Archive for June 6th, 2008

Predictions – The Halfway Point

Sharon June 6th, 2008

I’m doing the final proofread on _Depletion and Abundance_ right now, and as I was hunting up some old data I’d linked to, I ran into my New Years predictions. Here they are if you want to see them. 

Now note, these are slightly tongue in cheek. I don’t usually make predictions – frankly, I don’t want to be famous as the woman who said that the economy would collapse on Friday, when it didn’t.  Moreover, I think that kind of fame is sort of silly, anyway.  Making predictions is fun, and it can get you a lot of attention, but when you screw up a few dozen times, even teflon people like Daniel Yergin get in trouble eventually.

 Still, I think there is something revealing about looking at the year’s estimates of events, and noting just how quickly the pace of change is picking up.  With six months yet to go in the year of my predictions, 1, 2, 4, 6, 7 and 8 are already done, we’re well on track for 5 and 10 (the book comes out in early August ;-) ).  And I wouldn’t have expected 3 to happen yet – figure autumn, although I’m still hoping no.

 Now what I think is perhaps notable about this isn’t that I’m right – I wasn’t really going way out on a limb for most of these.  What’s interesting is that what I thought would probably take a year, has happened in a matter of about 6 months.  And generally speaking, I think that’s one of the more interesting things about what’s going on – the speed of events is accellerating.  Just as it is hard to recognize global warming in any single storm, but comparatively easier to recognize it in the aggregate of the quantity of natural disasters, I think that the accelleration of events does probably matter.  Does that mean that the future will look exactly like this all the time, with everything speeding up further and further?  Almost certainly not.  But does this suggest that things are somewhat more precarious in general, and that the faster the pace of decline, the fewer options we’re going to have for arresting it?  Broadly, I think that’s probably right.

For example, whenever you write a current events book, as I have, you have to accept that at some point, the book is done, and that it will only be so accurate by the time it comes out – and even less, probably by the time most people actually read it.  Still, I want to be as accurate and current as possible.  So when I sent the book out in late November, I put in the outside predictions – as many as a million foreclosures in 2008.  Well, it turns out that 1.1 million foreclosures occurred in just the first quarter of this year, and 1 in every 10 homeowners is showing signs of loan trouble.  Nationally, equity is down to below 50%. 

 When we edited the book back in February, I changed some of the material about high food prices to include a list of 8 countries that had already had food riots.  If I wanted to, I could add 12 more now.  I’m taking out my mention of price inflation, because it is so damned hard to figure out, but it is clearly wildly high, and prices are rising steadily with the price of oil.  So far, we’ve put it on our credit cards, but that can’t last.

I didn’t even bother to mention the price of oil, which is a good thing, since today alone it has popped up by almost $7.  The word “volatility” is the key here.  Nor did I mention any possible warmongering an its effects, even though it is sounding increasingly possible that Israel will attack Iran.

We had our neighbors over for a bit the other day, and they were talking about how the housing bust is almost over, and they feel like “they can spend money again’ and that things are getting better, oil prices will come down again.  When I run into this stuff, I don’t usually argue with people, although I did point out that unemployment was rising, and housing prices still falling, and that that would have repercussions.  They didn’t believe me – or rather, they believed things might not get better for a few months, but that essentially, the good times are coming again soon.

Another friend and I had a friendly argument – I suggested that we were very close to seeing wool prices begin to rise, from a conflation of two things – the desperate need that Americans in cold climates are going to have for insulation, and the rising cost of shipping and manufacturing anything.  I predicted that within a few years, it wouldn’t be at all unlikely to see competetively priced rolled wool insulation for attics, crawlspaces, etc…   She didn’t buy it, although she was too polite to actually roll her eyes at the crazy person she was talking about. 

Neither of my friends are dumb – quite the contrary.  But they cannot get their heads around the truth – that this change is fundamentally different, that a rise in energy prices will reverbate in ways that are unlike our previous recessions.  That’s not to say that history is no guide – in fact there are chunks of history looking increasingly relevant, none of them happy.

If I were making predictions today (and June 6 is not a classic date for predicting things) it would be this.  The pace of events will, with peaks and valleys, continue to increase.  And at the same time, things will feel, to some of us who have a wider sense of what’s happening, like everything is in slow motion.  Meanwhile, what we are being told and what we experience will become increasingly disconnected from one another, until the truth, to the extent we can ever find it, will come out of the aggregate accounts of ordinary people, not those who are charged with the job of keeping everyone calm.  

The good thing about this is that people are smarter than their media masters and their government – despite the fact that they are being told that these prices are temporary, people aren’t buying SUVs, they are walking away from overpriced homes, they are saying no to consumer spending.  That’s not to say we’re all getting it – but at least most Americans aren’t buying the hype.

A little while ago I wrote that we were in a fast crash, and I haven’t changed my mind.  A few people didn’t quite get what I was saying – my claim was not that we were weeks away from some grand apocalypse.  In fact, it was the opposite – that we are in the midst of billions of aggregate small collapses, an intensification of events (because there are always people and things collapsing around us), that is forcing more and more of us into deep change – some voluntarily, as we come to an understand of events, but most by collapsing their personal worlds, their personal economies, and most of all, their ability to understand and predict what will come next.