Where We're At

     Every time I saw a car towing a motorboat this holiday weekend, I wondered what was going through the head of the towee. Did they have a sense that darkness was falling on their careers in motor sports? Did they have an inkling that an oil-and-gas crisis is upon us and just not give a shit? Or were they just going through the motions, following some implacable rote programming induced by, say, forty-odd years of TV addiction and a diet based on corn-syrup byproducts?
     The holiday to me was a creepy hiatus from an ever more desperate reality overtaking the nation like a miasma. Meanwhile, the mainstream media's ongoing narrative has gotten stuck in the moronic groove of "drill drill drill." The belief of people like Larry Kudlow of CNBC and uber-mega-idiot John Stossel of ABC-News is that we could go back to $1.50 gasoline if only congress would open the offshore exploration areas and the Arctic National Wildlife Refuge. This view is just plain erroneous. Nothing we get out of these regions will come close to offsetting the ongoing depletion of worldwide oil resources, or even arresting our own losses.
     Larry King had a particularly dreary debate Sunday night between Robert F. Kennedy, Jr., and a grab bag of "drill drill drill" advocates. Kennedy took the position that the US could achieve a sort of energy independence by massive deployments of wind and solar equipment. It's an understandable wish, I suppose, but not something I view as consistent with reality. The unfortunate part of the Larry King presentation is that it gives the public an idea that these two fantasies are the only possible responses to our predicament. No one is interested in changing our current behavior.
     In the background of these energy conundrums is the sickening spectacle of the nation's fatal insolvency, which remains partially disguised by the machinations of the Federal Reserve, using the various new loan "windows" to maintain the illusion that the major banks have not swindled themselves out of existence -- and in doing so, caused at least $3 trillion (so far) in capital to vanish in a black hole. This three-card-monte game has gone on for a whole year now, and the consequences are hitting home. No more money can be lent into existence now.
      One consequence is that other nations sitting on our exported dollars (from our massive trade deficit) have apparently decided to spend off those dollars rather than wait for the fullblown financial collapse of the nation issuing them. My guess is that they are spending those dollars on oil, the primary resource of industrial economies, and that they are prepared to outbid other contestants (including the USA) no matter what -- because they know the dollar is losing value, and that those losses are apt to accelerate over time, and what else would they spend them on? I suspect this is behind the rising price of oil more than anything else -- certainly more than the phantom "speculators" the right wing is yelling about -- and that behind the spending off of those exported dollars are the geological facts of oil being a finite resource inequitably distributed around the world.
      But to get back to my prior point, things are hitting home anyway, and with force. The US economy is crumbling because the way we conduct the activities of daily life is insane relative to our circumstances. We've spent sixty years ramping up a suburban living arrangement that has suddenly entered a state of failure, and all its accessories and furnishings are failing in concert. The far-flung McHouse tracts are becoming both useless and worthless in the face of gasoline prices that will never be cheap again. The strip malls and office "parks" are following the residential real estate off a cliff. The retail tenants of all those places are hemorrhaging customers who have maxed out every last credit card. The lack of business is now leading to substantial layoffs. The airline industry is dying and will probably cease to exist in its familiar form in 24 months. The trucking industry is dying, threatening the entire just-in-time distribution system of things that even people with little money to spend still need, like food.
      These conditions will now get a lot worse, no matter whether the banks continue to conceal their problems. All of it leads to an inflection point that coincides with the November election. By then, I expect that quite a few banks will be toast, job layoffs will rise spectacularly, foreclosures and bankruptcies will be raging across the land, and homeowners north of the magnolia belt will be shattered by the cost of staying warm this winter.
     All this hardship and woe will be blamed on the Republican party. It may actually kill off the party. Political parties do go out-of-business in American history, and this one deserves to die -- with its aggressive no-nothingism, its avaricious, punitive religious extremism (the religious part often being fake), its stunning inattention to financial malfeasance in areas under its direct supervision, and its gross incompetent mismanagement of the nation's strategic interests.
      That said, I will feel a little sorry for Mr. Obama if he gets to the White House. He'll have to find a gentle way to tell the truth to the people who elected him, people who will be suffering mightily, and who will be very sore about their losses. He'll have to tell them that the previous "release" of the American Dream software is obsolete, and the new version will require a whole lot more of them in the way of earnest effort, delayed gratification, and revised expectations.
      There's a whole lot we can do to greet the new circumstances awaiting us, but the one thing we can't afford to do is put all our efforts into keeping the current system running as is. Reality simply won't permit it. We would squander our dwindling remaining resources trying to keep it all going.  The next president is going to have to lead us through the awful process of cutting our losses. So far, the debate has been about how to avoid that.

____________________________________
My new novel of the post-oil future, World Made By Hand, is available at all booksellers.

Comments

[Tangurena]

There will be some bargains, but not for us. Like the Bear Stearns fiasco, everyone outside of BS knew the company was dead.

http://www.vanityfair.com/politics/features/2008/08/bear_stearns200808?printable=true&currentPage=all

>the phantom "speculators" the right wing is yelling about...
As long as some invisible witch can be blamed for the situation, the right-wing doesn't have to change at all. Which is why they're going to be blaming speculators until the lights go out. The right-wing would rather destroy America than change at all. We saw that with the civil rights movement starting in the 50s. We see that with their plunder of Social Security.

[DanaJ]

I'm afraid that the Repugnican party won't go away. I'm also afraid that they will indeed pull some kinda "October surprise" in some insane attempt to pull off a win for McSame. Or just to declare an open dictat0rship by Darth Cheney.
As for the Truth, Jimmy Carter tried that 20 years ago, and America wasn't ready then, and we aren't ready now. Believe me, I've tried talking to the Repub side of the family, they all believe that if McSame is elected that gas will be less than $3.00/gl again and they can keep driving thier BFT/SUV's.
Even if Obama wins and gets up on national TV for his first State o the Union address and tells it like it is that there will NEVER, EVER be gas for less than $4/gl, and that we have to conserve and increase mileage on our cars, most Uhmerikans will just go "What the F**k is that (nword) talking about? Shit, I just bought a F250, all we gotta do is drill in the Polar Bear preserve up in Alaska and we can get all the oil we want for free!!"
In stead of "Oh say can you see..." the new national anthem should be:
"If you wish upon a star..."

[FARfetched]

Mornin', all. I'll kick off the week by responding directly to some of JHK's points.

«What was going through the head of the towee»

Perhaps unwittingly quoting Isaiah 22:13: "And behold, joy and gladness, [feasting] and drinking wine, 'Let us eat and drink, for tomorrow we die.'" Or more likely, it just hasn't sunk in yet. Sure, gas is $4-5/gallon (depending on where you live), but instead of getting the boat out every other weekend this summer they're only going to hit the lake on three-day weekends.

«the major banks… caused at least $3 trillion (so far) in capital to vanish in a black hole.»

Remember, that $3 trillion was created out of thin air, and back to thin air it has gone. It was all an illusion to begin with, right? Hard assets are still intact… they might be in China instead of Chicago, but they still exist. Push the RESET button on the banking system, wipe the slate, and start over. With a little more adult supervision.

«[President Obama will] have to find a gentle way to tell the truth to the people who elected him, people who will be suffering mightily, and who will be very sore about their losses.»

Pointing the finger at conservatism would be a good start. People are going to want to take out their frustrations on a scapegoat, so they might as well smack the right target for a change. There's a huge overlap between the goplets and conservatives in general, but the former is primarily a subset of the latter. The proper target should be conservatism, with the Republican Party destroyed as well-deserved collateral damage.

[oneEyeOpen]

The right wing has an oil speculation problem??? What the fuck you smokin'? It's not as if the "right wing is blameless in a lot of the mess that our country is now embroiled but to assign blame on them for pointing the finger at speculators is asinine.

The current congressional committee looking into the practice and effect of specutlators on the oil market is chaired by a Democrat. It is Democrats that have suggested the nationalization of refiners for chrissakes.

""Make no mistake about it, the excessive speculation in commodity markets is having a devastating effect at the gas pump that is rippling through our entire economy," said Rep. Bart Stupak, D-Mich., who chaired the hearing of a House Energy and Commerce subcommittee.

House Democrats on Monday suggested a range of actions, including: higher margin requirements, stricter position limits and increased disclosure of unregulated over-the-counter trades.

Energy and Commerce Committee Chairman John Dingell, D-Mich., said those measures and more "need to be debated, evaluated, and acted on, sooner rather than later."

article here:

http://www.cbsnews.com/stories/2008/06/23/national/main4203863.shtml?source=RSSattr=Politics_4203863

Furthermore, you want to paint the problems of the plundering of Social Security on the "right-wing"? Surely you jest. That whole scheme was born of Roosevelt who at the time knew full well (derived from the actuarial tables of his day) that very few of the participants would ever live long enough to claim any of the "security". Science marched on and now people live longer which is one of the principal problems with solvency.

The fact that the Congress and the Senate were controlled by the Democrats for roughly 40 years, prior to the Regan era, also had just a wee bit to do with the continued plundering (vouch safed by annal IOUs to repay the system at some future point) to the current state of our beloved Social Security System.

If the Republican Party deserves a swift death then justice demands that the Democrat party be invited to join them at the gallows.

[montysano]

I see where Nancy Pelosi has sponsored a new Media Fairness Doctrine, which is of course doomeed to failure. As to the issue of media fairness, what do you other Clusterfuckers think?

Let's be real: yeah, John Stossel is probably dumb enough to believe the "DRILL!" meme, but Limbaugh and Hannity are smarter than that. They know it's a load of crap. So when they sell this line of bullshit to their listeners, they are IMHO doing an extreme injustice to the nation. The Repubs that I work with can't, or won't, move beyond "DRILL!" to see if there's any reality behind it.

Should the rightwing barking dogs be prevented, by law, from slinging obvious lies on our public airwaves?

[oneEyeOpen]

"Should the rightwing barking dogs be prevented, by law, from slinging obvious lies on our public airwaves?"

Yeah, you fucking idiot. Let's make more laws about lying. Remember when Clinton was impeached for lying to a grand jury? Duh.....

[theroachman1]

Bring up Clinton. That's rich!

So your ok with Bush not testifying under oath to Congress then?

[jeffj]

"All this hardship and woe will be blamed on the Republican party. It may actually kill off the party."

Wish I could share Jim's 'optimism' on this front. The most painful jolts on this fall back to reality won't come until well after Nov. 2008. It will be all too easy for the GOP to dump blame on the newly elected administration once the hammer really falls.

[peakoilmom]

I'm afraid that Mr. Jim is engaging in some wishful fantasy when he says that the GOP's demise is near.

Conservatives seem to do a better job than liberals at spinning even dire events to their advantage. They have been quite loud in the last few weeks blaming the Democrats for the off-shore moratorium on oil drilling, even though it was a bipartisan decision.

I predict that McCain will be elected because the American public will see him as more able to deal with this crisis than Obama. Maybe in 2012 people will finally give up on the GOP. But I'm not going to hold my breath.

[et0hman]

I have been following Jim's articles for about a year now. I find them both insightful and shockingly truthful, as I see what he is writing about all around me. I live in the PNW, and currently have a good job. I spent 4 yrs un/under-employed from the tech bust. I live in the city instead of suburbia for many of the same reasons Jim hits on. No the city is not pretty at times, but getting to work is only a 30 minute/1 transfer away from my house by bus, and I can work 2 days a week from my house - that saves me $$ also. If people will get their noses out of the air and look around they will see they are sitting in a pile of c*(p and need to move on. We are in trouble folks in this "new" economy. We need what FDR put in 75+ yrs ago - real rules, good infrastructure, and keep the speculators out of things.

[mason-dixon]

OneEyeOpen:

Good points. The democrats have been every bit as out to lunch on this, as well as most other important issues. Peak oil was known to be a looming problem 10 years ago, but Bill Clinton never did anything about it. He is also the one who pushed the idiotic globalization and pro-outsourcing policies that have wrecked our economy and caused those massive trade deficits that Jim mentions.

I hope BOTH of the worthless establishment parties go out of business, and I would encourage everyone to thelp that process along by voting for 3rd party candidates this fall.

[emergentink]

The "Republicans/Democrats are to blame" stuff is as effective as "blame the speculators", "blame the weak dollar", "drill drill drill", and "massive deployment of wind and solar" for getting us out of this mess. Any of these things can be partially correct, but they are all distractions from the real task at hand: a massive change of lifestyle and living arrangements that we won't undertake until it is forced upon us. At which point it will be too late for too many.

Other than that, have a great Monday!

[Schizoid]

RE: "All this hardship and woe will be blamed on the Republican party. It may actually kill off the party."

The last two presidential elections were obviously rigged. After all of the funny business in Florida during the presidential election of 2000, where Al Gore was obviously the winner, the supreme court appointed George Bush as president of the United States. Then came 9/11, the Patriot Act and the invasion of Afghanistan and Iraq.

The 2004 George Bush victory over fellow Skull and Bonesman John Kerry is another example of bogus elections. Before this "election" we already knew that the Bush Crime Syndicate had lied to us about Sadam Hussein having ties to al-Qaeda and his possessing weapons of mass destruction. By then, the disastrous wars in Afghanistan and Iraq were in full operation, the US constitution was being shredded and in spite of this, we "elected" George Bush to a second term.

RE: "That said, I will feel a little sorry for Mr. Obama if he gets to the White House."

In the next few months, all of the skeletons in Barack Hussein Obama's closet will be exposed. His Muslim background, drug use, lies, inexperience and continued affiliation with black radicals should be enough to put John McCain into the White House without the need for any of the usual election fraud. Another 9/11 event would cinch the deal.

As always, the Military-Industrial-Congressional Complex will be calling the shots, no matter which stooge becomes president.

[oneEyeOpen]

" Before this "election" we already knew that the Bush Crime Syndicate had lied to us about Sadam Hussein having ties to al-Qaeda and his possessing weapons of mass destruction."

Oh really Schizoid? How do you explain this most recent AP story that goes into detail about Saddam's nuclear program? Who lied? You fucking tell me.

Story here:

http://seattlepi.nwsource.com/national/1107ap_iraq_yellowcake_mission.html

[Pentro]

Blaming this situation on Republicans or Democrats, as some of these comments do, is pointless scapegoating. The situation is what it is, made that way by 50+ years of the American lifestyle. If you want to blame somebody, look in a mirror. We had ample warnings in the 1970's, but we chose to ignore them.

Now if you will excuse me, I have to go feed my SUV.

[mason-dixon]

Another thing to remember about Barak Obama: his chief economic advisor is Mr. Wall Street, Robert Rubin. Which means you can expect an Obama administration to do nothing different on economic policy from the current bunch of Wall Street whores running the country.

[oneEyeOpen]

"Bring up Clinton. That's rich!

So your ok with Bush not testifying under oath to Congress then?"

No, fuckfnut. I'm saying to try and pin the fucking things that are wrong with this country on one party is denying reality. It is a futile, infantile exercise that will solve nothing. I say we start pinning responsibility on individuals..regardless of party affiliation.

[DanaJ]

"Remember when Clinton was impeached for lying to a grand jury? Duh....." OEO;
Speaking of lies, President Clinton was NOT impeached, there was a vote, the vote failed to pass, thus he was NOT impeached. If he was, he would not have served the rest of his term.
One of the biggest lies. Again, Clinton was NOT impeached.

[JW]

"Where We're At" concisely states our nation's predicament and refusal to face it. As usual, I agree completely with Mr. Kunstler's analysis. One thing that will make me feel more hopeful will be when I start to see some of our idiotic elected officials quoting excerpts from this blog or one of Mr. Kunstler's books. Until then our nation will operate with the same old feckless mindset and hope based non-solutions.

[km4]

Jim very nice post !

25+ yrs of industrial production decline and increasingly financial engineered driven bullshit for the US economy ( especially last 8 yrs under Bush ) with massive market bubbles has created systemic damage.

1. The USA needs $2B a day from China et al or could not keep its economy stable or spare the dollar from collapse.

2. The USA already has close to $10 Trillion in national debt

3. The USA has a trade deficit of $800B/yr

4. The USA is the prime engine for derivatives 'ticking bomb' that grew into a massive bubble, from about $100 trillion in 2000 to $516 trillion by 2007 that is starting to go off in blowback stages and the latest ploys by the The Fed, G7 will have little effect to stop it.

5. The USA already has way too many Americans overwhelmed by personal debt racking up a household debt-to-income ratio of 1.42 ( for total of $13.8 trillion in debt including mortgages ) that already matches the country’s $14 trillion G.D.P.

6. The USA has Bushie boy racking up $32 Trillion dollars in total liabilities and unfunded commitments for future payments since 2000.

7. Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips
http://www.amazon.com/o/ASIN/067...9070/ groksoup04

Phillips describes the consequences of our misguided economic policies, our mounting debt, our collapsing housing market, our threatened oil, and the end of American domination of world markets.

[Doug]

The real debate taking place should be about America's capitalist-imperialist system which has caused death and destruction around the globe. The debate should be about ending this immoral system and replacing it with a more humane and environmentally-friendly socialist society.

[theroachman1]

OEO

Kunstler has not just been blaming the GOP they just get the most scorn because they are the bigger fools. Did you even read the post today? You want to point out where Kunstler did not have heavy criticism of Kennedy?

Let me point out the line:

"Kennedy took the position that the US could achieve a sort of energy independence by massive deployments of wind and solar equipment. It's an understandable wish, I suppose, but not something I view as consistent with reality"

Double Dumb Ass on you pooh head!

[oneEyeOpen]

DanaJ

"Upon the passage of H. Res. 611, Clinton was impeached on December 19, 1998, by the House of Representatives on grounds of perjury to a grand jury (by a 228-206 vote) and obstruction of justice (by a 221-212 vote). Two other articles of impeachment failed — a second count of perjury in the Jones case (by a 205-229 vote) and one accusing Clinton of abuse of power (by a 148-285 vote). Four Republicans opposed all four articles, while five Democrats voted for at least one of them. Upon passage of H. Res. 611, Clinton became the first elected U.S. president and the second U.S. president to be impeached, following Andrew Johnson in 1868. (In 1974, Richard Nixon resigned the Presidency before the House impeachment vote.)"

Now shut the fuck up, moron!

[drstrangelove]

danaj-- Clinton was impeached by the House of Representatives on Dec 19, 1998. He was then tried by the Senate which, by the tally of their votes, determined that he was "not guilty."

[oneEyeOpen]

"Kunstler has not just been blaming the GOP they just get the most scorn because they are the bigger fools. Did you even read the post today? "

Yeah Fucktard, I did. And I read nothing about how the Democrat Party deserves "to die". DId you read the fucking post?