Ron Paul’s Party By W. James Antle, III

Ron Paul’s Party

WASHINGTON — “Hey,” a young man shouted to his friends in the hotel lobby. “This guy doesn’t know who won the straw poll!” He was referring to the presidential straw poll at the Conservative Political Action Conference (CPAC), the nation’s largest gathering of conservative activists. The crowd told “this guy” — your humble servant — that the winner was Ron Paul.

It wasn’t even close. Paul, a Republican now in his 11th term in the House, took 31 percent of the vote. Former Massachusetts Gov. Mitt Romney, who had won the straw poll for the last three years, came in second. Nobody else broke into the double digits, with Sarah Palin, the former Alaska governor and Republican vice-presidential candidate, running a distant third at 7 percent.

Ron Paul has bested his more famous GOP rivals in unscientific surveys before. His ardent supporters were numerous enough to dominate Internet polls and raise millions of dollars but too thin on the ground to deliver any primaries or caucuses during the 2008 Republican nomination fight. With the exception of Romney, the campaign teams for the other candidates listed on the CPAC ballot were either nonexistent or in their infancy.

But straw polls are a legitimate test of organizational strength and grassroots enthusiasm. Even in 2008, Paul had the latter in spades. But Paul-affiliated organizations like the Campaign for Liberty and Young Americans for Liberty are starting to come into their own, becoming savvier and more sophisticated. Paulites blended more naturally into their CPAC surroundings than during the previous two years. And the movement is even losing its cult of personality aspect, as former New Mexico Gov. Gary Johnson, Judge Andrew Napolitano, and bestselling author Thomas Woods become significant figures alongside Paul.

Glenn Beck, one of the country’s most popular television commentators and another CPAC star, has moved substantially in Paul’s direction on domestic policy and has inched a bit closer on foreign affairs. This is true of the conservative movement as a whole. The Mount Vernon Statement signed last week by leaders of perfectly mainstream conservative organizations was a thoroughly constitutionalist document. Every Republican in the House has signed onto Paul’s bill to audit the Federal Reserve, including the entire leadership team.

Even back in the 1990s, the previous modern heyday of the anti-statist right, conservatives tended to pinpoint the 1960s and the Great Society as where the country went off track. The more radical among them identified the 1930s and the New Deal. Under the influence of Beck, many Tea Party activists say the country went to hell in a handcart under Woodrow Wilson. Asked about the platform of her congressional candidate, the campaign team member of one Alabama Republican at CPAC replied simply, “He’s running on the Constitution.”

Foreign policy remains a huge dividing line. Most self-described conservatives believe not only that the Iraq war was just, but that it was a success (thanks mostly to the surge). A Campaign for Liberty panel discussion at CPAC questioned not only the Iraq adventure but the entire concept of the war on terror. But foreign policy has clearly taken a backseat to the economy and the growth of government. And Republicans have proved more willing to criticize military interventions now that there is a Democratic commander-in-chief.

The antagonism between conservatives who identify with Paul and the rest of the mainstream movement still remains, however. Many people at CPAC booed Paul when the straw poll results were announced. At the Paulian events, contemporary Republican leaders aren’t referred to any more glowingly than Barack Obama.

Already this year, two candidates for statewide office have far exceeded expectations running as representatives of the movement Paul started. One is Ron Paul’s own son, Rand Paul, who is running for the Republican nomination for Senate in Kentucky. The other is Debra Medina, who is running in a contentious GOP gubernatorial primary in Texas.

The younger Paul now leads his main primary opponent, Kentucky Secretary of State Trey Grayson, in public polls by margins as high as 19 percentage points. Medina has seen her numbers zoom from the low single digits to as high as 24 percent — enough to potentially force Texas Gov. Rick Perry into a runoff and perhaps overtake Sen. Kay Bailey Hutchison for second place. Both candidacies are fueled by Paulities and the broader Tea Party movement.

But there are differences in their approaches. Rand Paul emphasizes tax cuts, balanced budgets, and his opposition to future bailouts rather than the war in Iraq. He politely refrains from criticizing Senate Minority Leader Mitch McConnell, even though McConnell is supporting Grayson. “I believe in the fusion of bringing people together,” Rand Paul told TAS. “As Republicans we should be focusing on our agreements, not our differences.”

Paul’s campaign manager, David Adams, buys into Grover Norquist’s argument that American politics is divided between a “Leave Us Alone Coalition” on the right and a “Takings Coalition” on the left. And they are quick to distance themselves from the 9/11 truthers and other revisionists who have sometimes gravitated toward Paulite circles. “We are not to blame for people attacking us,” the younger Paul told a Kentucky television station.

Debra Medina was not willing to sound so certain a trumpet. In Feb. 11 radio interview, Glenn Beck asked her about accusations that she was a 9/11 truther. She did not embrace the label, but neither did she clearly disavow the views associated with it. “Do you believe the government was in any way involved in the bringing down of the World Trade Centers on 9/11?” Beck asked.

“I think some very good questions have been raised in that regard,” Medina replied. “There are some very good arguments, and I think the American people have not seen all of the evidence there, so I have not taken a position on that.” Beck followed up by asking if there were any truthers on Medina’s staff. She answered, “I’m certainly not into mind control or thought policing people. We’ve got a very diverse team in this state and that’s because Texans are standing shoulder to shoulder to support and defend the Constitution.” Medina subsequently issued a statement clarifying that she was not a 9/11 truther, but she sure seemed unwilling to alienate such people with her initial statements.

Medina’s primary is in early March, Rand Paul’s is in May. It remains to be seen how both candidates will do when they face the voters. But when it comes to mainstreaming the ideas that brought Ron Paul his surprise CPAC victory, we don’t have to wait that long to determine which is a more promising strategy.

Letter to the Editor

Ron Paul, Rand Paul, Debra Medina

W. James Antle, III is associate editor of The American Spectator.

The Great Recession of 2011-2012 By James Srodes

The Great Recession of 2011-2012

Are you ready for the Great Recession of 2011–2012? You should be, for it is getting under way even as you read this. Just as the 2009 “greatest economic crisis since the Great Depression” actually began back in 2007, so we are in the early days of the next cycle. Only this recession is going to be a doozy. And the aftershocks will be felt long after President Hillary Clinton leaves the White House in 2024.

The coming crisis should be no surprise, for we all have had plenty of advance warning. If it is a surprise, blame those chat-show economists who have become so politicized that they ignore the truths of their own science in order to acquire celebrity. Nor should we forget those politicians who deliberately suborn national interest for the security of zero-sum pork-barrel politicking. Combine it all with a news media largely made up of self-referential ignoramuses and it is small wonder that most of the world has been diverted as Dorothy was in Oz by the lightning bolts, explosions, and billowing smoke screen being generated by the men behind the curtain. The truth is our wizards dare not admit that the levers they pull are not really connected to the true crisis that confronts America or its place in the global market.

Despite the self-congratulatory assurances from the White House, Congress, and part of Wall Street that we have been saved from a slide into a 1930s depression, our most serious trials still lie ahead of us. We are unlikely to be able to get back to those halcyon days of perpetual prosperity and optimism that Americans (and most of the industrial world) enjoyed for the last 50 years. A tectonic shift is occurring beneath our feet and the world’s economic climate has shifted. We face not just a few abrasive years of getting back to normal, but a generational hard slog of constricted markets, limited resources, and rolling setbacks. And in each episode of crisis, some will prosper, the weak will suffer most, and radical visions propounded by political snake-oil salesmen of all persuasions will make rational discourse nearly impossible to conduct.

This is not to say that the Apocalypse is upon us, as morally satisfying as that might be to some. Nothing so dramatic is going to happen. The future offers no therapeutic collapse of civilization, with roaming bands prowling the rubble for Soylent Green. Folks will try to live just the way they have been but those lives will be more pinched, the opportunities more limited; caution and bitterness will replace the open-handed optimism that made it a wonder to be a 20th-century American, or even a Western European. If the stolid Swiss now quake at the sight of a minaret in Zurich, it is just one of the many new worries for all of us to fret over in the years to come. Civil privileges now considered “rights” will be up for renegotiation.

One has to feel a twinge of sympathy for the people who have chosen careers of service in government—not just in Washington but in all the capitals of the industrial West. Life just is not going to be as uplifting as it once was back when policy innovations were both credible and idealistic. But it must be especially hard for the crowd of wizards in Washington these days. Building consensus is hard when no one will talk to anyone else. Little wonder then that so much of the dramatic rescue being claimed by the White House in reality turns out to be merely putting rouge on the patient’s cheeks and exclaiming how well the poor soul looks.

Underscoring the difficulty in charting a new economic course is the truth that the government’s own statistics have become so distorted by age and the dynamics of change that they really don’t reflect the depth of the crisis that is upon us. So the wizards continue to twiddle the levers of stimulus and regulatory rules changes without realizing that the dials and barometers have long ago broken connection with what is going on. Houston, we have a problem.

CONSIDER JUST A FEW of the economic bellwethers one hears about on the evening news as proof that the crisis has been stabilized and recovery is imminent. Stock prices are up, true. But trading volume is way down and that is because retail investors—citizens making real investment choices— are on the sidelines. The price rises that swell the Dow Jones Industrial and other indices reflect almost pure speculation by Wall Street’s investment houses that are soggy with Washington’s cash injections. Just as Cash for Clunkers inflated Detroit’s hopes last summer, so the share price recovery is more of a sign of a new bubble inflating than it is of real value returning to share market prices.

The same for housing prices, only more so. It was headline news recently that house prices in “some” areas of the country had stopped declining quite as fast, while in some fewer areas there were even tiny increases in prices of houses sold, if not much increase in the volume. Yet there are uncounted hundreds of thousands of vacant houses, condominiums, and commercial office space for which there is no rational prospect of a buyer during 2010 or perhaps ever.

It will get worse. Of the 47.4 million home mortgages in place today, nearly 10.7 million are “underwater,” that is, the money owed on the loan is greater than the value of the house. And that’s not counting the 2.3 million other mortgages that are “near-negative equity.” Most of these latter will face sharply higher upward ratcheting of their interest rates in 2010 and 2011 and that will automatically plunge those debts below the surface.

In Nevada already the amount of mortgages outstanding is estimated at $132.6 billion against property worth $116.7 billion, a loan-to-value ratio of 116 percent. Even another slight decline in prices in areas such as California (loan-to-value ratio of 72 percent), Arizona (91 percent), or Florida (87 percent) will swamp Washington’s promised next round of mortgage subsidy relief. The government’s own rescue agencies, Fannie Mae, Freddie Mac, and FHA, are dead in the water, and the government’s bank deposit insurance agency, the FDIC, says it has no more reserves to offset the coming next round of failing banks.

EVEN WHEN WASHINGTON ADMITS to a worrying 10-plus percent unemployment rate the real numbers are so far from reality as to be laughable. The recent headlined dip in the jobless rate turns out to have been caused by more than 50,000 already jobless people simply giving up and dropping out of the workforce. This has the statistically absurd result that the percentage of people deemed to be unsuccessfully seeking work is judged to have improved. When labor data is closely parsed for the measure known as “U-6,” which includes people forced to work part-time, those “discouraged” from seeking jobs, and those “marginally attached,” the rate trends above 17 percent.

But even that fails to accurately gauge the cold reality of the hopelessness facing folks at either end of the workforce demographic—the very young (where unemployment is trending above 60 percent) and those 55 and older who are forced back into job quests because their nest eggs vanished in the storm. Two-thirds of the job losses across the country have happened to the very blue-collar workers the Democratic Party has claimed for its own. For those Americans who still have hourly-wage jobs, their employment week would be the envy of a Frenchman—33 hours, on average. Sectors such as manufacturing, construction, and even retailing continue to shed workers; the only consistent gains over the last two years have been, no surprise, in government employment.

The policy response of all Western governments is to follow the failed Japanese model of trying to inflate one’s way out of a downdraft, pumping up another bubble. The theory is that if interest rates are forced low enough, and the money supply increased enough, and the government ramps up deficit spending to redistribute more wealth from the supposed rich to the supposed poor, a “multiplier effect” of economic growth will be sparked by consumers buying more, businesses investing more, and more jobs being created with prosperity spreading and growing. But if interest rates are already at zero, and the value of the dollar has been halved by doubling the supply of it, and the debt service burden of government spending is already suffocating the capital markets, how can one expect consumers to buy more (to buy more of what?), or businesses to invest more (for a new machine to do what?), much less to hire old workers back when the jobs they used to have are vanished, not to some Third World haven, but just vanished?

No one in Washington can say with a straight face just what the U.S. gross domestic product is except that we have been pushed back at least a decade and will probably be more than a decade in just getting back to where we were in 2006 (when GDP rose by an anemic 2.7 percent) just before the bubble burst the next year. Meanwhile new bubbles are forming all around us, in the commodity markets, in Hong Kong real estate, in the troubling data coming out of China and other Asian economies, all just waiting to buckle. Can you say Dubai? Greece?

FURTHER CONFUSING ANY ATTEMPT at a rational public analysis of the current crisis are the prevailing lies that the fault for the crisis lies in the failed economic theories propounded by the late Ronald Reagan and, more, that what we need is to return to the sound prescriptions of the even later John Maynard Keynes. Reagan, this slander says, set the financial markets off on an orgy of speculation and risk-taking by taking off the restraints of sound government regulation and by insisting on deficitbusting tax cuts. By returning to the true religion that Keynes revealed to Franklin D. Roosevelt in a dream, government, and only government, can return us to prosperity by even grander deficit spending coupled with a massive expansion of liquidity and the lowest interest rates possible. If that sounds confusing, it should; neither man prescribed any such thing.

It is true enough that Reagan, despite having studied economics in college, was singularly immune to economic theories. In the interregnum year of 1979, when he had left the governor’s office but before his 1980 campaign, I traveled with him in northern California on a speaking tour and found him far more concerned about what worked in the real world rather than on speculations about what ought to work. That summer he gathered the cream of conservative economic thought—from Arthur Laffer to Herb Stein—in George Shultz’s offices in San Francisco to consider the stagflation that gripped the nation. After hearing an entire day’s worth of philosophizing by the party’s greatest minds, Reagan closed the meeting with a decision to make tax cuts a policy point for his upcoming run for the White House.

“Nancy and I always believed that if you didn’t want the kids to overspend their allowances, you didn’t give them the money in the first place.” And so it was tax cuts, which did indeed provide the investment capital needed to work the nation’s way out of economic gridlock. If he was wrong in presuming that federal deficits would be reduced, it was because neither he nor any president since has been able to restrain the 535 members of the U.S. Congress from overspending. Please don’t e-mail me about the myth of Bill Clinton’s surpluses; they didn’t happen. The last federal budget to have a genuine surplus of tax revenues over outlays was Lyndon Johnson’s $3 billion budget surplus for fiscal 1969.

For more than 40 years successive U.S. administrations, Republican and Democrat, have failed to rein in a feckless Congress, which has run a giant Ponzi scheme that would make Bernie Madoff blush. Our lawgivers have routinely spent more than they take in, jiggling the tax rates to help constituents, and sucking in imports from abroad by paying off in a currency that has steadily declined in purchasing power to the point that dependent customers like China and Brazil are reduced to barter-style trade transactions with each other because the dollar is of no further use to them as a monetary intermediary. The real sucker is the American wage earner, who by the government’s own accounting has lost one-third of his purchasing power since the 1970s (probably closer to two-thirds if we are honest, and if he still has a job).

Neither Reagan nor Keynes today would approve of the TARPs for banks, the near doubling of the money supply, and the loans to major corporations and other bailouts of institutions deemed “too big to fail.” Indeed, in his 1936 oft-cited but rarely read General Theory of Employment, Interest, and Money, Keynes did in fact speak of raising demand in an economy by redistributing income, but only in times when a booming economy is just starting to falter. Once the bust has occurred, however, and industrial capacity and demand are slack, Keynes warned that simply pumping up liquidity and depressing interest rates are of little use; government’s role in such a case, he recommended, was to invest in “public works” that enhanced the economic infrastructure while providing employment. No bailouts, thank you very much.

ANOTHER THING I AM SURE OF is that both Reagan and Keynes would have been acutely aware of the seismic shifting of the underpinnings that support the Western-style global marketplace. As late as 50 years ago America had much of what it needed to prosper, and foreign trade accounted for a nickel of every dollar of gross domestic product. Our prosperity was mostly in our own hands. Now we are fully engaged not only with older, industrially mature trade partners but also with newer emerging powers in the struggle both for world markets and for key ingredients for manufacturing and agriculture—just as they all become in ever shorter supply and ever more expensive to obtain.

During my 1979 trip with Reagan he resolutely refused to talk about policy questions that dealt with the kind of specifics that Washingtonians love to parse. A kindly man, he also sensed my frustration and finally asked me to ask him the broadest economic question on my mind. So I pointed out that America was in the midst of an economic crisis with inflation and interest rates at frightening levels, with OPEC jacking up oil price, and economic activity stuttering. What did he think was going on and what could be done about it?

“Well, I can’t help but notice that while oil prices are going up, so are gold prices. And that tells me the oil producers are fed up with taking dollars that are worth less each day while the industrial world consumes their oil. So we either have to find a way to make our dollar worth more, or to find more oil of our own, or to learn to get more economic lift with the oil we can afford—and probably all three. Things sure can’t go on like this forever,” Reagan said. He did not need the Laffer Curve to see that.

Keynes would have agreed. Indeed, much of his fabled theorizing about the certainty of uncertainty in the marketplace and the awareness of risk came from his having been an early and highly successful hedge fund manager who speculated in both currencies and commodities during the turbulent times following World War I. His fund partnership with a friend known as “Foxy” Falk corralled seed money from chums among the Bloomsbury literati and began in 1920 to go long in U.S. dollars while shorting the mark, franc, and lira in a play that lost more than $300,000 in today’s money before it collapsed. Later, as the linkages between raw materials, trade, and currencies became clearer to him, he not only repaid his friends’ losses but accumulated great wealth for himself and for his college at Cambridge, which made him its trustee.

The new certainty that both men would have recognized, and that we must confront, is that the era of cheap resources is over. The plentiful and extremely profitable supplies of everything—petroleum, metals, minerals, water, yes, and even air—have been exhausted. While we had them in abundance for a period of nearly three centuries the world was an ever-expanding place, a cornucopia that human ingenuity fashioned into ever more wonderful machines and the human spirit used to subsidize the expansion of opportunities and entitlements we call “rights” to all mankind.

THIS IS NOT TO SAY the lights are suddenly going to go out all over the world. Those who use the “peak oil” argument to say we have exhausted the globe’s oil reserves are wrong. It does not really matter whether there are two trillion barrels left or (more likely) 10 trillion barrels of petroleum still lurking under polar ice caps or offshore Brazil or in the South China Sea. We will have petroleum energy supplies aplenty from shale and other high-tech processes too. But it will be expensive and hard to get, and it is that extra expense of the getting that robs us of the subsidy that made so much of the industrial West’s prosperity—and indeed its political culture and civil promises—so possible.

Put another way, oil at $73 per barrel (the price at this writing) can readily be found in any number of offshore deep deposits. Most industrial metals and minerals can still be obtained if the price rises enough. But neither they nor the likely $100 barrel can produce the same economic lift that a barrel of $3 Saudi Arabian oil did in the 1950s. At the historically low costs of both energy and available ingredients it was possible to be intellectually lazy when it came to estimating the true cost of most of our human activities. Those days are over, and old solutions are increasingly disconnected from critical new challenges dressed in familiar terms—the need for new jobs, new products, market regulation, environmental responsibility, and truly global prosperity for all instead of competing regional advantages that disenfranchise entire races of people.

What this means is we must begin to look at public policies and economic choices from a “net energy” framework; that is, to apply hard analysis as to the true cost of everything we undertake. Will the energy and raw materials we invest in any undertaking yield a greater return or a lesser one? As an example, at some point in a coal mine it takes more energy to lift a ton of coal to the surface than that ton of coal will produce. There may be reasons to keep the mine open (to preserve jobs) but there should be recognition that that decision will require some other part of the economy to subsidize that losing operation.

The “net energy” concept explains why, despite the cries for alternative sources to our dependency on petroleum, there has not been a general shift to wind, solar, or other alternatives. This is because even at $100 a barrel, oil (and natural gas) still provides an extraordinary lift to economic activities while most “alternatives,” when fully costed-out for the technology, expensive materials, environmental impact, maintenance, and (in the case of nuclear power) the after-cost of tearing down and waste management, often absorb more energy than they produce over their operating life.

Nor does one have to buy into the suspect environmental warnings of Al Gore and the data fudgers of Copenhagen to realize that we also have subsidized our world by using our water supplies and the very air we breathe as an industrial sewerage system in ways that subsidize a wasteful way of life. That subsidy also cannot continue.

To have a conscious recognition of this truth is just the first step. Like any other addict, the policy prescribers in Washington (or any other capital) cannot be expected to easily acknowledge the new realities. So we see the familiar stages: there is denial that we will never get back to “normal”; Wall Street, insurance companies, drug makers, Rush Limbaugh (seriously) are all such easy targets for anger and the need to blame others. I mean, Rush Limbaugh, really.

DEMANDING NEW RULES to prevent financial excesses puts the bartender in charge of trying to ration the drunks and keep his tip jar filled at the same time. Congressional hacks like Nancy, Harry, and Barney will never admit to any blame for their insistence that Fannie Mae and Freddie Mac pressure the home mortgage industry into making home ownership available to people who were in no economic position to carry the burden. And don’t expect the career regulatory agencies that oversee the financial marketplace to acknowledge fault for turning a blind eye when banks bundled up those dodgy mortgages into even more dodgy securities, or when Wall Street took the government guarantees of that paper as being dependable. Nor will Alan Greenspan (or Ben Bernanke) fess up that the devaluing of the dollar caused the world’s key commodity markets to boost prices so sharply that ever more dollars were needed to pay for the same ingredients and that the rush for that liquidity made the dodgy mortgage paper irresistible to buyers from Norway to Beijing.

Yet until there is a general acknowledgement of government’s blame in compounding this upcoming recession on the back of the earlier slump, how can we expect Washington to seek a new approach to the global marketplace?

It would have been a comfort, of course, if there were a viable opposition force in Washington (or elsewhere) to the pervasive government-fix-all philosophy that exists. But a coherent Republican Party led by folks of stature who offer meaningful solutions has vanished from our scene as abruptly as did the Whigs in the 1850s. What’s left is a hologram of a political party, dominated by second-raters who obsess over moral doctrine in an appeal to some hypothetical “base” that will keep them in the few offices they still cling to.

The result, I fear, is more sham solutions that will merely interfere with the harsh corrections that are to be forced on us by a world economy that is losing traction even as the wheels spin faster. What that means is that instead of finding a way to get the 750,000 residents who have fled Detroit’s ghost-suburbs back in their homes and in new jobs, Washington will continue to mandate auto company executive suite changes and offer capital bribes to produce a government-mandated new generation of cars that Americans can scarcely afford to buy. And Wall Street’s bankers will still be able to get ever more funds on demand from their friends in the Treasury, even though most borrowers still can’t afford to borrow.

It will get ugly, make no mistake. How ugly? Wait until those things we consider “rights” start to get squeezed in the interest of what our ruling politicians decree as the national interest. The uproar that greeted the mere suggestion that health care resources for the elderly might be circumscribed was genteel debate by contrast with what’s ahead. The notion that rights can be rescinded as easily as they have been obtained is not a happy thought. Case in point: my mother recalled that she and my father had to marry in secret and she continued to live with her parents throughout 1936 because the New Dealers who controlled the Pennsylvania state legislature had decreed that no married woman could be a public school teacher or hold another state job when a jobless married man could take her place. Try that out on the next dinner table debate you attend and see how many bread rolls get thrown at you by women who are convinced that it can’t happen again; times have changed, they’ve come a long way, baby. Well, yes. Nowadays most women don’t have the option not to work.

HOW LONG WILL THIS DARK AGE LAST? Ask the Japanese, who have been at it for nearly 20 years. Ask the Chinese, who are just making a heroic jump out of a medieval time-warp into a modern industrial urban society only to teeter on the brink for lack of enough food, water, and arable land even as they accumulate piles of American dollars that lose value every day. How long? As a teenager growing up in Tampa in the 1950s I recall traveling south through a ghost town called Sun City on the way to Sarasota. This abandoned village had streets, municipal buildings, sidewalks, even steps up to residential lots, all laid out during the Florida land boom of the 1920s. What it lacked were houses and residents. And so it stayed for nearly 40 years, until Del Webb developed the retirement community and resort nearby and appropriated the name. Now people are fleeing Florida once again, and ghostly, empty high-rise condos dot the landscape.

Now ask yourself, how long will it take to reclaim the empty neighborhoods in Detroit, the empty condos in Las Vegas, or Phoenix, or, for that matter, in the McMansion-style suburbs that surround Washington, D.C.? What new jobs can be created to absorb the millions who have not only lost their jobs but who have stopped looking? What will those jobs make, and who will buy what is being offered?

Buddy, can you spare a dollar? Or maybe a Krugerrand?

Letter to the Editor

James Srodes, an author and broadcaster, is a former Washington bureau chief for Forbes and Financial World magazines. His latest book is Franklin: The Essential Founding Father. His email address is

“Watching the pot come to a boil” ‘Generation Zero’ movie appears on Hannity for the full hour

“Watching the pot come to a boil”

24-Feb-10 News – Iran captures Jundallah terrorist leader
‘Generation Zero’ movie appears on Hannity for the full hour

Some observations about ‘Generation Zero’ on Hannity

The new movie “Generation Zero” was the subject of the entire hour on Fox News Channel’s Sean Hannity show. The guests were the movie’s writer/director, Steve Bannon, and the executive producer, David N. Bossie. Several segments of the movie were screened, including a couple of segments in which I appear as commentator.

This movie is extremely exciting to me personally for obvious reasons. It’s exciting that I’m in it, but it’s even more exciting that Generational Dynamics and generational theory is receiving all this exposure. (See “New documentary movie ‘Generation Zero’ brings generational theory to the public.”)

I can see why everyone who’s seen the movie is really touched by it. It’s very dramatic, and it forces everyone to focus on the generational causes of the financial crisis. It also makes it clear, to anyone who’s paying attention, that there is no solution except a major meltdown far worse than we’ve already seen, leading inevitably to world war.

A disappointment to me is Hannity’s stress on blaming Democrats for the crisis. That’s really not a surprise, of course, since Hannity’s show is always very pro-Republican party. As for myself, I would never blame the financial crisis on any politician or political party. As I say all the time on this web site, no politician could have either caused or prevented the financial crisis. The perpetrators exist in all organizations and all political parties, and the only possible explanation is that the “perpetrators” are entire generations.

However, to be fair, the heavy pro-Republican slant was Hannity’s alone. Both Bannon and Bossie made the point that Republicans are just as much to blame.

Another interesting development is that the material on the relationshp between Boomers and Generation-Xers was omitted. The Boomers could not possibly have perpetrated the financial crisis by themselves, since everyone agrees that they’re too dumb and incompetent to have done so. The only way this could have occurred is by the greed shared by Boomers and Xers, with Boomer bosses condoning and supporting the massive fraud being perpetrated by Gen-Xers.

I can see why Bannon decided to omit the criticism of Gen-Xers. By leaving that out, the movie will be a lot more popular with Gen-Xers, who really want to blame everyone on the Boomers anyway.

But those are just nitpicks. This is a fantastic movie, and it’s going to make a lot of people aware of generational theory. Generational Dynamics is the most important professional thing that I’ve done in my life, and it will, I believe, be a boon to mankind.

Iran captures leader of Jundallah terrorists

Iran, Afghanistan, Pakistan, highlighting the region of September's Jundullah attack
Iran, Afghanistan, Pakistan, highlighting the region of September’s Jundullah attack

In September, I wrote about a terrorist attack on Iranian soil that was extremely humiliating to Iran. (See “Furious Iran blames Pakistan, US and Britain for Sunday’s terrorist attacks.”)

The attack was conducted by Jundallah, a Sunni Islamist terrorist group with links to al-Qaeda and the Taliban. The attack targeted Iran’s Revolutionary Guards. It was the biggest attack on the Revolutionary Guards since the Iran/Iraq war of the 1980s, and it killed 42 people, including 20 or so top commanders in the Revolutionary Guards.

Now Iran has finally gotten revenge. Iran’s Press TV reports that Abdulmalek Rigi, the leader of Jundallah, has been captured, along with one of his deputies. It required detective work by the Iranians to learn that Riga was on a jet flight from United Arab Emirates to Kyrgyzstan, crossing Iran’s air space. Iranian security forces forced the plane to land, and Riga was taken into custody.

The story is far from over, however. The Iranians have been claiming that Jundallah was an American and British funded terrorist organization. Now the Riga has been captured, they’re claiming that they will soon have proof of Western funding and support.

The article quotes an Iranian official as saying, “Not only are we aware of the many crimes against humanity committed by [Rigi], but we also have more than enough evidence that this terrorist group was in fact acting on US orders. This is a disgrace for a country which tries to portray itself as an avid supporter of human rights.”

An AFP report quotes an unnamed senior US official as saying, “This is of course a totally bogus accusation.”

This accusation has never made much sense to me. We’re fighting a war against al-Qaeda linked terrorists in Afghanistan, and American funding of an al-Qaeda linked terrorist group under any circumstances would almost be an act of treason. On the other side, an al-Qaeda linked terrorist group would not disgrace itself by “acting on US orders.”

What makes much more sense is that Jundallah funding and support has come from Saudi Arabia, a Sunni Muslim country that’s fighting Iran for hegemony in the Middle East. Saudi Arabia sees itself as the protector of the Sunnis (LA Times), and the Saudis have already been fighting the Iran-supported Houthi rebels in Yemen, and the Saudis and Iranians are fighting for politicial influence in Iraq.

There’s little doubt that the Iranians are going to produce some kind of evidence to support their allegations that Jundallah is funded by the US and acting under US orders. How credible that evidence is remains to be seen.

Paul Krugman, the former economist, turned politician

I’ve described Paul Krugman as a man who used to be an economist, but now just plays one on TV (and in newspapers). He won the Nobel Prize in Economics because he possessed the main qualification that the Nobel committee was looking for: He hated George Bush.

A New Yorker magazine profile of Paul Krugman describes how he gave up economics and became a leftist political pundit. Apparently, it’s the fault of Robin Wells, his wife!

According to the article, she edits all his articles to make them “angrier”:

“Recently, he gave her a draft of an article he’d done for Rolling Stone. He had written, “As Obama tries to deal with the crisis, he will get no help from Republican leaders,” and after this she inserted the sentence “Worse yet, he’ll get obstruction and lies.””

Hmmmmm. Maybe the Nobel Prize committee made a mistake after all. It’s Robin Wells who really deserved to receive it.

Alan Greenspans calls it ‘the greatest financial crisis — ever’

Former Federal Reserve Chairman Alan Greenspan gave a speech to the Credit Union National Association conference. He’s quoted by Reuters as saying that this is “by far the greatest financial crisis, globally, ever” — including the 1930s Great Depression.

He added, “It’s really an extraordinarily unbalanced system because we’re dealing with small businesses who are doing badly, small banks in trouble, and of course there is an extraordinarily large proportion of the unemployed in this country who have been out of work for more than six months and many more than a year.”

Kenneth Rogoff predicts sovereign defaults, collapse of the euro

I’ve been writing about this coming financial meltdown for years, but this year we’re seeing something we really didn’t see before — there are a lot more commentators talking openly about it. Alan Greenspan is getting more realistic, as we’ve seen, and the “Generation Zero” movie really propels the crisis view forward.

Harvard Professor Kenneth Rogoff has always been realistic about the oncoming crisis, but at a forum in Tokyo on Monday, Rogoff predicted that “a bunch of sovereign defaults” are coming, as reported by Bloomberg.

According to Rogoff, the sovereign defaults are going to be triggered by the phasing out of fiscal stimulus that we’ve seen in the last year.

With regard to Europe, he was fairly specific, according to the article:

” Rogoff, 56, said he expects Greece will eventually be bailed out by the IMF rather than the European Union. Greece will probably announce an austerity program “in a few weeks” that will prompt the EU to provide a bridge loan which won’t be enough to save the country in the long run, he said.“It’s like two people getting married and saying therefore they’re living happily ever after,” said Rogoff. “I don’t think Europe’s going to succeed.”

In the case of US Fed policy, When they start tightening monetary policy even a little bit, it’s going to send shockwaves through the system,” Rogoff said.

A report by Morgan Stanley, quoted by Ambrose Evans-Pritchard writing in The Telegraph, agrees that Europe faces a worsening crisis.

The report points out that European banks need to roll over €1 trillion (£877bn) of debt over the next two years, at increasingly high interest rates. Thus, “Lenders will have to cope with a blizzard of problems.”

Additional Links

A commentary in Der Spiegel talks about the “Arrogance of China’s Leadership.” “For a start,” it says, “the Chinese government is brimming with a self-confidence bordering on arrogance. The Chinese see themselves as the winners of the global economic crisis.” As we’ve said many times, China is going through the same kind of generational changes as the West, and is the midst of even worse real estate and credit bubbles than America. Generational Dynamics predicts that China is headed for major financial disaster, an internal civil war, and world war with the West. The Spiegel article illustrates how acrimony is growing on both sides.

There seems to be no end to the ways that scammers work. Police in Utah have warned that crooks have installed credit card “skimming” devices in pay-at-the-pump gas pumps. So you fill up your tank, pay for it at the pump, and the crooks get your bank card and pin numbers.

I’ve been accused of all sorts of things since starting this web site in 2002, including “liking war.” Believe me, if I liked war, I wouldn’t have lost so much sleep the past few years. One of the most touching articles about the enormous pain of war is “Distant Wars, Constant Ghosts” by Army Captain Shannon P. Meehan (Ret.) in the NY Times. He recounts how he still has constant nightmares about the mothers and children in Iraq that his actions killed accidentally.

(Comments: For reader comments, questions and discussion, see the 24-Feb-10 News – Iran captures Jundallah terrorist leader thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Feb-2010) Permanent Link

Electro Thermal Dynamic Stripping Oil Recovery Could Unlock 400 Billion More Barrels of Oil in Alberta at $26/Barrel

Electro Thermal Dynamic Stripping Oil Recovery Could Unlock 400 Billion More Barrels of Oil in Alberta at $26/Barrel

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A field test was performed from Sept 2006 to August 2007 and the recovery and performance exceeded expectations. The recovery factor was over 75%, energy used per barrel was 23% less than anticipated and peak production rates were better than expected.

ET Energy’s Electro Thermal technology could be used to pump out 600 billion barrels of Alberta’s oil sands bitumen. That’s more than triple the Alberta government’s best guess at what’s currently recoverable from the oil sands, and enough to satisfy total global demand for twenty years.

Saudi Arabia has 260 billion barrels of oil reserves, so the additional 421 billion barrels would be close to double the oil in Saudi Arabia.

In coming weeks, the company will hit the road to raise $150-million to commercialize its technology.

That technology isn’t much to look at — just a few well heads and large tanks sitting on a windswept field south of Fort McMurray. A series of electrodes dangle in each well. When they are turned on, they pass a current through the earth — like electricity through a stove element — and heat it up. The result: The bitumen, which is normally locked in sand as hard as rock, begins to flow — like molasses in a microwave. No huge mines needed, no greenhouse gas-spewing steam projects required.

In a place accustomed to prying bitumen from the earth using monstrous shovels and vast quantities of steam, this pilot project is a bold attempt to reshape the environmental and financial costs of the oil sands.

In other parts of Alberta, companies are using radically different techniques: Petrobank Energy and Resources Ltd. is studying how to free bitumen using underground combustion, while Laricina Energy Ltd. is mixing steam with solvents, which dramatically cuts the amount of natural gas used to extract bitumen from deeper oil sands. At universities and provincial research bodies, scientists are studying how microbes could be used in bitumen upgrading, and examining the effectiveness of new techniques inside specially modified medical CT scanners.

E-T has stumbled in its attempts to apply the technology to the oil sands (it has worked dozens of times in environmental remediation applications). In its second major test, it managed to produce oil from only one of four wells. Its problems ranged from electrical cables that were accidentally severed by surface equipment, to the design of its electrodes. In total, E-T has produced less than 3,000 barrels of oil.

Yet the potential prize for success is huge. E-T’s technology, for example, could help open up carbonate oil, a huge hydrocarbon resource that is so tricky to produce that virtually no one has tried. And Petrobank believes its process, which uses a controlled underground burn to intensely heat oil sands and make them flow, can be used in a huge variety of heavy oil fields around the world. Like E-T’s process, it requires virtually no water and uses dramatically less energy.

Speculative Design For Freitas Nuclear Nanobot to Replace Food

Speculative Design For Freitas Nuclear Nanobot to Replace Food

Michael Anissimov, at Accelerating Future, nuclear powered nanorobots for replacing food. The concept is briefly described in the Futurist magazine. The Futurist magazine has a solutions page which includes the Freitas work

Check out Robert Freitas’ Nanomedicine, Nanorobotics, Nanofactories, Molecular Assemblers and Machine-Phase Nanotechnology publication page.

Here’s how these would work: the only reason people eat is to replace the energy they expend walking around, breathing, living life, etc. Like all creatures, we take energy stored in plant or animal matter. Freitas points out that the isotope gadolinium-148 could provide much of the fuel the body needs. But a person can’t just eat a radioactive chemical and hope to be healthy, instead he or she would ingest the gadolinium in the form of nanorobots. The gadolinium-powered robots would make sure that the person’s body was absorbing the energy safely and consistently. Freitas says the person might still have to take some vitamin or protein supplements but because gadolinium has a half life of 75 years, the person might be able to go for a century or longer without a square meal.

A Len Holmes Presentation on Nanotechnology to a Biochemistry Class in 2005 provided the likely mechanism and function of the nuclear nanobot food replacer. Above is a page that describes ATP synthase.

“Nutribots” floating through the bloodstream would allow people to eat virtually anything, a big fatty steak for instance, and experience very limited weight or cholesterol gain. The nutribots would take the fat, excess iron, and anything else that the eater in question did not want absorbed into his or her body and hold onto it. The body would pass the nurtibots, and the excess fat, normally out of the body in the restroom.

A nanobot Dr. Freitas calls a “lipovore” would act like a microscopic cosmetic surgeon, sucking fat cells out of your body and giving off heat, which the body could convert to energy to eat a bit less.

Where can you read more about Robert Freitas’s ideas? In the January-February 2010 issue of THE FUTURIST magazine, Freitas lays out his ideas for improving human health through nanotechnology.

As mentioned:
Check out Robert Freitas’ Nanomedicine, Nanorobotics, Nanofactories, Molecular Assemblers and Machine-Phase Nanotechnology publication page.

1. Damian G. Allis, Robert A. Freitas Jr., Ralph C. Merkle, “Single-Atom Radical-Exchange Mechanosynthetic Transfer Reactions for Period 1,2,3,4 Elements using Monosubstituted Adamantane Tools and Workpieces,” J. Comput. Theor. Nanosci. 7(2010). In preparation.

2. Colin Weatherbee, Robert A. Freitas Jr., “Nanoscale Robot Navigation of the Human Kidney,” 2010. In preparation.

3. Robert A. Freitas Jr., “Chapter 23. Comprehensive Nanorobotic Control of Human Morbidity and Aging,” in Gregory M. Fahy, Michael D. West, L. Stephen Coles, and Steven B. Harris, eds, The Future of Aging: Pathways to Human Life Extension, Springer, New York, 2010. In press. Publisher’s book website ….. Publisher’s book flyer

4. Denis Tarasov, Natalia Akberova, Ekaterina Izotova, Diana Alisheva, Maksim Astafiev, Robert A. Freitas Jr., “Optimal Tooltip Trajectories in a Hydrogen Abstraction Tool Recharge Reaction Sequence for Positionally Controlled Diamond Mechanosynthesis,” J. Comput. Theor. Nanosci. 6(2009). In press.

5. Tad Hogg, Robert A. Freitas Jr., “Chemical Power for Microscopic Robots in Capillaries,” Nanomedicine: Nanotech. Biol. Med. 5(2009). In press. (Arxiv Preprint)

Here is the link to the 7 page pdf “Chemical Power for Microscopic Robots in Capillaries,”

6. Robert A. Freitas Jr., “Welcome to the Future of Medicine,” Studies in Health Technol. Inform. 149(2009):251-256. PubMed Abstract (HTML) ….. Full Paper (HTML)

This chapter describes the negative consequences of medical technology development and commercialization that is too slow, and makes the case for an immediate large scale investment in medical nanorobots to save 52 million lives a year. It also explains the essence of nanotechnology, its life-saving applications, the engineering challenges, and the possibility of 1000-fold improvement over our current human biological abilities. Every decade that we delay development and commercialization of medical nanorobotics, half a billion people perish who could have been saved.

7. Robert A. Freitas Jr., “Medical Nanorobotics: The Long-Term Goal for Nanomedicine,” in Mark J. Schulz, Vesselin N. Shanov, YeoHeung Yun, eds., Nanomedicine Science and Engineering, Artech House, Norwood MA, 2009, Chapter 14, pp. 367-392. In press.

8. Robert A. Freitas Jr., “Chapter 15. Computational Tasks in Medical Nanorobotics,” in M.M. Eshaghian-Wilner, ed., Bio-inspired and Nano-scale Integrated Computing, John Wiley & Sons, New York, 2009, pp. 391-428. Purchase Hardcover (Amazon) ….. Full Chapter Text (PDF, 5.2 MB)

9. Robert A. Freitas Jr., “Meeting the Challenge of Building Diamondoid Medical Nanorobots,” Intl. J. Robotics Res. 28(April 2009):548-557. (DOI: 10.1177/0278364908100501) IJJR Abstract (HTML) ….. Full Paper (HTML, 1.0 MB)

39 page pdf : the Challenge of Building Diamondoid Medical Nanorobots

* The first theoretical design study of a medical nanorobot ever published in a peer-reviewed medical journal (in 1998) described an artificial mechanical red blood cell or ‘‘respirocyte’’ made of 18 billion precisely arranged atoms —a bloodborne, spherical 1-micron diamondoid 1000-atmosphere pressure vessel [1e] with active pumping powered by endogenous serum glucose, able to deliver 236 times more oxygen to the tissues per unit volume than natural red cells and to manage carbonic acidity, controlled by gas concentration sensors and an onboard nanocomputer

* A second theoretical design study of a medical nanorobot describes an artificial mechanical white cell or ‘‘microbivore’’— an oval-shaped device measuring a few microns in size and made of diamond and sapphire—that would seek out and digest unwanted bloodborne pathogens

* Another theoretical design study describes an artificial mechanical platelet or ‘‘clottocyte’’ that would allow complete hemostasis in as little as B1 second, even in moderately large wounds. This response time is on the order of 100–1000 times faster than the natural hemostatic system.

* The chromallocyte is a hypothetical mobile cell-repair nanorobot whose primary purpose is to perform chromosome replacement therapy (CRT)

Meeting the Challenge of Building Diamondoid Medical Nanorobots

The technologies that are needed for the atomically precise fabrication of diamondoid nanorobots in macroscale quantities at low cost require the development of a new nanoscale manufacturing technology called positional diamondoid molecular manufacturing, enabling diamondoid nanofactories that can build nanorobots. Achieving this new technology will require the significant further development of four closely related technical capabilities: (1) diamond mechanosynthesis1 (2) programmable positional assembly1 (3) massively parallel positional assembly1 and (4) nanomechanical design. The Nanofactory Collaboration is coordinating a combined experimental and theoretical effort involving direct collaboration among dozens of researchers at multiple institutions in four countries to explore the feasibility of positionally controlled mechanosynthesis of diamondoid structures using simple molecular feedstocks, which is the first step along a direct pathway to developing working nanofactories that can fabricate diamondoid medical nanorobots.

Millions of Unemployed Face Years Without Jobs

Millions of Unemployed Face Years Without Jobs

Published: February 20, 2010

BUENA PARK, Calif. — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

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“There are no bad jobs now. Any job is a good job,” said Jean Eisen, who became unemployed more than two years ago.

The New Poor

Trading Down

Articles in this series will examine the struggle to recover from the widespread strains of the Great Recession.

The New York Times

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Readers shared their thoughts on this article.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.

Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.

She has learned to live without the prescription medications she is supposed to take for high blood pressure and cholesterol. She has become effusively religious — an unexpected turn for this onetime standup comic with X-rated material — finding in Christianity her only form of health insurance.

“I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got to go with what you know.”

Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life. Now, she is one of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.

Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.

In 1983, after a deep recession, women in that range made up only 7 percent of those who had been out of work for six months or longer, according to the Labor Department. Last year, they made up 14 percent.

Twice, Ms. Eisen exhausted her unemployment benefits before her check was restored by a federal extension. Last week, her check ran out again. She and her husband now settle their bills with only his $1,595 monthly disability check. The rent on their apartment is $1,380.

“We’re looking at the very real possibility of being homeless,” she said.

Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.

Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.

Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.

A New Scarcity of Jobs

Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.

Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”

During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.

“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”

Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labor-oriented research group in Washington.

After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.

Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.

It was a jobless recovery: Business was picking up, but it simply did not translate into more work. This time, hiring may be especially subdued, labor economists say.

Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.

At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.

All of which helps explain why Ms. Eisen — who has never before struggled to find work — feels a familiar pain each time she scans job listings on her computer: There are positions in health care, most requiring experience she lacks. Office jobs demand familiarity with software she has never used. Jobs at fast food restaurants are mostly secured by young people and immigrants.

If, as Mr. Sinai expects, the economy again expands without adding many jobs, millions of people like Ms. Eisen will be dependent on an unemployment insurance already being severely tested.

“The system was ill prepared for the reality of long-term unemployment,” said Maurice Emsellem, a policy director for the National Employment Law Project. “Now, you add a severe recession, and you have created a crisis of historic proportions.”

Fewer Protections

Some poverty experts say the broader social safety net is not up to cushioning the impact of the worst downturn since the Great Depression. Social services are less extensive than during the last period of double-digit unemployment, in the early 1980s.

On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.

“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”

When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned away for having too much monthly income. The cutoff was $1,570 a month — $25 less than her husband’s disability check.

Reforms in the mid-1990s imposed time limits on cash assistance for poor single mothers, a change predicated on the assumption that women would trade welfare checks for paychecks.

Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. Albelda.

“We have a work-based safety net without any work,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.”

Here in Orange County, the expanse of suburbia stretching south from Los Angeles, long-term unemployment reaches even those who once had six-figure salaries. A center of the national mortgage industry, the area prospered in the real estate boom and suffered with the bust.

Until she was laid off two years ago, Janine Booth, 41, brought home roughly $10,000 a month in commissions from her job selling electronics to retailers. A single mother of three, she has been living lately on $2,000 a month in child support and about $450 a week in unemployment insurance — a stream of checks that ran out last week.

For Ms. Booth, work has been a constant since her teenage years, when she cleaned houses under pressure from her mother to earn pocket money. Today, Ms. Booth pays her $1,500 monthly mortgage with help from her mother, who is herself living off savings after being laid off.

“I don’t want to take money from her,” Ms. Booth said. “I just want to find a job.”

Ms. Booth, with a résumé full of well-paid sales jobs, seems the sort of person who would have little difficulty getting work. Yet two years of looking have yielded little but anxiety.

She sends out dozens of résumés a week and rarely hears back. She responds to online ads, only to learn they are seeking operators for telephone sex lines or people willing to send mysterious packages from their homes.

She spends weekdays in a classroom in Anaheim, in a state-financed training program that is supposed to land her a job in medical administration. Even if she does find a job, she will be lucky if it pays $15 an hour.

“What is going to happen?” she asked plaintively. “I worry about my kids. I just don’t want them to think I’m a failure.”

On a recent weekend, she was running errands with her 18-year-old son when they stopped at an A.T.M. and he saw her checking account balance: $50.

“He says, ‘Is that all you have?’ ” she recalled. “ ‘Are we going to be O.K.?’ ”

Yes, she replied — and not only for his benefit.

“I have to keep telling myself it’s going to be O.K.,” she said. “Otherwise, I’d go into a deep depression.”

Last week, she made up fliers advertising her eagerness to clean houses — the same activity that provided her with spending money in high school, and now the only way she sees fit to provide for her kids. She plans to place the fliers on porches in some other neighborhood.

“I don’t want to clean my neighbors’ houses,” she said. “I know I’m going to come out of this. There’s no way I’m going to be homeless and poverty-stricken. But I am scared. I have a lot of sleepless nights.”

For the Eisens, poverty is already here. In the two years Ms. Eisen has been without work, they have exhausted their savings of about $24,000. Their credit card balances have grown to $15,000.

“I don’t know how we’re still indoors,” she said.

Her 1994 Dodge Caravan broke down in January, leaving her to ask for rides to an employment center.

She does not have the money to move to a cheaper apartment.

“You have to have money for first and last month’s rent, and to open utility accounts,” she said.

What she has is personality and presence — two traits that used to seem enough. She narrates her life in a stream of self-deprecating wisecracks, her punch lines tinged with desperation.

“See that,” she said, spotting a man dressed as the Statue of Liberty. Standing on a sidewalk, he waved at passing cars with a sign advertising a tax preparation business. “That will be me next week. Do you think this guy ever thought he’d be doing this?”

And yet, she would gladly do this. She would do nearly anything.

“There are no bad jobs now,” she says. “Any job is a good job.”

She has applied everywhere she can think of — at offices, at gas stations. Nothing.

“I’m being seen as a person who is no longer viable,” she said. “I’m chalking it up to my age and my weight. Blame it on your most prominent insecurity.”

Two Incomes, Then None

Ms. Eisen grew up poor, in Flatbush in Brooklyn. Her father was in maintenance. Her mother worked part time at a company that made window blinds.

She married Jeff when she was 19, and they soon moved to California, where he had grown up. He worked in sales for a chemical company. They rented an apartment in Buena Park, a growing spread of houses filling out former orange groves. She stayed home and took care of their daughter.

“I never asked him how much he earned,” Ms. Eisen said. “I was of the mentality that the husband took care of everything. But we never wanted.”

By the early 1980s, gas and rent strained their finances. So she took a job as a quality assurance clerk at a factory that made aircraft parts. It paid $13.50 an hour and had health insurance.

When the company moved to Mexico in the early 1990s, Ms. Eisen quickly found a job at a travel agency. When online booking killed that business, she got the job at the beauty salon equipment company. It paid $13.25 an hour, with an annual bonus — enough for presents under the Christmas tree.

But six years ago, her husband took a fall at work and then succumbed to various ailments — diabetes, liver disease, high blood pressure — leaving him confined to the couch. Not until 2008 did he secure his disability check.

And now they find themselves in this desert of joblessness, her paycheck replaced by a $702 unemployment check every other week. She received 14 weeks of benefits after she lost her job, and then a seven-week extension.

For most of October through December 2008, she received nothing, as she waited for another extension. The checks came again, then ran out in September 2009. They were restored by an extension right before Christmas.

Their daughter has back problems and is living on disability checks, making the church their ultimate safety net.

“I never thought I’d be in the position where I had to go to a food bank,” Ms. Eisen said. But there she is, standing in the parking lot of the Calvary Chapel church, chatting with a half-dozen women, all waiting to enter the Bread of Life Food Pantry.

When her name is called, she steps into a windowless alcove, where a smiling woman hands her three bags of groceries: carrots, potatoes, bread, cheese and a hunk of frozen meat.

“Haven’t we got a lot to be thankful for?” Ms. Eisen asks.

For one thing, no pinto beans.

“I’ve got 10 bags of pinto beans,” she says. “And I have no clue how to cook a pinto bean.”

Local job listings are just as mysterious. On a bulletin board at the county-financed ProPath Business and Career Services Center, many are written in jargon hinting of accounting or computers.

“Nothing I’m qualified for,” Ms. Eisen says. “When you can’t define what it is, that’s a pretty good indication.”

Her counselor has a couple of possibilities — a cashier at a supermarket and a night desk job at a motel.

“I’ll e-mail them,” Ms. Eisen promises. “I’ll tell them what a shining example of humanity I am.”