Counterpunch Weekend Edition
May 31 / June 1, 2008
CounterPunch Diary
The Worst is Yet to Come
By ALEXANDER COCKBURN
Between Grant's Pass, a pleasant retirement town in southern Oregon's
Siskiyou mountains, and the Californian fishing port of Crescent
City, chiefly noted for the nightmarish state prison known as Pelican
Bay, stretches route 199. It runs alongside the spectacularly
beautiful Smith River ravine for some 50 miles. To drive it,
particularly on long holiday weekends, can be a teeth-grinding,
bumper-to-bumper affair. This last Memorial Day weekend, on a late
Sunday afternoon, I shot through in record time, meeting as little
traffic as I normally would at 2 am.
For the first time since the national trauma known as the great gas
shortage of 1973 Americans are experiencing a collective shock as
they adjust to gasoline prices that are now three times higher than
they were four years ago.
Last weekend, on the edge of what used to be a summer's worth of
driving sprees, many of the families who would normally have been
chugging along 199, looked at the $4 a gallon basic price of gasoline
in the Pacific north west and stayed home or crept round the corner
to the local mall. Hence my pleasantly rapid drive home from Olympia,
Washington to Petrolia, California, the first place oil wells were
sunk in California, in the 1860s, though the industry lasted only a
couple of years. The drive comprised a distance of 630 miles,
achieved in my 1962 Plymouth station wagon, which gets 15 mpg on the
open road, better than the SUVs most Americans can no longer afford.
The round trip cost me $336.
Of course Europeans, paying roughly twice as much to fill their
tanks, snigger unfeelingly at American moaning at these prices. But
comparisons are not the issue here. The median family income in
Crescent City (pop. 4,000 excluding 3,300 prisoners) is about $20,000
a year. A third of the population lives below the poverty line. As in
thousands of American towns across the country there's no slack in
the family budgets here to accommodate a fuel bill here that's
suddenly shot up 300 per cent.
A family of four that decides, as many will this summer, that it
can't afford to drive 1,200 miles down Interstate 5 from Seattle to
Disneyland is making a decision that spells slim business for motels,
roadside restaurants and the tourist industry overall. Americans
routinely drive huge distances, starting with the long distance
truckers. It now costs well over $1,000 to fill the tanks of an
18-wheeler with diesel fuel averaging around $4.20 a gallon. Over
1,000 trucking firms have already gone bankrupt this year and the
independent drivers about a fifth of the industry overall face
imminent ruin.
Roman emperors knew well that political tranquility marched arm in
arm with the cost of bread. As energy costs have soared in his term,
Bush's popularity ratings have plummeted. Doug Henwood, editor of
Left Business Observer calculated a couple of years ago that an
"uncanny" 78 per cent of the shifts in Bush's
ratings mirrored changes in gas prices. But the political
implications are far larger and more long-term than the dismal
trendlines of the 41st president.
Across the past generation American incomes, below the very rich,
have remained essentially static, or have actually gotten worse. Year
after year Americans work harder, longer, for less money in real
terms. Political tranquility has been maintained by cheap gasoline,
cheap food and, in recent years, the seemingly easy credit and tax
deduction on home mortgage interest allowing middle-income families
the illusion they owned a home. Gasoline is no longer cheap. The
cost of food is going up. The subprime crisis has pitchforked
thousands of Americans into forfeiture.
There's worse to come. Since the subprime meltdown there's been a
lull. But now the so-called "Alt-A" loans, made to supposedly more
credit-worthy borrowers and amounting to a trillion dollars, are
allegedly about to go down the tubes, carrying banks and insurers
with them. And this time Ben Bernanke, chairman the Federal Reserve,
has no bail-out strategies left. He can't lower interest rates to
banks below the current 2 per cent, a level partially responsible for
oil costing almost $130 a barrel. Round the corner looms hyper-inflation.
The sky is dark with chickens coming home to roost. America is in a
terrible fix. But you wouldn't know it from the politicians. Obams,
Clinton and McCain flourish quick-fix recipes that are as
inconsequential as a pop gun aimed at a gunship by an Iraqi child.
Whoever is in charge come January 2000 will have to set as drastic a
change in course as did Roosevelt in 1933, the last time the
political economy faced this serious a crisis. Not that we need
another Roosevelt, trying to bail out capitalism and stave off the left.
We need an an active radical mass movement, shoving Congress into
action. There's no sign that any of the candidates have advisors at
their elbows capable of offering pertinent counsel. Thirty years of
vacuous boosterism about the virtues of neo-liberalism and unfettered
markets have exacted a fearsome toll on the intellectual capacity of
the policy-making elites.
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