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Old May 12th, 2005, 08:12 AM   #1
 
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America changes when gas hits $4 / gallon

BY MICHAEL VENTURA

09/10/05 "Austin Chronicle" - - America is over. America is like Wile E. Coyote after he's run out a few paces past the edge of the cliff - he'll take a few more steps in midair before he looks down. Then, when he sees that there's nothing under him, he'll fall. Many Americans suspect that they're running on thin air, but they haven't looked down yet. When they do ...

Former Federal Reserve Board Chairman Paul Volcker, a pillar of the Establishment with access to economic information beyond our reach, wrote recently: "Circumstances seem to me as dangerous and intractable as any I can remember. ... What really concerns me is that there seems to be so little willingness or capacity to do anything about it" (quoted in The Economist, April 16, p.12). Volcker chooses words carefully: "dangerous and intractable," "willingness or capacity." He's saying: The situation is probably beyond our powers to remedy.

Gas prices can only go up. Oil production is at or near peak capacity. The U.S. must compete for oil with China, the fastest-growing colossus in history. But the U.S. also must borrow $2 billion a day to remain solvent, nearly half of that from China and her neighbors, while they supply most of our manufacturing ("Benson's Economic and Market Trends," quoted in Asia Times Online) - so we have no cards to play with China, even militarily. (You can't war with the bankers who finance your army and the factories that supply your stores.) China now determines oil demand, and the U.S. has no long-term way to influence prices. That means $4 a gallon by next spring, and rising - $5, then $6, probably $10 by 2010 or thereabouts. Their economy can afford it; ours can't. We may hobble along with more or less the same way of life for the next dollar or so of hikes, but at around $4 America changes. Drastically.

The "exburbs" and the rural poor will feel it first and hardest. Exburbians moved to the farthest reaches of suburbia for cheap real estate, willing to drive at least an hour each way to work. Many live marginally now. What happens when their commute becomes prohibitively expensive, just as interest rates and inflation rise, while their property values plummet? Urban real estate will go up, so they won't be able to live near their jobs - and there's nowhere else to go. In addition, thanks to Congress' recent shameless activity, bankruptcy is no longer an option for many. What happens to these people? Exburb refugees. A modern Dust Bowl.

For the rural poor it's even worse. They are the poorest among us, with no assets and few skills; they earn the lowest nonimmigrant wages in America, and they must drive. When gas hits $4, their already below-the-margin life will be unsustainable. They'll have no choice but to be refugees and join in the modern Dust Bowl migration. So, too, will people who live where people were never intended to live in such numbers - places like Phoenix and Vegas, unlivable without air conditioning and water transport (energy prices will rise across the board, regular brownouts, blackouts, and faucet-drips will be "the new normal" everywhere). In the desert cities, real estate will plunge, thousands will be ruined, most will leave - while all over the country folks will have to get used to "hot" and "cold" again.

But where will the new refugees go, and what will they do when they get there? They will migrate to the more livable cities, where rents are already unreasonable and social services are already strained, and where the new refugees will compete with immigrants for the lowest-level housing and jobs. Immigration issues will intensify to hysteria. Native-born Americans will clamor for work that only legal and illegal aliens do now. In a culture as prone to violence as ours, that will probably get ugly.

Meanwhile, suburbs and cities will be in various states of chaos, depending on their infrastructure. As inflation and interest rates rise, and the real estate bubble bursts, millions will see their assets plunge precipitously. In five years, many who are now well-off will live as the marginal live today, while the marginal will sink into poverty. With gas at $4-plus a gallon, real estate values will depend on nearness to working centers and access to transportation. As has already happened in Manhattan, the well-off will head for what are now slums, and the slum-dwellers will go God-knows-where. Places with decent rail service will be prime. Places without rail service will be in deep trouble.

One key to America's future will be: How quickly can we build or rebuild heavy and light rail? And where will we get the money to do it? Railroads are the cheapest transport, the easiest to sustain, and the only solution to a post-automobile America. (For reasons I haven't space to detail, hybrid cars and alternative energy won't cut it, if by "cut it" one means retaining anything like the present standard of living. See James Howard Kunstler's "The Long Emergency" on Rolling Stone's Web site. Also check Mike Ruppert's site www.fromthewilderness.com and the documentary The End of Suburbia.) A massive investment in railroad infrastructure could offer jobs to the unskilled and skilled alike, absorb much of the inevitable population displacement, and create a new social equilibrium 10 or 15 years down the line. Old RR cities like Grand Junction, Colo.; Amarillo, Texas; and Albuquerque, N.M., could become vital centers, offering new lives for the displaced. Railroads are key, bu!
t the question is: how to finance them?

There's only one section of our economy that has that kind of money: the military budget. The U.S. now spends more on its military than all other nations combined. A sane transit to a post-automobile America will require a massive shift from military to infrastructure spending. That shift would be supported by our bankers in China and Europe (that is, they would continue to finance our debt) because it's in their interests that we regain economic viability. What's not in their interests is that we remain a military superpower.

And that's where things get really interesting. The question becomes:

Can America face reality? If the government responds to the coming changes by attempting to remain a superpower no matter what, there is no way to underestimate the harm. The numbers speak for themselves. Soon we'll no longer have the resources to remain a military superpower and sustain a livable society that is anything like what we know today. It happened to England; it happened to Russia; it's about to happen to us. England sustained the transformation more or less gracefully; it lost its dominance while retaining its essential character. Russia is still in a period of transformation, but has remained a player thanks to its oil reserves. Europe in general - France, Germany, Italy, and Spain (all world powers in the fairly recent past) - is creating a post-national society, the most experimental form of governance since America's revolution. We have no appreciable oil, and we no longer have a manufacturing base. So what will the United States do? Sanely recognize its decl!
ining status and act accordingly, or make one last ignoble stab to retain its position by force?

Half a century ago James Baldwin wrote: "Confronted with the impossibility of remaining faithful to one's beliefs, and the equal impossibility of becoming free of them, one can be driven to the most inhuman excesses." Americans believe they're "No. 1," destined to lead the world. That is the America that's over. If we insist on that illusion, then this world is in for tough times. We will neither hold on to what we have nor create what we might have, but we will wreak untold harm (if we don't destroy the species altogether). Or we can face and embrace reality. And that reality is: There is no such thing as "No. 1" ... there is no such thing as an ideal destined country that is better than any other ... there is only us, doing the best we can, trying to live free and sanely, within limits that are about to become only too clear. Our glory days are done. What's next?

Remember, we're not talking about the far future. We're talking about the next decade.

No country gets two centuries anymore. The 21st will be China's century. That's what $4-plus a gallon means, and nothing can stop it. So: How will we change? But the question "How will we change?" is really the question "How will I change?" Because history isn't a spectator sport. It's you and me. Everything depends on whether we side with reality or illusion. Face reality, and we have a chance. Cling to illusion, and we are lost. The America we've known is over - very soon. The America we can create is up to us.

Michael Ventura will join Robert Bly, Joseph Chilton Pearce, Coleman Barks, and John Densmore, among others, at Bly's 31st annual Conference on the Great Mother and the New Father, May 28-June 5, in Wisconsin. For info e-mail [email protected]

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Old May 12th, 2005, 08:26 AM   #2
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Here's a link to the original article .
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Old May 12th, 2005, 08:44 AM   #3
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Quote:
But the U.S. also must borrow $2 billion a day to remain solvent.....


With that kind of money being borrowed everyday and the strain that is being put on there social services, how long can they keep it up? The best out of all that is that they are borrowing some money from a Communist State.

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Old May 12th, 2005, 08:48 AM   #4
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My partner and I have been considering moving to Toronto before we have kids. Reading this story makes me want to buy a house near the subway line that much faster...
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Old May 12th, 2005, 09:16 AM   #5
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Originally Posted by ct77
My partner and I have been considering moving to Toronto before we have kids. Reading this story makes me want to buy a house near the subway line that much faster...

The sad thing was we moved out of Toronto to have kids. I'm thinking we made a huge mistake. I'm in a position where I don't have to commute, but a couple of years ago I did and that was when gas was $0.45/litre, I couldn't imagine the costs now.

I remember in University I wrote a paper predicting that one day the huge office towers in Toronto would be more valuable as living space than office space, funny reading that article now.
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Old May 12th, 2005, 10:24 PM   #6
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I think that the Wile E. Coyote image is perfect.

And where America goes Canada will follow. We are like the tiny twig that Mr. Coyote grabs on to as he starts his plummet. No doubt the US's economic and military decline will unloose the fascist tendencies that are appearing everywhere there.

I highly recommend the article The Long Emergency by James Howard Kunstler, in Rolling Stone. It's an excerpt from his book of the same name, which I haven't got around to reading yet.

In it, Kunstler quotes Carl Jung, who remarked that "people cannot stand too much reality." I think that's why Wile E. Coyote is still spinning his legs in the air at this point. We still cling vainly to the hope that somehow, anyhow, technologists will invent something to replace oil and natural gas and keep our industrial society humming on. If the oil peak isn't upon us now, its arriving very soon and we have no plan B. So most of us just refuse to look down.

This is about more than just the price of gas. Our whole society, everything we depend on, relies on dirt cheap fossil fuels to continue. Our modern society is the yeast that has formed in the vat of sugar water. We've expanded exponentially in just over a century, based on what we thought was limitless sweet stuff. It's been a giant sugar sucking party since the late 1800s, not a long time in the scheme of things. What happens to all the yeast when suddenly there's not enough sugar to go around?

I used to think, 10 years ago, that we could engineer a soft landing. If we started working on an alternative version of our society back in the 70s we may have had a chance at that. But I'm starting to believe that we'll have to go through some pretty rough stuff in the coming years. I don't think many people are really prepared for it, as I know I wouldn't be. I'm starting to think that has to be me and my family's number one focus now. Getting ready for some heavy stuff, however it may manifest.

In the meantime, I hope these guys are wrong and the optimists are right. But the evidence and the cold, hard facts seems to be siding with the pessimists. That being said, anything we do today, to steer us in the direction of sustainability certainly can't hurt. We should be heading in the direction of strategies to deal with the post-fossil fuel age as fast as we possibly can, before the post-fossil fuel age comes crashing down around our heads.

Remember, the economy is a wholly owned subsidiary of the ecology.
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Old May 13th, 2005, 07:13 AM   #7
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Wow, I haven't seen 'food for thought' with that much spice for quite a while. At first I wondered about how Canada fit into the whole equation. But sleeping next to the Roman Empire pretty well guarantees a similar effect.

I hope to read more about this rather sobering prediction, but in the meantime I'm more than a little concerned. The time frame is so short.
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Old May 13th, 2005, 08:48 AM   #8
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as I was saying

While I'm on side with certain aspects of the article I have more confidence in the abiity to change.
It WILL depend on choices made and the current regime makes me ill in their blindness.
Much flows from a worldview distorted by the RR in the US and that's a horrible wild card.




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Old May 13th, 2005, 08:57 AM   #9
 
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Quote:
Originally Posted by da_jonesy
I remember in University I wrote a paper predicting that one day the huge office towers in Toronto would be more valuable as living space than office space, funny reading that article now.
That isn't funny. It's SCARY! Can you predict 6 numbers for me?

I've been pondering where to get a place and definitely want walking distance to a subway stop. But everyone I know lives all over the place where public transportation doesn't go or it's pretty unreliable. The problem though is, Toronto is built for commuting. You have to drive everywhere. Public transportation wasn't built WITH the city. Is this the same across Canada? I know Montreal's metro is goes all over the city (it's such a time saver!).
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Old May 13th, 2005, 10:37 AM   #10
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Quote:
Originally Posted by gwillikers
Wow, I haven't seen 'food for thought' with that much spice for quite a while. At first I wondered about how Canada fit into the whole equation. But sleeping next to the Roman Empire pretty well guarantees a similar effect.

I hope to read more about this rather sobering prediction, but in the meantime I'm more than a little concerned. The time frame is so short.
I think that Canadians have a sharper sense of reality than Americans. We're more tuned in to the effects reliance on oil and gas has on our environment and lifestyle. Americans are living large like the declining phase of the Roman Empire. Hedonistic with no sense of tomorrow or what todays actions mean for their children's future. I'm just wondering who or what the barbarian at the gate will be let alone when he may strike.

I'm not so naive to think that Canadians are perfect by any means, we too can make changes. Even with cheap oil and gas here in Alberta, Canadians are less averse to driving smaller, less thirsty vehicles per capita than in the U.S. AND we have longer distances to travel. The OneTonne challenge would never be considered down south unless something extreme occurs to foster thoughts of sustainability and resource responsibility. Kyoto may still be a bad word up here, but even thinking in that direction means a level of awareness beyond the myopia in America.

That's a factor in why manufacturers test market cars like the SMART car and hybrids here in Canada first before marketing to the U.S. We're more open to new ideas and forward thinking not just sustaining the status quo and beyond. The way the U.S. is going, anything less makes them appear weaker in the eyes of the world. They have a real paranoia about that and current leaders are willing to keep going to maintain that perception.

Schools across the country are educating our future leaders to think "green" beginning with recycling, water conservation techniques, and many more programs. It's the larger, older demographic that needs to break old habits and think different. (to borrow a certain phrase).

Canada is on the cusp of being a world leader in SO many ways if we just pick up the torch and run with it. We tend to over analyse and look over our shoulders in so many ways before we take a leap, but there are people out there, especially in the oil patch, that know how to jump in and "just do it".

Tell me there are more out there to lead our country, not to dominance, but to success and sustainability for the long term.
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