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Guest Post: Our Dust Bowl Economy

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

When the present path cannot possibly lead to success, regardless of the labor and treasure poured into the effort, then risking the unknown by trying something different is the only way forward.


The PBS series The Dust Bowl inspired an apt metaphor: ours is a dust bowl economy. What is the basis of the metaphor?
Simply this: those living in the dust bowl responded by doing more of what had failed rather than doing something different.
Several key responses actively worsened the crisis:
1. In response to declining prices for wheat, farmers plowed up more marginal prairie land to plant even more wheat: the idea was to compensate for lower prices per bushel by growing more.
We can anticipate the unintended consequence: bumper harvests further depressed prices, which fell from 95 cents a bushel to 25 cents a bushel (and stayed there).
2. Plowing up fragile prairie held together by native grasses exposed the soil to the winds, further feeding the dust storms.
In our economy, debt is the marginal field that has been plowed up for brief exploitation and profit. In response to the drought of income and collateral that supports debt, the Federal Reserve, Congress and the Obama administration have actively made the crisis worse by doing more of what failed spectacularly: encouraging more debt with zero-interest rate policy (ZIRP), massive "socialized" subsidies of housing and mortgages, and so on.
Just as in the dust bowl years, the occasional rain raises hopes of complete reversal. In our dust bowl economy, every "green shoot" of debt expansion, consumer confidence, builder confidence, retail sales, etc. is taken as "proof" that the "recovery" is "gaining steam" and the economy has fully reversed course from contraction to expansion.
Then a few months later the "green shoots" whither because the fundamentals that enable more debt--household income and asset collateral--are both deteriorating. Income is down 8% from 2007, and median household net worth fell 38% from 2007 to 2010.
(The data is skewed by the top 10% who own most of the individually owned stocks; as the stock market bounced back in 2010, so did the net worth of the top 10%, while the bottom 90% who have little exposure to stocks saw their housing-based net worth stabilize at post-bubble valuations.)
Doing more of what failed spectacularly simply sets up even more spectacular failures in the future. Why do people persevere in doing more of what has failed? One reason is that we have been trained to think that perseverance in itself will magically lead to success. This overlooks the key determinant that the chosen path must be one that is capable of reaching success. Other characteristics are just as critical as perseverance: being flexible, adaptable and willing to learn and evolve.
A second reason is the emotional appeal of hope. Since humans avoid the risk of radical change for the good reason that radical changes can go horribly wrong, it was easier to stay in the dust bowl and hope for a return of favorable weather and market prices than to accept that farming in the affected area was no longer feasible.
Sadly, those who stayed based on hope for "better times" lost everything, while those who recognized the end of the previous era of prosperity left with some assets and an intact sense of self.
The third reasons is a failure of imagination. This is a subject I have often addressed, for example in We Have No Other Choice (March 15, 2012), The Federal Reserve and the Pathology of Power (November 18, 2010) and Oversupply of Old Failed Ideas, Undersupply of New Pragmatic Ideas (July 16, 2010). We can sympathize with those faced with giving up a life they knew and that that had recently offered hope of enduring prosperity for an uncertain and unknown future trying something else.
But when the present path cannot possibly lead to success, regardless of the labor and treasure poured into the effort, then risking the unknown by trying something different is the only way forward.

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.


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Tue, 11/20/2012 - 11:09 | 2998685 HoofHearted
HoofHearted's picture

Try something new? That's crazy talk. We Americans have been sitting on our asses eating Doritos forevaz, and that's why we are the GREATEST NATION ON EARTH! USA! USA! USA! (I'm reminded of the clip in Animal House where the Dean's charges are an indictment against the whole system, and we won't stand for him trashing our country.)

BOHICA, USA. Fiscal cliff will be gone, debt ceiling going higher. Gold, bitchez. And try to find something that you can invest in once the reset comes...agriculture, fuel development. Something.

Tue, 11/20/2012 - 11:12 | 2998690 zuuma
zuuma's picture



If things truly go THAT sideways, a good plan might be a bottle of whiskey, a pistol & an open field.

Tue, 11/20/2012 - 11:19 | 2998709 GetZeeGold
GetZeeGold's picture



Sounds cheery!

Tue, 11/20/2012 - 11:37 | 2998756 hedgeless_horseman
hedgeless_horseman's picture



If possible, make lifestyle changes, now, rather than a "what if" plan for tomorrow.

Our Swiss Chard thrives in this Dust Bowl economy.

Tue, 11/20/2012 - 11:38 | 2998773 Spastica Rex
Spastica Rex's picture

I live in the desert and grow swiss chard -  I do have irrigation, though. My family eats HUGE amounts of it.

Haven't figured out a great use for the stalks, but they're not bad baked with a little butter. Tried fermenting them - not good.

Tue, 11/20/2012 - 11:57 | 2998821 francis_sawyer
francis_sawyer's picture

The stalks can be sliced up and tossed into any kind of chinese stir fry (which can have any combination of hard & soft veggies such as cabbage, celery, carrots, peppers (hot & mild), onion, bok choi, broccoli, bean sprouts, water chestnuts, bamboo shoots or whatever you want)... When you wok these things together with any kind of basic meat (chicken, pork, beef) and then toss in spaghetti type egg noodles & you have your basic Lo Mein dish... Usually, you'll want to use a basic chinese 'sauce' which includes 2x hoisin sauce, 1x oyster sauce, & 1x soy sauce & a little ginger & sesame oil...

Or you could just compost them back &/or make some worm relish...

h_h is right though... If you can't grow Swiss Chard, you can't grow anything...

Tue, 11/20/2012 - 12:51 | 2999073 odatruf
odatruf's picture

Kale will grow anyplace Swiss Chard will grow and while similar, it is different enough to be worth a planting.

Tue, 11/20/2012 - 13:54 | 2999265 francis_sawyer
francis_sawyer's picture

they both can thrive in soil that has a rather wide spectrum of pH tolerance... (bottom line ~ if ya ain't got that great soil &/or don't know what the fuck you're doing ~ you can toss the seeds on a cinderblock and the plants will probably grow... They're fucking 'chia pets'...

I'm embarassed to say that most of my Kale gets relegated to 'garnish duty'... Fresh oysters on the half shell & other seafood looks great perched atop... But you sure can EAT IT too... 

Tue, 11/20/2012 - 11:59 | 2998831 XitSam
XitSam's picture

Feed them to your livestock.

Tue, 11/20/2012 - 15:03 | 2999486 CPL
CPL's picture

Swiss Char...funny way of saying ditch weed.

Tue, 11/20/2012 - 11:31 | 2998755 Snidley Whipsnae
Snidley Whipsnae's picture

Whiskey PLUS whatever else is available...

In Russia they didn't need a pistol. Stalin did the shooting for them.

Tue, 11/20/2012 - 11:32 | 2998760 SilverRhino
SilverRhino's picture

Fuck that, but if you do.  Be sure that it's the police that find you, not your family. 

Tue, 11/20/2012 - 11:13 | 2998689 buzzsaw99
buzzsaw99's picture

Just like during the dust bowl god is punishing the people for their greed. god is one mean mofo who only metes out retribution after the fact bitchez.

Tue, 11/20/2012 - 17:50 | 3000006 RockyRacoon
RockyRacoon's picture

Pretty soon an act of god will be the only thing to save these financial markets... and it ain't coming... cause HE don't care.   I can see the saving of a few Okies, but not the pond scum in 3-piece suits that inhabit the boardrooms of America.   I thought the exact same thing while watching Ken Burn's documentary.   Later on came the punch line:  The ogallala aquifer is the next farming bubble to burst in the exact same footprint as the Dust Bowl.  Over half of it is gone and the remainder is disappearing at an accelerating rate.  They know it and still can't stop it from happening.  Just further proof that humankind is a useless parasite that needs thinning out so that it becomes symbiotic again.


Tue, 11/20/2012 - 11:14 | 2998700 TahoeBilly2012
TahoeBilly2012's picture

Well, during the dustbowl, California was essentially "Okie ready". There are no more California's left to escape to.

Tue, 11/20/2012 - 11:17 | 2998704 buzzsaw99
buzzsaw99's picture

it seems as if there has been a bit of a reverse dust bowl migration lately.

Tue, 11/20/2012 - 11:20 | 2998716 GetZeeGold
GetZeeGold's picture



Raisins of wrath bitchez......cause the juice is all gone.

Tue, 11/20/2012 - 11:23 | 2998727 buzzsaw99
buzzsaw99's picture


Tue, 11/20/2012 - 11:18 | 2998707 CPL
CPL's picture

Correct, and there are now 7.2 Billion versus 1.9 billion.  World debt was in millions, now it is in the Quadrillions of derivative shadow debt


The margin for error is impossibly slim to manage or calculate around now.  This will end in tears and pain for all.

Tue, 11/20/2012 - 14:56 | 2999470 imbrbing
imbrbing's picture

I used to think I would be "ready", but ..........

Tue, 11/20/2012 - 15:17 | 2999522 CPL
CPL's picture

Individuals can be ready, but expectations on options in energy, food, clothing and even housing is a moot point.  Centralized everything and JIT systems have seen to that in their construction over 35 years.  Doesn't matter who you are, what you do, if you are important or not.


Behind each of those JIT systems, is another framework of JIT systems, behind another layer of JIT systems.  Any failure or slowdown in any of these systems results in collapse because the efficiencies are tuned like a Chinese firedrill. 

2007 should have been the year of the reset with everyone running out of credit (not money, not capital, credit).  That tiny, insignificant shock to the system is still being felt now.  A problem of 540 billion dollars has cost the world 90 trillion.


One single bond shock in a third tier repo market.  Today we are talking about primary dealers, Central bank bonds and Tbills collapsing.  Not just in the USA.  Every country is keeping a lid on things.  All from a single housing fuckup that only reflects less than 3% of the housing market and loan system. 


How's that for screwed?

Tue, 11/20/2012 - 11:19 | 2998710 Mitch Comestein
Mitch Comestein's picture

If you haven't read "The Worst Hard Times" by Egan about the dust bowl, you have never heard of hard times.  It is a great read. 

In this derivatives (dust) bowl, the migration will be out of California.  I guess we will have to come up with some derogitory name for them.  Cali's?  Lefties?  Coasties?  What do you think?

Tue, 11/20/2012 - 11:24 | 2998720 buzzsaw99
buzzsaw99's picture

it seems to me that the cream of the crop are the ones leaving. (btw that is no great compliment imo). californicators is what we call them.

Tue, 11/20/2012 - 11:41 | 2998780 Spastica Rex
Spastica Rex's picture

I remember the California migration as a Seattleite in the 80s and 90s.  Around 2000, I started referring to Seattle as the northernmost suburb of L.A. Then I left.

Tue, 11/20/2012 - 11:59 | 2998832 TahoeBilly2012
TahoeBilly2012's picture

Recently I was offered a choice; suck on my .44 mag or cancel my Facebook account, which had "friends" brimming with enthusiasm over the re-election of our Dear Leader. I choose to live (and ski) another day. What sorta fool would end his life because 95% his college educated friends are nitwits living in a black hole? Goodbye Facebook.

Tue, 11/20/2012 - 12:53 | 2999085 Ident 7777 economy
Ident 7777 economy's picture

Yes, true exemplification of a 'bubble' ...

Tue, 11/20/2012 - 11:19 | 2998712 SmoothCoolSmoke
SmoothCoolSmoke's picture

We are trying someting new. 8 years of a Dem president.  8 years of a Repub obviously didnot go well.

Tue, 11/20/2012 - 12:22 | 2998923 foodstampbarry
foodstampbarry's picture

Really? I was making 3 times what I make now back in 2006 and my 401k looked quite nice.

What is it with Democrats and facts?? I just don't get it. ....FORWARD!!!

Tue, 11/20/2012 - 16:08 | 2999697 All Risk No Reward
All Risk No Reward's picture

There is only one police force - even if there is a good cop and a bad cop routine being played on you.

Both parties are stooges for the banksters that finance them and who are running the world's greatest con game - Debt Money Tyrrany.

The system is working near perfectly!  Leverage and inflate - even if Section 2A of the Federal Act says that criminal.

When the 100% certain top is reached, loot the crap out of the ignorant, apathetic populace while sending out the false narrative that the debt slaves can look forward to their own bailout via hyperinflation so they don't revolt.

Folks, all these personalities that grew up in the establishment need to explain why the OWNERS AND CONTROLLERS of JP Morgan are givng out 3.5% 30 year mortgages ahead of a hyperinflation they will have to orchestrate themselves.

You've never heard anyone go there - because that's a MAJOR contradiction that isn't easy to gloss over.

No, the criminals aren't saving what they created to blow up.  That's just what the tell the ignorant serfs.  They are looting trillions and offloading trillion in debt to a debt saturated society.

When that game ends, they will say we need to "be responsible and pay down our debts."  They know full well this will bust the citizenry - and that's the plan.

They will use their stolen loot to buy up reality for pennies on the dollar.  They want your house, your farm, your businiess - and they need to use their debt money system to strip you of everything you've worked for.

It is elementary.  They aren't stupid, they've read Sun Tzu's Art of War that says they should feign stupidity and build up the ego of the population being victimized by their deceptive, asymmetrical financial war campaign.

Debt Money Tyranny


It's an operation.  The real terrorists and threats to liberty, freedom and your future finance the people who willing sell out in order to rule over you - and they don't care what role they are required to play.

This view is evidenced base.



The Democrats simply eat the blame for something they didn't do - because that's the false narrative the financiers use to control a disengaged, ignorant population.

"The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can "throw the rascals out" at any election without leading to any profound or extreme shifts in policy."
- Carrol Quigley, Tragedy and Hope

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences."
-- Quote from Caroll Quigley's Tragedy and Hope, Chapter 20

Tue, 11/20/2012 - 13:24 | 2999174 forexskin
forexskin's picture

nothing new there. robama from the demipublican party was guaranteed to win.

thinking party politics offer a solution leaves you blind in the matrix.

Tue, 11/20/2012 - 11:19 | 2998713 I need more cowbell
I need more cowbell's picture

Geez another CHS " of one mind-numbingly ad nauseum analogies" portrait of the current situation.


Tue, 11/20/2012 - 11:26 | 2998742 DOT
DOT's picture

Our economy is like a lingerie model whose breasts are.............


Tue, 11/20/2012 - 11:22 | 2998722 woggie
woggie's picture

the beast is on the gobble and all that matters is we're all headed for it's belly

Tue, 11/20/2012 - 11:22 | 2998725 Quinvarius
Quinvarius's picture

Another warm winter probably means another crop failing summer.

Tue, 11/20/2012 - 11:27 | 2998744 otto skorzeny
otto skorzeny's picture

dumb comment of the day- you can now become a 6 figure employee (and all of the hollow point you can shoot) employee of the National Weather Service. they can't predict the weather tomorrow-let alone a year from now

Tue, 11/20/2012 - 11:30 | 2998750 Quinvarius
Quinvarius's picture

I said the same thing last winter. 

Tue, 11/20/2012 - 11:31 | 2998759 buzzsaw99
buzzsaw99's picture

if the stock market goes up it will probably go up. :snark:

Tue, 11/20/2012 - 15:22 | 2999542 imbrbing
imbrbing's picture

And I bet you got the same result

Tue, 11/20/2012 - 11:23 | 2998726 JustObserving
JustObserving's picture

Why Things Are Falling Apart and What We Can Do About It

Corruption and to fix it, just hang a few banksters for their crimes.  Buy real assets before everyone knows that fiat currencies are confetti. 


Tue, 11/20/2012 - 11:23 | 2998728 ptoemmes
ptoemmes's picture

+1 for The Dust Bowl film by Ken Burns.

Tue, 11/20/2012 - 11:29 | 2998746 buzzsaw99
buzzsaw99's picture

the very ending when they mention irrigation and the aquifer depletion was OMINOUS.

Tue, 11/20/2012 - 11:25 | 2998736 otto skorzeny
otto skorzeny's picture

those dummies-they should have used corn to power their cars and then demand would have increased.

Tue, 11/20/2012 - 11:28 | 2998747 Snidley Whipsnae
Snidley Whipsnae's picture

Why not grapes of wrath instead of corn?

Tue, 11/20/2012 - 11:29 | 2998749 Dr. Engali
Dr. Engali's picture

We are about to try something new...once the collapse accelerates we will follow the dear leader straight into full fledged communism. And if you do nos assimilate there will be a special place on the front lines reserved for you.....resistance is futile.

Tue, 11/20/2012 - 11:36 | 2998765 Snidley Whipsnae
Snidley Whipsnae's picture

Why not? They will probably continue to call it a democratic capitalism.

Tue, 11/20/2012 - 12:29 | 2998971 Peterus
Peterus's picture

They might face personal consequences if it all hits the fan. With such a gigantic bubble it's going to go nuclear, people might actually have problems with getting food for transition time... hungry, pissed off mob mith very well physically run down and let banksters and politicians hang by the neck from lanterns and trees. Not going full totalitarian with this kind of crash ahead is a dangerous choice for rulers.

Tue, 11/20/2012 - 11:49 | 2998803 Umh
Umh's picture

It's amazing how many times the problem masquerades as the solution.

Tue, 11/20/2012 - 11:53 | 2998816 fonzannoon
fonzannoon's picture

resistance is futile? Doc you alright? Have not seen too much of you on here lately, although I may have missed some stuff.

It's people like you telling me to establish a good network of people and prepare accordingly etc. I hope you are just annoyed and pissed off today.

Tue, 11/20/2012 - 11:36 | 2998768 jack stephan
jack stephan's picture

As your attorney, I advise you to take a hit out of the little brown bottle in my shaving kit.

Tue, 11/20/2012 - 11:38 | 2998770 Never One Roach
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House Prices Are Nowhere Near A Bottom Says Analyst



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