The Abyss Stares Back

     
       The public perception of the ongoing fiasco in governance has
moved from sheer, mute incomprehension to goggle-eyed panic as the
scrims of unreality peel away revealing something like a national
death-watch scene in history’s intensive care unit. Is the USA in
recession, depression, or collapse? People are at least beginning to
ask. Nature’s way of hinting that something truly creepy may be up is
when both Paul Volcker and George Soros both declare on the same day
that the economic landscape is looking darker than the Great Depression.
       Those tuned into the media-waves were enchanted, in a related
instance, by Rick Santelli’s grand moment of theater in the Chicago
trader’s pit last week when he seemed to ignite the first spark of
revolution by demonstrating that bail-out fatigue had morphed into high
emotion — and that the emotion could be marshaled against public
policy. The traders in the pit on-screen seemed to color up and buzz
loudly, like ordinary grasshoppers turning into angry locusts preparing
to ravage a waiting valley. “Are you listening, President Obama?” Mr. Santelli asked portentously.
      In the broad blogging margins of the web that orbit the
mainstream media like the rings of Saturn, an awful lot of reasonable
people have begun to ask whether President Obama is a stooge of
whatever remains of Wall Street, with Citigroup and Goldman Sachs’s
puppeteer, Robert Rubin, pulling strings behind an arras in the Oval
Office. Personally, I doubt it, but it is still a little hard to
understand what the President is up to. For one thing, the stimulus
package, so-called, looks more and more like national sub-prime
mortgage itself, a bad bargain made under less-than-realistic terms,
with future obligations fobbed onto whoever inhabits this corner of the
world for the next seven hundred years — and all to pay for a bunch of
granite counter-tops and flat-screen TVs.
     I suppose Mr. Obama is burdened with the knowledge that the
economic truth is so much worse than he imagined back in November that
there is simply nothing to do at this point except pretend to serve up
a “tasting menu” of rescue plans in the hope that markets and
mechanisms might be conned back into compliance with our wish keep
getting something-for-nothing forever. FDR already used the fear of
fear itself trope, so Mr. O is left with little more than displaying
pluck and confidence in the face of overwhelming bad news.
     The sad truth is that banking has become a Chinese fire drill — a
frantic act of futility — as insolvent companies persist in covering
up their losses in order to avoid the counter-party hell of credit
default swaps that would ring the world’s “game over” bell. This can
only go on so long. All the chatter about “nationalizing” the banks
really boils down to what kind of bankruptcy work-out will they be put
through, how destructive will the process be, and how much of the pain
can be shoved forward in time to people now in diapers and their
descendants.
      Among the questions that disturb the sleep of many casual
observers is how come Mr. O doesn’t get that the conventional process
of economic growth — based, as it was, on industrial expansion via
revolving credit in a cheap-energy-resource era — is over, and why
does he keep invoking it at the podium? Dear Mr. President, you are
presiding over an epochal contraction, not a pause in the growth epic.
Your assignment is to manage that contraction in a way that does not
lead to world war, civil disorder or both. Among other things,
contraction means that all the activities of everyday life need to be
downscaled including standards of living, ranges of commerce, and
levels of governance. “Consumerism” is dead. Revolving credit is dead
— at least at the scale that became normal the last thirty years. The
wealth of several future generations has already been spent and there
is no equity left there to re-finance.
      If contraction and downscaling are indeed the case, then the better question is:
why don’t we get started on it right away instead of flogging rescue
plans to restart something that is DOA? Downscaling the price of
over-priced houses would be a good place to start. This gets to the
heart of Rick Santelli’s crowd-stirring moment. Let the chumps and
weasels who over-reached take their lumps and move into rentals. Let
the bankers who parlayed these fraudulent mortgages into investment
swindles lose their jobs, surrender their perqs, and maybe even go to
jail (if attorney general Eric Holder can be induced to investigate
their deeds). No good will come of propping up the false values of
mis-priced things.
      No good, in fact, will come of a campaign
to sustain the unsustainable, which is exactly what the Obama program
is starting to look like. In the folder marked “unsustainable” you can
file most of the artifacts, usufructs, habits, and expectations of
recent American life:
suburban living, credit-card spending, Happy Motoring, vacations in Las
Vegas, college education for the masses, and cheap food among them. All
these things are over. The public may suspect as much, but they can’t
admit it to themselves, and political leadership has so far declined to
speak the truth about it for them — in short, to form a useful
consensus that will allow us to move forward effectively. One of the
sad paradoxes of politics is that democracies do not seem very good at
disciplining their citizens’ behavior. The wish to please voters and
the influence of campaign money overwhelm even leaders with mature
instincts. In America’s case, this could lead to what I like to call
corn-pone Naziism a few years down the road. Someone will design snazzy
uniforms and get us all marching around to “God Bless America.” At the
point of a gun.
      It’s not too late for President Obama to
start uttering these truths so that we can avoid a turn to fascism and
get on with the real business of America’s next phase of history —
living locally, working hard at things that matter, and preserving
civilized culture. What a lot of us can see now staring out of the
abyss is a new dark age. I don’t think it’s necessarily our destiny to
end up that way, but these days we’re not doing much to avoid it.

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My 2008 novel of the post-oil future, World Made By Hand, is available in paperback  at all booksellers.