The always interesting Interfluidity writes:
Both globally and within most nations, the patterns of consumption required to sustain existing social arrangements are inconsistent with the distribution of the fruits of production. Social and economic stability, therefore, depend upon redistribution for which there is no overt legal framework or political consensus. To square this circle, the financial and government sectors have evolved means of hiding redistribution in complex, continually improvised arrangements. Unsurprisingly, massive wealth distributions arranged in this way leave much to be desired, in terms of straight corruption (the financial and government sectors redistribute a lot of wealth to themselves), justice (e.g. wealth is redistributed to those who happen to speculate early in bubbles), and sustainability (the illusion of value behind the claims of those from whom wealth is taken may prove fragile, but “loss realizations” are socially disruptive if they are not carefully paced and allocated).
Neither financial nor political reform can succeed unless we overcome the social and economic contradictions we have relied upon the financial sector to literally paper over. Off-balance-sheet liabilities that hide the impairment of savers’ claims, whether in subprime mortgage-backed securities or sovereign entitlement programs are not aberrations. They are essential tools in the arsenal of social stability, the economic equivalent of military “black-ops”, things that must be done but must always be denied in order to protect the American (and European, and Chinese) way of life. Unless we define overt arrangements that overcome the contradictions between the organization of production and socially desirable patterns of consumption, each scandal and reform will necessarily be followed by some new technique or trick that delivers, however unjustly or corruptly, the wealth transfers upon which our societies depend. Our choices are to [#1] overtly align the fruits of production with patterns of consumption, [#2] to continue to employ accounting fictions and magic to pretend away the contradictions, or [#3] to undergo some form of collapse.
Our elites have chosen Door #2. So they think.
I think, in reality, they will discover they have chosen Door #3; the paper is simply too flimsy, the structure too frail, the winds to great.
It's also interesting that a lot of the quotidien conversation here and elsewhere on the C list is, exactly, about changing consumption patterns -- I'd say, "happiness" -- like cooking, gardening, eating, putting money into credit unions and not banks, and all of that. Which we had some water and energy techs posting here...