The Rise of Gonzo Porn Is the Latest Sign of America's Cultural Apocalypse
By Chris Hedges, Nation Books. Posted July 31, 2009.
...A culture that cannot distinguish between reality and illusion dies. And we are dying now...
...I reported in my new book, "Empire of Illusion: The End of Literacy and the Triumph of Spectacle"...to chronicle our terrifying flight as a culture into a state of illusion. I looked at the array of mechanisms used to divert us from confronting the economic, political and moral collapse around us. I examined the fantasy that if we draw on our inner resources and strengths, if we realize that we are truly exceptional, we can have everything we desire.
The childish idea that we can always prevail, that reality is never an impediment to what we want, is the central motif of illusion peddled on popular talk shows, by the Christian Right, by Hollywood, in corporate retreats, by the news industry and by self-help gurus. Reality can always be overcome. The future will always be glorious. And held out to keep us amused and entertained are spectacles and celebrities who have become idealized versions of ourselves and who, we are assured, we can all one day become.
The cultural embrace of illusion, and the celebrity culture that has risen up around it, have accompanied the awful hollowing out of the state. We have shifted from a culture of production to a culture of consumption. We have been sold a system of casino capitalism, with its complicated and unregulated deals of turning debt into magical assets, to create fictional wealth for us and vast wealth for our elite. We have internalized the awful ethic of corporatism -- one built around the cult of the self and consumption as an inner compulsion -- to believe that living is about our own advancement and our own happiness at the expense of others. Corporations, behind the smoke screen, have ruthlessly dismantled and destroyed our manufacturing base and impoverished our working class. The free market became our god and government was taken hostage by corporations, the same corporations that entice us daily with illusions though the mass media, the entertainment industry and popular culture.
...We ask...to be fed lies. We demand lies. The skillfully manufactured images and slogans that flood the airwaves and infect our political discourse mask reality. And we do not protest. The lonely Cassandras who speak the truth about our misguided imperial wars, the global economic meltdown and the imminent danger of multiple pollutions that are destroying the eco-system that sustains the human species...The worse reality becomes, the less a beleaguered population wants to hear about it and the more it distracts itself with squalid pseudo-events of celebrity breakdowns, gossip and trivia...
You do not need charts parrotting highly-erroneous data for a subject that's--like so many other fields of study in life--as much of an art as it is a science.
In fact, that's what this diary's about, at least as far as our current economy's concerned.
"How Fake Is The Recovery?"
This becomes even more self-evident when we learn that "professional hindsight" (especially when it concerns economic data during the quarter prior to a U.S. presidential election) strongly reaffirms what many have been saying for quite some time, as in: "Study shows economy twice as bad as first reported."
So, when you accept the truth that if you ask 100 different economists what constitutes a "Depression," you'll receive 100 different answers; and, that it's now acknowledged by our own government that the, "U.S. Recession Worst Since Great Depression, Revised Data Show," you really do not need to wait until the six o'clock news to find out it was a proverbial tornado that levelled your neighborhood, as you look at the ruins around you while the rest of the community hears: "Yup, that was a tornado, alright."
The damage was done; and that's really all that mattered...to you and to those around you.
Using another analogy, when you come into an emergency room complaining of chest pains, you don't wait until the results come back from the lab confirming you've had a heart attack--and until you're flatlining--to be treated for it.
By then it's too late.
To deal with these types of truths in any manner other than with extreme haste becomes nothing less than virtually guaranteeing a brutal result that delivers a byproduct that may be considered little more than draconian governance. (Yes, think Hurricane Katrina, and multiply that 1,000 times.)
Finally, when we learn beyond any doubt--from multiple credible sources--that we were basing virtually all of our decisions and ongoing actions on grossly understated data, we declare a state of emergency for those neighborhoods hit by the tornado, and/or we take out the paddles and turn on the defibrillator.
At critical junctures in time, the quantitative realities take a backseat to the qualitative presentation, and to the actions necessary to appropriately address that qualitative reality.
It's no longer: "Bad winds caused damage to a neighborhood on the east side of town." It's: "A tornado levelled a neighborhood on the west side of town."
It's not: "I have chest pains." It's: "The patient's having a heart attack."
And, when the qualitative realities of a subject overcome the accepted quantitative "rules," it's time to: a.) stop listening to the self-styled pundits and "experts," b.) rewrite the rules, and, most importantly, c.) invoke common sense.
Because it's no longer a recession and a recovery. It's a depression. (Maybe not as bad of a depression as the one this country experienced in the 1930's, but a depression, nonetheless.)
Even Paul Krugman all but tells us as much, just this weekend: "Growth and unemployment."
Growth and unemployment
Paul Krugman - New York Times Blog
August 1, 2009, 11:51 am
...Has the rise in unemployment been more than we should have expected, given the slump in GDP? Looking at the data, I don't think there's a strong case -- not so much because of the numerical exercise I did in the earlier post, but because this recession is just completely on a different scale from anything we've seen for a long, long time. It's hard to know what we should have expected.
And one last point: when I say that the rise in unemployment makes sense, I mean that it makes sense given the depth of the recession. It is, of course, completely crazy and disastrous from a larger point of view.
Bold type is diarist's emphasis.
Now, as far as this train of practical thought is concerned, many are asking with regard to our economy: "How Fake Is The 'Recovery?'" (NOTE: Paul Craig Roberts was an Assistant Secretary of the Treasury during the Reagan administration.)
First and foremost, you have to acknowledge that "NUMBERS LIE."
Put simply, common sense trumps conventional wisdom, especially when the conventional wisdom is based upon a continual stream of (acknowledged) flawed quantitative data.
This is not a wannabee economic pundit-blogger, slapping a bunch of charts in a diary telling you this as they bogusly attempt to grossly oversimplify reality, it's a Nobel laureate economist saying: "It's hard to know what we should have expected."
And, here's an ugly truth: Our government is dealing with our nation's economy based upon plans drafted six to twelve months ago, which are now acknowledged as being based, almost entirely, upon extremely understated and/or inaccurate data (i.e.: Yes, President Obama's only been in office for six months, but our nation's economic fixes are being directed by people who laid the groundwork for many of the currently-implemented "solutions" months before the Obama administration took office).
Former Goldman-Sachs managing director Naomi Prins pulls the curtain back on her former employer in the latest issue of Mother Jones, "How You Finance Goldman Sachs' Profits."
How You Finance Goldman Sachs' Profits
An insider's view of Wall Street's rebound.
--By Nomi Prins
Tue July 28, 2009 12:28 PM PST
This is perhaps the most important thing I learned over my years working on Wall Street, including as a managing director at Goldman Sachs: Numbers lie. In a normal time, the fact that the numbers generated by the nation's biggest banks can't be trusted might not matter very much to the rest of us. But since the record bank profits we're now hearing about are essentially created by massive federal funding, perhaps it behooves us to dig beneath their data...
(I strongly recommend reading this Mother Jones article. It's incredibly insightful, and it covers a lot of truthful ground that hasn't been traversed by the MSM, or any other media outlets, for that matter.)
Yes, the numbers we're hearing in the MSM, and even on these blogs--certainly with respect to the parrotting of government statistics and corporate information, if nothing else--do lie; and the graphics (i.e.: the charts) that represent them misinform us and misdirect our attention, as well, "Wall Street Analysts Keep Telling Big Earnings Lie."
Wall Street Analysts Keep Telling Big Earnings Lie
Commentary by David Pauly
July 30 (Bloomberg) -- At a time when the financial industry's credibility is at an all-time low, you would think Wall Street's finest would break their necks providing transparency.
Not so. Stock analysts continue to promote corporate earnings lies, insisting that net income isn't really what investors need to know.
Wall Street's big earnings lies must exasperate investors. They already have lost faith in the reported earnings of banks that are the center of the financial system.
Exactly how impaired are banks' impaired loans? The Financial Accounting Standards Board, under political pressure, has ruled that the banks decide. Might as well ask a six-year- old who took the cookies.
The argument is that "adjusted" earnings make for a smoother picture of company performance....
And, those statistical lies and deliberate misdirections are not just about Wall Street's so-called "reporting" of completely twisted CORPORATE EARNINGS, or Ms. Prins' highly enlightening, firsthand account of the true extent of the massive, surreptitious GOVERNMENT BAILOUTS of Goldman-Sachs, either.
How bad is this misinformation? What are the true extensions and byproducts of these lies? How serious are these deliberate misdirections? Apparently, significantly worse than we thought.
We're at a point, calendar-wise, where we've been in this "recession" for 19 months. In September, we'll be at a point where we're over a year ahead of when everything proverbially hit the fan. At that point, year-over-year comparisons will be totally skewed. Most statistics will start to look great compared to a year ago.
In fact, all comparisons to a year ago since January 2009 have been relative to previous numbers referenced from a period where this country was already in a "recession."
Let's start with HEALTHCARE.
From: "How Fake Is The 'Recovery?'"
How Fake Is The "Recovery?"
July 29th, 2009
By PAUL CRAIG ROBERTS
Last week on NPR a professor in the Sloan School of Management at MIT explained that what is really at stake in the health care bill is the US government's ability to borrow. In other words, the bill is about cutting health care costs, not about providing hard-pressed Americans with health care.
The professor said that if we didn't get health care costs under control, in 30 years the US government would not be able to sell Treasury bonds.
It is not at all clear that the Treasury will be able to sell its debt instruments in 30 months, and it has nothing to do with health care costs. The Treasury debt marketing problem has to do with two back-to-back US fiscal year budgets, each with a $2 trillion deficit. The size of the US deficit exceeds in these troubled times the supply of world savings available to fund the US government's wars, bailouts and stimulus plans. If the Federal Reserve has to monetize the Treasury's new borrowings by creating demand deposits for the Treasury (printing money), America's foreign creditors might flee the dollar.
The professor didn't seem to know anything about this and gave Washington 30 more years before the proverbial hits the fan.
One looks in vain to the US financial media for accurate economic information. Currently, Wall Street, the White House, and the media are hyping a new sign of economic recovery--"surging" June home sales. John Williams at shadowstats.com predicted this latest reporting deception...
Roberts continues on to cite John Williams, over at Shadow Stats, who points out that statistics may easily be "reported" to show false signs of recovery.
Williams, in turn, tells us of how data may be easily distorted to create false hopes, thereby leading to investment losses
The economy has been contracting for so long that a plateauing of the falloff in home sales compared to the previous time period's more rapid contraction can appear like a gain.
I've been reading about this no-less-than extreme contortion in housing and mortgage information from countless sources over the past few weeks, as well: "Economists React: Housing `News Sounds Better Than It Looks.'"
Economists React: Housing `News Sounds Better Than It Looks.
Wall Street Journal Blog
By Phil Izzo
July 27, 2009, 12:35 PM EDT
Economists and others weigh in on the month-to-month increase in June new-home sales...
* Unlike the prices of existing homes, the median sales price of new homes sold fell in June by 5.8% from the May median and 12% from a year ago. However, the average sales price was essentially unchanged in June and down about 7.5% from a year ago). Underlying details show suggest that sales of lower priced homes improved more than of higher priced homes. -Nomura Global Economics
* The news sounds better than it looks ... despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982. -Richard F. Moody, Forward Capital
* Although most evidence indicates that new housing activity (starts and sales) has bottomed, we do not anticipate anything resembling a "v-shaped" recovery. The same appears to be true of existing homes, where first-timers are being tempted by deeply discounted properties coming out of foreclosure, but activity up the price scale remains spotty at best. Moreover, supply will remain enormous, particularly with increased competition coming from distressed sales of existing homes. -Joshua Shapiro, MFR Inc...
And, then, there's the issue of the "shadow inventory," "'Shadow' inventory lurks over U.S. housing recovery."
"Shadow" inventory lurks over U.S. housing recovery
Fri Jul 31, 2009 6:15pm EDT
NEW YORK (Reuters) - The storm may have subsided, but clouds continue to hover over the U.S. housing market as homeowners waiting for prices to rise get ready to flood the market with fresh inventory.
"The number of homes listed officially on the market, while still at historically high levels, might be only the tip of the iceberg," said Stan Humphries, chief economist at real estate website Zillow.com in Seattle, Washington.
Standard & Poor's widely watched gauge, the S&P/Case-Shiller 20-City Home Price Index, rose 0.5 percent in May, the first increase since July 2006.
The historic average is about six months' supply, so a huge imbalance between supply and demand remains. Continued...
"Shadow inventory has the potential to give us another leg down on home prices during the second half of the year," said Steven Wood, chief economist at Insight Economics in Danville, California.
"It appears that there is a significant amount of shadow inventory in the form of bank owned properties, which will continue to grow with the rising in delinquencies," he said. It can take about 4-6 months for a house for be out of foreclosure and ready for sale.
And, of course there's the reality--often unmentioned in the MSM--that if unemployment's increasing, foreclosures will, as well.
It's just common sense! (Do you need a chart to know this?) Apparently, folks right here on this blog are posting charts attempting to "explain" how housing prices are stabilizing, while these same people tell us that unemployment will continue to accelerate in the months ahead.
This is just out-and-out conflicting information.
Unemployment spreads distress in U.S. home loans
Thu Jul 30, 2009 1:23am EDT
By Lynn Adler
NEW YORK (Reuters) - Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday.
With the unemployment rate near a 26-year high and many employers cutting wages, more consumers in areas that were initially spared in the foreclosure explosion are now behind in their home loan payments.
More than 20 percent of areas with above-average foreclosure activity were in Oregon, Idaho, Utah, Arkansas, Illinois and South Carolina in the first half of the year. That shift points to growing unemployment more than to fallout from subprime and adjustable-rate loans, RealtyTrac said in its midyear metropolitan foreclosure market report.
While total foreclosure activity kept rising, "some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, while new markets like Provo, Utah, and Boise, Idaho, have seen large increases," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.
"As unemployment rates increase in different parts of the country, it's very likely that we'll see similar patterns develop elsewhere," he said.
Stage 2 of the financial collapse of the U.S. is being triggered by the accelerating rates of default/foreclosure in the prime-rated mortgage market, as well as the collapse of commercial real estate. I am going to focus on the residential mortgage component, as it is three times as large as the commercial real estate mortgage market. Whereas the subprime and Alt-A mortgage markets are roughly $1.5 trillion combined, the prime-rate mortgage market is in excess of $10 trillion, depending on your source of data. For purposes of my analysis, I am using data presented by Mark Hanson of Field Check Group in his "7-19 Mortgage Default Crisis - Brutal Past Two-Months" article posted here (any housing/foreclosure data I use comes from this article):
The biggest problem, however, facing the housing market, is the impending surge in bank foreclosure inventory, fueled by the rapid increase in defaults and foreclosures in the $10 trillion prime mortgage sector of the market. Delinquencies surged in May and foreclosure inventories hit new highs. The May foreclosure rate hit 2.79% of all mortgages. This foreclosure rate increased from April to May by 6.2% and surged from May 2008 by 88.3%. Further troubling is the 5% spike in the rate of delinquencies from April to May. This compares to the April to May average increase in delinquencies over the past four years of 1.1%. The increase in delinquencies from May 2008 to May 2009 spiked up by 50%.
What's most troubling about this data is that the main source of these horrific foreclosure/default numbers is the rapid increase in defaults in Prime-rated mortgages over the last six months. Once a mortgage defaults, it typically takes 12 to 18 months for the property to be foreclosed and either listed for sale for held in suspense by banks hoping for a miracle in the condition of the housing market.
The default/foreclosure statistics for Prime mortgages are starting to follow the same statistical path experienced in the subprime and Alt-A markets. Currently, over 12% of all subprime mortgages and 8% of all Alt-A mortgages have been foreclosed. Let's assume that the total foreclosure rate for the prime mortgage market eventually hits 5%. I believe this is a conservative estimate given what has already occurred in subprime and Alt-A, the surging rate of delinquencies in the prime sector and the rapidly escalating rate of unemployment, which directly correlates to mortgage defaults.
Assuming 5% means that $500 billion in prime mortgages will be foreclosed. This equates to the entire size of the subprime mortgage market. Imagine the damage this is going to cause to the entire financial system in this country...
Speaking of unemployment...
IMHO, here's the scariest unemployment fact of all: Less than one-third of all people that are eligible for unemployment insurance file for it.
Tell me, how often have you heard this harsh reality in recent months?
As Roberts explains, in his article linked above, seasonal adjustments in unemployment relate to antiquated "adjustments" for things such as the retooling of auto lines; and many of these auto lines no longer exist. This reduced the amount of actual unemployment claims that were reported by our government.
Roberts also points out, again, what Williams has been telling us for quite some time: statistics are now "being compared to prior periods of collapsing activity."
"Improvements" are thus artifacts of the prior collapse and not signs of economic rebound.
Then there's the Bureau of Labor Statistics' "Birth-Death Model." "Birth" refers to new jobs created by start-up companies. "Death" refers to jobs lost to failed businesses. As it's pointed out to us by Williams, the BLS' birth-death model is 'based upon normal periods of economic growth, where there are more non-reported start-up jobs than losses.' Well, folks, when you're in a "recession," you might as well throw that model out the window!
We also learn that the BLS' model adds 75,000 new jobs per month, or 900,000 new jobs per year, automatically to all reported numbers.
Stating the obvious, we're told it's wrong to make these assumptions during downturns such as the one we're experiencing now.
Lastly, perhaps the most offensive truth about our government's reporting of the unemployment situation is the hard-to-believe truth that if you've been unemployed for more than a year, our government simply assumes you're no longer unemployed.
Meanwhile, our nation's welfare rolls are growing at the greatest pace ever recorded: "Obama's Jobless Safety Net Torn by Rebecca Alvarez."
Obama's Jobless Safety Net Torn by Rebecca Alvarez
By Rich Miller
July 10 (Bloomberg) -- Rebecca Alvarez says she's "barely hanging on."
Without a job for seven months, the 48-year-old computer- network administrator said she's stopped dining out, cut back cable-television services and put off paying a photography class bill from her 14-year-old son's school in Monrovia, California. She is among more than 4 million Americans who have been looking for work for more than 26 weeks, representing 29 percent of the unemployed, the most since records began in 1948.
Hundreds of thousands of lost jobs in industries such as autos and construction haven't been replaced with new ones, shrinking payrolls by 6.5 million since the recession began in 2007, Labor Department figures show. The June jobless rate reached 9.5 percent, the highest since 1983.
"We are going to have a huge pool of unemployed, second only to the Great Depression," said Allen Sinai, chief economist at Decision Economics in New York. "It will be a big public-policy problem."
Now, much has been said of 1.5 million folks running out of unemployment benefits by year's end. But, what about 650,000 of these folks who'll be without benefits by the time the Summer's up?
As many as 650,000 workers may exhaust even their extended benefits within three months, said Maurice Emsellem, policy co- director for the National Employment Law Project, a nonprofit advocacy group headquartered in New York.
As we're learning this weekend, we're talking less than two months from now: "Prolonged Aid to Unemployed Is Running Out."
Prolonged Aid to Unemployed Is Running Out
By ERIK ECKHOLM
Published: August 1, 2009
Over the coming months, as many as 1.5 million jobless Americans will exhaust their unemployment insurance benefits, ending what for some has been a last bulwark against foreclosures and destitution.
Because of emergency extensions already enacted by Congress, laid-off workers in nearly half the states can collect benefits for up to 79 weeks, the longest period since the unemployment insurance program was created in the 1930s. But unemployment in this recession has proved to be especially tenacious, and a wave of job-seekers is using up even this prolonged aid.
Tens of thousands of workers have already used up their benefits, and the numbers are expected to soar in the months to come, reaching half a million by the end of September and 1.5 million by the end of the year, according to new projections by the National Employment Law Project, a private research group.
Yes, emphasis on coverage of this story has related to events by year-end. The truth will become self-evident much sooner, IMHO; as in just a few weeks. Mish Shedlock, whom various high-profile bloggers frequently quote from time to time, has recently come out and just said it: "Weekly Unemployment Claims Portend Disaster."
GROSS DOMESTIC PRODUCT (GDP)
Then there's talk of our GROSS DOMESTIC PRODUCT numbers "improving" later in the year, and into 2010; but, upon closer historical inspection, the latest projections of our government don't add up. And, when one looks at the historical references from the Great Depression in comparison with where we are now, discussion of a "double-dip recession" takes on a Depression-like meaning unique to current day, per Michael Kamperman from the Escape The New Great Depression blog.
For comparison purposes we are 20 months into the depression, which means this is the spring of 1931 and not the spring of 1933. Unemployment first reached 10% in the spring of 1931.
Last year one out of two college graduates had a job offer upon graduation. This year it was one in five. When the unemployment office calls and the accounting major living at home with Mom and Dad says he works part-time at Starbucks for gas money the U-3 stats you quote say he is employed. The real measure of unemployment is U-6 which counts this young man and those that are discouraged and have given up looking for work but are willing to take a job. Currently, the U-6 measure of unemployment is 16.5%. And lets not forget the unemployment rate in Spain is 17.9%.
The latest GDP reading of a 1% contraction included a positive 1.38% contribution from net exports. Actual exports fell 7% in the second quarter, but because imports fell 15% the "net" was a positive number. Now who really thinks shrinking imports and exports is a sign of positive economic growth?
Again, does anyone really need a chart to understand this funny math or, for that matter, just to read about historical reality?
I haven't even bothered to get into the reality that consumers just aren't spending (a primary key to a return to sustained levels of growth that has allowed us to emerge from recessions past), and that consumer price index (i.e.: CPI) has been so contorted in the past 15 years, it's now all but meaningless. But, this information is widely available for all that wish to seek it out.
Much of the real concern, going forward, relates to ongoing unemployment. Very simply, it affects just about everything, as even Ben Bernanke has recently acknowledged: "Unemployment could undercut U.S. recovery: Bernanke."
Unemployment could undercut U.S. recovery: Bernanke
Tue Jul 21, 2009 7:02pm EDT
By Mark Felsenthal and Alister Bull
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke Tuesday said the outlook for the long-suffering U.S. economy was improving, but supportive policies would be needed for some time to prevent rising unemployment from undercutting recovery.
Delivering the Fed's semiannual report on the economy to Congress, Bernanke also sought to dispel concerns the U.S. central bank's aggressive monetary easing could end up fueling inflation, saying he was confident the Fed could pull back its extraordinary stimulus when the time was right.
"Better conditions in financial markets have been accompanied by some improvement in economic prospects," Bernanke told the House of Representatives Financial Services Committee. "Despite these positive signs, the rate of job loss remains high."
While housing and household spending appear to be stabilizing, unemployment is likely to remain uncomfortably high into 2011 and could sap fragile consumer confidence, he warned.
Yes, with all-but-guaranteed unacceptably high unemployment for years, any talk of a recovery--supported by charts and related distractions from our bigger truths--are just a waste of time.
And, that's just common sense. Last I checked there is no chart for that.