This is Ilargi's intro from The Automatic Earth today.
There's no better way to prove that, and why, we will not climb out of our present crisis hole on the sunny side than to read and hear reporters and the people they quote. Everybody tells us that everything they do and say is shaped by their firm look towards the future. And the problem, of course, is that nobody is actually looking at the future. Everyone looks at the past, to pick what they like best, maybe tweak, twitch and embellish it a little bit, and project in unto and into the future. But that particular kind of future is no longer available. Too many among us have too much debt, and would need to make absolute fortunes in order to ever pay it off.
Instead, we're on our way back to making what we need. Literally. Those of us who are lucky. It's like Chris Whalen explained over the weekend, and again today, about AIG. There was never any chance of AIG paying its debt, since there was never any way the company could generate enough income to cover its CDS contracts. Or, as Tim Freestone put it years ago, addressing AIG's actual value: "To justify the share price [..], it would have to grow about 63% faster than [its] peers for the next 25 years. If investors believe that AIG can sustain this type of performance for that period of time, then AIG is properly valued".
It's probably clear to many of you that AIG has no future, and that the only reason your money is dumped in it is the risk (or certainty) that its demise will bring down some, if not most, of the most powerful financial institutions on the planet.
What is apparently much less evident is that AIG is the perfect, tailor-made metaphor for our entire economic system and indeed our entire societies. We would all have to grow that 63% for those 25 years in order to save our skins as the nations and communities we are today. It is equally impossible.
The fact that AIG is still around makes it much harder to learn the lesson that lies in that metaphor, understand what has happened and why it has, and then move on. By refusing to owe up to our losses, we rob ourselves of the chance to prepare as societies for what lies ahead. And if we don't do that, individual preparations, while not necessarily redundant, become an all-out crapshoot.
I see very few people who, when they talk about their own ways to try and get ready for what will admittedly always be an uncertain endeavor, fully take into account how they fit into their societies in all their multiple layers. Just about everyone relies on concepts of the world which surrounds them staying more or less the same to a large extent. And it won't, not a chance.
We need to stop what we're doing, we need to stop the people who are doing what they do for us and to us. We need to get off this road we're on, and we need to do it fast. We get deeper into debt every single day, and we have nothing to show for it. We can't get back to the future, even though that's very literally what we're trying to do. We can either organize our societies in ways that allow for survival as societies, as best we can, or there will no longer be societies, and everything will shatter to the ground in a disaster whose magnitude we cannot begin to imagine.
So far, however, we are busy spending all the wealth we have left, and then some, to keep dead corporations alive, and craving, hoping and praying for greenshoots, light between trees and other maddingly meaningless spinmeister drivel. We are, both as individuals and as societies, addicted to the sweetest of dreams such as can only be provided by the deadliest of potions.
In all honesty, I have grave doubts that we have it in us to get out of this in one piece. I can make rational arguments, and have done so incessantly, but I see a world merely longing for the next fix, for the dreams and hollow visions to linger one more hour, one more day, one more year. We may be a species blessed with reason, but how much of a blessing it is is a huge question, and moreover, it's not the only quality we possess. Our present predicament should be more than sufficient evidence for that.
But that's not what we see in it.