Wednesday, April 8, 2009

One Giant Dubai

Apologies for the lack of posts over the last several days. Things are busy outside the FutureJacked Bunker at the moment.

Last night while taking a few minutes to catch up on the stories Matt Savinar posted over at LATOC, I read an opinion piece on what is happening in Dubai as the credit bubble continues its implosion. Then it got me to thinking - I know, I know, always a dangerous thing:

The dark side of Dubai
by Johann Hari
...If you take the Big Bus Tour of Dubai – the passport to a pre-processed experience of every major city on earth – you are fed the propaganda-vision of how this happened. "Dubai's motto is 'Open doors, open minds'," the tour guide tells you in clipped tones, before depositing you at the souks to buy camel tea-cosies. "Here you are free. To purchase fabrics," he adds. As you pass each new monumental building, he tells you: "The World Trade Centre was built by His Highness..."

But this is a lie. The sheikh did not build this city. It was built by slaves. They are building it now.

III. Hidden in plain view

There are three different Dubais, all swirling around each other. There are the expats, like Karen; there are the Emiratis, headed by Sheikh Mohammed; and then there is the foreign underclass who built the city, and are trapped here. They are hidden in plain view. You see them everywhere, in dirt-caked blue uniforms, being shouted at by their superiors, like a chain gang – but you are trained not to look. It is like a mantra: the Sheikh built the city. The Sheikh built the city. Workers? What workers?

Every evening, the hundreds of thousands of young men who build Dubai are bussed from their sites to a vast concrete wasteland an hour out of town, where they are quarantined away. Until a few years ago they were shuttled back and forth on cattle trucks, but the expats complained this was unsightly, so now they are shunted on small metal buses that function like greenhouses in the desert heat. They sweat like sponges being slowly wrung out.

Sonapur is a rubble-strewn patchwork of miles and miles of identical concrete buildings. Some 300,000 men live piled up here, in a place whose name in Hindi means "City of Gold". In the first camp I stop at – riven with the smell of sewage and sweat – the men huddle around, eager to tell someone, anyone, what is happening to them...

The story of the exploitation of migrant workers in Dubai is not exactly a new one and I'm sure that you can find three bright, intelligent, hard-working men and women for every one of the empty-headed fools mentioned in Mr. Hari's piece. I suggest reading the article in its entirety and, if you happen to know folks who have lived and worked in Dubai, talk with them.

I'd heard stories from friends who worked in Dubai of the sewage on the beaches and the insane building boom and the horrid treatment of workers. Some will chalk it up to the pain inherent in exteremely high growth rates, others will chalk it up to mindless medieval oppression. Today I don't really want to dwell on the specifics of the Dubai story - others who live there can do that job. I want to briefly hold up Dubai as an example of what kinds of delusions are possible when an entire society has on blinders, convinces themselves to ignore the obvious and then tries desperately to pretend there won't be consequences.

Blinders

I've mentioned here before that in my view the "magical thinking" (the tag used by the socionomics model to describe the flight from reason that occurs as mood shifts from positive to negative) that sweeps through a society really begins in the latter part of the fifth wave advance of positive mood. The positive mood has been entrenched for so long and the benefits of buying into that mood are so obvious that most people view it as a fact of nature, akin to gravity or Planck's Constant.

The opinion piece on Dubai got me to wondering about what blinders am I wearing? Sure, I like to think I'm a bit more aware than the average consumer out there, but am I just fooling myself? Or, more accurately, maybe I am aware of one or two more sources of systemic risk than most of my neighbors, but in the big scheme of things am I missing some huge factors that may come back to bite me on the butt?

Like the Dubai citizens who ignore the Morlocks who build the skyscrapers and tend to the families of the ugly rich, what could I be ignoring?

Here are just a few "givens" that could implode on those of us in the West:

  • The "value" of money. After this Suckers' Rally ends in tears, the impulse to "do something" - arelady at a fever pitch in Washington, D.C., will become deafening. If they are stupid enough to run these future-killing deficits now, what will hold them back from sending everyone a check for $50,000?
  • The ability to get to "your" money. The ability to easily access your money and move it around via ATMs, automated billpay, web access to your accounts, etc. has become a given. What happens if we get slapped with a Bank Holiday? Or a couple of big bank crashes that bring down the ATM system for a few weeks?
  • Ag Shock. What happens if we have a bad harvest? What happens when you can't just go down to the store and find it filled from floor to ceiling with cheap food? Impossible? Maybe. Maybe not.
  • Oil Shock. This is old news for many, but as far as society is concerned the magic oil fairy farts out the stuff into gas stations all over the country. What happens if war with Iran or a collapse in the dollar or the continuing death of the Canterell field causes us to lose access to cheap and easy fuel?

Then What?

Let's say we do identify some gaping holes in whatever model we use to look out over the universe. Then what?

If you lived in Dubai, what would this realization of the horrid conditions that some migrant workers live in do for you? Or of the knowledge that the easy money that helped build the city was drying up like water in the desert?

Sure, you could pay your maids a decent wage, treat them well and give them time off. You could reduce your exposure to debt and hope to avoid debtor's prison. But that is just tinkering around the margins. You'd still look out over the skyline and see the darkened obelisks of empty office towers. You'd still hear the stories of the hundreds of cars abandoned at the airport as people flee the sheikhdom. You'd still know that the current rate of water consumption at Dubai is totally unsustainable. You'd know that the city-state's current way of doing business still relies on cheap and abundant credit - credit that is drying up all around the world.

You'd be tied to the wheel with everyone else. Sure you could do a few things to prepare both mentally and financially, but the very sea in which you swim is boiling off under the heat of intense and growing negative mood.

Is that really all that different than what we are facing here in the Land of the Indebted?

1 comment:

David said...

You highlight what I've alluded to in columns at lewrockwell.com. We've entered the period when so much of what was built up over the past 7 decades is revealed as mirage, and all those who have invested their lives building rooms in that mirage palace will suddenly, in the "flick of a light switch," find themselves figuratively AND litterally living under a bridge.

What is real? What is mirage? Damifiknow. We (you and I) can guess as some things, but what of the rest? How far down the rabbit hole are we to travel?