Sunday, December 11, 2011

This Is What Collapse Looks Like

From this week's Archdruid Report:

The point that has to be grasped just now, it seems to me, is that this is what peak oil looks like. Get past the fantasies of sudden collapse on the one hand, and the fantasies of limitless progress on the other, and what you get is what we’re getting—a long ragged slope of rising energy prices, economic contraction, and political failure, punctuated with a crisis here, a local or regional catastrophe there, a war somewhere else—all against a backdrop of disintegrating infrastructure, declining living standards, decreasing access to health care and similar services, and the like, which of course has been happening here in the United States for some years already.

Meanwhile those who do have the opportunity to get something approaching a clear view of the situation will by and large have every reason not to say a word about what they see. Politicians and the talking heads of the media will have nothing to gain from admitting the reality and pace of our national decline, and there will be a certain wry amusement to be had in watching them scramble for reasons to insist that things are actually getting better and a little patience or a change of government will bring good times back again. There will doubtless be plenty of of the sort of overt statistical dishonesty that insists, for example, that people who no longer get unemployment benefits are no longer unemployed—that’s been standard practice in the United States for decades now, you know.

It’s no longer necessary to speculate, then, about what kind of future the end of the age of cheap abundant energy will bring to the industrial world. That package has already been delivered, and the economic rigor mortis and political gridlock that have tightened its grip on this and so many other countries in the industrial world are, depending on your choice of metaphor, either part of the package or part of the packing material, scattered across the landscape like so much bubble wrap.

I responded in the comments (somewhat altered):

In Hubbert’s day, a peak oil scenario might include legions of unemployed people, folks begging on street corners, houses falling apart, factories closed and rusting in the rain, and Detroit lying in ruins. Well, those of us in the Midwest already live with all that stuff. So you’ve expressed something I’ve felt for a long time – we’re already living through the collapse, and waiting for some singular ‘event’ to signal it is as vain as picking the exact date Rome ceased to exist (258? 313?, 410?, 476?, 1453?). Of course, much of that devastation is due to what you so correctly pointed out is labor arbitrage enabled by (relatively) cheap energy, which our political class has managed to convince most of us is “free trade.” But to document the continuing collapse, we need not turn to dystopian sci-fi authors, we can simply turn to the Grey Lady:
“…According to the study, to be released Friday by the John J. Heldrich Center for Workforce Development at Rutgers, just 7 percent of those who lost jobs after the financial crisis have returned to or exceeded their previous financial position and maintained their lifestyles. The vast majority say they have diminished lifestyles, and about 15 percent say the reduction in their incomes has been drastic and will probably be permanent.
Few Workers Have Fully Recovered, Study Says (New York Times). Or this :
“…Even before the recession began, young people were leaving home later; now the bad economy has tethered them there indefinitely. Last year, just 950,000 new households were created. By comparison, about 1.3 million new households were formed in 2007, the year the recession began, according to Mr. Zandi. Ms. Romanelli, who lives in the room where she grew up in Branford, Conn., said, ‘I don’t really have much of a choice,’ adding, ‘I don’t have the means to move out.’”
As Graduates Move Back Home, Economy Feels The Pain (New York Times).
"Americans got much poorer last quarter, as their collective household net worth suffered the biggest decline in three years. The total net worth of American households and nonprofit groups fell by $2.4 trillion in the third quarter of this year, according to a new report from the Federal Reserve. That was a decline of 4.1 percent compared with the second quarter. Wealth declined primarily because the financial markets did poorly. Americans saw big drops in the value of their assets like corporate equities (stocks), corporate and foreign bonds, mutual fund shares and pension fund reserves. Household real estate assets also suffered, falling in value by $98.3 billion (0.6 percent) from the previous quarter, in nonseasonally-adjusted terms."
Americans got much poorer last quarter (New York Times)

The Times also published a much-discussed article implicating the housing collapse on the lack of demand for suburban homes. And listening to the BBC recently, they pointed out that no less a historian than Fernand Braudel pointed out that the endgame of every empire in modern history was the financialization of the economy (Spain, the Dutch, Britain, etc.).

Some people think things will eventually ‘get back to normal. But if you take the long view of history, the period we’ve been in since the Second World War is the anomaly. So we are getting back to normal; it’s just not the normal we expected.

Someone else in the comments posted this perceptive comment from Ran Prieur from 2007:

So the dollar is in free fall, global oil extraction has peaked, and the deflating housing bubble is bringing down half the banking industry. A hundred years from now, they'll file 2007 with 1929. The crash is not close -- we are in the crash. This is what the crash looks like -- not roving gangs storming your house to steal canned food, but gasoline and milk prices rising twenty cents, and another vacant house on your street, and your credit card sending you a few pages of fine print about some new ways they can charge you 29%. The crash looks like trains breaking down and roofs leaking and unemployed people moving in with family and employed people cynically going through the motions. Every day will look almost exactly like the day before, but in a few years you will find yourself eating dandelions and sorting out your pre-1982 pennies to sell the copper.

We fantasize about the Road Warrior crash scenario because it would make life simple and raw -- the winners would have a fun time and the losers would not have to suffer long. In the real crash, you'll still have to go to your job and pay bills and get stuck in traffic, but everything will be a little crummier, a little less predictable. You will see more depressed people and rambling crazies and potholes and buses that never come and long lines and important phone numbers where nobody answers. Your whole city will not be wiped out by a biowar super-plague, but here and there someone you know will die of cancer or MRSA. Even when oil is $200 a barrel, I predict that more people will die of car crashes than starvation.

And I've previously noted full-on collapses have been seen in the former Soviet Union, Argentina, and now Greece. All them resembled Ran's description above much more than The Road Warrior. This is probably what the collapse of the Western Roman Empire looked like too:

You're a farmer in Northern Italy or southern France barely scraping by, and every year the government requisitions more wheat by force, even though the rains have been less frequent and the land is more and more parched. Every year they pay you in coins with less silver content and more lead. The guy who sells you meat and olive oil wants more coins every few months for the same amount of goods, and there's less of it since the trading ships are showing up less frequently; even the ceramic quality of the amphoras containing the olive oil is going down. Meanwhile, the neighboring farms are abandoned one-by-one even as wealthy landowners build ever-larger villas, and more and more people speaking some funny-sounding foreign language show up every day. The baths are only open three days a week for lack of wood, and the soldiers who used to keep the peace have been pulled away and sent to some far-off frontier to secure the border. The army fights among itself even more than external enemies, and the new magistrate simply takes bribes from the richest landowners and looks the other way, leaving people to fend for themselves. You don't even know who the emperor is anymore, since the army kills off the old one and puts a new one on the throne every few months; and besides, what's going on in the capital has no bearing on your life anyway. One of your sons is in the army fighting Jupiter-knows where, and your son is getting into this new Middle-Eastern cult called Christianity...

I was thinking that even as I ran across this - Northeast states cut heating aid to poor::

Mary Power is 92 and worried about surviving another frigid New England winter because deep cuts in federal home heating assistance benefits mean she probably can't afford enough heating oil to stay warm.

She lives in a drafty trailer in Boston's West Roxbury neighborhood and gets by on $11,148 a year in pension and Social Security benefits. Her heating aid help this year will drop from $1,035 to $685. With rising heating oil prices, it probably will cost her more than $3,000 for enough oil to keep warm unless she turns her thermostat down to 60 degrees, as she plans.

"I will just have to crawl into bed with the covers over me and stay there," said Power, a widow who worked as a cashier and waitress until she was 80. "I will do what I have to do."

Thousands of poor people across the Northeast are bracing for a difficult winter with substantially less home heating aid coming from the federal government.

"They're playing Russian roulette with people's lives," said John Drew, who heads Action for Boston Community Development, Inc., which provides aid to low-income residents in Massachusetts.

Let's see, how many trillions did the government give for free to bankers? But they can't afford heating assistance for the elderly in winter? This is not fiction. This is real. This is America. This is what collapse looks like.

P.S. There are many blogs chronicling our decline in real time, it's not my intent to become one, just to point out the big picture form time to time. I recommend Decline of the Empire, The Downward Spiral and The Economic Collapse Blog if you want to get you gloom on. Remember, do not be ashamed for not keeping your head in the proverbial sand. Knowing we're in decline, and not being in denial, allows you to make the right choices, better choices, even when times are hard. Once enough of us start making better choices, we can start to build something better.


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