Obama will have to start announcing things like bank holidays, nationalizations, possibly even dollar devaluation.
Kunstler's President's Day
A creepy feeling ushers in President's Day this year as the suspicion grows that nobody in charge of anything knows what what to do next. The usual yin-yang consensus has solidified in congress along party lines, both equally idiotic. In the White House, Mr. Obama is under excruciating pressure to "do something" as systems unravel and economies augur into darkness. Amid all the anxiety and raging cluelessness, one thing is clear: we're doing everything possible to evade reality.
The reality we can't face is that one way of life is over and a new one is waiting to be born. It's been waiting, really, since the early 1970s, when God whacked the USA upside its head to announce that we'd outgrown our once-stupendous domestic supply of oil. I remember those fervid months following the OPEC oil embargo of 1973 (I covered the story as a young newspaper reporter.) The basic message was this: from now on we'll be running this show on other people's oil so we better start doing things differently. Back then, the not-yet-lost-in-a-fog-of-greed Baby Boom generation rolled up its tie-dyed sleeves and got to work doing a lot of forward-looking things: micro hydro-electric, passive solar houses, rural homesteading, the next generation of public transit (BART, the D.C. Metro), the first wave of urban gentrification....
Then, in 1979, the Ayatollah tossed out the Shah of Iran, we got another dose of oil problems, and a year later, President Jimmy Carter's clear-eyed view of the oil situation as "the moral equivalent of war" got overturned in favor of Ronald Reagan's dreadful Hollywood nostalgia projector. As usual in times of severe social stress, the public got delusional. Mr. Reagan was very lucky. During his tenure, two of the last great non-OPEC oil discoveries came into full production -- Prudhoe Bay, Alaska and the North Sea -- and took the leverage away from the Islamic oil nations who had been making us miserable with their threats, embargos, price-jackings, and hostage-takings.
Americans drew the false conclusion that Ronald Reagan was an economic genius (a similar thing happened in Great Britain with Margaret Thatcherism). The price of oil went down steeply while they were in office. Britain could kick back and enjoy it's last remaining industry, banking, on a majestic cushion of energy resources. The USA resumed its major post-war industry: suburban sprawl building. Reaganism got elevated to the status of a religion, though it was little more than a twisted version of Eisenhower-on-steroids. Under Reagan, WalMart embarked on its campaign to destroy every main street economy in the nation. The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of "consumer" debt, and the Hamptons. Greed was good. (No, really....)
The first President Bush's Gulf War jolted the oil markets briefly, but Saudi Arabia was demonstrably on our side in that conflict, while the non-OPEC oil supply was goosed up by production from Mexico's giant Cantarell field. The slight economic shudder caused by the Gulf War was enough, though, to unseat Bush Number One in favor of the Boomer Bill Clinton. A puzzling figure in many ways, articulate and magnetic, Bill Clinton was hardly a reformer, surely not in terms of the national lifestyle. He was in so many ways an exemplar of it. He'd been governor of WalMart's home state (and his wife sat on its board of directors). He was a pure product of the New South, the sunbelt, with its economy literally driven by everything connected to cars -- new suburbs, malls, fast food huts, Nascar. He wasn't about to pull a Jimmy Carter and try to prepare the people for some harsh realities.
Really nobody saw what was going on during the Clinton years. The public was sleepwalking in a Martha Stewart nesting fantasy. Clinton was as lucky as Reagan. The only geopolitical conflict he faced was the Balkan gang-war that attended the collapse of Yugoslavia. Baby Boomer greed went into overdrive during the Clinton years as the former hippies hit their mid-life career strides, epitomized in billionaire-worship and the eventual money-grubbing book deals both Clintons made on departure. Does anyone remember Mr. Clinton saying, even once, that an economy based on suburban sprawl building and car dependency might not be such a good thing? Of course not. Under Clinton, the SUV became our new national bird. The price of oil flat-out crashed while Clinton was in office, sinking to the $10-a-barrel range by the time he handed over the White House keys to Bush Number Two.
Poor dim "W" rode his generation's last wave of cultural inertia into two terms as little more than custodian of things set into motion by others years before. Reality was shifting starkly "out there" but "W," raised in the protective globe of great wealth, coddled in made-to-order business deals, surrounded by political triumphalists and Jesus Jokers, couldn't see through the brush-piles in his mind. (Maybe it was all that cocaine from the years before.) He paid lip service to a murky notion called "energy independence," but to him that just meant finding a home-grown way to maintain extreme car dependency and all its perilous usufructs. The 9/11 tragedy allowed him to pretend to be a man-of-action, but as the various wars and occupations ground on, "W" more or less disappeared into the deep groove of his own limited programming.
During those years, more than a few things happened to inform the American people -- not all of whom were dim, of course -- what was up. For one, a cohort of senior geologists retired out of service to the oil industry and started publishing their own dark thoughts about the world's energy future. The discussion of these matters spread to the internet, where it grew in clarity and insight. We began to understand, for instance, the connection between our energy predicament (peak oil, so-called), and the growing parallel fiasco in hypertrophic debt creation that was driving the banking system and threatening to wreck it.
Now we've arrived at the moment of wreckage. Meanwhile, Barack Obama sailed into the White House on a tide of "hope" for "change." The change was unspecified, by both Mr. Obama and the general public (and the news media that audits its thinking). What is dogging many of us who supported Mr. Obama is the delayed entrance of much-vaunted change. At this moment of "stimulus" and TARP-II, it seems to have been about a desperate attempt to preserve the hypertrophic debt economy of "miracle" mortgages, blue-light-special shopping on credit cards, and endless happy motoring at all costs. And by "all costs" I mean literally bankrupting our society at every level to keep on living as if it were still 1999. This naturally alarms those of us who perceive a need for more drastic reprogramming in American life.
Mr. Obama is not dim. The euphoria that attended his election was largely about acquiring a leader of first-rate intelligence and sensibility, compared to his lamentable predecessor. I like to think that Mr. Obama really does know what's up -- that "change" means we have to live a lot differently, not mount a campaign to sustain the unsustainable. I suspect that President Obama has learned over the last several weeks that the nation's banking system and economy -- indeed, the whole world's -- are in way worse shape than anyone imagined before January 20. He is faced with the immediate crushing problem of appearing to do something while a tsunami of catastrophic debt deleveraging sweeps away the first outlier nations and their economies and bears down on the G-7. I suspect that in a few weeks, or possibly even a few days, Mr. Obama will have to start announcing all kinds of new and more drastic measures that will shock the stunned American public -- things like bank holidays, nationalizations, possibly even dollar devaluation.
As I've said more than once, I believe this basically honest and intelligent president will have to take on the role of the nation's hand-holding camp counselor or school teacher. When the time comes that he assumes this role, I think he'll do it pretty well, even though great pain and misery will be abroad in this land.