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LQD: James Howard Kunstler on 'What now?'

by Magnifico Mon Oct 27th, 2008 at 03:09:25 AM EST

In his October 20, 2008 essay, James Howard Kunstler gazes into his crystal ball and tries to answer the question: What now? Not surprisingly, he sees a devastating economic reboot.

So, that's what I think we will get: an interval of deflationary depression followed by a destructive wave of inflation that will wipe out both constructed debt and constructed savings, scraping the financial landscape clean. There's no question that stage one is underway. But we can be sure the giant wave of money recklessly loaned into existence in just a few weeks time will wash back through the global economy leaving a swath of destruction.

And then what? The societies of the world will be faced with the task of rebuilding systems of fruitful activity, i.e., real economies based on productive behavior rather than the smoke-and-mirrors of Frankenstein-finance con games.

Kunstler thinks people will quickly soon catch on and become an "angry peasant mob" demanding some sort of justice be dealt to the economic Frankensteins who jump started the collapse.


Personally, I think he's a little optimistic about that happening. However, he writes:

Perhaps, in some countries (maybe the USA, if we're lucky), this will take the more orderly form of systematic prosecutions, bringing to justice persons who perpetrated swindles involving the alphabet soup of investment "products" that have gone bad in so many accounts (and ruined so many individuals, institutions, and governments).

He suggests if there isn't accountability through justice, then there is the risk of violent revolution.

Apart from orderly prosecutions (which can certainly turn harsh and cruel), there is the possibility of sociopolitical upheaval -- revolution, violence, civil war, war between nations, the whole menu of monkey-human mischief that afflicts mankind.

The collapse fits within Kunstler's future view, which is the collapse of American society as it is known today. In his 2008 forecast, Kunstler wrote:

One thing the public doesn't get about the housing debacle is that it is not just the low point in a regular cycle -- it is the end of the suburban phase of US history...

Unfortunately the whole point of the housing bubble was not really to put X-million people in so many vinyl and chipboard boxes, but rather to ramp up a suburban sprawl-building industry as a replacement for America's dwindling manufacturing economy.

And to put a finer point on what Kunstler is predicting, he wrote in his September 8, 2008 essay, "Last Ditch" that "the housing market is not coming back. Ever. In the form that we knew it. The suburban project is over. That version of the American Dream is over."

And in his current essay, he predicts:

Under the best circumstances we will reorganize our society and economy at a lower level of energy use (and probably a lower scale of governance, too). The catch is, it will have to be a whole lot lower. I think we'll be very lucky fifty years from now to have a few hours a day of electricity to do things with.

The energy story and its hand-maiden, the climate change situation, are both lurking out there beyond the immediate spectacle of the financial fiasco. Both these things imply pretty strongly that the economic relations currently unraveling will not be rebuilt -- not the way they were before, or even close to it.

Kunstler suggests, once again, that "the best outcome will be societies that can practice small-scale "process-intensive" organic agriculture and equally small-scale process-intensive modes of manufacture in the context of very local sociopolitical networks."

He thinks Obama would make a better president to deal with the mess than McCain, but "the best a President Obama can do is offer some reassurance to a public that is totally unprepared for the convulsion now upon us." In Kunstler view, Obama basically can do nothing to stop what he sees as about to happen. He concludes:

The change that has been in the air all year -- that Mr. Obama has talked so much about -- is coming in a bigger dose than anyone expected. I hope we're ready to get with the program.

Oh boy.

Display:
US miles traveled are down 5.6% from last year.

All other things equal, i.e. no change in miles per gallon of vehicles.  This means US oil consumption is down 1.1 million barrels daily over the same period last year.  And this is without calculating in any efficiency change in the US vehicle fleet.

The thing I worry about is that gas is now near $2/gallon where I am (Ohio) how long before people start to travel more because gas costs less?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Oct 27th, 2008 at 03:31:19 AM EST
That's a good question.

Star Tribune (MN): Will we put the pedal to the metal again?

"We're right in the middle of a major change in people's driving habits. We don't know if it's going to stick," said Frank Pafko, director of the Minnesota Department of Transportation's office of environmental services.

Dawn Duffy, spokeswoman for AAA Minneapolis, believes larger economic pressures will keep driving mileage down, even with cheaper gas.

"When gas was averaging $2.50, we wondered: Is that going to change people's habits? It did not," she said. "When it finally went over $4 this summer, it changed our habits, and those habits have continued. People don't have that disposable income."

I think the U.S. is likely to see reduced consumption for oil as the black hole of capitalism sucks more and more money. Even though the price of gas is down, fewer Americans can afford to drive like they did even a year ago.

by Magnifico on Mon Oct 27th, 2008 at 03:53:29 AM EST
[ Parent ]
law of diminishing returns...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Mon Oct 27th, 2008 at 07:49:50 AM EST
[ Parent ]
Even though the price of gas is down, fewer Americans can afford to drive like they did even a year ago.

Yes, the YoY trend in decreasing mileage (MoM) appeared about Q2 2006. I scanned the tabulated data -- April 2005-2008. (An interesting note: contrary to MSM theater, summer holiday months, May-June, report the least total vehicle miles travelled in any one calendar year.) So I tend to rule out the relative spike in pump price (Jan-Aug 2008) being the proximate and a determinative cause of Aug rate change reported. Of course, someone would compare YoY pump price(s) to mileage to argue correlation to aggregate consumer purchasing and transportation preferences. (That will not be I :)

Diversity is the key to economic and political evolution.

by Cat on Tue Oct 28th, 2008 at 10:54:32 AM EST
[ Parent ]
I think that most people can make the connection that the fall in gasoline prices is not due to supplies being unlimited.

People will always have in their mind the possibility, if not probability, of $4.00 gas and will make their dispositions accordingly.

I agree with Kunstler that this is a game changing moment.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Oct 27th, 2008 at 05:54:08 AM EST
[ Parent ]
... short horizon demand response and long horizon demand response.

Having experienced $4/gallon gas, it is no longer unimaginable. And so if people are buying new cars ... which they will start doing sooner or later, even if economic conditions remained depressed ... they will imagine gas prices that were simply crazy talk in 2005.

However, in depressed economic conditions, it becomes even more critical to address the difference between cost-to-buy and cost-to-own, which is one thing to lobby a new Obama administration for ... a feebate, with an excise on vehicles under current fleet average efficiency and a rebate on vehicles more than twice current fleet average efficiency ... especially a feebate with the rebate focused on vehicles manufactured in North America, would be worth pushing for.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Oct 28th, 2008 at 03:02:19 PM EST
[ Parent ]
 
Kunstler thinks people will quickly soon catch on and become an "angry peasant mob" demanding some sort of justice be dealt to the economic Frankensteins who jump started the collapse.

 
Apart from orderly prosecutions (which can certainly turn harsh and cruel), there is the possibility of sociopolitical upheaval -- revolution, violence, civil war, war between nations, the whole menu of monkey-human mischief that afflicts mankind.

Kunstler and I should be pen pals (email pals?).  

Sing It Folks!

"Happy days are here again, the skies above are clear again ..."

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Mon Oct 27th, 2008 at 08:42:12 AM EST
I'm glad someone decided to diary some of Kunstler's thoughtful and often funny ponderings. I quoted this very piece a couple days ago, but left it for dead when it stirred no response. Kunstler writes in a vernacular style closer to the generalist than the "expert", so is perhaps a bit alien here.
Another crusty reprobate from the days of "searchimg for wider view".
How nice. Thanks.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Tue Oct 28th, 2008 at 05:07:30 AM EST
I'm not sure I agree with this bit:
[BLOCKQUOTE] Under the best circumstances we will reorganize our society and economy at a lower level of energy use (and probably a lower scale of governance, too). The catch is, it will have to be a whole lot lower. I think we'll be very lucky fifty years from now to have a few hours a day of electricity to do things with.[/BLOCKQUOTE]

I think that energy use will be precipitously lower no matter which future we receive. But even in Kunstler's worst prognosis, the current increases in energy efficiency and production should allow more than 'a few hours of electricity a day'. LED lighting, time-pulsed fridges, low-energy laptops and potentially memristors should mean that the bare essentials will take a fraction of the power we use today.

Advances in solar, wind, geothermal and marine are increasing exponentially, with huge capacity increases nad price decreases approaching. Storage technology is also improving (although it could be more advanced). Barring utter collapse of all manufacturing across the entire world for a decade, I can't see these new technologies not being widely available.

That means lighting, computer access and food storage should be available at least 18 hours a day (10 hours of sun, 8 hours of wind), with brownouts probable during days without natural resources. Desert installations of solar thermal (with 24 hour storage from molten salt), goethermal installations, tidal and energy storage improvements should help with this even in worst case scenarios.

The biggest challenges efficiency-wise (ignoring luxury items) are transportation, cooking and internet servers. Those are the three things I think are hardest to provide for in a low-energy/resources scenario.

I think some of the world could end up like Kunstler predicts, in particular badly run countries and/or countries with little solar/wind/marine resources (although pretty much everywhere can use geothermal if drilling tech improves). His idea of a completely collapsed society of dirt farmers is simplistic and too homogenised - there are resources both natural and human that will keep technology around.

I agree with a lot of his comments about what's wrong with today's society but find his predictions are too dismissive of human ingenuity and the natural resources we are already beginning to exploit. Our future won't be dystopic but patchy, with some regions perhaps falling back to lower standards of living as they fail to adapt and those regions who invest in energy-efficient infrastructure and renewable energy struggling but succeeding in having a dynamic economy and society, if different from today's.

by darrkespur on Wed Oct 29th, 2008 at 09:40:00 AM EST
[ET Moderation Technology™] Please use actual HTML tags with angle brackets such as <blockquote>

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Wed Oct 29th, 2008 at 09:47:42 AM EST
[ Parent ]
Yeah sorry about that, got my brackets mixed up.
by darrkespur on Wed Oct 29th, 2008 at 10:16:25 AM EST
[ Parent ]
"The biggest challenges efficiency-wise (ignoring luxury items) are transportation, cooking and internet servers. Those are the three things I think are hardest to provide for in a low-energy/resources scenario."

I was under the impression that the energy used for building heating, ventilation, and air conditioning was a significant "low hanging fruit." Relatively small changes in the way buildings are constructed and used could have a huge impact.

For example, in older buildings (e.g. high-end American houses built in the 1930s) there was frequently no arrangement at all for heat in the main entrance hall, staircase, or upstairs hall. But our new McMansions are usually built on open floor plans where the bedrooms and hallways and living rooms and dining rooms all merge together into one big space. Some fairly minor adjustments can be made to this arrangement without too much difficulty--just add some partitions and you can cut your heating bill by 1/3...

by asdf on Wed Oct 29th, 2008 at 09:58:23 AM EST
[ Parent ]
I'd agree with that. Heating isn't such a big problem - I read that some newhouses in cold parts of Germany are heated purely by the body heat of the people living there and clever uses of insulation. I'm sick to death of the houses where I live in Bristol, UK, which can't have their old wooden sash windows  replaced because of planning regulations. Personally I think a building that leaks heat like a torpedoed boat doesn't deserve to be kept that way on aesthetical grounds (these are terraced homes hundreds of years old)

Despite such idiocies in planning councils, I think insulation can fix a lot heating problems. It's heat for cooking (ovens, hot plates, kettles) I worry about - natural gas is no answer, coal and wood creates supply problems and electrical is pretty power hungry.

Similarly transportation and internet servers (I think internet access of a decent speed is fast becoming an important human neccessity for both business and education) consume a lot of energy that will be difficult to replace.

by darrkespur on Wed Oct 29th, 2008 at 10:23:15 AM EST
[ Parent ]
Servers can run on batteries for a while. Transportation can be done very effectively by electrified rail. That leaves cooking. But cooking is hardly time-critical - if one day you happen to not have power to spend on the kitchen, you can always eat cold food.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Oct 29th, 2008 at 12:33:18 PM EST
[ Parent ]
What's the problem with electricity for cooking?
by asdf on Thu Oct 30th, 2008 at 08:52:13 AM EST
[ Parent ]
It requires a lot of energy, simply because heat is energy. If you're trying to have a home with very little energy use, it's hard to reduce the amount of energy used to cook something, for what I can see.
by darrkespur on Thu Oct 30th, 2008 at 03:38:09 PM EST
[ Parent ]


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