Experiential Capital and The Will to Work

My Labor Day entry drew extremely insightful reader responses.

The word "capital" usually conjures up concepts of money and perhaps factories. But there are several types of capital. As noted in yesterday's entry, there are four separate types of capital:

1. natural capital (arable soil, oil, coal, fresh water, etc.)

2. built capital (tools, cranes, manufacturing equipment, electrical grids, etc.)

3. social capital (government, education, healthcare, Imperial bureaucracy, etc.)

4. experiential (internal) capital (skills, drive, ability to learn, health, etc.)

Without the fourth type of capital, then the other three erode to worthlessness. Some may argue that internal skills are not properly capital, but I would argue that "soft capital" is no less important just because it cannot be quantified like the number of mines, miles of roadways or students graduating.

In one sense, experiential (internal) capital is where the rubber meets the road. You can have natural capital, built capital ands social capital, but if nobody wants to produce value in the real world any more, or has the experience to do so, then the physical capital is unproductive and the citizenry will rapidly decline into abject poverty.

The costs of losing the willingness to learn and work in the physical (non-digital) world is the common thread in these reader comments.

Eric Andrews:

Here in the country we're back to the season of canning tomatoes, freezing corn, drying beans and apples, which is the yearly round. And like TV, it's just a habit. We don't need it, necessarily, but it's so familiar that it's easy to us, and we can't let the knowledge die. I mean, what happens if THIS is the year we NEED it? And after 15 years of habit, this year we found someone who wants to learn canning, so the knowledge won't die, because it is. You can read it in a book, sure, but it's all these little habits, these workflows, these tricks. Without them, you'll ruin a bunch, work too hard, be too worried, and not eat it because to some extent your life is at stake. Or put better, you're putting your life back into your own hands and away from somebody else.

But back to the work of it, that no one will try or learn how to garden, much less can, it's astonishing to me. I go over to houses even here in the endless open farmlands of Western NY, and nobody works. Half of them are on welfare, disability, Social Security, or some other such, and lay in bed until 10:00, then get up to watch TV, video games, or the computer. They don't clean, don't plant, don't work on the "projects" they're planning to get around to. And these are country people! Many times even the old folks who used to know better.

Even when you have them over, or when talking with them on the phone, they get upset if you try to work, doing the dishes or something. Used to be we all had to work all the time, and here in the country, you'd have friends over to pitch hay or turn the corn sheller because it didn't do any harm and at least was a change from doing it alone. You'd sit on the porch and shell beans while talking. After dark, you'd sew or sort or something while listening to the radio, or watching TV.

How is that more harmful than doing exactly nothing? Could even do that much watching a movie. Heck, you could put up a whole wardrobe of sweaters in a year that way. But people get agitated, I think they feel desperately guilty, angry in a way, that you're doing more then them, that you're doing what they know they should be doing anyway, but aren't. And they want you to fall down rather than lifting themselves up. This isn't an American trait as it's been noted worldwide, and heard it mentioned especially about native societies.

There aren't many of us left, that know, that work, even in the country. And this knowledge is like seed-saving, it must be used every year, every 3 years, or it vanishes, extinct, like a nursery rhyme with no new generation to carry it on. Even this far out, the country's really the suburbs now, because although the lots remain at 10 or 50 acres, the mentality is all from the city, which is all dispersed through the TV to every corner of the nation, and we get little hip-hop children here in a tiny cabbage town of 3,000 because they want to be somebody, and thanks to the Federal Reserve and Co., working for a living by making things and saving for tomorrow is being a nobody.

How so? What's the point of saving when rates are +1% minus 6% inflation for 30 years in a row? What's the point of planning when they'll change the rules on chickens, on milk, on where you can make a barn, or a Tastee-Freez, or where –Pop!--thanks to foolish and easy bank money, where you once had a rural paradise, someone drops in a car lot or a prison or a trailer park over your favorite spring-house stream? Why bother? Why love? Why hope? When you've seen this every year of your life, or for you older folks, since 1963?

It's incredibly destructive, and has made the entire nation acutely ill. They're falling apart, in trouble, and their relationships are dark and self-destructive as well. Again, it has every sign of drug addiction, denial, decay, lack of work, the kind of simmering violence of lashing out at someone when they feel unwell all the time and are looking for the reason for it. Since they can't define it, that reason must be YOU, and you should pay.

And all for the lack of getting up at 6:00 in the morning and doing something for yourself? Cleaning the house or rustling up a shovel to plant something, make something of yourself, having ideas and dreams?

I'd say luckily it's going to get all shut off for us, and soon.

The US is like a classic movie starlet, born on a farm in Kansas, raised on family and hard work, and with years of love and hard struggle, touring, loving all the people down in the smallest little grange towns, finally made the big-time in LA. Then stayed fixed in the limelight year after year as they aged, always taking new big parts in the same big movies, not noticing anything changing as life turned from love of craft and the people, slowly to parties and dissipation.

Eventually, the craft decayed and with increasing poor acting and bad manners and drunken, selfish fits, she found less and less work, still living the high life as the money ran out and secretly hit up old friends for “loans”. Finally, the constant pressure and desperation has led them to become a true junkie, losing house and fortune, raving in an astonished public about attacks and injustices, and using the old charms and stories to sleep with people for favors. Oh, not prostitution yet, of course--we could never do that--but what's the real difference except in the way we lie to ourselves?

And the thing the rest of the world is thinking, and makes them keep us going, is "this is the star! She was so GOOD in the day. She'll surely reform, come to her senses, go back to the old magic you can still see glowing under the surface. How can we pull the plug on her and leave her in the gutter, lost and dying in deluded dreams?" And I agree. Here's a really GOOD person, even now: smart, talented, hardworking, well-meaning, with a long history of overcoming challenges with brilliance. Genius almost. And yet--what else can anyone do?

They are going to cut us off, because, like any junkie at this point, they have to. And that's not an easy time, because it's do or die, and even odds as to which way it may fall. Dying as a nation IS an option here. We're not special. Without hard work, what have we got? And our drug is CREDIT. It's something for nothing. It's dreams borrowed from the future and we can't stop ourselves anymore.

And that's coming whether they want to or not. Plummeting imports (like this)

mean that China, Japan, Saudi Arabia and Germany won't have money to recycle into our economy even if they wanted to. And where would it get them if they did? Clearly, Liberty has hit the skids, and the work ethic has died.

Have you seen any official, any leader, any pundit yet saying, “There's no way out, boys, we're going to have to roll up our sleeves and get to WORK.” Get to work on corruption, with a big, ugly broom. Get to work on the catastrophic malinvestment in un-sustainable houses. Get to work on our sclerotic health care system that spends 60% on paper and 40% on doctors. Get to work on our infrastructure--and I don't mean roads--of decaying steel mills, grain elevators, factories, canals, ports, and a rail system worse than Bolivia.

And most especially, get to work on a solution to the energy crisis, where we can stop wasting 2/3 of our oil on stupid things like shuttling minivans back and forth to a school and work we should be walking to. Wouldn't that just make life as terrible in America as it was in 1923?

But I have yet to hear the FIRST official, pundit, or leader say the word “Work”, which is too bad, because that's what we're best at. So since they won't say it, won't do it, won't help it, and will fight you every step of the way, you're just going to have to go out there and take life by the handles and do the work yourself. Without anybody asking you. Anywhere you find it.

Me, I found it first here on the farm and with struggling to get somebody--anybody--to allow me to fix their barn for free. No takers. Let me show them how to lay stone. No takers. How to restore any door, window, or wall of our perfect, and perfectly run-down, falling-in 1890's Main St America. No takers. How to prune an apple and how to can a jar. Well, this week we found a taker for that, and that's a start.

From the low belly of the sow, that's life on the farm here.

Michael H.:

I am retired, and find that when I get off of my assssss, and do something I feel much better. I do play a lot on the computer. However, I find that when I physically.... reposition the fence in the back yard, when I dig a drainage ditch, when I repair drywall and paint I feel better. When all else falls I get on the treed mill. It will be snowing soon, and the ability move snow is a work out. Helping my neighbors move snow, cut trees etc is good. I have plenty of time to sit on my asss. There is a true joy in working, of doing something, for self and for others.

Rob M.:

I could not agree more (with your entry Labor Day Musings: On Skills and Skil 77s). What is funny is that when I was a kid in the sixties if you did not have a vegetable garden/root cellar and canning expertise you were the exception. I guess people got lazy over the years when there was no longer any seasonality in the retail produce business (ie. you can buy tomatoes, strawberries, blueberries, grapes, cherries year round now). Grapes used to be high status, only the well-to-do could afford them at any time of the year.

I also think people have gotten out of touch with the taste of homegrown food. A lot of the fruits sold today are picked green so they can stand the rigours of shipping. When I was young the only decent fruits and vegetables to be had during a Canadian winter were in a can or jar (courtesy of mom). Frankly no one felt hard done by either. Now everyone expects to have everything they want when they want it, even though it is often over-priced and tastes cruddy.

RE: your peaches: I worked in a peach orchard a few years ago after exiting twenty years of work-a-day grind in the lovely world of insurance. Rode my bike to the "office" and loved every minute of it. Kept thinking of Steinbeck for some reason. Unfortunately the orchard is gone now, a victim of our twenty-first century depression.

Gene M.:

"...Guitar Hero over actually learning how to play a real guitar and watching rather than doing."

Have you heard about the guy who was asked whether he could play the violin. He responded: I don't know. I've never tried."

(I don't often get to tell that joke!) I have to say that the jam sessions I've had with my kids over 3 decades will remain among the most treasured memories of my life. I play 6 instruments or so, but none all that good. Sure is fun though.

Thank you, correspondents, for your experiences and insights. As Emerson noted: Do the thing and you shall have the power.
Essays: V. Compensation (1841) (Ralph Waldo Emerson)

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Why We Should All Grow Some of Our Own Food

Growing some food ourselves is key to an experiential understanding of food, nutrition and health.

The key feature of an integrated understanding is that it is essentially three-dimensional, not in the spatial sense but in the sense that it combines a structural understanding with an historical and experiential understanding.

Without a knowledge of history, then the present is decontextualized--the precise goal of the status quo's mass-marketing/mass media machine. The person with no awareness of what came before is easily manipulated and exploited by a carefully manufactured politics of experience which supports the status quo.

An integrated understanding includes an experiental understanding. "Old World" skills (both Old World Europe and Old World Asia) were grounded on the absolute mastery of the fundamentals through practice and repetition. Only when this foundation was perfected would the student or apprentice begin adding higher skills and knowledge. This is the structure of scientific knowledge as well.

Thus an integrated understanding of health, well-being, nutrition, cooking/cuisine and life itself requires growing some food oneself. Even if it a single tomato vine in a pot, everyone must gain the experience of nurturing, harvesting, preparing and eating real food. Without this experiential working knowledge, then there can be no truly integrated understanding of health, well-being, nutrition or cooking/cuisine.

It is a simple "obvious" truism that what we put in our bodies for sustenance directly influences our health and well-being. No one denies this, yet many stuff themselves with visibly unhealthy foods--mostly packaged by agribusiness/fast-food global corporations for profit, not nutrition.

As a result, the U.S. is a nation plagued by poor health and pandemic chronic illness.

There can be no real understanding of what food is without growing fruits or vegetables or raising livestock/fish and then preparing and eating the results. Even if it a single tomato harvested from a single vine in a single pot on the deck of an apartment, then the experience is necessary to transform one's understanding of food, nutrition and health.

Here are some photos from readers' own harvests. Correspondent Cheryl A. and her husband Michael grow vegetables in large containers on their deck.

Correspondent Jed H. recently submitted this photo of his mango harvest in Hawaii:

An integrated understanding works back from "the obvious" to the source and then works forward again, grasping each causal link in the entire network. To understand the epidemic of "diabesity" then we have to trace the causal chain back to our stilted, alienated understanding of food itself.

From there, we can advance through all the other causal links: from the stupor/torpor induced by high-fat, high-sugar, high-salt packaged food to the decline of cooking skills and the saturation of the mass media with messages to consume unhealthy but highly profitable items which are simulacra of actual food, manufactured to stimulate the addiction/reward centers in our brains.

Once a truly integrated understanding is reached, then you stop buying packaged foods entirely and you also lose the desire to consumer fast foods, half-gallons of ice cream and a host of junk-"food" snacks and beverages.

In a similar fashion, there is no way to reach an integrated understanding of well-being without being physically fit along with eating real food prepared at home--even if "home" is a campsite. No gym equipment is necessary to become fit; nothing is needed but two square meters of open space. If one has never experienced well-being, then how can one claim to understand it?

This is a radical departure from the quasi-"scientific" politics of experience which claims a full understanding is possible by quantification alone. This is a politics of experience which leads to quantification traps in which simulacrum of understanding are supported by quantifications which are inherently ambiguous or decontextualized of meaning.

Propaganda favors statistics and quantification because manipulated data can always be presented in ways which support a politics of experience under the control of a centralized, concentrated-power Elite. (Does that list of ingredients on packaged food really tell you anything which adds to your understanding? Or is it designed to obfuscate and deceive?)

That Americans are eating their way to death does not support a highly profitable complex of "food" and "sick-care"/pharmaceutical industries. Hence it is suppressed and decontextualized in favor of incentives to continue eating oneself to death so that powerful Elites can increase their profits.

The relentless promotion of "free" media is an integral part of this profitable world; not only does mass media profit from ads for fake-food and medications to counter the diseases created by the fake-food but the media itself acts as a substitute for experience of the real world.

Citizens spending hours sitting on the sofa watching cooking shows is immensely more profitable for the Power Elites than citizens turning off the TV and engaging the real world of growing and preparing real food. The profit potential of citizens experiencing the real world in these ways is almost zero. There is little profit in seeds, raw vegetables and garden mulch.

Nurturing a single bean plant and preparing the harvest, however small, gives an enlightenment that is unattainable by any other means.

In a way, an analysis of the politics of experience leads to this point: lived experience is the key to seeing through the sham politics of experience presented by the Power Elites for their own benefit.

Just as mind and body are one, so too are food, activity and health one. But it is much more profitable to make us ill with "food" manufactured to be unhealthy and then proceed to sell us the pharmaceutical and surgical "cures."

Yes, some diseases are genetic and others are triggered by environmental factors; these will need to be treated by medications or surgery or other treatment. But to ignore the causal connections between food, diet, activity, consumption of mass media/marketing and chronic disease/ill health is to ignore the "obvious." Why surrender control over those elements of health we do influence?

This is why I have said "A healthy homecooked family meal and a home garden are revolutionary acts." In the context of a State/Elite-shaped politics of experience which profits from unhealthy fake-food and the management of the resulting diseases, then wresting control of one's food is decidedly revolutionary.

A free people will want control of their own lives, sustenance and destiny; an enslaved people will "buy" whatever they are "sold" and accept their Masters' "explanations."

As soon as we buy a packaged "food product" or "fast food," we have ceded control of our nutrition and "cooking" to a corporate entity whose concern is not our health but shelf life, profit margins, and engineering the "taste" of the "product" to trigger the reward centers of our brains in a cocaine-like fashion.

If you think this is exaggeration, please take it up with the former Commissioner of the Food and Drug Administration, David Kessler, M.D. who reached these conclusions after careful study of the available scientific evidence. He published his findings in 2009: The End of Overeating: Taking Control of the Insatiable American Appetite. Among many other points, he found that the nutrition information on packaging is manipulated by the food industry to mask its true composition. Thus the "quantified data" which you are invited to trust is deceptive.

Why should we cede control of our health and well-being to global corporate interests whose sole purpose in marketing their products as "food" is to maximize sales and profits?

It is a reflection of the twisted influence of false ideologies that taking control of one's food, cuisine, nutrition and health can be viewed as either "highly progressive" (down with the corporate parasites and toothless State lapdogs) and "highly conservative" (let's get back to the roots of what made this country great--real homegrown food, real homecooked family meals and hard work) at the same time.

Is there any wonder than an integrated understanding steers clear of ideological entanglements? Ideologies are all about the opposite of understanding: manipulation of public opinion by Power Elites to further their own control and gain.

I would like to emphasize the value of control and establishing who holds control in every causal chain or network. If I buy a packaged food item which contains more salt than is healthy for me to consume in one day, then I have ceded control of my salt intake to the corporation which manufactured the packaged food and thus control of my own blood pressure and the attendent health risks that high salt intake incurs.

The goal of an integrated understanding is to make a realistic assessment of what serves your best interests and what does not serve your best interests, and then act on that awareness. We can all start by growing some of our own food, no matter how modest the harvest.

Here is a recent photo of our own modest harvest from a small urban garden and one peach tree:

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University Degrees, Social Capital and Debt

Is going into stupendous debt to attend university "worth it" in terms of social prestige and lifetime earnings?

Correspondent Mark A. recently wrote about the "social capital" benefits of a college degree. In the taxonomy of capital, there is natural resources capital (fresh water, arable soil, oil, coal, minerals. etc.), built capital (infrastructure, equipment, tools, etc.) and social capital: skills, health, social networks, memberships, etc.

Here's Mark's commentary:

From what I can tell (and this isn't my idea - I picked it up from somewhere else) college (not to be confused with graduate education) involves at least three distinct purposes which are rarely differentiated.

The first (call this the "humanistic" purpose) is to acquaint people with important ideas, histories, and intellectual traditions so they aren't ignorant hicks. Professors and generic liberals go off into raptures about this, how it introduces us to our larger human heritage, democratic principles, individual potentials and whatnot. And for those in the audience with a bent in that direction, this immersion is in fact anything from rewardingly entertaining to intellectual bliss.

While some of the subject matter can be conveyed in high school, I venture that few young people have developed the resources to appreciate the power of ideas and their own intellects till they hit university, so it really is a distinct mission and experience from that of high school.

All of this is, to me, fine and good, since to the extent people absorb actual ideas and culture from the experience I can live in a society that much less polluted by teevee, football and Nascar. Call me a snob, but that's worth something.

The second mission of college, not well articulated anywhere, is to expose young people to the process of actual scholarship and recruit the next wave of actual scholars into academe. Arguably, this was the orginal mission of university (I think of Oxford and Cambridge).

The process is perhaps more visible in the natural sciences, where anyone with a clue learns that a Bachelors degree is only the first of several necessary to distinction, and advancement depends on some actual originality and contribution, however incremental or obscure. Again, this is fine and good with me.

While I don't doubt that there all sorts of degreed people with ordinary minds, I'm also sure that those with extraordinary minds require the company and tutelage of other extraordinary minds, and I want there to be as many and as smart people around as possible, and I am happy to support those people with tuition money, directly or indirectly (e.g., government subsidies).

The third and most prevalent (perceived) purpose of college, though, is to qualify people for employment in the commercial economy, particularly in white collar jobs. I'm going to guess that this purpose bloomed along with the rise of the industrial corporation, especially after WWII, when the existing educated class which graduated with "humanistic" backgrounds found they needed more folks to run district offices and compile reports, which required some greater writing and numerical skills than they might find among their manual workers.

The same applies - indirectly so far as it involves graduate degrees - to the professions such as engineering and chemistry and so on, where the actual technical requirements of the economy increased. As a comparatively new and fast-growing purpose, though, I think this mission became overblown and conflated in the interface between business and academia such that companies came to require degrees in everything and colleges came to offer degrees in everything to no good end. (I'd like to know who started it. Your contributor's IT example suggests it was the schools. Me, I don't know). Anyway, when people talk about the cost and value of a college degree, they seem usually to be talking about this mission, but...

There's at least one other purpose of a college degree, and that is as a class signifier and admission. A degree from an Ivy or other top-tier school is a passport to a network of smarter-than-average people in more-influential-than average positions, and earns the holder more money and access than they would otherwise have.

A degree from a more-ordinary institution may not (nowadays, in the aggregate) buy someone better lifetime income or prestige than they might have otherwise, but it does buy them membership in the class of "college graduates", which I believe is still worth something in economic status and (gag) self-esteem. Though I reckon these two examples to be distinct cases with distinctly different paybacks, both share the quality of being social rewards whose value won't change quickly, whatever their dollar costs.

This makes the discussion of college costs vs. benefits by cranky old farts like us (or even the slighter younger cranks and iconoclasts among your readers) more than a little problematic, because as it is now, the benefit of degree-as-ticket is greater than almost any dollar cost.

Without a collective social respect for manual or other non-degreed occupations, anyone without a degree is a loser or "unqualified", and amidst an otherwise scattered and desolate social fabric (cf. "Bowling Alone" and other tales), no one wants to risk falling into the void. This might change if increasing numbers of middle-class kids get priced out of college and form a self-respecting (intelligent) cohort, but the "credentialization" of employment in our "globally competitive environment" suggest that Bizness will keep the pressure on to put kids in debt.

There's no question, by the way, that college costs too much, or that most of its content could be learned (and used to be learned) by the time of graduation from high school. However I suppose my point is that the dollar cost-benefit comparison, as economically valid as it is, doesn't fully account for the less-tangible social benefit of a degree. Even if a crappy degree never earns back its price in dollars, it might, in keeping the holder on the near side of (expanding?) socioeconomic oblivion, be better than the alternative for a majority of students. Plus, of course, it keeps us from becoming (that much more) a society of ignorant hicks.

Thank you, Mark, for an incisive (and free-wheeling) commentary. I will now add my three cents (if deflation really kicks in, make that one cent).

1. What if earnings don't materialize? A number of readers of my initial post on education costs Is Higher Education Worth a Lifetime of Debt? (August 26, 2009) sent me this story from the New York Times about law students who have mortgaged their future to the tune of several hundred thousand dollars of student loans, expecting to exit law school into the welcoming arms of law firms paying $150,000 a year.

Alas, said law firms have ceased or severely trimmed hiring, and said law students are now facing the prospect of paying off $200,000 loans without said fat $150K per year paycheck.

There is undoubtedly a valuable cache to an Ivy League law degree, and as the pickings get slimmer then those Alpha types who got into Yale, Harvard, Stanford or Boalt already have the necessary skills to navigate the treacherous waters of hyper-competitive law firms.

But being able to do the work is different than competing for a slot in law school or for a position. It is presumed that the same skillsets apply, but they don't. For example, some star architect students make lousy architects.

Although it's far from scientific, a list of the "top" surgeons, physicans and attorneys compiled a few years ago here in the San Francisco Bay Area reflected just this division between credentials and actual real-world skills. Among this list, few attended Ivy League schools.

This is not a slam on the Ivy League, just an observation that not all skills can be taught, even for a price; an unpredictable mix of talent, drive and skill wins out. It may well be that once graduates enter the real world, the differences in talent erode the initial advantage offered by elite university degrees.

As the global economy devolves, then the declining income of all but the very top talent will make those student loans ever more onerous.

Of course this is not an issue for those attending Stanford et al. on scholarships, which is many if not most students; so as long as the endowments don't crater in value, the elite schools are often "free" to coveted students.

Not so lucky are students who paid top-dollar to attend second-or-third-tier private universities but did not exit with the top-tier cache. What is the "value" of their degree compared to much cheaper and reasonably prestigious state universities? Would it be that terrible if some high-priced private universities closed their doors as students balk at paying $150,000 for a modest level of social prestige? Perhaps some price competition would be useful in higher education.

2. The subject matters. We know many young people who graduate from U.C. Berkeley, one of the top public universities in the world and one of a handful of premier research universites (at least until the State of California goes bankrupt). Those who graduate with degrees in rhetoric, English, philosophy (gasp) or other non-technical, non-career path subjects find they are mere mortals upon graduation. With these degrees in hand, you can either go on to graduate school or enter a field where the prestige value of your degree doesn't carry much weight: insurance, retail, etc.

Following Mark's taxonomy of benefits accruing to those with university degrees, we can anticipate that the social "college grad" benefits may actually devolve along with the economy.

3. Social capital and social networks. It's well known that the two young founders of Google received mentoring and key introductions to venture capital sources from their professor at Stanford. Could this have happened at San Jose State, an excellent state university a few miles away from Stanford? Perhaps not, but the professors at San Jose State are definitely plugged into Silicon Valley and students in EE (electrical engineering), network enginneering, programming, etc. there have an excellent chance at meeting the "right people" in the Valley by attending SJSU and working in those departments.

On the other hand, Steve Jobs met Woz at the Homebrew Computer Club; neither had degrees. Woz went back to college after he became a millionaire co-founding Apple and earned a dgeree in education.

My point is that social networks and place matter as much or more as the social capital of "membership" in the class of college graduates.

Attending a major university (a big state school, for instance) does confer one potential benefit: it can introduce students to a wider circle of friends and future contacts. High school is often dominated by the torturous navigation of cliques and the burdens of being an outcast. University is about working with groups of people on projects and having to deal with a variety of people in settings where "getting along" is paramount. Those social skills are valuable, especially in a culture which emphasizes "me."

4. The Military/Veterans University Nexus. The same can be said of service in the Armed Forces, too--and the number of people who enter the U.S. Military for a stint and then go on to earn a college degree with their veterans' benefits is extraordinarily large. Indeed, we can posit that the explosive growth in higher education in the U.S. was and is directly correlated to the explosive growth of the Armed Forces in World War II and beyond (from 400,000 service members in 1940 to 15 million in 1945).

Some 1.5 million citizens serve in the Armed Forces and many earn degrees either while serving or after completing their term of duty. This is a "pool" of potential college students whose expenses are largely paid for by the government.

And let's not forget the enormous funding for research (and thus grad students) which flows through Pentagon departments like DARPA, ONR (Office of Naval Research), etc.

5. Establishing goals and purpose. In an economy with fewer job opportunities for young people, then college has two distinct advantages: it removes millions of people from the job pool, albeit temporarily, and it offers students a purpose and goal in life at the very point many are drifting and aimless.

Is a Bachelor's degree worth $150,000? In any rigorous cost-benefit analysis, the answer will probably be no. Is it worth $25,000 in social capital, networking, "membership" and the additional four years of learning how to learn? The answer is "yes" unless other opportunities present themselves which offer even higher payoffs for four years of labor and the $25K invested.

Lagniappe thought: if you're a real workaholic, then you can work while attending university and actually learn practical skills at the same time. I exited college with a "worthless" degree in philosophy but two years experience as a carpenter/helper. I already knew how to hang drywall, finish concrete, frame houses and much else relating to construction (digging a nice deep straight ditch, for instance).

Which is just another way of saying, if you have some employment opportunity, then it is possible to take it and earn a college degree "on the side" for the fun of it or for the potential "social capital."

After all, learning isn't just about earning a "membership"--it's also great fun.


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"Your book is truly a revolutionary act." Kenneth R.


Of Two Minds is now available via Kindle: Of Two Minds blog-Kindle

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How Low Can We Go?

The six-month long global stock market is losing steam, which begs the question: how low can we go?

Is this a new Bull market or just another typical Bear Market rally? Let's look at two charts for clues.

First, read the HUGE GIANT BIG FAT DISCLAIMER below: these are the free rantings of an amateur ignoramous, etc. etc.

Before we glance at the charts, let's ask: has anything really been fixed in the global financial markets and economy, or have all the problems just been papered over with trillions in central bank bail-outs, loan guarantees, stimulus and bogus accounting/statistical lies?

The VIX is one measure of volatility or what is sometimes called "the fear index." When confidence reigns supreme (with an emphasis on the "con") then the market players see no reason to bid up options to protect themselves from potential drops into the abyss. So when confidence is high then the VIX is low and stable:

When the wheels finally fell off the MSM/central bank fantasy that "subprime is under control" then fear sprouted wings and the VIX soared.

Judging by the VIX's return to the low-to-mid 20s, then confidence has returned in full force and the fears of a global meltdown have vanished.

Nice, but what if nothing has really been fixed? What if market participants sniff out that everything's just been swept under the rug? What if the $7 trillion commercial real estate market in the U.S. is about to slip into the abyss of domino defaults?

The Shanghai market's sudden 10% drop in only two days suggests not all global players are convinced.

The MACD on the VIX is crossing at a very low level, suggesting a lengthy period of rising volatility could be upon us. The stochastic has been rising for awhile now, having made a bullish cross last month.

In sum: the VIX seems to be warning us low volatility may be giving way to higher volatility.

Here's a chart of the Dow Jones Industrial Average:

One fairly predictable pattern in any market chart is that price tends to oscillate between the upper and lower Bollinger band. I've marked this trait with small blue lines.

When markets are trending strongly, they can ride the Bollinger bands up or down. But if this is once again a "normal" market, as the VIX suggests, then it would be entirely normal for price to drift down to touch the lower Bollinger--around 7,800 or so, with the caveat that the bands expand in volatile markets and thus if they widen then the lower band drops.

In other words, if volatility increases, then the bands widen and the target drops accordingly.

Many observers are recalling that stocks tend to re-test their lows after severe drops, something which forms a "double bottom." The psychology is supposedly something like this: participants can't really be sure there won't be a new low until the market dips down and bounces off its last low.

If this holds true, then it would entirely normal for the DJI to drop back to the 6,500 area. From its high last week at 9,600, that's about a 3,000 point decline.

Standard issue financial pundits (SIFPs) are mewing calm words about a 10% decline of "profit taking."

Better keep a chart of the VIX handy just as a real-world test of those placid reassurances. If the VIX keeps rising, then Wiley Coyote may find he's run off the cliff into thin air.

A few titles of long-term interest:

The Fourth Turning

Running On Empty: How The Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It

The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century

The Great Wave: Price Revolutions and the Rhythm of History

Beyond Oil: The View from Hubbert's Peak

The Party's Over: Oil, War and the Fate of Industrial Societies

The End of Oil: On the Edge of a Perilous New World

The Dollar Crisis: Causes, Consequences, Cures

Fewer: How the New Demography of Depopulation Will Shape Our Future

The Coming Generational Storm: What You Need to Know about America's Economic Future

Our Stolen Future: How We Are Threatening Our Fertility, Intelligence and Survival

Planet of Slums

I've added a number of books to my comprehensive list: Books and Films


Permanent link: How Low Can We Go?


If you want more troubling/revolutionary/annoying analysis, please read Free eBook now available: HTML version: Survival+: Structuring Prosperity for Yourself and the Nation (PDF version (111 pages): Survival+)

"Your book is truly a revolutionary act." Kenneth R.


Of Two Minds is now available via Kindle: Of Two Minds blog-Kindle

Thank you, Aneel P. ($1), for your much-appreciated generous donation to this site. I am greatly honored by your support and readership.

Thank you, Rastacrucian (50), for your outrageously generous donation to this site. I am greatly honored by your support and readership.

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Could a Viable Third Party Emerge in the U.S.?

Japan's recent election boosted a new party into national power by a landslide. Could that happen in the U.S.?

Japan's voting public recently tossed out the sclerotic, entrenched Powers That Be (the Liberal Democratic Party, LDP) in favor of the upstart Democratic Party of Japan (DPJ). Given the lock on power maintained by the LDP, Japan was essentially a one-party state for the past five decades. Other than a brief dalliance with another party in 1993 (and only in the Upper House of the Diet), the Japanese public continued empowering the same old party hacks and the same old alliances of rural constituencies, the construction industry, global exporters, zombie banks/ insurers and government ministries.

And the public's reward was economic stagnation and devolution for the past 20 years. Japan is an extremely conservative, traditional culture--don't let the wild youth fashions fool you. Patience and forebearance are national virtues, and it took two decades of malfeasance, corruption, incompetence and abject failure to wear through the public's conservative bias for the status quo.

After all, hadn't the LDP alliance delivered decades of growth that had become the envy of the global economy? Hadn't Japan, with only 125 million citizens, become the second largest economy in the world?

But like political Elites everywhere, perhaps the LDP was delighted to take credit for a trend which had little enough to do with their leadership abilities and everything to do with Japan's cultural capital: a reverence for education, an obsession with quality, an appetite for hard work and a keen awareness of Japan's modest natural resources.

It was not the LDP's strengths which created the 30-year boom but its weaknesses which created the 20-year "lost decades." Structural flaws in governance abound in Japan, and it would take a deep understanding of the structure of Japanese society and history to explicate them all. I will summarize just two: due to way districts are weighted, rural voters hold outsized sway over their far more numerous urban kin. Secondly, the dominance of crony capitalism and State collusion is not some malignant aberration which replaced a golden, purer version of free-market capitalism: Japanese "capitalism" was always founded on the marriage of crony capitalism and State ministries.

Financially, Japan's banking system is opaque and its corporate shareholders hold little power; collusion and cronyism reign supreme. Add these factors together and you have the pefect setup for Elite over-reach.

As the structural flaws in this cronyism and State management eroded the underlying economy, the status quo engaged in simulacrum "reforms" which left all the Power Elite players firmly in command. Safely in charge, they proceeded to squander 20 years hiding their incompetence, collusion, corruption and applying duct tape to the structure as it slowly came apart.

The parallels to the U.S. are not trivial, but deep. Here in the U.S., crony capitalism collusion with State Elites (the Fed and Treasury, the executive branch, toothless regulatory agencies captured by Wall Street and political hacks, etc.) has duct-taped together a structurally flawed economy by expanding debt and expanding the class of debt-serfs to carry that debt: stupendous mortgages, consumer debt, student loans and of course all the public debt, which debt-serfs and their children will pay for as taxpayers.

A few years after Japan's property and stock bubbles burst in 1990, a collapse which devastated the wealth of the average household, the Japanese public elected an alternative leadership in 1993. But it was all for nought; the "reformers" were still firmly controlled by the Old Elite and their "reforms" were so shallow and meek that literally nothing changed. The Old Guard was reluctantly swept back into office--what alternative was there?

It took 15 years for a new party to coalesce around three groups: disaffected politicos from the LDP, consumer advocates and young activists willing to investigate the corruption and gross incompetence which was rife in the corporate-government Elites. This is an unstable gathering of forces; if each group focuses on its differences with its allies rather than the common ground, the new party could collapse into ineffectuality.

Regardless, the status quo has been dealt the first body-blow of a long struggle to free Japan from the iron grip of a failed Elite of crony-capitalists and Central State managers.

Here in the U.S., young reformers gathered behind Barrack Obama, seeing in this young leader a future of "change." But alas, the Obama administration is so riddled with Wall Street Elites and their lackeys that "change" has been less than empty: Obama's administration has given the rentier-financial Elites they could possibly want, and masked the reality behind simulacrum "reforms" and various special-interest giveaways masked as "stimulus."

Perhaps Obama's election will parallel the failed Japanese attempt at true reform in 1993. Does anyone really believe either the Democrats or Republicans are capable of real reform? How could they, when each is beholden to the Power Elites?

Third parties in the U.S. have typically been centered around one individual's ambitions to bypass the usual Power Elites (Teddy Roosevelt, Ross Perot, et al.) or "safety valve" movements such as the Socialist Party which were quickly co-opted by one of the existing parties.

Nonetheless, on rare occasions, political parties do arise and replace imploding older Elites: the Republicans replaced the Whigs, for instance. Is it possible that the grand failure and fundamental corruption/collusion of both the Democratic and Republican parties could lead to the rise of a new political party in the U.S.?

Again, Japan offers some interesting parallels.

The leader of the new party which just gained power had quit the LDP back in 1993. Are there any politicos in the current Republicrats who have the courage and conviction to realise the parties are hopelessly compromised and corrupt? If so, we will know it when they quit the parties and accept political exile as the only way forward.

Could the young activists who worked so hard to back Obama accept that he is just another tool of the Power Elite? Perhaps after another two years of disappointment, some might be willing to accept the reality that the only differences between the parties is who tailors their suits (if that--maybe they use the same tailors, too).

Could a group of Americans finally realise that the political and corporate/financial Power Elites will never enact fundamental reform of the system which enriches them so mightily? Could this group--shall we call them "consumer activists"?--seek to form a new party which places the interests of households, consumers and wage earners above those of the rentier-financial/party Power Elites?

I think the Democratic Party of Japan offers a working template for the development of a viable new national party and thus national progress. As long as the average American voter (the 40% who bother voting) keeps re-electing the sclerotic parasitic Demopublicans (Tweedledum wears a blue suit, Tweedledee wears gray) then "change" will continue to be a simulacrum: phony, shallow, a sham presented by the organs of propaganda (the mass media) for the consumption of a credulous public.

Here's a wild thought: since the two failed parties each take about 20% of the potential voting pool (only 40% vote in the U.S.), then if even 30% of the U.S. public roused themselves from the sofa and voted for a new party, that party would sweep into power. The failed, corrupt Republicrats could each get their 20% and then be soundly trounced by the new party's candidate who drew 30%. (About 70% of eligible Japanese voters turned out for this election--an interesting contrast with apathetic, passive U.S. citizens.)

Here are the key ingredients of a viable new party:

1. The usual suspects which fund the Old Guard must not find a new home: that would be the unions and all the other Power Elites: the investment banks, the pharmaceuticals, the "Defense" industry, the trial lawyers, etc. Their money and their participation must be politely rejected lest they co-opt and thus destroy the new party.

2. A few break-away Old School politicians who could provide credible leadership while the party grew.

3. Consumer advocates--middle-class citizens of all ages who are tired of being lied to and manipulated, tired of being ripped off, etc.

4. Young activists who are willing to devote their energies to investigating and exposing all that the political and corporate/banking Elites strive to keep obscured and secret. When the corruption, cronyism and collusion have been exposed, year after year after year, then eventually the general public--poorer, more insecure and frustrated than ever--will finally let go the comforting illusion that they share any real interests with either of the two corrupt parties of collusion. any

5. Insiders willing to expose the machinery of collusion and cronyism. The Status Quo will move rapidly and violently to suppress whistleblowers, but without these courageous citiznes then the full extent of the rot cannot be exposed.

If these parts slowly self-assemble, a viable national party could become possible. We should note that it took 15 years for the process to reach critical mass in Japan; there were many half-starts and disappointments along the way.

As I read the blatherings, obfuscations and rationalizations of the existing political class, it seems to me the most honest voices tend to be Republicans who are not Power Players. These are the few who openly note that the Status Quo is about to crash into demographic shoals and financial over-reach. I would like to hear some Democrats speak openly about the unsustainability of entitlements, Empire and debt, but I haven't heard any. Maybe they exist, but if so they keep a very low profile. Only when politicos quit their party can their credentials be stamped.

Based on this anecdotal evidence, I would anticipate the break-aways who could found a third party, or lend their weight to one, would be disaffected Republicans, those few sick of the lies, collusion and baggage of the current Elites.

Yes, I understand Japan is a parlimentary system and the U.S. is not. But the key idea here is that the formation of a new national party follows a certain track regardless of the political system.

If the U.S. voters are in a hurry, perhaps a new party could take power in, say, 2020. Interestingly, that aligns with the 80-year cycle proposed in The Fourth Turning .

There are numerous forces converging which suggest a radical transformation lies ahead. Here are a few titles for your consideration:

Running On Empty: How The Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It

The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century

The Great Wave: Price Revolutions and the Rhythm of History

Beyond Oil: The View from Hubbert's Peak

The Party's Over: Oil, War and the Fate of Industrial Societies

The End of Oil: On the Edge of a Perilous New World

The Dollar Crisis: Causes, Consequences, Cures

Fewer: How the New Demography of Depopulation Will Shape Our Future

The Coming Generational Storm: What You Need to Know about America's Economic Future

Our Stolen Future: How We Are Threatening Our Fertility, Intelligence and Survival

Planet of Slums

I've added a number of books to my comprehensive list: Books and Films


Permanent link: Could a Viable Third Party Emerge in the U.S.?


If you want more troubling/revolutionary/annoying analysis, please read Free eBook now available: HTML version: Survival+: Structuring Prosperity for Yourself and the Nation (PDF version (111 pages): Survival+)

"Your book is truly a revolutionary act." Kenneth R.

Of Two Minds is now available via Kindle: Of Two Minds blog-Kindle

Thank you, Cheryl S. ($5/month), for your stupendously generous subscription to this site. I am greatly honored by your support and readership.

Thank you, Carl G. ($25), for your exceedingly donation via mail to this site. I am greatly honored by your support and readership.

Read more...