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skiing uphillRecent travels have taken me to Las Vegas, New Orleans, and of course my home city, Santa Rosa, California. The economies of these places are faring quite differently. House prices in Las Vegas have nosedived, and the urban landscape that stretches away from casino theme parks on the strip is starting to look desperate, with empty storefronts everywhere in evidence. In Santa Rosa, the big indoor shopping mall close to my home is now about one-third empty, with one huge, recently remodeled retail space sitting vacant while a neighboring giant department store sells off the last of its inventory before shuttering for good. Housing prices in Santa Rosa are way down and still dropping fast—now about half what they were three years ago. Meanwhile in New Orleans, an upscale shopping mall I visited had no vacancies (though the shoppers appeared alarmingly few), and house prices are holding up fairly well. Unsurprisingly, folks I spoke to in Louisiana were less worried than ones in California and Nevada.

Differences in perspective are easy to find also within each community. Talk to a person who still has a job and didn’t have much invested in the stock market and you’ll hear a mostly upbeat view of the economy’s prospects; but talk to another person who was recently laid off, or whose retirement savings have shrunk by half or more, and their outlook is decidedly darker.

Are we at the beginning of an epic Depression, or at the bottom of a nasty recession with brighter days only months away? It would seem to be a matter of perspective. Recent bank earnings reports and stock market activity have led many analysts to claim that the economy has indeed reached the bottom of the trough, and that while the recession is not over the worst has passed.

Statements emanating from the White House, the Treasury, and the Fed are ambiguous but generally upbeat: president Obama says dark days still await us, but foresees a return to growth; and secretary Geithner and chairman Bernanke are careful not to talk the market down.

The indicators to which I pay attention lead me to a different conclusion. We are indeed seeing a let-up in the frighteningly rapid financial collapse that began to unfold late last summer. That’s to be expected: all the trillions that are being spent on bailouts and stimulus packages must have some effect—though ultimately it will only be to provide a brief interlude before the storm returns in far greater force.

Why such a bleak forecast?

Real estate prices, and especially prices for commercial real estate, have much further to fall. And that means that mortgage-backed derivatives have further to unwind. The toxic assets that caused so much grief to bankers and investors during the last six months have not really been dealt with, and therefore comprise a time bomb that’s still ticking.

As a result, the banks are still not lending. TARP bailout funds are merely being used to clean up balance sheets while the credit crunch continues unabated. And until the toxic assets are fully and finally dealt with, many of the biggest banks remain functionally insolvent even if they happen to be posting quarterly (bailout-based) profits.

But these reasons for concern pale in importance before the deeper, more profound and systemic problems of our time.

Looming first among the latter is of course the global energy picture. World oil production has hit its ceiling, and though demand and prices are now down, further economic growth will push against energy limits that will constrict further with every passing year. But energy is just one of a spate of limits to growth—a list that includes renewable resources (fish, forests, fresh water) as well as non-renewable ones (phosphorus, zinc, indium). And there are crucial limits not only to sources, but also to environmental sinks (including the atmosphere and oceans) that must absorb the waste outputs of industrial society—most notably, the CO2 emitted by our burning of fossil fuels.

At the same time, the economic crisis is contributing to a fundamental realignment of global finances and power on a scale greater than anything seen since World War II. The neoconservative imperial over-reach of the past eight years created a nexus of problems that cannot be sorted out and solved one by one; at best, a few of the nastiest (having to do with Iraq, Afghanistan, Iran, and Pakistan) can be kept at bay while the world watches the curtain-closing finale of US hegemony. It would be nice to think that all of this can happen in an orderly, gradual way, but with China’s exports down by over a quarter and domestic unrest welling up within that nation and scores of others around the globe, there is no reason to assume that it will.

In short, while surface appearances could lead one to think that not much has changed from the status quo ante, in fact the beams, rafters, and studs that hold up the façade of normal everyday existence in modern industrial society are rotting and crumbling. In essence, we are witnessing the shift from a century of unprecedented growth to a century of contraction. Cheap, abundant energy led to an expansion of population, consumption, and financial leveraging based on a belief in the inevitability of further growth (Colin Campbell puts this so well: "Banks lent more than they had on deposit, confident that Tomorrow’s Expansion was collateral for Today’s Debt"; read more). Fossil fuels represent 85 percent of world energy, and the total amount of energy annually supplied by fossil fuels has almost certainly rounded its inevitable summit and begun its terminal slide.

The down-slope will be long and rough: even though momentous episodic events are no doubt in store, it is probably better to think of this as a “Long Descent” (John Michael Greer) or a “Long Emergency” (James Howard Kunstler) than as complete and sudden dissolution.

I’m tempted to use downhill skiing as a metaphor here in order to convey some morsel of advice as to what we should do to avoid hitting symbolic trees or otherwise coming to unnecessary grief. But in skiing, the downhill bit is the easy and fun part of the experience; getting up the hill takes time and effort (or a powered ski lift). Ironically, for modern society to get to the point of maximum population and consumption was as easy as rolling down a grassy slope. But finding our way peacefully to a lower, sustainable level of population and consumption will be a rocky, uphill march.

If we want to accomplish that march successfully, we need to put ourselves in the proper frame of mind.

We all want some “good” news from time to time. But what’s “good” news and what’s “bad”? Obviously, losing one’s job or home is painful. The media and the government understandably see the preservation of the status quo as good, and anything threatening it as bad. But if we adopt that outlook, we condemn ourselves to a future of endless bad news. In order to make our way through the decades of transition ahead, it’s important that we adopt a longer view, and devote much less effort to preserving a beguiling veneer of normalcy. The more of us who have a long view, the better. Without it, people (including world leaders) will get scared or unrealistically, giddily optimistic and do foolish things.

That’s why it’s important to keep educating one and all about what’s really happening and why. Ultimately we can indeed live perfectly satisfying lives if there are fewer of us, each using much less energy and less stuff. That’s how our species has spent nearly all of its existence on this planet. That’s the true “normal.” If that is our goal, we can chart a course and certainly arrive back in that condition in due time, much the wiser for our high-energy industrial interlude.

The danger comes when those who are making decisions on our behalf don’t realize what is normal, don’t see that as a necessary goal, and try instead to restart the sputtering engine of growth.
How totally last century.

Photo: WenatcheeOutdoors.org

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13 comments

keeping our bearings: bubbles, crises, equillibrium, normalcy

From: Phil Anderson, Jun 7, 2009 10:30 AM

"One who does not change their course will get to the destination" (Chinese Proverb). Richard reminds us that we do not want the destination of our current course, and we have not changed that course despite spending the future wealth of our children and grandchildren. The energy bubble and climate bubble are far more significant than the economic and geopolitcal bubbles, but our leaders do not recognize this, or even the bubbles, except maybe Obama who is waking up or capable of waking up and acting. No amount of aggressive human ego or eloquence or theory or bold fiasco can counter the natural laws of equillibrium. And why would we want to? -simplicity, organic living, community, liberty and all the other wonderful virtues of the new paradigm being forced by the global crises are what we need, what we've long yearned for --the normalcy, the natural environment in which we were constructed to function best and be happiest. The global crises are a blessing because they are forcing us to make the changes needed for our survival and happiness, driving the paradigm shift to a bright new world for all life. But that shift could be painful if we do not understand it and ride the crest of the wave to shore. Like the Pioneers, we have before us unlimited opportunity on the new horizon and need only leave our old ways and ride out on the invigorating, creative, joyous adventure to a better life. Richard is on the beach, high on a life-guard stand, beckoning, and sometimes blowing his whistle madly, as are our own hearts. We should listen and act, and go jolly.

solutions and coping

From: Michael J. Kaer, Apr 29, 2009 01:20 PM

I know most you who read here know about the wonders of the Hemp plant. I do not have to go into them here. Getting industrial hemp to be grown around the world, if for no other reason than to stave of starvation, should be one of our main goals. Hemp will not be the total solution to this situation, but it will help us cope with the immediate problems. Coping means we need to rethink alot of what we think we need and want from what we actually need. Stick to the basics. Do you have clothes? check, a roof over my head? Check, food in my belly? check, clean water for drinking and washing? check. I am living like a king of old. I am paying more in taxes than some people see in a lifetime and I am near the bottom of the scale in this country(Canada).

Stick with the basics and you can release some of your fear.

I hope that helps.

Michael.

Re: 'A Beguiling Veneer Of Normalcy'

From: Hugh Potton, Apr 29, 2009 02:05 AM

What more can anyone usefully add to what Richard has said? Only perhaps that we wish our leaders such as Brown and Obama would devote their attention to treating the root cause of our problems, rather than waste precious time and vast sums of money attending only to the symptoms.

Substituting a new car battery for a dead one might get you off the hard shoulder, but if the underlying reason for that dead battery is a defective alternator, then the new battery very soon ends up going the same way as the old one. Strikes me Mr. Haynes very practical advice for the DIY mechanic holds equally true for the world economy!

Perspective

From: Jan Steinman, Apr 28, 2009 01:36 PM

I think it was John Kenneth Galbraith who, when asked the difference between a "recession" and a "depression," said, "Oh, that's easy: a 'recession' is when your neighbour loses his job, whereas a 'depression' is when you lose your job!"

And so the problem of perspective rears its head in many ways. Those who feel relatively secure in their lot probably don't understand what all the fuss is about, whereas those who feel unemployment is imminent and homelessness just a few months afterward probably feel the sky is falling.

That problem of perspective extends to the comments posted here: those who worship at the altar of technology don't understand what all the fuss is about -- cold fusion is just around the corner! Meanwhile, the "doomers" are enjoying the recession, buying discounted ammunition and freeze-dried foods at "going out of business" sales.

Among all the other stuff going on, we are reaching a place in time where "rock logic" is running up against "water logic," in the words of Eduard DeBono. Perspective tends to function in either/or mode: a rock is in a cup, and you tip the cup, and the rock falls out. It is either in or out of the cup. "You're either for us, or you're for the terrorists."

Fill that same glass with water, then tip it: some of the water flows out, and some remains. Water logic is what's going to get us through the coming difficult times.

The rock logic is that fossil energy decline is a problem to be solved. John Michael Greer rails against such thinking, calling the fossil energy decline a predicament, rather than a problem. A predicament has no solution; it only has coping strategies.

The water logic is that almost all of us will have fewer energy slaves following us around, doing our bidding, and that life will be less comfortable and shorter. But that doesn't mean we can't make the best of it.

The Trouble With Normalcy It Always Gets Worse

From: Bloomer, Apr 27, 2009 09:00 PM

In strict economic terms, we been on a tear. Global output in goods and services has been booming. As a result, a doubling of income for workers in the 3rd world countries. Hell, the way the global economy was rolling along, there were predictions that sometime by the end of the century, people all over this planet would enjoy the same standard of living as us, in the western world. We all want to see our brothers and sisters in the southern hemispere prosper do we not?

Unfortunately, we ran out of gas and we ran out of money. And it seems good ole mother earth is faltering under the weight of its' inhabitants. Even as we fire up the printing presses, drill deeper and dig up more earth, somehow normal isn't what it used to be. Perhaps, now is the time to consume less, so others' can have more.

Thanks

From: Michael Dawson, Apr 27, 2009 12:25 PM

We're up against ourselves, especially the rich and powerful amongst us. The only answer is to keep learning and fighting.

Art and history museums can be invaluable educators

From: John O. Andersen, Apr 27, 2009 05:00 AM

Perhaps more than anything else, such museums teach over and over the sense of tragic: that life goes through cycles, that humans age and die, that empires rise and fall, that resources that were once seemingly inexhaustible, are suddenly exhausted.

Art and history museums can offer people of all ages subtle reminders of their mortality, and the fragility of all life.

With those concepts firmly in mind, people will be better able to understand and accept concepts like Peak Oil and Climate Change.

Fusion Energy to the rescue?

From: Anonymous, Apr 27, 2009 02:51 AM

I've read recently some optimistic reports about fusion energy, I'd be interested in Richard's view on this. Both hot fusion contained or suspended in rotating magnetic fields and cold fusion using paladium and deuterium. Like in the movies, can humanity come up with something innovative in the nick of time?

Who actually knows what the future will bring

From: Nick Collingridge, Apr 26, 2009 12:51 AM

Although I agree with everything you say in this article from the strict and limited perspective of current knowledge, I do think we need to always remember that the future is the future - we don't know what will happen until we get there. Things could pan out in exactly the way that you propose, but then again there might be some fundamental changes that mean it will be very different. We just don't know until we get there.

Two simple examples of things that could happen to kick things back into life in the current model are nuclear fusion and room-temperature superconductivity. These are technologies that are actively being researched and breakthroughs might happen. There are probably also technologies that we don't yet know about that could come along and save the current energy-intensive model.

I don't view these possibilities with any great relish - like many others I view the current state of our society with horror and would welcome a downsizing and simplification, apart from the unattractive prospect of the dislocation and pain that the necessary population reduction would undoubtedly bring with it. But yet again I will say that we just don't know what the future will bring, and I suspect that in fifty years time your forecast could look as accurate a prophecy as the Dan Dare visions of today which were all the rage in the mid-fifties.

"A veneer of normalcy?"

From: John Monro, Apr 25, 2009 05:10 PM

I've used the same comment at the end of this article a few times recently. Indeed, with our present National administration's keenness for coal electricity generation in New Zealand, you could say "how nineteenth century".

Richard's article goes to the nub of the problem, I am a medical practitioner, and tend to think in medical terms. The patient, our economy and our society (they are the same thing), is moribund, and in desperate need of a cure. But without a diagnosis, there is no appropriate treatment, Without a diagnosis, treatment is quackery. And that's what we have now, economic and political quackery on a global scale.

There is no general understanding of the revolutionary times in which we live, likely the greatest revolution in our circumstances since the first wheat was planted in Mesopotamia about 10,000 years ago. The emotional and intellectual investment in the status quo is almost universal, and it will nearly destroy us; not completely, humanity will survive in some form or other, but for most of us, or our children, there will unfortunately be great sorrow. I see no other future for us, because whilst the revolution in our circumstances is unavoidable, there has been no equivalent revolution in our thinking.

Humanity will do what it's always done, and that's behave in its perceived short-term interests and neglect the long term ones. So much as I admire Richard's thesis, I am now convinced we will never become wiser, and the thought we might is pious. Evolution is our creator, and in this it has played a cruel trick on us. We are the universes's first creatures, almost certainly, to have evolved sufficiently intelligent enough to learn many secrets of the universe, and apply them to our own advancement, but tragically not sufficiently intelligent enough to do so wisely and sustainably.

Gory details, please

From: D3PO, Apr 25, 2009 02:13 PM

All true and believable, but you've forgotten to include the gory details about how we transition our global or US population from present numbers to the fewer you mention will be necessary. Soylent Green? Or, do we have lots and lots of time left to enjoy a gentle down-slope with say, birth control?

I know it's unseemly to ask questions you already know the answer to, but I'd like to hear your take on it, Richard.

electrification & nuclear fission

From: Anonymous, Apr 25, 2009 01:54 PM

You should read "Prescription for the Planet," by Tom Blees. Integral Fast Reactors offer safe nuclear power unlimited by fuel supplies, with a waste product sharply reduced in toxicity and volume, all at low cost and with no contribution to proliferations.