The Auto Economy

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We are de-globalizing

The turmoil happening right now is the explosive unwinding of a business model that cannot be sustained by oil. AIG, bad mortgages, high unemployment, bank failures are not the causes of the unwinding, but the symptoms.

The Saudis, the Russians, the Venezuelans, the Mexicans all have falling output of oil. We have no alternative infrastructure in sight. Energy prices are down right now because factories are idle and not shipping anything. Energy prices are not going to stay down. This is the festering cancer waiting to come out of remission just as soon as the economy starts to turn around.

As a kid I had a favorite National Geographic betamax tape called Love those Trains that I would watch over and over. In part of the story, they follow a box car of lettuce that is picked in Southern California and finally delivered to a PTA luncheon in Boston. While I loved watching the trains, even as a kid I thought it was rather silly to ship lettuce from California to Boston. Even if Massachusetts couldn’t grow their own lettuce, I was sitting in the Garden State of New Jersey…. surely we, or some other close-to-Boston state, could produce enough lettuce to be able to supply Boston with salad instead of it coming from California.

We’re going to be forced to move to a more locally produced model of consumption. This will be a permanent change unless we develop and deploy an alternative fuel right now.

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