What if there were a secret store of wealth that America could use to pay down its debts and restore prosperity? What if we could free hundreds of billions of dollars to reinvigorate our society and restore confidence to industry and financial markets? Such a reserve does in fact exist. It is our accumulated store of institutionalized stupidity.

Readers of “Dilbert” who have worked in large organizations must constantly explain to children and other innocents that the pervasive stupidity depicted in Scott Adams’ comic strip is only slightly exaggerated. It exists in every corner of our “efficient” quasi-capitalistic marketplace. In prosperous times, institutionalized stupidity is annoying, but in times of extreme economic difficulty, this huge reservoir of dysfunctional behavior is inevitably tapped as desperate necessity becomes, temporarily, powerful enough to overcome the general human tendency toward stupid institutional behavior.

Whence institutional stupidity? The best answer I can come up with is that our species is designed by evolution to adopt destructive simplifications of behavior. The eagerness of individuals to substitute obedience to simple rules for independent development of specific solutions is the foundation of institutional decay. Fixed rules substitute for context-based decisions and dogmas crowd out considered judgments until schools produce dropouts, prisons incubate criminals, food plants ship toxic peanut butter, and Vista bogs down your computer. As every institution ages, the accumulation of irrationality in its growing mass of rules, dogmas, and habits raises the level of dysfunction and stupidity, until some final crisis sweeps away the accumulated mountain of folly.

A year ago, I began using the FIOS high-speed Internet service provided by Verizon, a huge telecommunications corporation. Ever since I began using FIOS, Verizon marketing personnel have contacted me, on average about twice a month, asking me to sign up for the FIOS service. Each time they call me, I carefully explain to them that I am already a FIOS customer, and they reply that they will not solicit me again. Then, a few weeks later, the phone rings again with another FIOS solicitation. Verizon has probably spent more money on re-marketing FIOS to me than they did on the initial installation of the service. This is not an isolated anecdote. Such stupidity accounts for hundreds of billions of dollars of waste. Let’s look at the big examples.

It looks like GM is going to be nationalized, but with a twist. Because we can’t bear to say the S-word (Socialism) in America when the taxpayers start funding a private company, the incompetent management is likely to be retained and given more money to burn. Readers of the business pages may recall that the GM CEO was given a vote of confidence by the board just a few months ago, and so this bozo expects to retain control of a company that is too distressed even to file for bankruptcy protection.

The Wile E. Coyote moment never seems to come for incompetent US top managers. They continue to defy the laws of economic gravity because their spin control is so highly perfected that it functions as a levitation mechanism. I wonder how much longer the taxpayers will be willing to provide unlimited funding to companies led by idiots? Here are some practical measures the Obama administration should consider when it takes over a private company:

1. Conduct a thorough post-mortem on the management decisions leading to the business failure.

2. Remove all managers associated with poor decisions revealed in step 1.

3. Hire replacement managers with proven records of business turnaround execution.

4. Reclaim all past bonus compensation paid to managers associated with a failed company for the last five years.

5. Restructure the business model of the failed corporation to address shifting national priorities. (E.g., GM should start making rail cars and trolleys, in addition to fuel-efficient cars).

6. Introduce a high degree of transparency into the financial records and management deliberations of the nationalized company. All key decisions and their supporting documentation should be visible on the Internet. A taxpayer-funded company should be accountable to the taxpayers.

7. Put private citizens and worker representatives, with no connections to existing management, on the board of every taxpayer-funded company.

If the peak oil theorists are correct, within 20 years Americans will have to live on 10% of our current per-capita energy consumption. This means that the auto industry as we know it must undergo radical change. The conclusions for the auto industry are clear, and it will be up to the Obama administration to transform it according to the following imperatives:

1. The era of high personal mobility is ending. Americans may still own lots of cars, but they will be driving and replacing them dramatically less.

2. Auto sales are going to plunge to a fraction of what they are today, and the types of cars and trucks sold will shift to electric-powered vehicles.

3. The productive capacity of America’s auto makers must be shifted to the manufacture of other goods to avoid massive unemployment and further economic collapse.

4. The precedent of WWII factory conversion of manufacturing away from automobiles should be followed by the Federal Government, but it is mass transit vehicles, buses and train cars that should be produced, not weapons.

5. The production of clean buses, electric locomotives, and rail cars will absorb the unemployed and under-employed workers of the auto industry and enable the rapid expansion of public transportation in America.

6. The Federal government should supply funding, leadership, and technical assistance for this strategic industrial conversion.

7. Fiscal stimulus, in the form of massive subsidies for the build-out of inter-city rail, light rail, and bus service, will be the most productive anti-recessionary policy the government could pursue.

Americans should understand that the current economic turmoil is not a temporary interruption in our old energy-squandering way of living, and that the fat times are not going to return soon. We have got to radically restructure our society to function with less energy, and we will have to start with our automobile industry.  

When everyone is mad, only madmen are respectable. The sharp collapse of automobile sales in America is supposed to be a dire omen of economic failure, and pressure is mounting on the government to “save” the US auto industry. But on closer inspection, the US auto industry has been encouraging wildly wasteful and environmentally destructive behavior for decades, and “saving” it is the last thing we should do. This industry should be shut down and rebuilt from the ground up. Here is why:

1. Automobiles are ecologically and socially destructive. Producing, fueling, and disposing of them consumes vast amounts of precious resources. Yet their impact on world society has been to spread unsustainable living patterns and isolate individuals from contact with their neighbors.

2. Automobiles have been sold as disposable fashion merchandise, an extremely wasteful practice. There is no reason an automobile cannot be designed to last 20 years, like a refrigerator, stove, or washing machine. (The billionaire founder of IKEA drives a 20 year old Volvo.)

3. Automobiles generate a huge number of deaths and injuries and inflict enormous insurance costs on their owners. Actively selling “high performance” cars and encouraging drivers to drive them as fast as possible contributes to this mayhem.

4. The toxic wastes produced by automobiles are substantial. Discarded tires alone account for a huge problem, since no efficient recycling system has been developed for them. Similarly, vast amounts of plastics and toxic fluids are dumped into the ecosystem because of artificially stimulated junking of cars to permit the frequent replacement that is vital to the current industry model of selling cars as fashion statements.

We need to stop this madness. The world auto industry should be producing only about 1/3 of its current output of cars, and these cars should be engineered to last indefinitely, with a minimal negative environmental impact. GM, Ford, and Chrysler should be shut down, because they are unlikely to reinvent themselves as “green” vehicle manufacturers. New organizations should replace them, and the US government should provide appropriate research and development subsidies to help these newcomers rebuild the US auto industry.

The future of the world automotive industry should be grounded in sustainability, not disposability. We literally cannot afford to keep making and buying cars as we have for the last 60 years.

Just when you thought things could not get worse, we face the specter of the rise of National Socialism in the United States. Because moneyed interests now control the US government, they intend to use the US Treasury as an insurance fund for their financial losses. This will be done to “protect” taxpayers, but it is basically the last stage of the looting of the American economy.

We now face the worst of both ugly worlds: the greed of a rapacious plutocracy coupled with the inefficiency and unaccountability of faceless government bureacracy. Politicians and propagandists will be quick to explain why the princes of commerce need to continue to be paid their astronomical salaries, while the taxpayers make good their losses.

This ridiculous denoument to our decaying society will end when foreign lenders effectively take control of our economy and restore rationality to our business affairs. What a sad end to a once great nation.

Perhaps the saddest thing about the spectacle of folly and degradation that the US Presidential election contest has become is that Obama lacks the courage to deliver the speeches necessary to put the truth before the American people. Out of frustration, I have decided to draft a few of these imaginary speeches and publish them here. The first one concerns McCain’s shameless use of his POW experience as a magically inexhaustible source of honor.

Speeches Obama will never deliver: #1 – John McCain’s Bottled Honor

John McCain does not receive enough credit as a politician. His career has been built upon a feat that is unrivaled in modern American history. Senator McCain took one episode of courage from his wartime experience and transformed it into a permanent claim of exceptional honor. It is as though he filled a bottle with honor during his POW ordeal, and this bottle has never run dry.

But can honor really be stored? Isn’t honor something that we have to validate every day of our lives? How can a man insist that all behavior subsequent to a notably honorable action is irrelevant? Let us consider the honor of Senator John Sidney McCain and consider if what is stored in the bottle marked POW Honor is sufficient to wash away the stains of his subsequent actions.

I ask you to judge if a man who betrays a loyal first wife is a man of honor. I ask you to say if a man ensnared in the Keating S&L scandal is a man or honor. Is a candidate who curses his wife in front of reporters a man of honor? Is a politician who embraces a President who slandered him a man of honor? Is a torture victim who voted to enable torture a man of honor? Is a candidate who accuses me of teaching kindergarteners about sex a man or honor?

John McCain cannot replenish his honor from a bottle that was filled in Vietnam. The shelf life of that bottle expired many, many years ago. John McCain is not a man of honor today; he is a man so consumed by ambition that he will commit one dishonorable act after another to win the glittering prize of Presidential power. Honor is not a preserved and stored attainment that excuses any subsequent action, and it is particularly dishonorable to use past glory to claim permanent exemption from the consequences of bad conduct.

So take a closer look at the bottled honor of John McCain, my fellow citizens, and ask yourselves why Senator McCain acts dishonorably today. Honor cannot be permanently attained by any man before his death. He must defend and preserve his honor in all the acts of his life. Whatever honor John McCain attained in Vietnam has been spilled and scattered in the imprudent and ambitious actions of his subsequent career. Look again, America, and see that the bottle of John McCain’s honor is empty. It is as empty as McCain’s promises for reform and as useless as his obsolete and dangerous views on foreign policy. The highest duty before us is to preserve our country, my fellow Americans, not our nostalgia for the lost honor of John McCain.

A strange thing is happening in the Presidential race. The increasing economic pressures on American voters are not resulting in a resurgence of rationality and pragmatism. Instead, we seem to be witnessing a desperate grasping for magical solutions. McCain and Palin are dispensing Republican magic, and Obama is offering Democratic magic. Poor old Biden is just peddling the same old, same old.

What can one say to a population that refuses to face facts and believes that a ferocious old Vietnam ghost or a perky hockey mom can be a “game changer?” What can one say to people who believe that sports and gambling metaphors are the best way to describe American Presidential politics? America is like a broken down gambler at a craps table in Las Vegas risking his last few dollars on one more high-stakes roll.

Unfortunately, even if the gambler wins another throw of the dice, the odds remain against him, and that is his doom. Maybe we dodge a flu pandemic, and maybe we luck out of the next warming-related cycle of droughts and weather disruptions, and maybe we slink out of the Mideast without igniting a global war, and maybe the Chinese decide to keep lending us money for another few years, but how long can all this “good luck” continue. Not much longer. We appear to be past the point of no return in a politics of national self-delusion that features instant messiahs of varying degrees of credibility and durability. Each one promises that magic will solve our problems. But there is no such magic. You can’t get something for nothing, and you can’t lie your way to the truth.

Prudent people should be making plans to move their dollar-denominated savings into stable assets likely to survive the repudiation of America’s foreign debt and the resultant hyper-inflation. Those with the option to relocate should consider moving to nations with sound economies and responsible leaders. Americans are spending their last night in the casino praying for magic, but they will face the dawn with empty pockets and broken dreams.