Casualties are mounting as airlines face fuel bills $89 billion larger than last year. Airlines reckon they may lose $40 billion this year, thrice the deficit recorded after the Sept. 11, 2001, terrorist attacks. In less than a month Australia's Qantas twice announced across-the-board fare increases, each time plus 4 percent, to pay for fuel. American Airlines plans to reduce its U.S. flight capacity by more than 10 percent in the fourth quarter. Passengers are already being charged from $15 to $25 per checked bag, and thousands of airline personnel are already being laid off.
Republican oil billionaire Boone Pickens sees oil continuing its upward climb to $150. Other handicappers put the ceiling at $200, and double that again if hostilities break out between the United States and Iran.
Outlandish executive compensation packages, a housing bubble with some 57 varieties of spellbinding mortgages, ethanol and the global food crisis, the erosion of the middle classes into the ranks of the poor, all are driving mammon capitalism into bankruptcy. A paradigm shift from bandit capitalism to democratic capitalism is in the making with the objective of getting naked greed under control. Cassandras and Pollyannas are battling it out with wet fingers to the wind over a full-blown or mild recession.
A few years ago liberal philanthropist George Soros dropped a bomb at the annual shindig of movers and shakers in Davos, Switzerland, when he said unfettered capitalism is the greatest danger to democracy. He should know. On Black Wednesday, Sept. 16, 1992, Soros broke the Bank of England by shorting more than $10 billion worth of pounds, cashing in on the Bank of England's reluctance to either raise its interest rates or to float sterling, and netted for himself $1.1 billion.
Franklin D. Roosevelt's bogeyman was Big Business. Ronald Reagan had Big Labor. And the 44th president is almost bound to have Big Finance. A paradigm shift from unfettered to fettered appears to be in the making. Democratic control of the White House and both houses of Congress would quickly translate into more regulation. In Kevin Phillips' new book, "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism," the former Republican Party strategist deals with the reckless expansion of private debt as well as the federal budget deficit.
Phillips is not alone these days when he says "American financial capitalism, at a pivotal period in the nation's history, cavalierly ventured a multiple gamble: first, financializing a hitherto more diversified U.S. economy; second, using massive quantities of debt and leverage to do so; third, following up a stock market bubble with an even larger housing and mortgage credit bubble; fourth, roughly quadrupling U.S. credit market debt between 1987 and 2007, a scale of excess that historically unwinds; and fifth, consummating these events with a mixed fireworks of dishonesty, incompetence and quantitative negligence."
This upheaval is probably the greatest story never told, covering two decades from 1986 to 2006. The number of billionaires in the world jumped from 350 before Sept. 11 to more than 1,000 today.
The Republican renegade describes today's financial services sector as "a grasping, gargantuan combination of banks, stockbrokers, insurancemen, loan sharks, credit card issuers, hedge fund speculators, securitization mavens and mortgage operators." Over the last five years financial services have reached a swollen 21 percent of U.S. GDP -- the largest sector of the private economy. With twin-war costs now well over half a trillion dollars and "Happy Motoring" utopia running on empty, no one seemed to notice.
Science may yet come to the rescue of democratic capitalism -- or make things worse.
In South Korea, the RNL Bio Co. received the first-ever commercial order for cloning. An American woman paid the company $50,000 to clone her dead pit-bull terrier, Booger. In the United States, the world's most prominent scientists and futurists met to assess how science could improve the human race over the next two decades.
Ray Kurzweil, America's leading scientist-futurist ("The Singularity Is Near"), sees nanotechnology over the next 20 years transmogrifying Homo sapiens with an upgrade. Kurzweil told the BBC, "We'll have intelligent nanobots go into our brains through the capillaries and interact directly with our biological neurons." The next level up for Homo connect-us is known as transhumanism, first coined by Julian Huxley (brother of Aldous who wrote "Brave New World"), who described it as "man remaining man, but transcending himself, by realizing new possibilities of and for human nature."
Nanotech scientist Eric Drexler agrees with Kurzweil that we are on the brink of a new technological breakthrough, similar in scope and significance to man's breakthrough to the Industrial Age. Soon, they say, nanotech will enable humankind to get all the energy we need from solar power and make 99 percent of illnesses easily curable by specially designed nanobot antibodies that will hunt down specific viruses in our blood and kill them, also to augment our reflexes, our concentration, even our intelligence, with nano-implants in our bodies and brains.
The blog Global Dashboard, which is frequently ahead of the scientific news curve, reports Francis Fukuyama is not writing about the Future of History because he believes transhumanism "is the most dangerous idea facing humanity." The new technology, he believes, would be more available to rich individuals or rich societies, and thus might create a "genetic overclass." And greed galore.