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Letter Re: The Reactive Culture, or 20 Years of Greater Depression
Dear Jim,
America, and modern industrial democracy, is a reactive culture. We wait for
disaster to strike, then we talk about it, vote, and throw money at it until
it goes away. That's what we've been doing since the deficit spending initiated
by FDR, socialist that he was. Now we've reached the end of deficit spending,
having exported our jobs, currency, and control of our economy overseas and
become a great big lazy balloon floating over the glass recycling bin at
the local dump. Gasoline, food, and other essentials are in a tight 18% inflationary
spiral and the public is only just now starting to complain, to shift their
behaviors. Carpooling is becoming more common and accepted. Smaller cars
are replacing SUVs and large pickups for solo commuting needs.
The trouble is, this is too little, too late. The disaster is already upon
us. Oil prices are $140/bbl. Financial opportunists claim "oil price correction
next week" then exploit the delusional optimism for profit. Gasoline is
$4.50/gal, diesel $5.30/gal. Thieves (most of them methamphetamine junkies)
are stealing the copper wiring running irrigation pumps, gutting houses abandoned
by foreclosure (an irony if ever there was one), taking the farm diesel from
unguarded tanks and equipment. Farmers are angry, but basically helpless to
stop this. The Chinese pay top dollar for "salvage copper" and ship
it back to mainland China to grow their own economy, meanwhile gutting US infrastructure.
And its probably even worse in the Third World. Then again, lose enough infrastructure
and the USA will be the Third World (again).
As a Republic, we are ill-positioned to deal with proactive efforts. There's
no percentage in the risk associated with planning out a solution you may not
be in office to reap the political capital for. Instead, our representatives
vote for pork that benefits their constituents and wins votes now or in the
next few months. Stuff that people remember at the polling station.
Trouble is, Peak
Oil isn't going away. It's getting worse. And solutions need
to be developed 5 years ago to have any value today, to help with this situation.
What can be done today is grassroots carpooling, use of mass transit (often
slow, smelly, and expensive, as well as impractical), and eventually the highly
unpopular but inevitable: fuel rationing. I know that's terrible, but that's
inevitable too. If you don't ration, you get hoarding and the US economy collapses
faster. What's worse, it's terribly unpopular politically and no Rep who wants
re-election will vote for a national fuel rationing plan. We, as citizens,
are going to have to beg for fuel rationing just to make sure we get some fuel
as things get more dire. Even with that, America only produces 7 million barrels
per day of oil, and our demand is 21 million barrels. Libya and much of OPEC is responding to the threat to seize assets of terrorist sponsoring nations
by cutting production to the world, which then pressures the world to squeeze
the USA to back off. So expect trade tariffs, first as warnings, then as punitive
measures. That means our inflation rate will worsen.
We've seen protests and riots over fuel prices in Portugal, France, Italy,
Spain, Belgium, and the UK over the last few weeks. This is only the beginning
of troubles. As the prices rise thanks to production falling, the blame game
will continue, and further irrational public behavior will worsen. The public
have resolutely refused to grasp that oil is ancient energy and it will run
out. Right now, our leaders here in the USA point fingers to delay tactics,
like offshore drilling, domestic discoveries (which would have already been
exploited if they were remotely as big or easy as these non-geologists like
to claim). The oil under the ANWR?
That's 45 days of [global]
oil supply. That's it. If you saved it for US-only consumption, you can stretch
it to around 6 months of oil supply. Better than nothing--only it takes five
years to reach the marketplace. All those pipelines and wells and sideways
drilling takes time, and by five years from now, the price
of oil will be around $500/bbl. and gasoline something like $20/gal, well beyond
the means of humble lower and middle class users to buy. Only the rich will
be burning $500 per barrel oil.
And at some point, your fuel ration and carpool won't get you to work, or it
won't get most of your co-workers to work so your operation/job ends. It doesn't
have to be your fault, it just happens. Some few businesses will relocate,
but they may leave your area and offer you a job if you follow--if you can
sell your house and convince your family to join a company town somewhere in
the Midwest (assuming that's where they go, not overseas). Rinse and repeat
and the conservative estimate for job loss due to Peak
Oil is around 20%. Public
works programs, hiring the unemployed on contract for physical labor is very
likely, a return of the WPA.
Roads must be maintained. Railroads need to be rebuilt, with spurs reaching
every town in the USA (and other nations would
be wise to do this too). That's a high demand for steel, so all those useless
SUVs
can be turned into 3 feet of heavy rail apiece. Rail is cheap transportation,
very cheap with energy. Frugal. We like that.
Smarter and wealthier towns will also install streetcar railing and overhead
wiring for electric operation. And then police that wiring for thieves looking
to steal it or the power generated. That returns mobility to the local population
so they can get to school, get to work, get from their neighborhood to the
job on the other side of town instead of bicycling. But it may take 5 or 10
years before the economy can support that. It's cheap to do it now, but nobody
cares enough to make it happen while they can still afford it on Chinese-supported
bonds. And that's the real tragedy of Democracy.
None of this happens until after the disaster, after people
can't buy gasoline, after they've lost their jobs and the
unemployment rate jumps 20% in a week. Only after disaster
will things change. And when you proactively Hurry Up And Wait and Just In
Time, you get slow improvements, shortages of critical infrastructure supplies
so
you can't rebuild fast enough to save all those businesses. Unlike the Great
Depression, your gasoline, the fuel that runs the recovery, isn't going to
cost four cents a gallon. Its going to be "out of reach", "can't
buy it here", and "sorry Mister, we're out." With no interim
solution, those jobs are going away for good. And the general public is going
to shift from Middle Class to Poverty with no way around it.
Both candidates for US President are funding a contest to invent a new car
battery for all electric cars. Good move. Doubt we'll see it anytime soon,
as the laws of physics and chemistry are laws for a reason, but maybe we'll
get lucky. It would be nice. Even with a crash program like the Manhattan Project,
you're still looking at years before a product hits the shelf, years with a
collapsed economy is decades of Greater Depression and generations of mistrust
and sore memories of our suffering. You don't recover from that easily or quickly.
Children today are going to have to grow up in a time that's worse than the
Great Depression was, and it will last longer, too.
We still need to face facts that the Saudis have promised us $200 oil this
year, and that's $6.30/gal. gasoline. Think about how you're going to operate
your life on $6 gasoline. My commute is now two miles. I could walk if
I had to. How many people can do this? Not many. If you own a house, or are
leasing
one from a bank, you probably don't have the option to just move closer to
work. If you take a job you hate or aren't suited for to have a commute, your
pay will decline and your job security too. Not a good move for most people.
And businesses won't move to keep their employees until after they
stop showing up for work and they realize they have to close their doors. It
only pays to be Proactive if you're smart enough to look ahead. The fact that
you're here reading this means you're smart enough. But are your neighbors?
Your coworkers? Your boss? Your congressional representative? Probably not.
And we get to live with their mistakes and ignorance as a consequence. Best,
- InyoKern
