Fwd: Macroperu (ECONOMIA) Zombie Economics Part II

O. Blanco en Macroperu envia: -- The Dow closes down about 680 points, as manufacturing hits a 26-year low and the U.S. is declared to be in a recession. Gary's Note: Jim picks up where he left off in yesterday's installment. Change is a comin' and it's going to be a lot more drastic than most of us think. Jim explains below. Send all questions and comments to gary@whiskeyandgunpowder.com. Whiskey & Gunpowder November 27, 2008 By James Howard Kunstler Saratoga Springs, New York, U.S.A. Zombie Economics, Part II As the fiesta of "globalism" (Tom Friedman-style) draws to a close — another consequence of currency problems — we'll have to figure out how to make things in this country again. We will not be manufacturing things at the scale, or in the manner, we were used to in, say, 1962. We'll have to do it far more modestly, using much more meager amounts of energy than we did in the past. My guess is that we will get the electricity for doing this mostly from water. It may actually be too late — from a remaining capital resources point-of-view — to ramp up a new phase of the nuclear power industry (and there are plenty of arguments from the practical and economic to the ethical against it). But we have to hold a public discussion about it, if only to clear the air and get on with other things, namely the new activities of alt. energy. But I would hasten to warn readers (again!) that we'll probably have to do these things more modestly too (don't count on giant wind "farms"), and that we are liable to be disappointed by what they can actually provide for us (don't expect to run Wal-Mart on wind, solar, algae-fuels, etc). In any case, we're not going back to a "consumer" economy. We're heading into a hard work economy in which people derive their pleasures and gratification more traditionally — mainly through the company of their fellow human beings (which is saying a lot, for those of you who have forgotten what that's about). Our current investments in "education" — i.e. training people to become marketing executives for chain stores — will delude Americans for a while about what kind of work is really available. But before long, the younger adults will realize that there are enormous opportunities for them in a new and very different economy. We will still have commerce — even if it's not the K-Mart blue-light-special variety — and the coming generation will have to rebuild all the local, multi-layered networks of commercial inter-dependency that were destroyed by the rise of the chain stores. In short, get ready for local business. It will surely be part-and-parcel of our local food-growing and manufacturing activities. I hate to keep harping on this — but since nobody else is really talking about it, at least in the organs of public discussion, the job is left to me — we have to get cracking on the revival of the railroad system in this country, if we expect to remain a united country. This is such a no-brainer that the absence of any talk about it is a prime symptom of the zombie disease that has eaten away our brains. Automobiles (the way we use them) and airplanes are utterly dependent on liquid hydrocarbon fuels, and you can be certain we'll have trouble getting them. You can run trains by other means — electricity being state-of-the-art in those parts of the world that do it most successfully. I know that California just voted to create a high-speed rail link between Los Angeles and San Francisco. It's an optimistic sign, but it shows more than a little techno-grandiose over-reach. High-speed rail would require a mega-expensive re-do of the tracks. We need to scale our ambitions for this more realistically. California (and every other region of America) would benefit much more from normal-speed trains running every hour on the hour on tracks that already exist than from a mega-expensive, grandiose sci-fi program that might not get built for ten years. The dregs of the Big Three automakers can and should be reorganized to produce the rolling stock for a revived railroad system. Even amidst the financial carnage underway right now, the public is enjoying a respite from high-priced gasoline, but it is due to be short-lived. As I've already said, we are in danger not just of oil prices going way back up again, but of losing access to our supplies from the exporting countries. In other words, we're just as likely to face shortages as high prices, and soon. Oil shortages are certain to produce a political freak-out here unless we get our heads screwed on right — and this means that the next President had better prepare quickly for a comprehensive action plan in the face of such an emergency (which has to include a robust public information initiative). That this meltdown is building straight into the Christmas holidays is one of those accidents of history that leaves one reeling in wonder and nausea. The cable networks better be prepared to bombard the public with round-the-clock showings of It's a Wonderful Life, because they're going to need all the moral support they can get as zombies stalk through the silent night, holy night. Regards, Jim Kunstler Parting Shot: Check out more of Jim at www.Kunstler.com. Sic transit globalism mundi. Good riddance.