charles hugh smith-The Silent Epidemic in a Broken, Deranged System: Stress

Longtime readers know that I see our system not just as financially sick but as spiritually and psychologically deranging. The illnesses are related, of course--a distorted economic system (i.e. financialization) that rewards parasitic sociopathy and political predation cannot help but make its participants physically and psychologically ill.

Here is a selection of the many entries I've written on this largely ignored topic:

I recently received this commentary from Kenneth Daigle, a 33-year veteran stockbroker/financial advisor on the subject of chronic, systemic stress. (He requested that his full name be published.) Kenneth succinctly ties together the nation's economic distemper, its broken healthcare system and the culture of high expectations and consumerism:

Thank you, Kenneth, for your report from the world we actually inhabit, as opposed to the one that is dutifully reported in the mainstream media (i.e. everything's fine, unemployment is only 7.6%, go out and buy a new car, no down payment and easy credit, etc.)

In my view, the high cost of living is a direct contributor to chronic stress. While there are numerous explanations for the rising cost of living--Baumol's Cost Disease ( Productivity, Baumol's Disease and the Cliff Just Ahead December 8, 2010) and the rising cost of energy, to name but two--the one key driver that nobody dares discuss is the state-cartel (crony capitalism) structure of our economy: cartels (defense, energy, sickcare, education, etc.) avoid competition, enabled and enforced by the State (government).

This explains why sickcare and education costs have skyrocketed far above the rate of inflation. Apologists try to invoke Baumol to explain the lack of productivity in sickcare and education, but the primary cause is the cartel structure of these industries which ruthlessly eliminates any real competition.

People respond to incentives and disincentives. If it's easier to fake a disability, get Section 8 housing, food stamps, etc., than it is to earn a productive livelihood, then people will fake a disability, etc.

As it becomes increasingly costly and risky to start a business and hire workers, then people won't start businesses or hire workers--unless they have a guaranteed government contract, i.e. they are quasi-public-sector employees.

Another factor few dare mention is debt-serfdom. By the time the brainwashed consumer has loaded up on the "absolutely necessary" debts--$100,000+ for college, $200,000 for a home mortgage, $20,000 for a vehicle loan, and whatever he/she can swing in credit card debt--the options to escape stress shrivel.

Bankruptcy and opting out is one option, but that requires sacrificing all the signifiers of identity and success--the very factors in a consumerist society that establish not just identity but self-worth and personhood.

I say few dare mention state-cartels and debt-serfdom, because once you question these you question the entire debt-based "growth" that underpins our social order. If people refuse to become debt-serfs, the system will implode. If the cartels were boycotted, the State would implode, because the political order depends on the concentrated wealth of private-sector cartels and the financialization Aristocracy.

In other words: eliminate the real sources of stress and you bring down the entire economic, political and social order. The Status Quo hopes another med or two will make all the debt-serfs' stress decline to manageable levels, but it's not only the individual who needs help adjusting to chronic stress--the deranged system he/she inhabits needs to change.

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 economy
Complex 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.

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