Wed. May 22nd, 2024

The World Needs a Lobotomy

By karlsie Jun 6, 2009

lobotomyBy A.B. Thomas

The world is the grips of a recession not seen since the dirty thirties. It is not merely thousands but millions of people world wide that have been torn from their homes because of bank foreclosures, with a multitude of companies no longer able to afford to operate… laying off some, most or all of their employees. Federal, provincial, state, regional and municipal governments are forecasting large deficits that may take a decade or decades to eradicate. Slowly though the global village is starting to see the horizon and the years of 2007, 2008 and 2009 will be studied for years by economists in an effort to understand how this modern version of the seven plagues of Egypt occurred. The one line of thought that will not be explored by these economists is that they created a public delusion with disastrous results. There will be no accounting of the sheer numbers of human pain and suffering that occurred as a result in keeping a strict adherence to the abstract over the concrete conditions of actuality.

The wealth and economic growth potential of any country is based on projections of raw material resources, manufacturing capabilities and the likely need for those products, resources or services in ratio of their availability. To illustrate what is meant by this statement one simply has to look at the crude oil market. At the base are two factors. First, how many barrels of refined oil is necessary for the daily functions on a world wide scale, which fluctuates with each country according to different population sizes, seasonal conditions and cultural needs, but is estimated as a median for a certain period of time. The second factor is the estimated barrels of oil that are in the ground within the oil bearing countries. As with the median need, this number is altered periodically. The fluctuations in the price of oil come from the projections by those in the industry based on the information they assess on a daily basis. The primary condition that affects the price of oil is how many barrels of oil are being produced by a country or a bloc of countries; that is to say that if a country or bloc decides that oil prices should rise they can simply cut down the production of the amount of barrels being put on the market at any given time, leading to speculation that there may be a shortage and thus raising the price of the commodity. Other conditions are also considered, the price of extracting the crude oil, weather conditions such as torrential storms, especially for off-shore oil rigs, and the political stability of the regions where the oil is situated. The price is set according to anticipatory need versus anticipatory supply. This model applies across the board with all commodities; hence the world economy is not based on the here and now but on the future demand placed on that economy.

In the case of the recession that the world is existing in today, the beginning rests in the mid 1980’s when most of the Western world had gone through a lesser recession. There was a renewed confidence in the world’s markets as to how much the economies of the different nations could handle in terms of marketable goods that went unchecked. These projections of need, supply and profit margins that could be easily absorbed into the consumer pool of debt that should have paralleled as a set of rail road tracks the actuality of the individual consumer, instead took to being a sky rail system without platforms for the passengers to disembark. This was of no concern to governments or most consumers as artificially inflated economic forecasts brought higher wages along with higher taxes that made the bloating development, manufacturing, advertising costs minimalistic in the impact felt via the pocketbook. Governments, companies and consumers, based on the economic projections of their nation’s prosperity, joined the world’s stock markets in a positive speculation of the future and began spending monies that did not exist in concrete terms but simply as numbers on a page. Two countries in particular bought into “Popeye’s” Wimpy’s axiom, “If you give me a burger today, I’ll pay for it on Tuesday”; Great Britain and The United States of America.

Of the G-7 nations, Great Britain and The United States in particular have large chasms between what goods are exported and what goods are imported. The stability and viability of a country is not solely based on population or buying power but on what resources that country has. For example, Canada, though ten times smaller in comparison to the U.S. is seen by world markets as a stable economy because its natural resources of oil, natural gas and mineral deposits is seen as a solid investment. However since Canada is not as large a market as the U.S., the import projection of goods for Canadians to purchase makes it unattractive in terms of profit margin. By 2005, the monolith capital gains compared to the capital losses created uncertainty in the world markets on whether or not these two countries could balance the inequalities in trade. In order to counter the world view of a large gap in the ability to jump the import/export chasm created by economic projections, both Great Britain and the U.S. increased the minting of their monies. This increased the availability of the Pound Sterling and the American Greenback to pay for the inequities. However, the negative kickback to the increased production of viable tender is that the value of that tender was lessened because of the availability. The actions of the two countries caused other G-7 nations to follow suit in printing of their corresponding monies were a reactionary spasm to a second factor, the coming of age of China and other traditionally repressed economical Asian regions.

With the explosion of the internet as a global strip mall of goods, came increased consumer awareness of price differences for the same products that had not been previously available to them without great cost and expense for investigating those products themselves or through a middleman or broker. Consumers began to look at the products available to them locally with a skeptical eye and began to opt for the cheaper versions available. Western manufacturers were in a quandary; if they lowered their prices it would cut severely into the bottom line and profit margins which were already being pushed by Western workers high expectations of what they should be paid and what constituted as a standard quality of life. To continually raise prices in an effort to keep their profits was no longer a solution that consumers were willing to accept. It was at this point that markets that had far lower standard of life levels, lower wages and less negotiated work hours and employee expectations came into their own, particularly China. By producing the core goods for Western manufacturers or distributors for a fraction of the cost because employee driven higher production costs were no longer an issue, manufacturers were able to keep their costs down and in turn lessen the overhead they would have had by using employees in their own countries. The result was some regression in prices to consumers though most products just created more profit for the company or distributor involved and the loss of jobs to the local community that the company had once invested in. The want of more for less mentality of the consumer drove manufacturers to countries where they could not control the quality, the possibility of human rights violations or worker safety issues and the consuming public turned a blind eye to it as well. This also gave countries, particularly China, because of the export/import balance in favour of that country, a greater voice in the economic decisions for the world market though minimalizing the economic boon on its own population’s expectations.

For all the explanations as ti why the world is in a recession, it still is nothing more than a mere mathematical illusion with very tangible consequences. Forget the most zealous religious sects that you can imagine; they are nothing compared to the faith that world leaders hold to the mighty wrath of Economics and the Law of Probability. Millions of people’s lives have been destroyed over the steadfast refusal of governments to let go of the mathematical sentence of “a + b <ab/c”. Deficits could be erased with a single vote, proclamation or edict because they do not represent actual accruements of goods but conceived numbers. There are examples of this that could be applied: the African countries Nigeria, Uganda, Cape Verde, and Tanzania as well as Bolivia have had their debts cancelled out by the World Bank, so it is not unreasonable to assume that a larger scale absolvent of perceived debt could be meted out.

This option will not be considered by the world’s governments however because there would have to be a universal will to do so. China, in particular, which the recession has touched very little in terms of affect on population, quality of life or economic stability, would fight this action as erasing the debt of the other countries would decrease the value that China has in the eyes of the World Bank and economic forecasts. The erasure of debt would mean that each country involved would also have to undergo a major economic restructuring of its actual assets, the reassessment of the value of its primary monetary unit and the opening of their actual expenditures to public scrutiny. This option would also mean that the banks that do business based on the federal reserves of that country would have to be restructured in order to reflect the reality of the reserves with huge losses to their profit margins garnered primarily on projected interests on monies that do not have liquidative assets to cover those loans and speculations. The effects would not be limited to governments and economic institutions; the public would also have to adopt new and much lower standard of living expectations that would not rely as heavy on manufactured goods and services though it would logically progress that personal debt would be dismissed because of governmental and bank restructuring. While this effort would benefit those in the direst of positions, those who are in the higher income bracket would feel a negative backlash as the mathematical equation that created their wealth would cease to exist. In the end, those who relish in wealth and its accompanying power, be it individuals, companies, or governments will ‘live’ with the recession rather than diminish those perks; Chriss Angel may like to purport himself as a mind freak but he is a hackneyed amateur compared to the people sitting in some dark room with their pocket protectors and calculators resisting the urge to type in “58008” and turn it upside down.

By karlsie

Some great perversity of nature decided to give me a tune completely out of keeping with the general symphony; possibly from the moment of conception. I learned to read and speak almost simultaneously. The blurred and muffled world I heard through my first five years of random nerve loss deafness suddenly came alive with the clarity of how those words sounded on paper. I had been liberated for communications. I decided there was nothing more wonderful than writing. It was easier to write than carefully modulate my speech for correct pronunciation, and it was easier to read than patiently follow the movements of people’s lips to learn what they were saying. It was during that dawning time period, while I slowly made the connection that there weren’t that many other people who heard the way I did, halfway between sound and music, half in deafness, that I began to understand that the tune I was following wasn’t quite the same as that of my classmates. I was just a little different. General education taught me not only was I just a little isolated from my classmates, my home was just a little isolated from the outside world. I was born in Alaska, making me part of one of the smallest, quietest minorities on earth. I decided I could live with this. What I couldn’t live with was discovering a few years later, in the opening up of the pipeline, which coincided with my first year of junior college, that there were entire communities of people; more than I could possibly imagine; living impossibly one on top of another in vast cities. It wasn’t even the magnitude of this vision that inspired me so much as the visitors who came from these populous regions and seemed to possess a knowledge so great and secretive I could never learn it in any book. I became at once, very conscious of how rural I was and how little I knew beyond the scope of my environment. I decided it was time to travel. The rest is history; or at least, the content of my stories. I traveled... often to college campuses, dropping in and out of school until one fine day by chance I’d fashioned a bachelor of arts degree in psychology. I’ve worked a couple of newspapers, had a few poems and stories tossed around in various small presses, never receiving a great deal of money, which I’m assured is the norm for a writer. I spent ten years in Mexico, watching the peso crash. There is some obscure reason why I did this, tightening up my belt and facing hunger, but I believe at the time I said it was for love. Here I am, back home, in my beloved Alaska. I’ve learned somewhat of a worldly viewpoint; at least I like to flatter myself that way. I’ve also learned my rural roots aren’t so bad after all. I work in a small, country store. Every day I greet the same group of local customers, but make no mistake. My store isn’t a scene out of Andy Griffith. The people who enter the establishment, which also includes showers, laundry and movie rentals, are miners, oil workers, truck drivers, construction engineers, dog sled racers and carpenters. Sometimes, on the liquor side, the conversations became adult only in vocabulary. It’s a good thing, on the opposite side of the store is a candy aisle filled with the most astonishing collection, it will keep a kid occupied with just wishing for hours. If you tell your kids they can have just one, you have an instant baby sitter; better than television; as they agonize over their choice while you catch up on the gossip with your neighbor. We also receive a lot of tourists, a lot of foreign visitors. They are usually amazed at this first sign of Alaskan rural life style beyond the insulating hub of the Anchorage bowl. Many of them like to hang around and chat. They gawk at our thieves wanted posters. They laugh at our jokes and camaraderie with our customers. I’ve learned another lesson while working there. You don’t have to go out and find the world. If you wait long enough, it comes to you.

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One thought on “The World Needs a Lobotomy”
  1. Thanks for giving us some persective. As I look back on the US’s economic situation wonder where we started to take a nose dive to the sea of red. President Clinton erased the national deficit by the end of his terms. Shortly after Bush II came to Washington he jumped us into war. Wars cost money. When we don’t raise taxes and spend spend spend it doesn’t take an economist to figure out what is going to happen. It has been projected that the was would cost us 2 trillion dollars.

    How much is a trillion? This will help you put that into perspective.

    Just imagine for a moment how else this money could have been spent or invested.

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