• Check out Joe Bageant's excellent book, Deer Hunting with Jesus, as well as his great website, www.joebageant.com. Think of him as a kind of Thomas Frank ("What's the Matter with Kansas?" -- http://tcfrank.com) on steroids. Lots of good stuff on the culture wars, the economic collapse, and peak oil.
• I also recommend Morris Berman's Dark Ages America (see his blog at http://morrisberman.blogspot.com/). This is a careful but wide-ranging book about the long-range, lockstep developments in American foreign policy, economy, culture, and domestic politics that have brought us to the brink of imperial burnout. Definitely worth checking out.

I'd like to build on a recurring motif of Berman's to get into our discussion here. Repeatedly in Dark Ages America, Berman emphasizes that past decisions and developments really matter, and that they tend to close off possibilities for the future. So we may hope for all of these great things (green jobs, local food production, energy independence, rebirth of the middle class, etc.), but the pathways laid down in economic and social structure over the last few decades or centuries preclude their emergence. The result is a kind of hopeful agonizing, where justice and sanity and humanness are always just out of reach. We know exactly what we want, and may even have working models of our desires, in small scale. So we have some workable charter schools, or local food co-ops, or employee-owned businesses, or whatever. But expansion to the whole society or country never seems to get off the ground, because we are too locked in to prevailing ideologies and physical realities.

The great Jim Kunstler coined this phenomena "the psychology of previous investment," and he uses it in his brilliant analysis of the stubborn American clinging to the energy-sucking and soul-destroying byways of the suburban sprawlscape. But as we flail around this summer, caught on the horns of BP perfidy, Afghanistan quagmire, collapsing federal and state budgets, and 10% unemployment, political and cultural exhaustion are all around us, and the tired reformulations of past failures are becoming more threadbare by the day. How did we get to this point, and what might come out of the looming election cycle this autumn? Are we legitimately painted into a corner by the psychology of previous investment, and the socioeconomic realities on which that rests?

Let's start by looking at the Obama administration, and so-called liberalism in general.At this point in the Obama reign, a general theme on his style has emerged: he's a big-spending, triangulating technocrat, unable or unwilling to rock the boat in any meaningful manner that might make a real difference. Sure, there are different variations on this theme, depending on which side of the aisle you're on. In conservative circles, Obama's spending is obviously part of an overall socialist agenda, designed to change America into (gasp!) a European hell-state. On the left, the socialism thing doesn't play -- but I do think that there is a general feeling emerging on the left as well, that Obama is simply spending too much money in the wrong ways: continued war, a monstrous health-care "reform" package, toothless financial regulations, etc. 

Certainly it is the case that the havoc wreaked by Dubya has almost totally crippled the current administration. In the public's perception, Obama now "owns" all this stuff, especially the economy and the wars. But reality does not operate according to the ebbs and flows of the pundit sphere. We are absolutely handcuffed as a nation by the trillions of dollars flushed into the sands of Iraq and Afghanistan, the trillions whisked away to offshore bank accounts via years of tax cuts for the wealthy, and by the basic inability of Bush's economic team to warn of the looming housing bubble disaster. These are irreversible and fatal events, and there may be nothing salvageable in the long run, no matter how many things Obama tries.

Consider the three signature items of the current adminstration: the stimulus package of 2009, health care "reform," and the financial reform bill just recently signed. In each case, there was a dire need to roll back epic dysfunction, and bold solutions were called-for. But instead, in each case, what was delivered was overly-complex, critically-compromised, fundamentally pro-corporate, and depressingly conventional. At no point were courageous, risky, novel approaches considered. At no point were lobbyists and corporate lackeys kicked out of the process and told, "shut the f*!# up, you've had your decades at the public trough, it's time to do something for the good of regular people." Instead, the psychology of previous investment was in effect all along the way. The old saw about what's good for the "business community" being good for America was baked into the stimulus, health care "reform," and financial regulations. Corporations had both elbows on the table the whole time, with their forks and knives thrust towards the pile of money at the center.

What we needed was smart, targeted stimulus that acknowledged new economic realities: rebuilding of local self-sufficiency, especially in manufacturing, transport (railroads and canals), and food production; a national project in green power generation, applied through rejuvenated municipal power plants; and a robust chain of federal retraining/placement facilities to transition people away from service-sector and sprawl-building sectors to the new jobs needed for the projects mentioned above. From health care reform, we needed a single-payer system, the simplest and most cost-effective way to provide service for everyone, as every other major industrialized country in the world has demonstrated. And from financial reform, we needed the quick reinstatement of Glass-Steagall (separating investment banks from deposit banks), a financial transaction tax (an easy way to cool down gaming and speculation), and hard stances on CEO pay, too-big-to-fail breakups, and laws repealing corporate personhood.

Of course, we did not get these things, because of the straitjacket of existing ideologies and processes. National politicians need lots of money to run for re-election; corporations provide that money; mainstream media (corporations themselves) perpetuate the illusion that corporate interests are American interests; big business thus gets the biggest seat at the Washington budget table, and actually help craft the legislation. That's why we get a trillion dollar a year military, far larger than anything we might conceivably need -- it's good for business. The stimulus we so badly needed last year was converted to tax cuts and a hodge-podge of pork-laden, "shovel-ready" projects that provided just a wisp of economic activity before being rolled over in the tide of recession. Instead of single-payer health care, we were treated to an absurd smorgasbord of forced private-policy purchase, new assistance programs and bureaucracies, and an utter lack of price-controls on drugs and overall system costs. And of course, with the new financial rules (especially if Elizabeth Warren is spurned as the consumer protection czar), there is nothing with teeth for big corporations to fear -- just more studies, more governing agencies and programs, with the massive loopholes that always ensue.

So all in all, the Obama administration is really stuck in a hard place. Their toolbox is just not equipped with anything truly novel. They keep crafting hugely-complex, pro-business packages that endeavor to preserve the fallacy at the center of the American experiment: that economic growth is necessary at all costs, and thus that pro-business policies will eventually accrue to the public good. You get the feeling that the Obama team is now sitting around saying, "OK, we've given the business community everything it could possibly want, when will they start investing and hiring to get things going again? Give us that goddam recovery already!" The psychology of previous investment completely blocks out the possibility that we are in a qualitatively different situation, and that the cavalry of consumer over-borrowing and over-spending is not riding over the hill.

The ugly truth is that Obama has really spent his capital and opportunity-window in the wrong way. The spending that he has done within the pro-business, status quo framework has not produced economic results, at least as far as the general public is concerned (10% unemployment is what it is). So American people of all stripes are now worried about the federal deficit and national budgetary bloating. Republicans and Democrats in Congress are now demanding that spending cuts or no-new-tax pledges be included in legislation before they will approve it. And there is just a general feeling from Americans that we are overstretched in many ways, and that we need to stop throwing federal money at everything, since it hasn't seemed to have done much so far. And really, they are right.

This brings me to another point on liberal economists and stimulus. Paul Krugman and Dean Baker (among others), economists for whom I have great respect, and who (especially in Baker's case) warned of bad mojo well in advance of the recent collapse, are calling for more federal stimulus. They emphasize that the destruction of the housing bubble has pulled so much demand-side money out of the system that no amount of business-as-usual activity will get things moving again. Like the Great Depression, we're in a death-spiral of stagnation and contraction, and thus we need another huge round of federal stimulus to bring life back to the American economy. Their arguments are persuasive, and their diagnoses are spot-on. But there is something missing.

If the goal of more stimulus is simply a return to the hyper-leveraged, overconsumptive, sprawl-building of the last four decades, then it will absolutely fail. As evidenced from many posts on this site, I believe that the underlying algorithms  of work, housing, and consumption are on their way out. The One Person-One Job/One Family-One Dwelling social form is not sustainable in the long run, possibly even the short run. The realities of Peak Oil, technological unemployment, and ecological collapse are going to necessitate a collective lifestyle, one where people are forced or drawn out of the formal economy to perform more functions and services in-house, for larger groups of cohabitating people. Decentralization and devolution will be the new rules of the game, so the trends towards localization of production will continue. Unless a new round of federal stimulus makes these goals explicit, it is not worth doing, and it would not pass public muster anyway. 

So that is the real challenge ahead for Obama. He must realize that the pro-corporate pork he has been shoveling his cronies is not going to catalyze a recovery of a way of life that is on its way out. He needs to have the courage to tell the American people about the new realities of energy, economy, and ecology, and then lay out a plan for real, transitional stimulus, as well as a legislative revolution in property taxes, zoning rules, and eminent domain standards. If Obama can't articulate the need for the United States to start transitioning over to a new kind of arrangement, then the harsh winds of reality will do it for him, and us.