You are right to mention drugs as an aspect of the great unravelling. However, perhaps one should include the SSRIs and other psychoactive prescription drugs as an important part of the phenomenon. If you think about the quantity of Prozac and similar drugs being taken, and consider there is a class bias to them, it seems likely that almost all corporate and financial decisions of any size for the last 10 or 15 years have been made in meetings by groups where half or more of the people are to some degree hopped up.

Now, we embarked on the mass medication of the West after research on the effects at an individual level. We thought we had established individual safety. What we never did was examine the effects on society and on collective thinking processes.

It is undeniable that since the 50s or 60s there has been a dramatic change in American attitudes to business decisions and to information. We've seen the collapse of prudence as well as the collapse of a mindset that accounts should accurately portray the underlying reality of the business. We've also seen the invention of more sophisticated financial instruments which in the end are simply means of gambling. If you consider the facts about GM debt you see this clearly. GM has $20 billion of debt outstanding. It supports however about $1 trillion of Credit Default instruments. These are basically bets on whether GM will default, by people and institutions that have no other interest in GM or their credit than the success or failure of that bet.

There is no scientific proof of this, but I believe that the use of prescription anti depressants has made enough of a change in group decision making that many of the more amazing aspects of the recent credit bubble can be explained by it. It is like the Romans and lead. It is everywhere and invisible, and there is no apparent social alternative. We are not used to thinking about society when we license medication, and even after the crash, we probably will not start, it is such an odd idea.

Instead, groups of people half or more of whom are on mood altering medication will turn their attention to finding the villains. Heaven help us if they think as sloppily about this as they have about risk in the run up to the disaster! And they will.

In 2005 there were 118 million prescriptions of anti depressants in the US. Source, Center for Disease Control. Think about the implications of this!

These are interesting times. I heard a different perspective on the sub-prime blow-up that was something everyone can relate to: 2 trillion in housing backed mortgages are bankrupt. When one thinks about it this is the hard, cold reality.

The Bear Stearns HF blow-up X 2 is a seismic event in that those assets were only getting bids of 30-11 cents on the dollar. Implicitly all of these assets have been marked to market. The bailout is meaningless if not a death knell for BS.

Think about the bailout in terms of a trade. Would you take 25% of your capital and put it into a trade that was going against you? I wonder who forced them put their own gun to their head?

The situation is similar to LTCM. The problem with being the market is finding someone to which one can sell without adversely affecting price. The guys on the other side of the trade smell blood and are circling. No one is going to let these guys off the hook. Hope is a waste of time as it is in 99% of all bad trades. And when the selling starts the feeding frenzy will begin. The innocent will suffer with the guilty.

The real problem with newspapers isn't some change in morals, quality or even commercialization of news (newspapers have always been businesses.) It's just that other media came along and made their business model obsolete. You hinted at that in your piece when you talk about Google and Craigslist eating their revenue stream.

The "reporting" on the front page was the major cost for the newspapers, and for TV news. The actual revenue was in the sports pages, comics, classifieds (esp. job wanted and real estate), and perhaps the stock reports. The rise of the internet has killed off all those profitable special categories, leaving only news to support most newspapers. So they've resorted to dumbing that down and running those dopey "lifestyle" features. The stupid part of this is that the internet is also better at covering health, food and celebrity gossip (see The Superficial.com) This tactic is not going to save them.

The internet is just the last nail in the coffin though. Even thirty years ago, when I first started reading newspapers, the local paper was mostly crime and fire, plus articles recycled from the AP and major newspapers. Newspapers have been stagnant, and have had stagnant subscription levels, for generations.

TV news started it, by eating away at demand for printed news. People just don't consume as much news as the elite think they should. A few sentences on the problems in the Middle East is more than most people really want to know, and has been for decades. We can moan all we like about the lack of quality reporting, but that's not going to change if there's no market for it.

But so what? It's not as if you can't get good reporting if you want it -- you've managed to inform yourself on a wide variety of subjects, so clearly it's possible. And the internet is even starting to produce some original reporting, for example, Michael Yon and Michael Totten in the Middle East. Not to mention all the first-hand accounts by residents of other countries found in blogs all over the world. And of course for editorial material (like your blog), this is a golden age.

I've never been all that impressed by most reporting anyway. If you throw away the stuff that's just a summary of a press conference with some government figure, or a company press release, you have very little "research"-style reporting. And even in that rare situation, the results generally stink. I think it was Michael Crichton in one of his speeches who said we all have a weird amnesia when we read a newspaper. When we hit an article about something we know about (because it relates to our work or own life experience), we see that it's riddled with errors and omissions. Then we turn the page and read about the Middle East and assume that's accurate!

This isn't because reporters are all sloppy or stupid, it's because they are not experts in any field. Even a specialist, like a financial reporter, doesn't generally have a degree in economics or a previous job at a brokerage, or even experience as a day trader. They are experts at talking to people and writing short summaries of what they've learned. The actual subject matter is secondary.

So in fact, the internet is a boon for "research" reporting as well. We are finally hearing directly from the experts, in a forum where they can write what they please. The doctors are writing about medicine in their blogs, and the lawyers are writing about law. Now we can read a realtor writing about his business, not an article by a reporter who talked to an industry spokesman who's never sold a house in his life. The failure of newspapers to turn some of that blog content into articles is mindboggling. It's not as if the authors would object!

Newspapers and TV news should be moving onto the web with new content -- instead of some reporter standing in front of the white house with some dull summary, why not transcripts of the speech linked to video segments, linked to analysis or backgrounders on all the issues mentioned, linked to advocacy groups and pundits, all arranged in a searchable, permanent archive? This isn't much harder, and it would use the internet in the way that it's used best -- to give you as much or as little information as you want on a subject, all searchable by keywords. Over time, if newspapers kept their archives up to date, linking in new material, soliciting summaries from real experts, they'd accumulate massively useful databases. Then run ads at all the links to make some money.

I still skim the online front pages of newspapers like the New York Times or Washington Post or my local San Jose Mercury News, but I wouldn't pay for most of that content. I haven't looked at a paper version in years. Why should I?

Michael later submitted these additional comments and links:

Here's a link for you: stateofthenewsmedia.org

I thought newspaper circulation had been in absolute decline since the 70's, but it's only been as a percentage of the population. Absolute decline started in the 90's.

By 1990, however, even the boost from a growing population was not enough to maintain how many newspapers were sold each day. Circulation began dropping at the rate of 1 percent every year from 1990 to 2002. By 2002, weekday circulation of U.S. newspapers had dropped 11 percent in 12 years.

The real rate of circulation decline could be even greater. The Audit Bureau of Circulations changed the way it counted circulation to include bulk sales of papers to places like airlines and hotels for free distribution. These sales are technically "bought" by the hotel or airline, often through a barter exchange, but can make up a significant part of total circulation. For example, 46 percent of USA Today's circulation - 987,670 papers - comes from bulk sales.6 And the ABC rules have been liberalized in other smaller ways through the years, masking even further the true extent of circulation loss, according to Rick Edmonds at the Poynter Institute who has examined this closely.

There's no reason papers can't distribute online and make money from advertising. Local entertainment/Metro papers are free and presumably profitable. The big newspapers were already computerized, so it should have been relatively simple and cheap to produce digital editions and serve them over the web. Of course, some organizations, large and small, get taken to the cleaners doing technology projects, so who knows?

The problem I notice today is most people regurgitate either the right or the left line of thought that has been marketed to them through various means. Most of information carries with it the imprint of the writer and his ideology no matter how neutral he may try to be. Once the information is copied it becomes imprinted with a new set of beliefs and eventually it is unrecognizable from what it truly was. Truth is always very simple while explanations of it are always stretched out and form something completely different ergo lies.

China is basically a worker and America is the factory owner whom mandates that the worker be paid in factory store credit hence China is always going to loose.(sort of the historical perspective of the 49er mining all the gold an suppliers getting it all with inflated price for equipment) That is the simplest explanation of US-China relationship. A bad decision is better then indecision in a time of crisis seems weird but true. Absolutely the worst thing to do is to stand in front of a train while running toward it may seem stupid at least you are in process of confronting the problem.

Little changes that aren't noticed are usually what forms part of the big picture of aggregate change in my view. While big things that are known to happen usually been prepared for consumption and thus have no change information embedded in them. Ergo the cracking down on Chinese products is nothing new its a gradual isolation of markets and protection of home industry here and in Europe as we all collectively head into a recessionary environment. But little things are what show change ergo if rural Chinese are rioting nothing is new, if Chinese students are rioting also nothing new, but if urban citizenry begins to riot then that would show that the growth of disenchanted has spread from one strata of the population hence the poor and the young to the well situated city dwellers.

Generally things do not happen without a catalyst. We could speculate on what it is but when it eventually happens we will probably ignore it. When the globalization theme runs out we will head into a different direction and I have no idea what it will be. Some countries will turn to revival nationalism and hence conflicts, others might become focused on internal growth and development from external. But the major theme of next direction for the majority is not really in my view. Dynamic change is very painful on a global scale and usually involves a lot of suffering. Right now money is meaningless the availability of credit and people lusting after it at the same time seems odd but believable. No virtue is higher than a fat paycheck today which changes in times of need and meaningful money when people stop lusting after it use it as a tool which it was meant to be. To some degree this is a global truth in times of easy money everyone wants it but in times of hardship social focus changes to some other aspect ergo family and social interaction and or art etc...

The biggest problem in US today is women value men in money more than anything. Other characteristics matter less ergo strength, smarts, agility and hence all energy is spent on achieving the illusion of wealth. At least for the majority of the populous Throughout time we cycled through strength, art, brains, ergo neolithic, Renaissance and enlightenment/early 1900s periods which defined the century and ones weight within a society of that time. Perhaps we are only in the middle of our own "Capitalistic" period but what is next? Generally the virtues of today is cunning, cleverness, ability to lie and enrich oneself at the expense of others (also was a virtue in prior periods but to a lesser degree). The only way this period ends is when weights shift from monetary focus to something else. Perhaps stupidity would be next?

Thank you for your blog. It's a place of comfort knowing that someone writes about reality. I hate to quibble with you, but I must object to one of your comments regarding your blog entry.

But our objective anthropologist notes that the water is safe to drink in the U.S.

With the addition of fluoride the water is far from safe to drink. I could provide several links to back my claim, but my guess is that you have knowledge on this issue already. I bring it up not just to point out an inaccuracy, but because of its importance. As you know, people spend large amounts of money and time trying to improve their health. One of the first and in some cases the most important thing they could do is remove fluoride from their water. Many people filter the water, but nearly all filters can't remove the fluoride. Perhaps you have covered this before, if not please consider writing a few words about it.

I think part of your problem here is your age. You are coming at this from the vantage of a particular time in American history. After WWII, the country boomed and could do no wrong. Houses were cheap, jobs were plentiful, and everyone was on a rising curve. That set your expectations.

The 60's generation grew up on tales of idealism and self-fulfillment. They grew up with a sense of entitlement, raised by parents who thought their kids would have everything. It's not the "Me generation" for nothing. They then ran up against reality of the cold war and possible nuclear annihilation. The results were drop-outs, hippies, protestors (any cause will do) and greenies -- anything that made people feel idealistic and worthwhile. And that continues today, in what seems to me, very tired (and tiresome) liberal politics. Global Warming and recycling your trash has replaced the Civil Rights Act and the ERA. Iraq instead of Vietnam.

I'm a bit younger than you, so I've seen some of the reaction. Everyone was so shocked in the 1970's when I was a teenager -- high oil prices and stagflation and Jimmy Carter. Instead of men on the moon, we had Skylab falling out of orbit. Even the music was horrible -- Rock had died and turned into Disco. Women's lib gave us Studio 54. It was all so depressing and tacky and not at all what they had expected! And the 60's generation has just become more bitter and wistful since then. Maybe they'll even elect Hillary as one last gesture to show how enlightened they are!

I had to roll my eyes numerous times while reading your rant. I'm sure you've read Babbit, published in 1922, and it complains about conspicuous consumption and middle-class conformity in terms not much different than yours. People have been making fools of themselves for public exposure since radio was mass entertainment. Beauty contests and talent shows and idiot celebrities go back at least 100 years. If I remember my history, people were also upset about declining morals ("flappers" and the excesses of "The Great Gatsby" era.) And of course, there was a massive real estate bubble in Florida.

People are status conscious, no doubt about it, and always have been. It's built into us as social animals, no different than any other primate. Whether the status symbol is a house in the suburbs, a color TV, or a giant SUV, some percentage of people will have to have it, even if they overextend themselves financially, or work slave hours, to get it. There's absolutely no point in complaining about this. If people wanted to live like the Amish, they would.

There's another deeper reason for all this -- when times are good, people expect to be able to earn more money, and so carry more debt. This isn't just a fault of shallow suburbanites -- governments and corporations do exactly the same thing. That explains the massive debts levels and poor savings, not some lack of integrity. People just don't think the times will really change. The mortgage mess was par for the course. Borrow more than you can afford because housing is going through the roof! You can always refinance later when you have a huge pile of equity. It's simple optimism based on lack of perspective. And with a big helping of mob psychology!

And when the tide turns and money isn't so easy to come by, they get burnt. There's a crash and a cautious generation (1940's) that practices thrift and wants nothing more than security. They naturally get rich, and tell their kids that it's a world of opportunity. They also regret all the time they spent working, and tell the kids to find their ideal job, ideal mate, to make the world a better place and not just work. Those kids try to do that (1960's), but inevitably lose touch with the work ethic and thrift it takes to pay for it all. They leave their kids a rotten legacy of high taxes, high debts, inflated pension and government benefits. Their kids (children of divorce, with uncertain prospects) are a mess (1980's.) They try to match the affluence of their parents, but the economy no longer supports it. They are the ones running flat out just to keep up appearances. They can't back off because they think the affluence they grew up with is "normal."

I've seen the same thing in my family -- my father (born 1934) once said he was amazed that he had two houses and three cars and a boat. Growing up in a one-bedroom flat in NYC, that's what he associated with rich people, and yet all he had done to earn it was work at an engineering job with IBM for 30 years. Mom didn't have to take a job at any time during their marriage. He retired with a pension and full health insurance at age 55.

It's been nearly impossible for his kids to match that. Real estate is out of sight, so no 4 bedroom/2 bath house. We switch jobs every few years, so no pension or automatic salary increases. And no one wants to get married at 23 like my parents did! After all, the person you meet at that age might not be "the right one!" No one wants to work at the same company for 30 years either. That's not fulfilling! We wanted what they had, but didn't think we had to do it the way they did it (early marriage, savings, a career.)

You've talked about a "Great Awakening" as a response to coming hard times. I think this is just more 60's nostalgia, a yearning for an idealistic, shared vision. It's the religious impulse that 60's liberals never indulged when they were young. It's what has powered the green movement and leftist politics for a generation. The right wing thinks their faith makes them better people. The left wing thinks their activism and desire to improve the world make them better people! Neither group is particularly interested in figuring out what works. Neither group is too interested in looking at the results of their actions.

The population is older, larger and more settled than it was in the 1930's. There's a generation of boomers who will be in their late 50's and early 60's when this hits. They expected Social Security, Medicare and a long, leisurely, healthy retirement. A generation of 40-something's that have been burning both ends for all their working lives and just barely keeping up appearances. And a generation of 20-somethings that, when not oblivious, are cynics who think the future will be one disaster after another.

The 1930's "greatest generation" supposedly knuckled down and coped with depression and war. I suspect it was not quite that simple. I don't know what the current population will do, but I doubt it will be any kind of "Great Awakening" (it wasn't in the 1930's!). We've been too used to prosperity for too long to just grin and bear it. We're too used to depending on government to just rely on our own efforts (we didn't do that in the 1930's!) And our elites and "opinion makers" spend so much time pissing on American institutions like capitalism, self-reliance and skepticism that I wonder if the foundations of this country are still intact.

I guess we'll find out. Let's hope we do better than the 1940's.

The reason we have so many problems with debt in America is that securitized lending made it possible to carve up the risk so we now give tons of credit to people who don't deserve it.

I like to tell my "guitar story" about one of my Dad's tenants in the 70's who had a good job as a waiter and no debt. He wanted to get a loan from a bank to buy a new Gibson electric guitar. He put on the suit that his Mom bought him for his Grandmother's funeral wore the tie that my Dad helped him tie and went down to the bank to get a couple hundred dollar loan that he paid off within a year. Years later my Dad had a tenant who admitted that he was in trouble since he had bought over $25,000 of Guitars and Amps on his credit cards and he was having a hard time making the minimum payments since he did not make much playing gigs.

I've noticed a change in recent years where truly wealthy and successful people are pushing away from flashy status symbols (so they are investing even more and creating even more wealth) while most people keep going deeper and deeper in debt.

Great quote:

"let's consider another trend which we can see with our own eyes: a culture of individual identity based solely on the external markers of fame, prestige and wealth."

I was just talking about the desire for "external markers of fame, prestige and wealth" and with some exceptions it is mostly from people who have not really done anything in life. Warren Buffett or the top Brain Surgeon in the East Bay does not need a flashy car to impress anyone and odds are that the manager of a local Best Buy (who wants to impress others) will drive a flashier car (and have more "brand name" clothing) that the average guy in the Bay Area worth $50 million (who usually does not have a need to impress others).

"Because we live in a college town (okay, a prestigious university town), we do know super-achievers. For example: graduated from super-selective law school a semester early, was flown to London all expenses paid for a job interview, was hired at a starting salary of $150,000 or so and moved to London. ' Good on ya, girl! "

You will be better off making $80K in the East Bay than $150K in London...

"Does anyone else see a disconnect between the frenzied drive to attend a private college which costs $40,000+ a year and the fact that tech heroes Bill Gates and Steve Jobs did not finish college? This smacks of a culture so fearful of failure and worthlessness that every ounce of "prestige" must be scrounged like the last scrap of bread in a famine."

The truly rich and successful don't send their kids to Cal and Stanford to brag, they do it because they know that life is a lot easier if their kid has a circle of friends that went to Cal or Stanford (where you are usually just one phone call away from getting anything done).

"Yes, it's important to go to college or acquire a trade/skill--I am only questioning why so many people choose a lifetime of debt in order to go to a private school when a perfectly good public university is probably close at hand. (And if you work your way through, your grades will suffer, but with some roommates and a cheap lifestyle you'll get your degree with a modest loan or maybe even no debt rather than a mountain of debt.) "

I worked my way through a public university, but in hindsight I would be much better off today if I went to Cal or Stanford and took out loans so I could get very involved with the schools (and even better off if I later went to a good grad school).