No subject

It seems inconceivable, but it begins to look like that's the way it
really is, and we just can't accept it.

Of course, one of the reasons that Americans are so anxious to get away
on a holiday weekend from the places where they live is because we did
such a perfect job the past fifty years turning our home-places into
utterly unrewarding, graceless nowheres, where the private realm of the
beige houses is saturated in monotony, and the public realm has been
reduced to the berm between the WalMart and the strip mall. Now, we
barely have the gasoline to run all this stuff, let alone escape from it
for a weekend.

We're at a dead end with all this and a lot of Americans are paralyzed
with fear about what's next. This may actually be a deeper fear than the
anxiety about money and banking in 1933, when Franklin Roosevelt was
sworn in and tried to reassure the nation. Back then, despite the grave
problems of capital, we still had plenty of everything: plenty of good
productive land, plenty of manpower earnestly eager for hard work,
plenty of ore in the ground, shining cities equipped with excellent
streetcar systems, a railroad network that was the envy of the world,
sturdy small towns and small cities fully equipped with locally-owned
business, and a vast number of small family farms that could re-absorb
family members unable to get wages in the cities. Most of all, we had
plenty of oil in the ground, and the world's biggest industry for
getting it out and selling it. What we didn't have in 1933 was cash money.

The crisis at hand now goes way beyond a crisis of capital - though that
is certainly part of it. Notice how many of the things we had in 1933
are gone now. Our cities, with a few exceptions, are imploded husks. Our
small towns and small cities (Schenectady, home of GE!) are gutted,
especially in terms of locally-owned business. Our passenger rail system
is worse than anything a Soviet ministry might produce (while the
airline industry that replaced it is dying of a kind of financial
hemorrhagic fever). Our local transit hardly exists anymore. Family
farms have all but disappeared. We have plenty of manpower earnestly
eager to become American Idols (but certainly not for heavy labor). Our
oil industry now supplies only a fraction of the world's daily supply
(and not even enough for half of our own needs).

What happens now? We face not just change but convulsive change. The
public senses the rapid unraveling of our car-centric arrangements. In
the week before the holiday, gasoline prices went up several cents each
day - in upstate New York, it crossed the $4 mark and kept going up. The
trucking system faces collapse as diesel fuel price-rises exceed even
the rise in gasoline, and the vast number of independent truckers who
make up the system confront the individual calamity of a personal
business failure. American Airlines last week announced severe measures
to keep operating through the fall of 2008, but none of the airlines can
feasibly carry on as usual with oil prices above $120-a-barrel - and the
ominous message is of a business model that has no conceivable way to
adapt to the new reality. Most likely, in a very few years air travel
will no longer be a "consumer" enterprise.

In the background of these practical problems - "off screen" during the
holiday of car races and ball games - is a crisis of capital orders of
magnitude worse than the one faced by Franklin Roosevelt in 1933. For
behind the "liquidity" (that is, insolvency) issues faced by the big
institutions lurks the Godzilla of the derivatives trade, which has
evolved into a black hole capable of sucking all notional "money" into
oblivion. That "money," which represents the aggregate value of our
society, also amounts to the emperor's new clothes of an empire in
serious trouble. As the black hole of derivatives sucks away these "new
clothes", America will stand naked against the elements of fate.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/05/anxious-hiatus.html


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