The Long Emergency Ahead
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When Hurricane Katrina swept through New Orleans and the Gulf Coast two weeks ago, a lot of the delusions cherished by the American public about the kind of nation we are becoming were washed away. The inhabitants of a region nearly the size of Italy now face real hardship and the loss of all their presumed entitlements to a way of life that is supposed to be non-negotiable. The weather has negotiated for them, and everyone else in the nation is feeling the effects at the gas pumps that rule our lives.
People often ask me why we are getting such poor leadership on the issues that comprise the Long Emergency, as I have called the difficulties advanced civilizations face in the decades ahead. Specifically, why haven't President Bush or the leaders of the Democratic opposition uttered a word about our extreme car dependency?
The answer, I think has to do with the nature of our economy. The dirty secret of the American economy for at least a decade now is that it has come to be based on the creation of suburban sprawl and the activities associated with it -- the building of cul-de-sac McMansions, highway retail pods, car sales, real estate sales, the creation of false liquidity in the form of easy mortgages and the deployment of that debt into tradable instruments. The sprawl-building industry comprises over 40 percent of what we do in this country. If you subtract it from the U.S. economy, there isn't much left besides hair cutting and open heart surgery.
Our leaders don't have the courage to tell us that we can't continue to live this way, because too many jobs, incomes, and votes would have to go with it. They may not have the courage to even face the facts themselves. They may be hostages -- like most other Americans -- to the belief that a drive-in society is the only conceivable way to live, or the best, or simply normative.
The suburban project, which has preoccupied us since the end of the Second World War, can be seen now in light of the gathering global energy predicament as the greatest misallocation of resources in the history of the world . Having put so much of our post-war wealth into this massive infrastructure for daily living, we are captives of it, subject to a corrosive psychology of previous investment, which does not permit us to imagine letting go of this way of life, or even reforming it.
Vice-President Dick Cheney's declaration that this way of life is "not negotiable" is a prime symptom of this collective psychology. With the city of New Orleans now being drained, proposals for rebuilding it are flying around the noosphere. Daniel Libeskind, the cutting-edge starchitect whose proposal for turning the former World Trade Center site into the set for a German expressionist movie won the hearts and minds of New York City planning officials, has proposed that New Orleans should be rebuilt into a Jazz theme park. Apart from the fatuousness of this idea, I'd have to simply wonder at the economic assumption that cheap airfares and motor tourism will remain at the heart of any region's economy in an energy-scarce future
More sensible proposals will be made by the New Urbanists, leading proponents for walkable neighborhoods and compact development -- which is, in fact, consistent with the original template for most of the neighborhoods ruined by floods. This means sticking to an interconnected street-and-block system, normal urban building lots, and a menu of building types consistent with the history and scale of the place. This is really not a tough assignment to either understand or execute, but if the so-called production home builders come on to the scene, they may wreak a new kind of havoc with their mostly suburban standards and practices.
Of course, any rebuilding would depend on a major engineering effort to raise the ground level in these neighborhoods. That, in turn, depends on whether whole neighborhoods are deemed to be "scrape offs," since such a project could not be done in piecemeal fashion. Finally, we would be faced with the economic paradox that new construction tends not to fall into the "affordable housing" category, and those displaced might not be able to acquire new houses to replace the ones they lost in the places where they stood. It's too early to tell what will become of New Orleans' downtown core of skyscrapers and megastructures.
On Tuesday, news began to leak out that the Superdome was damaged beyond saving and may have to be torn down. The modernist office and hotel towers have liabilities on their own terms that detract from their usefulness in the years ahead, for instance the fact that they were designed with cheap air conditioning in mind. Since cheap A.C. may not be on the menu in an energy-scarcer future, one has to wonder whether these buildings would be worth rehabilitating.
Much of the stuff just outside New Orleans, and along the Gulf Coast, was largely post-war suburban fabric -- housing subdivisions, collector boulevards with their complements of fry pits, malls, muffler shops and big box out-parcels. We'd hope that the states of Alabama, Mississippi, and Louisiana will not undertake to rebuild them they way they were. But the existing template reflects a pattern of property ownership that is not easily changed. The New Urbanists have a good record of retrofitting some of these things. For instance they have had some success in turning "dead" malls into mixed use town centers. But some of this stuff, in particular single-family housing developments, do not lend themselves very well to reform.
Many of the debates over the suburban extravaganza have been framed in terms of the "choices" Americans make. Suburbia, it is often said by cheerleaders like David Brooks of The New York Times , or Wendell Cox of the Reason Institute, represents a favorable "choice" on a big menu that includes city apartment life, or a cabin in the woods, or a soybean farm. I'd argue that the suburban choice is coming off the menu.
The public may recognize that commuting 80 miles a day to a job just isn't financially possible for many of them anymore. They may even balk at driving four miles to a food market. If the collective culture that brings us redevelopment does not change its methods -- and by this I mean everyone from the bankers to the builders to the government planning officials -- then the people of the Gulf Coast will be stuck with an infrastructure for daily life with no future.
For the moment, reality is intervening in the form of gasoline prices exceeding $3 in most parts of the nation. While the price of gasoline may go down for a while, it is not liable to stay down for long, and it is just as likely to shoot above $3 before New Year's Day 2006.
What about the x-thousand number of people around America beyond the Gulf Coast who, up until the day after Hurricane Katrina hit New Orleans, were making plans to put in an offer on a new house 38 miles outside of Dallas (or Minneapolis, or Denver, or Washington, DC, etc.)?
What if, all of a sudden, with a full tank in their Ford Expedition costing almost $100, they begin to calculate that living 38 miles from town isn't such a great idea anymore? Surely this is occurring to some potential buyers. We won't really know until the home sales figures come in a month from now. What's more, many of them may decide that a new McMansion in a distant suburb is a bad idea not only for themselves, but an even worse idea from an investment point-of-view, in case they are buying the house just to "flip" it for the expected 10 percent annual rise in value that such houses have enjoyed in recent years.
Even if the price of gasoline retreats a bit, there will probably be resistance among the gas retailers to drop it much below the $3 range once it has been breached, and despite what you think you hear in the news, help is not necessarily on the way. For instance, the Strategic Petroleum Reserve is composed of 25 percent light sweet crude and 75 percent heavy sour crude. Do you know the difference? One difference is that sour crude is more difficult and more expensive to refine. In addition to that it requires special dedicated refineries, of which there are few.
Another dot to connect. We arguably are in more trouble with our natural gas supply than with gasoline. I'm speaking of methane -- the gas we use to run our furnaces and stoves. Fully half the houses in America heat with natural gas. The gas supply was extremely tenuous even before the Hurricane struck. A great deal of it comes out wells in the Gulf of Mexico -- because we have depleted so many of our land-based wells. Natural gas sold for $3 a unit (1000 cubic feet) in 2003. The price is now around $12. Nearly half of that growth is just since the previous heating season. Imagine your heating bill doubling in a year. It could go up beyond $16 before the coming season is over. There are reports that Hurricane Katrina may have damaged three natural gas processing facilities on the Gulf Coast with a combined capacity of almost 8 percent of total national production.
Now, since Americans have fallen in love with super-sized suburban houses regardless of the local climate; and since many owners of these giant new houses are barely able to keep up with their enormous mortgage payments; and since they will pay through the nose to stay warm this season; and since they will be getting into serious financial difficulty that will be made worse by severe changes in the bankruptcy laws that take effect on October 16 -- ask yourself if that might effect the housing market, that is, the suburban sprawl-based economy.
I think it will. I think we may find ourselves in a situation that gives the term "affordable housing" whole new dimensions of meaning.
Interestingly, The New York Times ran a front-page headline on September 4 to the effect of, "U.S. Economy Not Affected by Hurricane." This is the thinking now at the highest levels of news gathering among a group I hesitate to label the power elite -- but they do exist, even for those of us allergic to conspiracy theories.
This is why we have such poor leadership: an utter failure of imagination among our leaders, including politics, business and the media.
The hurricane that shredded the Gulf Coast will have consequences, but mainly in accelerating structural problems already present in American society, with its gross imbalances and collectively suicidal economic behavior.
The next thing to look for: If fewer suburban houses are sold because of higher energy prices, the creation of false liquidity in the form of mortgages spun out of thin air will cease. If this stream of false liquidity ceases, the government-sponsored entities who bundle all this debt into tradable instruments will find themselves in trouble. If they go off the rails, the American finance sector will follow like a choo-choo train.
Things could get very serious. And just because of some bad weather.
In the meantime, Americans in all ranks of society will resist the idea that we might have to make other arrangements for daily life in the 21st century.