Has the Financial Crisis Killed Consumerism?
James Howard Kunstler is the author of The Long Emergency and The Geography of Nowhere.
New York—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 United States 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 declare on the same day that the economic landscape is looking darker than the Great Depression.
Among the questions that disturb the sleep of many casual observers is how come President Obama 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 refinance.
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. 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 perks and maybe even go to jail. No good will come of propping up the false values of mispriced 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.