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Musings Report #15 4-9-16 'We're just tired of hate'
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
'We're just tired of hate'
In contrast to its reputation for positive thinking, America seems unhealthily obsessed with Apocalypse: zombies abound in films and games, dystopian "Hunger Games" (and its many copycats) are all the rage, and depictions of apocalyptic catastrophes are staples of pop culture.
Does this reflect America's waning belief in its own future, or is it akin to a cultural fascination with car crashes--since we can't stop looking at Apocalypse, it's an easy sell.
I tend to think it's some of both, plus a failure of imagination: as the status quo's failure becomes increasingly evident, we can't imagine a future that's different from the present that isn't worse.
This failure of imagination is evident elsewhere in the world; it's as if the possibility that Degrowth and the implosion of predatory Elites could be positive for humankind simply doesn't occur to people: any deviation from the current status quo would not just be bad, it would be catastrophic.
Thus it was very refreshing to read 'We're just tired of hate' — My social experiment on Holi in Pakistan (via Lew G.) about a young Pakistani Islamic man who joins in a Hindu holiday (in which everyone is splashed with colored water) and then boards a bus to assess the reaction of the overwhelmingly Islamic populace to a Pakistani Hindu.
What the article implicitly makes clear is that nation-states and the Elites who dominate them teach hate as a powerful control mechanism: hate and fear go hand in hand.
In the 1950s, Americans were taught to fear Communist Russia. It is a small step from fear to hate, and so it is no wonder that China's propaganda machine churns out hundreds of anti-Japanese films and TV scripts every year: Chinese actors who play brutal, murderous Japanese soldiers have essentially permanent employment.
The Global War on Terrorism (GWOT) ups the ante by turning what was once a targeted anxiety--fear our nation-state enemy--to the much more destructive free-floating anxiety against a shadowy, relentless, stateless enemy, the Islamic terrorist and multiplying terrorist organizations.
Is terrorism a real danger? Of course it is. Has the world suffered from widespread terrorism before? Yes--terror attacks were common in the early 20th century, and World War I was triggered by an assassination that was essentially a terrorist attack.
But does the fact that the danger is real doom the world to a runaway feedback loop of fear and hate? The apocalyptic camp sees this self-reinforcing feedback loop as unavoidable: the only possible end is Doom with a capital D.
This first-person account comes with a powerful reminder that the feedback loop of fear and hate is not the social equivalent of gravity: individuals can become tired of hate and its endless repercussions. And if enough individuals become tired of fear and hate, then eventually entire populations can become tired of hate.
There are several ways out of the fear-hate-Apocalypse feedback loop. One is to place the source of our fear and hatred in context by asking, who benefits from instilling fear and hatred in us? (Cui Bono--to whose benefit?)
The other is to actively imagine a future in which the current status quo is tossed on the dustbin of history, peacefully replaced by a much more sustainable, transparent, decentralized, Degrowth ecosystem in which everyone who interacts with other groups around the world benefits--and the system itself benefits as this Network Effect makes the benefits of trade and cooperation increasingly rewarding to everyone who joins in.
This is the world I envision and that I describe in my book "A Radically Beneficial World." The first step toward a better world is to imagine it, not as a gauzy dream but as a carefully designed, self-sustaining transparent system of communication, trade, positive incentives and free-flowing knowledge.
Once we've imagined a better, more sustainable world system, perhaps more people will become tired of hate because they can finally imagine a different ending to the story than Apocalypse.
Summary of the Blog This Past Week
Want To Eat Like an Aristocrat? Grow It Yourself, Make It Yourself 4/9/16
The Network Effect, Jobs and Entrepreneurial Vitality 4/7/16
The Panama Papers: This Is the Consequence of Centralized Money and Power 4/6/16
Triffin's Paradox Revisited: Crunch-Time for the U.S. Dollar and the Global Economy 4/5/16
The Future of Money 4/4/16
Best Thing That Happened To Me This Week
Homemade lemon meringue pie (turned out essentially perfect--the stars aligned) shared with friends.
Market Musings: The Fed Can't Please Both Japan or China
As longtime readers know, I've focused considerable energy on understanding the ways foreign-exchange (FX) changes affect the global economy and the economies of trade-dependent nations.
This has forced me to analyze Triffin's Paradox, which describes the complex consequences of the primary reserve currency (the US dollar, USD) strengthening or weakening.
As their economy stagnates, leaders try to weaken their currency to make their exports cheaper in other countries. This is presumed to boost their export sector and rekindle growth in their stagnating domestic economy.
But currencies are a zero-sum game: all currencies can't weaken together. At least one has to strengthen. Recently, that one is the USD.
Now that trend has reversed, the Japanese yen is strengthening as the dollar weakens--much to the horror of export-dependent Japan. The Japanese desperately need the USD to strengthen and the yen to weaken.
Meanwhile, China has the opposite need. It too is export-dependent, but its currency, the yuan (a.k.a. RMB), is pegged to the US dollar. So when the USD strengthens, so does the yuan/RMB. This makes Chinese goods more expensive in Europe, Japan, etc.
So China desperately wants the USD to weaken, so its currency will weaken without having to devalue it.
The Fed is trying to satisfy both demands from the world's #2 and #3 economies, but it's impossible to do so: pushing the USD down further will crush the weak Japanese economy.
But as the USD strengthens, China is backed into a tight corner: it either accepts lower exports, or it devalues its currency. That will trigger capital flight, so devaluation is not without unintended consequences.
Some smart observers think the G20 nations agreed to weaken the USD in Shanghai, and the dollar's abrupt decline supports that unspoken accord. But if that was the plan, it's backfiring badly for Japan.
If the Fed raises interest rates, the USD strengthens as capital flows into USD assets. If the Fed acts dovishly, promising never to raise rates, the USD weakens.
The Fed can't do both at the same time. It will have to choose who to shove off the gangplank: Japan or China. Both are important, neither is expendable.
Here's the crux in my view: Japan literally has no option but to weaken the yen. China, on the other hand, can devalue its currency--and in my view, it should devalue its currency. In other words, China has a way out if the USD strengthens: loosen the peg to the USD and let the market set the value of the yuan.
USD Bears are now as ubiquitous as USD Bulls were a year ago. But if we look at the consequences of the USD weakening/strengthening, I am guessing the Fed must move to strengthen the USD to save Japan from a self-reinforcing recession.
Time is not on the Fed's side. If they let the USD sink further, the pain in Japan will soar to unbearable levels. Keep your eye on the FX markets in the coming weeks-months.
From Left Field
Sweet drug clears cholesterol, reverses heart disease—and was found by parents (via John D.)
Fifth time's the charm: SpaceX finally lands on its drone ship in the ocean (via Maoxian)
Just How Harmful Are Bisphenol-A Plastics? (via Chris M.)
Whole Lotta Love vs. Beethoven 5th Symphony (4:21, via Lew G.) -- two cellos--Fun!
Traumatized Worker Syndrome -- Chris Hedges Interviews Michael Hudson
Beyond the Limits of DNA with Misa Kuranaga (1:36) -- inspirational... DNA as dictator to be overthrown....
Jeff Bezos' annual letter--and his 1997 letter -- worth a read, even if you hate Amazon...
With Romance Novels Booming, Beefcake Sells, but It Doesn’t Pay -- bodice-rippers with male models on the cover sell 3X covers without beefcake...
The Earthquake That’s About to Hit Restaurants -- insane business, good way to go broke, by a guy who knows...
The Golden State Warriors Have Revolutionized Basketball -- watch the videos to see how Curry hits treys from downtown...
Hillary Clinton’s Support Among Nonwhite Voters Has Collapsed (via GFB) -- this matters....
Adoptee on search for birth parents learns magnitude of China’s grief -- (via Maoxian)
Crackdown in China: Worse and Worse (via Maoxian) -- when Orville Schell says it's bad and getting worse, it's bad and getting worse....
The primary reason the Party is so susceptible to graft is that while officials are poorly paid, they do control valuable national assets. So, for example, when property development deals come together involving real estate (all land belongs to the government) and banking (all the major banks also belong to the government), officials vetting the deals find themselves in tempting positions to supplement their paltry salaries by accepting bribes or covertly raking off a percentage of the action. Since success without corruption in China is almost a non sequitur, officials and businessmen (and heads of state-owned enterprises are both) are all easily touched by what Chinese call “original sin” (yuanzui), namely, some acquaintance with corruption.
"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well." Jeff Bezos
Thanks for reading--
charles |
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