Guest Post: Why Our Current Way of Living Has No Future

Tyler Durden's picture




 

Submitted by James H. Kunstler via Peak Prosperity,

All the sordid and spellbinding rackets working their hoodoo on the financial scene have obscured a whole other dimension of the fiasco that America finds itself in, namely the way we have arranged the logistics of everyday life on our landscape: the tragedy of suburbia.

I call it a tragedy because it represents a sequence of extremely unfortunate choices made by our society over several generations, and history will not forgive the excuses we make for ourselves, nor will it shed a tear for the tribulations we will induce for ourselves by living this way. History may, however, draw attention to our remarkable lack of a sense of consequence in transforming this lovely, beckoning New World continent into a wilderness of free parking. In any case, we’re stuck with what we’ve done and the question naturally arises: what will we do now?

A Confused Public

When you show a photo to any random audience of Americans of some ghastly boulevard of strip malls and big box stores, with the many layers of incoherent signage, and ask them what’s wrong with the picture, they always say “everyplace is the same as every other place… it’s all the same!” That is their chief complaint and it is off the mark. They don’t get it, really.

There are many places and things in the built-by-humans world that are characterized by uniformity or sameness. To the casual observer, the ancient hill towns of Tuscany look virtually identical from 500 meters distance. Montepulciano and Pienza might be as hard to tell apart for the average American tourist as a WalMart in Hackensack from a WalMart in Oxnard. But you will hear very few complaints from tourists about the sameness of the design scheme in the Italian villages: the red tile rooftops on every building, the narrow, twisting streets, the stuccoed masonry walls, the casement windows with their functional shutters, etc. Few American tourists return from Paris grousing that the boulevards were monotonous and gave them a headache. This is because the sameness observed in these foreign places is a uniformity of excellence. The problem in America is different: not just that it’s all the same, but the same miserably low quality. The parking lots are all equally dispiriting, whether in New Jersey or Santa Cruz. The tract housing subdivisions are all equally inauthentic and lacking in conviction. The big box stores are all equally pernicious. The public realm all over the USA is uniformly degraded (or non-existent).

Often these characteristics are summed up as “ugliness, but it’s actually worse than that. The built environment is as immersive for people as water is for fish, and the immersive “ugliness” of most places around the USA is entropy made visible. It indicates not simple carelessness but a vivid drive toward destruction, decay and death: the stage-set of a literal death trip, of a society determined to commit suicide. Far from being a mere matter of esthetics, suburbia represents a compound economic catastrophe, ecological debacle, political nightmare, and spiritual crisis — for a nation of people conditioned to spend their lives in places not worth caring about.

Suburbia is also largely behind our current state of political paralysis because it represents a gigantic legacy of sunk costs, investments that have transformed themselves into liabilities. The unwillingness to acknowledge that transition makes it impossible for us to construct a coherent consensus about what is happening and what we might do about it. We ought to know, for instance, that we face a daunting predicament over our oil supply. It’s no longer cheap. Alas, our drive-in Utopia was designed to run on cheap oil. Hence the clear implication is that suburbia has rather poor prospects going forward. I would actually go further and state categorically that it is a living arrangement with no future.

It is in the nature of sunk costs to provoke in people a psychology of previous investment. Having sunk much of our accumulated collective wealth (our capital) in this living arrangement with no future, we are afraid to let go of it, or even reform it substantially. Instead, The Fear of facing our gigantic losses prompts a retreat into denial and wishful thinking.

The higher the price of oil goes, the more the economy contracts, the more frightened people get — and the more determined to seek solace in magical rescue remedies. Thus, the recent cavalcade of nonsense and propaganda telling the public that shale oil and “drill, baby, drill” will soon turn America into “the next Saudi Arabia,” that we are about to become “energy independent,” that we have “a hundred years of shale gas.” These dishonest memes may be floated by mendacious PR spin doctors in the pay of oil and gas companies, but they wouldn’t be effective if the public itself wasn’t so desperate to hear the “good news” that we can continue living exactly the way we do. The mainstream media falls for it, too, not because they are necessarily paid stooges of the energy companies, but because The Fear affects them as well. 

The Fear, of course, especially affects American homeowners, most of whose homes exist in suburbia, and who have already been battered by five years of lost equity, lost incomes, calls from collection agents, the scary visitations of re-po men, and all the other now-familiar manifestations of everyday financial terror.

The Money Problem

Now, it is coming to be understood that there is an additional deeper relationship between the end of cheap oil and the workings of banking and capital.

As energy “inputs” to an industrial economy decline, the ability to generate wealth declines too — and contrary to conventional “wisdom,” it is not offset by “efficiencies,” high-tech or otherwise. In fact, the decline of true capital accumulation in the USA since the 1970s was offset only by the hypertrophic unnatural enlargement of the financial sector from about 5 percent of the economy to 40 percent today. The sector transformed its original mission of managing and deploying accumulated wealth for purposeful enterprise (a.k.a. investment) to sets of rackets designed to game financial mechanisms (markets, interests rates) in order to get something for nothing. It amounted to a sort of national economic self-vandalism.

Much of that putative “activity” was mere churn-for-fee hanky-panky, the wash-rinse-and-repeat cycles of institutional money managers creaming off profits from the pointless movements of money in and out of accounts. Perhaps even more of the financial sector growth was the “innovation” of new swindles and frauds, the biggest and most blatant being the housing bubble, a massive “control fraud” in which suburban houses were used to collateralize deliberately mispriced bonds (debt obligations) on the grand scale in order for giant firms to collect insurance on their failure, in addition to other fees and profits garnered for manufacturing and selling the damn things.

Much of that story remains shrouded in mystery because no prosecutions were mounted against the gigantic banks involved, there was no effort to pursue the truth or justice, and the statute of limitations clock is rapidly ticking down. What we can say about it is that the rule of law obviously got lost in shuffle, and that the continued absence of the rule of law in banking is a profound threat to civilized life. Computerization was certainly an enabler of these monumental shenanigans, and it produced one startling diminishing return: the inability of banks and governments to accurately report numbers on their balance sheets — hugely ironic given the phenomenal math abilities of computers. We find ourselves now in the unfortunate situation where accounting fraud has become the basic operating system of banking and government — not a very salutary prospect for managing civilized human affairs — while much of the nation’s business has been reduced to a sorry matrix of rackets.

More to the point perhaps is that the diminished accumulation of real wealth due to decreasing inputs of the master energy resource — cheap oil — has impaired the ability of interest to be repaid on the grand scale. There was a correlation between abundant cheap oil and the creation of abundant credit. That relationship is now broken and there are more paper (or computer) claims against wealth than there is wealth, which is no longer growing, to pay back the debt. Hence, the interventions of governments and central banks to offset this ruinous new dynamic and artificially prop up the price of assets, i.e. collateral subject to liquidation at bargain prices by insolvent debtors.

The unintended consequences of this monkey business beats a path straight to currency wars, inflation, loss of legitimacy, political uproar, and knock-on effects easily more disastrous.

The breakdown of debt repayment has in turn crippled the crucial and fundamental operations of compound interest in banking, while the dishonest work-arounds by central banks and governments in the form of interest rate manipulations and bailouts have obscured the truth of what is happening: a general failure of capital formation.

So, What To Be Done?

The bottom line is that our future will be defined as much by capital scarcity as by energy scarcity. They synergize each other’s failures.

Politically, all this mischief has manifested as a campaign to sustain the unsustainable, to keep all the rackets running at all costs, including most particularly the suburban way of life. It is unlikely that we will succeed at that — though it does account for the desperation running through the national zeitgeist these days. Rather, the mandates of reality will compel us to comprehensively reform and re-order all the activities of civilized life, and I think how this will occur can be stated plainly and categorically.

In Part II: The Essential Elements for A Sustainable Future we lay out the reforms that will be most needed in restructuring our way of life to fit the constraints of the natural world we live in. The good news is, it can be done - and done in a way we have great odds of enjoying more than our current blindly gluttonous modality of living. 

What you can count on is that we will return to the traditional mode of assembling human habitats, that is, integral, walkable, urban places on the variable scale of village-town-city with work, commerce, housing, and culture woven tightly together in the recognizable form of a real civic organism, not a simulacrum or a cartoon of one — places that add up to more than the sum of their parts, places worthy of our affection that we can call “home” without irony or regret.

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Wed, 03/06/2013 - 22:35 | 3307354 medium giraffe
medium giraffe's picture

No shit Kunstler.

Wed, 03/06/2013 - 22:39 | 3307366 wee-weed up
wee-weed up's picture

The Bernanke Bubble...

It's got to pop!

Wed, 03/06/2013 - 22:46 | 3307389 ACP
ACP's picture

2,000 years from now, people will be discussing the stupidity of the US and the world as we printed trillions of dollars to lull the masses into ignorance and failure.

Much like historians discuss the failures of the Roman Empire today.

Wed, 03/06/2013 - 22:48 | 3307395 Abraxas
Abraxas's picture

How about 5-10 years from now?

Wed, 03/06/2013 - 22:54 | 3307423 SafelyGraze
SafelyGraze's picture

the historians will, at least, find solace in the archival editions of Zero Hedge that are safely shelved in the libraries for posterity

 

Wed, 03/06/2013 - 23:03 | 3307439 wee-weed up
wee-weed up's picture

If you believe the Libs/Socialists will not try to alter history by changing, and even erasing, historically opposing views - especially those on-line such as ZH, you are very naive - history proves otherwise!

Thu, 03/07/2013 - 00:09 | 3307635 ACP
ACP's picture

Interesting point...but the real story will emerge over time. The 'Great Keynesian Presidents' are only still considered great leaders because their policies haven't been exposed (Edit: or maybe I should say "accepted") for what they are as yet. When enough time passes that the last 100 years is a 50 minute lecture, a blip in history, people will get to see the failure of endless money printing in all its glory.

Unfortunately, we're all living that nightmare now, as it happens.

Thu, 03/07/2013 - 00:17 | 3307664 wee-weed up
wee-weed up's picture

Hell, the lack of a "real story" is emerging right now!

Just watch the Lib/Socialist controlled MSM Nightly News any night of the week if you have any doubt.

Thu, 03/07/2013 - 00:23 | 3307673 old naughty
old naughty's picture

ACP,

you're assuming the nightmare will sustain, as it happens?

 

It may not...whether or not, we heed the messages from out there?

Meteor over Russia; Speedy one closing in on Mars; etc.

Fuku fishes...

Thu, 03/07/2013 - 01:13 | 3307767 Big Slick
Big Slick's picture

Kuntsler has some opinions worth considering, BUT I'M ALWAYS SKEPTICAL of folks who actually admit that they VOTED FOR OBAMA... twice.

http://www.zerohedge.com/news/2013-02-16/james-howard-kunstler-dangers-a...

Thu, 03/07/2013 - 05:37 | 3308025 Zwelgje
Zwelgje's picture

I'm here for the comments. Twice, holy shit.

Thu, 03/07/2013 - 08:32 | 3308203 SWRichmond
SWRichmond's picture

Agenda 21, bitches.  This is why I despise Kuntsler and his ilk.  Control control control.

Thu, 03/07/2013 - 09:42 | 3308343 dark pools of soros
dark pools of soros's picture

I had the same vibe.. He doesn't talk about living near farms. Just living in a limited fashion

Thu, 03/07/2013 - 11:09 | 3308596 Crime of the Century
Crime of the Century's picture

I will see you and raise you, my friend. I identified this as JHK tripe before I even clicked it. Right again! Good thing I didn't see the usage of "simulacrum" on the main page tease, as then I might have been tempted to think CH Smith. But then Smith isn't a sneering control freak with a little-g god complex. 

Thu, 03/07/2013 - 00:35 | 3307706 Lost My Shorts
Lost My Shorts's picture

I admittedly haven't watched the MSM nightly news in a long time, but ...

The late Peter Jennings who reigned at ABC for decades was openly Republican.  Bryan Williams at NBC always looked like he wanted to give GWBush a back rub and happy ending.  When the future looks back, they will see confused people posting comments in echo chambers about a reality that didn't exist.  Such as your lib/socialist MSM.  There is no such thing.

The MSM tends to mirror the Washington Elite -- fanatically pro-Israel and pro-empire on foreign policy and defense (in line with mainstream Republican views); socially liberal (soft on gays, abortion, school prayer etc.); corporate Republican on economic issues.  The MSM is certainly not Tea Party.  It's on balance corporate Republican.

Thu, 03/07/2013 - 00:54 | 3307737 wee-weed up
wee-weed up's picture

The late Peter Jennings and the current Bryan Williams were/are Lib/Socialist elites and what you say is not only preposterous, it is a bald-faced lie!

Thu, 03/07/2013 - 01:10 | 3307790 Big Slick
Big Slick's picture

"The MSM is certainly not Tea Party"  

The only accurate (though completely obvious) thing that Lost Shorts typed.

Thu, 03/07/2013 - 00:56 | 3307751 ACP
ACP's picture

He may have been conservative, but was not a US citizen until 2003, so maybe he was pro-Conservative, but not Republican until at least 2003.

Thu, 03/07/2013 - 00:47 | 3307734 ACP
ACP's picture

Yeah, that's the problem with the human condition...every time humans create an era of prosperity, the sociopaths and psychopaths always seem to find a way to fuck it up by:

1) Abusing the system created by responsible parties for personal gain,

2) Using the wealth created by said system to demonize the people who created the system in the first place!

Fortunately, evolution is a very powerful and undeniable force and will put an end to the bullshit, but not before a protracted period of pain and suffering. It's coming, just make sure you give no quarter and provide no charity to the infection that destroyed the host.

 

Thu, 03/07/2013 - 01:01 | 3307766 Ignatius
Ignatius's picture

You might take your thinking a lot further if you lose the solid tin labels and reference frames given to us by others ("Liberal/Socialist/Communist/Conservative", etc.).  Banks and corporations are running the show and left unchecked they will bury us all and gobble up every last bit of excess value in whatever territory they operate.  Who benefits?  Is the system being run for the benefit of the population at large or for those who run it? Follow the fuckin' money....

Thu, 03/07/2013 - 14:03 | 3309244 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

Oh please not another whine about the "Lib/Socialist" media from a fool placing blame on only one side of the false left/right dichotomy.  The whole system is f&*%ed and the so called "left" and "right" consist mostly of morons who believe in it.  As far as the lack of future of suburbia, it is mostly the "right" that refuse to face facts, they of the "drill baby drill" bumper sticker idiocy.  The illusion will end no matter what brand of dillusion you subscribe to.  We are already are immersed in fake money but TPTB have been able to maintain a fake illusion that is is real.  They will not be so much able to create "fake energy" nor sell it as an illusion.

But go on with the scapegoating that your masters taught you...

Thu, 03/07/2013 - 14:03 | 3309245 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

Oh please not another whine about the "Lib/Socialist" media from a fool placing blame on only one side of the false left/right dichotomy.  The whole system is f&*%ed and the so called "left" and "right" consist mostly of morons who believe in it.  As far as the lack of future of suburbia, it is mostly the "right" that refuse to face facts, they of the "drill baby drill" bumper sticker idiocy.  The illusion will end no matter what brand of dillusion you subscribe to.  We are already are immersed in fake money but TPTB have been able to maintain a fake illusion that is is real.  They will not be so much able to create "fake energy" nor sell it as an illusion.

But go on with the scapegoating that your masters taught you...

Thu, 03/07/2013 - 00:35 | 3307705 Burnbright
Burnbright's picture

I have to agree with Wee here ACP. People still talk about FDR like he saved america from the depression, that Wilson didn't do enough to entervine. Or my favorite "historical fact" is that all deflation during the great depression was caused by our money being linked to Gold and not because... you know... banks were commiting fraud!

Thu, 03/07/2013 - 01:23 | 3307774 ACP
ACP's picture

I agree with Wee...just that the masses won't realize it until the massive failure of Keynesian economics bitch-slaps everyone in the face, HARD.

The Glass-Steagall act was eliminated in 1999...crash in 2008. Less than 10 years. It took 16 years for the first massive crash after the creation of the Federal Reserve in 1913. The BIG SHIT is getting closer and closer...

Edit: For those who may not know...the Federal Reserve was actually modeled after the German Central bank, which, with the help of the League of Nations, created the conditions that started WWII:

Federal Reserve Act Main article: Federal Reserve Act

Newspaper clipping, December 24, 1913

The head of the bipartisan National Monetary Commission was financial expert and Senate Republican leader Nelson Aldrich. Aldrich set up two commissions—one to study the American monetary system in depth and the other, headed by Aldrich himself, to study the European central banking systems and report on them.[143] Aldrich went to Europe opposed to centralized banking, but after viewing Germany's monetary system he came away believing that a centralized bank was better than the government-issued bond system that he had previously supported.

In early November 1910, Aldrich met with five well known members of the New York banking community to devise a central banking bill. Paul Warburg, an attendee of the meeting and longtime advocate of central banking in the U.S., later wrote that Aldrich was "bewildered at all that he had absorbed abroad and he was faced with the difficult task of writing a highly technical bill while being harassed by the daily grind of his parliamentary duties".[148] After ten days of deliberation, the bill, which would later be referred to as the "Aldrich Plan", was agreed upon. It had several key components, including a central bank with a Washington-based headquarters and fifteen branches located throughout the U.S. in geographically strategic locations, and a uniform elastic currency based on gold and commercial paper. Aldrich believed a central banking system with no political involvement was best, but was convinced by Warburg that a plan with no public control was not politically feasible.[148] The compromise involved representation of the public sector on the Board of Directors.[149]

Aldrich's bill met much opposition from politicians. Critics charged Aldrich of being biased due to his close ties to wealthy bankers such as J. P. Morgan and John D. Rockefeller, Jr., Aldrich's son-in-law. Most Republicans favored the Aldrich Plan,[149] but it lacked enough support in Congress to pass because rural and western states viewed it as favoring the "eastern establishment".[2] In contrast, progressive Democrats favored a reserve system owned and operated by the government; they believed that public ownership of the central bank would end Wall Street's control of the American currency supply.[149] Conservative Democrats fought for a privately owned, yet decentralized, reserve system, which would still be free of Wall Street's control.[149]

The original Aldrich Plan was dealt a fatal blow in 1912, when Democrats won the White House and Congress.[148] Nonetheless, President Woodrow Wilson believed that the Aldrich plan would suffice with a few modifications. The plan became the basis for the Federal Reserve Act, which was proposed by Senator Robert Owen in May 1913. The primary difference between the two bills was the transfer of control of the Board of Directors (called the Federal Open Market Committee in the Federal Reserve Act) to the government.[2][140] The bill passed Congress on December 23, 1913,[150][151] on a mostly partisan basis, with most Democrats voting "yea" and most Republicans voting "nay".[140]

Wed, 03/06/2013 - 23:56 | 3307608 fourchan
fourchan's picture

post apocalyptic ghost citys in china

Thu, 03/07/2013 - 11:12 | 3308604 Big Slick
Big Slick's picture

I think you meant 'in Michigan'

Thu, 03/07/2013 - 12:32 | 3308930 TheFourthStooge-ing
TheFourthStooge-ing's picture

In the case of Michigan, wouldn't those be pre-apocalyptic ghost cities?

Thu, 03/07/2013 - 15:17 | 3309488 mick_richfield
mick_richfield's picture

pre.

Wed, 03/06/2013 - 22:56 | 3307430 true brain
true brain's picture

We're discussing it right now. But now the majority does not care as long as the tv is on. Wait, is that the Simpsons on right now. Got to go. Got to catch this episode. I love that Mr. Burns. He reminds me of the bankster- the bald headed one, who is the head of Goldman sach.

Thu, 03/07/2013 - 11:13 | 3308610 Big Slick
Big Slick's picture

(rubbing his hands) "EX-CELLENT!"

Thu, 03/07/2013 - 11:15 | 3308622 Big Slick
Big Slick's picture

Blankfein reminds me more of the Emperor in Star Wars:

"Everything is proceeding as I have forseen."

http://www.youtube.com/watch?v=LAf0QnLFS7Q

Wed, 03/06/2013 - 23:01 | 3307449 kaiserhoff
kaiserhoff's picture

Yes, crab grass and cocker spaniels are the bane of our existence: the source of all woe and misery.  Why didn't I see that before?

Or maybe it's just "breeders."

The gay term for those of us who are just normal, sane, and hopeful enough to have children.

Thu, 03/07/2013 - 05:31 | 3308019 Dr. Sandi
Dr. Sandi's picture

Keep it in your pants and keep it to yourself.

Thu, 03/07/2013 - 06:31 | 3308056 stacking12321
stacking12321's picture

hopeful? more like delusional.

besides, you're already redundant, the world doesn't need more copies of you.

you are not a unique and beautiful snowflake.

Thu, 03/07/2013 - 15:43 | 3309574 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

Nowhere in the post was anything said about "breeders" but I laugh at your using the the words "sane" and "hopeful to have children" in the same sentence.  Having children at this juncture in time is anything but the definition of sanity.  Now someone who really wants children and is willing to put the tremendous amount of time and effort towards creating some sort of future for them while things around you are spriralling downward go for it but from the tone of you post I'd betting against that. 

There are 7 billion people in the world and the number keeps growing.  This is not going to be sustainable much longer.  But go on believing your special little snowflakes will be spared when the sh!t hits the fan.

Wed, 03/06/2013 - 22:52 | 3307410 otto skorzeny
otto skorzeny's picture

I think the stupidity discussion will be based on fueling our vehicles with edible food products

Wed, 03/06/2013 - 22:56 | 3307428 Totentänzerlied
Totentänzerlied's picture

Comparing America to Rome, is insulting ... to Rome.

Thu, 03/07/2013 - 00:09 | 3307640 akak
akak's picture

"Suburbia delenda est!"

Thu, 03/07/2013 - 15:20 | 3309494 mick_richfield
mick_richfield's picture

In pace requiescat.

Wed, 03/06/2013 - 23:11 | 3307488 tickhound
tickhound's picture

If we're still using "money" 2,000 years from now the human race deserves whatever lack of science, discovery, free will and imagination it imposed on itself.

Thu, 03/07/2013 - 00:45 | 3307729 GMadScientist
GMadScientist's picture

Definitely a function of what you mean by "money"...if it's still debt-based credit money like today, then I agree with you, but there's utility yet in those puka shells.

Wed, 03/06/2013 - 23:29 | 3307531 Dr. Engali
Dr. Engali's picture

You really think there will be people around 2000 years from now? We will be lucky to make it through this century.

Thu, 03/07/2013 - 04:57 | 3308004 Parrotile
Parrotile's picture

Making it through this decade is starting to look rather optimistic . . . . .

Wed, 03/06/2013 - 23:37 | 3307561 Mr. Saxby
Mr. Saxby's picture

2000? Try 100. We are the generation that had the choice that future generations will not and we chose self-interest.

Wed, 03/06/2013 - 23:46 | 3307587 Cloud9.5
Cloud9.5's picture

Two thousand years from now, none but a few clerics will even know we existed.

Thu, 03/07/2013 - 01:20 | 3307809 algol_dog
algol_dog's picture

Doubt there will be anything of the likes of our current money system, paper, metal, or otherwise, in 2000 years ...

Thu, 03/07/2013 - 03:18 | 3307941 q99x2
q99x2's picture

This is true if people exist 2,000 years from now.

Thu, 03/07/2013 - 04:58 | 3308006 Parrotile
Parrotile's picture

"It's Life, Jim - but not (quite) as we know it!"

Wed, 03/06/2013 - 22:49 | 3307401 CPL
Wed, 03/06/2013 - 23:08 | 3307475 Freddie
Freddie's picture

Hope and Change. 

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