Every time I saw a car towing a motorboat this holiday weekend, I wondered what was going through the head of the towee. Did they have a sense that darkness was falling on their careers in motor sports? Did they have an inkling that an oil-and-gas crisis is upon us and just not give a shit? Or were they just going through the motions, following some implacable rote programming induced by, say, forty-odd years of TV addiction and a diet based on corn-syrup byproducts?
The holiday to me was a creepy hiatus from an ever more desperate reality overtaking the nation like a miasma. Meanwhile, the mainstream media's ongoing narrative has gotten stuck in the moronic groove of "drill drill drill." The belief of people like Larry Kudlow of CNBC and uber-mega-idiot John Stossel of ABC-News is that we could go back to $1.50 gasoline if only congress would open the offshore exploration areas and the Arctic National Wildlife Refuge. This view is just plain erroneous. Nothing we get out of these regions will come close to offsetting the ongoing depletion of worldwide oil resources, or even arresting our own losses.
Larry King had a particularly dreary debate Sunday night between Robert F. Kennedy, Jr., and a grab bag of "drill drill drill" advocates. Kennedy took the position that the US could achieve a sort of energy independence by massive deployments of wind and solar equipment. It's an understandable wish, I suppose, but not something I view as consistent with reality. The unfortunate part of the Larry King presentation is that it gives the public an idea that these two fantasies are the only possible responses to our predicament. No one is interested in changing our current behavior.
In the background of these energy conundrums is the sickening spectacle of the nation's fatal insolvency, which remains partially disguised by the machinations of the Federal Reserve, using the various new loan "windows" to maintain the illusion that the major banks have not swindled themselves out of existence -- and in doing so, caused at least $3 trillion (so far) in capital to vanish in a black hole. This three-card-monte game has gone on for a whole year now, and the consequences are hitting home. No more money can be lent into existence now.
One consequence is that other nations sitting on our exported dollars (from our massive trade deficit) have apparently decided to spend off those dollars rather than wait for the fullblown financial collapse of the nation issuing them. My guess is that they are spending those dollars on oil, the primary resource of industrial economies, and that they are prepared to outbid other contestants (including the USA) no matter what -- because they know the dollar is losing value, and that those losses are apt to accelerate over time, and what else would they spend them on? I suspect this is behind the rising price of oil more than anything else -- certainly more than the phantom "speculators" the right wing is yelling about -- and that behind the spending off of those exported dollars are the geological facts of oil being a finite resource inequitably distributed around the world.
But to get back to my prior point, things are hitting home anyway, and with force. The US economy is crumbling because the way we conduct the activities of daily life is insane relative to our circumstances. We've spent sixty years ramping up a suburban living arrangement that has suddenly entered a state of failure, and all its accessories and furnishings are failing in concert. The far-flung McHouse tracts are becoming both useless and worthless in the face of gasoline prices that will never be cheap again. The strip malls and office "parks" are following the residential real estate off a cliff. The retail tenants of all those places are hemorrhaging customers who have maxed out every last credit card. The lack of business is now leading to substantial layoffs. The airline industry is dying and will probably cease to exist in its familiar form in 24 months. The trucking industry is dying, threatening the entire just-in-time distribution system of things that even people with little money to spend still need, like food.
These conditions will now get a lot worse, no matter whether the banks continue to conceal their problems. All of it leads to an inflection point that coincides with the November election. By then, I expect that quite a few banks will be toast, job layoffs will rise spectacularly, foreclosures and bankruptcies will be raging across the land, and homeowners north of the magnolia belt will be shattered by the cost of staying warm this winter.
All this hardship and woe will be blamed on the Republican party. It may actually kill off the party. Political parties do go out-of-business in American history, and this one deserves to die -- with its aggressive no-nothingism, its avaricious, punitive religious extremism (the religious part often being fake), its stunning inattention to financial malfeasance in areas under its direct supervision, and its gross incompetent mismanagement of the nation's strategic interests.
That said, I will feel a little sorry for Mr. Obama if he gets to the White House. He'll have to find a gentle way to tell the truth to the people who elected him, people who will be suffering mightily, and who will be very sore about their losses. He'll have to tell them that the previous "release" of the American Dream software is obsolete, and the new version will require a whole lot more of them in the way of earnest effort, delayed gratification, and revised expectations.
There's a whole lot we can do to greet the new circumstances awaiting us, but the one thing we can't afford to do is put all our efforts into keeping the current system running as is. Reality simply won't permit it. We would squander our dwindling remaining resources trying to keep it all going. The next president is going to have to lead us through the awful process of cutting our losses. So far, the debate has been about how to avoid that.
NVDL: Here's what happened in the US markets today: U.S. bank shares plummet amid stability fears
"It's the cockroach theory. You don't just have one bank failure -- when you have a big bank go under, there's always more than one," said James Ellman, president of hedge fund Seacliff Capital, who is short some financial stocks.
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