It looks like 2016 will be the year that humanfolk learn that the stuff they value was not worth as much as they thought it was. It will be a harrowing process because a great many humans are abandoning ownership of things that are rapidly losing value — e.g. stocks on the Shanghai exchange — and stuffing whatever “money” they can recover into the US dollar, the assets and usufructs of which are also going through a very painful reality value adjustment.
Of course this calls into question foremost exactly what money is, and the answer is: basically a narrative construct. In other words, a story explaining why we behave the way we do around certain things. Some parts of the story have a closer relationship with reality than other parts. The part about the US dollar has a rather weak connection.
When various authorities — the BLS, the Federal Reserve, The New York Times — state that the US economy is “strong,” we can translate that to mean giant companies listed on the stock exchanges are able to put up a Potemkin façade of soundness. For instance, Amazon.com. The company continues to seem like a good idea. And it reinforces that idea in the collective imagination by sending a lot of low-priced goods to your door, (all bought on credit cards), which rings your (nearly) instant gratification bell. This has prompted investors to gobble up Amazon stock.
It’s well-established by now that the “brick-and-mortar” retail operations are majorly sucking wind. Meaning, fewer people are driving to the Target store and venues like it to buy stuff. Supposedly, they are buying stuff at Amazon instead. What interests me in that story is the idea that every single object purchased these days has a UPS journey attached to it. Of course, people also drive to the Target store, though I doubt they leave the place with just one thing.
That dynamic ought to call into question just how people are living in the USA, and the answer to that is: spread out all over the place in a suburban sprawl living arrangement that has poor prospects for being reformed or mitigated. Either you drive yourself to the Target store for a slow-cooker and a few other things, or Amazon has to send the brown truck to each and every house. Either way includes an insane amount of transport, and sooner or later both the brick-and-mortar chain store model and the Amazon home delivery model will fail.
Now I don’t believe that will be the end of retail trade, but it will open the door for a painful transition to whatever the next iteration of retail trade will be. Probably much smaller and more local with less stuff. Unfortunately, it is difficult to imagine a resolution of that without also imagining a transition away from suburbia. The loss of faith in the suburban disposition of things will probably represent the greatest loss of perceived wealth in human history — which is how it should be, since it also happened to be the greatest misallocation of resources in human history. It seemed like a good idea at the time, and now its time has passed.
I suppose the loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle. One wonders, for example, how many well-dressed young people at the bond desks have been able to pawn off sub-prime car loans bundled into giant, tranched bonds with attractive yields to hapless counterparts at the asset allocation desks of the pension funds and insurance companies. My guess is the situation is at least just as bad as it was 2007.
The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year. I’m going to hazard to predict that the damage halts briefly in mid-winter and then resumes with a vengeance in March. This may give thoughtful people a chance to rest and assess.
Coming in June
World Made By Hand 4 (and final)
The third World Made By Hand novel
!! Is available !!
(The Fourth and final is complete
and in production for May 2016 publication)
“Kunstler skewers everything from kitsch to greed, prejudice, bloodshed, and brainwashing in this wily, funny, rip-roaring, and profoundly provocative page- turner, leaving no doubt that the prescriptive yet devilishly satiric A World Made by Hand series will continue.” — Booklist
My local indie booksellers… Battenkill Books (Autographed by the Author) … or Northshire Books…
or Amazon…
JHK used to seem vaguely insulting with his rants about suburbia
and endless “commutes” to work and markets. For many, “suburbia”
is a smallish independent community butted up to the city. An extension
of the city really. Then there is “exurbia,” a different animal. You see a field,
largely treeless, 20′ from any city, with a bunch of ticky tacky houses that
are mostly the same. Ugly, and soul-less. Then you have “rural”…10′ out from
a tiny community, itself rural. That, I would say is very nice indeed. No electricity?
Horses and mules will be in high demand.
What I like about Kunstler is the way he can craft phrases.
However his rant: that everything is going to go to shit – immediately, if not sooner, is really getting old.
His obvious hatred for the suburbs, and autos, while he lives in some remote hick town himself.
Both Dmitry Orlov and now JHK rage against the inefficiencies of suburbia and they are right…to a point. Considering the current paradigms Suburbia is a massive waste of energy, in commutes, shipping, utilities, etc. But they both miss the fact that paradigms will change. People will no longer commute from suburbia into the cities if they physically cannot–ie, no gas. UPS will not deliver everyday for the same reasons. However, I look at my neighborhood–suburban as it gets–and I see a community that could quite easily become a self-contained, largish agrarian community. There are large greenbelts that could easily be converted to public gardens, lawns converted to private gardens and chicken coops, there are several beef ranches within a few miles, the huge amounts of commercial retail space could be converted into greenhouses or many small shops run by LOCAL retailers.
The point is all of this is certainly possible, but would require a MASSIVE paradigm shift. Historically, this only happens when it becomes absolutely necessary. I think something like what I describe could quite possibly happen–but it will never happen as long as UPS trucks roll, Targets and Walmart and Home Depots remain open and people can go a mile a minute while picking their nose and listening to the radio.
Necessity is the mother of all real change.
Another point I forgot to make about suburbia is that is could provide a population density “sweet spot.” In other words, not the city where there are too many fucking people packed together, or BFE where it takes two days to go see your neighbor to borrow some sugar. Enough people to get proper diversity of skills but not so many where they want to kill each other just to get some space.
@Drud: You have some good points – there is more open space in the suburbs – they could easily grow food, chickens. Also the infrastructure is new. NYC, Philly, Chicago, etc all have ancient gas mains, water mains, and electric distribution service. It’s decaying in Philly everyday – some day they won’t be able to keep up with the repairs.
If you went to a four day work week – that would save 20% of the fuel right there.
Kunstler has his head up his ass on this.
Bla bla bla buy my book bla bla bla new book out soon.
Old.
And I did buy wmbh.
I want my money back.
He is an excellent writer but he has a blind spot a mile wide.
HSF, I just clicked on to write the exact same comment. Nice going
JHK is a splendid writer…but SO judgmental. Leave people alone
with their choices, or be smug in private. Orlov is also a splendid writer,
but again with hating the suburbs. I lived in a “suburb” and my commute was
<than 15 minutes.
For all yous Pilgrims in the sub-burgs, it will be 1620-21 deja vu for yous. Many of yous don’t hardly know greens from pot and even yous with a garden will not be able to produce enough food to even raise yous chickens (which will take at least four months before they are requisitioned by yous neighbors or the government) much less feed all yous highly diversified and skilled selves. Seriously, you are having a fantasy and if you doubt me, start that garden and see if you really can feed yourself; and that rancher can’t feed your neighborhoods either. Half the food eaten in America is imported so ya’ll will be starting off with a huge food deficit. Good luck if you expect to wing it.