Swans Commentary » swans.com December 17, 2007  



2007: The Great Unraveling Begins


by Eli Beckerman





By what name will future generations know our time? Will they speak in anger and frustration of the time of the Great Unraveling, when profligate consumption exceeded Earth's capacity to sustain and led to an accelerating wave of collapsing environmental systems, violent competition for what remained of the planet's resources, and a dramatic dieback of the human population? Or will they look back in joyful celebration on the time of the Great Turning, when their forebears embraced the higher-order potential of their human nature, turned crisis into opportunity, and learned to live in creative partnership with one another and Earth?
—David Korten, author of The Great Turning: From Empire to Earth Community


(Swans - December 17, 2007)   2007 began, in the eyes of many, with reason for hope. Here in Massachusetts, the self-styled "progressive" Governor-elect Deval Patrick had Progressive Democrats pinching themselves after an impressive and historic win. In Washington, D.C., the Democrats had swept back into the Capitol building, with an apparent mandate for change.

The truth should have been been obvious, once Patrick was asked by The Boston Globe what the biggest misconception about him was during the campaign: he answered, "the liberal thing." After carefully cultivating that image, and then calling it a big misconception, the feel-good politics of this corporate apologist should have been transparent to all.

The truth should have been obvious to hopeful liberals and progressives across the country, but those first 100 hours of the Democratic majority were spun to great effect. In July, minimum-wage workers would see an increase of 70 cents an hour, the first increase since 1997. That would bring them UP to a whopping $5.85/hour. The next summer there will be another 70 cent raise, and another the following summer. By July 2009, thanks to the boldness of the Democrats, workers in this country will be making a minimum of $7.25/hour, or about $15,000 for a 40-hour work week. Meanwhile our elected Congresspeople earn $165,000 every year, not to mention their cushy benefits, including a generous pension plan, real health coverage, and paid staff. The rest of the first 100 hours saw bills pass on ethics reform, pay-as-you-go budgeting, 9/11 Commission recommendations, negotiating prescription drug costs, lowering student loan interest rates, canceling Republican tax breaks to oil companies, and stem cell research (which was ultimately vetoed).

But before even taking power, the Democrats appeared to cave on impeachment and Iraq. Yet somehow the aura of their "Out of Iraq," "Take America Back" posturing kept aglow. While Nancy Pelosi had said before the elections that "impeachment is off the table," it was John Conyers admitting the same before he took over the House Judiciary Committee that deflated some of the hopeful. Then came the struggle over war funding for Iraq and Afghanistan, and the famous purse strings that the Democrats played up in their 2006 campaigns. Although the Democrats did pass a resolution that denounced Bush's surge strategy, they ultimately went along with further funding, despite the fact that a filibuster could have stopped financing the Iraq War. Apparently, the debate about "staying the course" in 2006 was not a debate about ending the war or not, but rather about how to best achieve our objectives. With a new Secretary of Defense, and a new general leading the Iraq War, there was apparently enough confidence in the war effort to continue to fund it, and even fund its escalation. And while the troop surge has been credited with decreasing violence, the fact that Shiite cleric Muqtada al-Sadr has pulled back his Mahdi Army for six months has not been credited.

Then came even bigger Democratic disappointments -- from the lips of the presidential candidates. On September 26, Hillary Clinton voted for a Senate resolution calling the Iranian Revolutionary Guard a terrorist organization, lending credibility to any Bush attempt to wage war on Iran, with or without Congressional support. I guess she didn't learn her lesson from unknowingly authorizing the Iraq War. Barack Obama missed the vote, but had said that no options are off table. So while impeachment is off the table according to the Democratic leadership, the Christmas stocking for Iran is overflowing with military options. At a Democratic debate later the same night, the presidential hopefuls couldn't promise a full troop withdrawal even by the end of their first term, leaving on the table the possibility of a US occupation that lasts until 2013, even with a Democrat as president.

But the real news of 2007 is not the disappointment of the US political system, but rather the growing signs of a social, political, economic, and environmental nightmare. The real news is that even while the mainstream politicians and mainstream media have turned a corner in their treatment of global warming, the bigger questions before us as a society are not even part of the discourse. As the subprime lending shell game has worked its way into prominence as an economic problem, big banks and big media continue to dress it up as a manageable one, contained to those who foolishly signed loans they could not handle. Unfortunately, however, the entire US economy is suspect, because it is built upon a number of assumptions that are starting to buckle. In short, the US economy, and much of the world economy, is a house of cards. And 2007 has been the year that the first cards began to fall.

In his 2005 book, The Long Emergency, James Howard Kunstler outlined the connections between peak oil, the housing bubble, debt-fueled consumer spending, and the financial gimmicks underlying much of the economy. He takes you on a ride through the commoditization of lending, the S & L crisis, the abstraction of money, the creation of derivatives, leveraged debt, hedging, on up to the period of slashed interest rates starting at the end of the nineties, leading to ever-easier credit, and in turn to the real estate bubble, which he describes as "perhaps the last act in the sorry drama of the hallucinated economy."

We are so heavily dependent on oil, and no credible replacement is on the horizon. Our industrialized food system, with food shipped across the globe to keep the supermarket shelves stocked, has oil inputs at many different levels, including the mechanized production, the petrochemical fertilizers and pesticides, the asphalt of the road system, the shipping, cooling, and packaging, not to mention the processing. The increasing suburban sprawl and car-centric layout of our lives means even more driving to go and buy the food. All of this is made possible not only by the existence of exploitable oil, but by the cheapness of the stuff. Sadly we have been subsidizing oil and making it artificially cheap, as well as subsidizing the industrial food system, so that the price of food from a supermarket is also artificially cheap. The reason it often, though not always, costs more money to buy food from local sources is that you are paying the true cost of that food. Commuting to our distant workplaces, heating and cooling our new McMansions, funding the car-centric infrastructure, and clothing ourselves and stocking our homes with "cheap" goods from China, all will become ever less affordable as oil prices continue to rise. Our lifestyles are, simply put, not sustainable.

The housing boom, also heavily dependent on cheap oil, has led to false hopes that buying a house is itself an investment. The idea that bad mortgages, sold upstream to Fannie Mae and Freddie Mac, could somehow become a commodity of value has led to an orgy of profit-making and now the collapse of an unsustainable sleight-of-hand economic card game. These "collateralized debt obligations" are only collateralized to the extent that the value of the house stays put or goes up. But with adjustable rate mortgages resetting at record numbers, and American consumers stretched to the max, home foreclosures have skyrocketed and the record inventory of houses on the market has meant price drops all over the map. In the days of booming house prices, home equity meant that people could use their home to refinance and borrow tremendous amounts of money, which largely accounted for keeping the economy afloat through consumer spending. A lot of consumer spending was also made possible by credit card debt. But with the fall of mortgage companies and hedge funds as the intricate shell game started to unravel, a liquidity crisis became the first sign that trouble in paradise was not relegated to risky home buyers. And a never-ending array of phony solutions have been promoted to keep the markets buzzing, from the Abu Dhabi government infusing Citigroup with $7.5 billion at 11% interest, to the Federal Reserve inventing more money and further lowering interest rates, and President Bush offering up the idea that the mortgage resets could be postponed for five years. The peak in the number of resets is set for March, 2008, and they are so intricately woven into the increasingly fraudulent system of finance that Bush's plan will likely create new problems as it goes.

Signs are that the residential housing bust is spreading into commercial real estate, all of which is bad news for real estate related employment. Banks are writing away "money" as though it never existed. People's homes have become less valuable than the amount of money they owe, leading to negative home equity and even further downward pressure on home prices. Municipal governments, which are already squeezed to the brink, will have to face declining property tax revenues and soaring energy prices. The federal government has borrowed like mad to pay for its oil wars and corporate giveaways, and the declining dollar is threatened further by the prospect that many more nations could soon walk away from it as their reserve currency. Oil producing nations have continued to move away from the US dollar as the purchase currency, and it remains to be seen how we could possibly continue our borrowing frenzy, from the federal level down to the consumer level.

While 2007 saw General Electric and its NBC network turn "green," it also saw fears about global warming and rising oil prices create soaring demand for GE's nuclear power and "clean" coal, along with a push for government subsidies for these large polluting companies to provide "clean" energy. So the hopes of techno-fixes pour in; the Arctic accelerates its melt; California burns; and, as I write, the US government is trying to sabotage climate talks in Bali and Congress is readying $50 billion in energy subsidies, half of which would go toward new nuclear reactors. The farm bill in Congress saw an historic coming-together of public health, environmental, and even overseas farm interests to weigh in on the monstrous giveaway to agribusiness, but instead it is laden with corporate welfare to the largest farming interests in the nation. And the emphasis on biofuels further raises questions of sustainability and justice, as food prices will inevitably creep higher, and water depletion and topsoil erosion will be accelerated.

So while we appear to have entered Kunstler's "Long Emergency," an era that David Korten calls the "Great Unraveling," the question before us is this: will the "Great Turning" follow? Korten maintains that this transition has already begun, and that the first stage is a cultural and spiritual awakening. As Michael Pollan's Omnivore's Dilemma brought the industrialized food system and even the Whole Foods revolution into question, and Barbara Kingsolver's Animal, Vegetable, Miracle brought local eating to the mainstream, and Bill McKibben's Deep Economy fundamentally challenged the growth economy and his "Step It Up" rallies sparked unprecedented grassroots action on climate change, 2007 did mark an awakening of consciousness. Could a cultural and spiritual awakening be far behind? With the mass-marketing of consumerism as a solution to the Earth Crisis, from compact fluorescent light bulbs to Toyota Priuses, and Leonardo DiCaprio as the spokesperson for the crisis, perhaps it is very, very far behind. But maybe, just maybe, the nearing of a real period of discomfort, challenge, and consequence, will give the human spirit -- so deeply crushed by our individualist society -- the freedom to soar.


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Internal Resources

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About the Author

Eli Beckerman on Swans (with bio). Beckerman lives in Cambridge, MA, and is the Communications Director of the Green-Rainbow Party of Massachusetts. He is also the Project Coordinator for the Massachusetts Coalition for Healthy Communities and is working on their Relocalization Project.



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This Edition's Internal Links

From Travesty To Tragedy - Charles Marowitz

A Battered America, Careening Toward The Tipping Point - Gilles d'Aymery

The Nation Magazine And The 2008 Presidential Elections - Louis Proyect

The Meltdown - Gerard Donnelly Smith

Looking Back At The Antiwar Movement - Martin Murie

Who, What, And Why Was 2007? - Carol Warner Christen

2007: Disconnected In The Age Of Technology - Jan Baughman

The USA Of 2007: A Sinking Ship Of State - Philip Greenspan

What Myrtle Said And Read In 2007 - Peter Byrne

World Tragedy 2007 - Guido Monte & Francesca Saieva

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Swans -- ISSN: 1554-4915
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Published December 17, 2007