Kunstler's forecast for 2009

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There are two realities "out there" now competing for verification among those who think about national affairs and make things happen. The dominant one (let's call it the Status Quo) is that our problems of finance and economy will self-correct and allow the project of a "consumer" economy to resume in "growth" mode. This view includes the idea that technology will rescue us from our fossil fuel predicament -- through "innovation," through the discovery of new techno rescue remedy fuels, and via "drill, baby, drill" policy. This view assumes an orderly transition through the current "rough patch" into a vibrant re-energized era of "green" Happy Motoring and resumed Blue Light Special shopping.

The minority reality (let's call it The Long Emergency) says that it is necessary to make radically new arrangements for daily life and rather soon. It says that a campaign to sustain the unsustainable will amount to a tragic squandering of our dwindling resources. It says that the "consumer" era of economics is over, that suburbia will lose its value, that the automobile will be a diminishing presence in daily life, that the major systems we've come to rely on will founder, and that the transition between where we are now and where we are going is apt to be tumultuous.

Note especially Kunstler's prediction for the economy, below. It amazes me how many people believe we can borrow ourselves out of this mess: businesses borrowing from the government; the government borrowing from China, et al. And most of the Average Joe's conspicuous consumption came from credit, which he will find difficult to obtain, forcing him to change his lifestyle, thereby further undermining the many businesses that depend on the purchasing of undulgent goods and services; even worse, the cash he has will be worth much less as inflation will destroy his purchasing power.

We'll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable. This is the area where the crash of giants will be heard. I've been saying since publication of The long Emergency that comprehensive downscaling in all our activities, from farming to business to schooling to governance, will be the categorical imperative of the years ahead. Giant enterprises requiring giant loans to get from quarter to quarter will tend to not make it. Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off.

But there is always hope; I take much from Kunstler's prediction about changing demographics:

With all the economic hardship, we ought to expect a lot of demographic churning, people leaving hopeless places and moving on to something more promising. I believe we will see them move to smaller towns and smaller cities. The reorganization of the rural landscape into smaller-scaled farms has not begun to occur -- though 2009 might be very hard on agribusiness, given the shortage of capital and if oil begins to march up in price by late winter. Eventually, the rural landscape will require the labor of many more people than is currently the case.

Happy new year!

the change we need

From the Distributist Review:

So what is wrong with the Republican Party? Let me suggest that the problem is that they have no idea of what they ought to conserve; they have no idea of what constitutes liberty. Indeed, the only common theme among the factions is economic, and in that what they are trying to conserve is economic liberalism, the doctrine of laissez-faire capitalism. They have forgotten that this was the very doctrine that destroyed conservatism in the 19^th century, and while it is now over 200 years old, it will never be conservative.

What conservatism ought to conserve is the proper scale of things; government at its lowest possible level, strong families as the foundation of society, small manufacturing, small farms, strong communities. Low taxes, to be sure, but taxes commensurate with the tasks we ask government to perform. We know that the key to lowering taxes is to localize government as much as possible and reduce its scale. But you cannot have localized governments in the face of commercial institutions that are bigger than most states—indeed, bigger than most nations. These institutions declare themselves “too big to fail,” when in truth they are too big to succeed without massive government support....

Distributists know that the key to shrinking government and ending oppressive taxation is to shrink the need for government. Great and global institutions require big government and large military and regulatory apparatuses. And these require big taxes. And while they create great wealth, for some, they create great dependency for the mass of men, a dependency that expresses itself as the welfare state. The small farm is better for food, but it is also better for community; the small manufacturer, tied by bonds of economy and affection to his locality is the basis of a sane economy.

The unchecked assumption that brings the house down

The magisterial Patrick Deneen, reflecting on the graphic history of the stock market, points out the glaring blind spot in all our prognosticating:

Our entire political, economic and social system is based upon the idea that this line - notwithstanding temporary ups and downs - will continue its upward trajectory forever. The recent efforts of the worlds' governments - whether called "conservative" or "liberal" - has been to reinstate the upward climb of economic growth at any cost, whatever the later or ultimate consequence. Every aspect of our society is premised upon the permanence of this growth - the infinite inflation of the ultimate bubble.

But what if industrial life has been the greatest misallocation of resources in the history of the world, and the far bigger bubble (a totally unsustainable way of life--naturally, morally, spiritually) is starting to collapse? What then? The core sympathy behind the modern narrative is that life has been getting progressively better and better, even exponentially, in every way. To see that civilization has not been getting better and better (despite superficial advances)--that we recently came through the bloodiest, deadliest, cruelist, most dehumanizing century in the history of the world, and now in light of building on the sand of secularism, individual choice, sexual depravity, violence as entertainment, and reckless material consumption, we are teetering on collapse--is to see things from the perspective of having left the cave.

Can civilization collapse? Can it collapse again?

we just don't get it

Amidst the furor over our deflationary spiral and the collapse of the economy, where now apparently we are willing to get nothing for something, we have forgotten about the greater crisis looming: peak oil. If you haven't thought about it, you really can't appreciate how disasterous the implications of decreased oil production will be. (For an idea, see James Howard Kunstler's Long Emergency.) And still we are trying to get Detroit Auto back on track, which is like giving a bailout to a furious crack addict. An addict who is meanwhile piping to our children.

Kunstler, on Obama's recent clamor for public works projects:

President-elect Obama has announced his intention to kick off a massive "stimulation" program when he hits the White House "running" in January. Early indications are that it will be directed at things like highway repair. If so, we will be investing long-term in infrastructure that we probably won't be using the same way in ten years. But I doubt there is any way around it. The American public can't conceive of living any other way except in a car-centered society. Anyway, some parts of our highway-bridge-and-tunnel system are already so decrepit that they pose a menace right now, and the clamor to direct "stimulation" there is already very strong -- backed by all the fraternities of engineers.

Stimul[i] aimed at perpetuating mass motoring will be a tragic waste of our dwindling resources. We'd be better off aiming it at fixing the railroads (especially electrifying them), refitting our harbors with piers and warehouses in preparation to move more stuff by boats, and in repairing the electric grid. Unfortunately, our tendency will be to try to rescue the totemic touchstones of everyday life, things familiar and comfortable, regardless of whether they have a future or not.

The ominous forces gathering out there will defeat these efforts and everyday life will reorganize itself some other way consistent with the single greatest trend: the force of contraction. Every sign we see is pointing in that direction, from the inability of the earth's ecology to support more human beings, to the dwindling of mineral and energy resources, to the destruction of farmland, to mischief in the climate. We just don't know how badly things will fall apart in the meantime, or how kind (or cruelly) people will act in the process.

And Kunstler said it well way back in May:

Years ago, U.S. negotiators at a U.N. environmental conference told their interlocutors that the American lifestyle is "not up for negotiation." This stance is, unfortunately, related to two pernicious beliefs that have become common in the United States in recent decades. The first is the idea that when you wish upon a star, your dreams come true. (Oprah Winfrey advanced this notion last year with her promotion of a pop book called "The Secret," which said, in effect, that if you wish hard enough for something, it will come to you.) One of the basic differences between a child and an adult is the ability to know the difference between wishing for things and actually making them happen through earnest effort.

The companion belief to "wishing upon a star" is the idea that one can get something for nothing. This derives from America's new favorite religion: not evangelical Christianity but the worship of unearned riches. (The holy shrine to this tragic belief is Las Vegas.) When you combine these two beliefs, the result is the notion that when you wish upon a star, you'll get something for nothing. This is what underlies our current fantasy, as well as our inability to respond intelligently to the energy crisis.