Whenever the herd mentality lines up along a compass point leading to "permanent prosperity," or a yellow brick road lined with green shoots, or something like that, I tend to see the edge of a cliff up ahead. We are now completely in the grips of the deadly diminishing returns of information technology. The more information comes to us about How Things Are, especially from TV, the more confused or wrong the conventional view gets it.
A broad consensus has formed in the news media and among government mouthpieces and even some "bearish" investors on the street that "the worst is behind us" in this tortured economy. This view is completely crazy. It will only lead to massive disappointment a few weeks or months from now, and that disappointment might easily transmute to political trouble. One even might call the situation tragic, except a closer look at the sordid spectacle of what American culture has become - a non-stop circus of the seven deadly sins - suggests that we deserve to be punished by history.
The reason behind this mass delusion is not hard to find: it's based on wishing, especially the wish to retain all the comforts, conveniences, luxuries, and leisure that had become normal in American life. These are now ebbing away in big gobs for most of the population - while a tiny fraction of the well-connected pile on ever-larger heaps of swag, enjoying ever more privilege. Those in the broad bottom 95% were content as long as there was a chance that they, too, could become members of the top 5% - by dint of car-dealing, or house-building, or mortgage-selling, or some other venture enabled by easy credit and a smile. Those days and those ways are now gone. The bottom 95% are now left with de-laminating houses they can't make payments on, no prospects for gainful work, repo men hiding in the bushes to snatch the PT Cruiser, cut-off cable service, Kraft mac-and-cheese (if they're lucky), and Larry Summers telling them their troubles are over. (If I were Larry, I'd start thinking about a move to some place like the Canary Islands.)
Too many disastrous things are lined up in the months ahead to insure that we're entering a new phase of history: The Long Emergency.
- Government at every level is worse than broke.
- Our currency, the US dollar, is hemorrhaging legitimacy.
- Inability to service old debt at all levels or incur new debt.
- Bad (toxic) debt lurking off balance sheets everywhere.
- The housing bubble fiasco is far from over.
- Commercial real estate fiasco just getting started.
- Unemployment rising implacably.
- So-called "consumers" unable to consume consumables.
- Crucial energy import supply lines fragile.
- Food supply subject to energy problems and climate abnormalities.
- A world full of other societies who would enjoy watching us fail and suffer.
When The Long Emergency was published in 2005, I said then that the greatest danger this society faced would be its inclination to gear up a campaign to sustain the unsustainable at all costs - rather than face the need to make new arrangements for daily life. That appears to be exactly what has happened, and it didn't happen under the rule of some backward-facing, right-wing, Jesus-haunted crypto-fascist, but rather a "progressive" party led by a dynamically affable young man unburdened by deep cultural allegiance to Wall Street. Barack Obama has been sucked in and suckered. "Change you can believe in" has morphed into "a status quo you will bend heaven and earth to hold onto."
Whatever else you might think or feel about Mr. Obama's performance so far, this strategy on the broader question of where we go as a nation pulses with tragedy. What's remarkable to me, to go a step further, is the absence of comprehensive vision - not just in the president, but in all the supposedly able and intelligent people around him, and even those leaders not in government but in business and education and science and the professions.
History is clearly presenting us with a new set of mandates: get local, get finer, downscale, and get going on it right away. Prepare for it now or nature will whack you upside the head with it not too long from now. Attempting to maintain anything on the gigantic scale will turn out to be a losing proposition, whether it is military control of people in Central Asia, or colossal bureaucracies run in the USA, or huge factory farms, or national chain store retail, or hypertrophied state universities, or global energy supply networks.
These imperatives are so outside-the-box of ordinary experience right now, that to drag them into the arena of politics can only evoke blank stares or nervous giggling. But whether we like it or not, these are the things that will really matter in the years ahead - not whether General Motors can ever make a profit again, or what Target Store's sales figures are next quarter, or whether the latest high-rise condo - and - gambling complex in Las Vegas will be successfully marketed.
Here, in the dog days of summer, it seems to me that the situation in the USA is so fundamentally bad, so unpromising, so booby-trapped for failure, that I wonder if there has ever been a society so badly deluded as ours. We're prisoners of our wishes, living in a strange dream-time, oblivious to the forces gathering at the margins of our vision, lost in a wilderness of our own making.
Anything can happen now. I certainly wouldn't rule out international mischief as we arc around into fall. The air is so full of black swans that the white swan now seems like the exceptional thing. Whatever else happens, it sure will be interesting to see the public's reaction to Wall Street's announcement of Christmas bonuses. The folks at Rockefeller Center better be thinking about getting a fireproof tree.
Regards,
James Howard Kunstler
for The Daily Reckoning Australia
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About the Author
(born 1948) is an American author, social critic, and blogger who is perhaps best known for his book The Geography of Nowhere, a history of suburbia and urban development in the United States. He is prominently featured in the peak oil documentary, The End of Suburbia, widely circulated on the internet. In his most recent book, The Long Emergency (2005), he argues that declining oil production is likely to result in the end of industrialized society and force Americans to live in localized, agrarian communities.
Comment by Daniel Newhouse on 5 August 2009:
The best historical analogy is the collapse of Spain in the 17th century. When they ran out of gold and silver from the new world they had to deal with the fact that they produced nothing to sell to other countries.
Similarly, the United States' export to GDP ratio is laughably low. Germany, by comparison, is in a much better position for a long term turnaround - it is a country that produces goods and services that other countries want to buy. Yes, they binged on an overpriced welfare state when times were good, but the question is how does their society react in a time of crisis? What strengths do they have to fall back on?
Comment by Pete on 6 August 2009:
Agree with you there Daniel, particularly about Germany. I saw some older Germans interviewed on TV recently and they seemed happy to live rough for a while if it meant a better future for the country.
I also think the Roman empire is a good historical analogy. Excuse me if I get any of this wrong, but my understanding was that Rome did a great job of conquering neighbouring lands throughout Europe - all the while generating a hefty income for their huge armies through pillaging and maintenance paid by other civilisations or captured provinces.
But when the war machine slowed down, they still needed to pay the armies but didn't get so much tribute. So they devalued their currency slowly by diluting the precious metals in the coins with other metals. And that continued for quite a while until their currency wasn't worth much at all.
In a way I see a similarity to the US (except for the debt). They grew and grew, but then their war machine cost a lot of upkeep and their cash generating facilities dried up. Then they started devaluing their dollar. The rest is...future history (oxymoron unintended).