2009: The Status Quo versus The Long Emergency
Again, stop whatever elese you were doing, like reading things I wrote about 2009, and read Jim Kunstler’s forecasts about 2009. The author of The Long Emergency is experiencing the unenviable task of seeing dire structural change ahead, change that won’t be mollified by new gadgets, and being right about its consequences.
Some highlights:
He’s not a fan of techno-solutions. (not unlike yours truly)
The various tech industries are full of MIT-certified, high-achiever Status Quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia, the three thousand mile Caesar salad, and the theme park vacation. The environmental movement, especially at the elite levels found in places like Aspen, is full of Harvard graduates who believe that all the drive-in espresso stations in America can be run on a combination of solar and wind power. I quarrel with these people incessantly. It seems especially tragic to me that some of the brightest people I meet are bent on mounting the tragic campaign to sustain the unsustainable in one way or another.
He sees Dow 4000:
A consensus in the blogoshpere says that the stock markets will rebound strongly during the first Obama months. This is possible just on the basis of pure “animal spirits,” but the Obama Bounce will occur against a background of continued dismal business and financial news. It will appear to defy that news. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year.
He believes that you’ll actually need positive cash flow to make a business run (old-fashioned, but radical!):
We’ll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable…Giant enterprises requiring giant loans to get from quarter to quarter will tend to not make it. Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off.
Real change. Not new technologies for old philosophies. Nobody will save the day. We’ll need to make workable solutions for many different types of people.
And still - people will need things. Goods and services will be required, perhaps just different types.
Business development will need to be on its toes! Are you ready?
Commercial developers headed for bankruptcy, naturally asking for a bailout
The most important part of thinking about the future is systems thinking. In our Future Intelligence method, the first part of every project or exercise is to map out the system of any business, activity, or market. Thinking about the beer market? Don’t just stop at consumer tastes, think about packaging, trasnportation, distribution, leisure, sports, etc. That way, you think not just about one kind of change, but the relationships.
This financial crisis is one long lesson on the interconnected nature of all industry, governance, finance, and geopolitics. This is going to surprise you all, but now, since they are part of the whole system, the commercial developers are now asking for bailouts from the federal government.
Let us not consider the merits of such a proposal, but just marvel at how much all of these industries are interconnected. Every actor in the system requires certain behavior from the others in order to survive. When one actor changes (e.g. suddenly ballooning the amount of credit) all the others respond.
Subprime mortgages are now changing the dynamics of the construction of mini-malls around the world.
It’s a mess, but at the very least it’s interesting.
If retail and commercial development are melting down, what comes next?
California forges ahead with climate balance, despite hard times
This strikes us as a really positive sign: despite calamitous financial events everywhere on earth, California is not throwing its ecological goals out the window, still adopting one of the most aggressive plans to put carbon back in balance in the world.
In crisis, it’s easy to forget our long-term plans we had just moments before. If the world’s fifth largest economy can keep from losing its head, think about how the rest of us can make positive moves in 2009!
Obama: Infrastructure the key to the future of competitiveness
President Elect Obama, along with America’s Mayors and governors say that massive infrastructure projects are the key to pulling us out of recession.
Incidentally, this was the subject of one of our first STEEP Reports around one year ago.
The whole set of ten STEEP Reports to be available soon…watch this space.
Net Neutrality lobbying still simmering under the surface
Declan McCullagh at CNET posts an interesting bit of news that is of interest to those concerned with Net Neutrality debate and also those D.C. policy dorks who love terms like “astroturf payola punditry.” (Incidentally, that’s me, and everyone within five blocks of our office)
The story is actually about how a number of telecom companies have been paying a certain D.C. pundit to slam Google’s pursuit of Net Neutrality, arguing that Google (and, unmentioned, the 96% of the planet which uses Google) doesn’t pay their fair share.
The arguments are less of concern to me than the fact that I have been hearing about this topic for years now. It has slipped below the radar, but clearly, given the lobbying efforts going on, somebody sure thinks it’s important. So it bears keeping an eye on in the years ahead.
Any bills coming up in the new Congress?
Diplomacy 2.0 - using Facebook and Twitter to tell America’s story
Steve Clemons runs The Washington Note, one of the truly essential blogs for anyone who has an interest in America’s foreign policy.
Clemons thinks like a natural futurist, always considering strategic trends in a holistic, intellectually honest manner. But he’s also is interested in new technologies like Facebook and Twitter that will connect people around the world in a way that impacts America’s diplomacy. Cutting edge stuff. Check out this speech on social media from the New America Foundation:
Bretton Woods, part two: how will it shape the future of finance?
Interesting piece by Gideon Rachman in today’s Financial Times regarding the upcoming meeting of the G20, 
dubbed Bretton Woods 2. Given the shambles of world finance, established and emerging economies are given a chance to sort of remake the world financial system.
Rachtman makes a good point that in 1944, the destruction of the world let us start with a clean slate. This time, we seem much less willing to upset the established order. Really, bankers aren’t even willing to give up their bonuses in the face of disaster, so completely overturning the power structure seems unlikely.
It seems that a whole host of institutions are going to receive makeovers. Will they be superficial or substantive?
The end of giant corporations?
My intelligence buddy August Jackson just made an interesting point: given the fantastic new AUTOMOTIVE BAILOUT that’s flirting with us, will the world lose its taste for giant, conglomerated corporate entities?
Seriously, what’s the upside of having businesses so large that governments believe they shouldn’t fail? We’re spending ludicrous amounts of tax dollars to keep banks alive. The U.S. federal government is running a debt that would cause any individual to choose bankruptcy. Now, the car companies feel that they need more of (my) tax dollars to keep afloat, because letting them fail would be far too painful for all concerned.
What is the benefit of companies so big, we can’t let them fail?
And if consolidation is so bad, why is the pharmaceutical industry considering even more of it?
Questions for this new age.
Business Week: The long-term future is the last refuge of a wrecked economy
For sometime I have been saying that we’re on the cusp of a wave of interest in the long-term future that is not driven by economic bubble or apocalypse per se. The normal cycle is that people are interested in the future when we’re inventing new technologies and profiting, or when we think we’re going to nuke each other. This time, perhaps for the first time, we’ve got a mix of both: technologies will likely be influential, the economy’s a mess, the world is largely peaceful, the climate is changing, etc. People are finally interested in the future not as a gimmick, but as the only way to wise management of public institutions.
Pretty cool.
The most recent edition of Business Week has a great example of this emerging mindset. Michael Porter, the intellectual godfather of competitive analysis, has written an article that is desperately needed today: “Why America Needs an Economic Strategy.”
You should read this in its entirety, but to sum up, Porter says that America has a lot of valuable assets, and no plan whatsoever for long-term prosperity. The United States has a great science and technology engine, the best technology transfer in the world, and a still-vibrant culture of entrepreneurialism. However, we are hobbled by our lacking social net, a mess of a public health system, decaying infrastructure, and creeping neo-mercantilism in the form of giant corporations that distort markets. The only way out is to think long-term, from small businesses up to national policy makers.
We couldn’t agree more! Too bad the economy had to be smashed into flints before we could notice it, but better late than never.
John F. Kennedy reads the Declaration of Independence
God bless YouTube, this is very cool.
In case you want a taste of the logic behind major change, this is JFK reading the Declaration of Independence, in its entirety.
Words written by fallible human beings, but powerful, and remembered.
Be social