Exactly. In his latest post, The Abyss Stares Back James Kunstler writes:
In the broad blogging margins of the web that orbit the mainstream media like the rings of Saturn, an awful lot of reasonable people have begun to ask whether President Obama is a stooge of whatever remains of Wall Street, with Citigroup and Goldman Sachs’s puppeteer, Robert Rubin, pulling strings behind an arras in the Oval Office. Personally, I doubt it, but it is still a little hard to understand what the President is up to. For one thing, the stimulus package, so-called, looks more and more like national sub-prime mortgage itself, a bad bargain made under less-than-realistic terms, with future obligations fobbed onto whoever inhabits this corner of the world for the next seven hundred years — and all to pay for a bunch of granite counter-tops and flat-screen TVs.
We’ve heard it over and over and over and over from those in power in reference to this coming depression: “We have to do something.” My thought? No, no actually you don’t HAVE to do something especially when doing something is the wrong thing to do. Action for the sake of action is stupidity. But they are not just doing something. They are doing the same thing that got us into this situation. Taking on more debt to fix debt for the sake of growth that is not even real growth. Well, the consumption was real and the growth for China was real, but the debt taken on in the U.S. was just that, debt. We got in the habit of telling ourselves, as a nation, that credit and debt were wealth but they are not even close to wealth. They may create the illusion of wealth but when it comes time to pay back what you don’t have the reality comes home.
There will be no getting out of this mess, no way to navigate around it. The hard truth is that we will have to slog through it day by day. This collapse was a very long time in coming and the going will be an equally long time. Unlike the first Great Depression though, when we begin to come out of this we will not find a ready, seemingly limitless supply of oil to tap into. We’ll discover that the production peaked sometime between 2005-2007. The good news though is that by that time we will have gotten used to a scaled back, lower income, lower energy way of life.
Again, to quote Kunstler:
Among the questions that disturb the sleep of many casual observers is how come Mr. O 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 re-finance.
It really is that bad and wishful thinking will not help.
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