Our New Look (Due to Readers' Complaints)

The Clusterfuck Nation Chronicle
Commentary on the Flux of Events

by Jim Kunstler   

Home

or, for previous chronicles click on
Clusterfuck Nation Archives


Tuesday, September 6, 2005,
     We've entered the blame-o-rama phase of Hurricane Katrina. I actually heard Homeland Security Secretary Michael Chertoff sparring with NPR's Robert Siegal on the air last Thursday, and a more weasily performance than Chertoff's would be hard to find in any bureaucratic circle of hell. FEMA chief Michael Brown gave new dimension to the word "clusterfuck" by blocking private charity shipments of food and water into New Orleans and making the armed forces "work around" his agency in order to get anything done. And it was revealed yesterday that a navy hospital ship idled with empty beds off the Louisiana coast without orders while old people died slow deaths on the sidewalks outside the Convention Center.
    There has already been one proposal for rebuilding the city, from Daniel Libeskind, whose proposal for turning the World Trade Center site into the set for a German expressionist horror movie won the hearts and minds of the architectural mandarins in New York. Libeskind said that New Orleans should adopt a jazz theme. Wow! Maybe they should think about serving Creole food to go with it.
     The actual tendency in practice, is to build back pretty much what was there before, because the insurance companies demand it. If a strip mall was washed away, then the insurer will only finance the rebuilding of a strip mall. This is most unfortunate, particularly for those places further east of New Orleans along the Gulf Coast, and a hundred miles inland, because they were composed primarily of suburban sprawl. If they rebuild along that template, they will do so in the face of strong signals from reality that the age of Easy Motoring is over. The romance of the car may be too great to overcome in Dixie.
      We have as yet no word how the cluster of downtown skyscrapers in New Orleans proper fared, but there is a good chance that some of them will not survive the damage to their foundations. It would be a shame to rebuild priapic towers in a new era when the urban norm probably should not exceed seven stories (the walkable limit for buildings with stairs). All our big cities will be contracting in the years ahead, as the electric grid becomes less reliable, and the demographic trend of the past two hundred years reverses, with populations shifting back to small towns and agricultural regions. It was interesting to see, finally, that the driest place in New Orleans was the French Quarter, the original settlement.
      The poor neighborhoods were composed largely of shotgun shacks, little post-war brick bunkers, and government-built housing projects. Virtually all of them appear to be ruined. I'd guess that few were insured, and the insurers will probably try to label it "flood damage," which generally exempts them from paying out. The population that inhabited them is now dispersed, and some of those who feel that they lost everything may not return. These neighborhoods will be blank slates. But they will also remain low-lying in relation to a coastline that is losing its wetland buffers against an ocean that is seeing a cycle of more violent storms, probably due to global warming. Anything new built in these wards will not be insurable.
     Meanwhile
momentous things are swirling in the background. The price of gasoline may retreat sometime in two to six weeks, but I doubt it will fall below the $2.50 range again. In fact, having gone way above the psychological barrier of $3.00, the gasoline retailers may resist falling below that. There have been no new oil refineries built in the US since the late 1970s. There will be no new ones built now, despite the crunch on refined "product." Why? Because the oil companies understand that they are in a twilight industry and refineries represent huge investments in future activity, which the corporations correctly perceive will be shrinking as global oil production passes peak.
     The biggest shock to the public lies a couple of months ahead when the cost of natural gas for home heating (50 percent of the dwellings in America) combines with stubbornly higher pump prices to whap them upside the head. Natural gas at around $12.00 is now many times what it cost as recently as 2003 ($3.00). A lot of Americans will be shivering this winter and some of the weak, old, and poor will die as a result.
     President Bush has already taken a hit on his appointees' Chinese Fire Drill response to disaster management. But the toll from the energy problems the whole nation faces will be more insidious. Strapped for cash from filling their gas tanks, unable to buy Christmas presents at WalMart, and huddled around space heaters, the public will be wondering why they were so poorly prepared.


Thursday Sept 1, 2005
      Posting a little out of phase due to Labor Day holiday, and will return on Tuesday, but some things worth commenting on about the aftermath of Katrina.
      People are emailing me to ask is this the start of the Long Emergency?
      It is certainly an event of great significance. The effects of damage to our oil and gas infrastructure in the Gulf of Mexico is already being felt in rocketing gasoline prices and a burgeoning supply crisis, especially in the southeast. The home heating situation is becoming a crisis before householders even turn their furnaces on. Half the houses in America are heated with natural gas, which is now clocking in at $12 a unit (1000 cubic feet). It was $3 a unit in 2003. It could go to $16. Connect the dots.
     The crisis at the gasoline pumps will thunder through the economy, most ominously in the bubble suburban sprawl-building sector, which adds up to over 40 percent of business activity in the US. How many people will now contemplate buying a new McHouse 32 miles outside Atlanta (or Dallas, or Kansas City, or Washington), and what will happen in the production home-building industry as a result?
      What will happen in the financial sector when the no-money-down-interest-only mortgage racket ceases to generate ever more hallucinated tradable debt? What will happen to Fannie Mae and Freddie Mac, the two federal governments sponsored entities at the center of that racket, and to their sponsor, whose treasury certificates are held by nervous foreign investors? And finally what happens to a dollar hammered by high energy costs and repatriated treasury certificates?
      Turning to New Orleans. . . viewing the hurricane damage on TV, it is hard not to conclude that most of the building stock in the city is irreparably ruined. One can't help feeling that the city we knew and love is really gone forever. Some kind urban settlement will remain, but New Orleans' downtown of hotel towers and megastructures may be the first comprehensive ruin of the Modernist city. Much of the stuff just outside New Orleans, and along the Gulf Coast, was largely post-war suburban fabric -- collector boulevards with their complements of fry pits, malls, muffler shops and subdivisions.
We'd hope that the states of Alabama, Mississippi, and Louisiana will not undertake to rebuild them they way they were. The era of easy motoring is over now, and to rebuild suburban sprawl would be a double tragedy.
      Of the desperate behavior seen in New Orleans this week, I don't have much to say right now. The significance of it is largely self-evident. The suffering of the people stuck in the Superdome is very impressive, though. One wonders at the failure of FEMA to airdrop water and food to those stuck on highway overpasses and in high-rise buildings such as CharityHospital.  On the agenda next, I'm sorry to say: cholera and typhoid fever. I'll be back here on Tuesday.

 

August 29, 2005,
     Waiting for Hurricane Katrina to land on New Orleans this morning, the news reports are ominous. But the photo above (posted on Internet news services) says a lot to me about the current condition of the American people. While we know many of those who sought shelter in the New Orleans Superdome are poor and without means of escape, they end up trapped in the high priced seats passively awaiting a spectacle that may destroy their way of life. Fate becomes just another spectator sport.
     It seems possible to me that we will be seeing gas station lines all over America within the week.
     With that, I yield to this week's excellent guest columnist.

ON WHY HIGH IQ FAILS US, THE FREAKONOMICS OF PEAK OIL, AND HORSE BREEDING, MANHATTAN STYLE

by Dmitry Podborits

Part One

I find myself in a very strange situation. Everywhere I look I see very smart people expressing confident opinions about some future developments of various large and small-scale financial and economic phenomena. One might assume that these opinions should somehow filter into various decision making processes for for various kinds of analytical, strategic and tactical thinking. Therefore, one might hope that the opinions expressed by the smartest people with the most confidence are the most informed, balanced and rational.

However, often I observe the opposite trend: the smarter the people are, the less they are interested in the world around them and the more confident their opinions become. Under these conditions, high IQ becomes almost a handicap. It is almost as if a storm would be forecast and a person would be warned to seek shelter, and his response would be – "Don't try to scare me – I am too smart to seek shelter. I am confident in my ability to always outsmart the storm".

You would think that his level of confidence would be correlated with the information the person has about the severity of the coming storm. But no, the person is not even interested in the storm. He cheerfully observes that he has little understanding of storms in general and has not even bothered to look into the information gathered by others about this particular approaching storm. He is not interested in these things. This, however, does not affect the confidence of his opinion or forecast which (the confidence) is based solely on understanding himself as a smart, high-IQ person. And this is something that is hard to argue with – yes, he is smart, "high IQ" is written all over his forehead. Nevertheless, you almost wish he wasn't, since high IQ makes him more vulnerable, not less, and his forecast more flawed.

One can speculate on the origins of this paradox. There is a well-researched phenomenon in evolutionary biology called Zahavi's handicap principle, which establishes that certain types of animal morphology and behavior evolve precisely because they reduce the animal's fitness and penalize its chance for survival. A peacock's tail is an obvious example. One can observe that a peacock's tail is almost "deliberately designed" to introduce a higher cost for survival for the host animal and therefore to communicate to others (including predators and potential mates) that the peacock-carrier of the larger tail is the animal with superior genes.

I propose that a very smart person deliberately ignoring reality and expressing extremely shallow opinions with extreme confidence based on no thinking at all behaves much like a peacock advertising to predators his costly tail. The message that he broadcasts is basically this: "Look at me -- I am so obviously smart that I can deliberately make extremely dumb statements with a very high degree of confidence; it takes a really high-IQ person to totally ignore reality and still be this confident in his forecast".

Under these circumstances, the worst possible thing someone on the receiving end of an "opinion" can do is to assume that smarter people express more informed, more based-on-reality, and more rational opinions. I cannot warn people strongly enough: beware of smart people expressing confident opinions or forecasts.

A case in point – a recent series of commentaries on the topic of "Peak Oil" by two eminent economists (and self-described "rogue" economists) who wrote an award-winning and best-selling book, Freakonomics. The book, which I greatly enjoyed (in the audio version) discusses various phenomena traditionally viewed outside the realm of economics from the classical economics standpoint. The book is well-written, insightful, makes a number of interesting observations and very quickly appeared on multiple bestseller lists.

I'd like to note, however, that the self-definition of the Freakonomics' authors as "rogue" economists is largely misleading. The success of the book is based on the application of the known patterns of human behavior -- the chief of which is the generalization that "people respond to incentives" -- to the analysis of human dynamics nontraditional to the economics at large, such as illicit drug dealing and abortion. Obviously, if one can talk about "the economics of Hollywood" and "the economics of healthcare", one can also talk about the economics of crack-cocaine, because in all cases it is ultimately the human behavior that underlines all of these dynamics. In this sense, the authors are not really "rogue" economists, as they do not undermine any of the reigning economic principles; they embrace them and apply them to the areas of human behavior unfamiliar to the economics as practices by the "economic establishment" (if there is such an institution).

The problem starts, however, when the "freakonomists" begin to obnoxiously profess that since some dynamics can be understood within the context of human behavioral patterns, then all dynamics can be understood with human behavioral patterns.

One such dynamic of supreme importance centers around the Peak Oil phenomena that has finally entered into the mainstream of public debate, as evidenced by the Peter Maass' article in New York Times magazine. Jim Kunstler criticized Maass' article last week for being wishy-washy about the issue of Peak Oil; to his criticism I would add that Maass in the article dedicated in part to the research by Matt Simmons noncritically repeats the official Saudi number for total recoverable Saudi oil reserves as 260 billion barrels (the claim never substantiated in public statements by field-by-field breakdown by Saudi Aramco or the Saudi government), while analyses abound by Simmons, Campbell, McKillop and other authoritative industry observers claiming that the official number has no basis in reality.

Nevertheless, I believe that the Maass' article is a valuable and welcome development since it increases, not decreases the overall public understanding of the Peak Oil phenomenon.

Freakonomists, however, confidently claim that the Peak Oil will be a non-event. In the leading commentary on the topic in the authors' blog, titled "Peak Oil: welcome to the new media's version of shark attacks," and then in the follow-up commentary, they ridicule the PO phenomena as a media-fabricated frenzy and portray the people analyzing this topic as a new incarnation of obscure alchemist tinkerers -- charmingly ridiculous in their doomed determination, but harmless.

On what basis? After all, the freakonomists cheerfully state that "I don't know much about world oil reserves. I'm not even necessarily arguing with their facts about how much the output from existing oil fields is going to decline, or that world demand for oil is increasing. But these changes in supply and demand are slow and gradual -- a few percent each year."

Well, this is how they describe their worldview:

"What most of these doomsday scenarios have gotten wrong is the
fundamental idea of economics: people respond to incentives. If the
price of a good goes up, people demand less of it, the companies that
make it figure out how to make more of it, and everyone tries to
figure out how to produce substitutes for it. Add to that the march of
technological innovation (like the green revolution, birth control,
etc.). The end result: markets figure out how to deal with problems of
supply and demand.

Which is exactly the situation with oil right now. I don't know much
about world oil reserves. I'm not even necessarily arguing with their
facts about how much the output from existing oil fields is going to
decline, or that world demand for oil is increasing. But these changes
in supply and demand are slow and gradual -- a few percent each year.
Markets have a way with dealing with situations like this: prices rise
a little bit. That is not a catastrophe, it is a message that some
things that used to be worth doing at low oil prices are no longer
worth doing. Some people will switch from SUVs to hybrids, for
instance. Maybe we'll be willing to build some nuclear power plants,
or it will become worth it to put solar panels on more houses."

And finally, the last nail in the coffin of these pesky Peak Oil doomsayers:

"As [Maass] notes, high prices lead people to develop substitutes.
Which is exactly why we don't need to panic over peak oil in the first place."

The scariest thing for me here is not the flimsiness and the stupidity of the rebuttal, but the CONFIDENCE and the LACK OF INTEREST IN THE REALITIES OF THE WORLD that they are pronounced with. Even scarier,
however, is that these commentators are smart people with high IQ, regarded throughout the world as authorities in economics. When these two talk, many listen.

Of course people respond to incentives! Of course markets will attempt (as they have been attempting for a long time, without success) to find substitutes within the same basic economic structure.

However, is there a physical law stating that an adequate substitute, fitting into any existing infrastructure and cost structure, and satisfying the needs of any living arrangement, has to exist? I wish the freakonomists were there with me during my various travels -- from Mexico to Greece to Alaska -- where I saw communities of various scales abandoned and in ruins because the populace couldn't find at sufficient cost and quantities the resources they have come to depend upon, from water to arable soil to fish in the sea to mineable minerals. What if the vast literature dedicated to discussing the inadequacy of all currently known putative replacements for cheap oil has a point?

So, if we are not lucky enough to find a sufficient replacement for cheap oil, what will our response be? How will we, so to speak, respond to incentives?

Well, as Kunstler euphemistically puts it, "we will have to make other arrangements." This will basically mean that the society will change its very fabric and structure in response to the post-cheap oil circumstances.

The structure of the "new arrangements" arrangement may be, however, very unfamiliar from the point of view of "the world as we know it" -- a Maass' term that the freakonomists disagree with. I also think that a better term would be "the world as we practice it".

For example, one of the "responses to incentives" can be described as "making do with less", as in malnutrition or starvation.

Another response under the same circumstances can be described as "going to war".

Yet another response can be described as "mass migration away from the areas that have become uninhabitable, into the still habitable areas whose longtime residents would not be too happy to share their own resources with the newcomers".

And yet another response could be described as "reorganizing the economy around local food production".

Of course, there could be still other arrangements including elements of several or all of the previous four, plus some other yet unmentioned. However, they all would reflect "the new equilibrium" of the post-cheap oil world.

If someone can show me that a perfect market and even a lessaiz fair economy cannot respond to incentives along these lines, I would be very interested. I think that a big mistake that the freakonomists make even in their "pure economic," i.e. maximally abstract, nonspecific and detached-from-reality considerations when they dismiss any changes, is that they equate the notion of a market economy with the notion of a growing economy, and also with a consumer economy. These, however, are not the same things. A market economy, for example, can remain such even while becoming, under post-cheap oil circumstances, a contracting or imploding economy. How this scenario would correspond to the notion of the consumer economy I would leave as an exercise to the esteemed freakonomists.

Furthermore. I have carefully looked at the economic side of the argument and have not found any substantiation of the claim that "the changes in supply and demand would be slow and gradual – a few percent per year." I don't see how even against the backdrop of a perfect market economy, say, Ghawar's production cannot collapse fairly quickly due to geological maturity and overinjection of seawater, as Simmons suggests. I don't see how the same cannot happen with any other of the currently producing fields, or several fields at once at some point in the fairly near future. What cutting-edge economic thinking precludes, for example, the oil province of Saudi Arabia to start declining at the rate of, say, North Sea or Alaska's North Slope?

The authors claim:

"If oil prices rise, consumers of oil will be (a little) worse off.
But, we are talking about needing to cut demand by a few percent a
year. That doesn't mean putting windmills on cars, it means cutting
out a few low value trips. It doesn't mean abandoning North Dakota, it
means keeping the thermostat a degree or two cooler in the winter."

It appears to me that the authors somehow missed in their analysis that the decline of, say, 5% per year in consumption of fossil fuels (against the backdrop of, say, 1% of overall population growth due to demographic reasons and mass migration away from the areas hit the hardest) would translate into a roughly 50% of fossil fuel usage reduction after 10 years. That's the core of the PO argument with which the authors "are not necessarily arguing with" -- that past peak, the oil production will continue to fall, as it will take ever-increasing heroic expenses to keep it flat, and any successes in keeping it flat will be necessarily temporary.

So, in a dozen of years in this scenario -- probably still within the economic life time of a brand new Hummer H2, which has by then recently descended from a factory conveyer somewhere in the state of Michigan on the day the oil has peaked (that day will be known only post factum, of course), purchased through an employee incentives discount and financed on credit, the owner will have to cut a nonessential 50% of his overall driving, keep the thermostata mere 25 or 30 degrees lower and face doing more of the same in subsequent years, all without abandoning North Dakota, or making any other lifestyle changes.

One could comment that the "freakonomists" seem to have gone pretty far in life for people exhibiting the kind of thinking (as well as the level of confidence in their own thinking) that they demonstrate. This observation helps matters very little, though. It is not the shallowness of their analysis, total lack of interest to the underlying realities, and a 15 second attention span -- it is how widely and noncritically such views are accepted that I find most disturbing here.

Part Two

On a more general ground, it is interesting to revisit the earlier made point that when supply/demand imbalances occur, the structure of the society changes in response. This goes very contrary to the central dogma of "freakonomics" (which is really traditional economics in disguise), that as supply/demand imbalances occur, mysterious market forces "make sure" that the adequate substitute is found, irrespective of the laws of physics, chemistry and geology.

Basically, this means that the structure of any observed society (that is not in a state of flux or discontinuity) reflects the balance between supply and demand of all critical commodities, existing in that society.

It also means that when new types of products, services and commodities become available through, say, geological discoveries or the efforts of inventors and innovators, or opening of the new trade routes, the demand for them does not occur immediately, but only builds up gradually and with much effort and large energy expenditures (witness, for example, the enormous expense companies go through in order to get their product accepted in the market), because such penetration of the new product into society essentially means restructuring the society around the newly available product.

This is illustrated by the history of penetration of absolutely indispensable items into the current North American living arrangement such as automobiles, computers, mobile phones and commercial airliners. Take away any one of them (much less several of them), and the structure of the society will change dramatically. However, when these items were introduced, they did not get incorporated into the then-existing living arrangement immediately and without effort. When they finally gained widely acceptence, they forced change, or restructuring, of then-existed living arrangement.

There is an observable diminishing returns effect here: further innovations do not create demand for new products if the new products do not "knock out" already established products occupying the same niche in the existing living arrangement. Thus, a person who was forced to buy a new computer (maybe even reluctantly) when the societal structure changed around him so much that the computerless life no longer adequately worked, may have less incentive to upgrade, even if the new computer, on its own, is overall better, cheaper and shinier.

In this light, maybe certain utterances commonly ridiculed as shortsighted may be viewed more charitably in the new context. Take, for example, the famous pronouncement of a top IBM executive circa 1950 that in the entire world there is market for maybe five computers. That statement reflected the realities of the living arrangement of the time, that's all. Yes, it is an absurd statement from today's standpoint because it would take tremendous changes in the societal structure to have computers as ubiquitous as we observe them today. However, it is extremely hard even for a very smart person immersed in the daily realities of his busy life to imagine, let alone anticipate, the changes in the societal structure that are lying ahead.

It may be just as difficult for some to imagine the extent and the direction of the societal changes that will result from the supply/demand imbalance (from today's arrangement's standpoint) in the energy supply. This is another notion that freakonomists ridicule without realizing how vulnerable and superficial their criticism looks.

For example, is it possible that in the post-Peak Oil world the price for oil would decline? Yes, of course it is possible -- without even finding the adequate substitute for oil. For example, disappearance of commercial airlines from the historic scene and inability of air travel for most people would make it possible (for a while).

Now, a society without air travel would be a differently structured society, wouldn't it? It would solidly fall within the "other arrangement" notion. There go a lot of things currently taken for granted, such as high mobility, tourism, globalization, and so on. But yes, it is possible -- within the context of a perfect market economy. I would even venture to assert that it is far more probable than finding an adequate substitute for oil. This kind of a change would fit well within the currently understood natural laws scheme.

Is it difficult to imagine a world where some of the ingredients for something like affordable air travel might not be adequately available, and it would have never, so to speak, taken off? Wouldn't our current necessities deemed indispensable today in the easy air travel world seem strange and foreign to people inhabiting that, alternative, living arrangement?

The "efficient markets" religion is so pervasive that people who make pronouncements in the spirit of the freakonomists do not even stop to look around them and think what they are really saying. Where does it come from that a perfect market society has to satisfy every human need?

Well, here is an example of a market society which is still relatively very wealthy: the United States circa 2005. And here is a basic need which even an economist would not dare to dispute: adequate health care for its population. In this society with about 40 million medically uninsured (some of which resort to pulling out their own decaying teeth with pliers, as Malcolm Gladwell reports in The New Yorker), and with the medical care and insurance industries virtually in the crosshairs of the economic "science", how can this market aberration be possible?

Clearly, this need in healthcare can be satisfied under some other living arrangement, as evidenced by countries where we do not observe such a large contingent without medical care. No laws of physics, chemistry and geology would need, most likely, to be changed for that; maybe only something in the public psychology and the currently existing system of priorities and values. What makes people think that under dramatic increases in the cost of energy, much reduced mobility, etc. other life support systems in the currently arranged society (such as, for example, food production and distribution, law enforcement, finance, government services, etc.) will perform better than the healthcare performs currently?

Finally, I'd like to observe the following seeming paradox from the "efficient markets will satisfy every need" standpoint.

I note that many of the residents of Manhattan, as a segment of the US population, are doing better financially than the average, and have more discretionary income. Some of these well-off Manhattanites happen to be economists, and some happen to like horses at the same time.

As it presently stands, horse breeding is generally incompatible with the life in Manhattan. Therefore, the stables in which the economists' keep their horses are typically located far from Manhattan, in places like Long Island, New Jersey and Upstate New York. This circumstance creates, I would assume, a major inconvenience for the economists who visit their hooved friends during the weekends (consider the stress of long distance driving, tunnel tolls, road rage, harassment by truck drivers and other unpleasant circumstances).

It would have therefore followed from the efficient market principle that the economists would be willing to pay extra, if someone figured out a way, or a substitute, that would allow them to keep horses right there, in Manhattan and avoid the inconveniences.

It is possible that someone already tinkered with, say, breeding smaller and smaller horses to fit a Manhattanite's lifestyle, but such substitutes didn't take off, probably because they wouldn't provide the potential clientele with the adequate horse experience. So, this way or another, the current economists' living arrangement for those of them who combine both horses and Manhattan in their lives has been restructured around certain inconveniences. The inconveniences, it appears, are here to stay.

I wonder, how this discrepancy might be explained by the freakonomics worldview.

_________________________________________________
Dmitry Podborits was born and grew up in Odessa, (then the USSR).
He immigrated to the US in 1991.
He specializes in analytical software for interest rate derivatives
and works in a major investment bank in New York City.

August 22, 2005
      Delusional thinking about oil was everywhere in the media last week -- as thick as advertising. Early in the week, Yahoo Finance ran a story with a headline (I paraphrase): "DOW Up Fifty Points as Oil Prices Plunge." The plunge they referred to was oil going from $63.90 a barrel to $63.30. Some plunge. This was after five days of oil ratcheting up out of the high $50s. (It ended the week around $65.)
     NPR's Marketplace show and a separate wire story piece on the web offered similar headlines (or lead-ins) which said (again I paraphrase) "US Economy No Longer Affected By Oil Prices." Of course, this is exactly the kind of magical thinking you'd expect to see in a public on extended leave from reality, despite the ubiquity of "reality television." The accepted idea is that since America outsourced most of its heavy industry to China and elsewhere, we now have an economy that runs just fine on Tic-tacs and Diet Pepsi, and oil is not in the picture anymore.
     Wrong.
America consumes one-quarter of the world's daily production of 84 million barrels of oil. More than half of our share is burned in cars and trucks. In fact, our economy now amounts to little more than running 200 million motor vehicles around the suburban metroplexes in the service of ever more slapped-together McHousing developments, big box stores, and fried chicken huts. That's our economy. That's all we do anymore.
      The New York Times chimed in with a cover piece in its Sunday Magazine titled The Beginning of the End of Oil? by veteran journalist Peter Maas. It presented a story that has been around the Internet for more than a year, based on investment banker Matthew Simmons' frequent public speeches about the apparent weakness in the Saudi Arabian oil industry (which Simmons published in book form last month as Twilight in the Desert). Apparently the Times editors have been mulling over the oil story for months and months, wondering if there is anything to it, and perhaps the movement of oil prices into the $60-plus range finally prompted them to run with it.
     Maas's article is full of howling omissions and delusions. For one thing, Maas omits any serious reflection of the consequences of a global energy crisis, any specters of geopolitical blowback, or potential problems for America's non-negotiable easy-motoring way of life.
That omission grows out of the delusional assumption that some magical market mechanism will conjure up a menu of just-in-time replacements for the vanishing oil. These are referred to as "alternative technologies," a term that points to a more fundamental delusion now rampant among the public, namely the mistaken belief that technology and energy are the same thing, that they are interchangeable, that you can substitute one for the other. Out of oil? Get new technology.
     Note to public: technology and energy are not the same things, and continuing to think that they are may place our civilization in jeopardy.
     The bottom line of the Times Sunday Magazine article is that they are still not convinced that global peak oil is for real, or that we necessarily ought to be worried about it, with all that "alternative technology" banging around out there in the innovational ethers of the magical market. They bring a magisterial cluelessness to the issue -- while the back pages of the Magazine are devoted to hawking the glitziest high-end products of the suburban housing bubble.
     Finally there was the Sunday Times'
editorial, "Foolishness on Fuel," which was really about the editors own foolishness. It essayed to assert that America's oil problem was entirely a matter of vehicle fuel efficiency -- with the presumption that our problems would go away if only congress had the spine to mandate higher gas mileage figures from the car industry. The editorial completely failed to recognize that there was any problem with extreme automobile dependency itself, that maybe we should be making other arrangements -- say, walkable communities, or railroad service on par with what they have in Latvia, or local economies liberated from the despotism of WalMart.
      This week's performance by the media on oil issues shows how America will dissemble its way into a dark era.

August 15, 2005,
     Before I even get started, I will qualify my remarks this week by reminding you 1.) I'm a registered Democrat, and 2.) I'm not "pro-war."

     So yesterday afternoon while working outside, I was listening to Harry Shearer's Le Show on National Public Radio. Le Show is a patchwork of skits and news commentary by the actor/comedian who played one of the rockers in This Is Spinal Tap, and who has since shown up in several Christopher Guest mockumentaries such as A Mighty Wind.
     So Shearer was on the radio and I'm not crazy about his show because he puts across a self-congratulatory air of moral superiority that, after a while, gets on my nerves. Yesterday, he was twanging on the Iraq War again and especially on the notion that the public was swindled into entering it on the phony pretext of "weapons of mass destruction( WMDs)," with the implication that he was a superior person for having figured this out.
     Anyone who reads this blog regularly knows that I regard the standard WMD argument as fatuous (turned out there was nothing there, so we shouldn't have gone in and looked"). But this blog isn't about the WMD argument per se. It's about Harry Shearer's snotty assumption that our exertions in the Middle East -- however poorly or well we are managing them -- are only undertaken for the vanity and greed of George Bush & Co.

     Because as Shearer was twanging on about WMDs and Iraq and how deplorable the whole thing is, I started wondering about Shearer's real life in Los Angeles, and imagining him driving from his house in one of the better sections of the city to the studio where he does the show, or Shearer motoring across town to Melrose Avenue for sushi, or Shearer tooling up into the canyons above Hollywood to have drinks with friends, or Shearer transporting a child, perhaps, twenty miles down the freeway to a soccer game. And I was wondering what kind of car Shearer drove, and I couldn't help imagining it was probably not a cheap car, and perhaps not a little tiny car, and if Shearer was married or lived with somebody, then his wife / partner undoubtedly had a car, too -- because that's how life is lived in Los Angeles, despite some of their strides in public transit. And as I imagined Harry Shearer driving around Los Angeles in an expensive car deploring this terrible war in Iraq, I couldn't shake the feeling that Shearer was getting, so to speak, a free ride.
     Which gets back to the war per se. Because if anyone asked me to define what the war is about -- and people have asked -- I would say the war is a desperate attempt by the US to stabilize the region of the world where two-thirds of the remaining global oil supply exists in order for Americans like Harry Shearer to continue enjoying a lifestyle of extreme car dependency. Now, this war may be an exercise in futility and ineptitude by the people running it, while it includes acts of valor or brutality by the soldiers engaged in it, and certainly produces a lot of personal tragedy for the soldiers and the Iraqi people.
     But I have trouble imagining what Harry Shearer thinks the Middle East would be like now if the US had not overthrown Saddam Hussein and was not struggling to maintain this police station there in the hot center of things. Does he imagine it would be a tranquil scene, like the picture on a pack of Camel cigarettes? If Shearer couldn't get as much gas as he wanted on a given day -- even if he could pay high prices -- to fill up his Infiniti, or Beemer, or Benzie, or Toyota Landcruiser, or whatever he drives, would he be feeling quite so superior about the war? Has Harry Shearer seen any of his children join the army and go to Iraq to preserve his entitlement to drive all over Los Angeles in a spiffy car? Has Harry Shearer made any sacrifices so that he is less oil-dependent than he was before there was a war in Iraq?
     Harry Shearer with his attitude of moral superiority reminds me of my neighbor here in Saratoga Springs, the lady with the "War Is NOT the Answer" bumper sticker on her Ford Expedition. For people who want to keep on enjoying an easy motoring utopia, war is the answer.
     This, of course, is the predicament of the Democrats, my own party. They have no interest in modifying the nation's suicidal suburban sprawl lifestyle either, only in the easy pretenses of political correctness. Instead of twanging on WMDs and the depravity of the war in Iraq, I'd like to hear someone like Harry Shearer (or John Kerry, or Nancy Pelosi, or Harry Reid) stand up and pitch for restoring the US passenger rail system. I'd like to hear some of these assholes propose some meaningful changes that Americans can make in behavior so we won't be so desperate to engage in military contests over the oil we need to drive for sushi in Los Angeles.
     

August 8, 2005,
     Has the world noted that the conservative establishment in America -- including the always prim George W. Bush and his buttoned-down minions, the heavenly hosts of mass-market evangelism, the zillionaire retired CEO authors of how-to-get-rich books, and the media tub-thumpers like David Brooks of the New York Times -- I repeat, has the world noted that they all preside over the most slovenly, undisciplined, and reckless economy the world has seen since mankind started bathing regularly?
     Many are amazed at the levitation of a financial system with no remaining reality-based understructure of value creation. Zero-percent financing. Loans to anybody with a pulse. Instant conversion of hallucinated house value appreciation into speedboats and Hummers, college kids declaring bankruptcy on graduation at unprecedented rates
, the explosion of "creative" financial instruments conjured out of the promises of millions to pay back money that they will never earn, and swapped in a spiral of casino-like wagers into metaphysical ethers of delusion -- things like that. I sort of left out the pretend money that Mr. Bush's government itself affects to disburse, and the bond racket linked to that affectation.
     We're a country with no discipline, led by fake scoutmasters, moneygrubbing ministers, chiseling accountants, and oversexed schoolmarms. The new national motto: Something for Nothing. The new spiritual capital: Las Vegas.
     Now, it's my personal opinion that we really are headed for crash central this fall. The price of oil is entering uncharted territory. Natural gas has virtually tripled in price since 2003. People are beginning to fear that the heating season will be brutal for those in the employ of WalMart and worse for those in the employ of nobody. Magical as this phony-baloney over-leveraged economy has seemed, whatever remains of real life will be affected by higher gasoline prices. I know it sounds absurd to say that, because so far Americans have seemed to absorb a one year price doubling without complaint. But we're hostages to motoring, whether we like it or not, and when the price of gasoline goes north of $3 a gallon (coming very soon) yowls will be heard even in the soundproofed sanctums of Karl Rove's west wing headquarters.
     Trouble is brewing with WalMart's chief partner, China. They are ticked off that they are prevented from acquiring hard strategic assets, such as US owned oil companies, with all those US dollars we have snookered them into hoarding from the sale of their plastic-ware. Together with Russia, China is egging on the former soviet-o-stans to kick out our military bases. China is inking long-term supply contracts with the people we desperately depend on for our oil: Venezuela and Canada. China is tired of our tendentious jive. Pretty soon they are going to want to try to kick our ass. Let's hope they don't try that by making moves in central Asia, where our prospects for fighting a land war with them are not promising.
     Meanwhile, at home, we will come to grips with the sheer fact that a society unable to produce things of real value must contend with a tanking of those financial markers pegged to the expectation that a society can produced things of value. When that recognition hits, there will be far fewer zero percent loans and no money down ghost condo sales. The unwinding will begin. America will be reunited with it's long-lost biological parent: reality. What will the despondent public think of the conservative establishment then?

August 1, 2005
     We begin this ominous month with the curious case of Daniel Yergin, who won the Pulitizer for his 1992 epic history of the oil industry, The Prize, later turned into a PBS megadocumentary. Since his big score, Yergin has set up a public relations firm called Cambridge Energy Research Associates (CERA) which, in the spirit of the PR profession, seems to have become the main disinformation organ for its clients, the major oil companies.
      In a piece published in yesterday's Washington Post, Yergin takes the position that there is no problem with the global oil supply. Over the next five years, he says, both OPEC and non-OPEC producers will come up with an extra 16 million barrels a day, taking the world from its current 85 m/b/d to 101 m/b/d in 2010. This will happen, he says, because of "new technology" used to exploit unconventional sources of oil such as tar sands, ultra-deep-water developments, and natural gas liquids.
      More than a few elements of Yergin's pitch are shifty. The slyest one is that he does not mention that unconventional oil tends to be very uncheap, and since it is cheap oil that enables America's "non-negotiable" easy motoring way of life, and the debt-fueled suburban sprawl-building economy that has evolved to serve it, there may indeed be a problem further along in the pipeline, so to speak.
      Yergin also leaves out the fact that most (and perhaps all) of the world's major conventional oil fields are past peak and now depleting at between three and twenty percent a year -- and, ironically, as in the case of the North Sea, the more advanced the drilling technology, the more efficiently the oil is recovered, the greater the rate of depletion.
      The big question mark, of course, is Saudi Arabia, which until recently was believed to be years short of peak. A new analysis by Matthew Simmons, chief investment banker to the US drilling industry, and author of the just-published Twilight in the Desert, concludes that Saudi Arabia is peaking now. Simmons adds that the Saudi's 50-year-old super-giant Ghawar oil field (from which SA gets more than half its crude) has been structurally degraded by aggressive over-production and by the practice of injecting sea water into the geological strata in order to keep the pressure up in the wells.
        Saudi oil reserve figures have been guarded as "state secrets" since they nationalized their industry in the 1970s, so nobody, including Mr. Yergin, knows for sure what is left under the desert. But we do know what is coming out of the Kingdom in its tankers, and despite repeated promises to increase production in order to goose down prices over the past year, the Saudis have failed to do so. This we know.
      Among the other things Yergin's rosy analysis leaves out is that oil is inequitably distributed among the nations of the world. It is a generally accepted fact that roughly two thirds of the remaining oil lies under the Middle East, and another substantial fraction is in Central Asia. That is to say, it belongs either to people who hate us, or to landlocked countries on the farthest side of the globe (next door to China). Another significant pool (though past peak) belongs to Venezuela, run by Mr. Hugo Chavez, who remains irked by American attempts to overthrow his regime and have him bumped off.
These facts ought to give pause to the confident.
       The conclusion that a reasonable person might draw is that the West, and America in particular, is liable to have trouble getting its mitts on all the oil it needs, and that the industrial nations altogether are headed straight into a fateful geopolitical scramble for whatever's out there. That's exactly why we are in Iraq, by the way. It is our central forward base to secure Middle East oil supplies. And it also why we have embarked on the somewhat crazy and dubious project of setting up bases in several former Soviet republics. (Kyrgystan has just asked us to pack up and leave.) A great game is underway and the patriotic steroids that America has been taking since 9/11 are no guarantee that we will end up the winners.
      Along these geopolitical lines, we note today the death of King Fahd of Saudi Arabia. Fahd had been disabled by a stroke for years, and the Kingdom has been effectively ruled during this time by his half-brother Prince Abdullah, who now becomes king. Abdullah himself is 82 years old, and whatever his abilities have been, he would not now seem destined for a long reign. What follows Abdullah --with Arabian oil entering its arc of depletion, and the kingdom's oil welfare disbursments shrinking among an exploding population, including a large number of unemployed, futureless, non-royal angry young Arabian men occupied in the study of a militant wahhabism -- may be a very turbulent chapter in the history of that region.
      These are the things that Daniel Yergin's public relations escort service to the oil industry doesn't want to talk about.
      By the way, the price of oil this morning: $61.02 a barrel as I close.

 

July 25, 2005
      At the end of each vexing day, I go out for a bike ride. It sends a lot of oxygen through my brainpan and burns away all the woe and consternation that remains from attempting to make sense of the world. I'm very fortunate. I live in a place where an actual edge of town still exists, at least at the northwest corner of my town, Saratoga Springs, NY.
      The ride is 7.5 miles. Half of it was unpaved until seven years ago. It is still not heavily traveled by cars. A few large land-owners -- Skidmore College and the Saratoga Polo Association -- have prevented the roadsides from being filled in with McHouses and the rest of the usual commercial McTrash.

     This this the road out, about one mile from where town ended. A horse farm lies on the left; to the right, about a hundred yards through the bushes, is a railroad track. Ocassionally freight trains and the once-a-day (is that all?) passenger service from New York City to Montreal pass by. This stretch is obviously pretty flat, but the terrain is more rugged than it might appear and the route actually has some challenging ups and downs.
     Motorists who do come by are often filled with gall and resentment that they have to swerve around me -- even though I ride pretty close to the shoulder. In our society, anything that interferes with motoring pleasure is considered perverse and illegitimate. I don't have to listen to the drivers gnashing their teeth, though, because I am wearing an MP3 player. It is a cheap one and holds about 30-odd tunes at a time. It is based around a computer jump drive and it is very easy to swap tunes on or off the thing.
Here are the tunes I was listening to last week:

Start Me Up, Beast of Burden, Tumbling Dice (Rolling Stones)
Pledging My Time, Visions of Johanna (Bob Dylan)
Drives Me Crazy (Fine Young Cannibals)
Remember Me (Lucky Dube)
Don't Dream It's Over (Crowded House)
Jordan Is a Hard Road To Follow (John Hiatt and the Chieftens)
I'm Looking Through You (Wallflowers [Beatles cover])

Africa (Hymn, William Billings -- 1746 - 1800)
The Full-rigged Ship (Abby Newton)
Broken Telephone (the Be Good Tanyas)
Sailing to Philadelphia (Mark Knopfler)
When I Get It Right (Joan Armatrading)
Crow Black Chicken, Cherry Ball Blues, the Tattler, Seneca Square Dance (Ry Cooder)
Nightswimming, Man in the Moon (REM)
Traveling On For Jesus (Kate and Anna McGarrigle)
Love is Everything (Jane Siberry)
I Am a Pilgrim (the Byrds)
City of Dreams (Brian Keane - From the Soundtrack of New York by Ric Burns)
The Last Rose of Summer (Ditto)
Lonesome Day (Bruce Springsteen)

     I generally don't get through the whole playlist during one ride, but the next day I pick it up somewhere in the middle and start going around again. It eases the pain a lot on the uphills and scrubs my frontal lobes clean.
     I am fully aware how lucky I am. I work for myself. Most of the places where people live in the United States today are fucked up beyond belief, and this kind of experience is impossible to find in them. I come out here every day precisely to forget about that. Next week we'll get back to the concerns of the real world.

 

July 18, 2005
     It was a very
bloody weekend in Iraq, including a gasoline tanker truck bomb on Saturday evening in the commercial center of Masayyib, where people had come out to shop and mingle once the fierce heat of the midsummer day abated. The explosion killed a hundred people, while half a dozen regular car bombs went off elsewhere around Baghdad.
     The British government, meanwhile, confirmed a rumor in the wake of the London subway bombings, that they intend to withdraw a substantial number of troops soon -- and there were rumblings that the US Military had prepared a plan to get out sooner rather than later, too.
     From a US strategic point-of-view, none of the options available are very appetizing. Staying in Iraq looks increasingly like an exercise in futility. The Jihad continues full-strength, Fourth Generation Warfare-style (in the phrase of Bill Lind), an archetypal asymmetrical clusterfuck of "little guys" with potent small arms paralyzing a military giant. Being a Jihad, it is directed against all "infidels" including the "crusader" western soldiers, the Shi'ite-dominated provisional government members (for cooperating with the occupying crusaders), and the Shia populace for being Shia.
     The US could conceivably withdraw from the population centers and remain within a set of "Fort Apache" bases strung out in the desert, but that would mean abandoning the pretense of bringing "freedom and democracy" to the Middle East, while leading to serious questions of re-supply, since it has already been demonstrated that we can barely control the highway from Baghdad's airport to the Green Zone. It also leaves the central political problem of infidels occupying Islamic terrain, therefore requiring continued Jihad wherever opportunity allows outside Iraq, i.e. world-wide terrorism.

       I hate to introduce this hoary old idea, but I believe it is true: an American withdrawal will be interpreted as a sign of weakness by aggressive enemies (and we do have enemies). If the US diminishes or gives up its military presence (that is, our police station) in the Middle East, it may only be a matter of time before we lose access to two-thirds of the world's remaining oil supplies that happen to be located there. We would also have to wonder how long our military bases in Afghanistan and several former Soviet republics could hold out in the face of a withdrawal from Iraq -- with the additional problem of the combined displeasure of Russia and China militating against our presence there.
     What I believe will happen: the Jihadi violence will continue, the American public will lose patience with the attrition in Iraq, other flash points (North Korea, Pakistan, Venezuela, Mexico) will make it clear that the US Army is not capable of conducting land operations elsewhere, events will evolve to choke off oil imports to the US as our hegemony slips away, terror events in Europe will continue and provoke a backlash against Islamic imigrants, which will only inflame the Islamic world further, the US will revert to a naval strategy of attempting to protect our interests -- namely access to oil -- which will not be effective, and America will be plagued at home by political recrimation, blaming, scapegoating, and a futile campaign to keep the car-dependent utopia going.
      Ultimately, the world will enter The Long Emergency, a horizonless era of conflict, withering global economic relations, and energy starvation -- with plummeting standards of living.
      Meanwhile, we are doing nothing at home to prepare for this future, for instance a crash program to restore the American railroad system, or to restore true fiscal discipline to the mortgage industry in order to stem the insane spread of even more car-dependent suburban sprawl (a.k.a. the housing bubble). Where is the Democratic party (my party) on this? Lost in the raptures of sexual and racial pandering.

July 11, 2005
     The glamorous Maria Bartiromo was just on CNBC talking globalism (and China in particular) with two Wall Street cretins. China is a great play said Cretin No. 1 because they have 300 million potential middle class customers for America's manufacturers. Excuse me, what do we still make that the Chinese either can't make themselves or can't copy five minutes from now?
      As Cretin No. 2 waxed effulgent over China's fabulous prospects for growth, CNBC flashed a bunch of American brand logos across the screen, including Pepsi Cola and Exxon-Mobil.
These companies are going to so clean up over there, Cretin No. 1 chimed in, or the shareholders are going to want to know the reason why.
      Yeah, soda pop is really hard to make. They'll have to buy it from us. You thought computers were hard? There are four ingredients in soda pop (water, sugar, favoring, coloring ) and you have to get the proportions just right or it don't come out good!

      As for Exxon Mobil, they're going to have enough trouble getting oil to their US customers five years from now -- leading us to the central fallacy of all the current cheerleading for the global economy: there isn't enough oil available worldwide to permit the industrialized nations to continue to expand. In fact, the industrial nations of the world will soon be competing desperately, perhaps even fighting over, the world's remaining oil, while all our economies contract remorselessly.

     The public discussion over the global economy is symptomatic of America's new pandemic of brainlessness, the mainstream media especially. The head cheerleader, of course, has been Tom Friedman of the New York Times, author of The World Is Flat. Friedman and the rest of the cheerleading squad believe that that the global economy is a permanent institution. Now that it is established, we can only expect more of it. More and better. Forever.
      What all these cretins seem to miss is the cold hard fact that today's transient global economic relations are a product of very special transient circumstances, namely, relative world peace and absolutely reliable supplies of cheap energy. Subtract either of these elements from the equation and you will see globalism evaporate so quickly it will suck the air out of your lungs.
      Also, it must be obvious that relative world peace depends on equitable distribution of cheap energy. If the industrial nations don't get the oil and gas they need at a tolerable price, they are going to get very cranky, and when nations get cranky, peace itself is in short supply..
      Three quarters of the world's oil is in the eastern hemisphere -- two-thirds of the total is in the Middle east alone. Guess what? All of it is a lot closer to China than it is to us. Some of it they can walk to. Do you have any idea how desperate for oil both China and America are going to be in five years? Do you have a clue how tapped out America's WalMart shoppers are going to be as jobs vanish and the value of a dollar craters in the face of runaway energy prices?
      Globalism is yesterday's tomorrow. The future is about living locally on a much smaller scale. Pepsi Cola and Exxon-Mobil are exactly the kind of gigantic enterprises that are going to wither and die over the next decade. China is not tomorrow's geopolitical colossus, it's a geopolitical super train wreck waiting to collide with the reality of its environmental devastation, population overshoot, and energy starvation. Americans will be lucky if they can do each other's laundry ten years from now, let alone sell massive amounts of soda pop to people twelve thousand miles away.
       Is it an accident that there is so much Realty TV in America when, in fact, there is so little reality?

 

July 5, 2005
(Posting off schedule again due to holiday)
     This Fourth of July, watching fireworks over an Adirondack lake, with the rockets' red glare and bombs bursting in air (and the motorboats finally at rest after a day of cuisinarting through the loons and mergansers), I was moved to reflect on the extraordinary level of violence in American society today. It's so pervasive that I think we fail to register it.
      Have you ever gotten out of your car for any reason in the shoulder lane of an interstate highway? All the comfort and security of being inside immediately dissolves and your muscles contract at the violent noise of cars and trucks passing at seventy miles per hour, not to mention the inescapable sense of danger at being so close to them passing by. Inside and back on the road again, we quickly forget how much violence we are were exposed to -- and now we contribute to it as our journey continues.
     The everyday world of America is a ceaseless assult on human neurology (and certainly the neurology of other beings) from a din of numberless motors: air conditioners, lawn mowers, weed-whackers, ventilation blowers, fry-o-later hoods, airplanes, as well as the constant background roar of car traffic.
     Our entertainments are saturated with violence. Hollywood has completely forgotten how to make stories based on the predicaments of human character and emotion. The only emotions they understand are bluster, threat, and murderous aggression with overtones of sexual excitement (because this is the way show business professionals act among themselves, and it is the only behavior they understand). Is it any wonder that rogue maniacs drive around the nation snatching children in order to torture and kill them? Or that the Cable News stations are now utterly preoccupied with covering the exploits of murderous maniacs, to the exclusion of everything else going on in the world?
      Millions of red-blooded red staters spend their leisure hours moiling at the Nascar tracks. Do you have any idea how unpleasant it is to be a spectator at a car race? How saturated with violence the atmosphere around the track is?
I have been to several races as a journalist. The noise alone is supernatural. Then there is the fans' unspoken sadistic voyeurism in anticipating a crash to liven up the boredom of watching cars roar for hours around the oval. Nascar fans will surely deny it, because it reveals the necrophilia at the heart of their so-called "sport," but crashes are part of the excitement. Dale Ehrnhardt surely died for their sins, and when the next driver kills himself on the track there will be new heaps of teddy bears to take the focus away from the crocodile tears shed in the stands and TV rooms of the Raleigh-Durham metroplex.
     Finally, thousands of miles away, there's the war in Iraq and Afghanistan -- it's all one war, by the way. It's being fought to fuel up all those Nascars, and power the interstate highways, and to keep the weed-whackers and fry-o-later hoods humming, and keep the suburban housing industry chugging along so more Americans can drive to the video store to get violently stupid movies about quasi-humans with great destructive powers. We are watching ourselves become monsters.


June 30, 2005
(posting early due to crazy holiday schedule)
      T
he current rational for the war in Iraq (bringing freedom to the Iraqi people) is, if anything, much more transparently stupid that the Weapons of Mass Destruction argument that precipitated the war.
     First, it raises the question: why should we give a fuck what Iraqis allow each other to do? We don't seem to give a fuck what strictures the people in Yemen or Syria live under. Or, for that matter, the people of Paraguay, Nigeria, Myanmar. Second the term freedom is a meaningless abstraction apart from institutions, concepts, and procedures designed to insure social justice, namely things like due process of law, separation of powers, sanctity of property,
public safety, a consensual notion of the public interest, et cetera.
     Under Saddam Hussein, Iraqis didn't dare voice opinions lest a gang of Baathist goons appeared at their doors in the dark of night to take them away for torture and execution. Under the current system, Iraqis don't dare cooperate with the government (or worse, their US military sponsors) lest a gang of Jihadi (or Sunni or former Baathist) goons show up at their door and drag them off to execution.
     Why would we suppose that our notions of a civil society, based on Greco-Roman and Anglo-American tradition, would comport with one based on an even older and different Mesopotamian-Semitic culture with Mongol-Turkic-Persian overlays? After all, Iraq is the birthplace of the Code of Hamurabi, which includes such statutes as the following:

If any one bring an accusation against a man, and the accused go to the river and leap into the river, if he sink in the river his accuser shall take possession of his house. But if the river prove that the accused is not guilty, and he escape unhurt, then he who had brought the accusation shall be put to death, while he who leaped into the river shall take possession of the house that had belonged to his accuser.


      Now obviously Iraq has been under scores of different regimes and governances in its history, but one of the clearest lessons of the US military adventure there is the discovery that justice in Iraq is still almost completely based on a calculus of revenge, usually applied on a clan, sect, tribal, or gang basis against a member of another clan, sect, tribe, or gang.
     I think what George W. Bush generally means by "freedom" (and it's awkward synonym "democracy") is simply the process of holding elections. But obviously the ability to elect one gang or faction with despotic predelictions over another gang with same does not necessarily produce a free society. Of course, as a practical matter, after the invasion the US had the choice of either A.) selecting the Iraqis'civil leaders for them (and inviting further opprobrium from other nations), or B.) letting the Iraqis pick (much better PR value).
     It remains to be seen whether the artificial construct of "Iraq," a product of British administrative procedure in the 20th century, is governable as a unit, and the evidence so far is not encouraging, given the ethnic split between Shi'ites, Sunnis, and Kurds within three fairly discrete geographical zones.
    Also troubling is the presumption that even if we manage to pacify this large, violent, desperate place, that such pacification will send a message to other dangerous nations in the region that such a state of coercive pacification is to be envied. Not to mention the assumption that once Iraq quiets down, all will be well Middle East, where two-thirds of the world's remaining oil lies.
     Compared to these painful and convoluted assumptions, the issue of WMD looks much more straightforward, even if you grant that the Bush adminstration had made up its mind to invade earlier than 2003 -- to wit, the fact that no weapons of mass destruction were found does not mean that we didn't have to look. Not finding any was always one of the possible outcomes, especially when Mr. Hussein had months to move things elsewhere. The public's refusal to understand this equation is an impressive case of obdurate stupidity, but not as dumb as our kindergarten ideas about spreading "freedom" to places where it means the right to kick our stupid American asses.

June 27, 2005
     The east coast is a steambath, the Dow Jones is tanking, oil has crossed the $60 barrier, and Don Rumsfeld says the Iraq insurgency could run for twelve years.
     Taking these things in reverse order -- why twelve years? Why not forever? Actually, twelve years might as well be forever. What Rummy seems to be saying to the US public is: better be prepared to keep Fort Apache going indefinitely. The part he left out was. . . "if you want to keep making that eighty-mile round trip commute from Cherokee County to Peachtree Street."
     Even that simple equation assumes a lot. For instance, that Mr. Suburban Atlanta Commuter will still have that job in the office tower on Peachtree. Or that he can continue to make a monthly payment of $3200 on a 4000-square-foot house in Hickory Flat. Or that the Fox TV News fans will maintain their enthusiasm for a war of attrition lacking in cineplex quality battles, while their property taxes are being jacked out of sight to cover the rising cost of maintaining senior parking privileges in the centralized school districts.
     The public indeed may be losing its appetite for the Iraq project, but not for Nascar racing, fried chicken buckets, car trips to Six Flags, and round-the-clock air conditioning. What shock of recognition will flash across the TV screens when the connection is finally made that keeping all these things going is why we're in Iraq? War is the answer. Sooner or later even the folks making those jitney trips to East Hampton are going to get it.
     Oil's remorseless up-ratcheting past $60 is as much a symptom of a weak dollar
as a strained global energy allocation system, and the dollar is weakening because the way of life it represents is becoming more and more unreal. The harsh truth is that we've reached the limit of our ability to expand our suburban sprawl economy and there is no alternative US economy in the background ready to take its place. The world can't fail to notice this weakness. The inability to generate even fake wealth, in the form of ever more WalMarts, will take its toll on the consensus that the American Dream has enduring value.
      The stock market contraction ought to reflect this reality -- apart from desperate attempts by US government proxies to levitate share prices -- and it is hard to imagine a rally in the face of $60 oil.
I'm inclined to predict a gruesome journey down for the Dow Jones into the 4000 range by the end of the year. Until now the dollars created by the Federal Reserve's supernaturally loose credit policy have sought shelter in the "hard assets" of houses? A meltdown of the stock markets will translate into vanishing leverage in all other areas of finance, especially in real estate (as well as a swath of destruction through hedge funds, retirement accounts and, eventually, the entire creaking superstructure of the hallucinated mortgage industry). A few Americans are actually going to get the message that this is not a good time to buy an overpriced raised ranch house. A lot of real estate geniuses are going to witness their own ruin with wonder and nausea.
    The striking aspect in all this is that the US appears to be reaching a breaking point in the absence of any precipitating disaster. Apart from the daily meat-grinder in Iraq, the geo-political scene is temporarily placid. The potential for disaster is huge, of course. Five pounds of Semtex in a crucial spot could crater the global economy. Sooner or later something will blow. But the US slide is commencing without a big shove. Phase change is a curious condition. Things just slip. Lahar rules.  


June 20, 2005
     Iraq is not Vietnam, all right, because there is no way the US can pull out now without severe consequences, namely the loss of our access to all the oil in the Middle East -- where two-thirds of the world's remaining oil is.
     In Vietnam, there was the primal fear that if we cut-and-run all of Indochina would "go communist," whatever that meant. What actually happened after we cut-and-ran in 1975 was Pol Pot and the killing fields of Cambodia, a military dictatorship in Burma, and Vietnam becoming the friendliest tourist country for westerners (including Americans) in all of Asia.
     It is actually hard to tell whether the strategy to "democratize" Iraq is a childish pretense or a cynical cover story. There may be some grownups in the White House, Pentagon, and State Department who believe that a functioning, democratically-elected Iraq government would be such a mind-blower for the people of other nations in the region that all the jihadistas of, say, Saudi Arabia, Syria, Yemen, Iran, and Afghanistan would enter a mystical transport and wake up as Jeffersonian democrats.
      The Iraq adventure so far seems to indicate that wishing can only accomplish so much. For instance, despite desperate US offensives in Karabilah and Anbar province this weekend, Iraqi hostiles managed to blow up fifty of their fellow Iraqis in Baghdad. The New York Times had an interesting way of capturing the mood: "
Life along the street running past the restaurant quickly returned to normal. Older men 80 yards away resumed curbside games of checkers before men had finished sweeping away chunks of flesh." In America these days, a wish is sometimes just another horror movie at the cineplex.
     My own is theory is that the war is a desperate attempt by a nation desperate over its energy supplies to retain a foothold, and therefore an economic claim, on the region where the oil is. Iraq was supposed to be our police station in a strategically vital bad neighborhood. The salient questions are: 1.) assuming we can't stay there forever, how long might we hope to stick around there? And 2.) at that point somewhat short of forever, will we lose our ability to even buy Middle East oil?
      The conventional belief is that oil is fungible, meaning that once it enters the universal market pool, it finds its own way to customers, determined by who will pay the most for delivery. This idea was based on the assumption that there would always be a swing producer -- some entity that could always open up the valves and goose up the world supply, keeping global prices within a reasonable range. The global production peak -- Peak Oil in shorthand -- seems to have obviated that mechanism. It's especially problematic that even Saudi Arabia and the Middle East generally appear to have peaked (see Twilight in the Desert by Matthew Simmons).
From now on, access to oil may be determined by other things.
     It was Amercia's hope that by turning Iraqis and other Middle Eastern people into democrats, they would magically become much friendlier and that our military presence would be happily tolerated -- and that eventually all the Middle East would become so democratic, friendly, and stable that our presence there would be regarded as a Godsend. Whoops, wrong God. For starters.

       The world may no longer have a swing producer of oil, but this period can probably be viewed as a swing period of history. By that I mean a period when we hoped that there was a quick and easy way to keep the oil flowing westward and found out that it wasn't so. The time is now coming when the American public won't tolerate a dozen US casualties a week, nevermind fifty Iraqis. But Americans won't tolerate $5 a gallon gasoline, either. We'll now see how the public will reconcile these intolerances.
     We enter this week with oil nearing $60 a barrel. Global finance, hedging, interest rates, and the continued zest of America's last remaining industry, real estate, will all hinge on the price of oil and on America's prospects for getting it at any price. President Bush last week shifted the responsibility for an energy policy to congress, because the ideas coming out of the White House have been so transparently lame (the hydrogen economy).
      My guess is that we are about to see the first act of the Hooverization of George W. Bush.

 

June 12, 2005
      
I just paid $3.25 for a twelve-ounce diet coke in the Los Angeles airport, known by the affectionate name LAX by the locals (sounds so cutting age, like rap stars who give themselves technoid names such as G-Unit). The truth is, LAX is just the airport code on the baggage label that they slap on your suitcase before it vanishes forever into the black hole of lost things. Evidently there was an earthquake here today, but the vibe of the city (if you can call this toxic hyper-mega-burb that) is so catastrophic generally that I didn't even notice.
     I've been on a long book publicity road trip around California, with a side trip to Seattle on Thursday, and it's hard not to feel hopeless about this country after being here. It probably doesn't help that my 10:30 red-eye flight has been delayed ("aircraft availability," the sign says) and I don't know whether I will make my morning connection in Washington for the final flight to upstate New York. My experience with United Airlines is that they (that is, the remaining skeleton crew) are a gang of lying fucks who will make up any excuse to disguise the fact that their company is a barely-functioning shell. As a matter of fact, there was not a single United employee in the entire P-7 terminal when I got here at 8:00 pm and I had to walk a half mile over to terminal P-8 to find a live gate agent. What you see in this miserable airport is simply the death of the airline industry. The airlines are the giant "canaries in the coal mine" of our imploding economy. They can't make any money, even running fully-loaded flights, with the price of jet fuel (which is little more than kerosene) not even very high yet. But I stray from my point.
     Which is that what you see in California is a society with a tragic destiny. I was all over the Bay Area earlier in the week, from San Francisco to Silicon Valley to Berkeley and even down to Santa Cruz, and that was bad enough, But then I got down to Los Angeles on Friday and have been in a state of pathological reflex nausea ever since. Despite their lame attempts to rebuild a few pieces of the 2000-mile-long streetcar system that they gleefully destroyed in the 1950s, life here is
all about cars and it will never not be about cars -- until the reality of our oil predicament falls on the hapless public like a hammer of God and the people of California die for their fucking cars in their fucking cars and over their fucking cars. I understand that the scene here is not qualitatively different from Dallas, Orlando, Atlanta, Northern Virginia, Miami, New Jersey and other cloacal hot-spots of the world's highest standard of living. But I digress again, sitting, as I am, on the floor of terminal P-7 because I cannot find a single electric outlet anywhere near a chair, and being fifty-six years old, with an artificial hip, this is not the most felicitous scheme for composing one's thoughts.
     I was invited to give a talk at Google headquarters down in Mountain View last Tuesday. They sent somebody to fetch me (in a hybrid car, zowee!) from my hotel in San Francisco -- as if I had any choice about catching a train down, right?
Google HQ was a glass office park pod tucked into an inscrutable tangle of off-ramps, berms, manzanita clumps, and curb-cuts. But inside, it was all tricked out like a kindergarten. They had pool tables, and inflatable yoga balls, and $6000 electronic vibrating massage lounge chairs, and snack stations deployed at twenty-five step intervals, with lucite bins filled with chocolate raisins and granola. The employees dressed like children. There were two motifs: "skateboard rat" and "10th grade nerd." I suppose quite a few of them were millionaires. Many of the work cubicles were literally modular children's playhouses. I gave my spiel about the global oil problem and the unlikelihood that "alternative energy" would even fractionally replace it, and quite a few of the Googlers became incensed.
     "Yo, Dude, you're so, like, wrong! We've got, like, technology!"
      Yeah, well, they weren't interested in making a distinction between energy and technology (or, more precisely where Google is concerned, a massive web-based advertising scheme -- because it is finally clear that all this talk about "connectivity" just leads to more commercial shilling, shucking, jiving, and generally fucking with your headspace in the interstices of whatever purposeful activity one may be struggling to enact on the internet).
     The taxi-cab ride to Berkeley (on Google's tab) ran over $160 on the meter. In Berkeley a radical leftist grandmotherly lady interviewed me for a radio show and once that was over she began to tell me about the chemical contrails that Dick Cheney was cross-hatching across the Berkeley skies for the purpose of controlling the masses of earnest, whole-foods-loving, undyed-wool-wearing devotees of diversity and turning them into whorish Stepford sex robots. Everybody knew it was a cover-up, she said.
     Seattle was a blurr of traffic, tofu, and dark green things that must have been coniferous trees or seaweed, I wasn't sure. The sleeplessness was catching up with me.
     Flying into LA the next day, and traversing its decrepitating central core clean out to Pasadena in the airport van, was like being immersed in an updated Hieronymous Bosch landscape of hell -- only substitute SUVs for spavined reptiles and tortured peasants half-stuck inside eggshells. At every turn of the odometer, one wondered: what will become of this entropic socio-economic sink, especially as the supply of its chief nutrient declines. I conclude that it may no longer maintain its stature as the breast-implant capital of the world.

     I gave a talk at the closing session of the annual Congress for the New Urbanism in Pasadena on Sunday. My message was one that readers of this blog are familiar with -- namely, that we are sleepwalking into desperate circumstances largely determined by our addiction to oil, our supply of which mostly comes from distant lands full of people who hate us, et cetera. I will not bore you by rehearsing this theme further today. Now, the CNU members have generally been among the most forward-looking citizen-activists on the scene for a decade. They certainly recognize the many deficiencies of our drive-in dystopia, apart from the oil issues, and have been working to remedy it. But they don't really believe what I said to them.
      The sad truth is that they are addicted to the same economic mechanisms as the sprawl-meisters: the production home-builders (so-called), the great mortgage mills of the conglomerate banks, and the real estate "industry" (also so-called.) So they don't want to hear that these "sectors" of our economy are not going to make it. They don't want to hear about the necessity to downscale America anymore than the grifters who develop the WalMart power centers want to hear about it.
     But we are going where circumstances are taking us whether we like it or not. We have to make other arrangements -- and I mean really different from the way we live now, not just tweaking the municipal codes and building slightly better housing subdivisions and squeezing chain stores under the condominiums and hiding the parking lots behind the buildings. I hope the New Urbanists come around. They have a whole lot of very useful knowledge that will allow us to make our derelict towns habitable while we re-assign the remaining countryside for growing the food that we need locally.

      Ah, I admit that I am in foul and turbulent spirits. I have been into the land of the American Moloch among its Moloch-worshippers and I am brainsick from it. I promise to cool my jets and come back next week with something a little less hysterical. By the way, my plane finally got out of LAX at 1:30 am Pacific time, three hours and ten minutes late. I missed my connection, so I am finishing this fugue in Dulles Airport, Washington.

June 6, 2005
Cluelessness over the the world energy / economic predicament fogs the public discussion more than ever as we approach summer. The New York Times ran a big story in the Sunday news section about India's soaring energy needs and its future plans ("Hunger For Energy Transforms How India Operates"). India is the world's fifth leading energy user. Dig this: they import 70 percent of their oil. India's government predicts that the country will have to import 85 percent of its oil two decades from now.

      So what's India's plan? According to Energy Minister Mani Shankar Aiyar, the solution is "to persuade China to cooperate rather than compete." Okay, and your bargaining chip would be. . .? Also consider this: The US, Japan, Europe and China will all have to import more than three quarters of their oil supplies. Does this suggest that the world is going to remain an orderly place.
     
Another plan to keep the lights on in Mumbai (where power outages are routine) is a 1600-mile natural gas pipeline from Iran, through Pakistan, to India. Has anyone noticed A.) that India and Pakistan have been deadly enemies for over half a century, frequently threatening to blow each other up with nuclear missiles? B.) that Pakistan is the world's largest unstable country, and that its rugged terrain is home to many of the world's most rabid and violent Jihadista groups, and C.) that such a proposed pipeline across Pakistan would be utterly indefensible?    The Times story about all this is so devoid of critical analysis that it appears to have been written by an 11-year-old child.
      The Times's star columnist Thomas Friedman is making hay this season with his new book, The World is Flat, about the global economy. His book asserts that current trends will continue indefinitely -- China will continue to manufacture ever more of America's household products, Americans will continue to enjoy cash-out home equity loans to buy plastic patio chairs made in China, WalMart will keep running its warehouse-on-wheels at a thumping great profit, and all impediments to global trade will be vanquished by telemarketing, computer technology, and confident corporate can-do spirits. I am tempted to ask how Friedman manages to type on a laptop with his head so far up his ass, but this blog is dedicated, above all, to a high-minded brand of politeness so we'll just say that he is not paying attention to a gathering global energy shitstorm that is going to change absolutely everything -- including global economic relations which pundits foolishly maintain to be permanent conditions of life.
      Here in the States, the price of a barrel of oil is back over $55 and we are only one week into the summer vacation driving season. President Bush is running a scam on the public by pretending to push Congress to act on an energy bill that offers nothing to realistically address the nation's oil addiction and, especially, its car dependency. He doesn't dare, I suppose, because he must know that the American economy is about little more than car dependency. But just watch: as the price for a barrel of oil heads north past $60, Bush's abject leadership failure will become self-evident and the public mood will appear to shift overnight. The oval office will become a very lonely place indeed by this coming fall, and its occupant will have three long and terrible years left to suffer there.

 

 

May 30, 2005
     It's a measure of our country's desperation that many hopes among US government officials are pinned to the just-completed 1000-mile oil pipeline between Baku on the Caspian Sea and the Turkish port of Ceyhan on the Mediterranean. The idea is to get oil from Kazakhstan on the far eastern side of the Caspian sea through several other former Soviet states, bypassing a shorter, older route through the Black Sea, and creating an alternative to the ongoing horror show of the Persian Gulf.
     The main problem is the idea that the American economy, and the easy-motoring lifestyle that holds it hostage, will now depend on a 42-inch wide oil pipe running through nations fraught with Muslim-Christian conflict on top of post-Soviet gangster politics. The good news is that the $4 billion pipe is buried underground so it will not be vulnerable to the small arms so abundant in that part of the world: shoulder-launched missiles, rocket propelled grenades, or .50 caliber bullets. The bad news is that it is only a few feet underground and can still be blown up by five pounds of Semtech strapped to a donkey. Also, the pipeline traverses some of the most rugged terrain in Asia Minor and presents many opportunities for mischief.
     Another problem: Kazakhstan is right next door to China. China needs foreign oil as desperately as the US does. Nothing prevents China from commandeering Kazakhstan's oil, by means ranging from legal contracts to Chinese soldiers on-the-ground. That logically raises the question as to whether America would entertain a land war with China over landlocked Kazakhstan, 12,000 miles away from here. What would you say our prospects would be in such a venture? The Russians might have some interests there, too, not necessarily identical to ours. World War Three anyone?
     Finally, the wish back in the 1990s that Central Asian oil would bail the west out of dependence on the Persian Gulf nations has faded with exploration which now indicates the region has far less oil than the 300-billion barrels originally hoped for (more like 16 to 40 billion now), and that it mostly consists of low quality "sour" crude, heavy on sulfur and more expensive to refine.
     But such is the nature of strategic thinking in Washington these days that it all comes down to a 42 two inch pipeline for us now. You have to wonder, for instance, why we couldn't take that $4 billion and refurbish at least part of the US passenger railroad system -- as compared to the roughly $290 billion slated for this year's federal highway construction and maintenance bill.
     Get ready for the interesting half of the year 2005. The summer vacation motoring season is officially underway with the Memorial Day weekend. Oil prices are back up near $52 a barrel after falling to $46 for a few weeks in May. Americans are not going to drive fewer miles this year. Just look at how we've arranged things on the landscape. Most have to drive all over the place whether they like it or not. By the fall, motorists (i.e. American citizens -- a.k.a. "consumers") are going to be very disappointed with the way things are going, and they are going to start blaming the people responsible for our strategic thinking.