Wednesday, April 27, 2005

Cheap gas for cheap housing

This piece and its companion part two on Truthout provide a complex mapping of how our energy deficit (i.e., oil imports) have led to every other deficit and how those deficits have tilted the country rightward for 25 years. The basic pattern is as follows:
1. Energy deficit creates trade deficit.
2. Trade deficit creates investment deficit.
3. Investment deficit creates budget deficit.
4. Investment deficit and budget deficit creates wages and wealth deficit.
5. Wages and wealth deficits create pressure to use energy to generate housing wealth, which starts the cycle over again.
The vicious cycle keeps real wages flat and oil prices cheap, thus encouraging people to look for cheaper housing farther from the city using cheap gasoline to finance their trips to work and back and to everywhere else. It also tends to keep them focused on husbanding the remaining scraps of prosperity that they have, something which they do increasingly by taking on debt.

The grim forecast from the author is that oil depletion will make America move even further to the right. This seems to me not to be a firm bet. At some point the whole edifice comes tumbling down. Whoever is in office at the time gets blamed. Who will replace the fallen officeholders is the question. Will it be those with a progressive agenda seeking to rectify the ravaging of the middle class, the poor and the environment or will it be those who promise to restore the recent past when there is no hope of doing so?

(Via Mobjectivist.)

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