care Reform

Staying Fit (at almost any) Age (January 25, 2011)

This Nation's Devolution from Quality to Convenience (January 4, 2010)

Why "Healthcare Reform" Is Not Reform, Part I (December 28, 2009)

Why "Healthcare Reform" Is Not Reform, Part II (December 29, 2009)

The End of Overeating: Taking Control of the Insatiable American Appetite (book)

The third disconnect is our cultural avoidance of the psychological and spiritual hunger that drives self-destructive overconsumption. Nina, proprietor of the insightful blog Deep Into Art Life West sent me a link to Charles Eisenstein's provocative essay Reuniting the Self: Autoimmunity, Obesity, and the Ecology of Health (Part 2)

All the individual is aware of is a hunger, a need for something more. The fact that obese people often eat when they are not physically hungry offers a clue to what is going on. Indeed, they are hungry -- they just aren't hungry for food. They are hungry for connection.Food is the most tangible, direct confirmation of our connection to a living universe that loves us. On a primal biological level, the act of eating tells us, "I exist" and "I am loved." Indeed, food is the most basic expression of love, a token of intimacy, of bringing an outsider into the realm of self. That is why it is customary in most countries to offer food to a guest, and why it is rude to refuse it. To feed another is, in this sense, an intimate act, an opening of the sacred boundaries of self.
When, as today, this intimate act has become a subject of commerce, and food a commodity, the entire food system reeks of obscenity.

This identifies something causally profound that is never addressed in "research" into the diabesity epidemic because it requires questioning the entire atomized and empty consumerist Status Quo. The emptiness of American consumerism does not lend itself to quantification like measuring leptin levels. But it is the "monster Id" behind the Thanatos American diet.

The last part of the disconnect is the broken link between our worship of convenience and self-destruction. Wanting a pill to fix all our problems, wanting to drive everywhere, eliminating physical fitness from our schools, addictive sedentary digital games, the profitability of managing chronic "lifestyle" diseases--it's all connected:

 

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My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com

To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.)

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Thank you, Brenda C.W. ($50), for your splendidly generous contribution to this site--I am greatly honored by your support and readership.

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Our Dust Bowl Economy

When the present path cannot possibly lead to success, regardless of the labor and treasure poured into the effort, then risking the unknown by trying something different is the only way forward.

The PBS series The Dust Bowl inspired an apt metaphor: ours is a dust bowl economy. What is the basis of the metaphor?

Simply this: those living in the dust bowl responded by doing more of what had failed rather than doing something different.

Several key responses actively worsened the crisis:

1. In response to declining prices for wheat, farmers plowed up more marginal prairie land to plant even more wheat: the idea was to compensate for lower prices per bushel by growing more.

We can anticipate the unintended consequence: bumper harvests further depressed prices, which fell from 95 cents a bushel to 25 cents a bushel (and stayed there).

2. Plowing up fragile prairie held together by native grasses exposed the soil to the winds, further feeding the dust storms.

In our economy, debt is the marginal field that has been plowed up for brief exploitation and profit. In response to the drought of income and collateral that supports debt, the Federal Reserve, Congress and the Obama administration have actively made the crisis worse by doing more of what failed spectacularly: encouraging more debt with zero-interest rate policy (ZIRP), massive "socialized" subsidies of housing and mortgages, and so on.

Just as in the dust bowl years, the occasional rain raises hopes of complete reversal. In our dust bowl economy, every "green shoot" of debt expansion, consumer confidence, builder confidence, retail sales, etc. is taken as "proof" that the "recovery" is "gaining steam" and the economy has fully reversed course from contraction to expansion.

Then a few months later the "green shoots" whither because the fundamentals that enable more debt--household income and asset collateral--are both deteriorating. Income is down 8% from 2007, and median household net worth fell 38% from 2007 to 2010.

(The data is skewed by the top 10% who own most of the individually owned stocks; as the stock market bounced back in 2010, so did the net worth of the top 10%, while the bottom 90% who have little exposure to stocks saw their housing-based net worth stabilize at post-bubble valuations.)

Doing more of what failed spectacularly simply sets up even more spectacular failures in the future. Why do people persevere in doing more of what has failed? One reason is that we have been trained to think that perseverance in itself will magically lead to success. This overlooks the key determinant that the chosen path must be one that is capable of reaching success. Other characteristics are just as critical as perseverance: being flexible, adaptable and willing to learn and evolve.

A second reason is the emotional appeal of hope. Since humans avoid the risk of radical change for the good reason that radical changes can go horribly wrong, it was easier to stay in the dust bowl and hope for a return of favorable weather and market prices than to accept that farming in the affected area was no longer feasible.

Sadly, those who stayed based on hope for "better times" lost everything, while those who recognized the end of the previous era of prosperity left with some assets and an intact sense of self.

The third reasons is a failure of imagination. This is a subject I have often addressed, for example in We Have No Other Choice (March 15, 2012), The Federal Reserve and the Pathology of Power (November 18, 2010) and Oversupply of Old Failed Ideas, Undersupply of New Pragmatic Ideas (July 16, 2010). We can sympathize with those faced with giving up a life they knew and that that had recently offered hope of enduring prosperity for an uncertain and unknown future trying something else.

But when the present path cannot possibly lead to success, regardless of the labor and treasure poured into the effort, then risking the unknown by trying something different is the only way forward.


My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

---

Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com

To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.

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Please click on a book cover to read sample chapters

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Thank you, Sharon J. ($50), for your stupendously generous subscription to this site--I am greatly honored by your support and readership.

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Understanding the "Exorbitant Privilege" of the U.S. Dollar

The dollar rises for the same reason gold and grain rise: scarcity and demand.

Which is easier to export: manufactured goods that require shipping ore and oil halfway around the world, smelting the ore into steel and turning the oil into plastics, laboriously fabricating real products and then shipping the finished manufactured goods to the U.S. where fierce pricing competition strips away much of the premium/profit?

Or electronically printing money and exchanging it for real products, steel, oil, etc.?

I think we can safely say that creating money out of thin air and "exporting" that is much easier than actually mining, extracting or manufacturing real goods. This astonishing exchange of conjured money for real goods is the heart of the "exorbitant privilege" that accrues to the issuer of the global reserve currency (U.S. dollar).

To understand the reserve currency, we must understand Triffin's Paradox, a topic I discussed in What Will Benefit from Global Recession? The U.S. Dollar (October 9, 2012) and Is There Any Correlation Between the U.S. Dollar and Gold (Or Anything Else?)
(November 14, 2012).

It seems very few grasp the implications of the Paradox, and even fewer relate it to global trade. I recently discussed Triffin's Paradox and The Rule of Law in a video program with Gordon T. Long, who noted that the U.S. Council on Foreign Relations (CFR) described the conditions in which Triffin's Paradox becomes unsustainable:

"To supply the world's risk-free asset, the center country must run a current account deficit and in doing so become ever more indebted to foreigners,until the risk-free asset that it issues ceases to be risk-free. Precisely because the world is happy to have a dependable asset to hold as a store of value, it will buy so much of that asset that its issuer will become unsustainably burdened."

In other words, if the U.S. issues too many dollars, that could destabilize the dollar. But this is only one aspect of Triffin's Paradox: the basic idea is that when one nation's fiat currency is used as the world's reserve currency, the needs of the global trading community are different from the needs of domestic policy makers.

Trading nations need dollars to lubricate trading and as foreign exchange reserves that bolster the value of their own currency and provide the asset base for the expansion of credit within their own nation.

U.S. exporters want a weak dollar to spur foreign demand for their products, while foreign holders want a strong dollar that holds its value/purchasing power.

This is one aspect of Triffin's Paradox that is intuitive. But it is misleading in several important ways.

Consider Apple's iPhone. It is a U.S. product, right? And so it is counted as a U.S. export when it is shipped and sold in Europe. How much of the iPhone is manufactured in China? How is the "value-added" part of the product accounted for? What if Apple partially owns the foreign factories that make the parts that are in its "export"?

This example shows how complex and potentially misleading it is to simplistically assume an "export" manufactured with imported parts is somehow purely a U.S. export that would be severely impacted by a strengthening dollar.

If the dollar strengthens, wouldn't Apple be able to buy imported parts for lower costs? Wouldn't a stronger dollar actually lower production costs?

This also ignores the fact that most large U.S. global corporations already earn 60+% of their revenues overseas, in other currencies. If the iPhone parts are made in Asia and the completed phone is sold overseas in exchange for other currencies, then exactly where does the strong dollar come in to destroy this trade?

The only impact the dollar has is when overseas earnings are reported in dollars. I have often commented on this "trick": as the dollar weakened, global corporate profits skyrocketed as earnings in euros, yen, etc. rose when stated in dollars.

As the dollar strengthens, overseas profits will decline when stated in dollars. But since roughly two-thirds of global Corporate America is already overseas--its factories, labor forces, back-office, etc.--and two-thirds of its revenues are earned in other currencies that are used to pay local labor and materials, then the supposedly devastating effect of a stronger dollar on corporate sales is illusory.

This supposedly horrendous impact of the U.S. dollar rising also completely overlooks the premium of necessity. If you need grain and soybeans to feed your people, and the only available surplus available is American grain and soybeans that cost 25% more when priced in dollars, you will pay the premium without hesitation.

If the U.S. starts exporting natural gas, buyers will happily pay a premium due to a strong dollar: U.S. gas could double in price and still be less than half the current price Europe is paying.

Let's not forget that exports are 14% of the U.S. economy. The truly domestic-only part of that 14% is less than meets the eye, as so many U.S. exports (such as Boeing airliners) are assembled from globally manufactured components priced in local currencies.

If the dollar strengthens, the price of all imported goods and services declines significantly. That helps 90% of the economy, for recall that imported components used in the manufacture of exports (such as oil) also decline in price as the dollar strengthens.

Does it make sense to demand a policy that helps at best 10% of the economy (and even that "help" is marginal for all the reasons outlined above) while hurting 90% of the economy? No it does not. A stronger dollar will help the U.S. and foreign holders of dollars.

Lastly, we need to understand the flow of U.S. dollars. Foreign nations don't end up with dollars by magic--they end up with dollars because they sold the U.S. more goods and services than they bought from us.

The U.S. got the goods and the exporting nation got the dollars.

The exporting nation ran a trade surplus with the U.S. and now has dollars. It can hold them as reserves, either in cash or U.S. Treasuries, or it can "recycle" the dollars back into the U.S. economy by buying real estate, investing in companies, going to Las Vegas, and so on.

What happens in global recession? Trade declines along with everything else. And what happens when trade declines? Trade deficits also decline. In the case of the U.S., which exports large quantities of what the world needs (grain, soy beans, etc.) while buying mostly stuff that is falling in price in recession (oil), the trade deficit could decline significantly. (It is currently $41.5 billion a month.)

And what does a declining trade deficit mean? It means fewer dollars are being exported. Think about this: the global economy is about $60 trillion, of which about 25% is the U.S. economy. Into this vast sea of trade, the U.S. "exports" about $500 billion in U.S. dollars via the trade deficit. Put in perspective, it isn't that big compared to the machine it is lubricating. (That is $250 billion less than was "exported" in 2006.)

It is an astounding privilege to conjure up dollars out of thin air and exchange them for real goods.

So what happens when there are fewer dollars being exported? Demand for existing dollars goes up, pushing the "price" of dollars up--basic supply and demand.

It also means that there will be fewer dollars seeking a safe haven in U.S. Treasuries, which will slowly but surely exert pressure on Treasury yields to rise.

Higher yields on Treasuries will then feed back positively into the value of the dollar, pushing it higher.

We can now understand why global recession will actually boost the value of the U.S. dollar and push interest rates higher in the U.S., even as the stronger dollar lowers the cost of imported goods. Rather than be the catastrophe many believe, a stronger dollar will greatly benefit the U.S. and anyone holding dollars.

Triffin wrote in an era of rapidly expanding trade, and so we can understand why the possibility that the interests of domestic and international holders of dollars might align, i.e. an era of declining trade where dollars will actually become scarce, was not the focus of his analysis.

If we follow the above analysis carefully, we can understand why those worrying about a surplus of dollars got it wrong: the real problem going forward for exporting nations will be the scarcity of dollars.

This explains the dynamics that will continue pushing the dollar higher for years to come. This is not an intuitively easy set of forces to grasp, and so many will reject it out of habit. That could prove to be a costly error.

The dollar rises for the same reason gold and grain rise: scarcity and demand.


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Part 27: Second Thoughts of New Lovers

Here is this week's chapter of my serialized comic novel "Four Bidding For Love."(Those who find absurdist humor and adult situations offensive, please read no further.)

     Kylie did not sleep well, and though she tried to convince herself her aching shoulder and the fire's aftermath were the causes, she knew those were only contributing factors. What turned her troubled mind was not the fire, but doubts about Robin—not just about him, but about herself, and the utterly inexcusable way she'd invited him to bed her on what was essentially their second date.
     Since high school Kylie had purposefully mocked the cliche of male impatience: if the girl failed to provide pillow time by the third date, then it was time to move on. Her mockery had served up a strict warning: forget it, buster, on the third date or the thirteenth or the thirtieth. Time duration has nothing to do with romance or pillow time.
     That worked both ways, Kylie reflected as she shifted restlessly beneath her comforter; there was nothing wrong with making love when you were in love. But what must he be thinking of me, a girl who didn't even make him wait to the third date? Or if their lovemaking was the third date, as he’d insisted, then at least to the fourth?
     And that led to another, weightier question fraught with self-doubt: am I really in love with Robin, or am I just in love with the idea of finally finding romance? The long drought of serious prospects since her college relationship had withered had left her more vulnerable than she'd admitted; the pain in confessing this proved its truth and this only deepened her self-disgust.
     I allowed myself to get carried away, just like those women-who-love-falling-in-love I always sneer at. How hard was it for him to sense that I was just another dreamy girl hoping for romance with a handsome stranger? Not hard at all; I practically wore a sign that read, "Please sweep me off to bed—I'll only seem to resist!"
     And now, Kylie told herself with resurgent dismay, you're in that same stupid boat with all the other stupid girls: hoping he calls you tomorrow, after you served up what he wanted with no conditions and precious little romance. And what about confirming that there was no need for protection? How stupid not to confirm the test results he mentioned, especially in the middle of my cycle.
     Steadying herself, she stared at the dark ceiling and thought, Don't go overboard beating yourself. Let's assume he was honest and protection was unnecessary. But you need to tell him very directly this was a special circumstance and that from now on, we're back to dates and movies and holding hands until I am sure this is love and not just desperation masquerading as love. And I need to ask for his test results, no matter how embarrassing the asking might be.
     If, she sighed, he calls me. If I were a guy, would I call me? Why call a girl who threw herself at me on the second date? If there's one thing that freezes a guy's blood, it's a clinging vine. You made it too easy, and now you've ruined it.
     The wind had died as quickly as it had arisen, and in the early morning quiet Kylie heard the forlorn distant wail of a passing freight train's whistle. She knew from past bouts of insomnia this marked the dismal hours between midnight and dawn; placing the pillow over her eyes, she told herself, there's nothing to be done now so I might as well go to sleep.
     To her surprise, her heartache refused to dim, and a relentless self-loathing robbed her of sleep for three of the longest hours of her young life.
   
      *       *       *
   
     Robin had once read that the fortunate soul who'd found a girl willing to slip off her knickers on a second date awoke bursting with the wondrous self-confidence that comes from having won the prize without enduring any of the tiresome courtship. The girl, it was reported, was left hugging her pillow, wondering why she felt so empty.
     Robin wished he'd awoken bursting with good cheer, but he did not; for the image of Kylie forlornly hugging her pillow gripped his imagination, and a completely undeserved remorse weighed upon him. It was undeserved, he reckoned, for he'd been gentlemanly throughout; he'd only accepted her invitation, and what man would refuse that?
     Despite this reassurance that his actions were above reproach, Robin could not lay this question aside: if I'm so admirable, why am I troubled? Perhaps it was bedding Kylie the day after he'd accepted Alexia's invitation; talk about a drought ending with a flood, he told himself, and then sighed. Or maybe it was the suspicion that he'd taken advantage of Kylie's confusion, ergo, his respectful gentleman had been a mere guise.
     It had been a fantasy come true to touch her, safely hidden by the dark; and her kiss had expanded the fantasy to reality. Yes, she could have turned on the light and ended the moment, but who made it impossible for her to find her underwear? What was that but subterfuge?
     Did she feel the emptiness of being taken where she hadn't planned to go? Maybe she's feeling used, and now she's angry with me. And then what? You've lost her, you greedy fool; how can I make it right?
     His first instinct, to apologize, contained its own risks; for didn't a confession imply a guilt which he did not want to admit? What would he be apologizing for—hiding her panties? Of course not, he told himself hollowly, for Hell hath no fury like a hesitant woman whose panties have been deliberately stashed from sight. No, it would have to be the apology of a quasi-innocent: I'm sorry for the confusion.
     Hah, that's even worse than no apology, he berated himself; there has to be some confession of culpability: I'm sorry I took advantage of the confusion. She could forgive that, for what man would refuse her a full-body massage?
     Satisfied he'd steered clear of both the Scylla of false innocence and the Charybdis of confessing guilt, Robin prepared himself to face Kylie and transport Ross's remaining possessions to Alexia's spare bedroom. After knotting his tie and combing his thick dark hair into submission, he trotted up the stairs to Alexia's to confirm that she was indeed gone to her house-sitting in Sonoma. Opening her door with the key she'd given him to tend to Hanover, he made sure her cat had water and dry food and then peeked into the spare bedroom.
     The risk he was taking by moving Ross in without her permission suddenly struck him as absolutely foolhardy, and he thought, You did this hoping to impress Kylie and win her gratitude; what if she's unimpressed, and Alexia finds out? Then what?

Next: Low Spirits All Around 

To read the previous chapters, visit the "Four Bidding For Love" home page.

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