Tuesday, July 05, 2005

Reality Check

This post was supposed to be a warm one about my experience this evening watching the fireworks in Washington DC and how Virginia suburbanites came together on 395, 66, and US1 to make these highways part of the public realm, pulling onto the shoulders and leaning against guardrails as traffic stopped during the celebration of our nation's declaration of independence. It was supposed to sheepishly admit that I drove all over DC with my girlfriend, burning through a half a tank of gas to see great DC, Maryland, and Virginia attractions -- assets, I should say -- during her brief stay.


But, in fact, I'm not so cheerful anymore. A foreboding feeling has gnawed at the fringes of my consciousness since the news a week-and-a-half ago that a Chinese government-owned corporation has bid for the purchase of Unocal. Since my sophomore year in college when Ken Organski taught us his Power Transition theory I have been warily waiting for the theoretical implication that China would surpass the United States in world power to come true.


We may very well be in the midst of this transition. The late Organski, when I queried him one day, claimed that the transition would not necessarily be bloody or confrontational -- as it often had been throughout world history -- if both China and the US were somewhat rational and amicable partners in the process. To return us to the present, this Washington Post article makes it look like the transition will not be as smooth as we might hope. Given the Bush administration's deaf ear on foreign policy, economic development, domestic politics, and every other topic they've touched, I can't help but be worried that this attempt to buy Unocal's energy assets -- oil, minerals, etc. -- is going to get botched by the White House ideologues and we are going to have a serious situation on our hands, both long-term and short-term.


The U.S., of course, produces nowhere near the energy we consume, so we have to go to other places to get it, particularly oil and natural gas. Thus, our unhealthy fixation on the Middle East. Then, our domestic companies are some of the ones to drill for oil and mine for whatever overseas. CNOOC, a government-owned corporation, wants to buy Unocal and control its assets. CNOOC claims it is investing in energy assets, a safe bet in our increasingly consumptive world; however, if the Chinese government owns the company that owns the energy company and its assets, I have no doubt that there will be no little influence from the Chinese government on directing these assets to increasingly demanding and lucrative Chinese markets. ie, I can see them horning in on "our" oil pretty easily and there being serious domestic political upheaval here as people complain about the price of everything relying on oil for production or transportation AND the fact that the Chinese will become a more important global force than the US.


I certainly am a pessimist and even have a little conspiracy theorist in me. God, I hope I'm overreacting to China's increasingly hostile rhetoric (given their government controlled currency and humungous trade surplus threatening the US economy) and everyone will play nice. But I am worried about where the U.S. is headed. Just what IS the future of the US economy and the world's last remaining super power? How will the US react to the rise of the increasingly powerful and assertive China?

8 Comments:

Anonymous Anonymous said...

They might react by improving public transportation
and subsidizing research into alternative -- environmentally safer? -- energy sources. It's possible that the US will age gracefully, build windmills, and start eating home-grown organic carrots.
Kate
ps I bet the car gas was insignificant compared to the
airplane gas.

2:50 PM  
Blogger accidentalactivist said...

Yes, but the airplane fuel was already going to be burned.

4:33 PM  
Anonymous Anonymous said...

It's still supply and demand, though, even for airplanes, no?

Still, I agree with you. Next time, bicycles. That will also
save on electricity, since everyone will be too tired to stay up past 9.

Kate

5:09 PM  
Anonymous brandon said...

You beat Kunstler on this one.

Yeah, we're fucked, as I told my students numerous times during my uber-sunny discussion section last semester.

11:28 PM  
Anonymous Murph said...

I don't necessarily think "we're fucked". I think large parts of "the American way of life" are going to go out the window within the next generation, but that's true to some degree of every generation in the past century or two. I think the people who are going to get the least shock are the ones who are already to some extent acting as if oil is the scarce commodity that it really is. Live where you work (or within reasonable biking / transit reach), move towards veganism, know how to deal with the food that's grown close to you rather than flown in from Argentina, prioritize having a home that fits your needs with the least energy expenditure possible, rather than a massive house that's poorly insulated and has huge vaulted ceiling-space to heat, etc.

Yes, that's right. Someday, the hippies will inherit the earth!

2:41 PM  
Blogger accidentalactivist said...

Sometimes I get sort of excited about the possibilities of what's to come. In Fishman's suburbia course one day I said, "we are going to see a new model of the haves and have-nots." I meant that in terms of both cities and people -- which cities and people are planning for the end of cheap oil.

Fishman, to open the course, said basically that he doesn't like to characterize suburbia as just sprawl because it's actually an important historical force -- we have, over the course of about 150 years, dramatically changed the 5000 year old definition of what a city is and what urbanism is.

In a similar vein, the US is moving into the unexplored territory of a post-post-industrial economy. Not only "how do you make money in ways other than extracting natural resources from the earth and processing them in unregulated, polluting ways," but "how do you make money when many of your natural resources are gone, your processing capacity (and capital) are gone, and you are left with pretty good farmland and incredibly advanced science and engineering knowledge?" There will be other countries following the US on this path, so it's helpful, if not imperative, to make responsible choices.

I'd like to think, for one, that our research institutions will (be forced to) make their research much more relevant to everyday problem-solving. Billions of dollars in research every year and I'd wager only about, say, one-hundredth of it contributes to "real world" applications, be they medical, engineering, or humanities issues.

1:22 PM  
Anonymous brandon said...

I just think we aren't going to change quickly enough to deal with the coming oil crisis and attendant inflation, bankruptcies, massive unemployment, etc. We've build such a massive, massive investment in an oil-dependant landscape and infrastructure... it'll be another dark age of massive disruption and depression, and possibly violent civil strife, before this country re-emerges as any sort of stable and prosperous entity. We aren't preparing, plain and simple, for the enormous scale of transition that needs to take place. A few Ann Arbor neo-hippies shopping at the food co-op aren't going to survive when their vegetable gardens are raided by the hungry masses of laid-off former corporate workers.

But maybe I'm just being paranoid and Kunstler has gotten to me. Maybe it will be a smoother transition than that.

7:52 PM  
Blogger accidentalactivist said...

There will be billions lost in home values as our overbundance of homes catches up with us (a second home? Puh-lease) and we will necessarily move closer to cities.

Kunstler is right, that we can't expect Technology to save us. However, I do think we can reasonably hope for some clever responses from our collective citizenry and a massive redistribution of our prodigious national wealth.

The notion of foreign capital is intriguing to me, as well. It's said that all the cheap money available for home buying is because of massive foreign investment in American securities and bonds. Could we see a reverse Marshall Plan?

Have any of you taken any really good Econ classes? I would love to take an economics course that really dealt with international and domestic investment, both lecture and discussion, and not just a "this is how to..." kind of thing.

11:13 AM  

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