The Long Crisis

Posts Tagged ‘American living standards’

As those Long Crisis readers know who actually read most of the posts here I am expecting a long Japan like L shaped depression that may last for ten to fifteen years, perhaps even longer. Even that is not a completely accurate description of what I expect as that implies that we will eventually return to the level of economic and social structure activity that we were at in 2006 before the bottom started falling out. I doubt that will be the case.

I was reading James Howard Kunstler’s blog on Monday of this week and find that in an article posted om March 30,2009 named “Under a Fluorescent Moon” Mr. Kunstler has already done a lot of the heavy lifting, more accurately heavy thinking, as to what America and average Americans will face in the years immediately ahead.

The following is a chilling account as to where America is likely headed:

“What’s going on now is nature’s way of telling you that America’s standard of living has to be reduced by something between 20 and 50 percent. You can have it in the form of a compressive deflationary depression, including widespread bankruptcies… or you can have by way of inflation, in which money loses its value. But there’s one basic qualification to this: the way down is not symmetrical with the way up. That is, it’s really not just a matter of ratcheting down to a standard of living half of what it was, say, in 2006, because in the event all the various complex systems that support everyday life enter failure mode before our society re-sets at a theoretically lower level of equilibrium.

By this I mean our methods for getting food, for moving about the landscape, for deploying capital, for trading and manufacturing, for schooling, doctoring, and running public services all destabilize and, to some degree or other, fail to deliver their contribution to normal daily life. Banking (capital deployment) is already mortally wounded. It remains to be seen how this will affect the food supply half a year ahead in the harvest season. Capital is as big an “input” for our method of farming as diesel fuel or fertilizers made from methane gas. The failure of banking will combine with city and state insolvency to crush public transit, law enforcement, fire protection, and whatever flimsy local safety nets exist to keep the ultra-poor and helpless from die-off. The lowering of living standards by 20 to 50 percent essentially eliminates all but the must critical commerce, meaning that most of the stores in the malls and strip malls lose their customers and shed employees, while the mall and strip mall owners lose their rents, and the bankers lose performing commercial real estate loans. As all this occurs, tax revenues go way down, schools can’t pay their employees or buy diesel fuel for their yellow bus fleets. More people lose the ability to carry health insurance. Hospital emergency rooms are overwhelmed. Health care descends to Third World levels. Meanwhile, pensions are destroyed, the elderly live on dog food and ketchup. . . .”

There is no doubt that the old world order is well on its way out and that a new world order is in the process of forming. This process will likely continue for many years. As the transition is taking place we can expect that social order and the government will break down under the stress. In order to survive we all had better start learning new skill sets.

Those with a college degree had better realize that unless the degree is in agriculture not much else will matter. The people who will have the best chance for survival will be those who have hands on skills at carpentry, hunting, farming, fishing, weaving, sewing, and the like, including the survival skills and means to defend themselves and their families. Happily, the big shot bankers, corporate executives, politicians, and all around paper shufflers who got us into this mess will likely perish.

If the angry displaced masses don’t lop off their heads they will likely perish anyhow as they will not have the skill sets to look after themselves.

It will be difficult for many Americans to cope with a 50% reduction in living standards but there will be those who will be able to manage it and prosper. They will emerge as the new leaders in local communities. Going local will be a major component of the new order. A bankrupted central government in Washington will be disgraced, depleted, and not very relevant to everyday life.

For those able to adapt the new order may not be so bad after all.

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