The Futility Economy By James Howard Kunstler

[Crewleader]

on January 4, 2010 6:09 AM

It's the first business day of the new year and oil is trading above $80 a barrel, which means the price has re-entered the danger zone where it can crush industrial economies. This is a central element of the predicament we find ourselves in. The US economy is essentially a Happy Motoring economy. During the whole nervous period since the collapse of Lehman Brothers, American gasoline consumption hardly went down at all, though so many other activities collapsed, from house-building to trucking. Yesterday, The Seattle Times published a story with the idiotic headline: Oil Touches $80 on US Economy, Demand Optimism. Apparently, they think high oil prices are "a good sign."

How much can a nation not get it? Would $100 oil ignite a new orgy of "consumer" spending and another round of investment in commercial real estate? Welcome to the Futility Economy. This is the economy where Nature and its material companion, Reality, punish us for our stupidity and fecklessness. This is the economy that will tear the United States apart, after it bankrupts us at every level, and mercilessly drives the population down by one-third through starvation, homelessness, violence, disease, and sheer political cruelty.

Whatever you thought our economy was the past thirty years -- whatever model of it you have in your head -- that is definitely not what we are going back to. Like one of Dickens's Yuletide ghosts, Reality is leading us by the hand into new circumstances. We resist like crazy. We throw our hands over our eyes. We don't want to look. We want to return to the comfort of our dreary routines -- living in places that aren't worth caring about, weaving endlessly in freeway traffic, drawing a paycheck at the air-conditioned cubicle, inhaling Buffalo wings by the platterful, with periodic side-trips to the state-chartered casino where there's always a chance of scoring a lifetime's income on one lucky bet. And at the end of the day, you can retire with a simulated prostitute on your laptop screen! And not even have to fork over a dime -- except perhaps for the Internet connection fee.

http://kunstler.com/blog/2010/01/the-futility-economy.html#more

[Crewleader]

1. US Gas Prices

http://www.msnbc.msn.com/id/33693780/ns/business-oil_and_energy

Oil prices near $80 after U.S. stockpiles fall
Gas prices finish the year with six straight days of price increases

http://www.msnbc.msn.com/id/12400801/ns/business-oil_and_energy/

[phantom power]

2. There has been a prediction floating around for a while...

that from here on out, the world in general will experience cycles of aborted economic growth. The economy will begin to grow, but that will immediately begin to increase oil demand, which will cause oil prices to spike, which will abort the growth.

I think we may now get to find out if that dynamic plays out as predicted.

[truedelphi]

3. A very good article, but I would have liked to have seen the word "greed" mentioned n/t

[unblock]

4. futility, indeed, that's the word for it. if we have any money, monopolies will extract their share

there is insufficient competition in general, and particularly in some essential areas.

if the people have no money, too bad.

if the people do have money, well, then, there are plenty of corporations who are free to extract an unreasonable portion of it.


need health care? pay up.
need oil? pay up.
need to borrow money? pay up.
need software? pay up.
need phone service? pay up.

and the evidence is in the stock prices.
once upon a time, economists understood that industry leaders were MATURE companies, who generally offered stability and nice dividends and little growth potential. these days industry leaders can zoom up because they're free to grow by gobbling up their competitors and the real innovators in their industry. if any competition exists, why, you can just buy your rival and team up against your common enemy, the consumer.

[sendero]

6. I noticed this back in the mid 80s...

... for all the talk about "innovation" and "competition" and "free markets" we have a corporate culture that is predicated mainly on monopoly.

There was a time when our government kept monopolies in check, but that ended decisively with Reagan.

[femrap]

7. Just read that Silicon Valley

has a ton of office space empty. The article said the only businesses working were social-networking (Facebook) and some clean technology...a solar plant is being built in Fremont, CA.

I've read that China is far ahead of us in manufacturing solar panels.

With all the dumbing-down done since Raygun, maybe we aren't able to be as imaginative and creative as before. Of course, if one wants to step out and start a new business, who can afford the Health Insurance?

Our country stymies the entrepreneur. The monopolies want no competition.

I can't seem to see us moving forward, only backward. Maybe hand-cranked tools are the wave of the future.

[grasswire]

5. wow the comments

...just fascinating.