Like all of you, I've been watching and reading the business news - which has become just "news", more or less, which says something ugly about our economic situation, when you think about it - with the sort of grim displeasure that an old Roman noncom must have received the news from the frontiers in the latter parts of the 3rd and 4th Centuries AD. The situation is not just bad, it's the kind of bad that promises to be irretrievably bad; unresponsive to remediation short of further disaster, sure to bring further woes in its train before any glimmer of hope will emerge.
And I understand, to a fair extent, how and why we got here. Which is where, so far as I can tell, I differ from about 94% of the Republican Party and 101% of the wing of the GOP who gets their "news" from Rush
"I'm the boss here, bitchez!" Limbaugh - these idiots apparently still think the problem was that we didn't let the geniuses at Bear Stearns and AIG package
MORE derivatives and mortgage-based securities. Normally the issue of "what shall we do now" is the most difficult place to find a place to stand in a shitstorm. This time, with a fairly clear view of the bottom of the porcelain funnel cloud and the recognizable sight of Saint Ronnie's ass centered thereon (symbolizing his stated conviction that regulation of natural monopolies and oversight of traditionally larcenous financial grifters was a pile of used food), the 27% of the American public that still believes that there were weapons of mass destruction hidden in the pool cabana out behind Saddam's place in Tikrit is unwilling to even hint that we might be in trouble because for the past twenty-nine years we treated our nation's economy like a slush fund for malefactors of great wealth and a Nigerian-oil-minister-style confidence scheme.
But the point is that we have a pretty good idea where we're going and why we're in this handbasket.
Whether or not we can do something to prevent the coming economic train wreck is, IMO, a matter of real uncertainty. The current pileup is pretty unforgiving in its indictment of the current economic paradigm that the wealthy and the well-connected have conspired with the Party of Wealth to foist on us. Turns out that basing an economy on paper profits, irrational consumer spending, the enrichment of a tiny minority while flatlining income for the rest and exporting living-wage jobs was not a good idea - whooda thunk it? But the same bunch of chipmunk pesterers and bloviating fatheads who helped get us into this mess has a vested interest in keeping us from rejecting their True Belief.
And we aren't much more help - we'd rather cling to the fantastic promise of becoming superrich than face the reality that most of us will die in debt. It's no coincidence that the rise of the Moron Economy has coincided with the insane popularity of idiotic fairy tales like "American Idol" and "Who Wants To Marry A Millionaire" and the other yes-I'm-a-mouthbreather-but-I-could-still-win-the-lottery forms of entertainment. We've become a nation of fatuous fantasizers, of credulous couch-potatoes, who would do well as the slasher-fodder in a Wes Craven flick, persisting on opening the closet in the darkened hallway and stomping off into the woods when we should know enough to get in the Plymouth Fury and just drive like hell to the biggest town close by.
So by being stupid ourselves and electing people who kept telling us that stupid was the new smart and what the hell was so great about being smart, anyway, we've driven ourselves into the Hellmouth of Economic Reality, and we pretty much deserve the hiding we're gonna get. For those who tried to prevent this from happening, who kept their expenses low and the cash reserves high, well, hopefully they will ride it out. But the rest of us?
Sauve qui peut, mon ami.
Thing is, you remember how this all started as the "subprime mortgage crisis"? And how we're still hearing about how the big problem is that housing starts are down, and that real estate values are dropping like a paralyzed park pigeon?
Well, the whole "housing starts" thing got me thinking as I listened to another report of gloom and doom in the construction industry on the radio the past week. And it made me start to wonder, not about the coming Great Recession which, when you really look hard at it, is just another 19th Century "panic", the sort of thing that Keyenesian economics and New Deal regulations were supposed to head off until we decided to spend our national treasury killing brown people because the hate our freedoms and that regulation was for pussies.
No, it was the notion that "housing starts" were and are a fundamental indicator of economic health.
Because my little family lives in a house built in 1922.
It's not a nice house for 1922, like some of the lovely mansions up on the West Hills, in Laurelhurst or Irvington. It's a little 1920's shitbox, slapped together to sell to a grocer or a windowdresser or a ladies' hatmaker. The construction is average, with the exception that the lovely straight-grain fir reminds us that before we cut all the damn trees down we could use good wood for common dimension lumber without a thought.
Nope, it's the 1920's equivalent of the identical little cottages in Levittown, the sort of place that exploded in the late '40s and '50s as everyone wanted their own home.
But here's the thing:
it's perfectly sound. Replace the roof every twenty years, stay ahead of the dry rot and keep the footings dry and the damn thing'll last another eighty-seven years. Or more. Theoretically, my son could take over the house from us, raise HIS kids in there, and then deed it to his oldest to raise their kids in. Or not; hell, for all I know the Peeper may be a swinging batchelor until he dies, throwing Wesson Oil parties for the grannies down at the Catholic retirement home next to Roosevelt High some time in 2088...the point is, Mojo and I can happily live the rest of our lives in our little house. And one of our children can, after us.
We don't NEED a "housing start" for the next eighty years or so.
Okay, one of the kids will...assuming that his or her spouse doesn't come with a house from THEIR parents. But we could, if we tried and if we wanted to, live perfectly comfortable lives without ever needing a contractor to build us a new house. And if we did, there's half a dozen similar little houses for sale right now within ten blocks of our own.
So. It would seem that to need a "housing start" what you really need is
more people. Families with four kids instead of one or two. Immigrants moving in from another country. A constant stream of people moving out of rentals into homes.
That seems insane to me and let me explain why.
Maybe it's the scientist in me, but that kind of limitless population growth - as translated into "housing starts" - seems, in the long run, unsustainable.
Let's think about it. Almost every natural system has checks and counters. Get too tall, stay too short, and Nature usually has a way of sorting you out. The slowest gazalle becomes Cheetah Chow; the fastest dies of starvation in the dry season because it needs so much more grass. Sardines have mackerel, mice have cats, lemmings have cliffs. And we see the counterexamples every day. The cougars and wolves keep the deer numbers down. We kill the cougars and wolves, the deer explode, the browse is devoured, the deer starve.
Now, it seems to me, we have built a life system - not just an economic or industrial setup but an entire way of life - that centers around living off of things that depend on having more people to make and sell and build new
stuff for. I'm the same as most of the rest of you. If nobody builds that house, that shopping center, that Wal-Mart, that pornographic knicknack store, nobody hires a soils engineer to give them foundation recommendations, nobody hires me, I don't get paid and I starve.
But the notion that we just keep building houses, mining copper for wires, making clay into bricks and lime into concrete, oak into furniture, more and more, for ever and ever..? It just seems impractical, when you think of it that way. Certainly the notion that we won't overrun our petroleum supplies, when we know it takes something like ten-to-the-third years to turn biomass into keratin and then petroleum versus something like ten-to-the-minus-third years to locate, prospect, extract, refine and consume it...
drill, baby, dr...hunh?
So over the next couple of weeks I want to explore this notion that, while what we're experiencing in 2009 may be just a typical swing in the business cycle, we really need to examine our entire industrial society and the economic foundation it's built on.
Because, as the lemmings would tell you, if you realize that you've exceeded your resources only on the way off the cliff, it's probably too late.
