Note: George Ure asked me to write this for his excellent website: Urban Survival
Clusterfuck Nation: A Glimpse into the Future
by Jim Kunstler
It's customary when composing scenarios like this to say up front that nobody can predict the future and only fools attempt to, blah blah. It seems true that history is anything but linear. Events unfold fractally, so to speak, with surprising zigs and zags, with unexpected amplifications, resonances, and outcomes, showing up would-be smartypants prophets like me. But it strikes me as more foolish, in the face of what may be epochal and disruptive change in how we live, to put on a show of excessive humility and pretend that we can't make any sense of our unfolding circumstances.
Hence. . .
I see several major trends / events / stories that are apt to severely affect "normal" American life in the years ahead. One is the financial mess that lies under the immense and rickety credit structure that two decades of relative world stability has allowed us to erect. I saw the whole gruesome picture in microcosm illustrated in four commercials that played during a half-hour segment of CNN when I was visiting Atlanta to write a chapter for my next book. First commercial was for the DiTech "125 percent Dream Loan." People could finance a new house plus get a premium amounting to 25 percent of the mortgage, and use the extra money to buy furniture, or a bass boat, or go to Vegas and play the slots, if that's what they liked. The second commercial was for a debt consolidation service. The third was for bankruptcy lawyers. And the fourth was for a local bail bondsman "because bad things even happen to good people."
You could see the whole Sunbelt mentality in this sequence of advertisements, and, in a way, you could infer the whole story of the surreal, reckless 1990s boom in it: all the traditional notions of lending and banking suspended to fuel an orgy of spending.
My sense is that this will lead shortly to a fiesta of default and repossession such as the world has never seen before. The most ominous sign lately is the huge increase in home equity loans in a real estate market that had been inflating wildly and is now leveling off and even deflating in some places such as the San Francisco Bay Area. (DiTech, by the way, has moved aggressively into this home equity loan market, too.) The bottom line is that enormous numbers of people have been induced to trade in the equity value of their houses for lump sums of cash, while the market value of their houses is poised to plummet. We can assume that some of them are already in trouble with credit card debt. Connect the dots.
This is only a piece of what I consider the greatest single act of national misinvestment ever made: the construction of the suburban American drive-in utopia as a substitute for towns and cities, an armature for daily life composed of buildings designed not to outlast their depreciation periods and an automobile infrastructure of inconceivable cost that is destined to fail systemically when the cheap oil fiesta comes to an end (more on that shortly). We've thrown away our national wealth on free parking, cul-de-sac housing subdivisions, strip malls, fried food huts, and the other ridiculous accessories of the system. What will become of it all? A fraction of it will be retrofitted for sustainable living, the rest is apt to become materials salvage operations (steel, aluminum, copper), and ruins.
I'll defer elaboration of the macro global banking clusterfuck, to those better qualified -- except to say that the extraordinary leveraged dealings in highly abstract "creative" financial instruments (futures, arbitrages, re-bundled mortgages, etc.) combined with the unprecedented velocity of transactions, has reached the point where global banking is certain to implode into the black holes of misplaced faith in hallucinated wealth that such "creativity" represents. Read Doug Noland on this: PrudentBear.com.
The next event / story is the destabilization of the global oil and gas markets now underway. The American people have been sleepwalking into this mess since the 1979 OPEC price jackup faded away in our national imagination. Of course, we must look at the oil picture through the frame of the Hubbert Curve (The Coming Global Oil Crisis) but I will not elaborate on that aspect of it, which we should accept as axiomatic. The crucial element of this story is that the United States does not have to run out of gasoline or natural gas in order for our "normal" way of life (i.e., the fiasco of suburban sprawl and all its furnishings) to become completely dysfunctional. All that's necessary to upset the system is for the markets to destabilize mildly-to-moderately, that is, for the price and supply of oil and gas to become a little unpredictable. California is a nice illustration of the damage that can occur when events run their fractal pathways. North America has not run out of natural gas, but the markets are sufficiently queered to put California is jeopardy of a major energy crisis.
Under conditions of oil market instability, Wal-Mart can run its vaunted "warehouse on wheels" only so long before Wal-Mart dies as a way of doing retail. Of course, it should die, because the scale of operation it achieved, and the economies of scale it enjoyed, were a product of a highly abnormal cheap oil economy and had a highly toxic side-effect on local economies and communities in every corner of the nation. (The upshot as national chain retailing fades into history is that America will have to reorganize how it does commerce.)
You can say the same thing about industrial-style agriculture, as embodied by the 3000-mile caesar salad that travels from the San Joaquin Valley to your table in Scranton, Pa. America better prepare itself for more localized farming -- and, of course, one of the disastrous consequences of suburbia is that we've paved over so much of the best agricultural land in the world east of the Mississippi. The scale of farming will have to be smaller, the labor probably more intensive, and the markets much closer. Get ready for serious home gardening. Also, the knowledge gap implied by such a transition in practice suggests that food may be actually hard to come by for a while and that many Americans may suffer from hunger.
I don't believe that alternative fuels will come to the rescue. They exist, and they have uses both current and potential, but nothing known right now has the versatility to replace petroleum products. Airplanes will not run on hydrogen fuel cells as we now know them, or on plutonium, etc. To some degree -- probably greater rather than smaller -- "normal" life in America will not continue without cheap oil.
All of this tells me that America will have to re-condense its everyday life into coherent towns, villages, neighborhoods, and even cities with authentic agricultural hinterlands. Personally, I believe that there will be many collateral benefits to this, and you can read about them yourself in my books if you're interested. Suburbia is yesterday's tomorrow. Forget the hundred-mile daily commute. Forget those eleven-trip-per-household-per-day excursions to the SuperDuperMart for all of life's daily necessities. I see virtually every activity in America having to be downscaled, from commerce and farming to schools. We're going to have to live locally.
I believe that the implosion in the value and utility of suburban real estate (merging neatly with the debt clusterfuck), will amplify to make for a severe and fantastic fire sale free-for-all. You could call it a fight over the table-scraps of the 20th century. According to those strange, complex, fractal resonances, I fear that this battle will sooner rather than later express itself politically. A corn-pone fascist may appeal to distressed, dis-entitled suburbanite Americans with promises that he or she can make the nation just like it was back in 1997. Of course, no one will be able to really do that, so the upshot would probably be even more political extremism with the usual menu of civic disorder, economic hardship, scapegoating persecution, and international military mischief.
I'll return to that final point later.
The third event / story that I believe will play a major role in our lives is climate change. Even mild-to-moderate climate change will cause more severe weather, will start to put pressure on coastal areas where the majority of the earth's people live, will affect agriculture catastrophically, will prompt huge movements in populations from the impoverished third world. Sea levels only have to rise a tiny bit before the aquifers of the Florida coast are invaded by salt water, destroying wells, and making these areas uninhabitable. The harbor towns of the world are in jeopardy. Even the Gulf Stream is subject to disruptions with relatively minor changes in water temperature differentials between it and cold Arctic currents that drive it. The potential political amplifications are too huge to even address here -- and to some degree obvious, anyway.
A fourth event / story, related to the preceding, is the runaway population growth in precisely those nations that are already suffering horribly from poverty, disease, and ecological devastation, and social breakdown. In the United States, both ends of the political spectrum have recklessly ignored the issue of overpopulation -- the right wing with its anti-birth-control propaganda, and the left with its kindergarten gestalt therapy celebration of "multiculturalism." Putting aside the obvious current catastrophes of Africa and the potential ones of Asia, we face serious problems close to home.
The fact is that the Southwest United States is becoming culturally an outpost of Mexico. Read Robert Kaplan's "An Empire Wilderness.") Americans are very conflicted about controlling our borders. (And even more conflicted about dealing with immigrants who crossed the border illegally.) My guess is that we'll continue to fudge it until Texas, California, Arizona, and New Mexico become demographically and culturally Mexican, with all the political ramifications implied. By the way, this should not be taken as a racialist view, but simply a reflection of how things really stand. And keep in mind it's not ordained by God that the United States maintain its present shape in perpetuity anymore than Dynastic Egypt or the Holy Roman Empire of Frederick Barbarossa maintained their boundaries forever.
It seems to me that sooner or later these events will lead to military mischief and potentially to major war. War may unfortunately be part of the natural order of things, one of nature's thermostats. I'm not saying it's a good thing, but neither from a social point view are earthquakes, hurricanes, forest fires, and other cataclysms, yet they exist. Leaving aside that debate, what can we say about the international political situation?
Right now, the low-grade war between Israel and the Palestinians has high potential to escalate. The entire Muslim world is arrayed against Israel (note the conference in Teheran this past week affirming that). We are Israel's longtime backer. Even if we manage to stay out of it militarily, how long will the Saudis continue to sell us cheap oil?
A lot of people fantasize about the US militarily occupying the Arabian Peninsula. This must be regarded as a dangerous fantasy. We could never protect the complex infrastructure of the oil industry on the ground -- the pipelines, wellheads, and harbor terminals -- even if we deployed the entire American armed services there.
There is also the chance that a militant Muslim maniac could walk into the royal presence with a bomb strapped to his kishkas. The Saudi regime is weak and unpopular. Its Muslim allies are not fond of it, and have not forgotten that it took the American side against Iraq ten years ago. The Saudis have plenty of homegrown Muslim militant maniacs of their own, too.
George Ure views Russia as a potential threat in the instabilities to come. I doubt that they have the resources to make much mischief, or that they will be free from trouble with their own fractious neighbors (including former Republics of the old Soviet Union). It's true that they have a nuclear arsenal. I would be inclined to wonder whether they might sell it off to all comers, or whether they will lack the resources to even maintain it in working order. Nuclear devices corrode rapidly. Russia is disintegrating internally at a shocking rate. The average life-span is falling steeply and even the plumbing infrastructure is being disassembled for sale as scrap by desperate citizens. It's certainly ripe for another "savior" in the Tsarist / Lenin mold, and God knows what kind of trouble that could lead to. For a worthy angle on this view, see the May Atlantic Monthly article, "Russia is Finished."
Personally, I worry about China. For all its opaque solidity the regime strikes me as potentially psychotic. Apart from their presumed missile capabilities, they can muster ground forces in Asia until the cows come home, and I believe they will. My sense is that they will engage in the coming worldwide struggle to secure oil resources, and that they will go adventuring militarily in the oil-rich former Soviet republics and north into a Siberian frontier that is being systematically abandoned by dissolving Russia. I don't see how the United States could do anything about these movements, short of a nuclear strike -- and crazy as we may be capable of becoming, I reserve some hope that even a corn-pone American Nazi would not start such a terrible war.
Finally we must consider the question of epidemic disease, which can be thought of as a consequence of many of the problems mentioned above: overpopulation, population movements due to climate change, poverty, military mischief, even destabilized oil markets. A worldwide influenza epidemic on the order of the 1918 Spanish Flu is overdue. The world barely missed one such catastrophe two years ago when a chicken flu broke out in Hong Kong and was contained only by mass extermination at the giant factory farms where the disease spawned. Factory farming itself may be a menace to human life. I know intelligent people who believe that mad cow disease and other Transmissible Spongiform Encephalopathies (TSEs) will decimate the human population of Europe over the next forty years. Global warming is sure to increase the range and lethality of current malaria strains, and other diseases (e.g., west Nile virus). People who are starving tend to process a lot of rats. Bubonic plague still exists. AIDS is obviously rampant in sub-Saharan Africa and becoming worse in Asia. Drug-resistant tuberculosis runs wild in Russia.
This is how I see things developing. I'm unwilling to put a timeline on any of these events, except to say that I expect the financial implosion sooner rather than later, and that the Hubbert Curve states pretty precisely (within a decade or so) the range when we can expect chronic, grinding problems with global oil extraction to intensify (we've entered the zone, actually). For everything I've said, I also have to stick my neck out and say that the human race has proved to be both ingenious and resilient. "Normal" life has fallen pretty low before and mankind has recovered. The scale of all our problems today is greater than, say, the problems of the decaying Roman Empire, but our knowledge base is also broader than theirs was. Maybe this means we only have more to lose. A Dark Age is a possibility we ought to face.