Bye Bye American Pie

The end of suburbia is near and almost no one gets it yet. The whole gigantic misallocation of national wealth has probably ended soon to be followed by the great national garage sale. My borther who lives in California’s central valley told me that unemployment has jumped to 11 %
In Merced a town just north of him, 75% of all house sales are foreclosures and property values have dropped 50%. Even people not in foreclosure can’t sell their houses unless they price them at foreclosure prices. Access to american dream boxes is only possible by private car and the charade in Washington of uber wealthy Auto CEOs’s with tin cups was act 2 of The Great Depression Revisited, a play coming to your town soon. And the financing of all these boxes and BMWs was c/o the american banking dream which is in full retreat begging all the way down, with Citigroup the lucky reipient of today’s cash for trash award. So now the two pillars of the american dream: cars and crapboxes are collapsing with congress falling over itself trying to keep the dream alive with more credit and debt. But I think the music has died. What most economists and politicians have failed to see is that in an environment of declining economic growth, assuming more long term debt makes no sense whatsover.The banks may have already figured this out. How will you pay back the debt if you lose your job? The only thing that keeps credit alive is the assumption that you can pay back the loan with every rising income and appreciating asset values. The music has died and those assumptions are dying with it. This great suburban build out of America with its sprawl of highways, crapboxes and big boxes, strip malls and office parks could only have happened with free energy. That party will be over soon. The sudden world delationary economic collapse has detroyed all asset classes, oil included, and slackening demand will buy us a few years until supply falls to meet demand and then we’re back to the roller coaster again. With credit drying up, there will be no drill baby drill. We need renewable energy and infrastructure upgrades but it is beginning to look like we wont get very much change from the new administration. The names have changed but the pool of applicants come from the same” growth is good” school of economics. Obama’s solutions look perilously close to Paulson and bush solutions. We don’t need any more stimulus packages. We need savings, we need manufacturing jobs at home, we need local food production and rail transportation and taxation of wealth, not income but I don’t see it happening until the depression worsens to a full scale collapse. Trying to keep John McCains’s American Dream alive will ultimately bankrupt the country and lead to full scale default. We need real change, a new American Dream but I don’t see it happening. We were lucky to elect a president who has intelligence and perhaps he will find a way to lead us to a new paradigm but if the quality of his advisors to date is any indication, I will remain skeptical. Gertrude Stein of “a rose is a rose is a rose…” fame summed up our current economic predicament :”There ain’t no answer. There ain’t gonna’ be an answer. There never has been an answer. That’s the answer.”

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