Thursday, June 11, 2009

The Magic Kingdom

A growing consensus - though far from unanimous - holds that the economic downturn may have hit bottom, and the financial system is now on the mend. Recent stabilization in the numbers of unemployment; repayment of TARP funds by a number of large banks; an uptick in consumer spending, among other recent data, point to possible signs of recovery.

Already, though, we are seeing signs as well of the "cost" of any such recovery. Built on poor foundations - mainly the infusion of massive quantities of publically-borrowed or recently printed money - a "recovered" economy will simply continue to hobble down a perilous path leading to a dead end. One sign of the times: the price of oil has risen from a low in the $40's to a price-per-barrel today of $72. If the economy does indeed begin to recover, we can expect a continuing and rapid escalation of oil prices back to pre-crash levels - levels that we seem to have largely forgotten. Now, however, we are a considerably poorer nation as a result of the economic purge, less capable of making the large expenditures necessary to prepare for our energy-constrained future. The "stimulus package" was a particularly foolish exercise in self-destructive "investment" in a past with no future, with large sums allocated on "transportation" projects - few, if any of which, would go toward supporting more local forms of living that will be necessary when oil shoots past its old highs. And now, a growing chorus of nations are indicating a hesitance, or even outright refusal to finance the boondoggle and Ponzi scheme called "America," meaning that any "investments" we will make in our low-energy future are going to come from a crash diet, not from a credit card.

Utterly expectedly, long-term interest rates have been rising, from near-historic lows after the announcement by the Fed and Treasury of a major Treasury bond repurchasing effort, back to levels that now exceed the rates before that announcement. From here - with foreign nations balking at the idea that the dollar should remain the international reserve currency - it can be fully expected that long-term rates will continue to rise, while the dollar will fall against foreign currencies and gold will continue its relentless rise to $1,000 an ounce and beyond.

The result of this "recovery": an overall decline in purchasing power; a rise of inflation, particularly the price of food (associated with rises in the price of oil and the continued idiocy of pumping our food into our gas tanks); the inability of average Americans to borrow, not now because of deflation, but steadily rising interest rates; thus, continued and even deepening weakness in the housing market (why do you think the Senate is now considering a $15,000 tax credit for all house purchases, in spite of claims of "green shoots"?); and, the hard truth be told, a worsening of the American economy that is now being masked by the band-aid of trillions of dollars of borrowed money.

Nothing that has been done has redressed the systemic causes of this economic crisis, because - in the end - as a nation we are fundamentally unwilling to change our behavior. We elected a man to the Presidency who promised "change" knowing full well that he would not discomfit us with any actual challenge to our complacency. Having seen the result of a decades-long binge of living beyond our means - including not only borrowing beyond the ability of repayment under the assumption of permanent and magical "growth," but consuming with abandon the world's remaining cheap "resources" in the belief that our generation was entitled to materials that required millenia to form - our collective response was to double-down and borrow even more.

Our post-World War II past was marked, among other things, by a collective delusion that found its most perfect expression in the the phenomenal rise of the Disney empire. The Magic Kingdom was less a tutor and origin of self-delusion than its greatest manifestation. Disney became embedded in the American psyche because it appealed to the self-delusive fantasy by which post-war America defined itself. A car-addicted America flocked to Disney because it held out the fantasy of two incommensurable attractions: the future would always be bigger and better - particularly through the magic of technology (e.g., Epcot); and America was defined above all by the old-fashioned values of its small-town, agrarian origins ("Main Street America"). Disney was the fantastical manifestation of national wishful thinking, the idea that progress and tradition could be magically combined, above all by the creation of nostalgic facades that masked the brute machinery. In short: we could have it all!

We are now faced with the price of our Disney-fied fantasy of the past half-century. Having borrowed and consumed with abandon, all the while demanding and receiving high-tech distraction, while self-delusively believing that we were virtuous and good-hearted citizens who loved apple-pie and baseball (what Chevy told us we were, though the apple pies were purchased courtesy of Monsanto and baseball was pumped up on steroids and television money), the bill has come due. The facades are torn off, revealing not a virtuous America of Main Streets, but clunky mid-century machinery that consumes without limit and cannot be fed any longer. Our great post-War institutions - such as the heavyweights of Detroit - are more than merely financially bankrupt - they were built on the same basic fantastical notion that something could be had for nothing - forever. Our entire edifice has been shown to be ridden with rot born of this fantasy come due. Its high-water mark was the Presidency of Ronald Reagan, who borrowed shamelessly from the Disney message, telling us that we were good and decent folks even as we expanded the empire, sucked ever more deeply from the last of the world's great oil wells, and shopped until we dropped. Subsequent decades - regardless of our "leaders" - have been marked by a desperate holding pattern, the filling in with epoxy and plastic of the growing number of cracks of this unsustainable and unwinnable contest with reality.

What our post-Disney future reveals most fundamentally is that a facade of Main Streets cannot provide what Main Streets - and the communities that made those streets worth caring about - were designed and built to afford. Main Streets were a commitment to the future, albeit a reality-based future in which continuity with the past, and responsibility to subsequent generations, was paramount. Main Streets were lined with stores owned by local merchants that sold actual goods that were actually necessary for actual life (visit "Main Street America" and try to find a "store" that sells something other than Disney paraphernalia; for that matter, visit nearly any Main Street of yore - e.g., Old Town Alexandria - and try to buy a loaf of bread). They were places of public gathering, public spaces that tutored old and young alike in certain behaviors necessary for the continuity of civilization. The tutor of our young is now the sarcasm and irony of "The Disney Channel," a curious culmination of a project that began with the earnestness of the Mickey Mouse Club.

Our current "recovery" is now being cheer-led by a President who realizes that the only alternative to continuing our national fantasy is reality - and reality means a rendezvous with one-term. While he - like Reagan before him - flatters us by speaking of our better angels, he finances our "recovery" with pixie dust and amusement park mirrors. Implicitly, our "recovery" will return us to a condition that we have so recently regarded as a "good" economy. Our delusive understanding of a healthy economy rests upon our ability to borrow, to spend, and to consume - a premise that neither he, nor any "leader," has ever bothered to challenge. Like the little boy who tried to stop the leaks in the dyke, he's finding that stopping one set of leaks (TARP, "stimulus package," etc.) is increasing the flow of water through other leaks (inflation, oil, the dollar's decline). What can't be acknowledged is that the dyke is unsound. Meanwhile the seas threaten incessantly, and we are not wise enough to understand that one must simply stop living below sea level.


Anonymous said...

So true, so true.
Many years ago - it must have been about 1960 - I remember my family visited Disney land in California. I must have been about 13 at the time.
I remember we drove to Disneyland and the size of the parking lot was so gigantic - I was completely freaked out and refused to go to Disneyland!! How can I explain such a sentiment - the car-parking-pavement-freeway and consumption model was already wrong and sick to my mind even as a youngster.

Robb Davis said...

Last evening we celebrated my son's graduation from high school along with our young adult daughter. As they discussed their plans for the coming years I remarked that such choices may not be theirs to make. Stunned, and angry, they chastised me for my "buzz-kill" attitude and negativism. I was struck by their assumption that they had a "right" to choose their path and that nay saying that right amounted to simple negativism on my part. I realized then that I had failed as a parent to instill in them a sense of proportion about the false lives we have built. Over the years we HAVE tried hard to change our lives. We sold our car 6 years ago, have gone through two years of buying (nearly) nothing new, sold our home and rent, live without debt, etc. However, we have failed to communicate the simple lesson about WHY we did this to our kids. I fear they are ill-prepared to face the realities ahead.

George said...

I agree with the substance of the post, but I wonder about Disney. Reading this, I thought back to when my family was (unpologetically) at Disneyworld last year, and the idea that "the future would be better and America has agrarian values" seems pretty irrelevant--to us and to rest of the crowd.

Epcott isn't about "the bigger and better future," it's about the food and atmosphere of different countries. Main Street is just a strip of shops to grab a bite to eat on the way in or a souveneir on the way out from the rides. The Magic Kingdom was cool for our daughters, but fairy tales were around long before American culture and will still be around after American culture is gone.

Having it fresh in my mind, I'd say that Disney is special not for Epcott/Main Street/Magic Kingdom, or even the rides (lots of parks have similar rides) but for the attention to detail that surrounds them. Things like the unbelievable amount of time and research spent on details of the waiting areas for Yeti Mountain or African Safari, toilets that are always clean, cheerful staff instead of sullen high school kids punching a clock, that sort of thing.

The characters are another issue--clearly a draw at Disney. The major ones, like Mickey, though, cannot be said to represent "traditional America" in any meaningful sense. At least in Asia (I don't know how people in Europe see them), they are universal characters, in the same way as Hello Kitty or Pokemon, unmoored from any national identity.

IMHO, I think you're dead on about the economy, but you're stretching to read too much into Disney.

admin said...

"Ride on the crest of the dishevelled tide, And dance upon the mountains like a flame."

"It is a dreadful thing to say that Mr. W. B. Yeats does not understand fairyland. But I do say it. He is an ironical Irishman, full of intellectual reactions. He is not stupid enough to understand fairyland. Fairies prefer people of the yokel type like myself; people who gape and grin and do as they are told. Mr. Yeats reads into elfland all the righteous insurrection of his own race. But the lawlessness of Ireland is a Christian lawlessness, rounded on reason and justice. The Fenian is rebelling against something he understands only too well; but the true citizen of fairyland is obeying something that he does not understand at all. In the fairy tale an incomprehensible happiness rests upon an incomprehensible condition. A box is opened, and all evils fly out. A word is forgotten, and cities perish. A lamp is lit, and love flies away. A flower is plucked, and human lives are forfeited. An apple is eaten, and the hope of God is gone.

"This is the tone of fairy tales, and it is certainly not lawlessness or even liberty, though men under a mean modern tyranny may think it liberty by comparison. People out of Portland Gaol might think Fleet Street free; but closer study will prove that both fairies and journalists are the slaves of duty. Fairy godmothers seem at least as strict as other godmothers. Cinderella received a coach out of Wonderland and a coachman out of nowhere, but she received a command -- which might have come out of Brixton -- that she should be back by twelve. Also, she had a glass slipper; and it cannot be a coincidence that glass is so common a substance in folk-lore. This princess lives in a glass castle, that princess on a glass hill; this one sees all things in a mirror; they may all live in glass houses if they will not throw stones. For this thin glitter of glass everywhere is the expression of the fact that the happiness is bright but brittle, like the substance most easily smashed by a housemaid or a cat. And this fairy-tale sentiment also sank into me and became my sentiment towards the whole world. I felt and feel that life itself is as bright as the diamond, but as brittle as the window-pane; and when the heavens were compared to the terrible crystal I can remember a shudder. I was afraid that God would drop the cosmos with a crash."

GK Chesterton

Oengus said...

RE: "The Magic Kingdom"

Executive Summary: Our goose is cooked.