Reckoning A Living Wage

The last few posts of this blog have covered the key role of local businesses and local economies in promoting neighborhoods and communities that are resilient in the face of Peak Oil, climate change and economic collapse. Local businesses that have the greatest chance of early success will be those that make or repair necessary or highly beneficial material goods, or that provide essential or highly beneficial services, for market niches that cannot be easily serviced by the global “official” economy due to incompatibilities of scale. By incompatibilities of scale I mean that these market sectors are small enough and/or scattered enough that they can't be served by the mass-produced, mega-chain store approach that is typical of large-scale businesses. Of course, as economic contraction and collapse proceeds, an ever-expanding number of markets and people will be abandoned by the official economy, leaving more room for the rise of local businesses and local economies.

One key question for someone seeking to start his own local business is how much to charge for goods produced or services rendered. A big part of this question is for the prospective small businessman to figure out how much income he needs to live on, and this in turn is influenced by the state of the prospective market – that is, how much the businessman's customers are willing and able to pay for the goods and services rendered. The calculation of the businessman's required income can be stated another way: he must calculate what constitutes a living wage for himself and his dependants and employees.

The calculation of a living wage can be influenced by any number of factors. Many people start with a picture of a desired lifestyle, and by means of simple mental arithmetic they come up with the income required for that desired lifestyle. Our uniquely American problem is that almost everyone who watches TV (and a sizable number of people who don't) has been trained to imagine a very lavish lifestyle, and to want an income to match. Most of the celebrities and influential figures in our country are afflicted with this disease, and they will resort to desperate measures when their income doesn't match their desired lifestyle. Names like Donald Trump, Bernie Madoff, and Kim Basinger come to mind.

This diseased state of mind isn't confined to the rich and famous, as events of the last few years have shown how many Americans lived far beyond their means. And this mindset is a hindrance to the correct process of reckoning a living wage. The correct process begins, not by formulating a picture of a desired lifestyle, but by figuring out how much customers are willing and able to pay for the goods and services offered by a prospective local business. If a woman opens a shoe repair shop in a rural town in Kentucky, and hopes to have ten customers a day and gross $50 for each repair job, she's likely to be disappointed if the town's residents are so poor that they can only afford $5 or $10.

I'd like to suggest that those Americans who want to start local businesses should reckon their figure for a living wage downward, because the ability of most people to pay for goods and services is decreasing. This is due to three factors:

1. First, the global economy (and the large-scale American economy) is now contracting, due to constraints in the availability of natural resources necessary to supply the economy. It is becoming more evident that the world has passed the peak in global oil production, and that oil production is now beginning to fall. We have already seen peaks in other resources including metals and rare-earth elements. Peak coal is not far away. The availability of fresh water is also declining, due to overuse of rivers and drought-induced climate change. Some analysts say that the world experienced Peak Phosphorus (especially inorganic phosphates) in the 1980's. (Source: http://phosphorusfutures.net/index.php?option=com_content&task=view&id=16&Itemid=30) Phosphorus is a key ingredient of agricultural fertilizers. Resource constraints and exhaustion mean a shrinking economy, and a shrinking economy means less income for each member of that economy.

2. Second, the concentrated wealth of the United States, as well as the lavishness of the American lifestyle, have been built on a foundation of military conquests, trade agreements and treaties that facilitated the concentration of the world's wealth in this country, and in the hands of the ruling elites of this country. Thus, for instance, the U.S. has only five percent of the world's population, yet uses over 40 percent of the world's oil. Now those complex arrangements of military might and slanted treaties are starting to unravel. Net oil imports to the U.S. have been declining for the last few years as oil rich nations have become wealthier and have begun to use more of their own oil. Foreign nations are becoming much less willing to buy U.S. debt, and are turning away from the U.S. dollar as the world's reserve currency, due in part to the huge debts for which the U.S. government is already liable.

3. The collapse of credit worldwide which precipitated our present economic crisis has also resulted in the loss of access to credit for ordinary people, who are now forced to live within their means. The means of ordinary people are shrinking as companies, stung by failing revenues and their own lack of access to credit, lay off ever larger numbers of employees. The increasing layoffs and downward pressure on living standards are the evidence of a shrinking global economy and shrinking American access to the goods and services provided by that global economy.

A word about point #2 above is in order. Some analysts and “collapse thinkers” have voiced the possibility of a sudden, near-term collapse of the arrangements which underlie the American lifestyle – perhaps through a massive sell-off of foreign-held U.S. debt, or a Federal default on U.S. debt, or a sudden crash in oil production or oil exports. If that happens, there will be a swift and sudden decline in the standard of living of most Americans, since we depend on imported goods for so many things. To cite just one example of the scale of this decline, consider what would happen if the American five percent of the world's population that now uses 40 percent of the world's oil woke up one day to find that they now had access to only five percent of the world's oil. On a per capita basis, this would be roughly equivalent to each American finding out that his or her income had suddenly been cut to one-eighth its former value.

Now a per capita estimate of the effects of such a collapse is necessarily flawed, as wealth is not equally distributed in this country. Nor is access to wealth. In the event of such a crisis, it follows that some people would hardly be affected, while a large number of people would be thrown into grinding poverty. Yet it seems quite likely that whether this happens suddenly or gradually, our nation is moving toward a condition in which we have access only to our fair share of the world's resource base – and that the non-renewable part of that base will be continually shrinking. Under these conditions, the sort of small businesses that survive will be those whose proprietors offer necessary goods and services at an affordable price, and who are able to stay in business because they have scaled their own needs back to a level that's sustainable over the long haul.

Here then are some good questions: Could you live on an income that's one-eighth or less of your present income? If not, what steps could you take to simplify your life so that you could live on a drastically reduced income? How much can the citizens of your locality actually afford for the goods and services you propose to sell them? Are these goods and services really so essential or beneficial that people are likely to buy them?

Swinging Your Own Hammer

In my post, Localism And Resilient Neighborhoods, I discussed the importance of building and supporting local economies as a part of building resilient neighborhoods. Of course, building local economies means the revival of a great number and variety of local businesses that were destroyed by the rise of globalism and the concentration of massive amounts of capital in the hands of a small number of national and global elites. The revival of local businesses that actually make or repair the material goods needed for everyday life is a key element of neighborhoods and communities that can survive large-scale economic shocks caused by the failure of the global economy – a failure that is occurring right now due to the collapse of the resource base needed to sustain that global economy.

A key question is whether now is the right time to begin reviving and/or building local economies, and the necessary businesses that make up such economies. That question can be answered on two levels. On one level, the answer is “Of course this is the right time! In fact, we should have started yesterday, given our precarious, crumbling national economy and the coming economic shocks caused by our post-Peak resource base.” But I'm asking a different question, namely, whether people who are trying to rebuild a local economy in their locality can get away with it at this time.

I believe that at present, an increasing number of people are starting to resent the official economy and the conditions under which they are forced to participate in it. I believe that these people would gladly turn to alternatives if these alternatives were readily available. Yet the masters of this official economy and of the big businesses that comprise this economy are actively working to prevent the emergence of alternatives. In this they are willing to use any tools at their disposal, including the lobbying of politicians in order to make it hard for people to pursue alternatives. The sudden emergence of many local economies based primarily on large numbers of small local businesses would constitute a threat to the “official” global economy and its dominant players. Therefore I am not asking whether “we” should formulate some grand policy for reviving local economies, nor am I asking whether we should try to enlist the help of our government at the Federal or State level to promote such a policy. Rather, I'm asking, “If I want to start a local business that both makes and sells useful things, can I get away with it at this time? Or will I be driven out of business?”

To put the problem another way, the official global economy is like a huge, vicious pit bull that has suddenly shown up in the front yard of a home. Inside is a group of children who are trying to escape from the house, but they are rightly afraid of the pit bull. They have already lost a couple of their comrades who tried to make a break for it and were caught in the jaws of this evil mutt. But a Providential event has befallen them in that the pit bull has just knocked over a trash can and eaten some really gross, poisonous garbage. Now he's looking quite sick, and the children are starting to think he may die – or at least that he might be sick enough that they could outrun him and get away from that house. Yet they're not quite sure – so they converse back and forth along the following lines, “I think maybe he's dead. Wanna check it out?” “No way, man! You go first.” “Chicken!” “You see what that dog did to Jimmy's leg, don't you?” “Maybe if we throw a stick at it, we can see if it's still alive...”

Is the official economy sick? Absolutely. Those who depend on that economy for their livelihoods are being jettisoned from that economy in staggering numbers. The “official” unemployment rate in the United States is now 9.1 percent, although if you check out Shadowstats (http://www.shadowstats.com/alternate_data), the actual rate is over 20 percent. Is the Government, the enabler of that official economy sick? One way to answer that is to note that the Federal government depends heavily on debt, and foreign nations have grown increasingly reluctant to buy U.S. debt. Many state governments are in much worse shape. (California is the present poster child.) Is modern industrial society feeling well? Consider that there is now abundant evidence that global oil production is past peak and in decline, and that U.S. commercial crude inventories have been falling consistently by 3 to 4 million barrels every week for the past two to three months. Oil – the original topic of this blog, as well as the cause of our present economic collapse – is about to assume a central role in our story once again.

Is there still some “bite” left in the jaws of this pit bull? Unfortunately, yes. Consider government, for instance. There are several “food safety” bills now making their way through the United States Congress, bills that, if signed into law, would drive small farms and food producers out of business by creating such an expensive regulatory burden that only the biggest agribusinesses could survive. It's not surprising that large food corporations like General Mills, Kraft Foods and W.M. Kellogg have endorsed this legislation. There was also the “Consumer Product Safety Improvement Act” passed earlier this year ostensibly to protect children from lead and toxic chemicals. What the law actually accomplished was to saddle small American producers of children's toys with a crushing burden of required tests on products that obviously did not contain lead in the first place. These cases illustrate the strategy of big business, when faced with a crisis caused by a lack of safety in products produced by big business. That strategy is to promote legislation that does not forbid the big business practices that lead to dangerous products, but that rather saddle all businesses with a regulatory burden so heavy that it can only be borne by big businesses. Thus they drive smaller businesses out of business.

The use of governments to promote the policies of big business is but one of the strategies of big business. There are the other strategies – economies of scale, specialization, large-scale automation and the use of cheap labor in a globalized economy. Do you want to make something for a living? How about custom handmade guitars? It is certainly possible to make a decent living as a luthier, as long as you have a good reputation for quality products. Some well-known custom and semi-custom luthiers come to mind, such as Linda Manzer, Kevin Ryan, Grit Laskin and George Lowden, and their instruments can command a price of several thousand dollars each. Yet China has recently emerged as a lutherie powerhouse, and Chinese instruments of high quality can be had very cheaply, due to low labor costs and cheap fossil fuel-based transport. Last year's oil price spike put a temporary crimp in globalism, but that spike has gone away for the present.

Okay, then, how about bicycles? China's prominence is true in spades here. Almost every inexpensive bike sold in the USA is made in China. Yet it is also becoming true that expensive, supposedly “custom” bikes are also made in “low-cost” overseas locations. Consider the offerings of Rivendell Bicycle Works, a seller of “custom” bikes that were at one time all made in the United States. The majority of their most popular models are now made in foreign countries such as Japan (for the Rivendell Atlantis) and Taiwan (for the Sam Hillborne). Now don't get me wrong. I really like Rivendell and respect the company, and I know they aren't exactly rolling in dough. But even they have been somewhat altered by globalism. My point is that making a living in the First World by making things in the First World is still fraught with difficulty, unless you're a really big player.

So what's a person to do if they want to start a local business? What should be the focus of their business? This question is no doubt uppermost in the minds of many people who see that the official globalist system is breaking and who are looking for some sort of escape. Yet such people may feel trapped, people whose education has “...prepared [them] solely for working in a large organization,” and who can't imagine earning a living otherwise, as Matthew B. Crawford says in his book, Shop Class As Soulcraft.

Crawford's book is a deliciously subversive critique of modern globalism, and of white-collar culture and all its support institutions, including schools that teach useless factoids while destroying common sense. To those looking for a localist escape from the breaking globalist system, Crawford suggests finding work that essentially requires human craft of the kind that can only be gained through experience, and that can only be handed down through apprenticeship. This sort of work can't be globalized, outsourced, automated or exploited over an Internet connection. He suggests “finding work in the cracks,” work that is not being done by the official global economy because its scale or scope does not fit the large scale suited to the organs of the global economy.

Figuring out where the “cracks” are and what sort of work can be done in the cracks is a challenge I leave to you, the reader. (It's certainly a challenge I myself am facing.) But I leave you with some suggested avenues of exploration for finding such work. These were written by Ahavah Gayle, author of the blog Shalom Bayit, and are found in a series on that blog titled, “The Collision With The Reality Train – What Can We Do?” The relevant post is here: Repost: Third and Final part. Enjoy!

(P.S. I once got to see a Rivendell Atlantis as I was coming home from work and waiting at a MAX platform. It belonged to a middle-aged lady who was also a bike commuter. I came up to her and said, “Is that a Rivendell Atlantis? Can I drool over it?!” She said, “Sure! Do you need a bib?” Those bikes are cool.)

Sources:

• “Are Foreign Investors Losing Interest In US Treasury Bonds?”, Christian Science Monitor, 15 June 2009, (http://features.csmonitor.com/economyrebuild/2009/06/15/are-foreign-investors-losing-interest-in-us-treasury-bonds/)

• “General Mills, Kraft Seek Safety Rules In 'Philosophical Shift'”, Bloomberg, 4 March 2009 (http://www.bloomberg.com/apps/news?sid=aRnLL61d9xmc&pid=20601087)

• “Made In China,” Strings Magazine, October 2003 (http://www.stringsmagazine.com/issues/strings113/china.html)

• Shop Class As Soulcraft: An Inquiry Into The Value Of Work, Matthew B. Crawford, The Penguin Press, 2009

The "Congress Created Dust Bowl"

My job has me back in Southern California this week. On the drive down, between Sacramento and Bakersfield, I saw again an intermittent series of signs that I had noticed on previous trips, signs which read, “CONGRESS CREATED DUST BOWL.” In some places, these signs were located next to former orchards, now dead or dying.

The signs told me a story, as I drove southward in 105 degree heat, beneath the plumes of smoke from a couple of distant fires. First, they were evidence of the stress under which large industrial agribusinesses are now operating in this time of resource constraints and altered climate. According to a USDA report, California's snowpack contained nearly 30 percent less water than normal this last March.

California now has over 36 million people, a sizable fraction of whom are Southern Californians. Each of them seems to want enough water to wash his SUV, fill up his pool and water his lawn. Some of them work for realtors and developers who want to get rich from enticing yet more people to move here. All these residents must compete with each other and with farmers over a dwindling supply, as the Sacramento and Colorado rivers are under stress from excessive use. Many of the competing commercial interests who rule the California economy would each like to maximize their share of the available water, as their commercial success depends on it. Yet it is no longer possible.

My friends and coworkers here are telling me that Los Angeles County and Orange County have now imposed mandatory water use restrictions on residents. There's a news report from April of this year stating that San Diego County will start reducing water deliveries to its residents, starting in July. On all sides are signs that the residents of this state will be forced to start living quite differently, quite frugally, even to the extent of changing the way they grow their food. Big agribusiness will not survive unchanged.

Yet here were these yellow and black signs in the desert (that's right – it's a desert), a visual howl of existential angst and rage against reality printed in bold block letters. It seems that the man who put the signs up believes that if Congress or the State government simply relaxed environmental restrictions designed to protect some of the endangered Sacramento River fish, happy days would be here again, and the desert would burst into magical bloom. This man has friends among watchers of Fox News and its talking heads. They don't understand that the endangered status of the fish is one of the symptoms of larger limits that they will have to face whether they want to or not. Those limits are not the fault of Congress.

Localism And Resilient Neighborhoods

This week, I'd like to resume discussion of building resilient neighborhoods as preparation for Peak Oil, climate change and economic collapse. In this post, I will emphasize the importance of supporting local economies as a part of the building process. In an earlier post, Our Least Resilient Neighborhoods, I said the following: “Building resilient neighborhoods therefore consists of devising effective defenses against breakage [of neighborhoods], repairing the culture of the neighborhoods and fostering neighborhood self-sufficiency.” One key element of neighborhood self-sufficiency is financial self-sufficiency – that is, being as free as possible from the claims of the official money economy. This means either not having huge financial obligations, or having locally-owned, locally-controlled means of meeting the obligations one has, or both.

As a practical example, consider a homeowner who wants to become more self-reliant and less susceptible to economic collapse. Let's assume that his house is on a fairly decent lot (around 6000 to 7000 square feet), and that he has started “farming” his front and back yards in order to provide some of his own food. Let's also give this man a clothesline and some chickens in his backyard and assume that he has saved up a bit of money to pay for super-insulating his house and installing a simple rainwater catchment system under his roof gutters.

This is all well and good. The man is pursuing financial self-sufficiency by providing for his needs in a way that reduces his need to spend money over the long run. But let's assume that he “owns” his home only in the sense that he is paying a mortgage. If we give this guy a two bed, one bath house and assume that he bought it in Southern California between 2000 and 2007, he probably has a sizable mortgage payment (say, around $1800 a month if he bought it before prices really took off). That's a significant financial burden, a significant obligation to the official money economy. Even if we assumed that the homeowner in question owned his home outright, he would still have to pay property taxes as part of the cost of living in a city. Yearly taxes for this man's house would probably run between $2500 and $3000. That money would have to come from somewhere. If he didn't pay it, the County would foreclose on his house and he would be homeless.

So how does this guy get the money? Until recently, the answer to this was, “By participating in the official economy.” In the overwhelming majority of cases, that meant getting a job from an employer. Now, this employer demands a certain amount of work, as well as a certain level of personal preparation, skill and competence. The employee must spend some of himself in his labors and in his preparation to perform his labors competently (i.e., in schooling and self-study). The employee's labors generate wealth for the employer, who returns some of that wealth to the employee as compensation for his labors.

This arrangement works tolerably as long as the employer returns a fair share of the wealth generated by the employee's labors, and as long as the cost of goods and services required by the employee do not exceed his compensation from his employer. But whereas that may have been true of American employers and employees before 1980, it is certainly not true now. The trends of deregulation and globalism, pushed by corporations and corporatist politicians from 1980 onward, have produced a world in which an ever-larger share of the fruits of the labors of workers are skimmed off and sent to a small “club” of ever-richer ruling economic elites, while an ever-smaller portion of the wealth generated by those labors is returned to the laborers. Thus, for instance, there is an expanding class of recent college graduates who can't get work paying more than $10 or $15 an hour. (See http://legacy.decaturdaily.com/decaturdaily/livingtoday/050516/degree.shtml, http://www.impactlab.com/2007/04/30/study-growing-number-of-college-graduates-classified-as-poor/, and http://www.newser.com/story/58492/college-grads-face-years-of-lower-wages.html. Or if you're in college now, maybe you should skip reading these. I don't want to depress you.)

Meanwhile, the cost of necessities such as housing and health care skyrocketed during the period between 1980 and the last two years. In fact, the cost of health care is still climbing. And the rise in the cost of an education has outpaced the nominal national inflation rate. These rising costs have led to massive indebtedness, which does not make for a very resilient or self-reliant situation for most people. Organic farmers know that soils can become exhausted when they are over-farmed without returning returning adequate amounts of dead plant and animal matter back to the soil. In the same way, most American workers are becoming depleted and exhausted as the majority of the wealth generated by their labors is taken away from them by greedy faraway corporate masters who do not give back enough to maintain the workers on whom they depend. All these things mean that it has gotten much harder for people to meet their financial obligations to the official economy by working in that economy.

This is why localism has become such an attractive concept recently. The premise of localism is the local control and ownership of means of generating wealth, where profits generated by local businesses stay in the community in which these businesses reside. Thus the fruits of the labors of local workers remain in the communities of these local workers, providing them with the nourishment they need in order to continue their labors. If, for instance, a person worked for a fairly-run local business and her labor generated $50,000 a year in wealth for the business, it is far more likely that she'd be compensated with a fair share of that $50,000 than it would be if she worked for some multinational, publicly traded corporation. Thus it is far more likely that she'd be able to pay her bills – including her housing bill, whether that meant rent, a mortgage, or property tax, and that she could do this without having to work like a dog.

One other important aspect of the “official” economy is that it requires continual growth to function properly, and that it is now breaking because it can no longer grow. The masters of this economy – the majority shareholders, CEO's, corporate presidents and so forth – still expect and demand ever-increasing profits. Therefore, they have not only been cutting laborers from their workforce wherever they can, but they have been driving the remaining laborers ever harder. Those who are still bound to the global economy are therefore increasingly losing control over their lives and their time. (An example: “WANTED: Certified QXZ Engineer for ABC process control. Must be goal-oriented, self-starter, highly motivated to bring the client the best possible value for the lowest price. Must be willing to travel at least 20 percent of the time. ABC is a fast-paced, dynamic place for hungry, rising stars willing to grab all they can.” Translation: “You will live in a hotel at least one week per month and work like a dog at least 60 hours a week. You will also be on call evenings and weekends.”) Proper participation in a properly organized local economy allows people to regain some control over their lives while meeting their needs.

So what are some desirable characteristics of a locally-owned business? First, it must truly be 100 percent locally owned – not a mere franchise of some national or global business. McDonald's, New Seasons Market and Whole Foods Market don't count. Neither does Valero Petroleum, NBC or Clear Channel. Second, it must be entirely locally controlled. This follows from the first condition, since those who own a business get to run the business. A business run by faraway masters is not local. Of the various local business models, a cooperative model is one of the most attractive. Examples of cooperatives in Portland include Citybikes Workers Co-op and People's Food Co-op. Third, it must return a fair share of its profits back to its employees. At the very least, it must be able to pay a “living wage.” Lastly, its profits must be spent predominantly within the community in which it resides. A business which sends the majority of its profits out of the community is a drain on the community, and is not truly local. This also means that local businesses need a supplier base that is also predominantly local in order to keep profits within the local community as much as possible.

In light of these characteristics, what can be said about some of the recent advertising by large corporations who want to portray themselves as “local”? In my post, "Localism" And Truthfulness, I described a few corporations whose advertising I had recently heard or seen. Feel free to check out that post and answer for yourself whether these businesses are truly “locally owned.” But I want to ask another question, namely, how “local” does a business have to be in order to be truly “local”?

I ask this question because of a billboard I saw last week as I was on the way home from work. It was an advertisement for Darigold Farms, and it showed a burly guy with a mustache standing in a field of some kind of grain, with the caption, “Your Local Farmer” underneath. Now, there are some good things to be said for Darigold. First, it is a farmer-run cooperative that offers hormone-free milk among its product lines, and second, it does have a number of operations that are “local” to the Pacific Northwest. But is it truly “local” on smaller scales, such as the individual cities in which its operations are based? How much local control is exercised in each place where such companies have their operations? How much local say is there over how locally-generated profits are used? These are questions that successful cooperatives will have to answer for themselves, as some of them grow beyond the boundaries of the communities in which they first started.

The Return of the NINJA (or at least his cousin)

Beware – the NINJA is back! Or at least, his cousin. No, I'm not talking about some Oriental warrior dressed in dark, baggy clothes, some disciple of ancient methods of killing people barehanded, taught by some “college of violent knowledge.” Nor am I talking about the return of some indie, Asian-themed horror movie.

But I'm sure you will all remember the NINJA as I begin to describe him. He is the No Income, No Job, No Assets adjustable-rate, subprime loan foisted off on many working-class families by predatory lenders in the troubled years before our present economic collapse. He was seemingly run out of town in 2008 through the reluctant posturing of Federal lawmakers pushed by a wave of public outrage. But he now seems to be sneaking back upon us, albeit in a somewhat mangled form. Or maybe that's his one-armed cousin I see.

Observe the letter below:

I recently got this letter in the mail. I am sure it was sent to everyone in my neighborhood. (By the way, I live in a working-class neighborhood.)

At the top, you can see a statement in bold capital letters: “FHA BENEFITS UPDATE STIMULUS 2009.” Below are the words, “Passed by Congress and signed into law by the President.” The purpose of these words is to fool their readers into thinking that this letter is part of some Federal program. Next come the words, “HUD-approved Flagship Financial Group has been directed to:

1. Get FHA homeowners instant relief yadda yadda...

2. Yadda yadda...

This is a continuation of their opening ploy. “Flagship Financial Group has been directed...” By whom? By themselves and their own lust for your dollars? Certainly not by the Government!

Their “program” is available to anyone who has an FHA loan, with “No Appraisal, No Income Verification, No Credit Score Qualification, and No Out-Of-Pocket Costs,” according to the letter. This is not quite a NINJA loan, since it is meant for people with FHA loans who presumably are living in “starter” homes. Maybe we could call this a “NINJ” loan. The letter further advertises “4.375% Fixed Rates!” Although I don't owe any money on my house, I called their 1-800 number to ask about this 4.375% rate – just as a “private detective” exercise. When I asked whether this was a 30-year rate, the agent replied that due to present market conditions, they couldn't offer 30-year loans with this rate. However, they were willing to offer “hybrid” loans with this 4.375% rate for the first five years, then an adjustable rate afterward.

The agent's use of the word “hybrid” was quite creative (almost as creative as the use I heard this past week for the term “locally owned,” as I described in this post: "Localism" And Truthfulness). To me this sounds the same as the dishonest adjustable-rate mortgages with tempting introductory “teaser rates” pushed onto working-class families in the earlier part of this decade.

What all of this tells me is that in our present time of manifest economic distress, there are scam artists out there who are continuing to fleece ordinary people by playing on the crisis and on the coping strategies employed by these ordinary people. It is important to remember the basic coping strategies for these times, the strategies of frugality, which consist of paying down debts, becoming self-sufficient and living within one's means. Remember also that if something looks too good to be true, it usually is – and trying out things that are too good to be true may cost you everything you own.

One other thing this letter shows is how effective our lawmakers have been in reining in the excesses of the financial “industry” – which is to say, that they haven't done anything at all.

"Localism" And Truthfulness

I'm in Southern California this week for a job assignment. I drove down on Sunday. Yes, that's right – I drove instead of flying. Having witnessed the death of several airlines during the last oil price super-spike, I figured that the surviving airlines may be going beyond such well-known cost-cutting measures as charging extra for all luggage and cutting back on in-flight snacks. They may also be cutting back on maintenance and mechanics' salaries. Accuse me of being overly suspicious if you like. I don't want to find out the hard way that my suspicions are right.

Anyway, I was driving through some town – I don't remember if it was Grant's Pass or Ashland – when I saw a very curious sight. It was a billboard advertising a TV station, a local NBC affiliate. Among other things, the billboard proudly portrayed this station as “locally-owned,” with a strong “community connection.” I thought it strange that the “locally-owned” label was being applied to a TV station that's part of a national media corporation's broadcasting network.

But that wasn't all. A bit farther on, in Redding or thereabouts, I was listening to a classic rock station as its DJ was giving the station identification announcement, which enthusiastically stated that this station was “locally programmed.” Again, I was struck by the oddness of this announcement, especially since this station sounded very much like other oldies stations I've heard on trips between Portland and So. Cal., and it was playing the very same “oldies greatest hits countdown” I had heard on another oldies station a minute or two beforehand. This was followed a while later by a commercial for a Chevy dealership which boasted that it was “locally owned and family operated.”

These instances show how deeply and swiftly the “localism” meme is penetrating the American consciousness. Many ideas that would have been considered unacceptably countercultural even a few years ago are now going mainstream, as more and more Americans are looking for alternatives to our breaking “official” systems. Unfortunately, the masters of those existing official systems often try to co-opt the alternatives. Frequently, this co-opting takes the form of re-branding and re-packaging the official systems to make them look like the alternative.

This, of course, is known in plain English as lying. I think I heard and saw a few lies on Sunday. It is now well known that building and supporting local economies is one of the keys to building resilient communities that are able to survive the exigencies of Peak Oil, climate change and economic collapse. One key to supporting local economies is for local residents to buy from local businesses. But I always thought a “local business” was defined thus:

• 100 percent local ownership (no “owners” or “part-owners” who are far away)

• 100 percent local control (as in management and oversight)

• Characterized by a revenue stream which flows from local residents to the local business and back again, with the vast majority of that revenue stream staying in the local community.

Based on this definition, I don't see how the businesses whose ads I saw and heard could try to sell themselves as “locally owned.” Maybe the phrase “locally owned” is now under attack, just as big agribusiness is trying to hijack the term “locally grown” (see http://earthfirst.com/is-food-still-%E2%80%98local%E2%80%99-if-it%E2%80%99s-grown-by-a-nationwide-brand/, for instance), and as big agribusiness destroyed the term “organic” (with Federal government help) in its bid to eliminate an alternative that threatened the factory farm.

But I'm open to correction – I freely admit that I may be wrong in my assessment. Would someone therefore please tell me how a TV station affiliated with a national media company can be “locally owned?” Does the revenue generated by such a station stay entirely within the community in which the station is located? How is a radio station owned by some giant network like Clear Channel “locally programmed,” especially when you can hear its very same playlist replicated on other stations owned by the same network? Does “local programming” mean the times once or twice an hour when the DJ asks people to phone in their song requests and someone calls saying “Yo, dude, could you play some Billy Joel?” Is a dealer of autos made by one of the Big Three automakers (not so big now) really “locally owned” in the fullest sense of the word?

* * *

I'm planning to go out to lunch with some co-workers tomorrow. It will be a good opportunity to catch up on personal news. But I will also ask about the culture of So. Cal., and will try to see if there have been any healthy changes. I may write about my findings in another blog post.

9,000 Miles Farther On

In 2005, as gas prices topped $3.00 a gallon in Southern California, I became a bicycle commuter. In January 2007 I bought the bike that at present is my main steed. This week I logged my 9,000^th mile on this bike. Most of those miles have been commuting miles (to the store, or to work), although I have done a few pleasure rides. A lot has happened over those 9,000 miles. Looking back, a few highlights come to mind:

• In 2005, I didn't “get” the real story behind gas prices – I was far from putting cause and effect together to get a clear picture of what was going on. But in 2007, I was one of the Southern Californians who read the Los Angeles Times piece “O Pioneers In Pasadena” about the Dervaes family and their urban homestead. In addition, in late 2006 I had read Divorce Your Car! by Kate Alvord. In February 2007, I discovered Global Public Media and all the podcasts explaining Peak Oil and climate change. Believe me, all of that set my hair on fire!

• In January 2007, I knew next to nothing about food gardening or “food security.” I only knew how to grow Bermuda grass, how to kill weeds with Roundup and a little about how to trim rose bushes. Over these last two years, I've had a bit of a crash course in growing my own food.

• From 2005 to 2007, I had been drifting steadily leftward politically. My discovery of Peak Oil and validation of climate change accelerated and amplified that “drift” into something much more definite.

• In the spring of 2007, as I was learning about Peak Oil, I saw gas prices in So. Cal. drift upward to nearly $4 a gallon – just as I discovered the World Without Oil “alternate-reality game” website. At the time I thought we were actually about to “live” the game right then. The world situation didn't deteriorate with the speed depicted in that “game”, but that's not to say that things didn't deteriorate.

• In January 2007, I was having to cope with a few dysfunctional elements in my neighborhood, yet I didn't think too much of it. By May 2007, I was asking myself, “If the new information I have about oil is really true, can this neighborhood really handle it? Can these people?”

• In January 2007, I lived in Southern California. By September 2007 I was living in Portland, Oregon. In January 2007, I had a 401K. By September 2007, I didn't. In January 2007, I had a mortgage. By February 2008, I didn't. The crashing noise I heard from May to August was the sound of falling home prices and stock values. I got out in the bare nick of time. One of my motivations was a piece written by Sharon Astyk, titled, “Pick Up Your Hat.” The real estate lady who sold my house couldn't quite understand my sense of desperate urgency. Friends who heard what my selling price was kept saying, “You should ask for more. You're practically giving your house away!”

• In January 2007, oil prices were in the $60-65/barrel range. By year's end, they were over $90 a barrel. In January 2007, media coverage of an economic slowdown focused mainly on falling house prices. By December 2007, there were reports of tent cities for the homeless.

• In the spring of 2007, as I was learning about Peak Oil and its likely effects, I regurgitated what I was learning in the presence of any ears willing to listen, including those of my So. Cal. co-workers. I think many of them thought I was slightly nuts. I wonder what they think now.

• In January 2007, those who were tuned in to the “collapse” meme were a relatively small, “cutting-edge” minority. Nowadays, almost everyone I talk to acknowledges that something is seriously wrong with our present society and economy. As Joe Walsh once wrote, “Well there's a change in the wind, you know the signs don't lie/Such a strange feelin' and I don't know why it's takin'/Such a long time. Backyard people and they work all day/Tired of the speeches and the way that the reasons keep changin'/To make the words rhyme.”

• From the spring of 2007 onward, I read the predictions of many of the vanguards of the “collapse” meme. A surprising number of them came to pass, although not always with the speed or in the way that the prognosticators predicted. Our situation is now much more precarious than it was a few years ago. My view of things has grown darker than it was even in 2007.

• In January 2007, the President of the United States was a somewhat clumsy liar and stooge of the rich and powerful, a member of a political party whose holders of elected office were fellow stooges. In June 2009, the names of office-holders have changed, but has anything else (other than our current President's charm)?

• In January 2007, I got a Surly Long Haul Trucker with a carbon-fiber seatpost, indexed trigger-shifters and a Fizik Rondine saddle. From then to now, I have ditched the carbon fiber seatpost in favor of a good old-fashioned steel one, have switched the saddle to a Brooks B-17, have gone from Schwalbe Marathon 26” x 1.5” to Marathon 26” x 1.75” tires, and have switched the shifters to Shimano Dura-Ace friction shifters on Paul's Thumbies mounts. I also added a dynohub on the front so I won't have to constantly remember to charge batteries for my lights. The people at Citybikes joke that my bike is built to ride out the collapse of civilization.

• In January 2007, my commute to work was a 12-mile journey, one-way. By September 2007, my commute had lengthened to a 17-mile journey, one-way. (Thanks be for the MAX and the buses around here!) I get rained on a lot more now than I did in 2007. And there are more hills, including some seriously gnarly ones.

I'm sure I could list many other changes. And now as I write this, I think of teens whose conversations I have overheard recently on the bus, talking about all the plans they've made and all the fun they're going to have this summer. I think of co-workers in my present office with whom I get into discussions regarding the present world situation, and how many of these co-workers assume that the future will resemble the recent past, and that we'll somehow muddle through our present difficulties without a drastic lifestyle adjustment. Then I start thinking about the predictions of the Hirsch Report and the Oil Report of the Energy Watch Group, along with the Barclays “Burning Violins” report and the CIBC report titled, “Oil Prices: Another Spike Ahead.” I think about the last several EIA Weekly Petroleum Status Reports, and how almost all of them have shown a drop in U.S. petroleum stocks of at least 4 million barrels per week. And I watch the movement of prices at local gas stations – sometimes inching upward, sometimes leaping upward.

The last 9,000 miles have certainly had interesting scenery. I have a feeling that the next few thousand miles will bring us all to views like nothing we've ever seen.