How to Escape the Black Hole Called the U.S. Economy

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The dark tunnel that the U.S. economy has entered began to look more and more like a black hole recently, sucking in lives, fortunes, and prospects behind a Potemkin facade of orderly retreat put up by anyone in authority with a story to tell or an interest to protect – Fed chairman Bernanke, CNBC, The New York Times , the Bank of America… Events are now moving ahead of anything that personalities can do to control them.

The “housing bubble” implosion is broadly misunderstood. It’s not just the collapse of a market for a particular kind of commodity, it’s the end of the suburban pattern itself, the way of life it represents, and the entire economy connected with it. It’s the crack up of the system that America has invested most of its wealth in since 1950. It’s perhaps most tragic that the mis-investments only accelerated as the system reached its end, but it seems to be nature’s way that waves crest just before they break.

This wave is breaking into a sea-wall of disbelief. Nobody gets it. The psychological investment in what we think of as American reality is too great. The mainstream media doesn’t get it, and they can’t report it coherently. None of the candidates for president has begun to articulate an understanding of what we face: the suburban living arrangement is an experiment that has entered failure mode.

I maintain that all the “players” – from the bankers to the politicians to the editors to the ordinary citizens – will continue to not get it as the disarray accelerates and families and communities are blown apart by economic loss. Instead of beginning the tough process of making new arrangements for everyday life, we’ll take up a campaign to sustain the unsustainable old way of life at all costs.

A reader sent me a passel of recent clippings last week from the Atlanta Journal-Constitution . It contained one story after another about the perceived need to build more highways in order to maintain “economic growth” (and incidentally about the “foolishness” of public transit). I understood that to mean the need to keep the suburban development system going, since that has been the real main source of the Sunbelt’s prosperity the past 60-odd years. They cannot imagine an economy that is based on anything besides new subdivisions, freeway extensions, new car sales, and NASCAR spectacles. The Sunbelt, therefore, will be ground-zero for all the disappointment emanating from this cultural disaster, and probably also ground-zero for the political mischief that will ensue from lost fortunes and crushed hopes.

From time-to-time, I feel it’s necessary to remind readers what we can actually do in the face of this long emergency. Voters and candidates in the primary season have been hollering about “change” but I’m afraid the dirty secret of this campaign is that the American public doesn’t want to change its behavior at all. What it really wants is someone to promise them they can keep on doing what they’re used to doing: buying more stuff they can’t afford, eating more bad food that will kill them, and driving more miles than circumstances will allow.

Here’s what we better start doing.

Stop all highway-building altogether. Instead, direct public money into repairing railroad rights-of-way. Put together public-private partnerships for running passenger rail between American cities and towns in between. If Amtrak is unacceptable, get rid of it and set up a new management system. At the same time, begin planning comprehensive regional light-rail and streetcar operations.

End subsidies to agribusiness and instead direct dollar support to small-scale farmers, using the existing regional networks of organic farming associations to target the aid. (This includes ending subsidies for the ethanol program.)

Begin planning and construction of waterfront and harbor facilities for commerce: piers, warehouses, ship-and-boatyards, and accommodations for sailors. This is especially important along the Ohio-Mississippi system and the Great Lakes.

In cities and towns, change regulations that mandate the accommodation of cars. Direct all new development to the finest grain, scaled to walkability. This essentially means making the individual building lot the basic increment of redevelopment, not multi-acre “projects.” Get rid of any parking requirements for property development. Institute “locational taxation” based on proximity to the center of town and not on the size, character, or putative value of the building itself. Put in effect a ban on buildings in excess of seven stories. Begin planning for district or neighborhood heating installations and solar, wind, and hydro-electric generation wherever possible on a small-scale network basis.

We’d better begin a public debate about whether it is feasible or desirable to construct any new nuclear power plants. If there are good reasons to go forward with nuclear, and a consensus about the risks and benefits, we need to establish it quickly. There may be no other way to keep the lights on in America after 2020.

We need to prepare for the end of the global economic relations that have characterized the final blow-off of the cheap energy era. The world is about to become wider again as nations get desperate over energy resources. This desperation is certain to generate conflict. We’ll have to make things in this country again, or we won’t have the most rudimentary household products.

We’d better prepare psychologically to downscale all institutions, including government, schools and colleges, corporations, and hospitals. All the centralizing tendencies and gigantification of the past half-century will have to be reversed. Government will be starved for revenue and impotent at the higher scale. The centralized high schools all over the nation will prove to be our most frustrating mis-investment. We will probably have to replace them with some form of home-schooling that is allowed to aggregate into neighborhood units. A lot of colleges, public and private, will fail as higher ed ceases to be a “consumer” activity. Corporations scaled to operate globally are not going to make it. This includes probably all national chain “big box” operations. It will have to be replaced by small local and regional business. We’ll have to reopen many of the small town hospitals that were shuttered in recent years, and open many new local clinic-style health-care operations as part of the greater reform of American medicine.

Take a time-out from legal immigration and get serious about enforcing the laws about illegal immigration. Stop lying to ourselves and stop using semantic ruses like calling illegal immigrants “undocumented.”

Prepare psychologically for the destruction of a lot of fictitious “wealth” – and allow instruments and institutions based on fictitious wealth to fail, instead of attempting to keep them propped up on credit life-support. Like any other thing in our national life, finance has to return to a scale that is consistent with our circumstances – i.e., what reality will allow. That process is underway, anyway, whether the public is prepared for it or not. We will soon hear the sound of banks crashing all over the place. Get out of their way, if you can.

Prepare psychologically for a sociopolitical climate of anger, grievance, and resentment. A lot of individual citizens will find themselves short of resources in the years ahead. They will be very ticked off and seek to scapegoat and punish others. The United States is one of the few nations on earth that did not undergo a sociopolitical convulsion in the past hundred years. But despite what we tell ourselves about our specialness, we’re not immune to the forces that have driven other societies to extremes. The rise of the Nazis, the Soviet terror, the “cultural revolution,” the holocausts and genocides – these are all things that can happen to any people driven to desperation.

James Howard Kunstler
for The Daily Reckoning Australia

Editor’s Note: James Kunstler has worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone Magazine . In 1975, he dropped out to write books on a full-time basis.

His latest nonfiction book, The Long Emergency describes the changes that American society faces in the 21st century. Discerning an imminent future of protracted socioeconomic crisis, Kunstler foresees the progressive dilapidation of subdivisions and strip malls, the depopulation of the American Southwest, and, amid a world at war over oil, military invasions of the West Coast; when the convulsion subsides, Americans will live in smaller places and eat locally grown food.

You can get more from James Howard Kunstler – including his artwork, information about his other novels, and his blog – at his website.

James Howard Kunstler
(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.
James Howard Kunstler

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Comments

  1. james, a ‘rolling stone’ writer never used drugs ?

    james drop some lsd and get over yourself….

    it’s not that you haven’t got splendid ideas. but where’s da’ money ?

    anyway as to the mother of all credit bubbles: not once, not thrice, not even thrice…

    imagine, the plunge is just about to begin. america has gone bust. you know ‘broken’.

    fractional reserve banking has given way to unltd. credit expansion… it’s not just the printing presses can’t keep up covering bush der feurheur’s compulsive gambling insanity.

    but der fed’s are creating credit numbers out of an imaginary future.

    amerika has run out of time…
    tick tick tick tick tick tick

    buy buy buy sell sell sell
    sell sell sell buy buy buy

    but with what ?

    the silver lining with an escape proof gold clause is:

    WELCOME TO THE NEW AGE.

    Reply
  2. Kunstler is a good writer, but he’s just one of thousands of “seers” predicting disasters based less on factual evidence than on some kind of idee fixee. Kunstler is thus more like the Old Testament prophets heaping fire and brimstone on a sinful population than a scientist and futurist. The more evidence there is that things are not going the way he “predicts,” the more he rants and insists he’s right. There is no conceivable evidence that could refute his ideas. So, it’s like listening to some John Bircher or fundamentalist talking about the “rapture”–an interesting spectacle, but that’s it.

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  3. Spot on Mr. Kunstler. America is ready for correction, re-pricing, and everything else that will give us the severe reality adjustment that we need. Back to fundamentals and building a real society and civilization.

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  4. I had to look up the meaning of Potemkin façade. http://en.wikipedia.org/wiki/Potemkin_village

    The Potemkin fake village story to me sounds like the basis for the Puss ‘n’ Boots fable (although I stand to be corrected here).

    Puss used the same deceptive scheme to win fame and fortune for his dim witted master and afford luxurious comfort for himself. Can Bill Bernanke use the same deception to deliver a good outcome for his master and himself? Bill is not nearly as smart as Puss as he tries to keep things together until the US election votes are cast.

    In any case nobody in any of the any of these modern or ancient fables gives a real toss for the villagers.

    Coffee Addict
    January 24, 2008
    Reply
  5. James Howard Kunstler comes across as a car-hating urbanist.

    When folks get truthful price signals because their money is real instad of Fedback paper fiat funny money, folks can decide well.

    At least Kunstler gets some of it — a massive Progressive Utopian scientist/lobbyist Technocracy does not work and never will.

    It’s time to say good-bye to H.G. Wells dreamers and schemers.

    Reply
  6. Contrary to Dayahka’s claim, evidence abounds all over supporting much of Kunstler’s writing. Take off your freakin’ blinders! Kunstler comes off as annoying to some because he’s so in-your-face and he’s so far ahead of people who comment on his writing and 98 percent of the rest of America. The agribusiness thing is a no-brainer. (Ethanol is a good example of everything that’s wrong with America.) The public transport thinking has the backing of anyone who knows anything about community infrastructure, environmental degradation and CROWDING! One of the biggest problems with America is its incredible aversion to change, how it can minimize and rationalize anything it deems as “negative” or “naysaying” (which is just about every constructive proposal). Well, try minimalizing this: America’s middle class hasn’t been retracting this much since the 19th century, and there no signs of ending the retraction anytime soon. American economist’s infatuation with ridiculous numbers glosses over some of the country’s budding and alarming social problems with health care, the environment, education, whatever. It boggles the mind how status-quo adherents keep on their merry way, espousing more building, more construction, more cars, more SUVs, more coal power plants, more tax cuts and, of course, more subsidies for any of the above! Indeed a correction will occur — whether we foresee it or not, whether we acknowledge it or not.

    Pete Letheby
    January 25, 2008
    Reply
  7. …we need smaller lighter faster cheap cars…..all engines work on the principle of expansion….gas ignited…explodes in a confined cylinder etc etc …..or steam engines….water heated to a gaseous state…again the expansion principle…you could probably even run a car on vinegar and baking powder..for heaven’s sake…..

    Reply
  8. ….after all….mobility is the lynch pin of freedom…..

    Reply

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