Here’s an interesting story, if only to me. I submitted the piece below as a guest commentary (i.e., op-ed piece) to the morning daily in this benighted town.
The editors found it absurd, as expected. Actually, the editor who responded wrote, “there are many facts and statements in your article that appear to be wildly exaggerated” (exaggerated facts?), and asked for evidence to support a few of the statements. So I provided him a handful of links from the mainstream media, at which point he ran away. No great surprise there, I suppose. If you’re addicted to economic growth, as required by newspapers, the truth is damned inconvenient.
This is where it gets interesting. I sent the piece to the editor of the city’s progressive weekly. His response: “I’ll pass on this. There are lots of economic commentaries out there, many making these very same points.”
So, the commentary is too wacky for the mainstream media. And it’s old news for the progressive media. What’s a starving writer to do?
Even though we’ve seen the end of $4 gasoline, at least temporarily, the economy is not quite out of the woods. Demand destruction and a severely constricting economy have driven down the price of oil and its distillates. But the resulting economic bounce has resembled a dead cat tossed off the shiny new roof at Marriott Starr Pass.
Cheap oil allowed the creation of suburbia. Cheap oil allowed us to use our houses as automatic teller machines. Cheap oil allowed banks to borrow money inexpensively and lend it slightly more expensively (but it was still cheap). Cheap oil allowed economic growth.
Those days are behind us.
During earlier recessions, demand for oil dropped severely enough to drop the price down to $10 or $20 per barrel, adjusted for inflation. Since we passed the world oil peak, the price of oil has never dropped below $49 per barrel. And although we might yet see $49 oil again, and even $2 gasoline, the price will be great: Most of us will be out of work and too poor to afford cheap fuel, even if we can convince truckers to keep delivering gasoline and diesel to the corner convenience store.
The ongoing collapse of the U.S. economy will be complete within a few years, and there’s nothing you, me, or the federal government can do about it. The FDIC has sufficient reserves to bail out fully one percent of the bank deposits in this country, but every bank in the country is teetering on the verge of failure. If the events of September 11, 2008 or September 29, 2008 are repeated, every bank in the country will fail and this country’s economic collapse will be complete within a few weeks.
It seems neither the Fed nor the Treasury Department cannot stop sunshine with an umbrella, much less interrupt the relentless tsunami of dire economic news.
During the Great Depression, the Dow Jones Industrial Average shed 90 percent over a period of nearly three years. This time, the Dow is about halfway to that 90 percent in the last year. Daily market swings in the triple digits have become customary, and you can expect to see the Dow at 4,000 long before it touches last month’s average of 11,000.
As one of the world’s wealthiest nations, Iceland is a mirror of, and predictor for, the United States. And, much as Europe has caught a cold because Iceland sneezed, the world economy will fall when the U.S. economy collapses. Iceland is peering into the economic abyss, and one small push will send that country into an economic death spiral. The U.S. and the world will fall off the economic cliff shortly thereafter.
At this point, the Greatest Depression is locked in. The economic picture is bound to get a lot uglier before it improves, yet we continue to beg politicians to tell us lies, and they continue to indulge us. But in the very near future, we’re going to have to face the truth as we fend for ourselves in a world turn upside-down. We’ll need to live in the world, instead of apart from it. Even here in the sunny Southwest, it’ll be a dark future for those of us addicted to electricity and running water. But the future certainly, and suddenly, looks bright for the myriad cultures and species we’ve driven to the point of extinction.