Like a lot of observers in thrall to the agony of the financial markets, I have been commenting on less-than-the-Big-Picture in recent weeks. The Big Picture is the health of American society, which includes both its economy and culture. In healthier times, finance was but one part of the economy, the means for raising capital investment to apply to productive activity. For the past two decades, we have allowed it to become an end in itself.
As US manufacturing decamped to low-labor-cost nations, we turned increasingly to the manufacture of abstruse investment schemes designed to create "value" ingeniously out of thin air rather than productive activity. These succeeded largely because of the momentum of legitimacy American institutions accumulated in the years after the Second World War. The rest of the world believed our ingenuity was backed by credibility. That momentum has about run out.
You will hear about central banks and hedge funds and derivatives and mortgage backed securities, and all kinds of jargon, but the issue will really come down to matters other than finance. Are we building a society with a future? Does our culture affirm life or yearn for destruction? Are our daily ceremonies and rituals meaningful or empty? Are our hopes and dreams consistent with what reality has to offer? Can we look in the mirror and say that we are upright people?
I think we are in trouble with all these things. But I doubt we can give up our current behavior without going through a convulsion. The psychology of previous investment is, for us, a force too great to overcome. We will sell the birthrights of the next three generations in order to avoid changing our behavior. We will blame other people who behave differently for the consequences of our own behavior. We will not understand the messages that reality is sending us, and we will drive ourselves crazy in the attempt to avoid hearing it.
I haven't changed my view of what is happening to us. We have run out our string of stunts and tricks in the money rackets. We've spent our legitimacy. The rest of the world will strive mightily to get free of their obligations to us, including their respect for the value of our currency. The meta-cycle of suburban development, including the "housing" and all its accessories in roads and chain stores, is hitting the wall of peak oil. The suburban build-out is over. This will come as an agonizing surprise to many. The failure to make infinite suburbanization the permanent basis for an economy will rock our society for years to come. Hundreds of thousands of unemployed men with pick-up trucks and panoplies of power tools will feel horribly cheated. I hope they don't start an extremist political party when the re-po men come to take their trucks away.
Even under the best circumstances, with a nationwide change of
heart, and really wise leadership, America would find it difficult to
make the necessary changes that new reality requires. Of course,
reality will force us to make these changes whether we're on board with
the program or not. The only variable is how much turmoil may ensue in
the process. If we resist doing what reality commands, our trouble is
certain to be worse.
What does reality command? Well, first of
all (and especially for the benefit of the enviro-progressives I have
met recently, who want gold medals for buying hybrid cars) we'd better
drop the idea that there is any way whatsoever to preserve our system
of happy motoring. The car as a mass market phenomenon, and enabler
(dictator, really) of all our daily life arrangements, is finished.
We'd better find something else to talk about, or the American future
will amount to little more than a colossal circle-jerk on an
increasingly unfixable freeway. I am hugely worried (obviously) that
even the intelligent-and-educated fraction of our society cannot focus
on anything but how to keep all the cars running. A failure to drop
this, and move on to more practical endeavors, will lead automatically
to a failure of reasonable politics in this country. It is already
manifest in the abysmal failure of the Democratic candidates for
president to address the looming oil import crisis that will certainly
be underway as soon as any of them is inaugurated.
Reality
commands that we prepare to rebuild our small towns and small cities
and downsize our gigantic metroplexes. Reality commands that we get
serious about local food production and local economies. Reality
commands that we rebuild the kind of public transit that people will be
grateful to travel on. Reality commands that we prepare to rebuild our
harbor facilities for a revival of maritime trade, using ships and
boats that do not necessarily run on oil. Reality commands that we put
an end to legalized gambling, in order for the public to re-learn one
of the primary rules of adult life -- that we generally should not
expect to get something for nothing.
The trouble we are seeing
in the financial sector is largely a result of blowback from tens of
millions of people who tried to get something for nothing. It is a
circumstance that is now beyond the control of the Bushes, Paulsons,
and Bernankes. Their intended-to-be-soothing statements on Friday will
not hold back the implosion of cascading defaults and cumulative
insolvency. A few "poster children" may be symbolically rescued to try
to prop up confidence in this-or-that paper, but an awful lot of other
people and institutions will just go down, unfortunately, because of
their own bad choices.
A strange new meta-reality will assert
itself in America: that shit happens. We will see the ruined people and
feel bad about them, but we will not be able to un-do the shit that has
happened to them, that they have brought upon themselves. This is how
the idea of moral hazard returns to a society that has lost its way.
Meanwhile, there is too much to do for the survivors to sit around
wringing their hands and being crybabies. You can start by taking all
the mental effort that you are currently wasting on the subject of
cars, and how to run them on fuels other than gasoline, and instead
focus your energy on how to rescue our political institutions so that a
truly informed public can reconstruct a bankrupt society into a living
and credible republic.
Mr. Kunstler, This is your very best article written and this is the most emergent situation you have written about. I pray that we Americans have already reached these conclusions on our own. Some have. Keep writing. Thank you, Dell - Del Mar, CA
1
September 04, 2007
a guest: The Near Future
It is sad to say, but I think our near term destiny will lay with that political party formed by the truck-men. We may have a cycle of intelligence, but the recoil from our current excess will likely make Bush seem moderate. There have always been a lot of sparks as once dominate cultures circle the drain. It is unlikey that our experience will be different.
We are making our own biodiesel from restaurant waste, and have gotten several years of winter wood in by cutting two out of three standing deadwood trees in the neighborhood -- gotta leave something for the woodpeckers! We still use grid electricity, but here in BC, it's renewable hydropower, and dirt-cheap, making it really hard to justify putting money into. (We have biodiesel backup generation.) I'd rather have these two legs of our "energy tripod" figured out than having some PV panels, but being dependent on gasoline for transport and natgas for heat.
Of course, the free vegoil we harvest won't last forever. It's an interim solution. As energy rises in cost, dining out won't be as popular, and the waste vegoil will likely have more demand than supply. We aren't "car lovers," but feel that motorized transport will be available in some form for some time. Making biodiesel from waste gives us time to watch the trends and make further plans, perhaps equine. In the mean time, we drive under 3,000 km per year, and use the biodiesel in our tractor and farm truck, as well as put used vegoil in the chain saws for chain lube.
Next is 80,000 liters of potable water storage, attached to a 60'x20' metal roof, coming this month (September). That should give us about 1,000 liters per centimeter of rain -- enough for our small community to get off the municipal water system.
Food is next year's project. We had a small garden this year, but are hampered by lack of deer fencing. We may have to put five figures into a perimeter fence before we can hope to grow much food.
But most of all, we're working on community. All of the above is being done by a farm owned by a cooperative, in which we each own shares, and there are many others on our island (and off it) who are interested in what we're doing, and who may be joining us.
What we're doing isn't for everyone. I hope there's still an economy left for JHK to start his local newspaper. But being close to your sources of energy and food -- both physically, and in the sense of "being in touch with" -- seems the prudent thing to do.
3
September 06, 2007
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Like a lot of observers in thrall to the agony of the financial markets, I have been commenting on less-than-the-Big-Picture in recent weeks. The Big Picture is the health of American society, which includes both its economy and culture. In healthier times, finance was but one part of the economy, the means for raising capital investment to apply to productive activity. For the past two decades, we have allowed it to become an end in itself.
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