The Jive Economy (James Howard Kunstler)

[Tace]

James Howard Kunstler -- World News Trust

Feb. 1, 2010 -- What started out as a case of The Emperor's New Clothes now has America looking like the world's biggest nudist colony, with everyone in the long chain of power and authority admiring each other's splendid new (imagined) pimp suits. George W. Bush (remember him?) wasn't kidding when he discounted the function of objective reality in our national life, saying, "We make our own reality." This apparently hasn't changed much with a new chief at the top.

A nice example popped up last week with the GDP (Gross Domestic Product) index for the fourth quarter of 2009. The equation affects to measure the growth in economic activity and this particular release imputed that the US economy had expanded at an annualized rate of 5.7 percent. Wow, impressive! We must be digging a new Panama Canal or something.

It turned out to be based largely on some jive about inventory "investments" -- meaning, I guess, that the Ronco Corporation has laid in 1.7 million Dial-O-Matic food slicers and Showtime Rotisseries in the expectation that American stock market investors will enter 2010 creaming off their mutual fund profits to spend wildly on every infomercial prompt beamed at them over the graveyard shift at Fox News.

Memo to nation: we're not really growing, we're shrinking. Is this necessarily a bad thing? I dunno. Unlike, say, the stockholders of Toll Brothers I'm not so sure that "housing starts" represents my idea of a healthy economy -- since it really means we're destroying every cornfield and cow pasture left outside our cities, which will play havoc with our national life when the reality of our Wile E. Coyote agribusiness fiasco starts to hit home and we discover what cornfields and cow pastures were really all about in the first place.

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[dmallind]

1. When the Dow hits sub 4K take this clown seriously

He has been predicting it for at least three years in succession.

I think I'll take official GDP numbers over his insane doomer screed any day. Inventory investments are a bad thing? How can replacing sold goods be an indication of shrinkage? Does most of the US economy produce Ronco gadgets? I thought all the cheap shit was made in China according to Kunstler et al? So how can it be driving our GDP growth, which is measured only on American produced goods and services? Shouldn't doomer prophets at least be consistent in their claims? Do we make anything or not, Jimmy boy?

[earthside]

2. He was correct ...

... about the 2008 crash.

He saw the housing bubble bursting, as did a lot of us so-called "gloom and doomers" -- and we got the same reaction from folks like you then, too.

The U.S. is now on track to double the federal debt in ten years ... that's a pretty gloomy prospect.

Unless, you live in Pollyannaland.

But most of us don't live in Bush's "faith-based" world, we live in the place where the bill eventually comes due for the borrowing you do.

Listen to what Kunstler is trying to warn you about -- if he is totally wrong, no serious harm done. But if he is right (and because of Peak Oil, he ultimately is), then we might have some chance of mitigating the worst effects of the coming collapse.

[dmallind]

4. No he wasn't.

He forecast it for years beforehand, every year, and forecast it as being much much worse than it was.

Anybody can seem "right" to the half-informed by just preaching gains ior losses constantly. Because one of the two will happen.

When he gets either the timing or the dimension of a shift even vaguely close in a novel prediction that is not just spouted out as a nonstop whine that doom is round the corner then let me know.

If you think JHK is even sane let alone right you live with far more faith and far less fact than any Bush fan.

Some questiions to consider:

Where does the US stand as a debtor in relation to GDP? What is the worst that has happened to any industrialized democracy with a higher leveraged position? To whom are we mostly in debt? What is our long term population trend and what effect will this have on housing values across all markets? How many housing markets have seen significant losses in value? How many are seeing losses still? What percentage of homeowners have been foreclosed upon? What percentage are still current on their mortgages? How much oil do we have left in terms of years of supply? What alternative energies are incipient within this timeframe? How much solar power would it take to power the grid of the entire US and how many square miles of desert could supply it, even with today's technology? How much natural gas do we have in terms of years supply and how much could be converted into heating and grid utilities?

[ixion]

3. admiring your new clothes I see

Excelsior!

[dmallind]

5. Ah yes - naive symbolism is always the sign of a sound opinion. NT

[tom_paine]

6. Anyone who buys into ANY "official" numbers makes the same mistake they did in th 1970s Soviet Union

Unemployment at merely 10% :rofl:

Puh-leeze, anyone with eyes can see the Bushification of our nation, reflected in communist-like dissembling, misinformation, disinformation, and half-truths all cloaked in "Plausible Deniability".

Anyone can see that the election of Obama has not stopped this transformation at all, if anything it has slowed down the pace of transformation, consolidating the False Reality Bubble.

I understand your making the same mistake as someone taken in by the Soviets, or any increasingly, observably, corrupt and false system of self-reinforcing lies.

If I was to believe current Imperial numbers, then I would have to believe everything China says, and look back in history to believe everything the old Soviet Union said, because our nation is now immersed in delusion as much as those nations.

Kunstler may be underestimating something, the capacity of modern technology, psychology, advertising, PR, all in the service of the Aristocracy, to create false realities and sustain them through application of funny money and self-reinforcing hype.

And the capacity of people to deny reality and embrace the false reality, some for the sake of growing power, some for the sake of holding what they have, but most because denial is the most powerful human psychological force around, maybe second only to sex drive.

[bertman]

8. Hear! Hear! I'm listening, tom_paine.

[n2doc]

7. I'll say one thing- Best Buy was humming last night

If the economy is still in depression mode it sure didn't look like it. I don't know where they are getting the money but some folks clearly were spending, on tv's, new computers, etc., etc.

Not to say everything is great, but I don't think that the numbers are all that far off. People just aren't being rehired, which will eventually either change or drag the whole thing back down again.

[unblock]

9. he sounds like an idiot. inventories shrank; that's a sign of growth

not new hiring or production as companies work down their inventory. but it's a sign that people and/or companies are buying and if that continues, eventually the lower inventories become empty inventories and companies have to crank up production again, which means rehiring people. eventually. and slowly.

i don't think he understands gdp at all. then again, maybe i'm too harsh on him, few people with access to the media seem to understand it anyway.