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State of Cringe

     Just as Mr. Obama has danced into the oval
office, we’ve arrived at a moment when a lot of people have a hard time
imagining the future. This includes especially the mainstream media,
which has reached a state of zombification parallel to that of the
banks. But even in the mighty blogosphere, with its thousands of voices
unconstrained by craven advertisers or pandering managing editors, the
view forward dims as a dark and ominous fog rolls over the landscape of
possibilities.
     For at least a year several story-lines have
been slugging it out inconclusively for supremacy of the Web-waves. The
main event has been the Deflationists versus the Inflationists. The
first group basically says that so much “money” is being welshed out of
existence that it dwarfs the new “money” being shoveled into existence
in the form of bail-outs, tarps, and office re-decoration stipends. The
Deflationists see the tattered remnants of the consumer credit economy
auguring ever deeper into a hole until it is buried so far down that
all the back-hoes ever sold will not be able to dig it out. The
competing Inflationists say that the massive truckloads of shoveled-in
“money” will soon overtake vanishing “wealth” and, in the process, make
the US dollar worthless.
     Some of us see both outcomes in sequence:
the deflationary “work out” of bad debt currently underway — of loans
that will will never be paid back, of acronymic paper securities
revealed as frauds, of “non-performing” contracts entering the swamps
of foreclosure, of banks pretending to still exist, of hallucinated
“wealth” rushing into the cosmic worm-hole of oblivion — can only go
for so long before everyone who can go broke will go broke. Then, just
as we find ourselves a nation of empty pockets, the tsunami of
shoveled-in “money” designed to “reboot the consumer” (created not from
productive activity but just printed recklessly), will start churning
through the “economy,” chasing products and commodities that became
scarce during the deflationary phase — and the result is
hyper-inflation, the eraser of debt, destroyer of fortunes, and suicide
pill of feckless governments.
      I guess the basic difference is
that the hardcore Deflationists seem to think that their process can go
on forever. The society just gets poorer and poorer until we’re back at
something like a scene out of Pieter Bruegel the Elder. The
Inflationists see a fork in the road leading to more overt destruction,
especially political turmoil as a lot of negative emotion joins the
work-out orgy and overwhelms government.
     But in this moment, the week after a new president’s inauguration,
the deadly fog has rolled in and absolutely everyone dreads what lurks
on the other side of it, without being able to discern the path through
it. For example, the “bail-out fatigue” being reported suggests that
congress may just call a halt to money-shoveling. Where would that
leave Mr. Obama’s urgent call for “stimulus?” Not to mention further
TARP injections for redecorating bank offices.
      I’ve been skeptical of the “stimulus” as sketched out so far,
aimed at refurbishing the infrastructure of Happy Motoring. To me, this
is the epitome of a campaign to sustain the unsustainable — since
car-dependency is absolutely the last thing we need to shore up and
promote. I haven’t heard any talk so far about promoting walkable
communities, or any meaningful plan to get serious about fixing
passenger rail and integral public transit. Has Mr. Obama’s circle lost
sight of the fact that we import more than two-thirds of the oil we
use, even during the current price hiatus? Or have they forgotten how
vulnerable this leaves us to the slightest geopolitical spasm in such
stable oil-exporting nations as Nigeria, Mexico, Venezuela, Libya,
Algeria, Columbia, Iran, and the Middle East states? And we’re going to
rescue ourselves by driving cars?
      I know it is difficult for Americans at every level to imagine a
different way-of-life, but we’d better start tuning up our
imaginations, because endless motoring is not our destiny anymore. The
message has not moved from the grassroots up, and so at this perilous
stage the message had better come from the top down. Mr. Obama needs to
go on TV and tell the American public that were done cruisin’ for
burgers. He could do that by drastically reviving his stimulus proposal
as it currently stands.
      Putting aside whether this “stimulus” represents reckless
money-printing in an insolvent society, let’s just take it at
face-value and ask where the “money” might be better directed:


We have to rehabilitate thousands of downtowns all over the nation to
accommodate the new re-scaled edition of local and regional trade that
will follow the death of national chain-store retail of the WalMart
ilk. Reactivated town centers and Main Streets are indispensable
features of walkable communities. The Congress for the New Urbanism (CNU.org)
ought to be consulted on the procedures for accomplishing this and for
rehabilitating the traditional neighborhoods connected to our Main
Streets.

— We have to reform food production
(a.k.a. “farming”). Petro-dependent agri-biz will go the same way as
the chain stores. Its equations will fail, especially in a
credit-strapped society. That piece of the picture is so dire right
now, as we prepare for the planting season, that many crops may not be
put in for lack of front-money. This portends, at least, much higher
food prices at the end of the year, if not outright scarcities and
shortages. And the new government wants to gold-plate highway off-ramps
instead? Earth to Rahm Emanuel: screw your head back on.


As mentioned above, we have to get passenger rail going again because
the airlines are going to die the next time there is an uptick in oil
prices, or a spot shortage of oil. Let’s not be too grandiose and
attempt to build expensive high-speed or mag-lev networks — certainly
not right now — because they require entirely new track systems. Let’s
fix those regular tracks already out there, rusting in the rain, or
temporarily replaced by bike trails.

     Those are three biggies for moment and enough to keep this society
busy for a couple of years. But more to the point of this blog,
observers of all stripes are having trouble imagining any way out of
our multiple predicaments. All the possible actions tried so far have
have seemed absurd. Why even try to prop up inflated house values when
the single most crucial need in this sector is for house prices to
return to parity with incomes so the shrinking pool of ordinary people
still employed can begin to think about buying one? Well, the obvious
explanation is that politicians can’t bear the pain of watching mass
foreclosures and the ruination of families. This is pretty
understandable, and it is tragic indeed. Frankly, I don’t know of any
political narcotic that can mitigate the pain that results from having
made poor choices in life — even if those choices were promoted and
reinforced by the mighty ideology of “American Dreaming.” Anyway, the
foreclosures are well underway now, and perhaps the salient question is
how long will the public’s fury remain constrained while they hear
about Wall Street executives buying $80,000 area rugs? Surely there is
a tipping point of collective distress that is not too far from where
we’re at now.
       In the realm of TARPS and other continued
bail-outs aimed at the banks, the car-makers, and a host of other
corporate special pleaders, I wonder if we have already reached the
saturation point. But opinion on the Web is starkly divided and a prime
manifestation is the debate over whether it was a terrible blunder or
the right thing to let Lehman Brothers sink into bankruptcy. Both sides
make valid arguments, but virtually all the other super-banks right now
have lurched to death’s door and we have no clear guidance on what we
should do about them. Each one is touted as “too big to fail,” as well
as being interlocked with the others on credit default swaps that would
bring them all crashing down if one counter party truly failed. It
seems to me that this is what lies at the heart of the present
situation. Nobody I’ve encountered in the sphere of opinion-and-comment
thinks that these banks will survive, and this outcome beats a short
path to the conclusion that the entire banking system is fatally ill —
leading directly to a super-major crisis of political economy in which
the whole reeking, leaking system just crashes. I think this is what
lies behind Mr. Obama’s appeals for very urgent action.
       But then we’re back to square one: nobody, including Mr. O
himself, has really proposed a set of actions that have not already
been tried in the way of money-shoveling. So this will be a week in
which, perhaps, some wise and intrepid figures — perhaps even the
president — will articulate something we haven’t heard before, perhaps
even something like bearing our hardships bravely. It’ll be a very
interesting week, I’m sure.

____________________________________
My 2008 novel of the post-oil future, World Made By Hand, is available in paperback  at all booksellers.

About James Howard Kunstler

View all posts by James Howard Kunstler
James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

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