For many Americans, the years
ahead will be nothing short of a modern Dark Ages, where each day
brings forth fresh anxieties, unfamiliar risks, and a deep sense of
foreboding. --Michael Panzner
March 22, 2009 (Truth To Power) -- We've heard of the economist, Nouriel Roubini, aka "Dr. Doom," and readers of Truth to Power
are quite familiar with James Howard Kunstler and Dmitry Orlov, but
Michael Panzner serves up a recipe that contains the carefully blended
ingredients of all three.
In fact, we might call Panzner's latest
masterpiece, When Giants Fall, "Dr. Doom meets ‘World Made By
Hand' and ‘Re-Inventing Collapse' with ‘Long Emergency'(Kunstler) and
‘Long Descent' (John Michael Greer) waiting in the wings." I have
remained a fan of his website, Financial Armageddon,
and his book by the same title since the publication of it in 2008, but
since that time, in following Panzner's writings, I've observed a
fine-tuned incisiveness and a deepened resolve to deliver to his
readers the harsh realities of the collapse of empire and the economic
ramifications of that.
While he does not leave us without options in
the face of the decline, he sugar-coats nothing and just this past week
carried on his site a number of chilling scenes of collapse in recent
photos taken across the country.
While the styles of collapse-aware
writers such as Kunstler, Orlov, Greer, Astyk, Heinberg, and myself are
perhaps more socio-cultural, Panzner writes in economic terms that
economists or those versed in the discipline can readily appreciate. If
we had any doubt about the fiscal statistics on which our forecasts are
based, Panzner puts them to rest with his carefully-researched data.
He begins "Giants" with the reality
that has become ubiquitous in the current economic collapse: Financial
nirvana is now history. "Spend. Borrow. Repeat" is over because as a
result of the "mistakes and excesses of the past" the financial
chickens are coming home to roost with the disappearance of fuel, food,
water, and all the other lubricants of the machinery of empire. The
author emphasizes that these are not merely creating little bumps in
the road for the titans of globalization but that "taken together,
these various developments constitute a clear and present danger to the
economic well being of every American, especially those who have been
conditioned to believe that life can only get better in the future."
(xxi)
While briefly tracing the economic
history of how we arrived where we are, he examines the myriad
hostilities that are likely to erupt in a resource-depleted,
economically scaled-down world, China and Russia being two 800-pound
gorillas, along with less obvious hot spot nations in the Middle East,
Africa, and Asia. What is fundamental, he drives home to us, is the
waning influence and eventual irrelevance of the United States in the
global economic landscape. He points to our disastrous campaigns in
Iraq and Afghanistan, our ghastly dependence on the kindness of
foreigners to purchase our debt, and the near total reversal of
globalization now in process in the current economic meltdown. Crime,
politics, and economics intersect to undermine the stability of
international relations everywhere.
So what does it actually mean that
the United States no longer "rules the global roost?" It means that eventually
China and other American rivals could someday use their vast holdings
of U.S. debt "as a geopolitical weapon, despite the great harm that
would also cause to the attacker's own economy." (68) It also means, as
Panzner points out, that "... oil and gas-producing companies,
international commodity traders, and emerging-nation
governments ... dictate the rules of the game in global energy markets."
Simply put, "What takes place on a day-to-day basis [in the United
States] is increasingly in others' hands." (69)
And the ultimate consequences?
... with myriad
imbalances already starting to unwind and economic conditions likely to
be further undermined by geopolitical uncertainty, resource
constraints, and the specter of growing divisiveness, the groundwork
seems laid for a broad move away from American-style free-market
capitalism. (71)
If there was any doubt about this,
the global credit meltdown beginning in 2007, now having snowballed
into global economic cataclysm, has put that doubt to rest and turned
yet another prophet, namely Michael Panzner, into a historian.
One issue I wish the author had
expanded upon is climate change and its inevitable ramifications in
terms of climate refugees. The issue of tighter borders and the control
of the flow of people and goods is frequently mentioned, but in the
light of those realities, one wonders how nations will address the mass
migrations of populations as a result of climate-induced droughts,
famine, pandemics, and natural disasters. If as he states, and I agree,
"Immigrants and foreigners will become scapegoats for domestic ills",
we could legitimately infer an increase in violence issuing from mass
shifts in population around the world.
In a chapter entitled "Local Is The
New Global," the author argues, with solid evidence, the reversal of
globalization and why issues must now be addressed "with a shift toward
regionalization and localization of economic activity and investment
flows." This may evolve quite naturally as myriad divisions globally
erupt and reinforce the return to what is local and familiar.
Related to this trend, Panzner
mentions a couple of secessionist movements in the United States but
opines that "To be sure, many of these efforts will fizzle out or
remain firmly on the fringe." To this I must respond: Don't be too
certain about that. A strong secessionist movement abounds here in the
state of Vermont, viewed by some as a conscious step that Vermonters
must take to extricate themselves from the federal government, but
viewed by other Vermonters as wise preparation for the very
divisiveness explained by Panzner or simply imposed on the region by
climate chaos, natural disasters, or dramatic changes in geography
engendered by either of those.
In the spirit of the Transition
Town movement and other voices of the Long Emergency, the author
underscores the opportunity that is inherent for citizens, businesses,
and communities in the collapse of empire. What will be required for
the success of those opportunities, however, is the capacity to think
outside the box. Whereas there are areas of the world that might
actually offer the promise of investment opportunities-countries such
as Canada, Brazil, New Zealand, Thailand, and Vietnam, investment for
the average American is more likely to be a local affair as local
economies are born and struggle to survive. Although Panzer does not
dwell on the alternative or underground economy, there is likely to be
plenty of opportunity to invest in it in ever-ingenious and
unconventional ways.
In any event, Panzner argues that where one actually chooses to live is crucial, and in the last chapter of When Giants Fall,
he discusses the probable demographics of collapse, that is, the
likelihood that smaller cities, especially those situated by rails or
rivers, will offer better opportunities for jobs and income, but that
those places might become socio-culturally intolerable for all the
reasons the author has outlined earlier in the book, as stress,
paranoia, and societal breakdown exacerbate. The employment landscape
of a Long Emergency world is almost certain to be one of many
part-time, as opposed to full-time, jobs -- a world of getting one's
hands dirty, going into business making and selling necessary items,
and drastic lifestyle changes.
Budgets of state and local
governments will evaporate in some cases almost overnight, and safety
nets and what people have assumed are "essential" services will
disappear. Family, social, and community relationships will become far
more important, and much of this may be based on the need for safety
and security.
The last chapters of "Giants" reads like "World Made By Hand" or Richard Heinberg's "Letter from the Future."
I must say that little in its contents is actually new to me. What
makes the book remarkably arresting is that a 25-year veteran
of the global stock, bond, and currency markets -- a faculty member at the
New York Institute of Finance -- is forecasting the collapse of empire
and the daunting challenges, not exclusively economic, of a
post-industrial world.
In this moment, we are witnessing the rapid
decline of that world in the form of an unprecedented global financial
meltdown, and in his conclusion, Panzner quotes from Barton Biggs who
aptly names it an "episode of great wealth destruction."
When Giants Fall
analyzes the collapse of empire from the economist's perspective and
offers a crucial complement to future scenarios presented by experts on
energy depletion and climate change. Your Long Emergency library will
not be complete without it, particularly as you encounter those
influenced by the Pollyanna economists who assure us that in a few
years, "everything will return to normal". Like other analysts of
collapse, Panzner argues that "normal" is the worst thing to which we
could return and that every aspect of our thinking and behavior in
relation to the earth community must be radically transformed.
Speaking Truth To Power is a
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