OK, Kunstler Nailed this Recession, What Does He Suggest Now?

I've often thought that the most efficient use of solar energy must be a well-done vegetable garden, when you consider that you can sell the produce for cash just like any solar-panel electricity, but the investment is merely seeds and your time.

Kunstler is on the right track, but is still way off beat. He seems to think that we will be going back to the 1850's. Society will not digress that far for a number of reasons. First, the infrastructure of electricity and communications is not going to magically go away just because oil gets too expensive to dive our cars with.

Society will change, that is for sure, but we're not going back to plantations. Rather, I imagine we'll live more like the 1950's. Cities will still exist, but the neighborhoods will include things like the local butcher and market. Cars will still be here, but they will be much smaller, and only used on occasion. Most people will travel distances by train, but aircraft will still fly. America will still be rich, but we will down size a bit.

I've been thinking this morning about the great risks in narrative fallacy. My thinking grew out of this piece on the failures of economic, but but certainly we know the risk in peak oil circles.

So before we really get started, correct me if I'm wrong: Wasn't Kunstler's narrative about oil scarcity creating a financial crisis?

That's NOT what we got. We might have long term energy risks (I agree) but it looks like we GOT a financial bubble first, a commodity (and oil) bubble second, and a recession (or more?) third.

Some of these comments (for example, those regarding food production using petrochemicals) are on the mark. Others are less well reasoned, and I suspect that is due to a lack of experience. I would agree that rail transport is far more efficient than truck for distance movement of goods (this is well documented), and that electric rail in an urban area is also far more efficient than individual vehicles or bus transport (reading the history of electric rail in Los Angeles is illuminating). That said, you cannot build a rail station on every street and maintain any sort of decent schedule. Just as with telecommunications, there is a "last mile" gap that must be filled by individual transport of some type. For transport, that gap may be as large as twenty miles depending on terrain and how close communities are to each other. In farming areas, individual homes can be as much as sixty miles from the nearest town. Twenty miles is as far as one person can travel on foot in good weather on good terrain in one day. Distances traveled and/or time required are reduced as one travels the scale from animal transport upwards through various types of mechanical assistance (bicycle to vehicle). I think the solution is much more efficient vehicle transport using biofuels (which can be produced locally). Diesels were originally designed to run on peanut oil, for example, and such engines, properly designed, emit less CO2 and get better fuel economy than gasoline engines.

I am not sure where Mr. Kunstler lives or what his experience is with rural areas, but as someone who lives in an agricultural area with a large number of small farms and livestock operations, I can say with some conviction that many of his proposals are unworkable. Others have merit. However, I think such proposals should be reserved until the author has actually lived the lifestyle he proposes. There is amply opportunity to do this -- one simply has to move to a farming community and spend a couple of years there as a farmhand or as the owner of a small plot (twenty to thirty acres would be sufficient).

Odograph - I wouldn't describe it as a commodity bubble, because the oil at $140 bbl was actually needed. Now we may have a glut, but the recession in my opinion reaction to oil's real long term cost. Of course, people are conserving, even at low prices, which bodes well that we can change our consumption habits.

Also, the financial crisis may have been triggered by overleveraging, in anticipation of continued cheap energy, and the oil shock shattered that.

Actually he seems to be 40% correct

Per the 2006 piece:

1)$4 dollar gas, YES.
2) housing market collapse, YES
3)massive unemployment, by historic measures, not even close.
4) Dow at 4,000, NO
5)hyperinflation, NO, we are actually experiencing deflation.
6)chaos in China. No evidence that I'm aware.

Indeed I find it hard to believe that high fuel prices caused the housing meltdown. While it was surely a factor, overall cost increases as it related to fuel still represented a small percentage of a homes disposable income.

Odograph,

Let me simplify this for you:

A critical, yet limited commodity, when it reaches its end, causes sever disturbances before the final end.

The current economic crisis is tied directly to the housing market. Why did the housing market crash? It became too expensive to heat, power, drive to-from, most of those new build developments. That's why so many people suddenly had no money to pay the mortgage.

Oil prices peak, due in no small part to speculation, that is the final straw, housing market crashes, world economy crashes, oil prices crash due in no small part to speculation.

BUT...

If you examine current world supplies and demand, they are almost even, with supplies sometimes argued at still coming up short. But the world economy is not going to recover quickly. So it is logical to posit that oil prices will rebound much more quickly than the economy's ability to absorb the hikes.

So last time, the spike caused the crash but was absorbed for quite a while before it did. Next time, nobody will have any money, let alone jobs, to pay for any kind of steep climb, which MUST happen when supply cannot meet demand eve by a small margin.

Then things go BOOM.

This also ignores that Kunstler is a hard-core racist; anyone whose ever read his diatribes about the American southwest would realize that most of his rants about over-population are of the xenophobic sort, envisioning a poor hapless bunch of white people (who moved IN and built up the infrastructure that he's complaining about) being over run by a bunch of people from Mexico (whom were there BEFORE we build it to unsustainable levels).

The better response is, does Kunstler have a response to the crisis other than his absurd New Urbanism? No. His image of small town America (conveniently sanitized of people of color who will die in the great urban collapse) is ridiculous. We're not all going to move to versions of DIsney's Celebration, with cutesy faux general stores and small-town craftsmen.

Sean:

I didn't know anything about the racism. If that's true, its deplorable. I think immigration from Mexico helps both countries, because all of us trade information that leads to more efficient and enjoyable living on both sides of the border.

His good books are "World Made by Hand" and another I can't remember right off hand. His other work does indeed show a severe hatred of humanity in general, but he does take the time to pinpoint a culture or two and a few races that "clearly won't make it" in his mind. His hometown is also pretty clearly shown on his homepage. It could really only be termed as upscale white suburbia, although he's within an hours drive of the Adirondacks.

Overall though, Kunstler's predictions are a rapid descent into chaos and fire before settling into a system shock like culture of uncaring. His predictions also rely heavily on the fact he thinks people will be A.OK with living like the Amish, especially predominant is his world without electricity, period. His economic crises was in reaction to a fuel shortage (oil) as well. Since ours is a fiatable system and instead it was a housing crunch due to bad business practices that went unregulated and unchecked, his version is not in play. He could still turn out to be on the ball if say, the government gets overrun and crashes in the next year but that's somewhat unlikely.

Overall though, there are plenty of good bloggers that do the same thing he does (i.e. future predictions), that aren't racists.

"Why did the housing market crash? It became too expensive to heat, power, drive to-from, most of those new build developments. That's why so many people suddenly had no money to pay the mortgage."

No, its because banks were lending their money to people who didn't have enough money to pay them back in the first place. To people without stable employment for instance. And then, those same people were allowed to borrow *more* money, using their house as collateral. In essence, people who couldn't afford massive debt, took on massive debt only because the banks let them. And, because they were idiots, these borrowers just kept borrowing and borrowing simply because they could.

In Canada, where the banks did not take insane risks like that, there has not been a collapse in either the banks or the housing markets.

"...the fact is that he predicted this economic crash, and the reasons behind it, with absolute accuracy."

So did Peter Schiff, Paul Krugman, Karl Denninger and a whole heap of others. The trouble is, they neither agree on the ultimate cause or on what corretive action to take.

Even a broken clock tells the right time twice a day.

EVERYBODY knew an economic downturn was due, and you think Kunstler is some kind of hero?! No, seriously?

There are still high paying jobs on certain job sites, here's 3 from about.com's top ten job sites-

www.linkedin.com (professional networking)
www.indeed.com (aggregated listings)
www.realmatch.com (matches jobs based on your skills)

good luck to those looking.

Anonymous, you are wrong, plain and simple. Who cares about Canada? The Canadian economy effects the world economy...oh wait, it doesn't.

What do you think was the main reason why people suddenly could not afford their mortgages you silly schmo? Oh, I guess in your simpleton mind it was just a coincidence with the oil spike.

Amazing, such people like this one can even remember how to breath. :-/

Willy...the growing value of the loonies in my change desk tells different. Canada has become an essential energy supplier to the US, and is our largest trading partner. And they're not 5000 miles across the Pacific. We USers have been too arrogant about Canada for too long. They're great, hard working people who do a great job at what they do.

Apocalypse or no apocalyse, what is Kunstler doing on his everyday life to prepare for or avoid the inevitable social collapse that would come if he is right this time?

He never mentions what he is doing on his posts, is blogging about the future and sitting on your hands the answer?

Treehuggers I respect are people of action and very pragmatical and if I don't see some sort of activism and social responsibility from JHK to back his claims I really can't give his words much more credit than other "guilty entertainments" I read every week.

At least Monbiot gets himself in the line of fire for change and Astryk gets herself living the life she writes about. Wrong or right it gives them credibility...

Roy,

Why the disconnect? Its not blatantly obvious that the Canadian economy has no real effect on the world economy, certainly nothing even remotely close to that of the US economy? Is that really hidden from you?

Look, it was the anonymous moron who felt that the US housing crisis, which initiated the entire global collapse BTW, was not tied directly to the oil spike. She or He based this on their view of the Canadian economy. Its so moronic as to be humorous. Its also sad and depressing that people like this wander around and propagate such nonsense, misdirecting attention away from the real issue: oil. In my view, they need to be beaten with the "Wake-The-F-Up" stick.

But I'll give you this; for the past 8 years I would have happily left this crumbling Roman Empire 2.0 for your fair land if I could have.