Things Fall Apart

Kokomo, Indiana, is coming back, thanks to the stimulus funds supplied by the US government.

http://money.cnn.com/2010/10/18/news/economy/kokomo_stimulus_case_study/index.htm?source=cnn_bin&hpt=Sbin

KOKOMO, Ind. (CNNMoney.com) -- Kokomo is going back to work.
A year and a half ago the fate of this car town, home to four Chrysler plants and a Delphi facility, was as uncertain as the American auto industry itself.
 ...

It mentions new hires at Chrysler for $14 per hour instead of the old $28 per hour.

An experiment...
What happens when wages decrease 50%? In particular, what happens when the general level of wages decrease? I would say that one thing that will happen is that prices of goods will decrease, reflecting the decrease in buying power of the individuals households.

There is Deflation in our future. The people in charge did not want Rapid Deflation, they are on record for that. But a deflation at a more leisurely pace? Why not?
I remember years ago speculating on the rising costs of everything, wondering why prices just did not keep on growing - like compound interest. Assets crash, bubbles  burst, things fall apart; that is why prices do not keep on escalating forever.

And this inherent tendency that Things Fall Apart in Capitalism derives from the lack of any
homeostasis within Capitalism itself. A self-regulating homeostatic system within economics is what is needed. We thought we had something like it with our ratings agencies, only to discover they had been corrupted by the viral greed.

Personally, I think Things Fall Apart is one of the stories we have chosen for our society; we seek the ironic reversal from the high and mighty down to the dust. That is why we have always sought to increase our karmic burden: to fuel the dynamo of our demise. Not as individuals. No, as individuals we are wonderful people. But as a group! That is something else.
The group narrative differs from the individual narrative: the individual spins his own story, more or less, while the group has to get together and palaver about theirs. The incessant talking and arguing back and forth is nothing more than computation: it is how we process the incredible amount of detail and complexity in front of us. And that is why is takes so long.
I suppose we could use a system whereby we could speed up the processing of this complexity, short of surrendering our rights to tyranny. Democracy should view itself as a vigorous system that needs to stabilize itself for its job of optimally processing the almost infinite detail of our lives, not just a bunch of clowns on the take in D.C.!
Start by getting rid of the "crash and burn" scenarios we have in our myths, and substitute myths and stories that emphasize the good, the sober, and the just. Start there. If there is a virtue I've left out, we'll get to it once we have this inception process under our belts. Make our political debates to be aware of the true nature of what they are doing:  not fighting for the sake of fighting, but to - incredibly enough! - process infinite information into our crowded skulls! Our struggle every place and every time and everywhere is a struggle to get a grasp on the flow of the universe through which we live, and which flows through us.