Posted: January 06, 2009
9:07 pm Eastern

By Drew Zahn
2009 WorldNetDaily

Henry Kissinger

Conflicts across the globe and an international respect for Barack Obama have created the perfect setting for establishment of “a New World Order,” according to Henry Kissinger, the Nobel Peace Prize winner and former secretary of state under President Nixon.

Kissinger has long been an integral figure in U.S. foreign policy, holding positions in the Nixon, Ford and Reagan administrations. Author of over a dozen books on foreign policy, Kissinger was also named by President Bush as the chairman of the Sept. 11 investigatory commission.

Kissinger made the remark in an interview with CNBC’s “Squawk on the Street” hosts Mark Haines and Erin Burnett at the New York Stock Exchange, after Burnett asked him what international conflict would define the Obama administration’s foreign policy.

Read “Hope of the Wicked,” where author Ted Flynn reveals the greatest deception in modern history – corporations, foundations and governments converging to bring about a New World Order.

“The president-elect is coming into office at a moment when there is upheaval in many parts of the world simultaneously,” Kissinger responded. “You have India, Pakistan; you have the jihadist movement. So he can’t really say there is one problem, that it’s the most important one. But he can give new impetus to American foreign policy partly because the reception of him is so extraordinary around the world. His task will be to develop an overall strategy for America in this period when, really, a new world order can be created. It’s a great opportunity, it isn’t just a crisis.”

Kissinger’s comments are captured at roughly the two-minute mark of the following video:

The phrase ‘new world order’ traces back at least as far as 1940, when author H.G. Wells used it as the title of a book about a socialist, unified, one-world government. The phrase has also been linked to American presidents, including Woodrow Wilson, whose work on establishing the League of Nations pioneered the concept of international government bodies, and to the first President Bush, who used it in a 1989 speech.

“A new partnership of nations has begun, and we stand today at a unique and extraordinary moment,” said Bush before a joint session of Congress. “Out of these troubled times, our fifth objective – a new world order – can emerge: A new era … in which the nations of the world, east and west, north and south, can prosper and live in harmony.”

The phrase “New World Order” causes alarm for many Americans, particularly those concerned about an international governing body trumping U.S. sovereignty or those that interpret biblical prophecy to foretell the establishment of a one-world government as key to the rise of the Antichrist. Conspiracy theorists, too, have latched on to the phrase, concerned that powerful financial or government figures are secretly plotting to rule the world.

Kissinger’s ties to government and international powers – as well as his use of the phrase – have made him suspect in the eyes of many who are wary of what “new world order” might actually mean.

“There is a need for a new world order,” Kissinger told PBS interviewer Charlie Rose last year, “I think that at the end of this administration, with all its turmoil, and at the beginning of the next, we might actually witness the creation of a new order – because people looking in the abyss, even in the Islamic world, have to conclude that at some point, ordered expectations must return under a different system.”

As WND reported, Kissinger was also part of last year’s super-secret Bilderberg Group, an organization of powerful international elites, including government, business, academic and journalistic representatives, that has convened annually since 1954.

According to sources that have penetrated the high-security meetings, the Bilderberg meetings emphasize a globalist agenda and promote the idea that the notion of national sovereignty is antiquated and regressive.

CNBC’s Haines concluded the Kissinger interview by asking, “Are you confident about the people President-elect Obama has chosen to surround him?”

Kissinger replied, “He has appointed an extraordinarily able group of people in both the international and financial fields.”

Kissinger: Obama primed to create ‘New World Order’

There is an old social theory that in order to create a healthier planet, people everywhere must learn the value of collectivism. Its many proponents insist that individual rights and liberties pose a real threat to the health and safety of the “community at large. If we will just put the community before self-centered concerns, mankind can eliminate war and poverty. To many, it is our evolutionary destiny and our moral duty to comply with the spirit of community.

The founders of the Communitarian Network began “shoring up the moral, social and political environment” in the early 1990s. Today the communitarian theory is the basis for hundreds of new global rules and regulations eliminating individual rights, yet fewer than one percent of the affected population knows about it.

Communitarianism was embraced by leaders in every nation after it was financed by the international banking elite. Today the theory of community influences all aspects of life: news, science, money, law, land use, health, education, policing and employment, not to mention the arts, fashion, fundraising, causes and entertainment. Community is the buzzword on everybody’s lips these days.

Economist John Maynard Keynes

News & Opinion
Friday, March 13, 2009

More than half a century after his death, British economist John Maynard Keynes is back in vogue. Can Keynesian economics pull the world out of its slump?

Who was John Maynard Keynes?
The 20th century’s guiding light of liberal economic theory. Born in 1883, Keynes was educated at Eton and Cambridge, and became a prolific writer on subjects ranging from philosophy to probability. He joined the British Treasury during World War I, representing it in negotiations in Versailles over the treaty that ended the war. His experience in Versailles led him to write The Economic Consequences of the Peace, in which he condemned the onerous reparations imposed on Germany and sagely predicted the ruin that loomed ahead for Europe. Such unconventional views left him out of political favor for much of the 1920s. But the market crash of 1929 increased demand for his theories—and counsel—on both sides of the Atlantic. In 1936, he published his magnum opus, The General Theory of Employment, Interest, and Money, which for decades exerted a profound influence on economic thinking and practice.

What was the core of his economic theory?
Disputing the classical free-market belief in an “invisible hand” that guides economies in a natural cycle, Keynes viewed recessions and depressions as symptoms of economic distress that must be treated. He also challenged the prevailing view that governments should always strive to balance budgets. Keynes said the proper response to economic slowdowns was to boost demand in the marketplace, and if the private sector was not investing sufficiently to create demand—as was the case throughout the 1930s—then government should fill the void by spending. It mattered not whether the government was building trains or pyramids—the point was to create jobs so citizens would have more money in their pockets, which would increase demand for goods and services and propel the economy forward.

Did this theory get a real-world test?
Yes. It was called the Great Depression. With the country’s economy in collapse, President Roosevelt followed Keynesian principles by spending heavily on public-works projects. In response, unemployment rates slowly declined through the 1930s, and the economy began to revive. But it wasn’t until the largest public-spending program of all—World War II—that the Great Depression came to an end. After the war, most mainstream economists were more or less “Keynesians.” Time magazine wrote in 1965 that Keynes’ ideas had become so widely accepted “that they constitute both the new orthodoxy in the universities and the touchstone of economic management in Washington.”

Why did Keynes fall out of favor?
In the 1970s, global economic distress defied a lot of Keynesian thinking. Keynesian models projected that the ills of inflation and unemployment had an inverse relationship—if one was high, the other would be low. Government could supposedly keep both at modest levels by adjusting both monetary policy (interest rates and the money supply) and fiscal policy (taxation and spending). But in the 1970s, unemployment in the U.S. hit 8 percent and was accompanied by 16 percent inflation. Inflation in the U.K. and Japan rose even higher, and out-of-control government spending was blamed. Keynesian theory lost its mojo, replaced by the conservative policies identified with economist Milton Friedman. While Keynes emphasized demand, Friedman stressed adjustment of interest rates and the money supply as the primary lever of economic policy. Rather than trying to micromanage the economy, Friedman said governments should lower taxes, lower interest rates, and get out of the way, letting the pursuit of wealth drive a return to economic health.

Why is Keynes suddenly back?
Because of the mess we’re now in. In the current economic crisis, monetary policy has been pushed to its limit. The interest rate charged to lenders is near zero, but lending remains stalled and economic activity has plummeted along with employment. With no tools left in the monetarist kit, many economists favor a government boost to aggregate demand—just as Keynes would have advised. That’s the idea behind the $787 billion stimulus package.

How will the stimulus work?
It will spend billions on public-works projects, health care, education, law enforcement, and other programs in an effort to create jobs and put money in people’s pockets. The key goal is to goose consumer spending and counter the effect that Keynes called “the paradox of thrift.” If everyone tries to save money in an economic downturn, the reduction in spending only accelerates the spiral. With a burst of public spending, the White House hopes to break the cycle and restore confidence, the key psychological factor that Keynes called the “animal spirits.”

Will it succeed?
Nobody knows. Economics can be mystifying. Back in the Great Depression, Keynes said, “We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.” Eighty years later, the experts’ collective understanding of economies is greater than it was in Keynes’ hour of despair. But while the White House can point to broad support for the stimulus among economists, not everyone thinks it will work. Critics contend that government spending is inherently wasteful and that the resulting deficits will suppress private investment by driving up interest rates. They prefer balanced budgets, and their lower risk of inflation, saying that such sound policies will lead to a recovery—perhaps not immediately, but in the long run. To such critics, Keynes once famously said, “In the long run, we are all dead.”

Keynes’ bohemian side
Keynes was at home among the rarefied Bloomsbury set, the collection of artists and intellectuals that cohered in pre–WWI London. He appreciated Bloomsbury’s disdain for convention—he had a lengthy and fairly open homosexual affair with painter Duncan Grant before the war. But despite his bohemian tendencies, he found no attraction in radical politics. Squarely labeling himself a “bourgeois economist,” he used his financial acumen to amass a fortune, including one of the world’s great collections of 20th-century art. Keynes married a popular Russian ballerina, Lydia Lopokova, in 1925; the couple had no children. As a don at Cambridge, he influenced a generation of young intellectuals, establishing himself as one of the most formidable minds of the century. “Every time I argued with Keynes,” said philosopher Bertrand Russell, “I felt that I took my life in my hands and I seldom emerged without feeling something of a fool.”

Keynes’ comeback

John Maynard Keynes and Economic Fascism

By Matthew D. Jarvie
October 31, 2008
SovereignSentience.blogspot.com

A Wolf in Sheep’s Clothing

The Fabian Society, Communitarianism and the New World Order

This video is a very brief, six-minute introduction to the British Fabian Society, which was established on orders from the Crown in 1884, with the purpose of creating a movement to usher in by stealth a one world government.

The ideology promoted by Fabians and Fabian thinkers is called communitarianism, which is also sometimes referred to (by people like Tony Blair) as the ‘Third Way’. The Third Way refers to the synthesis of capitalism and socialism in the dialectic scheme.

This dialectical synthesis, or outcome, is to be a collectivist form of government where all individualism is forcibly relinquished in the name of “unity” and complete and unwavering allegiance to the state under a scientific, socialistic dictatorship run by “experts.”

This is to be a system run on complete and total efficiency, where the only purpose of the individual is to serve the state. The so-called “useless eaters,” as people like Kissinger refer to, are seen as only a burden to this efficiency, and therefore will be incarcerated or killed if this system is allowed to be fully implemented. This is precisely why the “Elite” want an 80-90% reduction of the world’s population, with just enough peasants to serve their utopia, described in writings by people such as Huxley and Fabian H.G. Wells, and promoted still today in well-funded works of propaganda such as Zeitgeist, which are designed to promote the New World Order religion.

A Wolf in Sheep’s Clothing: The Fabian Society, Communitarianism and the New World Order

The Federal Reserve is Bankrupt

Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.

My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.

Slide [2] The subject of economic collapse is generally a sad one. But I am an optimistic, cheerful sort of person, and I believe that, with a bit of preparation, such events can be taken in stride. As you can probably surmise, I am actually rather keen on observing economic collapses. Perhaps when I am really old, all collapses will start looking the same to me, but I am not at that point yet.

And this next one certainly has me intrigued. From what I’ve seen and read, it seems that there is a fair chance that the U.S. economy will collapse sometime within the foreseeable future. It also would seem that we won’t be particularly well-prepared for it. As things stand, the U.S. economy is poised to perform something like a disappearing act. And so I am eager to put my observations of the Soviet collapse to good use.

Slide [3] I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt.

Slide [4] The USA and the USSR were evenly matched in many categories, but let me just mention four.

The Soviet manned space program is alive and well under Russian management, and now offers first-ever space charters. The Americans have been hitching rides on the Soyuz while their remaining spaceships sit in the shop.

The arms race has not produced a clear winner, and that is excellent news, because Mutual Assured Destruction remains in effect. Russia still has more nuclear warheads than the US, and has supersonic cruise missile technology that can penetrate any missile shield, especially a nonexistent one.

The Jails Race once showed the Soviets with a decisive lead, thanks to their innovative GULAG program. But they gradually fell behind, and in the end the Jails Race has been won by the Americans, with the highest percentage of people in jail ever.

The Hated Evil Empire Race is also finally being won by the Americans. It’s easy now that they don’t have anyone to compete against.

Slide [5] Continuing with our list of superpower similarities, many of the problems that sunk the Soviet Union are now endangering the United States as well. Such as a huge, well-equipped, very expensive military, with no clear mission, bogged down in fighting Muslim insurgents. Such as energy shortfalls linked to peaking oil production. Such as a persistently unfavorable trade balance, resulting in runaway foreign debt. Add to that a delusional self-image, an inflexible ideology, and an unresponsive political system.

Slide [6] An economic collapse is amazing to observe, and very interesting if described accurately and in detail. A general description tends to fall short of the mark, but let me try. An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.

Slide [7] I’ve described what happened to Russia in some detail in one of my articles, which is available on SurvivingPeakOil.com. I don’t see why what happens to the United States should be entirely dissimilar, at least in general terms. The specifics will be different, and we will get to them in a moment. We should certainly expect shortages of fuel, food, medicine, and countless consumer items, outages of electricity, gas, and water, breakdowns in transportation systems and other infrastructure, hyperinflation, widespread shutdowns and mass layoffs, along with a lot of despair, confusion, violence, and lawlessness. We definitely should not expect any grand rescue plans, innovative technology programs, or miracles of social cohesion.

Slide [8] When faced with such developments, some people are quick to realize what it is they have to do to survive, and start doing these things, generally without anyone’s permission. A sort of economy emerges, completely informal, and often semi-criminal. It revolves around liquidating, and recycling, the remains of the old economy. It is based on direct access to resources, and the threat of force, rather than ownership or legal authority. People who have a problem with this way of doing things, quickly find themselves out of the game.

These are the generalities. Now let’s look at some specifics.

Slide [9] One important element of collapse-preparedness is making sure that you don’t need a functioning economy to keep a roof over your head. In the Soviet Union, all housing belonged to the government, which made it available directly to the people. Since all housing was also built by the government, it was only built in places that the government could service using public transportation. After the collapse, almost everyone managed to keep their place.

In the United States, very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Add to that the car-dependent nature of most suburbs, and what you will get is mass migrations of homeless people toward city centers.

Slide [10] Soviet public transportation was more or less all there was, but there was plenty of it. There were also a few private cars, but so few that gasoline rationing and shortages were mostly inconsequential. All of this public infrastructure was designed to be almost infinitely maintainable, and continued to run even as the rest of the economy collapsed.

The population of the United States is almost entirely car-dependent, and relies on markets that control oil import, refining, and distribution. They also rely on continuous public investment in road construction and repair. The cars themselves require a steady stream of imported parts, and are not designed to last very long. When these intricately interconnected systems stop functioning, much of the population will find itself stranded.

Slide [11] Economic collapse affects public sector employment almost as much as private sector employment, eventually. Because government bureaucracies tend to be slow to act, they collapse more slowly. Also, because state-owned enterprises tend to be inefficient, and stockpile inventory, there is plenty of it left over, for the employees to take home, and use in barter. Most Soviet employment was in the public sector, and this gave people some time to think of what to do next.

Private enterprises tend to be much more efficient at many things. Such laying off their people, shutting their doors, and liquidating their assets. Since most employment in the United States is in the private sector, we should expect the transition to permanent unemployment to be quite abrupt for most people.

Slide [12] When confronting hardship, people usually fall back on their families for support. The Soviet Union experienced chronic housing shortages, which often resulted in three generations living together under one roof. This didn’t make them happy, but at least they were used to each other. The usual expectation was that they would stick it out together, come what may.

In the United States, families tend to be atomized, spread out over several states. They sometimes have trouble tolerating each other when they come together for Thanksgiving, or Christmas, even during the best of times. They might find it difficult to get along, in bad times. There is already too much loneliness in this country, and I doubt that economic collapse will cure it.

Slide [13] To keep evil at bay, Americans require money. In an economic collapse, there is usually hyperinflation, which wipes out savings. There is also rampant unemployment, which wipes out incomes. The result is a population that is largely penniless.

In the Soviet Union, very little could be obtained for money. It was treated as tokens rather than as wealth, and was shared among friends. Many things – housing and transportation among them – were either free or almost free.

Slide [14] Soviet consumer products were always an object of derision – refrigerators that kept the house warm – and the food, and so on. You’d be lucky if you got one at all, and it would be up to you to make it work once you got it home. But once you got it to work, it would become a priceless family heirloom, handed down from generation to generation, sturdy, and almost infinitely maintainable.

In the United States, you often hear that something “is not worth fixing.” This is enough to make a Russian see red. I once heard of an elderly Russian who became irate when a hardware store in Boston wouldn’t sell him replacement bedsprings: “People are throwing away perfectly good mattresses, how am I supposed to fix them?”

Economic collapse tends to shut down both local production and imports, and so it is vitally important that anything you own wears out slowly, and that you can fix it yourself if it breaks. Soviet-made stuff generally wore incredibly hard. The Chinese-made stuff you can get around here – much less so.

Slide [15] The Soviet agricultural sector was notoriously inefficient. Many people grew and gathered their own food even in relatively prosperous times. There were food warehouses in every city, stocked according to a government allocation scheme. There were very few restaurants, and most families cooked and ate at home. Shopping was rather labor-intensive, and involved carrying heavy loads. Sometimes it resembled hunting – stalking that elusive piece of meat lurking behind some store counter. So the people were well-prepared for what came next.

In the United States, most people get their food from a supermarket, which is supplied from far away using refrigerated diesel trucks. Many people don’t even bother to shop and just eat fast food. When people do cook, they rarely cook from scratch. This is all very unhealthy, and the effect on the nation’s girth, is visible, clear across the parking lot. A lot of the people, who just waddle to and from their cars, seem unprepared for what comes next. If they suddenly had to start living like the Russians, they would blow out their knees.

Slide [16] The Soviet government threw resources at immunization programs, infectious disease control, and basic care. It directly operated a system of state-owned clinics, hospitals, and sanatoriums. People with fatal ailments or chronic conditions often had reason to complain, and had to pay for private care – if they had the money.

In the United States, medicine is for profit. People seems to think nothing of this fact. There are really very few fields of endeavor to which Americans would deny the profit motive. The problem is, once the economy is removed, so is the profit, along with the services it once helped to motivate.

Slide [17] The Soviet education system was generally quite excellent. It produced an overwhelmingly literate population and many great specialists. The education was free at all levels, but higher education sometimes paid a stipend, and often provided room and board. The educational system held together quite well after the economy collapsed. The problem was that the graduates had no jobs to look forward to upon graduation. Many of them lost their way.

The higher education system in the United States is good at many things – government and industrial research, team sports, vocational training… Primary and secondary education fails to achieve in 12 years what Soviet schools generally achieved in 8. The massive scale and expense of maintaining these institutions is likely to prove too much for the post-collapse environment. Illiteracy is already a problem in the United States, and we should expect it to get a lot worse.

Slide [18] The Soviet Union did not need to import energy. The production and distribution system faltered, but never collapsed. Price controls kept the lights on even as hyperinflation raged.

The term “market failure” seems to fit the energy situation in the United States. Free markets develop some pernicious characteristics when there are shortages of key commodities. During World War II, the United States government understood this, and successfully rationed many things, from gasoline to bicycle parts. But that was a long time ago. Since then, the inviolability of free markets has become an article of faith.

Slide [19] My conclusion is that the Soviet Union was much better-prepared for economic collapse than the United States is.

I have left out two important superpower asymmetries, because they don’t have anything to do with collapse-preparedness. Some countries are simply luckier than others. But I will mention them, for the sake of completeness.

In terms of racial and ethnic composition, the United States resembles Yugoslavia more than it resembles Russia, so we shouldn’t expect it to be as peaceful as Russia was, following the collapse. Ethnically mixed societies are fragile and have a tendency to explode.

In terms of religion, the Soviet Union was relatively free of apocalyptic doomsday cults. Very few people there wished for a planet-sized atomic fireball to herald the second coming of their savior. This was indeed a blessing.

Slide [20] One area in which I cannot discern any Collapse Gap is national politics. The ideologies may be different, but the blind adherence to them couldn’t be more similar.

It is certainly more fun to watch two Capitalist parties go at each other than just having the one Communist party to vote for. The things they fight over in public are generally symbolic little tokens of social policy, chosen for ease of public posturing. The Communist party offered just one bitter pill. The two Capitalist parties offer a choice of two placebos. The latest innovation is the photo finish election, where each party buys 50% of the vote, and the result is pulled out of statistical noise, like a rabbit out of a hat.

The American way of dealing with dissent and with protest is certainly more advanced: why imprison dissidents when you can just let them shout into the wind to their heart’s content?

The American approach to bookkeeping is more subtle and nuanced than the Soviet. Why make a state secret of some statistic, when you can just distort it, in obscure ways? Here’s a simple example: inflation is “controlled” by substituting hamburger for steak, in order to minimize increases to Social Security payments.

Slide [21] Many people expend a lot of energy protesting against their irresponsible, unresponsive government. It seems like a terrible waste of time, considering how ineffectual their protests are. Is it enough of a consolation for them to be able to read about their efforts in the foreign press? I think that they would feel better if they tuned out the politicians, the way the politicians tune them out. It’s as easy as turning off the television set. If they try it, they will probably observe that nothing about their lives has changed, nothing at all, except maybe their mood has improved. They might also find that they have more time and energy to devote to more important things.

Slide [22] I will now sketch out some approaches, realistic and otherwise, to closing the Collapse Gap. My little list of approaches might seem a bit glib, but keep in mind that this is a very difficult problem. In fact, it’s important to keep in mind that not all problems have solutions. I can promise you that we will not solve this problem tonight. What I will try to do is to shed some light on it from several angles.

Slide [23] Many people rail against the unresponsiveness and irresponsibility of the government. They often say things like “What is needed is…” plus the name of some big, successful government project from the glorious past – the Marshall Plan, the Manhattan Project, the Apollo program. But there is nothing in the history books about a government preparing for collapse. Gorbachev’s “Perestroika” is an example of a government trying to avert or delay collapse. It probably helped speed it along.

Slide [24] There are some things that I would like the government to take care of in preparation for collapse. I am particularly concerned about all the radioactive and toxic installations, stockpiles, and dumps. Future generations are unlikely to able to control them, especially if global warming puts them underwater. There is enough of this muck sitting around to kill off most of us. I am also worried about soldiers getting stranded overseas – abandoning one’s soldiers is among the most shameful things a country can do. Overseas military bases should be dismantled, and the troops repatriated. I’d like to see the huge prison population whittled away in a controlled manner, ahead of time, instead of in a chaotic general amnesty. Lastly, I think that this farce with debts that will never be repaid, has gone on long enough. Wiping the slate clean will give society time to readjust. So, you see, I am not asking for any miracles. Although, if any of these things do get done, I would consider it a miracle.

Slide [25] A private sector solution is not impossible; just very, very unlikely. Certain Soviet state enterprises were basically states within states. They controlled what amounted to an entire economic system, and could go on even without the larger economy. They kept to this arrangement even after they were privatized. They drove Western management consultants mad, with their endless kindergartens, retirement homes, laundries, and free clinics. These weren’t part of their core competency, you see. They needed to divest and to streamline their operations. The Western management gurus overlooked the most important thing: the core competency of these enterprises lay in their ability to survive economic collapse. Maybe the young geniuses at Google can wrap their heads around this one, but I doubt that their stockholders will.

Slide [26] It’s important to understand that the Soviet Union achieved collapse-preparedness inadvertently, and not because of the success of some crash program. Economic collapse has a way of turning economic negatives into positives. The last thing we want is a perfectly functioning, growing, prosperous economy that suddenly collapses one day, and leaves everybody in the lurch. It is not necessary for us to embrace the tenets of command economy and central planning to match the Soviet lackluster performance in this area. We have our own methods, that are working almost as well. I call them “boondoggles.” They are solutions to problems that cause more problems than they solve.

Just look around you, and you will see boondoggles sprouting up everywhere, in every field of endeavor: we have military boondoggles like Iraq, financial boondoggles like the doomed retirement system, medical boondoggles like private health insurance, legal boondoggles like the intellectual property system. The combined weight of all these boondoggles is slowly but surely pushing us all down. If it pushes us down far enough, then economic collapse, when it arrives, will be like falling out of a ground floor window. We just have to help this process along, or at least not interfere with it. So if somebody comes to you and says “I want to make a boondoggle that runs on hydrogen” – by all means encourage him! It’s not as good as a boondoggle that burns money directly, but it’s a step in the right direction.

Slide [27] Certain types of mainstream economic behavior are not prudent on a personal level, and are also counterproductive to bridging the Collapse Gap. Any behavior that might result in continued economic growth and prosperity is counterproductive: the higher you jump, the harder you land. It is traumatic to go from having a big retirement fund to having no retirement fund because of a market crash. It is also traumatic to go from a high income to little or no income. If, on top of that, you have kept yourself incredibly busy, and suddenly have nothing to do, then you will really be in rough shape.

Economic collapse is about the worst possible time for someone to suffer a nervous breakdown, yet this is what often happens. The people who are most at risk psychologically are successful middle-aged men. When their career is suddenly over, their savings are gone, and their property worthless, much of their sense of self-worth is gone as well. They tend to drink themselves to death and commit suicide in disproportionate numbers. Since they tend to be the most experienced and capable people, this is a staggering loss to society.

If the economy, and your place within it, is really important to you, you will be really hurt when it goes away. You can cultivate an attitude of studied indifference, but it has to be more than just a conceit. You have to develop the lifestyle and the habits and the physical stamina to back it up. It takes a lot of creativity and effort to put together a fulfilling existence on the margins of society. After the collapse, these margins may turn out to be some of the best places to live.

Slide [28] I hope that I didn’t make it sound as if the Soviet collapse was a walk in the park, because it was really quite awful in many ways. The point that I do want to stress is that when this economy collapses, it is bound to be much worse. Another point I would like to stress is that collapse here is likely to be permanent. The factors that allowed Russia and the other former Soviet republics to recover are not present here.

In spite of all this, I believe that in every age and circumstance, people can sometimes find not just a means and a reason to survive, but enlightenment, fulfillment, and freedom. If we can find them even after the economy collapses, then why not start looking for them now?

Thank you.

Closing the ‘Collapse Gap’: the USSR was better prepared for collapse than the US

Dmitry Orlov: Social Collapse Best Practices

By DAMIAN PALETTA

MARCH 6, 2009

WASHINGTON — Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The Connecticut Democrat’s effort — which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner — would give the FDIC access to more money to rebuild its fund that insures consumers’ deposits, which have been hard hit by a string of bank failures.
More

* FDIC Letter to Dodd
* Q&A: How Safe is Your Bank Account?
* Graphic: Banks That Went Bust

Discuss

* What’s the best place for your money right now?

Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding.

Mr. Dodd’s bill could also give the FDIC more firepower to help address “systemic risks” in the economy, potentially creating another source of bailout funds in addition to the $700 billion already appropriated by Congress.

Mr. Bernanke said in a Feb. 2 letter to Mr. Dodd that such a “mechanism would allow the FDIC to respond expeditiously to emergency situations that may involve substantial risk to the financial system.”

The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted. The bill would allow it to borrow $100 billion absent that approval. Currently, its line of credit with the Treasury is $30 billion.

The FDIC’s deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009. Some bank failures have a bigger impact on the fund than others, as IndyMac’s failure cost the fund more than $10 billion, while many others cost the fund less than $100 million.

A 1991 law generally caps the amount of money the FDIC can borrow from the Treasury at $30 billion, and the FDIC hasn’t borrowed money from the Treasury in more than a decade.

Ms. Bair said a change in the law would give the FDIC more options to determine the best way to rebuild its depleted fund. In an interview, she stressed that all insured deposits were already backed by the “full faith and credit of the United States government.”

A change in the law would ease “the mechanics of how seamlessly we can access our lines of” funding. “I’m the kind of person that likes to be prepared for all contingencies,” she said.

http://online.wsj.com/article/SB123630125365247061.html