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There's
a particular moment known to all Baby Boomers when Wile E. Coyote, in a
rapture of over-reaching, has run past the edge of the mesa and, still
licking his chops and rubbing his front paws in anticipation of fricasseed
roadrunner, discovers that he is suspended in thin air by nothing more than
momentum. Grin becomes chagrin. He turns a nauseating shade of green, and
drops, whistling, back to earth thousands of feet below, with a distant,
dismal, barely audible thud at the end of his journey. We are Wile E. Coyote
Nation.
Is there anyone in the known universe who
thinks that the US
financial system is not fifty
feet beyond the edge of the mesa of credibility?
Nothing will avail now. Not even if Sirhan Sirhan were paroled at
noon today and transported directly to the West Wing with a .44 magnum in
each hand (and a taxi driven by the Devil waiting outside to take him to the
US Treasury and the offices of the Federal Reserve).
It's hard to imagine what kind of melodramas
were unspooling on the Hamptons lawns this weekend, while everybody else in
America was watching Nascar, or plying the aisles
of BJs Discount Warehouse for next week's supply of
mesquite-and-guacamole flavored Doritos, or having
flames and chains tattooed on their necks, or lost in a haze of valium and methedrine.
With the death of the IndyMac
Bank last week, and the GSEs Fannie Mae and Freddie
Mac laying side-by-side in the EMT van on IV drips, headed for the Federal
Reserve's ever more crowded intensive care unit, there was a sense of the
American Dream having passed through the event horizon that denotes the
opening of a black hole.
What would happen if the US Government acted to
bail out these feckless enterprises (and what if they don't)? Either way,
it's not a pretty picture. If Mr. Bernanke does start shoveling
loans into the GSE black hole, he'll further undermine the soundness of his
own outfit and do nothing, really, to repair Fannie and Freddie's structural
problem of having securitized too many loans that will never be paid back. If
instead Fannie and Freddie are flat-out taken over entirely by the US
government (and remember the Federal Reserve is not the government), then the national debt will roughly
double overnight -- which will pound the US dollar down a rat-hole.
Meanwhile, the foreign holders of those
decrepitating dollars might not rush to the redemption window, but they
certainly would use them to buy up every oil futures contract on God's
not-so-green Earth as fast as possible -- they'd be dumb not to -- which
would leave American Happy Motorists with gasoline prices north of $5 a
gallon, and possibly north of $10. (In that case, say goodbye to the
airlines. In fact, say goodbye to what passes for the rest of the US
economy, including especially the vaunted retail
sector that supposedly counts for 70 percent of the action.)
If Fannie and Freddie are left to die out on
the desert floor, say goodbye to the housing market, the major investment
banks, countless regional banks, the retirement accounts of virtually
everyone in America, the viability of all fifty states' governments, and the
day-to-day operating ability of all their municipalities -- and very likely
the current incarnation of the world banking system.
This process is really out of control now. The
bottom line is the comprehensive bankruptcy of the United States. The Republican
Party under George Bush will be known as the party that wrecked America
(release 2.0). Painful as it is, Americans had better get a new "Dream" and fast. It better be a
dream based on the way the universe actually works, which is to say an
operating procedure run on earnest effort and truthfulness rather than merely
trying to get something for nothing and wishing on stars. We might begin
symbolically by evacuating Las Vegas
and calling in an air strike on the loathsome place -- to register our new
reality-based attitude adjustment.
After that, we've got to get to work
re-tooling all the everyday activities of life, including the way we grow our
food, the way we raise and deploy capital, the way we do trade and
manufacturing, the way we go from point A to point B, the way we educate
children, the way we stay healthy, and the way we occupy the landscape. I
know, it sounds like a lot, maybe too much. But grok
this: we don't have
any choice if we want a plausible future on this portion of the North
American continent.
Of course, none of that is likely to happen.
Instead, and under the worst imaginable economic conditions, we'll probably
embark on a campaign to prop up the un-prop-up-able and sustain the
unsustainable -- that is, defend every status quo habit and behavior that we're used to, whether it can be salvaged
or not. Of course, this would be a fatal squandering of our dwindling
resources, but it it tends, historically, to be the
last act of the melodrama in any faltering empire.
The result, pretty soon into that process, will
be social breakdown and political upheaval. Every tattoo freak out there who
has been prepping for his own starring role in some kind of comic book armageddon will finally get his chance to shine. Lots of
people will get hurt and starve. Property will change hands in a disorderly
way. And at the end of this process an American corn-pone Hitler may be
waiting to set everything and everyone straight.
The markets open in about an hour. Good luck
everybody.
James
Howard Kunstler
www.kunstler.com/
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 : http://www.kunstler.com/
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