Same Old New Year

Well, the "fiscal cliff" has come and gone, and the can has ceremoniously been kicked down the road once more. I've heard varying figures bandied about for what this will mean for the debt, but I believe that without the deal, the debt would've increased by $7.8 trillion, and will only increase by $7.6 trillion now that we've passed this heroic deficit reduction package. Or something like that. I forget the actual quoted figures, but I suspect it really doesn't matter a whole lot. Fantasyland is fantasyland, doesn't matter if the rides are painted blue or red. The coming year looks to be a doozie for all kinds of polarizing issues, too, with gun control and immigration reform poking their nose into the tent of unconsensus.

I don't think the significance of all this really hits people most of the time. After all, we still hear echoes of the "Greatest Generation" surviving the Great Depression, and so on. Everyone got through it while growing veggies in grandma's backyard and eating sugar sandwiches while working for the WPA until FDR came along and gave everyone a job in a defense plant (or whatever version of mythology is kicking around in your family tree). Things might be tough, but we'll get through it on the other side.

Well, kiddies, here's a problem -- only three percent of the population is involved in food production. Of those, only a tiny fraction does anything like the way it was done Back When. Most everyone else plants GMO hybrid seeds, has tractors the size of aircraft carriers, and raises cows more pumped full of antibiotics that the shut-in hypochondriac living next door to you. On top of that, most of the fertilizer and machinery involves oil at some point. As for everything else, America in 1937 still had not hit peak oil production, or was getting closed to tapping out other natural resources. The "emerging markets" of the world had not yet been discovered, and there was still a great deal of real wealth still waiting in the wings to be used.

Now...what? America is also an empire these days. We control a lot of real estate around the world, as well as cramming a couple of dozen mutually antagonistic ideologies into one nation through the miracle of "identity politics." Want to get elected? Just claim to represent some group, be it left-handed Elvis impersonators, or alien abductees, or something, and go to Washington to "fight for their rights." The only problem is that it makes everyone pissed off at each other and means that everyone's hand is in the cookie jar. Well, what happens when we get down to the last cookie and five or six people are reaching for it all at once? No one is going to want to work together, because "us vs. them" has been bred into the American mind for three generations now, along with the "gimme gimme gimme" mindset.

Things are only worth what people agree that they are. When China refuses to stop buying bonds and tells Washington to get stuffed, then what? Of course, all the pundits say that China will never, ever do such a thing because their economy is too tied to the dollar and too tied to American interests. These same pundits have not picked up a history book and look at Chinese history. Japan slaughtered Chinese right and left during the limelight of the "Greatest Generation." Look at pictures sometime of Chinese prisoners being lined up in front of a ditch, their heads being taken off by Japanese soldiers in some sort of contest. Then look at their Civil War, followed by the Cultural Revolution, and where they are now compared to where they were once in the past. This is a culture that deals with hostage takers by sending a cop out a window with a rope and a pistol. If they decide that they need to part ways with us, they will suck it up, whatever the cost, and move on.

And back to us -- we will be stuck in the middle of a political crisis where everyone is holding money that they have no idea what it's worth. The economy nearly collapsed because no one could agree what houses were worth. What's going to happen when the money itself is essentially valueless because no one can agree what it's worth? Unlike houses, we have to use money, we can't ignore the crisis and live in it, or not buy it. Are we going to get on the phone and call up someone at the corporate office halfway across the country and figure out how many bushels of potatoes our paycheck works out to? Yes, there will be attempts to pick up the slack through bitcoins or other currency alternatives, but I predict that these will be too little, too late, before real chaos -- the first we have experienced in most of our lifetimes -- hits.

Of course, if things weren't bad enough, go check out the headlines. Hugo Chavez is either dead or is the next closest thing to it. Venezuela is one of the world's major oil producers, as some might remember. What would happen if civil war breaks out (which is starting to look incresingly likely)? Couple that with the possibility of civil war in Iraq (as was predicted years ago), a wider conflict over Syria, possible conflict with Iran, and where are oil prices going to go? Back to $150 or maybe even $200 a barrel?

My prediction for the New Year: Nothing drastic is going to happen. We are not going to be chasing each other up and down the interstate while blasting away with home-made crossbows and wearing spiky leather codpieces. Zombies will not lust after your brains. Sanity will not come to our current addiction to over-consumption. Instead, we are going to keep meandering down the path of a little more wealth destruction, a little more overconsumption, a little more termite rot in the economic house. We will find ourselves looking for something and finding it is gone, another reminder that things aren't what they used to be. We'll hear of another person who lost their job and has been out of work for a while, and will be asked if we of anything to let them know. This is what real collapse looks like, when we are sinking and we know it, but it happens so slowly that we come to accept the condition as "how things are now."