More bad news last week. Employers cut 651,000 more jobs in February, pushing the official unemployment rate to 8.1%, the highest since 1983 (although the actual percentage is probably closer to 13 or 14%, if we count the incarcerated, the permanently-discouraged who have stopped looking for jobs, and the underemployed who can't get the hours they want). The US has shed 3.3 million jobs just in the last six months. Things are getting scarier, and one can only hope that the Obama stimulus plan stops the bleeding.

But again, we need to keep reality in view. There is this desperate but deluded idea that our current situation is a temporary one, and can be turned around by "unfreezing" credit or "loosening up" lending -- as if the whole mess is one giant hairball stuck in the collective American drainpipe.  Once we flush out that nasty clog, everything wonderful will begin flowing again: jobs, SUVs, and ever-expanding housing values.

This is simply not the case. What we are seeing now is that the hallucinated economy of the last few decades is being shrunken down to its appropriate size.  We've been filling our landscape up with too many houses, too much supporting sprawl, and generally too much crap. But it was all done on borrowed money, financial bubbles, and shady investment vehicles.  We hollowed out the national economy that actually did things (small farming, local manufacturing, durable good maintenance and repair), and replaced it with the "service industry" adjuncts to sprawl-building: real estate brokers, advertising execs, big box store retailers, etc. And of course, the ultimate lifeblood of the whole thing was cheap oil and other fossil fuels, the burning of which has the planet marinating in its own changing climatic juices. 

What we are witnessing now is the readjustment of the economic algorithms of America. The ratios of the last few decades simply don't work any more, because the underlying building blocks were bogus, exaggerated, or delusional. We just can't support the huge segments of the job market that subsisted on over-valued real estate, hyper-leveraged private debt, and ponzi scheme global finance. 

So what can rescue us? Where are our lifeboats? As we noted last time, we're starting to see the signs of forced collectivity. Senior citizens are moving back in with their adult children, as their retirement accounts get slashed in half.  More adult children are staying home with their parents, instead of moving out. Enrollment in the armed forces is way up, as job prospects dry up. And of course, the number of the economically superfluous that we shove away into our prison system has swelled to over 7 million people, meaning that 1 out of every 31 adults is either in prison or jail, or on probation.

So people are being forced into collective behavior of one kind or another. But what would we need to do to get on the proactive side of collectivity, to design lifeboats for ourselves in advance, on our terms, instead of being coerced by events? We have to shake off this sense that "normal" times are just around the corner, with breakneck consumption and full-employment growth restored to their former glory. These are desperate times, and radical alternatives are needed. Just how radical? Well, here are some of the things I think we'll have to do, in some form or another. Right now, the political will and general public awareness of our true dilemma are not there for this. But within a few months, as the economic stimulus fails to right the ship, and as the macro-collapse continues, there will be a frantic search for new solutions that go beyond the usual conservative and liberal scapegoating. We're into the realm where the most outside-the-box thinking and legislation will be necessary, and all of the contemporary notions about ownership, taxation, eminent domain, public confiscation of private property, and the like, may need to be scrapped and recreated.

• Re-tasking of the Military: Like any good liberal, I would love to see the military downsized to realistic proportions. It is worth remembering that almost all of our founding fathers were opposed to the idea of standing armies. Being consistent defenders against centralized tyranny, they saw a permanent military establishment as a real threat to liberty. It is a frustrating blind spot with present-day conservatives (save Ron Paul and co.) that they rail against big government's wasteful ways, but do not see the same inefficiencies and abuses in the bloated military. Centralized power is dangerous in any form, be it legislative, military, corporate, or otherwise. The US military budget, if we include the occupations of Iraq and Afghanistan (I refuse to call it "defense" spending, because of its offensive nature), is roughly a trillion bucks a year. We have about 1000 military bases of various sizes strewn about the globe. We have Cold War era weapons programs that are just flushing money down the sinkhole. And we spend more on our armed forces than the next 45 nations put together, almost half of total global military spending (see recent article from Chalmers Johnson). So yes, we need to downsize this insanity. We need to close down bases, shut down outdated weapons programs, and end the wasteful conflicts in Iraq and Afghanistan (we cannot win in Afghanistan, as many have discovered over the centuries). But considering the sheer size of the spending, and the enormous capital assets involved, both physical and human, we should definitely use this spending momentum to our advantage. Businesses that are under contract should be retasked with a new domestic "defense" project: building a system of decentralized, sustainable-energy power plants, all around the country. What could be more in the interest of American safety and security than making us as energy independent as possible? These defense contractors are not going to want to lose the ongoing money stream that comes from the government, so why not just redirect their efforts towards this construction? We can shrink the overall size of the military budget, but do so in increments, as the new power plants come online. Similarly, combat soldiers should be used to help build and staff these plants, getting valuable training in a hands-on, productive industry. When completed, these power plants (solar, wind, geothermal, biofuel) could be municipalized, with military personnel receiving some equity stake and employment preferences as the facilities go online. Again, power plant construction and the military don't sound like a natural mix. But we have to be creative, and using the cache and political safety that comes with doing things via the military is a practical way to get some radical things done.
• Emptying the Prisons: We cannot continue to swell our prison population. It is unjust, too expensive, and amazingly wasteful of human potential. It's time to stop pretending that our prisoners are anything but the economically superfluous, an entire segment of the population that we have failed to educate and empower, whether it be inner-city blacks or rural whites. We slap bogus, non-violent drug charges on them, and then lock them up, displaying ridiculous moral outrage at their criminality. It's a crock. The prisons are simply another way of hiding the unemployed, of denying that we have a dysfunctional economy that has produced no dignified work for millions of citizens. Very soon, we will not be able to afford this conceit. The prisons have to be emptied, and productive projects have to be available for these people. We need a massive federal, state, and local cooperative agenda, spearheaded not through spending, but through legal redefinitions of eminent domain, zoning, and property ownership, and through creative partnerships with established development organizations. Lots that sit unused in our cities and countrysides need to be seized and turned over to regular citizens, free of taxation and onerous zoning laws. Landlords that prefer taking write-offs by leaving spaces empty, as opposed to dropping rents to affordable levels, should forfeit their properties to regular people who need space in which to live and work. We are going to need to reintegrate the nation's prisoners into mainstream society, but we also need to change that mainstream itself to accommodate different kinds of occupying and owning the landscape.
• Rewarding Collective Living: I realize that it is difficult to imagine what a more cooperative, larger social form might look like. Everything in our society is geared towards individual consumption and nuclear-family living. And if you think about it, what makes the current recession so terrifying is people not being able to figure out how they are going to pay for all of the individual and family expenditures when the influx of money lessens or stops. I myself do not have any children, but I can imagine the terror of parents who look out on the years of expenses stretched out before them. All of our architecture, our financial workings, our legal structures, and our cultural values are coiled around the ideas of individual labor and small family living. The skids are greased, so to speak, for current arrangements. It is very difficult to hypothesize what a society would look like that greases the skids for collectivity. But that is what we need to do. In surveying the stories of the Intentional Communities movement (see www.ic.org), time and time again the same problems are listed: archaic and inflexible zoning laws that prohibit large group, multi-use structures; difficulty in procuring financing from institutions that just do not recognize the legitimacy of cooperative endeavors; issues with site location, due to unhelpful and obstructive local governments. Once these hurdles are overcome, many communities thrive, and are welcomed into their larger communities with enthusiasm. There needs to be a herculean effort, a collaboration between the federal, state, and local governments, to eliminate the zoning, financial, and civic hurdles to cooperative living. And indeed, there should be large tax incentives for lending institutions and local governments to facilitate cooperative loans, grants, and land giveaways. As mentioned above, unused sites should be seized and turned over to groups of people looking to build new community forms. There should be a national clearinghouse database of organizations and businesses with community-building experience, with a robust federal department that links people to the institutions they need.
• Decentralized Finance: There has been a lot of talk about nationalizing the banks, especially the troubled ones; and that might indeed be necessary. But it should only be temporary, and the push going forward should be for state banks and local banks, with new legislation and regulation that makes it attractive and safe for communities to set up their own lending and thrift operations. There should be significant tax incentives for investing in local or state banks, and local investment funds should be similarly regarded. State and local banks are not subject to the same boom and bust cycles of private banks, as they do not have to return unrealistic rates of profit. North Dakota is the only state with its own bank, and it works very well (see this recent article). Locally circulated and lended money has a much greater multiplier effect than money that is funneled through centralized transnational corporations. Local investment funds kick out to other local businesses and individuals, and do not get whisked off to corporate headquarters in New York or London. One final aspect of decentralized finance that might prove advantageous and necessary (sooner than we might think) is local currency. A local script is really the most robust way to stimulate local economic exchange without allowing for capital flight. Local currencies are also able to facilitate economic services and transactions that might not be possible in the general money economy. It's really a way to put a more formal face on the barter system.

Well, that's enough for now. I've put you through enough blather. The general thought that keeps running through my mind is the FDR statement about fear itself. In a world built for maximum employment, hyper-consumption, and constantly growing output of stuff, a future of economic contraction is utterly horrific. But if the skids can be greased to maximize the power of collective living (see an old post on this), I think we would be surprised at how quickly we could turn things around.