Alexander Cockburn

Counterpunch

May 31, 2008

Between Grant’s Pass, a pleasant retirement town in southern Oregon’s Siskiyou mountains, and the Californian fishing port of Crescent City, chiefly noted for the nightmarish state prison known as Pelican Bay, stretches route 199. It runs alongside the spectacularly beautiful Smith River ravine for some 50 miles. To drive it, particularly on long holiday weekends, can be a teeth-grinding, bumper-to-bumper affair. This last Memorial Day weekend, on a late Sunday afternoon, I shot through in record time, meeting as little traffic as I normally would at 2 am.

For the first time since the national trauma known as the great gas shortage of 1973 Americans are experiencing a collective shock as they adjust to gasoline prices that are now three times higher than they were four years ago.

Last weekend, on the edge of what used to be a summer’s worth of driving sprees, many of the families who would normally have been chugging along 199, looked at the $4 a gallon basic price of gasoline in the Pacific north west and stayed home or crept round the corner to the local mall. Hence my pleasantly rapid drive home from Olympia, Washington to Petrolia, California, the first place oil wells were sunk in California, in the 1860s, though the industry lasted only a couple of years. The drive comprised a distance of 630 miles, achieved in my 1962 Plymouth station wagon, which gets 15 mpg on the open road, better than the SUVs most Americans can no longer afford. The round trip cost me $336.

Of course Europeans, paying roughly twice as much to fill their tanks, snigger unfeelingly at American moaning at these prices. But comparisons are not the issue here. The median family income in Crescent City (pop. 4,000 excluding 3,300 prisoners) is about $20,000 a year. A third of the population lives below the poverty line. As in thousands of American towns across the country there’s no slack in the family budgets here to accommodate a fuel bill here that’s suddenly shot up 300 per cent.

A family of four that decides, as many will this summer, that it can’t afford to drive 1,200 miles down Interstate 5 from Seattle to Disneyland is making a decision that spells slim business for motels, roadside restaurants and the tourist industry overall. Americans routinely drive huge distances, starting with the long distance truckers. It now costs well over $1,000 to fill the tanks of an 18-wheeler with diesel fuel averaging around $4.20 a gallon. Over 1,000 trucking firms have already gone bankrupt this year and the independent drivers – about a fifth of the industry overall – face imminent ruin.

Roman emperors knew well that political tranquility marched arm in arm with the cost of bread. As energy costs have soared in his term, Bush’s popularity ratings have plummeted. Doug Henwood, editor of Left Business Observer calculated a couple of years ago that an “uncanny” 78 per cent of the shifts in Bush’s ratings mirrored changes in gas prices. But the political implications are far larger and more long-term than the dismal trendlines of the 41st president.

Across the past generation American incomes, below the very rich, have remained essentially static, or have actually gotten worse. Year after year Americans work harder, longer, for less money in real terms. Political tranquility has been maintained by cheap gasoline, cheap food and, in recent years, the seemingly easy credit and tax deduction on home mortgage interest allowing middle-income families the illusion they owned a home. Gasoline is no longer cheap. The cost of food is going up. The subprime crisis has pitchforked thousands of Americans into forfeiture.

There’s worse to come. Since the subprime meltdown there’s been a lull. But now the so-called “Alt-A” loans, made to supposedly more credit-worthy borrowers and amounting to a trillion dollars, are allegedly about to go down the tubes, carrying banks and insurers with them. And this time Ben Bernanke, chairman the Federal Reserve, has no bail-out strategies left. He can’t lower interest rates to banks below the current 2 per cent, a level partially responsible for oil costing almost $130 a barrel. Round the corner looms hyper-inflation.

The sky is dark with chickens coming home to roost. America is in a terrible fix. But you wouldn’t know it from the politicians. Obams, Clinton and McCain flourish quick-fix recipes that are as inconsequential as a pop gun aimed at a gunship by an Iraqi child. Whoever is in charge come January 2000 will have to set as drastic a change in course as did Roosevelt in 1933, the last time the political economy faced this serious a crisis. Not that we need another Roosevelt, trying to bail out capitalism and stave off the left.

We need an an active radical mass movement, shoving Congress into action. There’s no sign that any of the candidates have advisors at their elbows capable of offering pertinent counsel. Thirty years of vacuous boosterism about the virtues of neo-liberalism and unfettered markets have exacted a fearsome toll on the intellectual capacity of the policy-making elites.

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