What’s Changed and What Hasn’t in a Tumultuous Year

By Charles Hugh Smith

Source: Of Two Minds

Inequality is America’s Monster Id, and we’re continuing to fuel its future rampage daily.

What’s changed and what hasn’t in the past year? What hasn’t changed is easy:

1. Wealth / income inequality is still increasing. (see chart #1 below)

2. Wages / labor’s share of the economy is still plummeting as financial speculation’s share has soared. (see chart #2 below)

What’s changed is also obvious:

1. Money velocity has cratered. (see chart #3 below)

2. Federal borrowing / spending has skyrocketed, pushing federal debt to unprecedented levels. (see chart #4 below)

3. Speculation has reached the society-wide mania level. This is evidenced by record margin debt levels, record levels of financial assets compared to GDP and many other indicators. (see chart #5 below)

Interestingly, every one of historian Peter Turchin’s 3-point Political Stress Index is now checked. Recall that these are core drivers of consequential social disorder, the kind that leads to empires collapsing, the overthrow of ruling elites, social revolutions, etc.

1. Stagnating real wages (i.e. adjusted for real-world inflation): check

2. Overproduction of parasitic elites: double-triple check

3. Deterioration of central state finances: check

But what about social changes? This is an interesting topic because social changes are less easily tracked (few even ask relevant questions and compile the data). Social trends are often more difficult to discern, as surveys may not track actual changes in behavior: people may give answers they reckon are expected or acceptable.

Here are four long-term trends that may have been accelerated by the pandemic:

1. The residents of overcrowded tourist destinations are sick of tourists and are demanding limits that protect increasingly fragile environments and resident quality of life.

Here’s a typical observation of a resident in Hawaii now that tourists are coming back:

Sunday I saw a group of 30 spring break tourists littering the beach with red cups and bottles of alcohol and trash. They had a table full of booze on the beach and were happily leaving their trash everywhere. No masks and no cares for Hawaii. When they left, instead of using the beach access they all climbed over the fence into someone’s yard because it saved them a minute of walking.

No I don’t miss tourists.

This is a global phenomenon. The absence of tourists has awakened a powerful sense that the profits (which flow into elite hands, not local economies) have taken precedence over the protection of what makes the destination worth visiting.

2. Work from home is here to stay. The benefits are too personal and powerful. Corporations demanding a return to long commutes and central offices will find their most productive employees are giving them “take this job and shove it” notices as they find positions with companies that understand that you can’t turn back the clock or ignore the benefits of flexible schedules.

3. Consumer behaviors have changed and are continuing to change. This is not just an expansion of home delivery; it’s a re-appraisal of big-ticket spending on concerts, entertainment, sports events and many other sectors that depend solely on free-spending consumers who ignore the recent doubling or tripling of prices.

4. Perceptions of the wealthy are changing. I touched on this topic in The Coming War on Wealth and the Wealthy (1/5/21) and The Coming Revolt of the Middle Class (1/27/21). Inequality is America’s Monster Id, and we’re continuing to fuel its future rampage daily.

Nicaragua: Land of Revolution, Poetry and Solidarity

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Given its richness and complexity, it would be impossible to give an accurate overview of contemporary Nicaraguan society without years of research and experience within the country. What I humbly offer is just one visitor’s perspective of aspects of the culture picked up from about three week’s worth of experiences and interactions with a small cross-section of the population (mostly poor and middleclass people working as cab drivers, tour guides, museum docents, restaurant/shop employees, and agricultural workers) as well as tourists and expats.

What becomes apparent to visitors to Nicaragua soon after getting off the plane is the country’s pride in two of its most famous figures, revolutionary Augusto Sandino and poet Rubén Darío. Images of them can be seen on posters and decorating various items in gift shops within the airport, and in almost every town and city one can find them depicted on murals and statue monuments (other popular figures include Carlos Fonseca, Che Guevara and Hugo Chavez). The culture’s love for poetry is also expressed through its annual International Poetry Festival which has been hosted in Granada since 2005 (parts of which I was fortunate enough to witness while I was there).

Another sign of Nicaragua’s love for language arts and literacy is the ubiquity of bookstores and libraries which can be found in even the smallest towns. Roots of this aspect of the culture goes as far back as the late 19th century when the Spanish-American literary movement known as Modernismo was started by Rubén Darío who was born in Matagalpa and raised in León (where he also died). Another factor is the Sandinista Literacy Campaigns of 1980 and 2005-2009 whose mission was not just to eradicate illiteracy but to increase political awareness and nurture attitudes and skills related to creativity, production, co-operation, discipline and analytical thinking.

A sophistication of political thought and sense of social consciousness in Nicaraguan society was made apparent to me through extended conversations on history and current events with tour guides of diverse backgrounds (who were the locals I happened to speak with for the longest periods of time due to the nature of the activity) as well as shorter exchanges with random people encountered during the trip. While my impressions of the culture may be biased due to comparatively low levels of political awareness I usually sense when conversing with most U.S. citizens (not including readers & followers of this blog) and more frequent interactions with Nicaraguans from progressive organizations I intentionally sought out to support, I’ve heard similar or related observations from other travelers and expats. I feel it’s a real phenomenon that could be a result of the Literacy Campaigns as well as having collectively experienced relatively recent violent dictatorship, revolution, counter-revolution and widespread poverty. Just as individuals of more privileged backgrounds and little experience dealing with loss tend to have less empathy and understanding of moral complexity than those who have lived through tragedy and hardship, perhaps the same could be said of societies?

Other shared, seemingly culturally determined traits I’ve noticed was a sense of directness and sincerity and willingness to treat everyone as human beings. This is especially true regarding dealings with tourists from the U.S. I was a little surprised to experience no sense of resentment directed towards me for being from the country whose government has been the source of so much pain and suffering. Imagine if some country’s government propped up tyrants in the U.S. or supported militant terrorist groups with money and weapons (which the CIA has done in many places including the U.S.). Would we be as charitable towards the citizens of that country? In fact, from speaking to a docents at the Carlos Fonseca Museum, and León’s Museum of the Revolution, even former adversaries on different sides of the revolution have for the most part resolved their differences and resumed relationships as friends, family and fellow citizens. But this isn’t to say there aren’t differences in political perspectives and opinions on the current government.

One of the more surprising opinions I heard was from a young eco-tour guide in Jinotega who was a recent graduate of a college in León. He mentioned that he was doubtful that Nicaragua would be much different had the Samoza regime stayed in power. This was a bit shocking for me in light of what I’ve heard about Samoza’s human rights abuses but it made me think of how things might have changed or stayed the same. It’s likely the crackdown on dissidents would continue or worsen, but would the economy have been improved had the revolution and embargo never happened, or would it have been the same or worse due to increasing militarization and corruption? In either case, it seems unlikely Nicaragua would avoid long term economic harm caused by structural adjustment policies demanded by the International Monetary Fund and World Bank. In contrast to the guide in Jinotega was the eco-tour guide in Matagalpa who took me and other tourists to Mombacho Volcano. He made it clear that he felt Nicaragua had greatly improved since the overthrow of Samoza, embedding his views into the tour by talking about how during the Samoza regime prisoners would sometimes be dropped from helicopters into active volcanoes. He also took pride in the fact that Nicaraguans now have access to free education and healthcare.

The most memorable and moving conversation was with Hugo, a docent at the Museum of the Revolution in León who fought for the Sandinistas as a young man. Through an interpreter he told me of the impact the revolution has had on his life. Many of his siblings and relatives were forced to leave the country and many of his comrades died in battle. He seemed disappointed that there has not been greater improvements as a result of the massive struggle and sacrifice. He mentioned how after the revolution some Sandinista veterans were given parcels of land but many were given less support than they deserved and were promised in terms of land, pensions and healthcare. Hugo himself was struggling economically. As a side-gig he also sold bootleg documentary dvds outside the museum, one of which I purchased (FSLN: Un Pueblo en Armas). Despite his personal hardships, he made it clear that he remains a patriot and has no regrets about fighting the Somoza regime.

One topic that often arose unprompted was upcoming plans for a new canal allowing ships to travel back and forth from the Atlantic Ocean through the San Juan River and Lake Nicaragua to the Pacific Ocean. Though such ideas were proposed nearly 200 years ago, just last year Nicaragua’s National Assembly approved a concession agreement with the Hong Kong Nicaragua Canal Development Investment Company (HKND) giving them the rights to construct and manage the canal for 50 years. In January HKND CEO Wang Jing and President Daniel Ortega issued a statement that construction of the canal would begin in December 2014. Across the board, Nicaraguans I spoke with seemed excited about the plans but conflicted. The most skeptical opinion came from the eco-tour guide in Jinotega who took me to Lake Apanas. Though he acknowledged the potential benefits it would have for Nicaragua’s economy, he was well aware of the inevitable negative impact it would have on indigenous species and ecosystems. At the same time, he seemed resigned to the fact that coming changes are inevitable. He pointed out that Lake Apanas was artificially created to produce hydroelectric power for several towns. Once thriving trees and farmland are now underwater, but the area is now a habitat of different and diverse flora and fauna which supports the local economy through recreation, tourism and fishing. Other people I spoke with about the canal voiced concerns about whether Nicaragua would truly benefit from the project or if it would create a flow-through economy in which most workers and contractors would be brought from China and primarily Chinese corporations reaped the profits.

Another topic that frequently came up (most likely because the livelihoods of many people I spoke with are largely dependent on it), was the rise of Nicaragua’s tourism industry within the past few years. While its effect of boosting the economy is widely acknowledged, it has also in some cases led to problems such as gentrification, inadequate access to land and resources reserved for tourists and foreign owned corporations, commodification or loss of culture. I’ve also witnessed first-hand how Nicaraguan service sector workers have had to tolerate rude behavior from entitled wealthy tourists or expats doing their visa runs. To their credit, the workers showed incredible patience and professionalism, much more, I suspect, than employees and native citizens in the U.S. would show towards foreign tourists and expats had the tables been turned.

The following are just some of the more trivial miscellaneous observations that seemed odd or interesting to me from a visitor’s perspective:

  • It seems to be trendy for car owners (especially in larger cities) to decorate their vehicles with colorful LED lights on the hood, around license plates, underneath, etc.
  • Motorcycles are extremely popular. One tour guide who’s also a motorcycle rider said he estimates the number of other bikers he sees on the roads has nearly doubled in the past 7 years.
  • On a “Chicken Bus”, be prepared to be squashed like sardines if you don’t get a seat. And try not to end up near the front door because they usually won’t close it even while speeding through steep winding (occasionally unpaved) roads in the mountains.
  • The rule of the road is usually the largest vehicle that gets there first has the right of way. The order of hierarchy looks something like this: large truck>bus>van>SUV/small truck>sedan>Horse>tuk-tuk/pedicab>motorcycle>scooter>bicyclist>pedestian
  • DVD bootleggers work extremely quickly. I saw a bootleg of the Robocop remake on the streets at least a day or two before its official release in theaters.
  • While staying at the few places that had cable television I flipped through channels to get an idea of what Nicaraguan viewers were offered. I was disappointed to find that out of nearly 100 channels, about 2/3 of them featured primarily dubbed or subtitled U.S. television programming and Hollywood blockbusters. Out of the remaining 1/3, about a dozen featured mostly telenovela soap operas, another dozen were spanish language original programing featuring occasional dubbed or subtitled Hollywood films and spanish language versions of popular North American game shows and reality TV, there were about a half dozen music channels featuring latin and some U.S. pop music and just a few regional and public access stations devoted solely to news, local culture and community events.
  • For some reason, 70s-80s era adult contemporary or “yacht rock” music seems to be popular. While in more than a few shops and restaurants that don’t cater to tourists I’ve heard the likes of Brian Adams, Air Supply and Christopher Cross playing on the radio in the background.
  • In more bohemian “cultural cafes” the music of choice seems to be artists eternally popular with college kids and hippies (ie. Hendrix, Doors, Beatles, Pink Floyd, Bob Marley etc.) which though I am neither I do enjoy.
  • Backpacks and shoes seem to be popular items. At almost every major street market  in every town I’ve been to, usually located close to the main bus stations, there were huge numbers and varieties of these items sold at multiple booths. My theory is that since most kids in Nicaragua go to Catholic schools and are forced to wear uniforms they might value these items more as expressions of individuality (and they’re practical).
  • Many young people in Nicaragua (mostly middle/upper-middle class) are just as enraptured by wireless technology as people in the states.
  • Another favorite pastime among the youth is hanging out in the central parks (usually located near the largest church) where I’ve seen some groups do awesome breakdancing competitions.
  • The “typico” Nicaraguan meal of salsa, beans, rice, eggs, cheese and plantains is cheap, delicious and will get you through the day.

Back in the Belly of the Beast

Those who spend their lives within the belly of the beast see mostly the insides of the belly. Traveling outside the beast gives one a better idea of what the beast looks like and the impact of its actions on the world. For those who missed the 1/31 post (my last “live” post before this one), for the past few weeks I’ve been traveling through Central America. More specifically, exploring various towns, cities and nature reserves across Nicaragua. Though my primary reason for being there was for vacation, I took it as an opportunity to learn much about the region’s culture, environment, and often turbulent past. Though I’m sure much has happened while I was away (I’m still catching up on news), within the next few days I hope to share some of what I learned and experienced on the trip.

For others who might be planning vacations to other countries combining recreation and education, the importance of having at least a basic grasp of the native language (or traveling with fluent bilingual people) shouldn’t be underestimated. It greatly enriches interactions not only because locals can express themselves more authentically in their primary language, but it could help reduce potential social tensions. While many less developed nations including Nicaragua are increasingly economically dependent on the tourism industry, tourists need to be aware of problems their presence may cause or contribute to such as gentrification, cultural commodification and cultural dilution. U.S. tourists speaking in native tongues might not solve such problems, but it at least symbolically helps counteract inherent power imbalances while making possible more conscious consumer choices such as supporting smaller ecotourism, agritourism and community-based establishments which may not offer the same level of English language services and materials as larger, often foreign-owned businesses which cater to English language speakers. Greater fluency in the native language also allows tourists to acquire and compare more information on essential expenditures such as transportation, lodging and food, resulting in options of higher quality or greater practicality (and preferably locally-owned) for less money.

That being said, I’m definitely not fluent in Spanish but was fortunate enough to travel with someone who is. Without my travel partner I wouldn’t have been able to experience nearly as much as I did. Among the highlights:

  • Jumping into the Rio Coco in Somoto Canyon from a height of 12 meters (high enough for me).
  • Hiking though a cloud forest in the mountains surrounding Jinotega.
  • Kayaking on rough waters of Lake Apanas.
  • Seeing indigenous petroglyphs in a rural village near Matagalpa.
  • Climbing to the roof of the Basilica Catedral de la Asuncion in Leon, the largest church in Central America.
  • Learning to ride a motorcycle and driving it across Ometepe Island.
  • Hiking around the top of the Mombacho Volcano Nature Reserve.
  • Boating through Las Isletas near Granada.

There’s lots I’m leaving out, including visits to various cultural museums in different towns, some of which I plan to feature in future posts.