Whew, what a relief! Everybody from Ben Bernanke and a Who’s Who of banking poobahs schmoozing it up in the heady vapors of Jackson Hole, Wyoming, to the dull scribes at The New York Times, toiling in their MC Escher hall of mirrors, to poor dim James Surowiecki over at The New Yorker, to – wonder of wonders! – the Green Shoots claque at the cable networks, to the assorted quants, grinds, nerds, pimps, factotums, catamites, and cretins in every office from the Bureau of Labor Statistics to the International Monetary Fund – every man-Jack and woman-Jill around the levers of power and opinion weighed in last week with glad tidings that the world’s capital finance system survived what turned out to be a mere protracted bout of heartburn and has been reborn as the Miracle Bull economy. Our worries over. If you believe the claptrap. Which I don’t.
All this goes to show is how completely the people in charge of things in the United States have lost their minds. They seem to think this mass exercise in pretend will resurrect the great march to the Wal-Marts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park “capacity” and Big Box “power centers,” restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world – all this while turning Afghanistan into a neighborhood that Beaver Cleaver would be proud to call home.
America loves the word “recovery” as only a catastrophically sick society can. “In recovery” is the new universal mantra of loser individuals and loser nations. Everybody in the USA is in recovery. Even Michael Jackson (he may have given up on somatic activity but, on the plus side, as the Rotarians love to say, he’s quit using drugs for once and for all, and the magazines have stopped publishing photos of him taken after 1990, when he turned himself into something out of the Hammer Films catalog).
To sum it all up, the US economy is in recovery. Paul Krugman says that we’ll soon realize that Gross Domestic Product (GDP) is growing. He actually said that on the Sunday TV chat circuit. Not to put too fine a point on it, but I would really like to know what you mean by that Paul? Do you mean that the Atlanta homebuilders are going to open up a new suburban frontier down in Twiggs County so that commuters can enjoy driving Chrysler Crossfires a hundred and sixty miles a day to new jobs as flash traders in the Peachtree Plaza? Do you mean that the Home Equity Fairy is going to wade into the sea of foreclosure and save twenty million mortgage holders currently sojourning in the fathomless depths with the anglerfish? Do you mean that all the bales of deliquescing, toxic “assets” hidden in the vaults of Citibank, JP Morgan, Bank of America, et al, (not to mention on the books of every pension fund in the USA, and not a few elsewhere) will magically turn into Little Debbie Snack Cakes on Labor Day weekend? Do you mean that American Express and Master Card are about to declare a jubilee on accounts in default everywhere? Do you mean that General Motors will produce a car that a.) anyone really wants to buy and b.) that the company can sell at a profit? Are you saying we get a do-over, going back to, say, 1981? Did we win some cosmic lottery that hasn’t been announced yet? What’s growing in this country besides unemployment, bankruptcy, repossession, liquidation, gun ownership, and suicidal despair? In short, are you out of your mind, Paul Krugman?
The key to the current madness, of course, is this expectation, this wish, really, that all the rackets, games, dodges, scams, and workarounds that American banking, business, and government devised over the past thirty years – to cover up the dismal fact that we produce so little of real value these days – will just magically return to full throttle, like a machine that has spent a few weeks in the repair shop.
This is not going to happen, of course. It is permanently and irredeemably broken – this Rube Goldberg contraption of swindles all based on the idea that it’s possible to get something for nothing. And more to the point, we’re really doing nothing to reconstruct our economy along lines that are consistent with the realities of energy, geopolitics, or resource scarcity. So far, our notions about a “green” economy amount to little more than blowing green smoke up our collective behind. We think we’re going to build “green” skyscrapers! We’re too dumb to see what a contradiction in terms this is. The architects are completely uninterested in the one thing that really is “green” – traditional urban design – and most particularly the walkable neighborhood. That’s just too conventional, not special enough, lacking in star power, not enough of a statement, boring, tedious, so not cutting edge! We blather about high-speed rail, but you can’t even get from Cleveland to Cincinnati on a regular train – and what’s more amazing, nobody is really interested in making this happen. All we really care about is finding some miracle method to keep all the cars running.
What we’ve been seeing is nothing more than a massive pump-and-dump operation in the stock markets, most of it executed by programmed robot traders, with the trading nut provided by taxpayers current and future. These shenanigans add up to new risks and fragilities so extreme that the next time a grain of sand catches in the exquisite machinery they will sink the USA as a viable enterprise. We will end up discrediting not just capitalism, but also the idea of capital per se, that is, of deployable acquired wealth. As this occurs, of course, events on the ground will give new meaning to the term “reality television.”
James Howard Kunstlerfor The Daily Reckoning
James Howard Kunstler is perhaps best known for his 2005 book The Long Emergency , which predicted the financial meltdown and the implications of the peak oil problem. His 1993 book, The Geography of Nowhere, about the fiasco of suburbia, is a campus cult classic among the architecture and urban planning students. It was followed by a sequel, Home From Nowhere, and a companion book called The City in Mind: Notes on the Urban Condition. Mr. Kunstler is also the author of 10 novels including his latest book, World Made By Hand, a story set in America's post-oil future. His articles have appeared in The New York Times, The Washington Post, Rolling Stone and The Atlantic Monthly.
There are many architects interested in small sustainable homes, traditional urban design, walkable neighborhoods and live/work buildings. One example is DPZ. Mr Duany and his firm have spent years–before the current green trend–in designing traditional and walkable urban neighborhoods. But another thing to keep in mind: architects design what their clients want, so no use designing what nobody wants–it won’t get built. And many people have been brainwashed into skyscrapers, McMansions and suburban cul-de-sacs.
Somehow I’m sensing that Mr. Kunsler doesn’t count growing gun ownership as a plus. Strange…
And does that crack about no one liking GM cars ring true? Hardly. Silly really.
lmao – i hope someone paid kunstler for this gem….
on the other hand the drivel about green needs a sulphuric acid handy wipe as it is a pathetic attempt at jump starting socialism and totalitarianism based upon the handy dandy crisis which should never be put to waste and which is never based upon truth…
the only green i want to see is in my banking account….and no i am not the great american boob….sorry, look elsewhere..
everything else rang quite true….
Excellent. Why in Saratoga?
Mr. Kunstler, how much (if any) weight do you give to the loss of inner cities due to the “progress” (?) of anti-discrimination laws, especially post WW II? It’s not, of course, “politically correct” to mention it, but in parallel with the growth of suburbs, highways, was what they called “white flight.” Brown vs. Board of Education and the Civil Rights Act et. all have probably contributed as much to suburban sprawl as any of the other “safe” factors you often cite. Washington D.C. has gotten so bad over the decades that most of the blacks live OUTSIDE the District. Comments?
So, you’ve mused on the “status de joure”… What is your solution to the problem that exists?
Why omit the ethical issues that face us as a nation. Congress, by and large, forfeits any confidence by us, as voters and so-called governed, since they accept funds from lobbyists, Thus do they confirm that they have each become lackeys, beholden to the giver. Who, besides the Israeli lobby, is the biggest pay-off lobbyist? The pharmaceutical industry, then the insurance and HMO firms? Does the average citizen know this.? Of course not. The roots of our democracy are shriveling up, sickened by the shenanigans tolerated openly above. How much borrowed time remains? Why not address these twin themes? Thanks greatly for your insights to date. JLS
Given a choice, Bernanke will likely strangle the currency (your money)... in favor of “strengthening” the economy.
Eventually, economic reality and markets will collide -- unfortunately, the higher the market, the harder the fall.
How certain business practices wind up jacking up costs before sticking you with the bill.
The Japanese Nikkei fell flat on its face overnight.
While Bernanke Runs Wild, Let’s Talk Ponies