Soros says West disintegrating like former USSR
Renowned investor George Soros [says] the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.
Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union…
“We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”
“I don’t remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world,” [former Federal Reserve chairman Paul] Volcker said.
If you’re curious how a Soviet-style collapse would reshape America, you might want to read a recent speech by Dmitry Orlov, who says he predicted in 1995 that the U.S. was following the U.S.S.R.’s path to ruin:
I started to see Soviet/American Superpowerdom as a sort of disease that strives for world dominance but in effect eviscerates its host country, eventually leaving behind an empty shell: an impoverished population, an economy in ruins, a legacy of social problems, and a tremendous burden of debt.
While I hardly agree with everything Orlov says, his speech certainly provokes much-needed thinking about how to prepare for our (suddenly rather bleak) future. Perhaps especially shocking is Orlov’s argument that the Soviet citizenry was much better prepared to muddle through their economic collapse than Americans are to survive ours:
Many aspects of the Soviet system were paradoxically resilient in the face of system-wide collapse, many institutions continued to function, and the living arrangement was such that people did not lose access to food, shelter or transportation, and could survive even without an income. The Soviet economic system failed to thrive, and the Communist experiment at constructing a worker’s paradise on earth was, in the end, a failure. But as a side effect it inadvertently achieved a high level of collapse-preparedness. In comparison, the American system could produce significantly better results, for time, but at the cost of creating and perpetuating a living arrangement that is very fragile, and not at all capable of holding together through the inevitable crash.
Orlov says government should stop trying to save the failed system and instead focus on life’s necessities:
What should [government’s] realistic new objectives be? Well, here they are: food, shelter, transportation, and security. Their task is to find a way to provide all of these necessities on an emergency basis, in absence of a functioning economy, with commerce at a standstill, with little or no access to imports, and to make them available to a population that is largely penniless. If successful, society will remain largely intact, and will be able to begin a slow and painful process of cultural transition, and eventually develop a new economy, a gradually de-industrializing economy, at a much lower level of resource expenditure, characterized by a quite a lot of austerity and even poverty, but in conditions that are safe, decent, and dignified. If unsuccessful, society will be gradually destroyed in a series of convulsions that will leave a defunct nation composed of many wretched little fiefdoms.
If you’re looking for a new Depression-proof career, I recommend gallows humorist:
1990 was particularly tough when it came to trying to score something edible. I remember one particular joke from that period. Black humor has always been one of Russia’s main psychological coping mechanisms. A man walks into a food store, goes to the meat counter, and he sees that it is completely empty. So he asks the butcher: “Don’t you have any fish?” And the butcher answers: “No, here is where we don’t have any meat. Fish is what they don’t have over at the seafood counter.”
Posted by James on Tuesday, February 24, 2009