Disasters Far and Near: Haiti and the U.S. Economy
Jan 20th, 2010 | By James Howard Kunstler | Category: Featured
As the disaster in Haiti moves into its “Katrina” phase of a organizational chaos, relief effort failure, and public health calamity, the world will get another lesson in the dangers of techno-triumphalist posturing. American authority pretends to be in flawless control of a situation that by the minute crumbles into anarchy and death as the generals strut their stuff and the CNN crews broadcast yet another feel-good segment about adopted orphans. At this point, one rainstorm is all it will take to kill what is left of the Haitian social order.
It’s a tragedy for the ages, and tragedy is a fulcrum of the human condition that techno-triumphalism pretends to have vanquished. All the meals-ready-to-eat on God’s green earth won’t add up to a happy ending for everybody. Haiti was a disaster waiting to happen every bit as much as the Federal Reserve is for us. For decades, the USA’s policy (and the UN’s too) was just to stuff more food aid onto an island already so far beyond its carrying capacity for human existence that every new birth certificate was a death warrant in disguise. But free people are free to do what they will do, and in Haiti there was not much more to do than make more people.
Now the USA will also pretend that there is a Haitian government in charge — as in the pathetic grandstanding of Secretary of State Hillary Clinton the other day — though the Haitian government was a fiction for decades before the earthquake struck. The recent blatherings of Bill Clinton would have us believe that Haiti is poised to become an exemplar of economic development for the Caribbean once things are tidied up there. What planet are these people living on? (Answer: Planet Limousine.) Rather Haiti is the example of what life may become in nations bethinking themselves developed further along in The Long Emergency. If the figures on world crop failures for 2009 are relevant, even places like the USA may get a taste of this before the end of 2010.
On the home front we have President Obama’s announcement last week of a tax on banks that received bailouts of one kind or another. This tax, he said, would amount to $90 billion over ten years. That’s pretty funny, since there is no shortage of opinion to the effect that ten years from now $90 billion might buy you a box of Little Debbie Snack Cakes — if the means of production are even there to make the darn things. Here’s an idea: if the USA is going to backstop companies that are not allowed to fail, then maybe these companies should fork over hefty premiums for what is, in effect, an insurance policy. For instance, those billions now slated to be paid in in bonuses to the likes of Goldman Sachs, JP Morgan / Chase, Citibank, et cetera ad nauseum. Let them just pony up these bonuses to the taxpayers every year as long as they enjoy backstop insurance. (They’ll still have very hefty salaries.) And, by the way, those bundles of money don’t even cover these bank’s off-balance-sheet liabilities.
I raise these indelicate points to argue that the stories we are telling ourselves these days do not reflect the real circumstances we find ourselves in, and will not help us to get through the difficult times ahead. In fact, they amount to an invitation for more tragedy. The more the USA imagines itself to be too big to fail — and immune to the mandates of reality — the more likely we are to fail massively. The more we indulge in techno-triumphalism and organizational grandiosity, the more chaos we invite. The signal failure for the moment is the Obama regime’s unwillingness to imagine that the old economy is dead and that no amount of financial mortician’s wax and rouge will bring it back to life. Stunts such as so-called Financial Crisis Responsibility Fee (the $90 billion tax over ten years) will only corrode what is left of Mr. Obama’s authority as its meaninglessness reveals itself.
In the meantime, no one with any real authority has asked figures like Hank Paulson, Lloyd Blankfein, and Tim Geithner under oath exactly how Goldman Sachs managed to get paid 100-cents on the dollar for derivatives bets from the foundering AIG; and how come in the first place Goldman Sachs was short-selling the fraud-riddled derivative securities it was packaging for sale as AAA-rated paper to credulous investors; and many other pertinent questions of the day that ultimately must be answered and settled within the rule of law. Funny, too, that our constitutional law professor president hasn’t demanded this from his own Department of Justice. I maintain that it’s crucial to settle these matters if we don’t expect to become an entirely lawless nation. It’s necessary to break up the TBTF banks. It’s necessary to investigate their officers, and prosecute them if the facts warrant it. It’s necessary to open up the dark vaults of off-balance-sheet liabilities and dispose of them at their true value.
It’s necessary to start telling ourselves a different story about where we are going. We’re destined to become a different kind of society and economy. If that future economy is not based on real productive activity conducted at a scale consistent with resource realities, then we will starve to death, or watch our infrastructures of daily life crumble away to nothing, or hack each other to pieces as the the people in Haiti may do before the end of this week. Goldman Sachs and its cohorts are not necessary for the future economy of the USA. In fact, they’re already dead. The real zombies of this world stalk the sidewalks of Wall Street, not the swamps of Port-au-Prince.
Regards,
James Howard Kunstler
January 20, 2010
James Howard Kunstler
James Howard Kunstler is perhaps best known for The Long Emergency, which predicted the financial meltdown and the implications of the peak oil problem. The Geography of Nowhere , about the fiasco of suburbia, is a campus cult classic among the architecture and urban planning students. It was followed by a sequel, Home From Nowhere and The City in Mind: Notes on the Urban Condition . Mr. Kunstler has also authored 10 novels including World Made By Hand, a story set in America's post-oil future. His articles have appeared in The New York Times, The Washington Post, Rolling Stone and The Atlantic Monthly.
ShareThis
[...] This post was mentioned on Twitter by Ron Simon, Agora Financial. Agora Financial said: Disasters Far and Near: Haiti and the U.S. Economy: Haiti as harbinger? A system far beyond carrying capacity just… http://bit.ly/7IBYuF [...]
This reminds me of a family at the genetic dead end.
They haphazardly spawn until any spark of honor, decency, intelligence and drive is gone.
They could not spell Massachusetts, they think a Congressional seat is inheritable, their politicians and cops are never found guilty and laws they make are just for the unconnected.
Like the real estate madness we are about to revisit or the banking crisis never resolved ; unless or until we address these issues they will continue to rear up and bite us in the behind.
Political and economic parallels between Haiti and the USA can only exist in a peculiar Kunstlerian geometrical reality where wealth equals poverty, literacy equals ignorance, vast infrastructure equals shantytowns, rule of law equals chaos, recession equals disaster, and power equals powerlessness. Actually, our present economy is “based on real productive activity conducted at a scale consistent with resource realities.” If that fact is in question, just examine the still unsurpassed level of economic output which will remain at respectable levels despite difficulties and will not “die in six months” as stated by JHK in last week’s essay. Hyperbole may be a reflexive response to the large problems that we face, but we won’t get an accurate understanding of the future by overestimating its impact. Our nation’s decline is manageable. Just as a growing America supported the declining British empire, so a burgeoning Asian and newly global economy will ease our pains as we share economic prosperity with the world.
Once again, James – well written!
The talk of taxing Wall Street Treasury and Fed looters is a weak response to a Treasonous Fraud on America. This was a conspiracy by Wall Street operatives in and out of government. Those in high official positions are sworn to serve their country, not their cronies. We need investigations and prosecutions, not hearings and new regulations. Thanks for covering this disgrace and disaster to America’s future.
[...] here: Disasters Far and Near: Haiti and the U.S. Economy Share and [...]
[...] See the rest here: Disasters Far and Near: Haiti and the U.S. Economy [...]
[...] CONTINUED HERE [...]
Not with a bang, but with a whimper.
“Techno-triumphalist posturing” is prime JHK, but we may have to rethink “dirt cookies” (butter, salt, sugar, and dirt) ourselves. Yet again the harvest was bad, not only world-wide but in the putative glory of American Agribiz. Something I always find scary is a big notice in the Johnny’s Seed Catalog, “Seed Crop Failed.” If Johnny can’t grow plants for seeds, the rest of us are going to have trouble, too. In particular look for corn and wheat products to go up.
In Lester Brown’s “Plan B” he cites about a dozen major trends threatening the world’s food supply. Each of them would take concerted global effort to reverse. These include things like the impending loss of glaciers (about a billion people in China and India and South American rely on glacial melt for summer crops), overfishing (2/3 of the world’s fisheries are in collapse or decline), groundwater depletion (2/3 of the world’s aquifers are in decline, the rising number of people eating resource-intensive animal products, the fact that rising summer temperatures threaten photosynthesis itself – which stops at 104 degrees Fahrenheit, etc. Others include the mass-scale paving of farmland, topsoil depletion, and the very likely significant rise of the oceans which will inundate fertile deltas and, eventually, coastal plains.
One of the most intractable threats to the world’s food supply is, of course, the growth of population. There are many reasons for the world’s unsustainable population growth (including poverty), but one not sufficiently mentioned, in my opinion, is the role of America’s Christian right in preventing US aid to promote birth control or abortion. In an effort to protect the un-born, American Christians will cause the ugly, slow, painful death of perhaps hundreds of millions of adults.
There have been several references to the US having a “bad crop” lately as far as corn, soybeans and wheat. I just dont see it. Is the corn crop 13 billion bu? Probably not, is it less that 12 billion bu? Definately not. The number crunchers are putting the carry out at 1.5 billion bu give or take. For there to be a short crop and drastic rationing to take place you need a carry out of less than 1 billion bu. What everyone is arguing about between the gov numbers and the private numbers is about 500 million bu. Regardless of what the corn yield was like for your particular area. If you do not live in a state that begins with an “I”,Nebraska or MN it dosnt really matter what happened there concerning prices or the supply of corn. I was in Neb a good part of the fall doing some consulting and their crops were very very good. My farm in Illinois avg 196 bpa. The talk in the coffee shops in ohio shows very good yields as well. We did not have a short crop. There are issues with quality and with corn left out in the fields that will have to be harvested when the snow melts and the ground is fit, but we are not talking about an effect of 1 billion bu. We had a record or very near record corn crop. Beans did well also. South America looks like it is going to have a good crop. The russians had a good crop and are going to export 5 million more tons of wheat than they did the previous year. The export market has been slow so far this year. This is not pointing to a shortage of grain this year. Realistically corn would probably be in the $2.50 range if it were not for the funds and the faltering value of the dollar. The value of the dollar probably has far more reaching effects on the price of grain and other commodities than any other factor. With the big managed funds involved in the commodities markets you can see an inverse relationship between the dollar and the general price of commodities. It seems as if commodities in general are being used for store of value as currencies devalue. At least thats my take on it. I would say that the real problem right now is the quality of the crop thats sitting in bins. Low tests weights were reported all across the corn belt. Its going to take more corn to make a pound of beef, chicken, pork or gallon of ethanol than it did last year. Our corn was testing in the low 50s. I have heard talk of avgs being in the 45 pound range. That could cause usages to be higher than normal, we will see.