The sinking of the global economy has barely begun to sink in. Numbers representing the dollar losses are so big they have become meaningless to most of us. While we are offered comparisons to the Great Depression, those too become meaningless in the face of our very different circumstances today. We are in uncharted waters and the boat is going down.
The easiest future to imagine is a return to the status quo ante. It is a recent past in which we learned to be comfortable. Unfortunately, we don’t have the means to go back. The boat really is going down, and we no longer have the tools or the money to build a new one.
Our economy, our entire way of life, was built on cheap and abundant energy. No matter what the price at the pump might be today, cheap, abundant energy is history. (Look for prices to spike again later this year.) Sadly, we used the credit card our parents gave us (to buy gas in a pinch) to run up debt on the rest of our purchases as well, and in the memory bubble of easy credit we bid up prices, imagined we had created real value, and then borrowed against that as well. There wasn’t ever a there there.
As Jimi Hendrix sang it, “Castles, built out of sand, fall into the sea, eventually.” Well, the wave came in and the wave washed out, the castle dissolved and the boat went down.
We are here on the beach. What to do?
The very significant difference between our looming Post-industrial Depression and the Great one of yore involves numbers, too, but they are round numbers easily grasped.
Most Americans were rural in 1929. Most of us are urbanites today. North America (excluding Mexico) had about 100 million residents then, versus a little over 300 million now. Most of the world’s petroleum was still in the ground back then, and we were using it slowly. Most of it is gone now and we are using what remains at an exponentially increasing rate. The U.S. was a petroleum exporter then, an importer now. Other natural resources were in abundant supply back then, including vast amounts of timber and untapped fertile topsoil. We are far poorer in natural resources today. And while the Depression slowed growth, we had a burgeoning manufacturing base which went into overdrive to produce the machinery for World War II and the post-war domestic boom that followed. To top it all off, many people enjoyed only modest means and many were poor in 1928, but very few carried much debt other than a household mortgage and most mortgage holders had substantial equity in their homes.
So we are going to crash harder and longer this time.
What is the most rational response at the local level?
Every decision we make as a community from 2009 forward needs to be considered in light of our current reality. That may seem self-evident, but, unfortunately it is far easier said than done. If we direct our efforts toward recreating the past, we will fall further and fail faster.
We need to plan now for a society and economy based on localism. Tbere will be less motorized transportation, particularly for people. Automobile and air travel will be sharply curtailed, with trains picking up the load. (Trains are far more efficient than planes, trucks or buses.)
We will be greener because we have to be (see the post above). We will depend far more on local farms because they will be the most reliable sources for food. Money will stay in the local economy longer, and we will depend on local production and local mechanics to meet more of our technological needs.
For Asheville, in particular, we need to start now to imagine and build a post-tourism economy. We don’t have the means to build a boat, but we can cobble together a raft that will float this community through the hard times ahead. It is time to start building.
Bothwell
How can Asheville possibly support itself entirely on the economy that would be provided by localism?
The city alone has, I believe, 80,000+ residents? And Buncombe County has 225,000+? Where can food for 225,000 be grown in the mountains of WNC? Furthermore, can a proper balance of crops be grown here in WNC so as to provide something other than potatoes and corn? The answer is no. There are very few large scale agricultural businesses here in WNC because the land is not flat enough to support it. Instead we have lots of small farmers whose prices are artificially high because there is no local efficient competition.
The problem with your vision of Asheville is that it’s fine so long as you are rich. It’s sustainable, if you can afford to buy locally grown foods for double or triple the cost of heading down to your equally friendly neighborhood Ingles.
Trains? Where in Asheville is there a train station? Oh WAIT, there isn’t one. The closest train station is in Greenville, right? The Greenville Amtrak goes to a grand total of four major cities, meaning if one wishes to travel to any city other than one on the crescent route, you would need to transfer (which causes a significant rise in price).
Of course, this is all assuming that you are in fact correct about this being worse than the great depression. But the simple fact remains that this is not worse than the recession during Jimmy Carter’s presidency. Odd though, how someone who probably considers themselves fairly influential is spending time telling his readers not to buy or invest, which can only harm consumer confidence further.
Oh well. I guess the novelty of extreme liberalism will wear off once the economy crashes and everyone’s taxes go up to finance government spending programs that would prolong a recession.
Jesse, thanks for the comment.
1. I never suggested that our economy can cut itself off entirely from the rest of the world. But we are going to have to do more in the immediate region and depend less on travel. Air travel will soon be for the rich.
2. Apparently “artificially high” prices of local food are a direct result of cheap, plentiful fuel. Cheap transport of food grown on mechanized farms worked by cheap labor is the norm against which you are measuring cost.
As an organic grower for 40 years, I can assure you that we grow a lot more than corn and potatoes here, and on a commercial scale. The reason we don’t have more local farms (as we did 100 years ago) is less about terrain and more about cheap food from California (et al).
3. I have never made more than $30,000 per year, and currently make much less. I buy local food as much as possible to keep my dollars local, to feed the local economy, to support local farmers. You don’t have to be rich, you have to adjust your diet and perhaps your spending patterns. (And the cost difference will soon diminish.)
4. A great deal of car traffic in North Carolina is east-west. We already have train tracks and had an operating passenger terminal in Biltmore until some time after WWII. The state has been investigating high speed rail between Raleigh and Asheville for some time. When we institute that rail system, we will sharply curtail automobile traffic on I-40. At the same time, we can expect more and more freight to move by rail as fuel prices rise. Rail is far more efficient than trucking.
5. If you follow the financial news you know that the U.S. has lost about $14 trillion in capital in the last several months. That is huge. It is difficult to compare the Great Depression and the current situation for several reasons, but there are a few points on which it would be hard to disagree. We have far less manufacturing in the U.S. than we did in 1930. We were an exporter of oil and food in 1930, and now we are a net importer of both. We had far more natural resources at our disposal in 1930 (timber, minerals, water, etc.). We have far more people now.
6. Your tax model is upside down. Under Reaganism we cut taxes and then cut government programs under Clinton and Bush who cut taxes further. Deregulation permitted the recent bubble and crash. Huge military spending by Bush bankrupted the country. At some point we will have to raise taxes to pay off the huge debt run up by Bush.
One great idea is a quarter percent tax on stock trades. It would make almost no difference to investors but would impose a significant curb on speculators—the ones who are directly responsible for the current mortgage and banking crash.
7. Funny how labels work. I believe in conserving fertile soil instead of paving it,in conserving whatever fuel we have and finding new sources that pollute less, in water conservation, in trying to regain the clean air we had in the past, in taking care of my neighbors and building my local community and I am called a “liberal.” Looks to me like I’m pretty conservative.
Those who believe we should buy Chinese goods, eat South American and Californian food, drill for oil in our wilderness areas, permit bankers to run their businesses as Ponzi schemes, cut down the old growth forests, build bigger highways and drop environmental protections are called “conservative.” What, exactly, are they conserving?
“We need to plan now for a society and economy based on localism”
Could not agree more!
“can a proper balance of crops be grown here in WNC so as to provide something other than potatoes and corn? The answer is no.”
The answer is yes
There is so much land used for growing sod (grass) and all them golf courses etc. how we use land is important
CSA are a way to go: I have 2 acres of land and currently in the process of expanding my garden to 3/4 acre, already have 3 families that want to buy in.
and once cheap food is no longer available in stores locally grown food will be in high demand
Obviously I agree with the assertion that things are much worse then most people want to admit – if not now then when is the time to make preparations? We need local politicians that understand this (one reason I will support CB in his upcoming election!)
If the economy miraculously recovers because of the never ending stimuli the worst scenario is that we have a stronger local economy in addition to all the wonderful things we have now.
Cecil,
A so-called “conservative” today is quite the opposite. They cannot claim to conserve anything with the possible exception of the conservation of backward-thinking ideals that are firmly rooted in 19th century thinking. Maybe it is time for people who truly represent the ideals of conservation to lame claim to the conservative nomme and let the impostors come up with something that is more accurately descriptive. I sugggest: “CAN’TSERVATIVE.”