The Ponzi Scheme As Way of Life

Sharon December 19th, 2008

I’m sorry, I’m having a bit of trouble getting all outraged about Bernie Madoff and his ponzi scheme.  Yes, I’m shocked.  Shocked and appalled.  You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart.  Gosh, that seems so unprecedented.

Yeah, I feel bad for those who were taken in, particularly for charities that lost their funds.  But no worse than for those who lost their 401Ks or their pension funds on the stock market, for cities and states that can’t sell municipal bonds, and I feel far worse for the poor, who never had a glimmer of getting to participate in the get-rich-quick ponzi scheme that was a stockmarket that everyone said could have perpetual growth forever. 

Madoff may be a criminal, but he’s a criminal in large part because he’s engaging in a particular form of ponzi scheme that we look down upon, one small enough to be called illegal.  In general, we’re pretty comfortable with ponzi models -we live, quite happily, in a ponzi economy, one in which the concept of perpetual economic growth is sold, divvied up again and resold.  We live in a Ponzi ecology where we borrow constantly against the future to pay for our present affluence.

Is this truly a Ponzi scheme?  I think the answer is yes - a Ponzi scheme never really generates new wealth, it simply relies on a constant stream of new money.  And since the eco-Ponzi economy relies most of all on reducing the capacity of future generations to live well - because natural resources and associated wealth are already drawn down, I think that it does meet the criteria at both the economic and ecological levels.

 Most of us have been putting our money into 401Ks and Mutual funds,  and now that money is disappearing - and it is disappearing again, because we live in a Ponzi economy, one in which new funds can, for a while, conceal the bankruptcy of a society that draws down its natural resources and leverages both its ecology and economy past bearing.  Thus we get the mantra, as Bob Waldrop wisely observes, investing is saving that we all belong in the stock market:

“Lie the First: Money in the stock market is “savings”.

Reality: Money in the stock market is “speculation”. You buy a stock on the speculation that it will go up and you will sell it later at a profit and in the meantime, maybe get a regular dividend. It can also be considered casino gambling. It is not savings as we generally define the term, since it can be here today and gone five minutes later.

Lies the Second and Third: Everyone should be in the stock market. You can’t afford to NOT be in the stock market.

Reality: The stock market is only for people with money to gamble. People with debts and small savings should not be in the stock market. The former should pay the debts, including their mortgages first. The latter should wait until they have substantial savings before they decide to risk a small amount of their assets in the stock market.

The stock market game is rigged against the average small investor. With the way accounting rules and etc are these days, there are lots of ways that corporations can hide important information. Just ask some of the Lehman’s stockholders about that.

Lie the Fourth: Buy and hold is the smart strategy. Over time, the stock market always goes up.

Reality: That’s not the way the rich make their money in the stock market. They buy stocks when they are cheap and sell them when they are expensive. The “always goes up” comment is usually coupled with a comparison of two dates and the stock market index values on those dates. Compared to the history of economics, there is no way that we can say with total truth that the market over time will always go up. Where are the investments in the stock exchanges of the Roman Empire these days? And a rise in a stock market index may have nothing to do with the performance of individual stocks or mutual funds. Ask the stockholders of Enron about that. Or the stockholders of corporations that made horse-drawn carriages.”

I don’t blame people who were constantly told that they’d need X million dollars to keep living into their old age, and if they didn’t have it, would find themselves freezing and starving for believing this, but it is how the Ponzi economy works.  It relies on the idea that you are doing something good by feeding your dollars into corporate coffers, and that your money is still really yours.  Those are both false truths.  And they are built on ponzi model they pay out to the earliest investors (why, for example, wealth is increasingly concentrated in the hands of older folks) while offering nothing to those unlucky enough to get in late.

I had one of those “duh” moments yesterday as I was doing a radio show - I made a point I’ve made many times before - that growth capitalism in general and the real estate bubble in particular depended heavily on the idea that we can’t live together, that everyone has to own their own separate household.  So the rise in average material living space from 250 square feet per person in 1950 to 850 square feet for each warm body in 2000 was in part a product of the constant message that living together with one’s family or friends was a measure of failure. 

This point I’ve written about a number of times - but somehow I’d never quite fully grasped the corollary point, which I found myself articulating on the fly - that the Ponzi economy depends on an endless supply of laborers, laborers who wouldn’t quit because they can’t.  And that means that the cost of living - of basic needs like housing, food and transportation have to be kept high - because otherwise people might notice that serving corporate masters isn’t the best or only way to live their lives.  Those 850 square feet, and the costs associated with them, and the problems of housing the ordinary stuff we “require” for daily life in 250 square feet means that the cost of housing for ordinary people is dramatically  high - so high that we must devote most our time to the corporate economy, so high we then have no time to do work in the informal economy, so high that we can never, ever think about whether there are any better choices out there.

We’re going to try and rescue the economy with another Ponzi scheme - with borrowing against our children’s future wealth to protect financial institutions and invest in some good things and some bad ones.  This, of course, is the oldest ponzi scheme of all, and you can make the argument that some human societies have been playing this game for a very long time.  We’ve been doing it with natural resources and are continuing to do so, and we’re also expanding the share of our children’s wealth we’re willing to borrow against.  After all, what have future generations ever done for us?  They might as well serve some purpose - to pay off our debt.

And of course we’ve got the best possible reason for this - we’re in a crisis.  There’s always a good reason for taking just a little more of what belongs to the future - to bring people out of poverty, to resolve this or that crisis.  Of course, the crisis was caused by borrowing against our children’s inheritence of natural resources, but more of the same is now necessary.  A good Ponzi scheme always needs new investors - and if none are going to volunteer, well, let’s volunteer them.  We’ll use the to prop up the stock market and today’s version of the Roman chariot business.

Our ecology and our economy all fundamentally are built on a Ponzi scheme in which we can never make enough to keep up - we are always losing ground, always having to steal from further down the line of our posterity.  At the same time, we justify their forcible participation in this speculation by saying that we are protecting them - we have to protect them from a Depression, so it is worth risking their future.  But, of course, if you actually care about your children and grandchildren, you don’t ask them to make sacrifices you aren’t prepared to make.  Fundamentally, we’re covering our own asses, and asking our kids to do it for us.

And that’s, well, evil, to put it bluntly.  It is precisely the opposite of what parents are supposed to do for their children, and what present generations are supposed to do for the future.  As David Orr observes in his superb essay “Loving Children: A Design Problem” living in a world in which we do not act as though we love our children (despite our endless assertions that we do) does them deep, moral harm.  It lessens us, but more importantly, it doesn’t just physically impoverish our children, it morally impoverishes them too.

“The Skymall catalogue, conveniently available to bored airplane passengers, recently offered an item that spoke volumes about our approach to raising children. For a price of several hundred dollars, parents could order a device that could be attached to a television set that would control access to the television. Each child would be given a kind of credit card, programmed to limit the hours he or she could watch TV. The child so disciplined, would presumably benefit by imbibing fewer hours of mind numbing junk. They might also benefit from the perverse challenge to discover the many exciting and ingenious ways to subvert the technology and the intention behind it, including a flank attack on parental rules and public decency via the internet.

My parents had a rather different approach to the problem. It was the judicious and authoritative use of the word “no.” It cost nothing. My brother, sister, and I knew what it meant and the consequences for ignoring it. Still, I sometimes acted otherwise. It was a way to test the boundaries of freedom and parental love and the relation between the two. 

The Skymall device and the word “no” both represent concern for the welfare of the child, but they are fundamentally different design approaches to the problem of raising children and they have very different effects on the child. The device approach to discipline is driven by three factors that are new to parenting in the postmodern world. It is a product of a commercial culture in which we’ve come to believe that high-tech gadgetry can fix human problems, including that of teaching discipline and self-control to children. Moreover, the device is intended mostly for parents who are absent from the home for much of the day because they must (or think they must) work to make an expanding number of ends meet. And, all of our verbal assurances of love notwithstanding, it is a product of a society that does not love its children competently enough to teach them self-discipline. The device approach to parenting is merely emblematic of a larger problem that has to do with the situation of childhood within an increasingly dysfunctional society absorbed with things, economic growth, and self. 

We claim to love our children, and I believe that most of us do. But we have, sheep like, acquiesced in the design of a society that dilutes the expression of genuine love. The result is a growing mistrust of our children that easily turns to fear and dislike. In a recent survey, for example, only one-third of adults believed that today’s young people “will eventually make this country a better place” (Applebome, 1997). Instead, we find them “rude” and “irresponsible.” And often they are. We find them overly materialistic and unconcerned about politics, values, and improving society. And many are too materialistic and detached from large issues (Bronner, 1998). Not infrequently they are verbally and physically violent, fully adapted to a society that is saturated with drugs and violence. A few kill and rape other children. Why are the very children that we profess to cherish becoming less than likable and sometimes less than human? 

Some will argue that nothing of the sort is happening and that every generation believes that its children are going to Hell. Eventually, however, things work out. Such views are, I think, fatuous because they ignore the sharp divide imposed between the hyper-consumerism of the post-modern world and the needs of children for extended nurturing, mentoring, and imagining. It’s the economy that we love, not our children. The symptoms are all around us. We spend 40% less time with our children than we did in 1965. We spend, on average, 6 hours per week shopping, but only 40 minutes playing with our children (Suzuki, 23). It can no longer be taken for granted that this civilization can pass on its highest values to enough of its children to survive. Without intending to do so, we have created a society that cannot love its children, indeed one in which the expression of real love is increasingly difficult.”

Our love for our economy leads us to seek any path out of the crisis we are now facing - whether it will work or not, whether it does harm or good.  We say we are doing it for our children - but much of what we have done mean that their own Depressions will be deeper and they will be poorer.  The Ponzi scheme is coming to an end - we have drawn in generations at a huge remove from us.  500 years from now, when no one remembers our names, our descendents will still be living with the consequences of climate change, will still be paying the debt from our overdrawn ecology.

It may well be the case that we will have to borrow against both resources and wealth to adapt our infrastructure - but we shouldn’t put a penny of borrowed money into anything that won’t serve the next generation, as well as us or better.  That means not a cent for Detroit to keep building gas guzzlers and personal cars.  Not a penny for highways that they won’t be driving on anyway.  We cannot afford to waste what’s left of their inheritance - we need to leave our children buildings worth occupying, that will last long enough to house them, and energy resources that will serve them, and some accessible oil in the ground for the things they may not be able to produce without it. 

I was born in 1972.  By the time I was six or seven, it was well known that we desperately needed to take action to address future needs for energy, economic and climate stability.  In 1979, Jimmy Carter’s Year 2000 report identified Global Warming as a major threat, and the need for growth in renewable energy as a primary national project.  Some nations, including Sweden, took their posterity as a priority and began seriously investing in alternative energies.  And in the US, we had morning in America, and the decision to offer some temporary prosperity at the price that my generation, coming of age, with children on our knee, would face the coalescing problems passed down to us.

I don’t blame the baby boomers as a unit - many I know did their damnedest to make it happen, but they were not the majority.  I admire and respect all of those who fought the good fight to keep priorities straight.  But that said,  our parents and grandparents failed us, they passed the problem down to my peers, and those younger than us.  And those same people (because most of the powerful are baby boomers still) are planning on passing the problem down to the children we hold at breast or watch play at our knees.  They will impoverish their grandchildren to keep the Ponzi scheme going.

The question is whether we, and the baby boomers and older folk who had it right from the beginning, actually love our children and grandchildren enough to stop the buck here?  I don’t minimize how difficult that is - and I don’t doubt that trying to live on a fair share, and get through the necessary economic crisis so we can start better next time will be difficult for children as well as adults.  And yet, passing the buck again ensures them a darker, warmer, more bitter world with fewer natural resources, and a crushing economic debt.  Sometimes when there are no easy answers, one has to move to “what is right.”

The burden of addressing our world-wide Ponzi scheme falls, I fear upon all of us who are adult enough to demand it stop, to refuse to participate to the extent we can, to work to end it, and most of all, to shield with our bodies the children and grandchildren we do love, and in whom we must reposit our hopes, our endurance and our courage.


55 Responses to “The Ponzi Scheme As Way of Life”

  1. Andy Lon 19 Dec 2022 at 1:43 pm

    The new world is constantly destroying the old world - sometimes violently. Ponzi schemes, innocent animals getting hit by cars, tsunami’s, meteors hitting the planet, solar flares, blackouts, depressions, dinosaur die offs etc all happen and wishing they didn’t won’t make them not happen. Matter, wealth, power is constantly changing state. The old world you dream of is DEAD. It’s not coming back. Reinvent yourself and your life - TOTALLY. If you can’t stay ahead of the curve and no when to change direction you will get run over by the mass of retards who are afraid the sky is falling. Trust your instincts people and fight the fear meme - it’s total bull shit. The stock market crash is nothing but a giant reverse bubble -the worlds way of changing the old guard!

  2. Matt Kon 19 Dec 2022 at 1:51 pm

    250 sqft per person? Sharon, how many square feet are in your house per person?

    I just recently moved out of a 600 sqft apartment that my wife and I were sharing. Living in that place was a nightmare with two people, and we don’t even own that much stuff — we are both just out of college. I can’t blame anyone who wants 850 sqft to live in — maybe it’s a bit more than we need, but not *that* much more.

  3. Aaronon 19 Dec 2022 at 2:00 pm

    My wife and I and our infant son live in a 750 sq ft apartement - maybe a little less, 730-ish sq ft. We have lots of stuff - and it’s plenty of room. I’d like a bigger kitchen (who wouldn’t?) but other than that it’s just fine. I want more room - but only for productive space like a workshop or a room exclusively to brew beer or something like that. But that’s a luxury - it isn’t really necessary.

  4. MEAon 19 Dec 2022 at 2:02 pm

    I think a lot of the question about living space isd not how much, but how is it laid out and how flexable the space is, and how much you can shove the furnishing around. I manage with 4 people, 10,000 plus books, and two cats in 200sq/person, partly because we can shifts thing around at the drop of a hat to reconfigure and partly because I can store a fair amount in the basement and attic — honestly between the 2 of them I have antoher 400 sq feet, but it’s not really living space because the basement is pretty wet and the attic doesn’t have a proper stairway.

  5. Amyon 19 Dec 2022 at 2:05 pm

    That was a life changing article…thank you for your brilliance and sharing it with us.


  6. WNC Observeron 19 Dec 2022 at 2:13 pm

    There was a time when people bought stocks mostly for the dividend. It used to be that those widows and orphans that were fortunate enough to be left something to provide for their needs would often be left dividend-yielding stocks as well as bonds. Those dividends would be the result of companies producing something that people bought (mainly because it was something that people actually needed), and doing it competently and efficiently enough to turn a profit. The emphasis was on managing for the long-term, paying out consistent dividends year after year.

    Capital gains, if any, were incidental. Take away the impact of inflation (which was not much of an issue in gold-standard days), and whatever capital gains might be realized from stocks would almost entirely be due to speculation - gambling. The thing is, those widows and orphans did just hold on to their stocks and not sell them, so those capital gains were just on paper and did not really matter.

    This, IMHO, was a better way to run an economy.


    1) No, we do not need to tax capital gains at a lower rate than other forms of income. If anything, the exact opposite is true. Everything that politicians and “economists” have been saying in defence of lower capital gains taxes as being beneficial to the economy is pure BS, and clearly places them amongst those who have aided and abetted this giant Ponzi scheme that we call the US economy.

    2) Maybe we do need to index capital gains to inflation. Even better, though, is to properly manage our money supply so that we don’t have inflation in the first place.

    3) A term that I have not been hearing at all, but that IMHO would be competely reasonable and justifiable to hear a lot of: “Breach of Fiduciary Duty”. Most people do not actively manage their own retirement accounts. They invest them in mutual funds in IRAs or 401K plans. In the case of the latter, the employers very much want to wash their hands of any responsibility for the consequences of the investment choices offered to their employees. The fund groups want to wash their hands of any responsibility for the performance of the managers of the individual funds offered by their groups. The fund managers want to wash their hands of any responsibility for the performance of their funds. Banks want to disavow responsibility, regulators want to disavow responsibility, elected representatives want to disavow responsibility. It is time that someone stood up and said “No Way! People in positions of responsibility ARE responsible for their actions or inactions. It is time to hold those responsible to account.”

    Being old and wise enough to have become very cynical, I am not going to hold my breath waiting for this to happen. However, I do suggest that if “breach of fiduciary duty” is no longer an operative concept in our system, it is thus reasonable to conclude that NO ONE can or should be entrusted with fiduciary responsibility for one’s precious few financial resources. Yes, if that attitude would be widely acted upon, that would send the economy (excuse me, I mean Ponzi scheme) further into a tailspin. Well, I would furthermore suggest that maybe the prospects of that really happening may be just about the only thing at this point that will sufficiently get the attention of TPTB and concentrate their minds enough to result in some responsible action being actually taken.

  7. Sharonon 19 Dec 2022 at 2:17 pm

    We have a very large house, in part because it is supposed to have more people in it - the house was built for my husband’s grandparents to live in as well - we have 3500 square feet for 6, but there were, until a few years ago, 8 of us - we expected Eric’s grandmother who was only 80 and whose mother had lived well into her 90s to live much longer - she would have had she not had an accident. Since then, we’ve been looking for new housemates, actually, since the house is much too big for us. We shut off a number of the rooms, but it is still too big. We’re still looking, btw, if anyone wants to think about moving in - ideally, we’d add not just a single or a couple, but a family with young kids who want to share the house and land.

    This is actually the first time I’ve ever lived in a large house - before this, Eli, Eric, I and a friend lived in a 1000 square foot apartment, and before that five of us lived in 840 square feet. My parents owned a duplex about the same size as my current home - there were two families and 11 people in it, however.

    I dislike our large spaces so much that last year we came very close to buying a 900 square foot cabin for the six of us - my husband remained the holdout however, not on the space issue, but on the fact that the cabin had no running water or electricity ;-).


  8. Karinon 19 Dec 2022 at 2:17 pm

    Matt, I think she meant 250 per person. if the average is 850 square ft a person, that is your standard 3500 starter mansion. My SIL moved into her McDream home this past spring. She is struggling to pay the mortgage and can’t even furnish it. 3500 for a family of four; with 2 daughters who could share a bedroom. Crazy. Think of the amount of consumption that goes into filling all that space…Crazy…

  9. Sharonon 19 Dec 2022 at 2:21 pm

    Matt, I should add that I understand wanting more space - I want less now that I’ve had more, but I did dream of more space before. My point wasn’t that people should live in tiny houses - the point was that people *did* live in small houses, and didn’t mostly realize that they were small - most of the boomers, for example, grew up in houses that had 250 square feet per person - ask them if their primary memory was crowding or not? Before that houses were smaller. My point was that the need for space is in part a culturally constructed one. Don’t get me wrong, I like my privacy too, and I like the idea of a room of one’s own, but it doesn’t have to be a big room.

    Layout matters a lot too, I think - it is perfectly possible to have awful layouts that really do feel constrained. I know that 250 per person with no yard or porch or outside connection to the inside space would be tough with kids. But then again, the amount of yard you have is in part shaped by the size of the houses - look at those places where McMansions have replaced older 1950s style housing - they are out of proportion to the lot size and there’s no link to the outdoors.


  10. Matt Kon 19 Dec 2022 at 2:32 pm

    300 sq ft per person was hell with no porch or yard. This was an apartment on the SW side of Chicago. It was a depressing place to live.

    Our current place is about 1300 sq ft, it’s a 1BR apartment. I’d have no problem living in it with 2 kids if it had another bedroom, especially if there were some sort of yard (which there isn’t but at least there’s parks and English-speaking neighbors near where we are now).

    You’re definitely right that layout is more important than square footage, I think that has a lot more to do with why we are a lot happier at our new place.

  11. Elizabeth (aka heathenmom)on 19 Dec 2022 at 2:41 pm

    I agree — this is a life-changing essay. I’ll be sharing it with others.

    An aside: I think the discussion RE house size is an interesting and entirely subjective one. When we were preparing to build our home, my husband and I disagreed on the size home we needed. We both grew up with 2 parents and 2 siblings; my childhood home was 1400 sq-ft (280 sf/person) and his was 2000 (400 sf/person) sq-ft. I remember mine as being PLENTY big enough for 5 people; he remembers his as being WAY too small. LOL We went for the smaller house plan that fit our budget better (I WON!! ;)), and he is very, very grateful today that we did. We can afford our mortgage on one income and it’s far less expensive to heat/cool/furnish.

  12. Theresaon 19 Dec 2022 at 2:46 pm

    Thanks for another startlingly brilliant article Sharon - I will be passing this one on to friends and family since it is so universally important.

    Recently one of our most famous authors in Canada, Margaret Atwood, gave a series of lectures broadcast on the CBC called Payback: Debt and the shadow side of wealth. I thought you might be interested in that if you haven’t already come across it.

  13. Emilyon 19 Dec 2022 at 3:00 pm

    I think when people lived with 250sf/person, most people spent most of their days outside the house. They had thousands of square feet of parks, schoolyards, barns, and workplaces.

    When I was in college, I shared a tiny room with a roommate. We’d calculated that our room was actually smaller than the smallest prison cell deemed “humane.” The difference, of course, was that we got to leave the room.

    If you feel trapped in your home by weather, scary neighborhoods, lack of transportation, etc., you feel like you need to expand the space *inside* your own home.

  14. Aon 19 Dec 2022 at 3:28 pm

    For a year in college I rented an “efficiency” apartment. Total area was probably around 300sf. I made it work, but that would’ve been very difficult if I was living with someone.

    Currently my wife and I do have close to 750sf/occupant because it’s just the two of us. That said, we bought with full intentions of raising a family there and not moving. Buying a tiny under 1000sf home wouldn’t have been practical in that we’d very quickly out grow it. If anyone has been watching the real estate market lately I think it’s clear we made the right move to buy for the long term, rather than being stuck and putting life on hold for the real estate market.

  15. Elizabethon 19 Dec 2022 at 3:56 pm

    Our house is a little over 800 sqft and plenty big for the two of us. DH’s grandparents raised three boys and a nephew in 5 rooms. When I was growing up, my mom pretty much insisted that we be outside if it was still light and not pouring down rain. I believe DH’s grandma probably had a similar rule (or they wouldn’t have all survived to adulthood!).
    The house we’re planning on building next year is a little over 900 sqft, and we plan to (hopefully) have 2 kids in the next few years. Given that we have a few acres of land and permission to wander a few hundred more, I think we’ll be fine.

  16. young snowbirdon 19 Dec 2022 at 4:52 pm

    Growing up our family of seven lived in 1500 sqf or less. We utilized basements to give extra bedroom space. Most of my living spaces throughout my adult years have been under 250 sqf per person. I currently have the luxury of 660 sqf condo all to myself. Wow! If I’d just get rid of some junk, I’d have even more space!

    Sharon, your comment in your post about Corporations needing workers forever working is very astute. It is this machine that keeps needing to be fed to keep running, and it keeps feeding to keep running into infinity, isn’t it?

    In no way to sound contrary, for I have a genuine, deep- set inquiry to know - how do we stop it and what do we imagine the alternatives to be? I’ve read so many of your posts and you have excellent ideas and strategies that will need to be implemented. My question is way broader in scope: with what do we replace capitalism? What from our imagination will we pull to create, to transform, our macro material world? Our foundations, base, deep down foundations are crumbling and will crumble to dust. What can we create that will work better for us? Its scary but I am very curious to see what the future brings, and very interested in hearing brainstorming on this. If it is that we will have our standard of living adjusted to be more in line with the majority of the earth’s occupants, how do we do that and still retain our homes? Will it even be possible?

    Ok, enough of my rambling. Thanks for all your writing, Sharon. Your writing helps me keep the old brain cells active!

  17. virginiaon 19 Dec 2022 at 4:55 pm

    This has given me so much to consider. Just for fun, I called up to take a look at the first house I can remember living in, 37 years ago. It was 1869 sq ft, for the six people in my family. Adding our large family dog as a person, that made for 267 sq ft for each of us. I can’t remember ever feeling poor or crowded. Our house looked like every other house in the neighborhood, 2 or 3 bdrm, 1 bath.

    We had a huge suburban backyard, no fences, and we roamed around in good weather. In bad weather my mother sent us down to the finished basement where we rode a tricycle on the linoleum tile, painted on an easel, or pretended to drive cars made out of Safeway boxes. Nobody we knew owned gobs of toys, and sharing a bedroom was typical middle class.

    Fast forward to 2008. I live in a 3500 sq ft suburban McMansion with two kids, husband and dog. This is the new normal. All my kids’ friends live like this. Our nice, low-crime surburban enclave has good public schools, and close to public transportation we use to get to work. There simply are no 1300 sq ft houses here that offer all that. Obviously we have more space than we need, and our carbon footprint is depressingly enormous.

    Our jobs are here, so here we stay. It’s our home. In 14 years, if all goes well, it’ll be paid for, and maybe we’ll be able to sell it and be empty nesters on some more ecologically correct level. My conscience tells me we’re not living right. Ponzi, anyone?

  18. tasterspoonon 19 Dec 2022 at 6:05 pm

    Of course our childhood homes were smaller than we remember. We were smaller, too.

  19. GidsMomon 19 Dec 2022 at 6:06 pm

    I like the idea of investing in only what our children and grandchildren can use. This gives great perspective to the current economic/bailout situation.

    Housing: Our family of five lives in 1100 square feet and we are very comfortable. It’s all in the layout. We have a nice sized living room and kitchen, two small bedrooms, tiny bathroom, and a nice big finished attic room. The home was built in 1900 in a little town that became a suburb of Seattle - many years later. So everything is walkable (library, stores, main street) and the yard is nice sized (probably due to lack of garage and driveway). Plus, (and I am super excited about this one) I have a real cellar! I did live in 2400 square feet and it was way too much. The utility bills were incredible and so was the mortgage. We are much happier here.

  20. Frank Giffordon 19 Dec 2022 at 7:09 pm

    My wife Bonnie and I share a 500 square foot cabin. It has been a fifteen year journey to less space and less stuff. We just did a brief video inside. Go to EntropyPawsed and follow the link on the home page. If our desire is to leave a reasonable world to the children of future generations, then we all must learn to perceive the need and then learn to live with less stuff, and more connections to the natural world.

  21. Survivalist News » Casaubon’s Book: The Ponzi Scheme As Way of Lifeon 19 Dec 2022 at 8:08 pm

    […] Casaubon’s Book » Blog Archive » The Ponzi Scheme As Way of Life I’m sorry, I’m having a bit of trouble getting all outraged about Bernie Madoff and his ponzi scheme. Yes, I’m shocked. Shocked and appalled. You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart. Gosh, that seems so unprecedented. […]

  22. Daniel from Swedenon 19 Dec 2022 at 8:11 pm

    Ok, first of all I love your blog. Which I haven’t said before. What I especially like is the connections you make between food, peak oil and the economy. Esp. the connection to economy is something I haven’t dared make in my own blog that often yet (you don’t need to bother looking it up, it’s all in Swedish…but some of the pictures are nice).

    On housing. In Sweden we had 300 ft2 of living space per person 30 years ago. Five years ago we had 475 ft2 and today we have 600 ft2 according to statistics Sweden ( We use a lot of electricity too but almost all (90+%) of it comes from hydro and nuclear (50/50%)

    I actually don’t know why the number (600 ft2) is that high, my impression is that we live a lot more densely than in the US. When I lived in the US with my family last year, visiting some friends in McMansions almost made me nauseous. A bedroom the size of our livingroom back home and a walk-in wardrobe the size of one of our bedrooms. The cost of heating it! The time spent cleaning! The shoddy quality of the house itself - meant only to stand for one or two decades! I was appalled and acutely felt that this just had to be sooo unsustainable. A friend told me houses are or questionable quality even when brand new because it is not unusual for a buyer to tear down the “old” house to build a new “dream house” (as the price of the house was “marginal” compared to the lot). That too made me nauseous. That would be a prime example of “consuming houses” and how unsustainable is that behavior on a scale from 1 to 10? (”These go to eleven” - Spinal Tap -

    Me, wife + 2 kids live in an 1400 ft2 apartment in Stockholm and that feels totally luxurious. In fact, the apt. is only five years old and they don’t build them bigger than that. Many families (one or two kids) live in a 3-bedroom apt at 1100 ft2 and right now we wish we would have one of those (lower cost, lower loans). A friend of mine is moving to a 800 ft2 2-bedroom new apt in the area with gf + two kids but that would be pretty unusual even here.

    Anyway, I feel scared with the coming changes on their way but no way near as scared as if I still would have lived in Redmond… Since coming back from the US last year we are now part of an ecovillage-looking-for-land. That’s my lifeboat for the moment. Plus some modest investments in oil futures (oil just can’t get much cheaper than this but it can become much much more expensive).

    Again, I subscribe to and I love your texts! Keep up the good work! You have fans all over!

  23. Jenon 19 Dec 2022 at 8:11 pm

    I grew up in a 1100 sq ft house with 5 people. It was small and FELT small due to a terrile layout. It was bigger than the home my parents had prior which was 800 sq ft and all siblings (9,3 & 1 yrs) were in one bedroom. We didn’t mind until we were older. I spent most of my time out of house roaming as well. This could not happen now, even in my safe small-town downtown home. We are urban-homesteading and shopping for land now to build a 1200 sqft house for the 5 of us. My kids all sleep in one room by choice and my dh works from home. We live in a 1700 sqft house now, but already see if it were laid out better we would not need as much, just better storage and more room to move around in the kitchen.

    Young snowbird: I don’t think we will replace capitalism, but I hope for it to be managed better in the future. It hasn’t always run amuck, there have been decades, generations, where we had normal ups and downs, more of a bumpy road rather than the steep hills we have been climbing for some time now and are falling off of as we speak.

    Anyway, thanks Sharon for doing this everyday. I have 3 kids and we are the same age and I wonder at your productivity. Oh and I’ve asked before, but as someone, living in a drought ridden/prone state can we talk about water security? As we look for land it weighs heavily on my mind.

  24. Cassandraon 19 Dec 2022 at 8:22 pm

    Thanks for this post Sharon. I have been a LONG time reader and lurker, not sure if I’ve ever commented before, but I thought I would throw my 2 cents in about living space, since it’s something we are dealing with head on right now.

    I am due with baby number 4 in about 2 weeks, and we live in a small rural town in Nebraska in a 1250 sq. ft. home. We have two bedrooms, a large-eat in “country” kitchen (which ACTUALLY means that you DON’T have a dishwasher or microwave, but LOTS of cupboards, lol), a medium-ish family/living room, and then a “formal dining” room that we use as the kids’ everything room (toys, schooling, library, etc.) One bathroom. Laundry is in the basement, and we have a breezeway as well. All three of the children share a bedroom and then the baby will be in with us for a while. We have two boys in a set of bunk beds, and then our oldest daughter is in a twin by herself. Now we are wondering what our next move should be. Should we try to finish part of the basement for the boys’ room, should we put two bunk beds on ONE room?? With no closet I may add. (It has a “wardrobe” instead, and then a dresser) Right now we are actually quite comfortable, and never feel that crowded, but our families are always in awe and wonder at how we manage in such a “small” space. Hey, bedrooms are for sleeping in, the rest of the house and the yard are for the living, right? We live on 3/4 of an acre, so we try to spend a lot of time outside, and at the school/church park that is just across the gravel lane that lines our property.

    For now we are cozy, and we have lovely low mortgage payments since we got the house at a great price. I can afford to stay home and raise our family, and make it a nice place for us to reside in. :O) Plus, as someone else mentioned, our utilities are lower than others because of the smaller size of our home and the number of bodies heating it up! ;-)

    Your snippets regarding how much we love our children - but the lack of “acting” on it really resonated with me. What a statement about our values and priorities with our time. Thanks for your thoughts.

  25. Laurie in MNon 19 Dec 2022 at 11:21 pm

    With regards to space needs per person, a thing to remember:

    The average person used to have far, far less STUFF to take up space. Look at the closets in homes built early in the 20th century or before. When you have less stuff, you need less space.

    Working on having less stuff*….

    *In my Universe, books and sewing supplies don’t count. Unfortunately, they do in the material Universe! ;)

  26. Isison 20 Dec 2022 at 12:00 am

    I have to say I’m always astonished to hear what Americans consider to be a ’small’ house/apartment. I grew up in the Balkans, during the 1980s and 1990s. My family (two parents, two children) initially lived in 350 sq ft; that was for the four of us, not per person. Yeah, that was pretty small. Then we moved to a 750 sq ft apartment. Okay, I’ll grant you that I didn’t like sharing my bedroom with my sister, but still, this is more than most people had; precisely nobody considered us deprived. It amazes me how people would consider 1000 sq ft to be ’small’…

  27. conchscooteron 20 Dec 2022 at 1:04 am

    The beauty of modern living has been, up until now, the possibility to live in the manner one might choose- on a boat, in a cabin, in a mansion if one had the credit, in an RV, with children or without and the choice could be made with no severe societal ridicule or banishment (unless you grew up in a strictly segregated society, like the Amish, say). The fact that so many people blindly followed the “normal path” spoke more to their lack of awareness than any lack of choices in our modern world.
    To me, the wonder is that it took this profound crisis to awaken a few people to the possibilities that were always there and ignored, in favor of following the fads.
    I grew up in a castle, chose to live my adult life in a boat and came back ashore in middle age to an 800 square foot home with my wife. I have followed my own choices and will miss the ponzi scheme of 20th century living.It served me well.

  28. Stephon 20 Dec 2022 at 2:03 am

    Once upon a time we spent a year in a 600sf cabin (power, no water) in AK with 4 kids. That was absolutely too small but it was a wonderful year. We’re in 1800 now with 6 kids home and its more than plenty just not laid out that well. If I were building from scratch, I could be quite content with 1500 and a barn but we’re buying an old house with more than twice that. It comes with land and great water to offset the huge part.

    We pulled out of the ponzi scheme this week and I’m feeling very, very vulnerable about it. Too bad I didn’t know to pull out in May when it was high enough to pay off the house.

  29. Jocelynon 20 Dec 2022 at 6:52 am

    Two spelling mistakes here: “seperate” and “corrollary”. Pity to spoil a good article. (Please delete this comment after reading.)


  30. KathyDon 20 Dec 2022 at 7:22 am

    Greetings all,

    What a wonderful essay Sharon- you’ve expressed perfectly that anger and frustration I’ve been feeling. I have that sense of wanting to take this economic body blow for my kids (all little still), their kids and their kids. I don’t want to put off this pain for them to deal with. I’m also the type who always ate the food liked least on my plate and saved the food I liked best- is that called deferred gratification. I think that is one of the values that we’ve lost as a society — led by the greed is good crowd on Wall Street.

    We downsized from 2,000 sq feet to 1,700 sq ft for 5 people. Our “new” 100 year old house was built before people had gobs of possessions and therefore has almost no closets- there is not even a coat closet or any closet on the main floor. I wonder how that can be since this is Minnesota and we wear coats about 8 months of the year!

    Sharon- you are a blessing. A blessing to all of us.

    In gratitude,


  31. KathyDon 20 Dec 2022 at 7:27 am


    I want to second Jen’s call for some articles on water security. We have a giant ancient cistern in our back yard and there are no Extension publications on how to revive, use, access cistern water. It is a giant outdoor, underground room of mystery below my dining room window.

    Also, rain barrels, and other water storage strategies will be good to get started.


  32. SimplicityinKansason 20 Dec 2022 at 7:58 am

    While I agree Madoff will be one of the historic criminals on Wall Street post the evidence being revealed, the concept of mortgage the future is in fact a concern of mine too with the government borrowing. While I do not see this as Ponzi, I do see this as selling futures into an economy that is not certain and generational debt is burden for those who do not have any voice in the borrowing. While every president has promised to fight the debt issues, very few in the past 60 years have made progress in paying down the debt and with the recession, the borrowing will be at high levels.

    Also, at the core of the progress and prosperity is higher consumption and growth in prices with is contrary to deflation (I believe that is what you are thinking) which is a situation that any government or economist will view of unfavorable and counter at every move. I believe thinking in terms of real prices or adjusted places costs, prices and growth in perspective and comparable terms with the past events.

    As far as the spelling issues outlined on your blog, I had the attack of the spelling correction bloggers and punctuation police on my blog. My advice is ignore the comments and feedback as communication is more important than a misplaced letter. Some people search to find power in the most strange ways and perhaps the punctuation police can present their blog links for complete grammatical review and analysis.

  33. Sharonon 20 Dec 2022 at 9:35 am

    I don’t find the spelling corrections at all offensive - I take it as a sincere attempt to improve my writing, and am grateful for it.


  34. Andrewon 20 Dec 2022 at 9:38 am

    Great article and comments - here’s my experience with “square feet”. I grew up (5 in the family) in a 900 sq ft bungalow (no basement). My Dad later added a second level at the back for another 500 sq ft as we grew up.

    When my wife and I bought our first house we went a bit bigger, and have a two storey 1400 sq ft (Total is about 1900 including the sq ft from the basement as well). We did this for a variety of reasons, including figuring out what a single income could support in the event one or the other of us chose not to work, but the main thought at that time was “not moving” - we didn’t like the idea of buying a starter home, moving, moving again, etc. so we started at what we considered an upper end of a single income. Granted we’ve been lucky to find local employment so the “not moving” approach worked for us. Today, there are 5 of us living at home and we have developed a strong sense of place / neighbourhood. Other then bedrooms, each other space in the house is “multi-purpose”.

    Recently, we decided to banish the car outside. We have a small, unheated, semi-attached garage and plan to convert to a studio space / teen area / workshop. I don’t know if the sq ft from those massive 3 car garages are included in the sq ft of a typical McMansion. It occurred to us that garages are really fairly luxurious spaces - even here in Canada.

    The longer term goal is that in the event that some of our children stay, or start their families in the house, then we will be ready for that (just like many of the traditional lifeways in other cultures).

    Next, we have to figure a way to extract ourselves from the Ponzi scheme, ….

  35. Christinaon 20 Dec 2022 at 12:35 pm

    An interesting flipped view of the square footage discussion is that we are only talking about interior sf. In 1950, when there was an average of 250sf per person, unless you lived in a (true) city you had way more exterior sf per person than we have today. And you probably still knew what to do with it! I wonder how much the total sf per person (int + ext) has changed over the last century or two…

  36. LRHon 20 Dec 2022 at 1:10 pm

    I’m surprised that everyone here is focusing on the square footage of living space. I logged on to read the comments thinking it would be about children and choices made to be a part of the ponzi way of life or not to be. Amount of living space is only a small part of that. It is the values reflected by the tradeoffs that are chosen that really count, insofar as children are concerned. My parents came of age in the depression as children of immigrants from eastern Europe who were proud of at least graduating from high school. I grew up in a house poor family in the suburbs with two parents working full time in a neighborhood of stay at home mothers. The term “latchkey” kid did not exist then, but I was one starting in 2d grade. The other moms didn’t have me over in the afternoon, because they would not let their kids come to mine after school in return. My parents were frugal to the max. My father drove small inexpensive foreign gas sippers and kept track of gas mileage (even though it was only a quarter or less a gallon), and the heat was turned down at night. This was the 1950s and 60s. In the winter, I hated getting out of bed it was so cold. I still hate a cold house. Frankly, it was a nicer and bigger house than I have ever had as an adult. But, I did grow up in a nice, safe neighborhood with good public schools. And, I am sure my parents also enjoyed living in a nice safe neighborhood, having grown up in the city.

    Fast forward to my adult choices. Among the differences between my ex and I was his desire for a bigger and better house, and to use our financial “leverage” to the max. We didn’t do that with a house, because I refused to go along with it. I was afraid of the additional financial pressure. After the divorce, I ended up having to pay off half of the credit card bills he ran up instead, because my name was on all of them, with nothing to show for it. I would have been better off going with the bigger house, forcing him to cut back on credit card spending, none of which was for the girls and I. It also took me years to pay off my legal bills. The modest house was sold and I raised my daughters in a townhouse, which I still have. I economized and paid off the costs of their activities on an installment basis. They didn’t have expensive clothes, or a lot of clothes, but they had the extra enrichment activities that were important and an involved working mother who was still there for them and was not angry about having to work. They never had to either go to sleep or wake up in a cold house.

    During the years when others felt prosperous, I never did, as a child or adult. My daughters, who were well aware that their peers had more materially, never felt deprived and knew they were loved and valued from the way I structured my life and the financial tradeoffs I made to be available to them and to give them what was truly important. I traded off a lower salary for flexibility and a 40 hour workweek with no overtime located 10 min from home and their schools. They are down to earth, personable and high achievers who know the value of a dollar and what is important. I feel no guilt in having the whole townhouse to myself now, even though it is more space than I need. I have earned this comfort level.

    I would suggest that the living space issue is a dodge to avoid looking at the rest of the picture Sharon addresses that your life choices create and what values you are passing on and examples you are setting.

  37. EJon 20 Dec 2022 at 8:27 pm

    Surprised that no one mentions the biggest Ponzi scheme of them all - having more than one kid. Do the math - 3 kids times 3 makes 9 grandchildren, 4 kids times 4 makes 16 grandchildren and so forth on and on down the slope to the brave new world we are all now facing.

    Where are all the resources for these people going to be conjured up? Ah, yes in the get rich quick schemes of new continents (whoops they stopped making them after North America), by investing in real estate (um, I guess not), by extracting new resources (major problems here, too), new energy sources (don’t see anything viable on the horizon), and the stock market (doesn’t work either).

    I know, I know “it all depends on how you raise them, my kids are all going to grow up to be good little green non-consumers, by learning valuable skills from me they will help save the planet” or what ever your excuse is. But its really just a non-sustainable pyramid just like any other scheme.

  38. Texicalion 20 Dec 2022 at 10:49 pm

    One thing that has not been mentioned in this quite excellent thread is why is anybody lending us (the U.S.) money? It is illegal to question the full faith and credit of the U.S., but I am going to go out on a limb and say that we are not all that different from countries who have previously defaulted on their debt. The reason people continue to lend to us is that they recognize at some level that they are the Ponzi investors. If the game is called all of their money is gone, evaporated. When small countries defaulted their was some pain, if the worlds effective reserve currency defaults the “wealth” of the world would be gone. At some point people will stop paying in though, and that is what will happen. Confronted with the choice of large increases in taxation or default, the U.S. will make the same choice as the other nations.

  39. Rhisiart Gwilymon 21 Dec 2022 at 5:29 am

    I live in a well-fitted 102 square feet of floor space. Comfortable, warm/cool, providing all necessaries, exceedingly cheap to own, maintain and run. No debts attached (no debts at all). My three dogs often wheedle their way inside too, though they have good kennels just outside.

    I count myself to be living like a prince, with time and cash to spare, and no particular pressure on my life, despite my allegedly grossly inadequate cash income.

    My country — Britain — counts my way of life as well below (sic!) the acceptable poverty line. Shows you how little the people who make those estimates understand about the joys and liberations of small-footprint living, doesn’t it?

    Oh yes, I also re-sequester atmospheric carbon, continuously, as biochar into my permaculture food-gardens, from the Winiarski Rocket (google it!) wood-stove that supplies all my heat and cooking. I collect wood- in very modest quantities — from the surrounding woods (just going out with the dogs for a wooding session immediately after I post this). Every year, far more wood is left uncollected than the little bit that I need. I also plant trees constantly, to spread the woods back into neglected patches of land, and to expand the carbon re-sequestration that the trees/biochar/permaculture sequence enables. The biochar also enhances my food-harvest greatly. (Google it!)

    All this happens, incidentally, in a landscape far more cleared of woodland, for intensive, and now unsustainable, industrial agriculture than you have in much of the US. And our population density here is much worse (greater), yet the odds and ends of remaining woodland are superabundant suppliers for my requests. There is also a belated trend now in both Britain and Eire to renew lost forest cover.

    Come on in folks! The post-consumerist life is drastically superior to mall-ratting. Once you’ve left the mall life behind, for something this much better, you won’t miss the constant worthless-dreck-storm of consumerism for the greater good of capitalism for a moment. (But you will need to stop exposing yourself to advertising…..)

    Best regards, RhG

  40. the ponzi scheme as way of life | Dismantle Civilisationon 21 Dec 2022 at 10:42 am

    […] great insights from Sharon Astyk. Ponzi schemes are illegal, but what is our economic system, or how we are treating the ecology, […]

  41. LRHon 21 Dec 2022 at 10:43 am

    RhG: Do you own the land on which you live, and garden and collect wood? Free and clear? If you do, more power to you. If you don’t, this could all end in a heartbeat if you miss a mortgage or rent payment or two, or get caught trespassing. To own enough land to do all this free and clear of any lien would seem to indicate that you are from a wealthy family or are a lot older than you sound, and have lived most of your life a lot differently than you do now. Yet, it seems to me that you would have to be pretty young to still have the stomach and physical stamina for that kind of risk and hard work, but you have my respect for doing it as long as you can, regardless.

  42. Rodon 21 Dec 2022 at 2:22 pm

    You’re spot on. We rightly condemn Madoff’s scheme but we fail to understand that out entire economy is predicated upon stealing from the future. William Catton’s book “Overshoot” outlines what awaits a species that doesn’t live in reciprocity with its environment. Thank you for this important essay.

  43. rogeron 21 Dec 2022 at 5:08 pm

    I was born in 1925.As a child I was not allowed to be wasteful xmas toys where limited, when I was told no it was NO period!Dinner all the family was at the table,respect for elders was a must,movies once a week no TV then,help around the house was mandatory (child labor,haha)
    Funny I never questioned my parents love

  44. Matt Holberton 21 Dec 2022 at 6:54 pm

    In order to get our footprint lower, we need to not only live in less square feet, but we should dramatically reduce the amount of vacant square feet. Also, we need to adopt a lifestyle of non-accumulation. For example, rather than buying a new set of skis every few years, we would be able to have access to the latest models when we ski.

    We also need to create an institution that encourages us to critically examine some of the dogma and doctrine that we hold sacred.

    While I started out thinking of this institution as a club, I’ve come to realize that what we need is a series of universities that we remain in for our entire lives. Rather than departing the university in our early 20’s and then falling back on the doctrine and dogma — primarily religious and corporate — that we grew up with, we should turn ourselves around and spend the rest of our lives exploring the wealth of wisdom contained on the library shelves of most universities. If we did so, we would probably have far fewer offspring (thanks for mentioning the unmentionable, ej) and we might realize that all of the great religions have a level of development beyond the supreme being stage — the supreme identity stage.

    We might build our lives around livelihoods such as organic gardening and healthy cooking rather than as specialist desk jockeys. Instead of participating in the big Ponzi scheme described in this post, those with savings could deposit their money into a trust that builds these new universities that encourage us to explore a wider range of wisdom and give us an alternative way of living that is sustainable. As these patrons access the infrastructure at the lesser of cost or market (look ma! no inflation or deflation!) they will draw down their account.

    The whole scheme that is contemporary society has to be critically examined — not just the investment portion of it.

  45. Steven Earl Salmonyon 22 Dec 2022 at 11:16 am

    If President-Elect Barack Obama and his splendid team of scientists are not able to bring about necessary change, then I do not know where we are to find such vitally needed leadership.

    In some deep sense, President-Elect Obama and his new Administration are carrying the very future of children everywhere on his shoulders.

    If only we could undo the earliest years of Century XXI so that they were not filled with a colossal fool’s errand, catastrophic financial failures and ecological nightmares: an unnecessary and unjustifiable war; a collapsing economy; a human-induced, recklessly degraded environment and relentlessly dissipated planetary home.

    The challenges before the human community now appear to be daunting, that is easy enough to see; nevertheless, I believe our children will behold a good-enough future. Between now and the time our children lead the world come the necessary changes, I suppose.


    Steven Earl Salmony
    AWAREness Campaign on The Human Population,
    established 2001

  46. Ericon 22 Dec 2022 at 12:03 pm

    The larger point of your article as I see it is that we must learn to live within our means. If the majority of us did that, the parasites would starve within a short amount of time.

    Of course, it would be nice if there were some medicine, harmless to us, that would cause the parasites to die more quickly.

    However, I think the most effective way is to tighten our belts and wait the bastards out. They cannot force us to buy things we do not need.

    A discomfort that would be a small price to pay in order to see our children grow up in freedom.

  47. The Ponzi Scheme As Way of Life « rage and cuddleon 22 Dec 2022 at 12:40 pm

    […] December 22, 2022 by Sharon Astyk [Original] […]

  48. smcon 22 Dec 2022 at 1:43 pm

    I disagree that we all knew about climate change before 1988. It became a serious issue for me that year with Hansen’s testimony, but I had never heard of it before that.

    I DO see now that it was mentioned by National Geographic in 1982, and by the global 2000 report, but I never heard a friend mention it, or a magazine article, nor was it on the radar screen of the German Greens in the eighties, who talked of many things, but not this.

    I imagine if the Cold War was not winding down in 1988, we might not have paid attention to it that year.

    All that piddling aside- brilliant essay. If the world was a just place, you’d have a New York Times column. If the world was even more just, you’d get paid for it.

  49. Wannaon 22 Dec 2022 at 2:23 pm

    For those of us who believe in reincarnation, its not just our kids that we’re passing the buck to, but to ourselves! With the ever increasing population, where are all these souls coming from?

    I had dinner at a friends house last night. She lives in a MacMansion filled with beautiful antiques and art objects. Compared to my little, no frills house, I felt like a failure, like I had somehow failed to dream big enough. But we’re each on our own path and I shouldn’t be comparing myself to anyone.

    We each have to dream big but according to our own vision and not the vision sold to us by the corporations who want to own us. The more we own, the more we are owned.

  50. rawqueenon 22 Dec 2022 at 3:36 pm

    As a child, places seem larger NOT smaller. Grew up in a large home with a real long hallway which was freezing in winter as only the kitchen had heat. The living room was only heated for holidays or company. So square footage is not necessarily the issue.
    Live in a 1,000 square foot townhouse and it took me forever to find a small place. Nothing but the dreaded McMansions. Of course, the real estate agents were rooting for places twice as big and twice as expensive. I am happy with my small place that could easily house 4 people. My payments are low and the house should be paid off by retirement. Somehow found 2 room mates and everything is very harmonious and cozy. Dislike large houses even though most Americans seem to see them as a sign of “success”. My electricity bill nearly doubled when a 100% American joined us. Lights are not turned off, heat is turned on constantly. Guess nobody taught her how to conserve. Noticed that most Americans do not know how to conserve that does not make them bad but nobody ever told them otherwise. I still hear the voice of my very rich grandmother in my head “turn off the light” and some Americans probably consider me nuts as I usually turn off the heat(in hotel rooms) and turn off lights whenever nobody is in a room. It’s all about EDUCATION!!

  51. BrianMon 22 Dec 2022 at 7:34 pm

    You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart.

    Hmmm, sounds like a reasonable working definition of Social Security. Keep paying off today’s recipients with tomorrow’s earnings until there aren’t enough earners to cover the bills.

    Oh, that’s right, I think this is the first year that the first of the baby boomers are eligible for early social security payments. Whoops! Guess we might have left that problem go a tad too long.

    The markets are speculation, and speculation is gambling. Simple enough. However, Social security is a straight-up, in your face Ponzi scheme, with the added wrinkle that the “investors” (we the people) were entirely captive and forced to pay to play (no references or marketing costs required). The end of that game in now clearly in sight.


  52. Yvetteon 23 Dec 2022 at 12:30 am

    What an enlightening article. Thank you for the great insight. I too fear that we are essentially raping our children and our childrens children to pay for the “pressing issues of today, right now”. It’s like we no longer have foresight or the ability to think about next year, or 10 years, or 20 years from now. Last night on 60 minutes Arnold Schwartzenagger said that the car industry big whigs told him 10 years ago it would take approximately that long to make “greener cars”. He said, well, it’s been 10 years and we are no closer to that goal then we were.
    On a positive note however, I feel as if a depression would force us again to get to know our neighbors, spend more time with our families and require us to work togethers as communities to survive, i.e. community gardens, bartering goods for services. These things have gone by the wayside and now we are a very informed, but isolated society.
    By the way, I heard you on NPR about a month ago and I was just blown away. You are outstanding and I have been telling everyone about you and giving them your web address. Keep up the good work and God Bless you and your family. Whichever is the case I wish you a Happy Hannukha or a very Merry Christmas and a Happy New Year.

  53. Tom Dennenon 23 Dec 2022 at 2:50 am

    Ponzi is a way of life. This is how it may have started here:


    And We Didn’t Even Notice.

    Tom Dennen

    “But the free market is not primarily a device to procure growth. It is a device to secure the most efficient use of resources.” — Henry C. Wallich, a Governor of the Federal Reserve System from 1974 to 1986.

    Researching inflation has been an eye-opener because with all this meltdown stuff going on, every even half-baked student of basic systems wants to work out the who, what, where, when, and why of money systems.

    I started with the question, “Is there a definition, say of ‘inflation’ given that the basics of supply and demand are common cause?”

    Either we’ve lost the plot or there isn’t one, just some platitudes that do not lend themselves to anything but involutions:


    “The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index.”

    “A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.”

    ‘A sustained, but sometimes rapid increase in general price levels.”

    What causes it? Now, that’s the toughie.

    “There is no one single, universally accepted cause of inflation” … So the modern economist gives us three:

    1. Cost-push inflation, which is due to wage increases that cause businesses to raise prices to cover higher labor costs, which leads to demands for still higher wages to pay for the increase in prices, called the wage-price spiral. Duh.
    2. Demand-pull inflation which results from increasing consumer demand financed by easier availability of credit – a little greed is allowed in here – and,
    3. Monetary inflation caused by the expansion in the supply due to printing of more money by a government to cover its deficits.

    All of the above are pure hogwash especially the obvious wage-price spiral.

    Adding pewter to Roman gold coins (monetary inflation) didn’t fool the merchants then, and economists today generally agree that printing lots of paper money (adding pewter) causes high growth rates (inflation) in the money supply but merchants just charge more for the same goods if there’s more money in the system.

    Duh – but why do it?

    (Just incidentally, reading through Book 6 of Tacitus’ Annals, does anyone agree that he implied a certain regulatory indifference at that time by the Roman government toward the systems that were collapsing pretty much the same as today’s for similar reasons?)

    Because economic reality is so simple when viewed in relation to broader historical events – which it isn’t – it has to be fed to us in ‘economic theories’ that have to sound complicated but look circular in nature (balanced).
    But because so far no cause, no cure, I have to either invent or find one for myself and ask for some criticism on it:


    Before Zero Population Growth (ZPG), manufacturers had to make more goods every year because there were more people every year.

    So from the beginning of the Industrial Revolution every commercial enterprise linked to population growth – the lot – expanded, and ‘growth’ over many years, generations even, was an invisible source of expansion, eventually an integral part of the general western economic paradigm – common cause: you ‘grow’ a business, you don’t just sustain it.

    So it wasn’t ‘good business practices’, centralization, decentralization or the creation of profit centers – or thrift or fiscal generosity or Scroogeisms, just more people being born.

    Tom Peters said something like this on his 90’s lecture tours: In the sixties and seventies: you couldn’t run a Fortune 500 company into the ground if you tried.

    ‘Growth’ insidiously assumed itself into all western economies and had become as necessary as air.

    But the basic source of growth – population expansion – had dried up without it being noticed – what I think may have been Smith’s ‘Hidden Hand’ having writ, moved on.

    And what we lost sight of is the fact that when the population stopped growing at the rapid rate western economies were used to, demand for growth-generated profits didn’t.

    Now we had a problem.

    We couldn’t grow a business in the traditional way because the population wasn’t cooperating so it very soon became obvious that we were all competing for the same stable, non-growing market and still driven by the ‘necessity’ for increased profits!

    Time-And-Motion specialists in full fiscal drag disguised as economists appeared and told us to “Get lean and mean.”

    Well, it got more sales … and growth in profit through efficiency but not through more customers because First World populations stayed celibate in economic terms and Zero Population Growth (ZPG) became a buzzword.

    We became so lean and mean we could keep up with shareholders’ demands for MORE PROFIT! Even in a stagnant market.

    Crunch time: Computers arrived and took over middle management functions – compiling quarterly pie-chart reports worked for a while, but plugging into the factory floor in real time 24/7 was huge.

    And saved enough in wages to continue posting annual profit growth over the ten years up to the early nineties during which time populations expanded in microns.

    The first world became host to fifteen million ex-middle managers who it would seem, had turned to running small, medium and micro enterprises (SMMEs) which also appear to be a Whole New Set of Resource-based Sustainable Economies on their own!

    But still just guys scratching for a mortgage, education for the kids and this outrageous (to management) new-fangled thing called a pension which appeared for the first time about a generation ago and will certainly not survive into this current Boomer generation..


    “Growth’ was generic yet its source ‘invisible’ to industrial revolution- population growth-geared economy.

    Today it’s a completely different ball game, of course, except for pork bellies, sorghum, wheat and genetically modified corn.

    For more customers = population growth, the First World has turned to the developing, high population growth Third World for the embedded ‘necessity’ for profit growth.

    After the computer age put middle management out to work and before Third World intervention the Age of Leveraged Buyouts, Hostile Takeovers and Mergers came upon us as the only way to satisfy the ubiquitous (and now labeled ‘greedy’) shareholders’ demand for annual profit increases.

    “Sustainable” is still waiting in the wings with the SMMEs.

    Back home in the early ‘30s we saw foreclosures, expensive labor outsourcing, cheap labor brought in and price fixing so bad Woody Guthrie made note of a truly unbelievable economic ‘solution’ to the starvation caused by The Great Depression: destroy food.

    “The crops are all in and the peaches are rott’ning,
    The oranges piled in their creosote dumps …”

    Right now, with my take on short-term economic pocket history in mind, make a note of what the American banks are doing with the ‘bailout’ money given to them by taxpayers to lend back to taxpayers – if they’ll let you see the books.

    I say they are creating an even Greater Depression, even deliberately; but then so say all the other new students of economics, all reaching the same conclusion from different routes.

  54. Wanna in NJon 25 Dec 2022 at 9:30 am

    Hi Tom,

    Interesting thoughts, thanks for sharing them. I would add that computers created a lot of white collar jobs that then shrank with globalization, NAFTA, outsourcing and offshoring.

    I don’t think the banks are intentionally trying to make things worse. Clinton said he had sex with Monica because he could. I think the bank execs have pocketed the bailout money simply because they can. I really don’t think they put that much thought in to what they’re doing, just enough to justify their actions but then they have to stop thinking about it.

    I, like many others, would have preferred that the goverment let the banks take the consequences of their decisions and actions. Its not fair that they get rewarded for their bad behaviors at the expense of everyone else.

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