Spectrum of global worldviews, per Michael Adams' American Backlash.
The beliefs and behaviours shown in bold are increasing the fastest,
and are particularly prevalent in the US and among younger people.
It is not in human
nature to prepare for catastrophe. We are, at heart, a reactive
species, adapting to situations as they occur, rather than anticipating
and taking steps to mitigate or pre-empt them. This is abundantly clear
from our recent reactions to 9/11 and the consequences of Bush's Middle
East wars, to SARS and Mad Cow and Poultry Flu, to the Asian tsunami
and last year's hurricanes. We are not prepared now for economic
depression, for disease pandemic, for the End of Oil or the End of
Water, for the effects of global warming including the 2006 hurricane
season, for biological or chemical attacks by desperate individuals, or
for nuclear wars precipitated by overpopulation, famine, cultural conflict or Bush's
threats to launch nuclear attacks on non-nuclear nations.
Most of these catastrophic events have a reasonably high degree of probability of
occurrence, and those that occur will probably cause horrific damage, death,
loss and suffering. For some of them, we have feeble contingency plans,
known mostly only to governments that have demonstrated clearly that
they are not capable of carrying them out anyway. For the rest, we have no
plan at all. We will worry about them if and when they occur, make it
up as we go along. That is our nature.
On that basis, given that at least some of these events are
most likely unpreventable, inevitable, and not prepared for, how will we behave
when they occur?
Let's
look at what might happen in a second Great Depression to answer this
question. Many people, including leading economists and historians,
have acknowledged that this is likely, as our debt-ridden and
over-extended economy is now so fragile that only co-dependence is
keeping most of us from bailing out and precipitating it. The world's
only superpower, with the imminent collapse of its automotive and
airline industries, is now utterly dependent on its two biggest
industries: War, and Profit-Skimming. The US Defense and Homeland
Security Departments, totally funded by taxpayers and with a larger
centrally-planned budget than any communist regime could have dared
dream of, is spending money like water, with (at best) zero return on
investment. Corporate profit-skimming, the result of oligopoly
price-gouging, is giving many global corporations, most of them
US-based, huge mark-ups for almost zero risk, very little real 'work'
and extremely low investment, which consumers, no longer protected by
anti-combines legislation, have no choice but to pay. These fantastic
and unwarranted ROIs are necessary to prop up the wildly overpriced
stock market. Much of the rest of the US economy is dependent on
massive government subsidies, a form of corporate welfare, without
which they could not compete, or even survive, in the international
marketplace. These subsidies are in turn financed by taxpayers, and by
the largest government debt in the history of civilization.
The
first domino to fall, many seem to agree, will be the US dollar,
followed quickly by the stock market and the housing market. Interest
rates will soar to double digits as borrowers desperately try to
refinance US dollar debts no one wants to own. The net worth of
millions, perhaps the large majority of North Americans (the Canadian
economy is totally dependent on the US economy), will be quickly wiped
out. Consumer spending will cease, and as a result corporate profits
will disappear and bring about massive layoffs and pay cuts. Debts
incurred to pay for consumer purchases and real estate will be called
in, resulting in large numbers of foreclosures and bankruptcies.
Keep
in mind that the immediate effects of a plunge into Depression are on
paper only. While you may lose your life savings in a month, it may
take a year or two, through slow attrition, before you lose your job.
You will probably find that, without all the expenses of your (and your
spouse's) job, many of the costs you incur now will disappear. As Paula
at Adaptation has
explained, the first real pinch you will feel is the cost of food,
especially when your worthless dollars are no longer accepted by
vendors. You may find, as many did in the last Great Depression, that
growing your own food (with your new idle time) makes sense.
I
don't believe we're going to see massive rioting, looting, home
invasions and theft-related murders when this happens. In fact, I think
most people will pull together, help to maintain civil order, and be
generous with what they have. That's based in part on my positive view
of basic human nature, and in part on my study of past serious
Depressions, both global and local (like the recent one in Argentina).
But blog readers and writers who have commented on this are of two
minds about this: In particular, there seems to be a sense that the US
has become so un-compassionate over the past fifty years that hoarding
and civil disorder is more likely to occur there than in other
countries. There also seems to be a sense that the younger generations
today (who are disproportionately in the lower right quadrant of the
behaviour spectrum illustrated above) are more fatalistic and inclined
to take an "every person for him/herself" approach to such a crisis.
I'm not so sure, but this is important to know, especially if this
Depression can be stalled off for another ten or twenty years. What do
you think?
There are some who believe that millions will be
rendered homeless (by eviction following bankruptcy or foreclosure)
when a Depression occurs. I think this is unlikely, because lending
institutions would be better off taking a small amount of money each
month instead of houses they can't resell, and in fact having people
stay in the house at least prevents it from being ransacked. In the
last Depression foreclosures and evictions were common in some areas
and rare in others. Since financial institutions are unlikely to be
prepared for a Depression, it's hard to say what they will do. My guess
is that they'll only foreclose and boot people out into the street as a
last resort once the Depression is well underway.
The trick I think is to either have no debt on your home, or to have
enough cash that when Depression hits you won't be one of the unlucky
first wave to run out of money -- they'll be the ones to be evicted.
Utilities
are another big question mark. If the Depression occurs (as I believe
it will) before the major impacts of the End of Oil, you're going to be
hungry and unemployed long before the lights go out and the heat and
air conditioning stop. But if you're dependent on your car, life could
be very difficult, because oil prices are likely to spike well before
electricity prices do. And, again, if you're paying with a worthless
currency, you're going to find gasoline unaffordable. You're going to
have to find a means to work, and buy the stuff you need, close to home
-- or move. There could be a major exodus both into the cities that
still offer jobs and into small towns with cheap housing close to local
food supplies -- and away from the suburbs, which offer neither. The
suburbs could become partially abandoned and fall prey to squatters and
scavengers.
Given this scenario, I still bravely believe that we
would muddle through pretty well -- until and unless cascading
disasters like disease pandemics, ecological catastrophes brought on by
global warming, global wars precipitated by massive famines in
struggling nations, or the End of Oil, add to the burden. In fact a
Depression might actually equip us to better face the adversity of
these subsequent threats to our well-being.
That's my take, but
I'm interested in your views on this. If you think a Depression is
highly unlikely or impossible, please save your thoughts for another
time or post. What I'd really like to hear is if and when
we face another Great Depression, how will we react, behave, and adapt
to it? And what stories can you tell, from relatives who lived through
the last one or who lived through a more recent one in another part of
the world, that can help us, if not plan, then at least prepare
ourselves for what we will face? |
MADE IN CANADA
trust your
instincts 
