Bert Hielema–Columns and Writings

Year 9-11

Barack Hussein Obama is now the 44^th president of the United States, an exceptional man called to serve in exceptional times, facing exceptional challenges.

Until the World Trade Center calamity, President Bush was just hanging in there, only half-heartedly engaged for failure of a focus. Then Osama struck and from there on terror defined his tenure, even invading Iraq under that banner.

We now have Obama. We already know what will define his presidency. We can already state that “What Osama was to Bush is what the Bust will be to Obama.”

Let me go back some 80 years, to the onset of the First Bust, 1929, a year when unemployment was only 3.3 percent, which almost tripled the next year to 8.9, followed by 15.9 percent in 1931, 23.6 thereafter, reaching a high of 24.9 in 1933.

We now have an official 7.2 percent of unemployed in the USA, which omits those whose benefits have expired, fails to count the people who have given up looking for work and disregard those who want full-time jobs but can secure only part-time. When these are included we arrive at 13.5 percent, approaching Depression levels.

Recessions are natural phenomena. Once overproduction and too much inventory have gone through their cycle, matters revert to normal. However, a Depression doesn’t cure itself, all too evident from the frantic efforts to reverse the current trend.

The 1930’s Depression was bailed out by World War 2. In 1942 everybody had a job, thanks to the production of tanks, warships, planes, bombs, with many millions in the armed forces. The war made America the industrial and financial powerhouse of the world. During it the USA financed Britain and later helped out Germany and Japan. Large deficits then were not devastating, due to the high domestic savings rate.

The difference between 1929 and 2009 cannot be greater.

Going into the Dirty Thirties people were thrifty: no credit cards circulating, no liar’s loans lurking. Most houses were paid for. People had close-knit families, were informed, relied on self-help, eager to learn, willing to be led, mainly rurally based.

During World War 2 Texas was gushing with oil, Fort Knox was overflowing with gold. The word pollution had not yet been invented. Every country in the world looked to Uncle Sam for a loan.

The difference between 1929 and 2009 cannot be greater.

Now the trillions of US dollars aimed as medicine for the melt-down are all borrowed from abroad, while the American family structure is fragile, peoples’ needs more extravagant, savings non-existent, debts abound, their fixed expense- cell or land line phone, internet, cable or satellite service – high, their general level of knowledge low, their prejudices and beliefs anti-intellectual, their survivor skills minimal, their tolerance of hardship shallow, mainly city-based and threatened by environmental dangers and shortages.

Where will those borrowed trillions go? Fattening the rich, Wall Street, the Stock brokers and banks whose stupidity and greed caused

this crisis in the first place?

Catapulting piles of cash into the pockets of plutocrats pre-supposes that the crisis is an economic one. It is not. Parachuting trillions into a moribund system is like keeping a brain-dead person artificially alive. With the monetary system already on life support, giving it a transfusion with exactly the same toxic substances that caused its illness in the first place, will lead to a certain death.

We need a fundamentally new direction. The death of 40 million human beings during World War 2 was the price paid to cure the last Depression. This was followed by an all-compassing cosmic war on creation, threatening even more casualties, unless we make peace with our planet.

We need a total new strategy that first of all recognizes that Climate Change- also giving record cold- is the great threat. Coping with diminishing resources- even when gas sells below cost – is next. We then can proceed with healing, which includes extensive re-education how to live without ruining nature even more, and using funds wisely by having rail lines going everywhere and bus routes connecting small communities.

Today’s situation reminds me of a little ditty written by James Taylor, part of his “Traffic Jam” song.

Now I used to think that I was cool
Running around on fossil fuel
Until I saw what I was doin’
Was driving down the road to ruin.

Now is the time to replace machine power with man power, globalization with localization. Time is not money: all need a fair wage. The hour has come to recognize that our current way of life is unsustainable, that a totally new approach is needed, if an all-inclusive Bust is to be avoided.

Does Obama see the true picture? What is certain is that ‘as Osama defined Bush, so will this Bust define Obama.’

Year 9-10

With the white of winter everywhere, will a “Black Swan” be easier to spot? Not really, because a Black Swan is like the wind. And who has seen the wind?

The “Black Swan” phenomenon has become popular ever since Nassim Taleb introduced this concept in his book by that name. To quote him:

“It illustrates a severe limitation to our learning from observation or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans.”

My goodness, why can’t people write in plain language? Here’s what the man means: because nothing in the past gives any hint that a certain disaster will ever happen, the chance of this taking place at all is very remote. But when something unexpected does occur, in hindsight we’d say, “of course; makes sense.”

Since the Bible goes back a long way, a few examples from it are not out of place. During the time before the Flood, when Noah built the Ark – they must have called him Nutty Noah behind his back – nobody expected to drown in the centre of Asia, but, things had gotten so bad that, in retrospect, we can now see that a new start was needed. So God pulled a Black Swan.

Good man Job never expected to lose everything he held dear, but, as the Bible shows, Job’s misfortune was necessary to turn him from an ego-centered fellow to an eco-centered man. That Black Swan event still serves as an excellent example of God’s mysterious ways to educate even us today.

Recent samples are the rise of Hitler, the Pearl Harbour bombing, the fall of the Soviet Union, and September 11.

Nassim Taleb gave a good illustration. “Until Thanksgiving the turkeys live well. Everyday, the food arrives. Everyday, they get bigger and fatter. Then, one day, just before the third Thursday in November, when Americans celebrate their traditional Thanksgiving dinner…with no warning, comes the knife…the crash…the collapse…the discontinuity…the 7 sigma event in the turkey’s life that changes everything.”

Look at our banking collapse: A real Black Swan, it changes everything.

Barton Biggs, in his book, “Wealth, War, and Wisdom”, also mentions the Black Swan. Although he still expresses his total commitment to “the wisdom of equity markets”, “the intuitive astuteness of the investors”, and “the perfect and dispassionate judgements of the stock exchanges”, he ends his book on a note of caution. Says he: “expect the unexpected”, prepare for a “Black Swan” event.

Writes this man who has spent his entire life on Wall Street, and is seen as THE authority there: “History often leaps forward in disorderly, chaotic jumps.” He even quotes “The Four Horsemen” those beasts of doom cited in Revelation 6, who “will ride again and the barbarians will be at the gate“.

He says that “By definition, the next Black Swan will be some form of total breakdown of civilized society and the social and financial infrastructure as we know it.” The ongoing Money Melt-Down has the potential to deteriorate into such a disaster. No wonder the Pentagon is preparing 20,000 troops especially for such an eventuality.

Biggs cites one scenario: “The trigger event could be a power failure that lasted not a day but a month and would paralyze the economy.”

This was before the money-meltdown whose consequences are still in its infancy. Says he, ”Whatever happens, it most likely will be an event that is both unexpected and we will not be prepared for”. This fits the present circumstances. Both former Secretary of the Treasury Alan Greenspan and the current one Ben Bernanke voiced their surprise in connection with the current crisis, caused by the enormous fall-out from their cheap money policies. Yes, a true Black Swan situation.

So here is what Barton Biggs recommends: “Another strategy should be to have a farm somewhere or a ranch far off the beaten track but which you can get to reasonably quickly and easily…. You should assume the possibility of a breakdown of the civilized infrastructure. Your safe haven must be self-sufficient and capable of growing some kind of food…. It is expensive to be early, but it is far better to be early than to be late.”

His advice to the wealthy applies to all of us.

The least anybody can do is to have sufficient food in place – canned, frozen, dry, milk powder, root crops, bottled water – for at least 4-6 weeks, together with some basic camping supplies for cooking, heating, sleeping.

We don’t know when the next Black Swan rears it elongated neck. Better be prepared.

Year 9-9

2009 is going to be a colorful year, with lots of pink slips, bank statements printed in mostly red, people feeling blue, hairs turning prematurely grey. Blame the difficult economic times.

I grew up in such a time. I was born before the Great Depression, which ingrained frugality in me, something reinforced by five years of wartime experience in occupied Holland.

My earliest memories go back to two events: as a three year old I snatched a 2.5 guilders piece- called a ‘rijksdaalder’ and having the value of one US dollar then – from the kitchen table, the weekly pay for our live-in help, and went to the store to buy candies. My mother discovered my childish capitalistic venture when the merchant knocked at the door to bring back the change. My second recollection was when, at the North Sea, I was thirsty but unable to drink from the salty water, and suggested to my father to throw in a piece of wood, as Moses did when the Israelites were confronted with brackish water.

So, two things were drilled into me early in life: money and the bible, and I have maintained that interest. I also remember that, as a 10 year old, in those pre-penicillin days, I was ordered to stay in bed for 6 weeks to cure a bladder infection, where I read 100 books. That too has remained an abiding passion.

One of the books I treasure is Yale Historian Paul Kennedy’s 16 year old, “Preparing for the Twenty First Century”. It ends with a timely warning: “Nothing is certain except that we face innumerable uncertainties; but simply recognizing the fact provides a starting point, and is, of course, far better than being blindly unaware of how our world is changing.”

This point is affirmed by the “The Age of Extremes, the Short Twentieth Century- 1914-1991”, by Eric Hobsbawm, another historian.

This 600 page best seller also ends on a somber note: ”We live in a world captured, uprooted and transformed by the titanic economic and techno-scientific process of development of capitalism, which has dominated the past two or three centuries. We know that it cannot go on ad infinitum. The future cannot be a continuation of the past and there are signs that we have reached a point of historic crisis.”

Hobsbawm correctly stated that the 20th Century ended with the fall of the Berlin Wall, which didn’t mean that at that point Century 21 started. The interim from 1991 to 2008, those 17 years of unprecedented profligacy, can be seen as its introduction. I have observed that the rain is always heaviest just before it stops; my chainsaw always has an extra burst of power just before the fuel runs out: that’s how I see the time-span of ‘irrational exuberance’ to quote Alan Greenspan out of context.

We now have reached the point of historic crisis Hobsbawm referred to. The End is here: the End of the Age of Abundance, the age of subdivisions and two cars and super markets and big box stores and drive-to and drive-through whatever, the age of unnecessary upgrading, the age of ‘shop till we drop.’
Welcome to a belated start of the real 21st Century, an era that will rule the rest of our lives as cruelly as the Age of Abundance spoiled us rotten. Welcome to ever greater scarcity and ever more necessary restraint. No market magic will remedy this malaise. No government stimulus will turn the tide. We have arrived at ‘The Limits of Growth” the title of a book that appeared some 35 years ago under the auspices of the Club of Rome.

Capitalism is defined as the perennial gale of creative destruction. Its goal: to maximize personal consumption, and was designed for a world with some 1 billion people and abundant natural resources. We now are approaching 7 billion of ever more greedy customers with shortages of arable land, fish, oil, water and trees.

The future of limits is here; the age of Capitalism is over.
There are simply not enough resources left to satisfy the needs of a rapidly growing population. If all of the world’s nearly 7 billion people consumed as much as we North Americans, we’d need five Earths to support us all. Earth’s 27.7 billion acres of biologically productive land and water can support only about 1.2 billion people at our standard of living and consumption.

I’ll make it through all right in the coming age of Scarcity, having learned a few things in life. But I worry deeply about our five kids – all in their first marriage – and 13 grandchildren. At the very least they will have less, a lot less.

Paul Kennedy ends his insightful volume with an appeal for spiritual renewal. I believe that all spiritual activity and renewal starts with creation caring.

Year 9-8

Year-End Time. Prediction Time. Here is my cluster shot, bound to hit something: next year will be good, bad, excellent, depressing. You take your pick, because your guess is probably better than mine.

Here’s a thought: Noah’s Ark was built by amateurs; the Titanic by professionals. The professional economic forecasters were off the mark so much that even Queen Elizabeth, during a visit to the London School of Economics last month, wondered: “Why did no one see it coming?”

Good question. Although Her Majesty does not pay income tax, she too must have lost money which pains her because she is known to be a frugal lady. One of my younger brothers paid ten of thousands of euros to get a MBA in Geneva, Switzerland, but he too had no clue. So who did get it right? Apparently Pope Benedict XVI – then still Cardinal Ratzinger – was the first to foresee the crisis. His 1985 paper predicted “that an undisciplined economy would collapse by its own rules”.

Even brainy Ben Bernanke, the top financial guru in the USA, was way off the mark. In his Senate nomination hearing of 2005 he said that the system had already benefited from a series of crises that had reinforced its ability to cope with difficult times: “The depths, the liquidity, the flexibility of the financial markets has increased greatly.” There’s another Titanic victim.

So is Jean-Claude Trichet, European Central Bank president, who told four newspapers in mid-July: “Our baseline scenario is that we will have a trough in the profile of growth in the euro area in the second and third quarters of this year (thus from April through September) and, following this, a progressive return to ongoing moderate growth.” Instead, Europe has seen conditions worsening.

There was a time, some 30 years ago, when forecasters prescribed magic authority to computers, visualizing that they, with ever larger processing powers, would make it easier to see what’s coming. We now know better: somewhat more humble, and maybe a shade wiser, we start to grasp that economies are complex, dynamic, non-linear systems in which faintly fathomed facts can fatally influence final outcomes – the proverbial flapping of a butterfly’s wings that causes a hurricane.

So where are the butterflies today? Actually there was one colossal specimen at large: cheap money, which begat liars’ loans, which begat colossal debt, which begat market –and money meltdown. Now brand-new economic measures are required to come to a new equilibrium, a crucial balance between human needs and nature’s capacity to provide.

However it’s not the butterflies I worry about. There are dragons out there, creatures much more fearful. These violent animals are the offspring of us carbonizing our environment, giving birth to the unholy Trinity of Peak oil, Peak heat and Peak Food. In addition all-pervasive ‘plastic’ is playing havoc with our collective immune system to the point where, when the inevitable pandemic appears, our natural body defenses are fatally weakened.

Is that me again, always the party pooper, the killjoy, the perennial pessimist? I know that to be popular, as John Maynard Keynes has observed, it is usually better to be conventionally wrong than unconventionally right. Yet, believe it or not, I am an optimist.

Here’s where we are at. Capitalism is sunk, just like the supposedly unsinkable Titanic. With the old system under water, and nothing new on the horizon, this is the time to build on our own modest Ark. There the dragons, although at our doorsteps, can still be stopped.

So here is my wish for 2009: having learned from the erroneous notions of yesteryear, such as our impossible quest for unlimited growth, equating happiness with the acquisition of goods, and, especially, our neglect in providing a viable future for our children, we make our own small-scale beginnings in which we can avoid the mistakes of the past.

There the primary task is to restore nature to become livable for our children. That is our foremost priority. Go green. Gear down. Relax. Economize. Grow your own. Bike. Walk. Shop local. Volunteer. Start now to build your own ark, a self-sufficient refuge for family and friends.

If I read the Scriptures correctly, then I must conclude that we are approaching the time when genuine renewal is at hand. God loves this world too much to let the Unholy Trinity of the three Dragons destroy this beautiful cosmos. It’s God’s world, after all, even though Evil has taken temporary possession of it.

I admit that a different direction – following Noah’s example – will not come about easily. But if we want to be part of a new world to come, we have to be the agents of change. The current vacuum offers a once in a life-time opening to start a better system in the coming year.

Have an advent-urous year.

Year 9-7

The headline in last week’s New York Times was “Bad times are good for evangelical churches.” It reported that: “Many ministers have for the moment jettisoned standard sermons on marriage and the Beatitudes to preach instead about the theological meaning of the downturn,” which made me quickly scan the column to discover what God had in mind here. Alas, no such luck.

The article focused on the unemployed from its Wall Street sector, where, if my memory serves me right, the average annual remuneration was close to $400,000. Losing a job in that salary bracket is indeed a disaster, especially since, if their lack of foresight in predicting the money meltdown is any indication, none of them had the slightest idea what would happen to them. Their actions, however, were the direct cause that hundreds of thousands lost their homes.

So what could be the ‘theological meaning of the economic downturn’? I found a good example of this in Luke 19. There’s a story of the biblical equivalent of a moneyed man who is over-compensated, a man by name of Zacchaeus, a tax chief tax collector. Says that chapter: “He was wealthy,” and had got so rich by grabbing a healthy percentage to all taxes collected, not unlike the Wall Street crowd who packaged those toxic mortgage bonds by first levying fat fees and then sending them on a fund manager who padded them a bit more.

I picture Zacchaeus also as a man like Bernard Madoff who made off with billions on a Ponzi scheme – paying Peter by picking Paul’s pocket – all of which the Wall Street smart guys did legally. Zacchaeus, a short fellow, wanted to have a good look at this wonder-worker Jesus, so he climbed in a tree. Jesus spots him there, tells him to come down, and invites himself to dine with this wealthy manipulator. The crowd, who understandably hated this man who extracted hard earned cash from them with the help of the despised Romans, was not at all pleased with Jesus’ request, but then Jesus has never been in the crowd-pleasing business.

The upshot was that this fellow had a radical conversion and showed his repentance: “Look Lord, here and now I give half of my possessions to the poor, and if I have cheated anybody out of anything, will pay back four times the amount.”

Is repentance perhaps the theological meaning of the downturn? Did these ministers tell these new church goers to give their million-dollar bonuses to Sally Ann or another charity? I doubt it. Ministers seldom give offence: bad for the collection plate. This still leaves the question why do these people suddenly darken the church doors. They must be thinking that God is good for something. Perhaps they see God as a miracle-man who will conjure a sudden solution when they face a sudden illness or death, a job loss, a marriage break-up, or, without warning, must cope with poverty. We know that a lot of those people stayed away from any sort of religion when the bonuses were big and a nanny a necessity.

So is that what God is good for? Dietrich Bonhoeffer, the German theologian hanged by Hitler just before the end of World War 2, has something to say here. He writes that “Man’s ‘religiosity’ makes him turn in times of need to God’s power in this world. They see God as the ‘deus ex machina’, the God lowered to the stage in the classical Greek and Roman dramas by a crane. They see Him as the One to whom they can appeal in times of need and whom they view “as an anchor in the storm, a good luck charm, a religious stage prop, or a rabbit from the hat.”

Bonhoeffer rejects such ‘religiosity’. He writes that truly sharing in God is always acted out in the entirety of life, in everything we do. From composting to composing, I might add. Serving God never is something partial, something added on. To walk in the footsteps of Jesus of Nazareth has nothing to do with living a religious life, but everything with living as a full human being. This reminds me of my good Jewish friend, the late Dr Harold Goldsman, who called such a person a “Mensch.”

Bonhoeffer again: “Jesus does not call us to a new religion, but to Life ….The Christian existence does not mean being religious in a specific manner, rather it means being a true human being… Christ (whose humanity we celebrate this week) creates the human in us. It is not a religious act that makes a Christian, but participation in God’s suffering in the midst of our life in this world.”

So, perhaps the theological meaning of the downturn is that suffering with creation and fellow humans, is a necessity for Christians. If the church can make us see that, then it still has a place in society. If not…

Year 9-6

Adolf Hitler, on September 23 1933, shortly after he became Germany’s “Fuehrer”, attired in brightly polished knee boots and wearing an immaculate military uniform with a swastika armband, stepped on a small hill, scooped up some dirt, and symbolically started Germany’s economic stimulus plan. His massive highway construction project paved the way for the Volkswagen – the Peoples’ Car –, opened up a million jobs, and caused the First Depression to by-pass Germany. President Eisenhower, another military man, initiated in the early 1950’s, the US Interstate Highway system, which did miracles for the then Three Auto Giants. Eisenhower paid cash for this infrastructure venture at the start of America’s greatest financial boom: then the entire world owed money to the USA: America was rich beyond imagination.

Hitler had no money, so he financed the building of Germany’s Autobahnen and the war machinery by simply issuing paper obligations of the German Reich to its gullible public. As James Buchan in his book “Frozen Desire” states: At Hitler’s death – a dozen years later – the Germans possessed 70 billion Reichsmarks in worthless coins and banknotes and 380 billion in obligations of a regime which no longer existed….Germany had been converted into money and destroyed. … A whole nation fell prey to the monetary delusion in its most extreme form”. What a fitting description of today’s monetary mess!

The 1947 US Marshall Plan, the first international Bailout, doled out free cash to Germany and other devastated European countries, and successfully revived their war-torn economies. They did so well because, as their industrial plants were bombed flat, they had to re-invent themselves.

Today, sixty years later, Bailouts are back in. But this time there is a big difference. In today’s version the banks and automotive sector still have their bureaucracy, their failing structures and their outmoded practices, all of which got them into deep trouble in the first place, boding ill for their future.

Now the world as a whole now is on the same path Hitler started in 1933, when he financed his Reich with paper promises, unlike in 1947 when the USA rescued Europe with hard dollars. Europe was indeed fortunate to have rich uncle America put them back on track. Now America itself needs a Savior. At the end of World War 2 Germany’s net worth was zero. The USA, having fought two costly and disastrous wars, Vietnam and Iraq, and still engaged in Afghanistan, has seen its net worth turn negative, thanks to its immense debt. The U.S. Government Accountability Office (GAO) estimated last year that the unfunded obligations for Medicare and Social Security totalled $41 trillion. Add the current national debt of $10 trillion and each the 116 million households there carries a debt of $439,000, not even considering personal and mortgage debt, which would increase the total to well over $500,000.

Obama says – and economist Paul Krugman, recently awarded the Nobel Prize, concurs – that this is not the time to worry about deficits. Eisenhower ran a surplus. Hitler governed a police state, enforced strict price controls, used millions of slave laborers from occupied countries while diverting wealth from Jews and the rest of Europe – $24 billion from Holland alone – to pay for his conquests, and even then was dead broke in 1945.

Where will Obama get his money, or Britain or the rest of the world? They all are doing it the Hitler way, issuing paper promises to posterity. No wonder the GEAB – the Global European Anticipation Bulletin – a think tank specializing in economic forecasting and accurately predicting this fall’s banking bust – believes that the US dollar will collapse before July 2009, a mere 6 months from now, reducing its value to close to nothing. Jeremy Clarkson, a columnist for The London Times – a respectable paper, I believe – writes that: “I have spoken to a couple of pretty senior bankers in the past couple of weeks and their story is rather different. They don’t refer to the looming problems as being like 1992 or even 1929. They talk about a total financial meltdown. They talk about the End of Days.”

John Maynard Keynes, the architect of our post-war financial system predicted that, as the volume of money increased, and its interest rate would fall, “money would abolish itself.” Is that now coming true? Today the interest rate on US bonds is zero percent, while the global volume of money has become an avalanche, as everywhere governments are pouring funds – dollars, pounds, euros, yens – into their economies, threatening the value of money.

Here’s something to ponder: how prepared are we to carry on our life without money?