In the security biz, it’s rarely the anticipated events that kick your butt. It’s those so-called ‘black swans’ that blindside you, and maybe even inflict a career-ending injury.
Let me suggest one of those is paddling up the bayou at this very moment – carefully dodging the oil slicks – and we’re so busy looking at old threats and repeating our old prejudices at ever higher volume that we can’t hear the splash of those big, webbed feet.
The cygnus atratus I’m referring to is detailed here by Gus Lubin at The Business Insider. What he points out using wonderfully clear graphics is that:
- The wealth gap between the richest 1% and everyone else in America hasn’t been this bad since the Roaring Twenties
- The richest 1% has over 33% of the wealth
- The richest 10% has over 71% of the wealth
- Half of America has only 2.5% of the wealth
- Real average earnings have not increased in 50 years
- Savings rates are shrinking
- And the only real socio-economic mobility is downward.
I think this is the greatest national security risk facing America – and it’s completely under the radar.
Now, let me be clear. I’m not just talking about a backlash from tea party types, militia members and disgruntled Cessna pilots having a really bad day. (Although I expect there will be plenty of that.) It’s much more serious.
Real security is about economic and social well-being. And what those graphics show is that the American economy is a house of cards, waiting for a good breeze, and societal well-being is heading south faster than Joe Barton’s seniority on Energy and Commerce.
That breeze might come from the looming collapse of the commercial real estate market and its highly leveraged CDOs; the implosion of the municipal bond market and states’ inability to raise money to keep providing services; or any of a number of potential shocks that could trigger an iterative ‘avalanche’ effect.
This is an existential grade threat, sport fans. It’s quite literally about the ‘hollowing out’ of America, and its steady progress toward failed state status.
(BTW, the annual Failed States Index just came out, and guess what? America is rated ‘moderate’ in terms of failure potential.)
This is about the danger of shattered dreams and expectations, and the disintegration of primary loyalties (patriotism / nationalism). It’s about the transfer of allegiance from nation state to sub-national entities, be those clan, tribe, gang, corporation, neighborhood or . . . **
Now dial in these multipliers.
Most all of the ‘growth’ in the American economy since 1998 is smoke. It’s the sale of derivatives and other ‘financial figments’ that are traded without adding any genuine value. The best analogy I can offer is it’s like Hertz rotating the tires on their rental fleet and booking each transaction as a sale.
That monetized smoke has ended up in the hands of that 10% referenced above. Even though the value is mostly illusory, it has tilted the economic scales even more against the average person. All those bubbles caused when the smoke holders try to convert it into real value – whether tech stocks, housing, metals or food – have increased costs of living for the 90%. Multiply that by the reality that real wages have been falling since the 1970s – and if true inflation were honestly factored in it would be far, far worse – and you start to see why Joe Sixpack is not only seriously scared, but righteously pissed.
Bad combo. For as Bob Marley put it so well, ‘A hungry mob is an angry mob.’
And it’s iterative. It cascades. Because all the money has been sucked out by the 10%, there is none left for cops, firefighters, libraries, fixing potholes, building schools . . . the stuff that makes us think tomorrow will be better for ourselves and our children.
(Anyone NOT seeing this in their community?)
The state’s inability to provide services – not least physical security and a stable context for livelihood / savings / retirement – drives people into ‘dark’ economies. (‘They’re not giving me anything back, so screw ‘em.’) That money leaves the system, and the spiral deepens.
One of the first policy symptoms is isolationism. People think, ‘Things are tough at home, so the hell with them damn furiners.’ This is a key reason the IrAfPak franchise of the All American Amusement Park is unsustainable – regardless of how much lithium they may find over there.
If POTUS doesn’t get that these wars (which are now perceived as ‘his’) will breed ferocious resentment / blame over the misallocation of resources, he needs new advisors. (Well, he needs those in any case.) At minimum, these underlying realities could make him a one-term wonder. They may even make him the first president to turn federal troops on their fellow citizens in large numbers since the Bonus Army.
Other symptoms of this hollowing out – the ‘sinkhole’ phenomenon – include the onset of social and economic warlordism (think Hezbollah, La Familia and Dudus Coke) active and passive subversion / systems disruption, and, as Bob Marley also sang, ‘Burnin’ and a lootin’ tonight.’
Are we talking tomorrow? No. (Probably not, anyway.) Even failing systems often have more elasticity and capacity in them than we anticipate.
But if we track behavior over time, as the Lubin graphics do so well, the probability of a crater becomes much more apparent.
Buckle up, Bunkie. We could be heading for a wild ride.
**One of the really interesting questions is what kind of ‘attractors’ the new loyalties will coalesce around. I doubt they’ll be ideological – at least for long – because dogma tends to make orgs non-adaptive. I believe their primary characteristics will be entrepreneurial and they’ll provide not only livelihood, but also identity, community, security and fun. Think Robin Hood meets Ecotopia. Or, maybe, Steve Jobs dances with wolves.
And thanks to Fabius Maximus for the link to the Lubin piece!