On bathrooms

I read James Howard Kunstler’s blog regularly, but being busy in real life this week, I haven’t taken the time to engage with the comments section. So I don’t know what the tenor of responses to Jim’s pensées about gay and transgender people, the acceptance of gay marriage, et cetera has been. But I just did a quick text search and the word “vomit” only matched once, in the text of his post, but no responses. So no one appears to have taken up what to me was the singular point that I took away from reading him this week.

In brief, Jim Kunstler holds gay and trans people to be the human equivalent of plastic vomit. Regarding transgender people in particular, he offers the following options: “a psychological disturbance, a developmental problem, an extreme fashion statement, or a fantasy.” Why any of these should render trans people fit targets for discrimination or disqualify them from the full protection of the laws isn’t spelled out. It seems that, since they’re a parody of humanity (“plastic vomit”), not actual humans (Edouard Manet’s Luncheon on the Grass), the notion of them enjoying equal status with the rest of us just rubs him the wrong way.

Regarding homosexuality as distinct from transgender, Jim’s attitude toward “that behavior” is likewise dismissive, implicitly attempting to define or demean it out of existence. When I first read A History of the Future (I have my copy here), I was struck early on that the character Andrew Pendergast is introduced as a ‘reformed’ homosexual who has basically wised up and gotten real. In Kunstler’s depiction, if not in reality, the discipline required to survive in the new times just doesn’t leave space for such fripperies and affectations. Likewise in this week’s posting, Jim denounces “state approbation of homosexual behavior” (the Windsor decision) as motivated by “feelings” and thus illegitimate. One might note in response that in the past, and to a great extent in the present, homosexuals have faced relentless social pressure and the most extreme legal sanctions. In Europe they were burned at the stake; in Britain within living memory, Alan Turing, one of the great geniuses of the twentieth century, was forced to take hormones in an attempt to ‘cure’ him; today in Saudi Arabia, gay people face fines, years in prison, and hundreds of lashes with a bullwhip. Yet despite all this, gay people have continued to be gay and to act like it.

Whether the phenomenon of people who don’t fit the gender binary corresponds to any of Jim’s characterizations or not, one thing they clearly are is part of the spectrum of humanity, whether or not we deign to recognize “actually a real sexual category”. That gay people continue to be who they are in the face of everything straight people, backed by the power of the state, can throw at them ‘feels’ to me like an authentic expression of their humanity as they live it — their “pursuit of happiness” — not an affectation. Might this not constitute a rejoinder to Kunstler’s dismissiveness?

Jim’s final point is about the elimination of boundaries. In his view, the DOJ apparently has overstepped itself and “antagoniz[ed] large numbers of males and females by coercing them to consort with transgender people”. Consort! As if transgender people haven’t been here all along, urinating and defecating like all us humans do. (Land sakes, they’ll be using the drinking fountains next.) Which bathrooms trans people happened to use hadn’t been an issue until bigots in state legislatures decided to make it one. Then the federal government stepped up and reminded everyone that it has laws of its own, and won’t neglect to enforce them. The effrontery.

It’s true that when you push people’s boundaries, they push back. That makes for trouble and ruckus, and sometimes controversies that people feel passionate about really can destabilize societies. That’s not a trivial issue. But some boundaries deserve to be pushed, and pushed hard — especially the kind of boundaries that accord people on one side full humanity, and others not. Mr. Kunstler may imagine that he’s being generous in extending the olive branch of civil unions, but the question of “separate but equal” was settled in the courts decades ago: it’s not fit for a free society.

It’s not “extreme relativism” to insist that America live out the meaning of its creed and accord equal treatment to all under the law. It’s the exact opposite. I hope Mr. Kunstler will consider the truth of that statement.

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Ready to pop

Unlike the rest of my family, I’ve always been a renter, and because we’re all surrounded by cultural programming that drums it into our heads that it’s better to own than to rent (“Pay yourself first!”, etc.), I’ve always felt a little bad about it. So a few years ago, when mortgage insanity was at its height and interest rates were bottoming out, I did poke around a house or two and looked into what kind of mortgage I could get. I didn’t take the plunge then, and what I’ve been learning since then makes me feel a whole lot better about the whole thing. In Windsor, renting is a perfectly good deal, and if I lived in a hotter real estate market, it would be much better still.

In a recent article from the Toronto Star, Susan Pigg asks a pertinent question in these troubled economic times: is home ownership really a smart investment? She uses the example of a Toronto home purchased in 1906 for $1,200 which just sold for an astonishing $825,000. Adjusted for inflation, this represents an average gain of 3.9 percent – and from 1947 onward, just 2.3 percent (again, inflation-adjusted). This notably underperforms the stock market over the same time period, even with all its ups and downs. The difference would be even more stark were it not for the recent astonishing run-up of prices in Toronto and other Canadian markets (not Windsor, as far as I know), doubling over the past ten years. Nor does it take into account the necessary expenses of maintaining a place to live:

“A house is not a good investment, it is a roof over your head,” says James McKellar, director of the real estate and infrastructure program at York University’s Schulich School of Business. … Studies have shown that it’s $800 a month cheaper to rent a 1,000-square-foot home than to own it, he notes. “By any empirical study, houses do not inflate. They are a cost. But we all have to live somewhere.”

There’s more to this than just our individual choices to buy or rent. According to this article from The Economist, Canada is one of a number of advanced countries in the midst, or perhaps approaching the end, of a serious housing bubble. In Canada, the magazine calculates that the ratio of housing prices versus income is running 29% above its long-term (since 1975) average, while the ratio of housing prices versus rents is an astonishing 71% above its long-term average. Reality has to catch up sooner or later: when people start to realize that no one will pay the additional premium that gives their “investment” its notional value, the market will revert to the mean. Price discovery takes over, and a lot of people’s seeming equity will transform overnight into unserviceable debt, just as we’ve seen in the United States, Ireland and elsewhere. As a country, much of the wealth we think we have will turn out to be just an artifact of collectively pretending that an expense is really an investment. This has ominous implications for our economic future, and for the lives of millions of Canadians.

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White House pushes Keystone XL decision back a year

Has anyone else been noticing how, even though it’s mid-November, we’re still getting temperatures in the mid-teens here in southern Ontario? Environment Canada Is predicting highs of 16 and 17 degrees for Windsor this coming Sunday and Monday; it’s 14 and 15 degrees C for Toronto, so it’s not just our somewhat-milder Essex County microclimate, either. Jacket weather, surely, but I’m still wearing short sleeves underneath. By now it should be turning downright cold and we should be on the lookout for snow showers. And this is still just the beginning. From here on, climate change deniers are going to have an ever more desperate time clinging to their delusions.

On that note, there is some good news for a change, at least provisionally. There is a big push on to build a new pipeline called Keystone XL from Alberta to the southern U.S., to transport oil from the tar sands to where it can be refined, burned, and emitted into our already overheated atmosphere. The power to greenlight the thing lies in the hands of the Obama administration, not Congress, so for a few months now activists have been picketing the White House, making nuisances of themselves, getting arrested en masse and basically doing everything possible to draw attention to what may be the worst idea in the long, sad history of bad ideas (to quote The Lost World). Thank God, they are getting results: the White House has pushed back by a year any decision to allow the Keystone XL pipeline to be built. That’s another year for the ever-mounting scientific consensus to push back against denialist propaganda and for people to see for themselves how our climate is changing around us. We might beat this thing yet. It’s just one battle in the giant fight against the destruction of our environment, but a good thing is a good thing.

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Looks like I spoke too soon

So, about that whole George Panandreou “democracy” thing, there’s this from today’s Report on Business:

“I will be glad even if we don’t go to a referendum, which was never a purpose in itself,” Mr. Papandreou said in the text of his talk to the cabinet, which was released to reports [sic], according to Reuters. “I’m glad that all this discussion has at least brought a lot of people back to their senses. If the opposition comes to the table to back the bailout, a referendum is not needed.”

So he’s not actually a democrat; he was just using the threat of permitting the Greek people to rule on their own fate to try and shore up his position against his political opposition. Good to know.

 

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Papandreou still a democrat after all

The Euro crisis is close to the implosion point, where no one will be able to pretend anymore. The economic “rescue” plan intended to pull Europe back from the brink will come down on Greece like a ton of bricks, imposing a decade of harsh austerity, unemployment and misery, leaving them in the year 2020 with the same debt-to-GDP ratio as when the crisis started. The Greeks are expected to endure this in order to minimize pain for lenders and, crucially, enable the pretense that Greece has not defaulted on its sovereign debt. If Greece officially defaults, that will trigger payouts on endless numbers of financial derivatives called credit default swaps (CDS), which are basically insurance policies that lenders take out with other lenders to hedge against just this possibility. No one knows exactly how much money has been wagered on likelihood of a Greek default or who the ultimate bag holders are, but the entire structure of mutual obligation is basically a house of cards. If lenders actually have to face reality, and if the European Central Bank continues its intransigent policy of refusing to print new money (which the Germans, with their vivid memories of Weimar-era hyperinflation, adamantly oppose), then everything comes tumbling down and there will be a mad scramble for the exits: bank runs, economic chaos, cats and dogs living together, mass hysteria.

The thing is, the people of Greece are not meekly accepting the fact that they are being reduced to debt peonage, and their Prime Minister, George Panandreou, has shocked everyone by actually agreeing with them and calling for a referendum on the proposed deal. Good for him! Democracy may not actually be dead in the land of its birth. Our own Mark Carney is on the right side of this issue as well. As for those who insist that debts have to be paid, you’re not wrong, but there are two sides to every transaction, and the people who lent money to the Greek government didn’t do it out of the goodness of their hearts. It was a business transaction, done in the expectation of gain, and I fail to see why only one party should suffer the consequences of its failure — especially when it means a boot stamping on the face of ordinary Greeks for the foreseeable future.

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Setting the CBC up for a fall

Well, you couldn’t call this unexpected. With Stephen Harper’s Tories enjoying a secure majority, Canada’s ownership class feels emboldened to step up its efforts to import the heavily slanted, nakedly ideological Fox News model of right-wing broadcasting to this country. A major part of this effort is to attack, and if at all possible discredit, whatever institutions stand between them and complete, unaccountable control over all news and opinion.

And so this week, we are treated to the spectacle of Pierre-Karl Péladeau, owner of Québecor, Sun Media and the Sun News Network (aka Fox News North), unleashing his tame attack dogs to give the CBC a good old-fashioned mau-mauing. Of course a right-wing media baron like Mr. Péladeau hates the CBC: it’s an independent media outlet with secure public funding that doesn’t push the opinions he would have all media pushing, if only he could get control over them. The real danger here is that this campaign will go some way to advancing the general right-wing narrative that will make it easier for Harper to defund, or even try to privatize, one of our best national institutions. I hope the CBC can survive with its identity more or less intact.

 

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Low gas prices are not good news

Since Standard & Poor’s downgraded U.S. Treasury bonds last week in the aftermath of the debt-ceiling debacle, financial markets have been whipsawing up and down like a demented yo-yo. In the midst of all the turmoil, there is one seeming (I say, seeming) bright spot you may have noticed: the price of gasoline has gone down. Over lunch hour today I filled my tank at 119.3 cents per liter, a price level lower, by a few pennies at least, than we’ve seen for a while. (My touted e-bike has a flat tire just now, darn it.) Sorry to break it to you, but the price drop isn’t really good news, it’s just another species of bad news.

To boil things down, the price of gas was as high as it was because worldwide demand for oil was near the limits of supply. Things weren’t quite as tight as they were back in 2008, but they were tight enough. Oil isn’t just essential (you can’t run an industrial society on muscle power), it is non-substitutable: it would be a decades-long project both to switch to alternate energy sources for most applications, assuming such sources can be found at all; to rebuild transport and other infrastructure to run on a non-petroleum basis; and to find replacements for the myriad other uses to which petroleum is put. This combination of traits means that demand for oil is inelastic: in the face of supply constraints, the demand doesn’t go down even as the price goes up, up, up. Under these circumstances, the price of oil becomes a brake on the economy, as the increased costs of new productive activity gobble up any possible return. Now, with the financial system roiling from the effects of the downgrade, the game is over: people and institutions with money they could be investing are fleeing instead, looking for safe harbours. Productivity will drop, plants will close, people will be thrown out of work, shipping will shrink, there will be less travel and overall less activity, and demand for oil will go down the hard way – by being destroyed. Paying a few pennies less to fill your tank is a small consolation for all that misery, especially if you’re one of the newly unemployed and a full gas tank is more than you can afford.

That’s the bad news. The worse news is, demand destruction due to supply constraints is just going to keep happening. The magic words are, you guessed it, peak oil. The low-hanging fruit has all been plucked, and what’s left is the half that is most difficult, marginal, and unrewarding to extract. As the supply becomes ever more constrained, it becomes ever costlier to keep up even the same level of activity, much less increase it, until the activity becomes completely unsustainable and collapses to what the available resources will permit. This is what we’re beginning to experience, and will be an increasing part of our lives for the foreseeable future and beyond.

Jim Flaherty says that Canada is well-placed to weather the economic storm, but he would say that, wouldn’t he? Not only is it in his job description to make such optimistic pronouncements, but it’s not clear to me that he could be brought to understand the reality of our situation. As the finance minister of a G-8 country, he should be assumed to be as out of touch with reality as the economics profession is.

The financial crisis we’re in now isn’t new, it’s just a continuation of what started with the collapse of the U.S. subprime mortgage market in 2007 and really hit the fan with the failure of Lehman Bros. in September 2008 and the subsequent bailouts. The Great Recession that followed was partly, but sluggishly, reversed by a round of Keynesian stimulus, which has since petered out. Things might have coasted on a bit longer, but the Tea Party put a stop to that by using the threat of preventing a rise in America’s statutory debt limit as a way to pursue their demands. Absent extraordinary measures (there was talk of President Obama using seigniorage – literally ordering the Mint to produce a platinum coin denominated at TWO TRILLION DOLLARS to deposit at the Federal Reserve), this would have rendered the U.S. Treasury – effectively the cornerstone of the world economy – incapable of meeting its obligations. In other words, America’s Tea Partiers effectively put a gun to the head of Money Itself and threatened to pull the trigger. Small wonder if S&P decided this reflected poorly on the viability of U.S. government debt.

The ratings agencies, Standard & Poor’s not least, still have a lot to answer for. They continued to give residential mortgage-backed securities their top ratings long after it should have become obvious that they were so much toxic waste. In a saner age, the ratings agencies were paid by investors, who would have reason to punish them for such a failure. Nowadays their compensation comes from the other side of the equation, and can expect to be rewarded for letting investors take a bath on the banks’ offerings. The fact that this goes on in full view and no one does anything about it is one strong indication of how corrupt the financial system has become.

In some quarters, S&P is vehemently suspected of having enacted the downgrade not on the merits of the case but as part of a coordinated, ideologically-driven campaign to push the banks’ agenda. The invaluable Yves Smith pursues the story to the next step: a suggestion that another agency, Moody’s, might downgrade certain municipalities inhabited by a large number of high net-worth individuals – even though these municipalities are the least likely to default – in order to prompt the HNWIs to start pressuring their representatives to perform in a bank-approved fashion. Like a series of bad torture-porn films, this stuff just keeps escalating.

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