Bill Totten's Weblog

Saturday, December 17, 2005

The Clusterfuck Nation Chronicle

Commentary on the Flux of Events

by Jim Kunstler, author of The Long Emergency

Victory (December 12 2005)

What on earth does George W Bush mean by victory? To remake Iraq in the image of Indiana?

I suppose I am the 1,289,654th observer to note that the president does a poor job of articulating the goal of our military venture over there - which is to defend our access to the oil of the Middle East.

Incessantly flogging the word freedom the past three years was probably his biggest mistake. It would have been more precise, modest, and useful to say that we were supporting elections under a new constitution (written with our assistance) because the alternative would be to just appoint a bunch of guys we liked to be a government - and that government would have had no legitimacy among the Iraqi people, not to mention the bawling of world opinion against it (and us). So, of course, elections were a necessity, and the policing required to make that happen has been an ugly struggle.

Otherwise, the most conspicuous freedom in Iraq, for most Iraqis, the past three years has been freedom from reliable electrical service.

But victory? That's really a howler. Over what? The terrorists, I suppose, if you call the larger enterprise a War on Terror, another unfortunate locution. The fact is that there is a vast popular antipathy against the United States that emanates from west of Gibraltar clear across the eastern hemisphere to the south Pacific. In formal terms, it is an Islamic jihad. Its clear goal is to expel interlopers from Islamic territory. It imposes rather severe penalties on the perceived interlopers, and its tactics are not gentlemanly, especially where civilians are in the way.

Victory against this would seem to imply the extermination of at least tens of millions of Islamic young men, not a realistic goal. We are equally unlikely to charm them into a change of affection by demonstrating the art of elections.

Getting back to the smaller theater of Iraq itself, we see a cast of characters arrayed against our presence: Shiites acting as proxies for neighboring Iran; former Baathists seeking crazily to regain control; Sunnis desperately trying to keep a hand in the oil revenue, since most of the oil lies in either Shiite or Kurdish territory; and of course there is probably a contingent of international jihadistas, young men from all over the Middle East and elsewhere, with no regular work except to harass and exasperate the infidel occupiers. There is certainly an inexhaustible supply of these young men. And an inexhaustible supply of munitions at their disposal. There is no chance whatsoever that we are going to pacify these warriors. They will not rest until we depart their ummah and we are not going to do that until there is no oil left in it.

So, victory in any conventional sense that Americans understand this word is out of the question, and the President's use of it is his biggest blunder since the "mission accomplished" stunt of 2003. The Iraq elections may succeed in establishing a legitimate government - but then what? Will it govern for a month and a half and fall apart? The eventual likely outcome, as everybody knows, is civil war in Iraq, and perhaps a widening conflict with Iran on one side, Syria on the other side, and Saudi Arabia left to the Jihadistas. Elsewhere in the world, things will continue to blow up.

Meanwhile, back here in This Land is Your Land, the easy motoring utopia will remain non-negotiable and we'll drive Amtrak into bankruptcy.

Uncharted Territory (December 05 2005)

When people of any political persuasion cry for America to pull out of Iraq, what do they suppose will be the result? That America will go back to being the same nation of easy-motoring, McMansion-buying consumpto-trons we were in 1999? Things have changed.

The world oil markets have changed. Their stability through the 1990s was a transient phenomenon, and a circumstance which, unfortunately, put us to sleep. During that time, OPEC, led by Saudi Arabia, was the world's "swing producer" - the oil producer with spare capacity that could always open the valves and pump more. And they did, even cheating on their own official quotas, which only had the effect of flooding the market with "product" and driving down the prices - so by the end of the last century oil had sunk to $10 a barrel.

That was great for America in the short term. It reinforced the widespread illusion that the oil disruptions of the 1970s were a shuck and jive. We ramped up all our car-dependent behavior, built more malls and "lifestyle centers", carved more housing subdivisions in the farthest-out asteroid belts of the metroplexes, bought cars the size of tactical military vehicles, and acted as if this was a way of life with a future.

Many things have changed. One is that a potent segment of the Islamic world declared war on the west (jihad). Another is that OPEC, led by Saudi Arabia, has apparently lost its spare capacity, and therefore its role as the world's swing producer of oil. Another is that the North Sea and Alaskan oil fields have passed their production peaks and are depleting at phenomenal rates - in the case of Great Britain's fields, up to fifty percent a year - because they were drilled so efficiently with the latest technology. Yet Another is that rising ocean temperatures have led to several years of massive hurricanes wreaking havoc among the oil and gas platforms of the US Gulf Coast. Still another is the industrial turbo-expansion of China and India, taking advantage of their ultracheap labor to become the world's factories and back-offices, while jacking up their oil consumption.

Oil trade has now become a dead heat race between supply and demand, with demand looking like the stronger horse coming into the home stretch. As it overtakes supply, even more strange changes will unfold on the world scene. These are likely to take the form of fierce geopolitical struggles to gain favor in or control those regions that still have a lot of oil, foremost the Middle East, with Iraq located at dead center of it.

There is really only one condition that will allow us to pull out of Iraq. That is if we make an enormous collective effort to change our behavior here in North America; if we break free from an economy pegged to suburban sprawl, reform the way we do agriculture and retail trade, make substantial investments in public transit and railroads in particular, and practice fiscal restraint at every scale, including an end to the reckless creation of mortgages. Unless we face these facts and the tasks associated with them, then we will find ourselves at the center of that geopolitical struggle.

Right now, nobody from any political stance is talking about these facts and these tasks. Those in the anti-war movement are by-and-large people who enjoy the same suburban "entitlements" as the war-hawks. The anti-war leadership is even worse than the pro-war leadership, because the war-hawks don't even pretend to be interested in reforming the way we live - they've declared it "non-negotiable".

If the anti-war movement has a different idea, they sure haven't expressed it. If the Democratic party were to take the lead in the anti-war movement, they would have to start negotiations for changing the way we live in this country. To evade the responsibility for this would simply be cowardice. Leading sometimes means taking public opinion into territory it hasn't been to before.

We're now entering that territory, by the way. Stealthily over the past week, the price of natural gas has crept above $14 a unit (one million btu's). Half the houses in America are heated with the stuff. Ninety percent of America's farm fertilizers are made out of it. Above $14 really is uncharted territory.

Season's Greetings (November 28 2005)

Observers are already writing off 2005 as if it had shown us everything it has to show. I think the holiday frenzy will be as instructive as the hurricanes of late summer.

A mild late-autumn combined with extra imports of European oil and refined fuels, and withdrawals from our own strategic reserve, have held the gasoline prices down here in the US. But the northeast got a four-day cold blast over Thanksgiving, along with a substantial snowfall, and the furnaces are now cranking away, even as the WalMart shoppers commenced their first mad tramplings of the season.

Natural gas, methane, which powers half the home furnaces in America, is a separate story from oil, of course. We can't import it like oil because it requires special pressurized tanker ships and dedicated port facilities - of which there are currently only two in America - and getting it here by those means even if the facilities were in place would be very un-cheap. We are way past all-time peak natural gas production in the US, meanwhile, and desperately making up for it by importing all we can from Canada, which is compelled to sell us as much as we demand under the NAFTA rules, despite the fact that they are way past their own all-time gas production peak and desperately need the stuff to process the tar sands of Alberta into oil (which China has contracted to buy a great deal of). You may have noticed, too, that Canada is a northerly nation with significant home heating needs of its own.

The price of natural gas is back to where it was just after Katrina-and-Rita: about $11.50, which is roughly 400 percent higher than it was as recently as 2002. Even so, we've barely seen the effects of that yet and the prospects are that it will go much higher before this winter is over. The longstanding assumption that home heating comes cheap will go down hard in this country. The homebuilding industry is going to get crushed. They will be stuck with tens of thousands of already-built spec houses in the larger-than-3000 square foot range, with great rooms, lawyer foyers, and other heat-sucking features, and they will have tens of thousands more of them under construction or tagging close behind in the permitting process. Practically all of them will be located in the remotest suburban asteroid belts, since the closer-in ones have already been built on.

Add to this predicament the number of people already living in houses like this who may be desperately looking to get out of an increasingly ominous trap, perhaps compounded by additional problems with "creative" mortgages that have left them leveraged above their eyeballs. Some of them will be looking at heating bills as high as their monthly mortgage payments around Christmas time. If enough of them panic this winter, the housing bubble, which is already deflating, will simply fly to tatters and shreds. The high cost of home heating is the IED of the housing bubble.

American economists will be shocked to discover that the housing bubble had virtually become the US economy, and that all their bullshit about "productivity", and the "consumer sector", and the idiotic metrics that they employed to rationalize their errors, will no longer conceal the fundamental unhealth of our collective behavior. The lack of new mortgages alone will throw the financial world into a fugue of affliction, and the experience will be especially severe for the pension groups who tossed their capital into the black hole of derivatives trading.

The tragic part of all this is that we have become such a foolish and craven people, so lost in our endless victory laps, incessant self-awards, and failures of attention, that we will deserve everything that reality throws at us. We are past the point of being unworthy of our own history, so maybe we ought to stop pretending to celebrate it.

Bonus Essay: An excellent new piece by our Wall Street correspondent Dmitry Podborits, with special attention to that notorious ass, Forbes Magazine columnist Peter Huber.

Stay or Go? (November 21 2005)

Should we stay or should we go? In Iraq?

Neither Jack Murtha, the congressman who set the cable news networks afire this weekend, or Frank Rich, the lead dog on the New York Times Sunday op-ed page, mentioned the word oil once. I only mention it myself because it would be nice if we could have a coherent public discussion about staying or going in Iraq, and you can't do that without talking about the oil of the Middle East.

But it does illustrate how deep the national denial runs and how foggy the debate gets. Even poor George W Bush seems to think we're in Iraq in order to turn the people into Jeffersonian democrats, so the only issue for his opponents is whether that is possible or not.

Maybe we ought to ask: what happens to the oil supply of the Crusader West when none of its representatives maintains a garrison in the Middle East? I use the term Crusader not to be cute, but to remind you how Europe and America are viewed by many people of the Middle East. They don't like us. They have a longstanding beef with us. Some of them would like to punish us.

America is leading the current crusade because we are the society most desperately addicted to oil, and the Middle East is where two-thirds of the world's remaining oil lies. The one thing that we apparently cannot bring ourselves to talk about is our addiction itself. The commuters whizzing around the edge cities and metroplexes of this land probably got a big charge out of Congressman Murtha's anti-war blast taking over drive-time radio on Friday. I wonder if they thought about how it might affect their commuting.

This whole spectacle - both the inept war itself and our debate about it here at home - is particularly shameful for the official opposition, my party, the Democrats, because we could be talking about the so-called elephant-in-the-room, namely how we live in America and the tragic choices we've made, and the things we might do to change that - but the party leadership is too brain-dead or craven to do that. As long as we don't, we're going to be wrassling a tarbaby in the Middle East.

Unless an anti-war opposition has a plan to withdraw from the project of suburban sprawl, we're going to have to keep soldiers in Iraq, if not in the cities, then out in desert bases guarding the oil works and keeping planes ready to fly in case some al-Zarqawi-type maniac mounts a coup in Saudi Arabia. It would certainly be legitimate for the Democratic party to oppose the idea that we can continue to be crippled by car-dependency, or that we ought to keep subsidizing that way of life - which Vice-president Cheney called "non-negotiable". We'd better negotiate that or somebody else is going to negotiate it for us, and that is exactly what they are doing with IED's in Iraq and elsewhere.

But without that part of the argument, the debate in congress and on the airwaves is just stupid, because we've left ourselves no real choice.

True Blue (November 14 2005)

Years ago, President Nixon nominated a legal nonentity named G Harold Carswell for a seat on the supreme court. Derided by the newspaper columnists as "mediocre", Carswell was defended by a conservative Nebraska senator, Roman Hruska, who said, memorably: "There are a lot of mediocre people in America who ought to be represented".

Now Hruska has been reincarnated in Senator Charles ("Chuck") Grassley of Iowa, who said the following a few days ago:

"You know what? What makes our economy grow is energy. And Americans are used to going to the gas tank (sic), and when they put that hose in their, uh, tank, and when I do it, I wanna get gas out of it. And when I turn the light switch on, I want the lights to go on, and I don't want somebody to tell me I gotta change my way of living to satisfy them. Because this is America, and this is something we've worked our way into, and the American people are entitled to it, and if we're going improve (sic) our standard of living, you have to consume more energy."

Like the true-blue mediocre Americans of the Nixon era, American consumers (as we like to call ourselves) have the representative they deserve today in Senator Grassley. He expresses perfectly the dominant thought out there, which is as close to being not-a-thought as any thought can be. And this kind of proto-crypto-demi-thought is exactly what is going to lead this country into a world of hardship.

Instead of preparing the public for changing circumstances that will inexorably require different behavior on our part, our leaders are setting the public up to defend a way of living that can't continue for practical reasons. The question remains: are our leaders doing this out of cynicism or stupidity, or some other reason that is hard to determine?

Cynicism would mean that they know exactly what the score is with the global energy situation and our predicament in relation to it, and don't trust the public to deal with the truth. Two weeks ago, I was on a speaking program in Dallas with investment banker Matthew Simmons, author of Twilight in the Desert, an alarming book about the state of the Saudi Arabian oil industry. I asked Matt what he has encountered the time or two that he has had an audience with George W Bush. Apparently, the president's reaction to Simmons' message (which is that we are in big trouble) is a kind of curious incomprehension, as in the old expression, is that so?

Personally, I don't believe that Mr Bush or the people around him do not understand that oil production worldwide has about topped out, and that whatever oil is left belongs mostly to other people who don't like us very much. But public acceptance of this reality would mean the end of many illusions supposedly crucial to our national life, most particularly that we can continue to be an easy motoring society, and continue running an economy based on its usufructs.

But the psychology of previous investment is a curious thing. It compounds itself insidiously, and now we not only suffer from our misinvestments in an infrastructure for daily life that has no future, but we also suffer from the political investment in continuing to pretend that everything is okay. That is, if Mr Bush went on TV tomorrow and told the public we have a problem, the public would want to know why they weren't told sooner, and why they were not directed to some purposeful adaptive behavior, and Mr Bush's team, the Republican party, would be discredited for failing to do so.

While I doubt that the President and his posse are too dim to comprehend the energy trap we're in, there certainly is plenty of plain stupidity in the rest of our elected leadership, of which Senator Grassley's remarks are Exhibit A. To be more precise, actually, Grassley's statement displays something closer to childishness than sheer stupidity. It comprises a set of beliefs or expectations that are unfortunately widespread in our culture, namely, that we should demand a particular outcome because we want it to be so. This is exactly how children below the age of reason think, in their wild egocentricity, and it is the hallmark of mental development to grow beyond that kind of thinking. But the force of advertising and other inducements to fantasy are so overwhelming in everyday American life that they may be obstructing the development of a huge chunk of the population, something that becomes worse each year, as proportionately more adults fail to grow up mentally. This state-of-mind is made visible in Las Vegas, our national monument to the creed that people should get whatever they want.

What I wonder is: when will my fellow citizens discover that their thinking and their behavior are unworthy of their history? That we are entering a time when these things simply aren't good enough, aren't enough to meet the challenges that reality now presents. Or are we too far gone? It's possible that we are. After all, life is tragic, meaning that happy outcomes are not guaranteed and that people who forget that usually come to grief.

Attention Deficit Nation (November 07 2005)

The American public's failure to pay attention reached supernatural levels this week as our mass media gloated over falling gasoline prices - down 24 cents, average, to pre-hurricane levels. The news media took this to mean that all the end-of-the-summer trouble is over with and things can now get back to normal, including especially an economy based on trade in suburban houses.

What they failed to notice is this: since the hurricanes shredded our Gulf of Mexico oil and gas capacity, Europe has been sending us two million barrels of crude oil and "refined product" a day from its collective strategic petroleum reserve. The "refined product" includes 800,000 barrels of gasoline, plus diesel, aviation, and heating fuel. Meanwhile, US domestic production has fallen to around four million barrels of conventional crude a day. America uses close to 22 million barrels of oil a day. Bottom line: post-hurricane, total imports have accounted for eighty percent of America's oil consumption.

Now, the important part of all this is that last week the International Energy Agency (IEA), Europe's energy security watchdog, declared that it would now end the two million barrel a day shipments to the US. Not because they are hateful meanies, but because, after all, it is Europe's strategic reserve and they can't sell it all to us because, well, some strategic emergency might come up for them, too.

It will take a few weeks for the last of Europe's tankers to offload supplies and for the various fuels to work their way through the US fuels retail system. With US production and refining still crippled, we can look forward to watching the price of gasoline, heating oil, diesel and aviation fuel kick back up through Thanksgiving and on into the heart of the Christmas shopping season. At the same time, homeowners will be getting their first substantial heating bills of the season.

This will be very bad news to the guys in charge. The Hooverization of George W Bush will resume and accelerate.

Meanwhile, the new uprising of Islamic youth in France shows no sign of letting up and, in fact, is growing in both intensity and venues. If it continues along the same upward arc, the authorities may soon start making martyrs out of the young car-bombers. The action could spread to Holland, England, and elsewhere across Europe. The potential for wider scale insurrection and systematic terror operations such as bombings is obviously huge. Anybody can get instruction in bomb-making off the Internet now. People and materials move easily over a united Europe with fewer border controls than in the old days.

Europe knows it can ill-afford antagonizing the Jihadi factions beyond its borders. With the North Sea oil fields depleting at rates as high as twenty percent a year, Europeans have little local production to fall back on if, say, regular tanker shipments of Middle Eastern oil through the Suez canal were to be interrupted for some reason. England's methane gas production is at especially alarming low levels.

Europe - France and Germany in particular - have enjoyed the luxury of laying back since 9/11 and allowing the US to rumble with the Islamic world, while the Europeans enjoyed a comfortable sense of moral superiority about their supposed peaceableness. Those pretenses seem to be reaching an end. So now that Europe has gallantly spent down its strategic petroleum reserve for our sake, it will be interesting to see how soon they may need it themselves.

I wouldn't venture to guess whether the young rioters of France are getting help and encouragement from somewhere outside, but there certainly are enough Jihadi professionals and cheerleaders on the sidelines to support this new frontal action in Old Europe. It is going to be an interesting holiday season all around the western world.

Bill Totten


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