My bills are all due and the baby needs shoes/But I'm busted
Cotton is down to a quarter a pound/And I'm busted
I've a cow that went dry and hens that won't lay
A big stack bills that gets bigger each day
The county will haul my belongings away
'Cause I'm busted."
-H. Howard, Sung by Johnny Cash
I strongly recommend that everyone here read Stuart Staniford's analysis of the relationship between the credit crunch and our peak preparations. Staniford is one of the most balanced and careful analysts out there - he's been a voice of moderation and reason among peak oil thinkers. But reading Staniford's analyses over the last year, I get the sense he's increasingly worried. Here he says,
"and just lay out what has spooked me over the last couple of weeks, which is the whiff of financial panic... Clearly, we have a situation in which financial system players have started to lose confidence in each other. The public has not lost confidence in financial institutions, but they are losing confidence in each other. They are probably better informed than we are, suggesting that as the chain of bad debt and overpriced assets continues to unwind, we could see more institutional failures, and more public loss of confidence in the financial system... The last financial panic of major significance in the US was was the Great Depression..."
Precisely because Staniford isn't prone to panic or overstatement, I think people should take this very seriously. The comments, including the criticisms of Staniford's analysis, also are worth a look - predicting the future is difficult, and Staniford is doing something rather difficult. Staniford's deepest concern is a dramatic reduction in our ability to invest in infrastructure changes, alternative energy, alternatives in transport. If we find ourselves dealing with an economic crisis, our ability to invest on a large scale in alternatives will fall dramatically. And if
oil prices fall in the short term due to conservation motivated by us being poorer, it will make alternative energy investment seem like a bad deal - and we don't have a lot of time left on that one.
Personally, in some ways I worry more about demand destruction *not* happening than about its occurrence. Because the reality is that most Americans I know are so deeply tied into the energy system that they will probably cut back in almost every area but their shopping and commute to work. Matthew Simmons, at ASPO this year, observed that demand destruction simply wasn't happening in places like Australia and Kenya, where rising gas prices resulted in people cutting back on other things. I'm sure we'll conserve to some extent. But human beings don't behave rationally, and we've become so dependent on cheap energy that I suspect most of us will give up our meds before we'll give up our cars, let the groceries run out at the end of the month before we turn off the lights. And with food prices set to rise 50% over the next five years http://www.theage.com.au/news/business/food-prices-set-to-surge-50-per-cent/2007/09/01/1188067435964.html?page=fullpage#contentSwap1 and UN scientists warning that within the decade we're going see hunger on a scale we've never seen before http://sciam.com/article.cfm?alias=spreading-deserts-threate&chanID=sa003&modsrc=reuters, we're on the cusp of a sea change that is about to sweep the middle class of even the affluent nations into the well-charted, if sad, territory of poverty.
Stanford is still working the details out, and I personally don't claim to know whether the current market tremors are a large earthquake or something to be shortly forgotten. But I do think that the reality is that our economy and government are so overextended that all of us should work under the assumption that we are going to be left holding the bag, be left figuring out how to get along as systems fail. There will be some big and showy projects. But I suspect the simple truth is that instead of nicely organized rail systems coming in to fix the car problem, most of us will simply be deciding "if I've still got a job, can I afford to get there."
For a very long time, I've been making the very simple argument that we're about to encounter "ordinary human poverty." I take the term from Sigmund Freud, who once said that the goal of psychoanalysis was "replacing neurotic suffering with ordinary human misery." Freud's claim is that most suffering it ordinary, normal, human. And I think most of us in the rich world, who thus far have been comparatively isolated from ordinary human poverty, are in danger of encountering it. We're in danger of not being able to put enough food on the table, of finding that after we pay for gas and food and medicine, we're in the hole every single month. We're in danger of getting a little further behind and more desperate each month, of losing our houses and getting evicted from our apartments, and more and more entering the world of the poor.
Staniford quotes Paul Krugman of the NY Times several times supporting the point I made recently that the market is to a large degree a matter of confluent fantasies, known officially as "confidence" - that is, if we believe it works, it does. But the moment someone says "the emperor is naked" too loud, the whole thing can come crashing down. And even if you've got nothing in the stock market yourself, chances are your employer does, your Mom was planning on retiring on her investments and your own job depends on selling things to people who get their money from the stock market.
I'm no prophet, and I don't claim this is what will happen, or that any particular outcome is inevitable. But if I could suggest a single project for all of us, it would be to begin to strengthen poverty mitigation systems within your community and region. That means finding local food sources for your food pantry, or becoming a food pantry grower yourself. It means working with your neighbors to create local clinics, and local "meals on wheels" programs. It means "adopting" an elderly neighbor or a disabled community member, making sure that they have food and support and medical care. It means getting together with your neighbors and storing food and ensuring clean water supplies. It means getting your church or community group, synagogue or club together and looking into group discounts for big orders of things like food, bicycles, water purifying devices.
It means getting together and having "work weekends" where you reinsulate one another's homes. It means starting "goods pantries" and "community exchanges" for things like old clothes, tools and other extras. It means recognizing that your own security depends on the security of your neighbors - and all of them are equally vulnerable. It means remembering that the old "the life you save may be your own" is literally true here.
Staniford's analysis, if true, is just another reason why we simply can't expect this to be fixed from on high. And as frustrating as that can be, in a sense, it should be liberating. Because if the solution isn't going to come from government, and the stakes are this high, there's nothing to prevent you from plowing through the red tape and speaking up, taking the lead and stepping up to preserve you and yours and those around you. There is nothing to stop us now, from recreating those things we have relied on governments for within our own, new, shadow economies and governments. That is, there is no reason for us not to reclaim our power, because we have very little to lose.