Fuel Me Once, Shame On... Who?

The Daily Reckoning PRESENTS: OK…so the Democrats won big in the mid-term elections. But do they have what it takes to make the drastic changes that are really important to America…our push toward “energy independence” chief among them? James Howard Kunstler explores…


The day after the impressive Democratic election victory, Senate Majority Leader-to-Be Harry Reid declared that a top priority for the new congress would be policy leading to “energy independence” for America. The time of jubilee will certainly come, but not in the way Harry Reid thinks it will – nor in the way the rest of the country imagines this idea.

When politicians flog the term “energy independence” around, they invariably mean that we will continue enjoying the happy motoring utopia by means other than imported oil (which makes up 70 percent of all the oil we burn). Get this – the day is not far off when, for one reason or another, the flow of imported oil to the United States will cease. But when that day comes, we will not be running our country the way we have been running it. That day will be the end of the interstate highways, Walt Disney World, and Wal-Mart – in short, the way of life we are fond of calling “non-negotiable.”

We are not going to run our cars on coal liquids or tar sand byproducts or oil shale distillates or ethanol or biodiesel, or second-hand french-fry oil – nor on solar, wind, nuclear, or hydrogen. You can run other things on that stuff, but not the biggies we run at their current scale. If the Democrats really want to get serious and act responsibly, they’d better not squander whatever is left of our credit and collective confidence in a futile campaign to keep this racket going. They’d better prepare the public to start living differently.

Where to begin? They can start by recognizing that massive long-haul trucking of goods has to end and be replaced by improved, electrified rail and water transport – with trucks used only for the final, local leg of the journey. To reach this point of recognition, the Democrats will have to overcome the entrenched interests of the trucking industry – but, by now, most of the truck drivers in this country have been successfully converted into right-wing Republican zombies, so it might not be so difficult to overcome them. They will also have to overcome Wal-Mart and its “warehouse on wheels” composed of thousands of 18-wheelers full of discount goodies incessantly in motion for “just-in-time” delivery to the big box outlets. And, of course, by “Wal-Mart” I mean not only the company itself but the millions of Americans who think they can’t live without it.

Do the Democrats have the guts to go against this tide? My guess is probably not. But, get this, to Sooner rather than later, whether we like it or not, we’re going to have to replace Wal-Mart with an entirely different system of retail trade – probably resembling the system of multi-layered local trade networks that were destroyed by Wal-Mart. And the further off we put this task, the more difficult it’s going to be. So, real political leadership will have to inform the public that the time has come to start making other arrangements.

Instead of supporting the fiction that happy motoring can continue forever, the Democrats should create an “Apollo Project” to restore the U.S. passenger rail system, too. (We hear a lot about an “Apollo Project” to develop a miracle fuel for our cars, but that ain’t gonna happen, and we’d be much better off devoting that investment to public transit.) This will baffle and piss off a lot of the public, but it is necessary if we are going to survive as an advanced civilization. Please notice, by the way, that I am not suggesting we deprive anyone of the right to drive a car, only give them the option of getting somewhere by train instead. And don’t worry, the politicians will not have to do a thing to restrict automobile use – circumstances will do it for them as the world plunges into a permanent oil crisis that does not go away.

Another thing the Democrats can do with their new power is reorient the activities of the U.S. Department of Agriculture – and especially legislated cash subsidies – away from the “agribusiness” Big Boys to small-scale, local farmers. We are silently and stealthily approaching a crisis situation with the American food supply. Most localities now only have a two or three-day food supply, and any number of crisis events could disrupt the three thousand mile chain of frozen pizzas and Cheez Doodles that the public depends on for basic sustenance. We desperately need to reactivate what’s left of the productive land around our towns and cities, and to repopulate it with people who can grow real food.

The Democrats will have to contend with the imminent cratering of suburbia whether they like it or not. The “housing bubble” is the first leg down for a development pattern that has no future. What’s out there now is a vast over-supply of exactly the kind of houses in exactly the kinds of places that will not have value in an energy-scarcer world.

The overbuilding of tract houses is a tragedy caused by reckless and irresponsible behavior in the lending industry and in the government officials who regulate interest rates and the credit supply. The investments are already lost, and the individual carnage is going to be extreme, but the depth of the problem will reveal itself slowly for two reasons: 1.) Both homeowners and realtors will desperately try to maintain the fiction that these properties still have high value, and 2.) Individuals who are in trouble with their mortgage payments will never reveal their dire situation to their friends and neighbors because it is too humiliating. The news about default and repo will only arrive with the moving vans (if the individuals can afford to hire them).

The collapse of suburbia will be the Democrats’ chief inheritance from the “free-market” economically neo-liberal Republicans who were too busy money grubbing at all levels to notice that there was such a thing as the future. The tragedy of suburbia will finish off whatever is left of Reagan-Bush1-Bush2 Republicanism – although the truth is that Bill Clinton did as much to promote this way of life, indeed, to turn suburban development into a new basis for the U.S. economy when manufacturing crapped out.

The nation as a whole – however it reconfigures itself politically in the aftermath of this fiasco – is going to have to come to grips with a lot of hard truths. One will be that “energy independence” means a whole different scale and system for daily life, not just “new and innovative” fuels for cars. As long as we are stuck in a foolish national wish-fest aimed at keeping all the cars running and propping up all the trappings of car-dependency, we will remain lost in a wilderness of our own making. And the next president of the United States, whoever it turns out to be (whether a Democrat or the leader of a party that has not yet coalesced) will have all that he-or-she can do to keep this nation from completely falling to pieces.


James Howard Kunstler
for The Daily Reckoning
November 16, 2006

Editor’s Note: James Kunstler has worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone Magazine. In 1975, he dropped out to write books on a full-time basis.

His latest nonfiction book, “The Long Emergency,” describes the changes that American society faces in the 21st century. Discerning an imminent future of protracted socioeconomic crisis, Kunstler foresees the progressive dilapidation of subdivisions and strip malls, the depopulation of the American Southwest, and, amid a world at war over oil, military invasions of the West Coast; when the convulsion subsides, Americans will live in smaller places and eat locally grown food.

You can purchase your own copy here:

The Long Emergency

You can get more from James Howard Kunstler – including his artwork, information about his other novels, and his blog – at his Web site:


For the first time since 1994, the Democrats have control of the House and the Senate… and as we pointed out yesterday, the United States becoming fiscally responsible is at the top of their list.

We received a press release from the Democratic members of the House and the Senate titled, “Relying on the Kindness of Strangers: Foreign Purchased of U.S. Treasury Debt.”

The release points out that in 1965, foreigners owned only 4.7 percent of outstanding U.S. government debt, but that last year, that figure was 42.1 percent.

“If the United States does not begin to take steps to reduce its unsustainable dependence on foreign borrowing in an orderly way, there could be a run on the dollar that could precipitate an international financial crisis and sharp increase in interest rates,” continues the Economic Policy Brief.

“It will take years of sound fiscal policy to reduce our reliance on foreign lenders and return the federal debt to a prudent level. Unfortunately, the Bush administration and the Republican Congress have been unwilling to start the process of undoing the damage they have already done.”

Sounds like maybe all the copies of Empire of Debt that we sent to Washington a year ago didn’t go to waste, eh?

More news, from our team at The Rude Awakening:


Chris Mayer, reporting from Gaithersburg, Maryland…

“I spend a considerable amount of time thinking about where to find cheap tangible assets. More than just finding cheap assets, I also like to see that the investment somehow cashes in on some bigger trend or idea.”

For the rest of this story, and for more market insights, see today’s issue of The Rude Awakening.


More views:

*** January frozen concentrated orange juice futures bolted to new 16-year highs today on strong technically related fund buying that pushed the market into buy stops.

That may not mean much to the average person, but for those holding onto OJ options, it spells out big profits.

Kevin Kerr told us that for his Resource Trader Alert subscribers, the latest high for OJ futures adds over a 500 percent gain on the balance of their OJ options.

*** Today, Bloomberg reports something we’ve all know for a while: the United States is consuming more goods than it produces – that much is evident just by looking at September’s $64.3 billion trade deficit.

The U.S. trade deficit will most likely approach the $800 billion mark for 2006, but not just because China refuses to let their currency rise relative to the U.S. dollar, as many politicians would like to make it seem.

“In general, the Democrats have blamed china and its pegged currency for much of the loss of manufacturing job, and they have blamed President George W. Bush and congressional Republicans for not doing enough to protect U.S. workers,” continues the Bloomberg piece.

“More flexibility by the Chinese would undoubtedly give freer rein to market forces within that country, which would be in its own interest,” reports Bloomberg. “And it might slow the rapid rise in the U.S. deficit in trade with China, though only a bit.

*** “So, what’s your meeting on?”

“We’re making a movie.”

“Oh, yeah? What’s it on?”


We’d just jumped in a cab in front of the Merrill Lynch building at One World Center in NY and were circling around Ground Zero on our way up West Side to Midtown. If questioned later by the police, we would have sworn Woody Allen was the cabdriver; his accent was so quintessentially Manhattan. That is, I suppose, if we hadn’t have caught a glimpse of him in the rearview mirror. What we did see of him could have spared thirty or so pounds and live quite happily.

“Debt?!? Like, credit card debt? American consumer debt?”

“Yeah, that’s it.”

It was fairly early on Wednesday morning and we’d stayed way too late at a DVD release party the night before. Patrick and Christine, the husband and wife director and producer team with whom we’ve been discussing our film, threw a party for the release of their first documentary: WordPlay, a film about Will Shortz, the editor of the New York Times crossword puzzle, and a host of competitors at the annual crossword tournament they hold in Stamford, Connecticut each year.

“Credit card debt…” the cabbie whinnied. “Aw c’mon… why didn’t you choose a more cheerful subject… something funny and entertaining… something the whole family could enjoy… something like… like… I dunno… gay pedophiles who become serial murderers… yeah, that would definitely be more cheerful.”

“Gay pedophiliac serial killers?”

“Yeah, that would be way more entertaining and enjoyable than credit card debt.”

“Well, it’s not just about credit card debt…”

“Don’t get me started. Whatever kind of debt it is… it ain’t funny. Is this a horror movie you’re making?”

“Well the producers we’re working with specialize in horror films… and comedies.”

“Oh, perfect. You know what else you need in your movie? A campaign to rid America of the Cute Penguin syndrome we’re experiencing… yeah, kill all cute penguins… DOWN with Cute Penguinism, I say… down with Cute Penguinism.”

Later, as our meeting was drawing to a close, Patrick suggested he wasn’t sure that he and Christine could find a drier subject than crossword puzzles…. but maybe Empire of Debt was it.

The Daily Reckoning