For many Americans, the years ahead will be nothing short of a modern Dark Ages, where each day brings forth fresh anxieties, unfamiliar risks, and a deep sense of foreboding.
~Michael Panzner~
We’ve heard of the economist, Nouriel Roubini, aka “Dr. Doom”, and readers of Truth to Power are quite familiar with James Howard Kunstler and Dmitry Orlov, but Michael Panzner serves up a recipe that contains the carefully blended ingredients of all three. In fact, we might call his latest masterpiece, When Giants Fall, “Dr. Doom meets ‘World Made By Hand’ and ‘Re-Inventing Collapse’ with ‘Long Emergency'(Kunstler) and ‘Long Descent’ (John Michael Greer) waiting in the wings.” I have remained a fan of his website, Financial Armageddon, and his book by the same title since the publication of it in 2008, but since that time, in following Panzner’s writings, I’ve observed a fine-tuned incisiveness and a deepened resolve to deliver to his readers the harsh realities of the collapse of empire and the economic ramifications of that. While he does not leave us without options in the face of the decline, he sugar-coats nothing and just this past week carried on his site a number of chilling scenes of collapse in recent photos taken across the country.
While the styles of collapse-aware writers such as Kunstler, Orlov, Greer, Astyk, Heinberg, and myself are perhaps more socio-cultural, Panzner writes in economic terms that economists or those versed in the discipline can readily appreciate. If we had any doubt about the fiscal statistics on which our forecasts are based, Panzner puts them to rest with his carefully-researched data.
He begins “Giants” with the reality that has become ubiquitous in the current economic collapse: Financial nirvana is now history. “Spend. Borrow. Repeat” is over because as a result of the “mistakes and excesses of the past” the financial chickens are coming home to roost with the disappearance of fuel, food, water, and all the other lubricants of the machinery of empire. The author emphasizes that these are not merely creating little bumps in the road for the titans of globalization but that “taken together, these various developments constitute a clear and present danger to the economic well being of every American, especially those who have been conditioned to believe that life can only get better in the future.” (xxi)
While briefly tracing the economic history of how we arrived where we are, he examines the myriad hostilities that are likely to erupt in a resource-depleted, economically scaled-down world, China and Russia being two 800-pound gorillas, along with less obvious hot spot nations in the Middle East, Africa, and Asia. What is fundamental, he drives home to us, is the waning influence and eventual irrelevance of the United States in the global economic landscape. He points to our disastrous campaigns in Iraq and Afghanistan, our ghastly dependence on the kindness of foreigners to purchase our debt, and the near total reversal of globalization now in process in the current economic meltdown. Crime, politics, and economics intersect to undermine the stability of international relations everywhere.
So what does it actually mean that the U.S. no longer “rules the global roost”? It means that eventually China and other American rivals could someday use their vast holdings of U.S. debt “as a geopolitical weapon, despite the great harm that would also cause to the attacker’s own economy.” (68) It also means, as Panzner points out, that “…oil and gas-producing companies, international commodity traders, and emerging-nation governments…dictate the rules of the game in global energy markets.” Simply put, “what takes place on a day-to-day basis [in the United States] is increasingly in others’ hands.” (69)
And the ultimate consequences?
…with myriad imbalances already starting to unwind and economic conditions likely to be further undermined by geopolitical uncertainty, resource constraints, and the specter of growing divisiveness, the groundwork seems laid for a broad move away from American-style free-market capitalism. (71)
If there was any doubt about this, the global credit meltdown beginning in 2007, now having snowballed into global economic cataclysm, has put that doubt to rest and turned yet another prophet, namely Michael Panzner, into a historian.
One issue I wish the author had expanded upon is climate change and its inevitable ramifications in terms of climate refugees. The issue of tighter borders and the control of the flow of people and goods is frequently mentioned, but in the light of those realities, one wonders how nations will address the mass migrations of populations as a result of climate-induced droughts, famine, pandemics, and natural disasters. If as he states, and I agree, “Immigrants and foreigners will become scapegoats for domestic ills”, we could legitimately infer an increase in violence issuing from mass shifts in population around the world.
In a chapter entitled “Local Is The New Global,” the author argues, with solid evidence, the reversal of globalization and why issues must now be addressed “with a shift toward regionalization and localization of economic activity and investment flows.” This may evolve quite naturally as myriad divisions globally erupt and reinforce the return to what is local and familiar.
Related to this trend, Panzner mentions a couple of secessionist movements in the United States but opines that “To be sure, many of these efforts will fizzle out or remain firmly on the fringe.” To this I must respond: Don’t be too certain about that. A strong secessionist movement abounds here in the state of Vermont, viewed by some as a conscious step that Vermonters must take to extricate themselves from the federal government, but viewed by other Vermonters as wise preparation for the very divisiveness explained by Panzner or simply imposed on the region by climate chaos, natural disasters, or dramatic changes in geography engendered by either of those.
In the spirit of the Transition Town movement and other voices of the Long Emergency, the author underscores the opportunity that is inherent for citizens, businesses, and communities in the collapse of empire. What will be required for the success of those opportunities, however, is the capacity to think outside the box. Whereas there are areas of the world that might actually offer the promise of investment opportunities-countries such as Canada, Brazil, New Zealand, Thailand, and Vietnam, investment for the average American is more likely to be a local affair as local economies are born and struggle to survive. Although Panzer does not dwell on the alternative or underground economy, there is likely to be plenty of opportunity to invest in it in ever-ingenious and unconventional ways.
In any event, Panzner argues that where one actually chooses to live is crucial, and in the last chapter of When Giants Fall, he discusses the probable demographics of collapse, that is, the likelihood that smaller cities, especially those situated by rails or rivers, will offer better opportunities for jobs and income, but that those places might become socio-culturally intolerable for all the reasons the author has outlined earlier in the book, as stress, paranoia, and societal breakdown exacerbate. The employment landscape of a Long Emergency world is almost certain to be one of many part-time, as opposed to full-time, jobs–a world of getting one’s hands dirty, going into business making and selling necessary items, and drastic lifestyle changes.
Budgets of state and local governments will evaporate in some cases almost overnight, and safety nets and what people have assumed are “essential” services will disappear. Family, social, and community relationships will become far more important, and much of this may be based on the need for safety and security.
The last chapters of “Giants” reads like “World Made By Hand” or Richard Heinberg’s “Letter from the Future“. I must say that little in its contents is actually new to me. What makes the book remarkably arresting is that a twenty-five year veteran of the global stock, bond, and currency markets-a faculty member at the New York Institute of Finance, is forecasting the collapse of empire and the daunting challenges, not exclusively economic, of a post-industrial world. In this moment, we are witnessing the rapid decline of that world in the form of an unprecedented global financial meltdown, and in his conclusion, Panzner quotes from Barton Biggs who aptly names it an “episode of great wealth destruction.”
When Giants Fall analyzes the collapse of empire from the economist’s perspective and offers a crucial complement to future scenarios presented by experts on energy depletion and climate change. Your Long Emergency library will not be complete without it, particularly as you encounter those influenced by the Pollyanna economists who assure us that in a few years, “everything will return to normal”. Like other analysts of collapse, Panzner argues that “normal” is the worst thing to which we could return and that every aspect of our thinking and behavior in relation to the earth community must be radically transformed.
