Saturday, July 18, 2009

The Scholarship of Collapse |

I attack most things by beginning with the worst case scenario and going from there. And while this may not be the worst case scenario, I think you can see it from here.

And I should warn you, that if you are from the US, this version could hurt.

The Scholarship of Collapse |
"The June issue of Monthly, The Scholarship of Collapse, addresses several views of economic and systemic collapse from the works of Jared Diamond to Joseph Tainter, and then goes on to apply these views to the United States–and to its biggest state, California....Ouch. Permanently smaller economy!? Are you kidding me? The United States? Yeah, I know. The growth paradigm since WW2 is so firmly entrenched in the record (and in the psyche) that mere mention of US economic stasis seems outlandish. To suggest, as I am, that this condition will carry on for years sounds impossible. However, that is my call. I now foresee zero, net physical infrastructure or housing growth in California for at least another 5 years. If housing units go up somewhere in California, they’ll be bulldozed someplace else. If new roads or highways are erected, they’ll be discontinued or dismantled somewhere else. Without California, there will be no sustainable US GDP growth."

Believe it or not, it gets worse (as in more depressing) from there.

One more look in:

"The United States, just like California, now sits astride massive, gargantuan post-war infrastructure that was built with cheap energy and leveraged with cheap energy, for over 50 years. Many parts of the US right now are actually experiencing something closer to a depression,...The United States has been in an inflationary recession since the start of the decade, which now threatens to become an inflationary depression. To make matters worse, the federal government is in the midst of one of the largest policy mistakes in US history as it has chosen to make enormous new investments in car companies, cars, biofuels, roads, and highways to the exclusion of public transport. This is a classic, textbook example of the sunk cost effect in decision making and is a hallmark of the collapsed societies of antiquity."

And while I may not agree with all of this, it is definitely a possibility and being aware of it will make it less likely.

HT to @BionicTurtle for pointing this one out. (I am really looking forward to the BionicTurtle who just joined twitter. Check out his channel on YouTube or

1 comment:

David Harper said...

Thanks FinanceProfessor, I am big fan of your blog! David H @ bionicturtle