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A one-way trip on Avenue 5

Every now and then, someone will point out something which was so obvious that you had completely overlooked it.  Like Robert Anton Wilson asking what is the difference between the dollars that the Fed prints and the dollars – using the same plates, paper and ink – that the mafia prints?  Or Michael Shellenberger wondering why, “If solar and wind are so cheap, why are they making electricity so expensive?”  It is in this light that we might consider this conversation between Jeff Snyder and Steve Van Metre about Jerome Powell’s remarks at Jackson Hole…  Why, if the central banks have all of the best PhD economists, the best data, and the most accurate econometric modelling, do they raise interest rates in small increments?  If, as they claim, they know the “natural” rate of inflation, why not set the interest rate accordingly… why faff around?

The answer was the premise behind Armando Iannucci’s short-lived sci-fi satire Avenue 5, which was cancelled after its second series, presumably when the corporate ESG types at HBO realised that Iannucci had included them among the people it was targeting.  The basic storyline is about a passenger spaceship – the Avenue 5 – which suffers a momentary gravity loss, causing it to deviate from its orbit, extending the return trip to Earth to three years rather than the eight weeks the ship was provisioned for.  To add to the misery, the ship’s designer and chief engineer is killed when the ship is thrown off its course.  Meanwhile, the captain – played by Hugh Laurie – is no more than a front man, paid to be charismatic and to gladhand the passengers.  The same goes for the photogenic crew, who are merely professional models hired only to appear to control the automated ship.

The passengers on Avenue 5 – that’s us folks – generally have more money than sense, are extremely neurotic, and are long passed the point of being able to respond effectively to a crisis.  There’s even the Stockton Rush-type godzillionaire owner of the ship, whose control freakery and inane orders threaten to turn a crisis into a full-blown disaster.  Only a handful of unphotogenic physics and engineering geeks kept well out of sight of the passengers, have the first idea how to operate the ship… and nobody wants to listen to them… There’s even the inevitable “conspiracy theory” backlash, when a celebrity passenger convinces some of the passengers that their predicament isn’t real, they are not really in space, and that if they follow him out of the airlock, they will discover that the whole thing is just a film set.

Jerome Powell, Andrew Bailey, and Christine LaGarde are our not-so-charismatic captains, while the plethora of fifth-rate politicians which now populate our governments are the not-remotely-photogenic hired help brought in to pretend to steer the automated ship.  Gates, Musk, Zuckerberg, et al., are our demented godzillionaire owners whose insane prescriptions are causing us to crash and burn.  And, yes, we even have our complement of grounded physicists and engineers to remind us that, irrespective of what the uber-man-children who own everything claim, we won’t be breaking the laws of thermodynamics any time soon.

The reason the central bankers are raising interest rates in increments is because they have to be seen to be doing something.  And so, they raise rates a little, and then stop to see if anything breaks.  When nothing appears to break, they do it again.  Repeat and rinse until – because rate hikes take months to have an impact – the entire financial edifice comes tumbling down.  At which point, just like in 2008, they will claim that “nobody could have seen it coming” – because they certainly can’t.

The chancers, spivs and con artists who populate our governments are doing something similar.  These are people who claim to be implementing a combined energy transition and digital revolution despite being unable to get someone to throw tarmac – the second most recycled material in the UK – into the growing number of potholes in our roads.  Indeed, beyond the walls of the handful of still prospering (for now) top-tier university metropolises, decay and accelerating collapse is becoming harder to ignore.

Were this just televisual entertainment, it might, just about, be bearable.  But the clown show at the top has profound consequences for millions of people at the bottom.  Although bad enough in itself, pushing more than a million households into mortgage arrears doesn’t stop with homelessness.  As more than a million households rein-in their spending in a desperate effort to keep a roof over their heads, consumer demand across the economy is going to collapse.  And in a retail-focussed, debt-based, import economy like the UK, that spells bankruptcies and job losses on a scale not seen since the 1980s.  And all the while, the politicians are asleep at the wheel, relying solely on interest rate rises to reverse inflation which is largely a consequence of their actions – not just in stupid stunts like paying for everyone’s essential electricity last winter, or picking up our restaurant bills in the summer of 2020, but by locking down the economy without even considering the consequences, or by self-sanctioning critical energy and resource supplies in order to signal their impotent rage over the Russian invasion of Ukraine. 

Unlike the sci-fi satire – where partial “solutions” are needed to keep the series going – our tragicomedy is set to crumble in short order.  And when it does, one of the big delusions of our age – the illusion of agency – is going to go with it.  For the moment, millions of people worldwide have bought into the belief that only an obstinate ruling class stands between us and a better world.  Remove them, we assume, and we might easily create a fairer economy, an energy transition, and a sustainable environment.  Such ideas though, tend to be the preserve of affluent metropolitan liberals living in the few islands of prosperity which remain within a western empire which is rapidly going the way of the Dodo… and when the affluence comes to an end, as property prices and paper asset values plummet, finding sufficient food and keeping warm in winter will become more pressing than, for example, the vain attempt to generate “green growth.”  In short, without a functioning economy, all of the avenues for managing the decline which is coming will be cut off.

The nightmare scenario is this: with the economy in depression and the energy cost of energy rising steeply, a critical mass of people across the western states will mobilise and vote for not just the revival of oil and gas drilling, but a return to the one fossil fuel which we still have plenty of… coal!  Just as China turned to coal as a cheap alternative to oil in building its economy over the past 20 years, so a country like the UK, experiencing severe hardship while still sat on a mountain of coal – including a big deposit of lignite across Northern Ireland – will put the short-term need to power what remains of its critical infrastructure ahead of long-term considerations about the environment.

As you made it to the end…

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