A Bigger Picture

The comments below are an edited and abridged synopsis of an article by James Howard Kunstler

Covid-19 has exposed weaknesses in the US, and Americans must decide whether to continue arguing over who’s to blame, or begin a long, uncertain march down the road to a place of new arrangements.

A Big Picture | BullionBuzz
Businessman watching the city on the rooftop of skyscraper

In 1918, the US had a far deadlier pandemic at the same time it was fighting a world war, and life barely missed a beat. The economy was one of production, not the consumption of things made elsewhere in the world. The economy was a mix of large, medium and small enterprises, not just floundering giants, especially in the retail commerce of goods. Banking was only 5% of the economy, not the bloated matrix of rackets now swollen to more than 40% of so-called GDP. Government at the federal and state levels was miniscule compared to the parasitic leviathan it is now.

Everything has grown too cumbersome to adapt to new conditions, and suddenly conditions have changed. Now it’s all coming apart.

To keep propping up the US—as the Fed props up financial markets—will only promote the illusion that America doesn’t have to move on and conduct life differently. A worldwide contraction was underway before Covid-19 appeared. The contraction was sending a message: too big to fail was out; smaller and nimbler was in.

The authorities will mismanage the 2020 election. It will be the climax to a season of political hysteria, and the scramble away from that disaster will be desperate. No matter who ends up in control of the government, the same forces of contraction and simplification will rule, and Americans will have to act accordingly.

Many people will seek new homes and livelihoods elsewhere. New York, Chicago and California are losing much of their tax bases as the wealthy flee. These places will be overwhelmed by functional bankruptcy, even if they avoid declaring it. Other states, counties and municipalities will also founder, meaning that support systems and safety nets will vanish. Many supply chains will break. Money will be scarce or worthless, which are two ways of going broke.

But the turmoil will be filled with opportunity, and there will be work for those willing to do it.  

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