At Large : A recipe for relief from despair
The nation's economy staggers on, avoiding recession, but just barely. We withstand geopolitical shock after shock. The system has certainly been cleansed of the financial lightheadedness of the 1990s.
The real estate lightheadedness of the last few years has turned into a monumental headache. Across the country, on average, real estate values have fallen about eight percent. In some places, Los Angeles for instance, or Nevada, the plunge looks more like 16 percent, and additional declines are likely in some hard-hit areas. Here, inventory is up, sales are down, and prices are under pressure, though they haven't collapsed in all market strata.
The extraordinary rise in the cost of oil, and the forecasts that high and higher oil costs are here to stay, have had a stealthy, creeping effect on the economy, and the damaging influence of high energy prices has intensified for the past 18 months, raising costs, forcing budget adjustments, but not sharp disruptions in spending plans. That will certainly change if these price levels are sustained.
On the other hand, we don't depend on oil the way we did 30 years ago. According to Diana Furchtgott-Roth, writing earlier this year in The American magazine, "From 1974 to 1985, the United States spent more than 10 percent of its GDP buying energy. In GDP terms, the peak year for U.S. energy costs was 1981, when Americans spent roughly 13.7 percent of GDP. In 1973-1975 and 1979-1981, the share of GDP devoted to energy increased despite decreases in per capita and total energy use. Since then, even from 2003-2006, per capita energy consumption in the United States has remained relatively steady, between 340 and 350 million BTU per person ... Beginning in 1986 and lasting through the end of the decade, energy expenditures as a percentage of GDP started to decrease to around 8.0 percent. During the 1990s, that ratio fell even further, reaching six percent in 1999. The fast-growing information economy had relatively low energy consumption, which helped to reduce consumption as a percentage of GDP ... U.S. energy consumption has been fluctuating around 98-100 quadrillion BTU - hardly increasing at the pace it was in the 1970s, where consumption increased by 13.0 quadrillion BTU over a decade. Consumption in 2006 was only 5.7 quadrillion BTU greater than it was in 1996. And we have actually been decreasing our per capita energy consumption since 2004, whereas per capita energy consumption was increasing during the 1970s."
What keeps us going? To a degree, it's productivity. American workers are more productive, and steadily more and more productive, than they were in the past. It's just astonishing. It's as if we are working harder and more efficiently to outrun the chaos that's threatening to overtake us.
Faced with impending economic meta-doom, led by housing and energy costs, one may take some comfort in data, such as that supplied by Ms. Furchtgott-Roth. I do. Or, there's succor in the good news on the productivity figures. Maybe we'll just work feverishly enough to stave off economic collapse.
On the other hand, faced with desperate circumstances, namely the collapse of Europe beneath the Nazi machine, E.B White took another approach. Writing in September of 1939, White focused on the near-at-hand.
"I built a new henhouse this summer, to keep my mind off Europe, and I have chosen for its wall motto those fertile lines of Clarence Day's: O who that ever lived and loved/Can look upon an egg unmoved?
"I haven't yet had to be rubbed by an osteopath, but my trips to the grain mill are more numerous than they once were. This week, because of the invasion of Poland, the damn stuff is up thirty cents a bag.
"War comes to each of us in his own fashion. Early on that Sunday when England and France finally lost their patience, wishing to put my affairs in order, I cleaned my comb and brush, pouring a few drops of household ammonia in the bowl of water, running the comb through the brush, then brushing the comb with a nail brush. At breakfast there was a houseguest, in a bathrobe. She approached the war intellectually, through Versailles."
Please don't bring up the ostrich and the sand. These global issues are colossal, and a local approach may be as good a response as any other.