1. Tinky

    Speaking of the economy, on August 1, cash transactions in Israel will become illegal above 6000 NS (~$1750). This includes payments by check and banker’s checks. The previous threshold was nearly double the new threshold.

    I would say that most people who blithely accept the drive to eliminate cash have no idea of the ultimate ramifications.

    1. Pat

      So paying rent or mortgage by check will be illegal? Tuition?

      I don’t see that going well. Either that or not enough Israelis have yet been hit by an automatic payment screw up.

  2. The Rev Kev

    Woo-hoo. This is going to be good. I see that there is about 78 minutes to go until it starts and Lira’s Round Tables go for about 2 or three hours. Maybe one day Lira could have a Round Table with Michael Hudson and Sergey Lavrov.

  3. thoughtfulperson

    I see at 9am ET on the YouTube link. Here in central VA anyway. Looking forward!

    1. Yves Smith Post author

      Sorry, we (obviously) had confusion. Gonzalo had said 9 AM EST, which is 10 AM EDT. I still messed up when I realized it was 9 AM EDT (8 AM EST). As you can see, I had it right in the body of the post but not the headline (which I have now edited but you can see the original headline in the URL). I was fixated on setting my clock correctly….which is Central Time! Fortunately the service he uses shows how long before showtime, so you could compensate for my error.

  4. HotFlash

    すごい ( sugoi)! What a great way to start the day. Rearranging my sched for today and putting on a second pot of coffee. Also set alarm to wake Mr. HotFlash in time.

    1. Yves Smith Post author

      My favorite cat Blake. I like that in the photo he came out with Dune eyes (if you know the novel, induced by consuming the “spice”. Confers foresight).

      1. Roger Blakely

        Roger likes the name. If you’re going to be a YouTube star, maybe it is time to post a photo of Blake in the Antidote du jour so that we can get a good look at him.

  5. jr

    I just listened to the first 10 minutes and it’s a great talk! The bit about that British organization that did the numbers on Russian artillery and missile stockpiles is gold. I’m going to pass that along to a friend who is still convinced Russia is on the run. I’m saving the rest of the talk for my housecleaning time this afternoon.

    One quibble: I don’t appreciate Lira using “Nuclear Pants”, I’ve done my best to leave that nickname behind me.

  6. Mark Gisleson

    I reluctantly started listening to podcasts when COVID hit, but Ukraine has turned me into a regular listener, so much so that I cheered when Yves agreed to keep talking past the allotted hour.

    Incredibly informative show. Thanks Yves.

    1. jr

      Ditto. That bit reminded me of a my sister, a middle school teacher in the Bronx, telling me about problem students who fail upward year after year because the DoEd’s policy is that they will suffer “culturally” if they are held back. Not only is this a dire problem for society, it wreaks havoc on classroom discipline. Which is likely the point.

  7. Tom Pfotzer

    Yves, that was a great conv. I tuned in 1/2 way thru, got a lot out of it.

    One of the key points made, and agreed to by all three participants, was that we in the West have no good leaders, there are few / none in the pipeline, and we’re facing some, possibly several highly disruptive forces that will apply great strain to our societies.

    Izabella said those strains would cause a great coming together, and Yve and Gonzalo said those forces would cause a great rending of the social fabric.

    Yves then mentioned that she was considering relocating to another country.

    Big problems, no leaders, centrifugal political forces dis-assembling the “we’re in this together” instinct. Most-capable folks considering bailing out.

    What are we, the aware-and-capable, going to do in our own stead, in a timely way, to protect ourselves from this situation?

    We are _not_ going to get top-down help. Yves made that crystal clear, not once but several times. I agree with her.

    Most of us either cannot, or will not (that’s me) bail out. I’m riding this ship, come what may.

    There is currently no mechanism in place for we the aware-capables to formulate and execute a plan that:

    a. can be done in the absence of top-down leadership and provisioning
    b. is accurately targeted
    c. is of sufficient scale and take-up rate as to be viable

    How much longer are we going to sit like ducks @ shooting gallery?

    That was the first time I’ve heard Gonazalo Lira speak. He’s very impressive. I will listen to him more in the future.

    1. Yves Smith Post author

      Just so you know, I had sensed things were going to end not well for the US before 9/11. That was when I started working on moving to Australia. I lived in Sydney for 2 years, really enjoyed it, but the Gulf War delayed my getting my business there going (the good thing about Aussies is they are open, the other small firm finance/consulting pros said there was no new business happening for a period of about six month) which was deadly in conjunction with the requirements in my visa category for getting permanent residence.

      Long winded way of saying this is not a new idea for me but because I will need to move again, I need to take a hard look at where to live, and living overseas seems more prudent. The state of our health care system is a big driver.

      1. Tom Pfotzer

        And we will all hold you in high esteem wherever you decide to go. You’ve done your duty 10x already.

        Per Izabella, I was using shock-value as action-precipitator.

        1. flora

          And yet, and yet, with no disrespect, what am I to think of someone who runs away from the fight? Runs away to “safer” countries, hoping to comment from afar? Whitney Webb did this when she left South American and was very clear about her reasons. She wanted to comment on the globalists from a “safe” area. But you know, the “safe” areas seem to be shrinking. I’m starting to think of Bogart’s and Bergman’s movie “Casablanca.” Where running away was a questionable thing. “Play it, Sam.”

          1. The Rev Kev

            Not so simple. Sometimes the fight runs away from you. Think of the mass of Democrat voters who kept their values but found themselves stranded when their party veered hard right leaving them behind and abandoned. More to the point, I was thinking about an interview given by Canadian independent reporter Eva Karene Bartlett. She travels to places like Syria, North Korea and the Donbass and said that the last time she went back to Canada she no longer felt like she was home as so much had changed there and now may have to move to Russia for her own safety. Having seen ‘western values’ on action the past few months, I can see her viewpoint-


            1. flora

              Indeed. And of course, there’s the old adage “he who fights and runs away lives to fight another day.” / ;)

            2. norm de plume

              We also toyed not long ago with the idea of moving to Russia… well not really, it just crossed our minds rather slowly. Though highly critical of what we are pleased to call our ‘civilisation’ to friends and family, in comments on blogs and via the occasional grumpy letter to the editor or the local rep, I don’t rise to the threat level posed by brave people like Eva Bartlett or Patrick Lancaster, or indeed Gonzalo Lira, so it is not personal safety that prompted the thought.

              Rather it was the realisation, thanks to blogs like this and in particular to Michael Hudson, that we are doomed to experience a great diminution in our quality of life and the liberty we are so proud of – at the very least – and that while options exist to ameliorate this, there is no reason to feel optimistic that these will be exercised in any timeframe useful to oldsters like us.

              This decay is already well underway, prompting a conviction that so far from being any sort of solution, we are the problem. We are in fact the ‘bad guys’. As Tom says above ‘we in the West have no good leaders’ and our much vaunted democratic system seems structured to prevent genuine leadership rather than produce it. We do have leaders but they are in the main silent and invisible, unelected and unaccountable, their wealth pulling strings and levers without their needing to lift a finger. We instead have the sad spectacle of a dim, corrupt and pliable vacancy at the top, an agent without agency. This clearly cannot be said of Vladimir Putin. We in the West are no longer allowed strong leaders.

              I read that when Putin took over from our stooge in the Kremlin home ownership in Russia was at an historical low of 58%. The last figure I could find (from 2018) stood at 89%. The military is not the only thing Putin has rebuilt. Little wonder his approval ratings are so high. When you look at the prices of real estate over there you understand how this massive turnaround has occurred. You also see what Hudson is driving at in his comparison of political systems which subsidise the basic needs of the many like housing as opposed to systems which impose tolls on the essentials of life to enrich the few.

              If I were Yves I would put a line thru the idea of a return to Australia. Life in a province can be great when the sailing is smooth but can get very rough when things get choppy. We here are starting to understand the weight of Kissinger’s quip that ‘To be an enemy of America can be dangerous, but to be a friend is fatal’.

              1. Yves Smith Post author

                I never ONCE said I was returning to Australia. Australia is very well run for a small country, self-sufficient in food and with a lot of offshore gas. But it is impossible for anyone over 40 to get in now unless sponsored by an employer or spousal. And Australia has a huge problem with water sufficiency.

                1. Greg

                  On top of those problems, Australia and New Zealand both seem committed and/or doomed to follow the USA wherever it goes, whether that’s off a cliff or not.

                  1. Yves Smith Post author

                    The lockdowns were not excessive. They were too “leaky” and too short to be effective. Had the first lockdowns been harder and longer and had people kept up masking and been encouraged to be attentive to ventilation (btw cars are THE WORST), we’d be in a very different place.

                    1. JustTheFacts

                      Thank you, Yves. I think we might speaking past each other.

                      We agree on masks, and ventilation. Unfortunately as the transmission rates of new variants increases, the effectiveness of masks is falling. I recently saw on the latest omicron varieties show that even wearing an N95 only protects one for 20mn or so in a closed room if no one else is wearing one.

                      Another tool would be 222nm lighting, which is supposed to not harm one’s eyes, yet kills Covid. We’ve known about it since the outbreak began, but haven’t installed it in public spaces, as I believe we should. Humidity at 50%, and certain kinds of ionizers also are documented to reduce transmission.

                      As to lockdowns, the question is at what point are they still a useful tool. Clearly, the best would have been strong lockdowns and preventing international travel, had Covid been detected very early. That was what I was arguing for at the very beginning of the COVID crisis. Unfortunately, frozen sewage samples from places like Barcelona, shows that COVID spread much earlier than we thought, so it might have been too late anyway (there will always be some countries that cannot impose a lockdown).

                      However, once a virus has spread to other populations (human or animal), it will continue evolving in its new niches. At that point, lockdowns are a lot less useful: their cost may not be worth their benefit since people who are isolated from the virus are liable to catch it when they come into contact with it. Arguably, they may be more susceptible since their immune system is naive to its variants.

                      Importantly, there is no guarantee that a virus will evolve to be less lethal: for a virus to evolve towards being less lethal, there must be a mechanism that ensures those variants that don’t kill you outcompete those that do. This only occurs if the virus transmits after the point it would have killed you. If it transmits first, and only then kills you, there is no selection pressure against it. COVID falls into that category.

                      Given that omicron seems to have evolved in mice, I am no longer convinced that the cost of lockdowns is worth the benefits they provide. That is what I meant by excessive lockdowns. Costs include loss of work, elderly relatives dying alone, isolation, untreated diseases, loss of education, stress and mental illness, and so on.

                      To summarize, lockdowns can be a good tool at the beginning of a pandemic, but not a year or 2 in.

                      Ultimately, what really annoys me about the vaccines is that they were not designed to stop transmission. Even if the vaccines did protect people perfectly against the first variant of Covid-19, and had no side-effects, they would be creating an environment in which a subpopulation (the vaccinated) would not die of mutations that would kill other people. From the virus’ perspective, that is an environment where mutations that would normally kill people, and thus possibly reduce its success at transmission, artificially have no cost. And that increases the probability of a variant surviving that kills the unvaccinated.

                    2. Yves Smith Post author


                      No, the effectiveness of masks is not falling. High quality masks like N95s are highly effective. It’s that health officials all around the word never gave enough priority to masking, much the less conveyed the importance of getting good ones and wearing them properly.

                      How many did you see wearing them below their noses? Some of this was gaming the system, but some was also laziness/ignorance. I’ve even seen horrors like doctors leaning in to talk to patients while pulling their masks down. With modeling like that, no wonder masking looks not very effective.

      2. jr

        Yves, I think you recently mentioned a possible post about the ins and outs of moving abroad. If that comes to pass, I for one would really appreciate any information you and the commentariat would care to share. It’s not in my cards at the moment but life has dealt me many, many strange hands before…

      3. Darius

        If you’re leaving, I think it would be good to do in the next few weeks. I don’t think this Pelosi trip to Taiwan is going to go well. Things may be very different a month from now, including a financial swoon. As you said, a future financial disaster will dwarf the events of 2008 because it will occur in an environment of war and the resulting shortages of resources and credit. I hope I’m describing it accurately.

        1. Yves Smith Post author

          It is impossible to make an international move “in a few weeks”. There are countries in Latin America on my list that will be outside having war affect their visa policies. There are also countries in Asia that seek to admit foreigners and have long-standing friendly visa regimes.

      4. anahuna

        Someone told me a story in the midst of a noisy party in Mallorca decades ago that always comes to mind. In the late 1930s a couple, friends of his parents, became convinced that a war was coming that would engulf much of the world, including the U.S.. When they brought out an atlas and looked for ways to shelter from it, their eyes were drawn to an island far out in the Pacific, remote enough to offer safety. They packed up, sold everything, and moved to the island. It was Guam, where they ended up spending four years in a Japanese prison camp.

        Someone dramatizing the old Sufi story known as Appointment in Samarra? Maybe, but it rang true to me.

        Not an argument for or against any move, just in favor of the incalculable.

        1. Paul Beard

          A British couple did a similar thing in the mid 70’s. They were featured in the Sunday Times magazine if I remember correctly.

          The Falkland Islands turned out to be a little different to their expectations.

    2. Societal Illusions

      I missed the call but look forward to listening based on the comments.

      Your points, Tom, are pertinent for me. I now reside in another country that doesn’t have the same ability or seeming desire to care what I am up to, or mine me for $. My normal economic activities are sufficient to be welcome. I feel more free and need less to meet my needs.

      At times I feel that I could contribute more as a seemingly “aware capable” and have a momentary sense of guilt that I am not being part of any direct solution to the dysfunction we keep witnessing the poor outcomes from in our society. There are few metrics which demonstrate advancement or improvement of well-being, joy and happiness and physical and mental health. The problems we face are listed and discussed daily in this site, and it appears the only solutions are wholistic or integrated in their nature, while the focus is always on the symptoms and not the causes.

      But then I remember my decision: Is not the best way I can be part of the solution is to remove myself from the unfulfilling game and focus on my own well-being? Let “them” or the system play itself out, with less participation from me, and end up where it will. It seems wholly unlikely to succeed so perhaps the more rapid failure will create the opportunity for renewal.

      That is perhaps Randian in some form, but as Orwell and Huxley (recognizing the dichotomy there) keep demonstrating themselves more as prophesy than fiction, who says I have a responsibility to engage in a game I don’t enjoy and didn’t sign up for?

      I’ll add that I believe I am not alone. At some point the failures will be too much and their will be a shift in desire to take a stand. We can bemoan that “no one else is leading” or we can lead ourselves. My internal guide informs me and I sense risk is too high currently. Why would I want to lead in this corrupted system? When there is an opening for actual change of assumptions and of addressing the core causation, then it could be interesting, rewarding and fulfilling to devote my life to that. Currently it feels like a zero sum game. So I wait.

      1. Tom Pfotzer

        Societal: That was just terrific. I’m going to paraphase / condense what I thought you said, and then respond. I thought you said “I can’t fix the system. Too big and complex, it taints whoever engages it, and I didn’t sign up for this. We talk about symptoms, but we don’t achieve a quorum for actions. For now, I’m going to “fix me”, and maybe that’s the best role I can play. If (or once) it gets intolerable, I’ll revisit this decision, but for now I’m waiting”.

        Boy does that resonate with me. We’re doing almost the same stuff. I bailed off what I self-servingly call “the stupid train” a while back. I asked “how would I structure my life to uphold my values?” And I did. I participate in modern consumerist / Empire-Operations at a minimal degree, and every year passes, it’s less.

        I am ready for most emergency contingencies. Not all, but most of them.

        I’ve actually become proficient at the systematic, gradual de-coupling that needs to get done if one is to successfully “change trains”… from a stupid train, to a somewhat smarter one. It’s hard to do. We are herd animials, and train-changing hits us where we’re weakest.

        So, I’m mostly out of the tar pit. Ordinarily, that would be sufficient, and I’d be on my way to ease and comfort.

        Buuut – ya know there had to be a “but”…I have a problem. Parents. Parents said “you have a responsibility to do your part to … “. Everyone has to decide which of their parents’ programming to discard, and what to keep. I decided to keep that one.

        So how to discharge this responsibility? Should I somehow strive to be a “leader”?

        If by “leader” you mean some sort of Moses figure, who is and does what others can’t or won’t do, and thereby garners social approbation, then I say No, absolutely not. I think accepting the Moses myth is one of the most self-abnegating mistakes a society can make.

        I prefer this definition of leader: “A leader figures out what needs to get done, and does it”.

        And that’s cool; it works at the individual level. However, as I was fixing me, I also conducted “environmental sensing” to keep an eye out for nuclear bombs, roving crowds of crazies, and all the other manifestations of collapse, which lately seems a bit more likely that I’d hoped.

        It is my considered assessment that individual efforts (“leadership”) of a few isn’t sufficient to stem the incoming tide of stupid. As a project manager, I know when to spot a resource-to-workload imbalance, and we’re looking at a big one.

        We’re going to need something big. Something evenly matched with the scale of the problem we face. Some force-multiplier that links (not bonds, but “links”) the many into a coherent tide.

        I have in mind a culture of action, with motivated and capable individuals loosely linked for communications, knowledge and resource trading. Not linked as in “hierarchy”; linked as in “mesh network”. No single points of failure, no gatekeepers and all that sort of thing. A good, robust, decentralized, adaptive, load-leveling design.

        And a general vision of what “success” looks like. Navigational heading is … what, exactly? What are the metrics? And finally, the beach-head. Where (really, “wheres”) do we start, and how do we self-assign to the start-places.

        So there’s a few brush-strokes to start the painting. We all do our own thing, and we collaborate to become an “emergent force” through no particular fault of our own, and then we become, after a while, a “sufficient force”.

        1. Eureka Springs

          Talk around these threads as of late has leaned towards – we need a strong leader. I would only agree with that to point. Leaders need instruction with little leeway. In the system we have one place I would suggest is democratically established binding party platforms. And an ability for quick removal from leadership for those who deny representation. Example – Pelosi and Hoyer supporting anti-choice Dem candidates. Biden appointing anti-choice judges. And they sue to keep smaller parties which would support this cause off the ballot entirely. Assuring no democratic representation from any quarter. It’s clear the overwhelming majority of registered D’s want choice, and text of every platform I’ve read over the years has surprisingly strong almost harsh pro choice language.

          Let’s say choice is an issue where one decided to put their time and efforts to good use. The best way to do that in the duopoly as it functions now (especially towards the Dem corporation), imo, is first deny D corp. legitimacy at all. I so often feel like I’m on general strike. It’s frustrating but much better than playing with the veal pen and seeking a seat at a table to nowhere. Love me, I’m a liberal.

          When everything can be so easily co-opted and there are no mechanisms to democratically establish instructions for leaders with consequence… except with big money. Why play?

    3. jr

      Thanks for this comment, I’ve had similar thoughts. Not being given to patriotism I have no problem leaving the country, except for the lack of funds, ideas of where to go, and easily transferable skillset. So I’m stuck.

      I agree with the notion that there won’t be a great coming together here. There will probably be some small scale ones. I see two problems that will degrade those efforts:

      1. A political economy that both predates upon notions of communality and is ideologically driven to dissolve them. Think of Meta, which helped to destroy local journalism while offering incestuous news “communities” that serve as little more than echo chambers, bereft on alternate points of view and hostile to critical thinking.

      2. A populace that trends strongly towards caustic individualism and that is deeply suspicious of anything that smacks of communalism. Think of Joy Behar being called a Marxist while Musk or Gates are held up as heroes who, and I’ve seen this written, “want to make society a better place”. Or my favorite example, which I’ve seen with my own eyes, a CITIBIKE bicycle, a for-profit company tied to a major banking institution, literally doused with red paint and bearing a copy of the Communist Manifesto glued to the basket with a cloth snake glued to the cover.

      I’m sure it’s not quite so black and white but it sure as heck ain’t gray. There is a lot of false consciousness and magical thinking that needs to burn off. I think it’s going to get very ugly.

      1. Tom Pfotzer


        Good luck in your travels / efforts. No doubt you will prevail.

        Your item 2 above… “tends toward caustic individualism, etc.” … yes to that. I have that problem in spades. I’m really individualistic, yet I recognize the value of community endeavor. I even enjoy it whenever the politics somehow forgets to show up.

        I guess that’s why I like the “loose-coupling” notion so much. Suits my personality.


        And to Conor, below: If I lived in Ireland, I’d want to come along for some of those walks. Sounds really pleasant. And Ireland has some really fine ales, great music. I hope some of those walks end somewhere around a pub.


    4. Conor O'Brien

      We are a social species, we cannot survive in the absence of hope; but optimism has a weak exchange rate against realism.
      I am just in from a day on a walk and am catching up via the replies so I have not listened to the conversation yet.
      I agree with the view that we are heading for an ecosocial system collapse.
      In our complex hierarchic system change has to come from the top: it won’t. So the bottom has to have social structures that mitigate the collapse. It is not enough to have individual skills, they have to be coordinated.
      I’m living near the Knockmealdown Mountains in Ireland. When I retired from farming I became involved with a social walking initiative in our wider area which is simple but has had profound effects in building a new layer of social networks.
      Look up Siul Eile, Knockmealdown Active, Rhododendron walking Festival, Saint Declans Way. All of these are part of that network.
      We now know, and more importantly, value each other due to the continuous meetups of social walking.
      If you look up Ballyporeen and eventbrite you will find a social walking event we are running specifically to attract people looking for a place to live within a strong community.
      Social walking is not performance walking; it is walking at a pace that enables talk. Not all can walk fast and talk. Conversation is core to our being. We evolved a pattern of splitting the walk into halves. Let the hares off to get knock off their steam, but everyone turns back at 40 minutes; and now they are behind and everyone comes back together at the same time, whether they have done 6k or 1k.
      It sounds simple, and it is, but it feeds into an atavistic instinct of mentally synchronising our pace, our rhythms, and thoughts.
      If anyone in Ireland is interested in exploring the power of social walking, and the Knockmealdowns, have a look at Ballyporeen and eventbrite for Saturday 13th August in Ballyporeen. I would love to meetup with some other Irish Naked Capitalists.

  8. JP

    To the tune of Johnny Mercer’s ‘Laura’

    Lira, is the face on your youtube feed
    Red-pilled and an owner of libs
    The truth he’ll tell, direction he’ll lead
    He will give a screed with no fibs

    And you see Lira promoted by people you trust
    Those who put ideas in your head
    He gave your very first red pill to you
    That was Lira, but he’s only a Fed

  9. playon

    The discussion at the end about how Biden could exit… I wonder if the Hunter Biden issue could come to such a head that he’d have to step down?

  10. Stephen

    This was a great discussion amongst all three participants. Would have left early but it was worth staying to the end and did so!

    I share your overall bearish view, Yves. In particular: lack of adult leadership in the west, micro economic weakness and an inflated view of our military capability are toxic factors. Combined with universalist ideology and the urge to maintain world hegemony there is then a lot of potential to set off an explosion that we have not seen perhaps since 1945.

    Hope too that Izabella is right in her more bullish stance with respect to economic dislocation and subsequent rebirth but I fear the worst. My own career started in manufacturing in northern England in the late 1980s. We even made mass market clothing in the UK in those days. All gone now. I think that a handful of Chinese factories now make over 80% of the world’s socks, for example, and the lower supply chain tiers are there too.

    If the past 2-3 decades outsourcing of manufacturing to China could be reversed quickly, which it cannot, then I still believe there is major drama coming. Western autarky is anyway not a feasible objective for reasons you state related to commodities such as neon, vanadium and titanium.

    Even in WW2 (at least in the UK) we relied on global supply chains too, even if we had many of the factories that could assemble things. But we controlled much of the so called Global South (and Uncle Sam supplied the rest) so that meant we could manage those supply chains. Germany’s geopolitical disadvantage and part of how it lost both world wars was that it could not.

    A conflict with China and Russia now that cut off all direct and indirect trade with them would clearly end up with European consumption, supply chains and economies just collapsing. The US would not be able to play the role it played in WW2 and would have enough problems of its own too. We would not even be able to obtain socks. Let alone chips.

    1. Lambert Strether

      > Western autarky is anyway not a feasible objective for reasons you state related to commodities such as neon, vanadium and titanium.

      Western autarrky at today’s level of technology, at least. The Victorian telegraph was pretty good, though.

      MM T teaches that we can afford whatever we can make. But if we can’t make anything, our weapons turn out to be crap, and we don’t have a chokehold over the financial system, what happens to “the value of the dollar”?

      1. Stephen

        Exactly. The worse case is Rome after around 476 AD – a city without the empire that provides the food that it needs. We need the adults to re enter the room.

          1. Stephen

            Fair point. There comes a stage where one needs to stop complaining and to act. The question is how to do so responsibly and meaningfully amidst the swamp.

    2. Tom Pfotzer

      “Western autarky is anyway not a feasible objective for reasons you state related to commodities such as neon, vanadium and titanium. “.

      The West could make a pretty fair run at autarky. If we really needed neon, we could raid all those neon lights @ las vagas. I’m kidding, but remember, we’ve had plenty neon in use long before we started trading with Russia.

      Titanium might be tougher, but as I recall having grown up in a heavily industrialized town nearby a DuPont titanium dioxide (paint base-white color) plant, where the titanium dioxide came in via strings (dozens at a time) of giant tank cars….back in the sixties this was…well before we traded with Russia…seemed to be plenty of it.

      I’m not convinced that those materials shortages are insurmountable. Troublesome, disruptive, not insurmountable.

      I’d also like to endorse some of the “we can do this” themes which Isabella advanced during the discussion. Adversity and exigency are galvanizing forces, and attitude plays an oversize role in one’s response to troubles.

      1. Greg

        There’s a lot of titanium in other countries, it’s just that the use currently is way above what can be sourced from there. Canada IIRC has a fair chunk, and that’s probably what DuPont was eating.

        I guess the question becomes, can we do consumption reduction? Because the climate emergency says we can’t. In which case we can’t do autarky, because we refuse to adjust consumption to our internal resources and capabilities.

      2. Stephen

        I agree. The question is the transition as you say. Certainly, in the UK I believe that the practical intellectual property needed to run factories at scale has just simply been lost. Reigniting that would be a decade long program.

        Ricardo’s Theory of Comparative Advantage also says that autarky is a less optimal outcome than global trade. The fair question is whether we have pursued globalization beyond what is optimal though, and whether our approach to doing so has been based too much on short term decisions. The theory assumes a frictionless and fully rational world, which is not the reality.

        My recollection (do not have the data in my head) is that on many measures the world economy in physical terms was more integrated in 1914 then it became again until circa 1990. So there is precedent for these changes. But two world wars and a Cold War are not a good way to get there.

        1. Tom Pfotzer

          Stephen: I found this remark especially interesting:

          The fair question is whether we have pursued globalization beyond what is optimal though, and whether our approach to doing so has been based too much on short term decisions

          Many of you have seen my posts about “redesigning the economy”, and no doubt that comes across as hubris. I mean, who “redesigns an economy”? Ha!

          So, just to confound the incredulous, let’s get started.

          Step one in design is to set design goals. What’s the thing you’re building expected to do for you, once it’s done?

          Politics and war aside for a moment, there are two big problems confronting humans:

          a. The way we run our economy is rapidly compromising the planet we depend upon, and
          b. Globalization, big-scale and technology in general are causing major wealth concentrations, and starving the leaves of the tree of nourishment, so they’re dying

          Therefore, design goals might be:
          a. fix the planet as we make our living, and
          b. Direct more of life-cycle costs to wages .vs. rent-extraction

          I define an “economy” as the mechanism by which households get they need, and some of what they want. I say if it’s not serving the household, it’s parasitic, and eligible for jettison.

          I’d also like to introduce the concept of “life-cycle costs”. Procurement managers evaluate big purchases on the basis of full life-cycle costs, which include procurement, operations direct costs, maintenance, and then disposal costs, or possibly disposition proceeds (e.g. scrap value)

          Big scale production minimizes acquisition costs. How does big-scale production do for:

          a. Ops costs. Example: what’s it take to heat and cool your house?
          b. Maintenance. What’s it cost to get your car fixed? And your washer?
          c. Longevity. Your washer and HVAC equipment have a 10 year max lifespan, after which you junk it. Value goes to 0 at 10 years.
          d. Disposition. When you junk your washer or your HVAC gear, you have to pay the landfill to take it. You pay them. No resource recovery.
          e. In the entire product lifecycle of the washer or HVAC, how much of what you spent end up as domestic (U.S.) wages?

          This is a quick thumbnail sketch, but as you evaluate it, ask yourself about some alternative “designs” for the life-cycle of a washing machine.

          What if the washing machine:

          a. Was built to last. Every component easy to replace, using standardized parts stocked at Refurb Central, which would be located at what used to be the land fill. That would extend your washer’s fully-functional lifespan to 20 years, not 10

          b. Maintenance was done by grads from the local trade school, whom you could find easily by contacting…Refurb Central, which has a registry of such people

          c. Disposition. When your washing machine finally gives it up, you take it to Refurb Central, where they pay you about 25% of its acquisition cost for the privilege of recovering the sheet metal, the motor, the wash-drum, possibly the timer / controller. Each of those parts contains materials of high value, easy to recover and refurbish. Refurb Central has a co-op program with the local trade school, where the young people are trained in all things mechanical and electrical. Refurbed parts, since they standardized, can be used to repair washers still in the field

          What was the effect of that “design” on total lifecycle costs? And on the environment? And what about the proportion of washer-related expenditures, made by the household, that are spent on wages .vs. rent-extraction?

          1. Stephen

            A lot of our current problems are owed to incredibly short term thinking. I agree with you.

            Governments should focus on frameworks and incentives that encourage longer term thinking and appropriate allowance for externalities through society.

            But in our societies they are in reality often the entities with the shortest term thinking of all!

    3. podcastkid

      A chain I’d like to see would be “The Turkish Sock Store.” Sixty percent cotton beats zero percent. If they still make’em. I might be remembering Pakistan did likewise? Thin!

      Dynamite discussion, Yves. THANK YOU!!!

  11. Librarian Guy

    Very good discussion. I’m going to quibble & partially correct Yves on one minor matter. I taught public school in California for 32 years and just retired 13 months ago (got a very nice buyout with other senior staff due to Covid, from a deeply dysfunctional district which had gone steadily downhill the 22 years I worked there.) Education codes and law vary in different states, so I have no doubt that she accurately reported that the middle school class (if I recall correctly) she overheard was far behind, but parents could prevent their little geniuses from receiving a failing grade (?) or not advancing. So that isn’t always and everywhere the case– in my district by the end there was something like that for middle school students only. They got “social advancement” in middle school and on to high school irrespective of grades or participation. (I mean, who would look at a child’s middle school grades for a future job prospect anyway?) In my district by the time I left, the 3 middle schools had established a no-discipline policy which allowed for kids to repeatedly bully and harass others, pull the fire alarms to take “breaks” from classes (which the district had to repay local FDs for the false alarm visits), threaten teachers etc. largely without consequence to the students. However, the community consequence was that parents pulled their students out in droves (in an unincorporated community south of Oakland with a large immigrant population and lower than average Bay Area income & pay) and put them into charter or religious schools where such violence and chaos were not on the menu. Our district lost 250 or more students at the 3 schools over a period of 4 years or more (if anything I may be underestimating the student loss) which resulted in lower ADA (average daily attendance) reimbursements and losses of middle school teaching jobs. In any case, the point was true for middle schools where I was, though even though the standards slid at the High School I taught at, it was not the case, even under Covid, that students couldn’t receive F grades or not be passed along or graduate. So even though the district rampantly and openly pressured teachers to pass students who didn’t show up for Remote Learning classes, etc. there was still the legal protection (thanks to the Union insisting Cal. Ed Code be followed) to fail the no-shows. Yves’ claim is likely true of middle schools, though maybe not in every state(?). That wasn’t always the case in California (I remember in 2001, I got a 9th grader in at the 2nd semester, they’d held him back in middle school half his 9th grade year due to social immaturity) but yes, the larger point stands, in many districts education is more about “how the child feels” & much less oriented toward content or learning than in past years. (And in closing, such lowered expectations in US culture & society are hardly unique to modern schooling.)

    1. Mike

      Sounds like you taught in Hayward. Their claim to fame is that they are in the top 10% of most diverse school districts in California. Education might not be important but diversity RULES !!!

      I come from a different era back when diversity didn’t mean squat but discipline and education did mean something. I raised my kids with the same values. Both are college educated and work as professionals. It’s sad that American culture embraced narcissism so wholeheartedly. Who would have thought a man that served in prison many times, the last time for a home invasion while using a gun and robbing a pregnant woman of her valuables would become the Great American Martyr in 2020.

  12. notabanker

    Thanks for this. Interesting the Kaminska is one of the more critical thinking former msm’ers but still believes if a major crisis hits, we will be able to band together and figure it out. Citing Covid as an example, one would think is contrary to the actual evidence, but here we are.

    The ones that are totally captured have to be completely oblivious.

    1. Lambert Strether

      > if a major crisis hits, we will be able to band together and figure it out.

      We’ve had two chances: The GFC and Covid. I didn’t see a whole lot of banding together (although it would hardly have been reported if there had been).

      What they are training us to do is “personal risk assessment,” the exact opposite of banding together. That’s what’s so screamingly frustrating about the collapse of public health: Masking and ventilation are all about banding together.

      1. flora

        People will band together under local working it out together. I have seen it. The “great reset” will be ground up, imo, not top down. The “top” has shot their bolt and failed.

        1. HotFlash

          I dunno. My neighbours, and many of them are dear, wonderful people, believe what they read on Facebook and the CBC. They believe that Putin is an insane monster who wants to take over the world but that Russia is definitely losing the war. They think the war in Ukraine started in February 2022 when Putin invaded for no reason and have no clue that it is a civil war that has been going on for 8 years.

          They believe that Covid is over, that masks aren’t necessary b/c the vaxx will protect them. When I tell them that Mr. HotFlash has long Covid, they ask if he is quarantining. They trust Health Canada and believe that they are ‘following the science’ in not wearing masks but by golly, they are getting all their boosters.

          How bad will things get, and in what way, that they realize it is time to ‘come together’? And do what? This isn’t going to present like a flood or a hurricane, an obvious event that requires an obvious response which is doable by individuals or small groups. I expect that my neigbours will be mugged by whatever’s coming and by the time they figure out they are being attacked, let get on the same page, let alone figure out what to do about it, it will be too late.

          1. flora

            Yes. Indeed. I agree. I can’t think of anything more fitting in the circumstances than this, something about the
            ‘rain falling on the just and the unjust alike,’ something about humility in the face of greater cycles beyond human understanding or comprehension.

            KJV Matthew 5:45. “That ye may be the children of your Father which is in heaven: for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust.”

          2. podcastkid

            In general I see things more Yves’ way than Izabella’s. However, when people get through a major media travesty/hoax (like Nixon was an honest guy) I remember it as sort of a Kairos moment. Right now we’ve got two happen’n: 1)Sending weapons is right, and 2)Covid. I agree with Yves and Lambert on lockdowns. But there’s another side to it which Izabella alluded to briefly (as has Snowden). Economics studies mass phenomena. Well, how information flows on the net is big. Big and broad, and how could anyone (even fb) really follow how it flows? [it would be like flat out predestination, a thing which I’m prone to hypothesize only becomes the case for limited intervals in limited locales] Thus one could ask: could the bumpkins have gotten hold of some info that we missed? Maybe I’ve seen 3/4 of such info right here (in comments)?? And what about Cuba’s vaccines? Where’s the straight dope on their success? Or how they work differently? Or what makes them safer? [IF on all three, details please with illustrations] Anyway, right there are two MONSTER clean up waves to punch through. But, once on the other side, then perhaps a calmer less freaked out vista?

            1. podcastkid

              However much lockdowns are ineffective as JustTheFacts claims, I think humans are able to afford what they can still do. If we can see galaxies 13 billion light years away so clearly [the ones close to farthest away], lockdowns should be easy. Do UBIs, and M4A after THE PEOPLE have gotten their governments to work on their behalf. Free up the dough going to the stinger/HIMARS assembly lines (and to complete refurbishing of all ICBMs). Take a rest. Rig up some mule wagons to haul seed (edible and to plant).

              What’s GFC?

      2. DanB

        Yes, the dominant institutions are running [into the ground] according to the rules of neoliberalism: “there is no such thing as society”, so you’re on your own. (Actually our institutions serve the 1%). Overall, this has trained/socialized most people to see only individualized solutions to what they will see as their personal problems. This opens the door to demagogery and right-wing politics as the most viable collective solutions, because the promise is for personal salvation and the destruction of the scapegoated other. This dystopian outcome is not inevitable, but it is likely given our socio-historical context. On the other hand, the opportunity for egalitarian/communitarian renewal is a main theme in the Graeber and Withnow book, The Dawn of Everything.

      3. tindrum

        Ms. Kaminska is a strange sort of neoliberal type of conservative (litte c) fish in my opinion. She obviously does not remember or has chosen to forget the “Thatcher” riots of 1980 – 81 that tore through UK cities one after another destroying a lot of stuff. I was 18 at the time and remember it very very well.
        There is absolutely nothing preventing this happening again.

    2. Andrew Watts

      Another financial crisis will supercharge euroskepticism across Eastern Europe if anything else. The fissures are beginning to emerge as a result of the war in Ukraine. Who knows where things will stand in the winter.

      I’ve suspected that Hungary could be the proto-example of where Europe might be headed.

    3. Basil Pesto

      Citing Covid as an example, one would think is contrary to the actual evidence, but here we are.

      well, she is a GBD-ist, and seems to think the problem is solved and that in fact we erred by not doing a Sweden or paying more attention to the likes of Martin Kulldorf. It’s a serious………… (fnarr) Blind Spot in her commentary. A shame someone who has done so well to see through Uber’s bullshit can’t do the same in this instance, even allowing that a SARS virus is probably a more technical thing to understand.

      Lambert is exactly right though. The pandemic represents a distressing failure to come together and unite against a common problem. The public will was certainly there in most of the world in early 2020 but the technical responses from those in charge were already alarmingly weak in some countries, especially the US and UK, and energy was expended on propagandising for a doomed-to-fail technofix instead of the actual solution, and implementing divide and conquer along those lines.

      And among the affluent independent journalist class, they just completely ignore the present infinite covid reality even though it is a terrific story and one that lays government incompetence and sclerosis bare, which under normal circumstances any good independent journalist loves. I mean, it’s as though the problem doesn’t exist at all, unless its some vague concern about the threat of future “lockdowns”.

  13. Susan the other

    I enjoyed your chat with Gonzalo. He is almost as content rich in his thinking as you are. I’m not too sure about Isabella. She’s either pulling her punches, not wanting to put too fine a point on things, or she doesn’t have any depth. You, Yves, on the other hand, were great. Isabella wanted to have a blabber-off on “the crisis of liberalism.” I’d say that was a topic for 20 years ago. At this point in time liberalism has ceased to exist. All we can do is analyze the mess and clean it up. Adapt. So maybe that was the plan – it was already a lost cause in 2008, imo. Who knows? We need logistics now. I agree with you and GL about the mess our election is going to be, both midterm and 2024. All the more reason for logistics. And if Russia doesn’t come to the rescue for the EU this winter, then it will look like the Berlin airlift for LNG shipments. Things are crazy. Also too, I’ve heard Uruguay is a great place to be an expat – my son-in-law’s mother spent a lot of time down there.

    1. flora

      Thank you. I understand the point of view of Isabella (I think) and find her challenge to the official narrative very important. I thought her comments — from someone officially approved of by the “inside”, as they say — an important perspective. My 2 cents.

      1. Jeremy Grimm

        The discussion in this roundtable was disturbing. Though Izabella Kaminski’s views on the issues were interesting and offered a different perspective, I believe her optimism about challenge bringing people in Europe together is unreasonably hopeful. It sounds like a cheery retread of Nietzsche’s quip “That which does not kill us makes us stronger.” I believe Europe’s Winter and the Summer in the South, the Global South both promise bitter seasons of cold and hunger respectively. But the discussion in the last half-hour or so was the most disturbing. Yves pointed out that the financial ‘innovations’ which nearly brought down World Finance in 2008 were still widely practiced and likely hid a very large, very unstable financial construct which could bring about an even greater collapse than that of 2008. All it might take would be a little war with China or a major bank failure in Europe — like the failure of UniCredit Italia or Germany’s Deutsche Bank.

        The earlier discussion of u.s. leaders and the coming elections and the elections in 2024 were gloomy enough. Biden with a popularity lower than Dick Nixon during Watergate, the Senate without Kamela as the deciding vote, or suggestion of Kamela as President should Biden become too obviously incapacitated to continue? UGH! That’s not just gloomy, its disgusting. The discussion of the u.s. voting process, only added to the growing darkness which lurks in the mud of future of u.s. politics.

        I feel like one of billions of Frodo’s marching into Mordor. Gandalf’s words offer but cold comfort:
        “All we have to decide is what to do with the time that is given us.”

  14. flora

    Thanks for this link. Great conversation. I do believe people will come together, but not in the way the current pols, or under the current pols’ direction, the current pols imagine. /;)

  15. Andrew Watts

    Sounds like a cat was rubbing up against your mic halfway through Yves.

    Need to quibble with the panel’s take on the state of the labor market. The pandemic killed over a million workers in the US and temporarily disabled who knows how many more. The labor shortage is most pronounced in high-risk environments where the working class is considered expendable. I suspect that early retirement has only played a tertiary role in the tightening of conditions as COVID is most effective at killing older workers who’ve remained in the highest risk category.

    I’m relatively optimistic there won’t be a war with China as well given the overwhelming pessimism which surfaces when the topic emerges. When I was beginning to think that it was a possibility there was a sense of optimism among policymakers because the US Air Force and Navy weren’t directly affected by the wars in Eurasia. Now I think there is a widespread sense that in many ways the US is behind Russia and China with their capabilities to deny the ability to conduct operations without interference or air superiority. Nor can military planners be optimistic about any war the US couldn’t win within the period of weeks.

    These military concerns probably trump any economic fallout that would be the inevitable result of a war. Dying empires usually commit suicide as opposed to being murdered by an outside power.

  16. Skip Intro

    Great Conversation!
    2 points: Early on you discuss the disruption due to covid caused people to discover new modalities that changed the workforce. Research for that came from, IIRC, Transport for London, in a study of some tube disruptions. Apparently some fraction of commuters discovered better routes when their service was disrupted, or to generalize, being bumped out of your local optimum may let you find a more optimal one.
    And about all that increasingly unaffordable sovereign debt in the global south, it seems like the SCO/BRICS movement might pick up some converts by offering them cover for repudiating their odious IMF loans and forced privatizations.

  17. ex-PFC Chuck

    Great discussion! Thank you all. And thoughtful comments too, especially Tom Pfotzer’s.

  18. Mira Martin-Parker

    Why work for a living, when the pay doesn’t make up for the losses incurred? The remuneration doesn’t cover the costs of bodily sustenance, plus the humiliation involved is truly unhealthy. It literally doesn’t PAY to work. One isn’t earning “a living,” but is rather contributing to one’s sad and early demise. The State of Nature may be harsh, but it’s an honest game and the rules are clear. This “self-evident equality” business is a real racket, gangsters in broad daylight.

  19. c_heale

    Nice to hear Yves speak. Listened and fell asleep and woke up again, since it was a long discussion (to be fair I am in a very different timezone). Very interesting and hopefully I will catch up on the rest today!

  20. The Rev Kev

    Was able to listen to the first hour of this last night before it got too late so look forward to sitting down today to listen to the rest over a hot mug of coffee.

  21. JustTheFacts

    The key point for me was Yves pointing out the dismal level of education today. We can’t “just reshore” if there’s nobody to do the reshoring.

    Apple has said similar things: there’s no one here who knows manufacturing well enough to reshore even if they wanted to.

    The US could introduce a German style apprentice program, but then it’d need to get the people who know how to manufacture to come back and teach it… China certainly won’t let such people come teach us, the way we went over there and taught them. So the only options are getting those who know to change career or return from retirement or import such people from Germany.

    1. Kurtismayfield

      Restoring would take an actual industrial policy from our Federal government. This is something that their master do not want. Until we address who controls our Federal government all we will see is whatever Big finance, oil, and pharma wants.

  22. Louis Fyne

    agree to disagree: Izabella kaminska is greatly overestimating the current and potential amount of civic-patriotic unity in the US (can’t speak for the EU).

    A shooting conflict with China/Russia will not bring the US people together—-if anything a war involving the US will accelerate the civic disunity as the fingers will be blaming a wildly unpopular President (or Pelosi) for stumbling the country into war.

    Even a big chunk of the “God Bless the USA” crowd will not be onboard. Expect the irony of a Democratic president and the woke culture war turning Republicans into peacniks.

    your mileage may vary.

    1. SocalJimObjects

      Hm, I don’t know. The powers that be can always arrange a false flag attack somewhere, most probably inside the United States to whip up the fervor of “patriotism”. The whole blame the government thing will only happen starting year 3 of the war when it’s clear that the United States is in for a long slug …. and might possibly not win. Or perhaps public opinion will turn when the first aircraft carrier gets sunk.

      1. Greg

        A proper war footing needs a really effective othering of the chosen enemy – is that possible in todays America? Perhaps in the very homogenous areas in the middle of the country, but I feel like trying to paint all Chinese as bad would not go so well in the larger cities.

        1. SocalJimObjects

          Well if they are US patriots, here are two options:
          1. Enlist in the armed forces.
          2. Go to this camp where we’ve prepared some “fun activities”. We promise to make it better than those Japanese internment camps!!!

          Yes, there will be resisters, heck even a lot of them among the population, but ultimately there will be conversations like “is it really so bad, going to the camp, after all it’s for your own good“.

    2. sluggodacat

      Perhaps for the first few weeks or months there will be “unity”, but when the household essentials stop flowing in and the bodies start piling up, Americans will turn on each other. Hopefully it will be everyday folks vs the elite, but I doubt it.

      1. redleg

        A US shooting war with Russia and/or China will go nuclear quickly and won’t last longer than a few weeks.
        The US lacks the military and industrial capability to conduct conventional war and the only thing left are nukes. China and Russia know this, and must assume that the first US missiles launched are armed with nukes and will respond in kind before the US missiles reach their targets.

  23. maverick

    Very interesting talk and I found an interesting blog. Thank you for you contribution in the round table

    1. Yves Smith Post author

      Thanks for taking the trouble to give us feedback! I hope you’ll visit us from time to time.

      Naked Capitalism is particularly noted for the quality of its comments section, so if you read any of our regular posts, please be sure to check out the comments.

  24. Jim

    Very interesting talk, and a great surprise to find Gonzalo Lira at Naked Capitalism rather than the Saker or the Duran. Hearing Yves was definitely the highlight.

    Izabella Kaminska, however, struck me as living in some alternative fantasy land. Russiagate-like transference of all evil to “Putin.” China as a “threat.” The idea that a massive crisis (energy, financial, food, etc) will result in “the West” or countries within it “coming together,” and somehow quickly organizing new production and distribution chains? I want some of what she’s smoking. As someone noted above, to even begin to rebuild US manufacturing would require massive numbers of skilled workers, when all continuity was deliberately broken, and the previous generation is long retired or dead. This will somehow be overcome in the midst of a massive crisis, when US society is fracturing already?

    John Mearsheimer gave a talk recently to a group of faculty and graduate students at the Robert Schuman Institute for Advance Studies, in Florence, Italy, restating his position that the US and NATO are primarily to blame for the crisis and war in Ukraine. The questions and comments from audience members afterwards was distressing, though illuminating. If these are the future “leaders” of the US and EU, we’re in a hole as deep as the Grand Canyon. They were incapable of processing anything Mearsheimer had just explained to them, so enraptured were they with their own fixed beliefs, devoid of factual basis. I got that same feel listening to Izabella Kaminska. Here’s the whole talk, including the Q&A.

    1. Foy

      Agreed Jim, I saw the Mearshiemer Q&A earlier, and then listened to Izabella and thought the same thing.

    2. KD

      Yves came down like the mighty thunderbolt of Zeus with facts and studies and argumentation and you could tell that Isabella knew she was out of her league and couldn’t leave fast enough.

      As far as coming together, any direct war in Ukraine or conflict in Taiwan is going to go down like Vietnam II. Everyone loves a war when it is good TV and contract soldiers are dying. Not so much when their sons and daughters are being called up to fight it.

      You can talk about the lack of materials and industrial production capacity, but on the level of morale, you have taught the best and brightest that war is outmoded, nations are anachronisms, America stands for white supremacy, kneel for the flag, and then you think you are going to be able to conscript these people to fight a war, not to mention so many of them are out-of-shape, on drugs, and/or mental cases. Especially when the war won’t be against goatherders in sandboxes but peer war with high casualties.

      1. KD

        The above considers the effects of conscription, but a peer war, given existing weapons capacity, will mean missile strikes in the homeland, whether nuclear or conventional. I wonder what a few volleys in Northern Virginia would do the focus the minds of the U.S. leadership.

  25. amechania

    I’ve just been listening for the first 2 hours until the split.

    You mention literacy. We try to prognosticate, but I will remind everyone that 1/10 male children are born autistic. I’ve read many of the theories, but I chose to blame the pesticides. The research on ‘micro encephalopathy’ is stunning. Still probably the pesticides.

    The ‘new old supreme court’ ++sarcasm has decided the EPA shouldn’t be involved in such decisions, but Round Up (TM) Paging all cowboys. Roundup

    Anyways, I’m here to speak about literacy. I can’t speak of it, but even severely disabled kids can be taught to WANT to read with loving support and 4 hours a day. Not even every day. The fact that we can’t achieve that collectively speaks poorly for a future where 1/10 (or more, using basic projection) male children are born… permanently distinct.

    are born autistic, perhaps profoundly, here and now.

    1. hunkerdown

      “Can’t, or won’t?” as moralistic bourgeoisie love to say. Here, those three words turn all the concern about the apparent weakness of the collective will into a radical accusation of the bourgeois commercial ideal, the tedious manners culture with which classes conceal the system’s REAL values (an audit for which NT society is far, far overdue to sit), the very ideology of morality, and the particular core Western value of subordination, without whose social-environmental bullying (by glyphosate or manners culture or whatever else) autism would hardly be a disorder. Autism, like any other diagnosis, is just a value judgment, after all.

  26. Stephen

    Apologies for another reflection but it was a very good conversation.

    I see the logic for Izabella’s comment about us standing together in adversity. My mother always used to talk about how together people were in the UK in WW2 in the face of air raids and so forth.

    However, this presupposes that everyone buys into the objective that the adversity is being incurred to fight, and that the adversity is actually helping the fight.

    President Putin objectively is not the new wannabe conqueror of the world, this is not 1938 and the west shares much (or even most) of the blame for what is happening. However, propagandized, I think many people realise that. Failing to activate Nordstream 2, playing games with reverse flows down the Yamal pipeline and limiting hot water usage hurts us far more than it hurts Russia. People will die in Europe in the winter if energy is not available. Period. That really is the trade off.

    Hard to see how people will align in adversity to support a ropey cause that their own sacrifices are not really furthering.

  27. Ignacio

    Wow, what an interesting discussion in the video. I will be today watching it in pieces and I have already watched the first 20 minutes and felt the need to stop and leave here a comment of gratitude for this.

    First I wanted to hear Yves voice and loved to do so, as well as Isabella and Gonzalo (forgive me for using the names instead of surnames it is my way of expressing closeness and gratitude), but particularly Yves whom I have reading for so long. That was for me the first good thing about the interview.

    Secondly there is a lesson in those first 20 minutes that has been imprinted in my mind: to realise how much things are changing, in the economy and in the labour markets, the workforces, and the gig economy while at the same time the economic analysis is very much behind the curve, not realising what is really going on in our societies and missing perspectives. There is a fundamental disconnect that explains a lot about how Western elites are misleading and shooting in our own feet.

    There was a comment from Yves on how some or many families have changed their ways and seeing that for instance having two salaries in a household might not longer be seen as necessary and you could save a lot on things like children care, housekeeping etc. I have seen lots of anecdotal evidences on this of very different kinds and increasingly in some kind of professions related with mechanics (car and appliances maintenance and repair), house reforms and renovations, electricity… –it has to be said that some times with disastrous consequences when unskilled people try to do everything by themselves–

    Another comment from Isabella was on the different attitude of the generations now incorporating to the labour force (and during the last two decades probably) brought me to more anecdotal evidence and particularly to a generational divide that is quite real. I know of a few well established professionals and business owners that complain a lot about how difficult is now to find and contract the younger and they ask: aren’t they willing to work any more? Is this a generation of idlers? On the other side the younger might not be willing to participate in SOME PARTS of the gig economy as they don’t find the opportunities appealing for them. Some many of these parts are being filled by immigrants in more desperate situation. So, we need migrants even if we complain, to do part of the job!

    Again, thanks a lot for this. looking forward for the rest of the conversation.

  28. The Rev Kev

    Really enjoyed listening to that roundtable discussion. Nothing fancy, no talking heads, no fancy gimmicks or graphics – just three smart people talking over current events. Izabella Kaminska is very smart and I can see her idea of people pulling together but I fear that they will always be undermined by the present substandard leadership class. So as an example, people were willing to sacrifice to fight the present pandemic but governments everywhere (except for one) totally undermined them by pushing through ‘herd immunity’ policies, even though honest scientific advice would have said that it would never work. And which is why I was talking about substandard leadership. I noticed that Yves seems to come more into her own in a one to one discussion as sometimes having three people talking gets distracting. And listening hard to her voice, I would have pegged it as coming from somebody in their early forties with a delightful laugh. Hopefully we will get more of this down the track.

  29. Louis Fyne

    have a branch of extended family in Paraguay.

    basic-needs-autarky does to its oddball domestic politics in the 70s and 80s.

    can’t speak about its water security or health care for outlier maladies, but Paraguay is like the northern Maine of Latin America (you can’t get there from here—few directly connected cities via air).

    for the right type of person with appropriate expectations, Paraguay would be a great place. quiet, peaceful, detached from the trans-Atlantic world

  30. The Heretic

    A question to Yves and fellow commentators…
    If an Italian or German bank were to fail, why can they not redo what was done in 2008? The Bundesbank and Bundestag would have a temporary ‘coming to God’ moment, the ECB would be permitted to print what Ever quantity of Euros are necessary and of course the US Fed would oblige in some manner. The Institutions could be saved.

    The real problems of course cannot be printed away, so a lack of natural gas will cause either Industries to close (bad for Dax… perhaps we should buy some put options) or people to freeze or some combination of both.

    I hope some of you can shed light on the situation. Thanks.

    Btw, Neon is distilled from air.. so if you can build cryogenic plants (which requires turbines and compressors, which we can certainly do), the neon problem can be solved relatively quickly. A fairly simple Thermodynamic design problem, through still difficult to implement.

    1. Yves Smith Post author

      Your question was effectively an assignment, which is a violation of our written site Policies. I would have deleted your comment if I had come across it first, but since it has been up, I now feel compelled to deal with it.

      First, as I explained in the video, in 2008, the productive capacity of the economy was not impaired. The issue was inflated housing prices, turbo-charged by derivatives on the worst subprime exposures which were 4-6X the real economy value. The unwind of financial bubbles can still blow back to the real economy if you see loan defaults lead to bank closures that then hit activity across the economy.

      Second, the European leg of that crisis was almost entirely in the dollar books of EU banks, as in they ate a lot of the US bad subprime cooking. As I again explained in the video (and Gonzalo added), the Fed opened up dollar swap lines so the EU could lend dollars to EU banks. The US then also did a ton to prop up the value of housing via the Fed using QE to lower mortgage interest rates (Bernanke was explicit that that was what QE was about).

      This crisis is entirely different. Real economy productive capacity is directly impaired by the impact of Covid on workers (both literally their ability to work and secondarily their willingness to work in certain high risk settings. We then have the breakdown of globalization due to Russia sanctions.

      The sort of financial collapse that might happen in Europe will be the result of gas shortages. The EU propping up banks will not bring failed German businesses and their dud loans back to life.

      I should not have to repeat what I said in the video. You should listen again. This is the aural version of a reading comprehension problem.

      As for neon, please do not make statement that reveal inadequate investigation and then force me to correct what you said. The neon problem cannot be solved quickly or easily. Do your homework before spitballing that something is easy. That is the sort of MBA thinking that got us in this mess in the first place.

      Neon separation is very much a scale activity and benefits from being co-located with steel foundries. From R&D World:

      Air separation plants are expensive to build and operate. The products aren’t particularly difficult to transport, whether as a cryogenic liquid or compressed gas, but they are expensive to transport. Air separation plants generally serve a relatively local market or a large consumer. Distillation processes scale well, benefitting from what is commonly called the “two-thirds scale factor.” This is a mathematical relationship between how big something is and how much it costs to build. The capital investment to build an air separation plant grows at only 2/3 the rate of the capacity. Stated simply, bigger is better.

      The neon industry in Ukraine takes advantage of very large air separation plants associated with steel manufacturing. These have economies of scale. They are a source of low-cost, crude neon-containing material that is a great starting point for making the purified neon used in lasers. Two manufacturers, Ingas and Cryoin, came to dominate the neon supply. They built on a feedstock advantage, gaining a further scale advantage. By some accounts, Ukraine was supplying about 70% of the world’s neon. Others estimate closer to 50%. No matter what the exact figure, the result is a dramatic and significant drop in the supply due to the war.


      And the Financial Times, as reproduced in ars techinca:

      Gas mixtures that include neon are used to power lasers for etching patterns into semiconductors. Shifting away from Ukraine is difficult because it has to be refined to a 99.99 percent purity, a complex process that only a few companies around the world can do — including some based in the Ukrainian port of Odessa…

      Japanese chipmakers Renesas and Rohm said they either found supplies from other markets, such as China, or had stockpiled inventories of neon.

      Samsung and SK Hynix, the world’s two largest memory chipmakers, “have plants in China so they will have little trouble getting the gases for chip production there,” Kim said. The companies said the war’s impact on their chip sales would be minimal in the short term.

      But in a note published shortly before the invasion, analysts at TrendForce warned that even if alternative sources are secured, “product certification will take several months or even more than half a year,” causing “scarcity.”

      They warned that “the automotive industry, which requires large quantities of power management chips and power semiconductors, will face a new wave of material shortages.”

      Akira Minamikawa of market research firm Omdia said that all products using chips would be affected because only the most cutting-edge semiconductors did not require neon in their production. “It’s not like neon is used in chips for cars but not for smartphones.”


  31. mrsyk

    Finally got to listen to this (while putting up some firewood). Educational, entertaining and with some great advice (stock beans!). I found the discussion comparing 2008 to the potential financial crisis glaring at us in the headlights rather terrifying. These certainly are interesting times.

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