According to Mark Twain, “civilization is the limitless multiplication of unnecessary necessities.” It seems western civilization is just about done with the mindless multiplication of anything, much less unnecessary nonsense.
It’s too late for a fast collapse of the industrial economy. According to every significant index, the U.S. hit its economic peak in 2000. We’ve been in the midst of an economic recession since 2000. We’ve been mired in an economic depression since 2008, when the industrial age came within an eyelash of reaching its overdue terminus.
Even Ben Bernanke admitted as much, years after the meltdown on Wall Street. When all the banks fail — or even a significant proportion of them — we’ll suddenly lose access to the fiat currency that allows the current set of living arrangements to persist. I strongly suspect the high price of oil had a lot to do with the near meltdown in 2008, a notion consistent with oil price spikes preceding every economic recession since 1972.
When the next spike in the price of oil hits us, we’ll see another huge downturn for the industrial economy. According to more than 70 pundits, it’ll be the one that puts western civilization in the abattoir. This would be no surprise, given the fragility of the industrial economy and its near-termination back in 2008, when it was on much stronger footing than now. Oil priced at $140 barrel is almost certainly coming this year, and that should do the trick, much to the astonishment of those who believe the industrial economy is unaffected by spikes in the price of oil, or that its long-time decline can turn into a collapse.
Even Bank of America has joined the rising tide of voices calling for the price of crude to exceed $140/bbl within the next three months. And no wonder, with OPEC raising expectations of world demand after Saudi Arabia and OPEC have peaked.
As I’ve pointed out many times, and as Japan is making clear right now, economic growth is all about oil consumption. We’re falling off the oil-supply cliff this year, according to many sources, including the U.S. Department of Energy’s Energy Information Administration and the Joint Operating Environment of the U.S. military.
I don’t know the terminology for a sudden stop of the industrial economy. I don’t think terms such as hyperinflation and deflation apply, and economists rarely use the phrase, “industrial economy crushed by Godzilla.” As with any leap off a skyscraper, it’s not the fall that’s fatal: It’s the sudden stop at the bottom.
The rapid collapse of AIG back in September 2008 is a harbinger of an equally rapid failure of the Fed, hence our entire monetary system. The only difference is that this time there will be nobody to bail out the ultimate backstopper and, as a result, we will observe the long overdue termination of a failed experiment.
Here’s one analogy: We’re in an aerial tram, suspended a few thousand feet above the valley floor by a sturdy, steel, 2-inch-diameter cable. But the cable is comprised of thousands of tightly wrapped strands, all of which are hundreds of years old and half of which have already broken. The remaining strands are breaking at an increasingly rapid pace as the pressure builds. The U.S. Federal Reserve Bank has been holding this sucker together with duct tape and baling wire, but King Ben is fresh out of both items.
I find it a bit odd — no doubt because of bias inherent in my life as a scientist — that artists have a better understanding of reality than do scientists. Matchbox Twenty provides one example.
And while we’re on the topic of rearranging the deck chairs as the Titanic takes on water, the international community is rightly aghast at North Korea for spending a fortune on its military when its populace is suffering. Nearly one quarter of North Korea’s population is either starving or at risk of starvation, according to a recent UN report, yet its government pours money into missile and nuclear programs. Such behavior seems to be the height of irrationality, especially when you consider they stole the model for this behavior from the U.S.
I realize you and I had little to do with the dire straits in which we are immersed (i.e., we didn’t fuck it up). But we’ll be paying a high price.
No matter how many times I point out the acceleration of this ongoing slow decline, people take issue. I suspect it’s the primary reason Energy Bulletin and similar websites do not carry my essays. It can’t happen here. This time is different. There’ll be plenty of warning. And so on. In response to the insanity of the herd’s groupthink, I turn to Nietzsche for solace: “The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.”
The seemingly rapid collapse of the former Soviet Union — the latest superpower to hit bottom, never to recover — actually took a few years to transpire. The collapse was faster than the ongoing collapse of the current system, but I have the distinct impression Obama is a conniving version of Gorbachev. A few informed people saw the Soviet collapse coming and sounded the klaxons, but government officials did not post warning signs on the nightly news. Quibbling over minor differences between socialist news delivered by and for the Politburo and fascist news delivered by and for the Corporatocracy seems irrelevant at this point. As Oliver Stone points out, Barack Obama could take a lesson from Mikhail Gorbachev about how to dismantle a dysfunctional empire that has long overstayed its welcome.
The decline of the U.S. industrial economy has been a slow-motion, ongoing process, albeit with several steps down along the way. If we’re lucky, the next step leads right off a skyscraper, thus leading to a sudden stop at the sidewalk below. Obviously, this is the only legitimate remaining opportunity to prevent the near-term extinction of the many species we drive to extinction every day, as well as our own species. And, of course, it will allow us to see the end of Twain’s limitless multiplication of unnecessary necessities.