In
our history, the American nation committed obvious sins against select groups
of people, and we’ve paid bitterly for some of that. But now it’s our sins against the land itself that threaten
to sink the USA as a viable enterprise.
It’s
odd, that in his otherwise excellent blow-by-blow account (“Eight Days,” in the
Sept 21 New Yorker Magazine)
of the September 2008 Wall Street meltdown that left Lehman dead, and AIG
croaking in a ditch, and the banking system in general functionally crippled,
reporter James B. Stewart never got around to really describing the cause of it
all — namely, the on-the-ground material catastrophe of American suburbia.
It
was the worthlessness of the tradable securitized debt associated with all
those overpriced (and overvalued) chipboard and vinyl houses, smeared
recklessly over the American landscape, that started all the trouble in the
first place. And it is our
inability to come to grips with that underlying catastrophe that prolongs the
resolution of the still-florid banking crisis — since the federal government is
doing everything possible to prop up the failed capital equation of terminal
suburbia, and to deny the obsolescence of that version of the American Dream
and all the mechanisms for delivering it.
The
suburban project was not a conspiracy by the likes of Robert Moses, Walt
Disney, Frank Lloyd Wright, and President Eisenhower to produce a living
arrangement with no future. It was
the emergent, self-organizing result of special circumstances in a particular
time and place: post World War Two America, with an immense supply of cheap
oil, cheap land, and the industrial capacity to churn out all the necessary
components for a car-dependent development pattern. Suburbia was spawned out of a couple of persistent themes in
American cultural history:
1.) that cities and city life were no good; 2.) and that the romance of settling the
wilderness could be reenacted, at great profit, in all that space beyond the
towns and cities. It would be silly to deny the appeal of this arrangement at
its inception. By the end of WW
II, city life in the popular imagination was reduced to one potently awful
image: Ralph Kramden’s apartment in “The Honeymooners” TV show.
There had to be something
better than that. Suburbia was engineered as the antidote to the Kramden’s
apartment:
country-living-for-everybody. The evacuation of the cities to the new outlands
proceeded as relentlessly as the landings at Normandy. It wasn’t until the program was well
underway that the self-destructive essence of it became obvious — that every
new housing subdivision killed the original rural character of the land, with
the result that suburban life quickly became a cartoon of country living in a
cartoon of a country house in a cartoon of the country. With additional
layer-on-layer of, first, the shopping in the form of highway strips, then
malls, along with the office “parks,” these places elaborated themselves into a
kind of cancer-of-the-landscape, a chronic and expensive condition that
Americans had no choice but to live with, because of the monumental investments
they had already made in it. The
discontents it produced lent it to psychological depression and dark humor,
just as chronic illness does. But we
were stuck with it.
Meanwhile, all
the machinery of culture and politics made it impossible to construct anything
differently. The exquisitely fine-tuned planning-and-zoning codes generated by
the thousands of town boards mandated a suburban outcome everywhere — with
plenty of help from the DOT traffic engineers, the fire marshals, and the even
the mandarins of academia who trained all these professionals. As a natural consequence of all this,
the disinvestment in cities — especially the older cities of the industrial
heartland — continued remorselessly until it seemed as if the Second World War had
taken place in St. Louis and Cleveland.
This mode of behavior
persisted through the first, short-lived oil scarcity tremors of the 1970s. It
was so completely embedded in the popular imagination that it had become the
baseline American identity. The suburban project caught a second wind in the
1990s, when the last great non-OPEC oil fields of the North Sea, Alaska, and
Siberia nullified the grip of the Islamic cartel for while, and sent the price
of oil down to $11-a-barrel.
Ironically, it was during those years that the warnings of “peak oil”
first circulated beyond the geology offices, and it was clear to anyone who
reflected on the connections that the project of suburbia was doomed.
It was also
ironic, tragically so, that during this same period Wall Street began to seek
some new way to make real money beyond stock and bond markets, which didn’t
seem to produce wealth at all for more than a decade when inflation was
factored in. By a fortuitous
coincidence, the revolution in computers enabled Wall Street bankers to concoct
abstruse new species of tradable paper securities based on bundles of debt that
seemed to produce miraculous earnings. It had the added advantage of being
inscrutable to both investors and financial regulators. Due diligence became
impossible and moral hazard spread like ringworm in a dormitory. The bulk of
the securitized debt originated in home mortgages and the larger result was a
gigantic racket ramped up between Wall Street and the US government to conceal
all the structural weaknesses of a de-industrialized US economy behind a
hyperbolic commerce in the very thing that the American public cherished most: their houses, which, understandably, everybody
had come to call “homes.” Wall Street might as easily have commoditized mother
and apple pie – if you could sell each one for half a million dollars.
The
banking fiasco still underway is at once a proxy for the larger failure of the
American economy and the greatest fissure in it. Put as simply possible: we can’t service our debt, we can’t generate more debt, and the
notional “capital” we thought we possessed is dissolving into nothingness. The federal government and Wall Street
remain committed to supporting all the rackets associated with a suburban
sprawl economy that has entered its own zone of remorseless failure. It is failing as a capital investment
first, and is secondarily failing as a practical living arrangement. The two failures will continue in a
close race toward terminal entropy.
The dirty secret all
along was that by 2005 there was no economy left in the USA beyond the suburban
sprawl economy with its so-called “consumer” nexus — largely devoted to the outfitting
of suburbia. More mortgage debt
(and credit card and car loan debt) will go bad and the investment paper that
represents it will go bad and it will eventually destroy our current system for
accumulating, valuing, and deploying wealth. It will not destroy the function of capital — no matter how
many angry intellectuals inveigh against the straw man of capital-ism, as if it were merely a belief system – but it
will be a long long time before anything sturdy or credible in the way of
banking will be reconstructed out of the wreckage.