[Tanada]

$this->bbcode_second_pass_quote('Backtosteam', 'I') was just reading through this thread since the topic of American suburban development interests me. Kunstler ROCKS!! One comment I have...in terms of what it will take for changes to begin...I think it's not so much prices, but dependability of supplies. I know they go hand in hand, but while 5 dollars per gallon may not be high enough to force many to make living arrangement changes, 5 dollars per gallon with intermittant supply disruptions may be what it takes to get people thinking. The same effect could be had with rationed supplies of gasoline. If people can't get to the stores, work etc, because they live in bumblefreak and they've used their quota they may decide they want rail or walking options and move.

[emersonbiggins]

$this->bbcode_second_pass_quote('Tanada', '
')
At this point I'm not sure $10.00 per gallon would force a big change, if the ramp up to that price is low enough. The 'robust' economy is handling a ramp up of $12.00 per barrel per year without breaking a sweat, I am stunned at the resilience of the world economy. A year ago I was sure that we would be diving into recession if not depression by now, but look at what has happenned. Despite hurricanes and massive price swings we are still muddling on through!

If the 2006 average price is $68.00 and we are still motoring along I will no longer be surprised, just befuddled.

[Revi]

Gasoline has become a "Giffen Good" for most people in the US. A giffen good is something that has no substitute, so the price keeps rising, and people keep paying more for it. Like potatoes during the Irish potato famine. You have to have it, and can't afford not to buy it. I talked to a guy who had to commute over 400 miles per week. It was costing him plenty. He didn't have any choice but to keep paying for gas. He is stuck in consumption mode if he wants to support his family. Sounds a bit like the potato famine...

Here's something I found about giffen goods on Wiki:


Gasoline as a possible Giffen good: From Wikepedia
Sasha Abramsky conjectures that for some poor Americans who live far from their jobs, the recent (as of 2005) sharp rise in gasoline prices may make gasoline a Giffen good for certain populations of poor Americans. His model is that they will have to spend money on gasoline that otherwise might go for oil changes, tune-ups, minor repairs, or even to upgrade to more fuel-efficient vehicles. The result is that their "older, less well-maintained cars" will have "decreased gas efficiency", resulting in an increase in gasoline consumption. (Abramsky, 2005, 18) This corresponds to the Giffen model, with maintenance and upgrades constituting the superior goods and gasoline the inferior Giffen good.

[alecifel]

The alternative, unfortunately, to the "long commute" is to put yourself right in the middle of what I like to call the "stage 3 chaos."

Here in Oklahoma, we don't have sprawling suburbs. Once you leave your major city of choice, you're in the sticks. About a year ago I made the switch, realizing there was no more time to lose. I was commuting 64 miles one way to work from a small town, but instead purchased a wooded homestead 25 miles from work. This is still a considerable distance in a rural area where you have no public transportation, mind you.. and once the $4 mark is hit on Gasoline, that's going to take a big bite out of my $550 a week.

The alternative would be, what most rural persons will blindly decide upon, is to "move to town". Now when large populations move from the country to the city (as it happened in the 1930's) rents skyrocket. So you have your choice between one of two Giffen goods. Petrol, or Rent. I've already seen rent on a two-bedroom apartment get up to $700 a month, which is double what it was five years ago in Oklahoma City.

This is the "death trap" that is going to ensnare the multitudes. At $4 a gallon, they'll move to the city, then watch their earnings erode even faster with rent inflation. Then, when stage 2 occurs - the apex, or point at which economic growth ceases and stalls (at $6 a gallon, perhaps), some of them will be downsized from their jobs. Entire service industries will disappear. Fortunately, the military will probably step in at that point and give them a job to do. (We need oil. Here's a gun. Go kill Chinese.) But in 3rd and the last stage, when the economy starts a backslide that ends in implosion, what will they do on their sixth-acre postage stamp of concrete?

I chose to buy an acreage not too far from town, but not too close. I set up an RV that I stay in while my energy efficient home goes up, block by block. The virgin forest soil is super rich and good for almost any crop. I have enough standing oak to supply my heat needs for a lifetime with good management. I have neighbors who grow corn and peaches that can be made into ethanol. I did some projections using various scenarios to plot the best impact on my income. In the final analysis, I came out better off paying $6 a gallon until my job ends, than paying $1000, then $1500 and so on for rent.

By the way, there's another neat side effect from buying "contract for deed" (seller financed) acreages. They're on fixed interest, a fixed payment. When inflation starts to spiral up, good employers have a tendency to adjust wages accordingly. But my mortgage payment is fixed. Effectively, inflation makes my land cheaper!!! If gas is $10 a gallon, bread is $5 a loaf and I'm making $1100 a week, my mortgage is still $242.02! (This is why banks will sometimes just forgive mortgages carte blanch in times of severe depression).

[kuatolives]

No one seems to consider the possibility that the city will become the energy sink and that it will cost too much to do business there. That is, how much does it cost to heat that 50 story skyscraper? How much do the elevators cost to operate? Perhaps business will find it more economical to set up shop in the suburbs, thereby making the inner cities ghost towns and slums. Business may very well decentralize.

.02

[starryeyezmel]

You are all talking about people who must commute to their job. What about people who must commute for a living. The classic cab driver? They already face monthly dues to maintain their city permit. Many must fill up their tanks a minimum four times a week. When gas prices go all of a sudden their fixed costs are not stable. They are forced to increase the already high fare prices which decreases their monthly incomes. Some people have the luxury to afford a house in the outskirts were the school districts are favorable, however what about individuals who are making a living and gas prices are an important variable???

Just wanted to shed some light on those complaining about their long commutes...

[deafskeptic]

Execellent point there. I had been wondering the same thing when I had to call the taxi cab to pick up my car that got towed way a couple of months ago.

Now I've been wondering how those with fixed incomes and social security will be able to cope with the coming inflation and transportation costs.

Where I live Social Security is about 505.00 a month. Gas cost at the corner gas store is currently at $2.33 per gallon for regular gas. Let us imagine that our guy who lives on Social Security has to fill up gas once a week. Let's imagine that he normally fills it up with 11 gallons per week. That's 23.63 dollars per week. Muptipy that by 52 weeks and then divivde by 12 and that's 111.06 per month and that's assuming gas prices stay stable. That's 22 percent of the social security check! If he lives in the city at least he can take public transportation in order to reduce transportation costs at least until the city becomes unsafe or unfit to live in. He can also carpool as well depending on his situation.

However if recent events in my neighborhood is any example, the infrastructure may be falling apart. (roads needing repair, running water suddenly smelling like an open sewer, etc) Other cities may be having problems as well.

But for those out in the sticks, this is going to hurt unless they're able to grow their own food and are not as car dependant as the rest of us.


I'm also wondering how the goverment will cope with retirees in the coming years. I'm not sure how our remaining workforce will cope with the cost of all this.

[rogerhb]

$this->bbcode_second_pass_quote('Revi', 'I') talked to a guy who had to commute over 400 miles per week.

[Revi]

Commuting by train is not the same because you don't have to actively drive a train (unless you are the engineer) and you can read, get work done, etc. Driving 400 miles a week will eat you up both financially and eat time out of your life. It's probably a lot more dangerous too. You can sleep on a train.

[alecifel]

Commuting by train works in the northeast, as for the rest of us? Well a hobo once told me the end porches on those grain cars are pretty cozy!

I think business will decentralize. You have some services that simply can't move, like heavy manufacturing (what few are left). Telecommunications, call centers, customer service? They can locate anywhere. Cingular can service its customers with 100 small call centers instead of 10 large ones, and the move is pretty simple... as for Wal-Mart, well they can KISS it goodbye. (and good riddance.) All of a sudden those dusty general stores in every little town that have been limping along for twenty years will get a shot in the arm!

[Eddie_lomax]

$this->bbcode_second_pass_quote('emersonbiggins', '
')
Economic performance in 2005 was a combination of burgeoning consumer debt, massive government deficit spending and an orgy of mortgage refinancing, all of which will coalesce in 2006 to create the depression we've all been worrily waiting for. The fact that the hurricanes did not knock us out this year was mostly due to said government deficit spending, which we will have to pay back soon enough. Beware of massive inflation this year.

[alecifel]

Telecommuting isn't so popular with management in the US either, although in some trades (law firms, consulting and such) it seems to be gaining a foot hold. The solution is to move away from the employer-employee relationship and move to the client-vendor relationship. This will make telecommuting more viable for many of the management-level disciplines.

Having personal debt equal to the nation's GDP is hard to swallow, I believe there will wind up being many unhappy folks in the UK! At least your rail system is in better shape.

[spudbuddy]

Great thread.
I live in Canada's largest city - which has followed religiously, the classic LA model. A greater urban area sprawls outwards perhaps to about 50-60 miles, and beyond that there are lots of 75-80 mile commutes.
(I'm using standard measurment here, people: metric measurment is for scientists!)
A few points:
Any substantial increase in the cost of gas / fuel for cars / home heating/cooling costs...means that that much less revenue is available for economic activity within the extended community. Consumers will cut back expenses from somewhere. This ripple effect will certainly show up in the job market.
If one thinks about if for a minute - where is all that revenue going? To energy suppliers. Who are they, what is their politics, and who are the snugly tucked in bed with?

I liked the very first post in this thread. I'm in a similar situation. I live about 2 miles from my job, and in the east end of my city, every thing I do is less than a 10-minute drive away. I recently started doing this more...and discovered how much time I save just getting around.
Which is why I do it. It is still affordable. I spend no more per month on fuel than if I was to use public transit.
I've often found myself musing on these short trips...the city of Toronto is a fair size...approx. 37 miles long by about 18 miles deep...not quite a perfect rectangle. Outside of that rectangle are four "regions" that surround the city on its east, north, and west sides (the south side is just Lake Ontario.)
Some years back our metropolitan conglomeration morphed into something now referred to as a "mega" city. (5 cities and one borough amalgamated into one large city.)
Here's the point:
About 4 years ago history (of a sort) was made: The four regions outside the city reached the same population level as the city itself. They now comprise about 53% of the entire population of the greater Toronto area (referred to here as the "GTA".)
The city of Toronto has not "hollowed out" as many other north American cities have. Its population density has remained relatively healthy....although the condo boom downtown is getting a little silly, and if it keeps going that way, we'll one day see New York City sized pedestrain crowds downtown.
Here in the city we refer to the outer regions as the "905".....(which is the telephone exchange out there.)
Every time I see the traffic congestion in the core...the huge parking garages, I wonder....if our license plates had a designation that differentiated between the city itself and this "905" region....what percentage of all these vehicles would be literally from out of town?
Just a wild guess....well over 50%.
Which means all those vehicles have performed a minimum 50-mile commute (both ways) and in many cases, considerably more.

If you get out a north American road atlas, and take a good look at it...you discover that the highway system serving this sprawl resembles something like Omaha, Nebraska, or Memphis, Tennessee....
except that these cities are less than a quarter of the size.

I ponder this - wondering if politicians have sort of weakly caved in to the idea that maybe it's not a bad thing to discourage dependence on the automobile....by making it that much harder to commute. A pretty pathetic game plan, I'd say.
Because all it's really done is produce the 2-hour traffic jam, and turned our freeway system into something that resembles an LA rush hour.

I understand that most long distance commuters do so for cheaper housing costs. However, it isn't much of a deal if most of the savings disappear in higher fuel costs.
Although houses in the city are expensive, there's a new pattern arising...
The houses bought out in the sticks are just as expensive.
What's going on here is a "space greed."
Picture this:
A good little well-built century home, 2-storey, 3 bedroom (in a part of the city where the rule of thumb is $100,000 per bedroom...so that's $300,000....and about 1300 square feet of living space.
Same price out in God's country....(the 40-mile 2-hr commute) gets you double to triple that square footage. (2500-3500 square feet)

Back to the history of that century home: In its life, it has served three generations - possibly 3 different families, average size: 4 or 5.
The "supersize" mentality deems this totally unacceptable now.
Onward to the history of the exurban McHouse: it costs 2 to 3 times as much to heat and cool (especially since it has no shade trees within sight of the horizon, otherwise known as "God's air conditioning" (does that well, wouldn't you say?)

Now, here's the rub: let's take a peek inside that McHouse and discover who lives there: A smallish family of 3...average number of rooms per person....3. (does the family dog have a room of his own?)
Or worse yet...a couple of empty nesters.
While once pondering this phenomenon, I asked my wife...what do people do with all that space?
Straight-faced and instantly she answered: "Avoid each other."

Well that's a hell of an expensive way to buffer up a marriage!
(though perhaps cheaper than therapy and analysis!)

Back to the thread subject:
The whole damned design has obviously been set up to ensure the greatest amount of energy use possible. This makes sense to the powers that be because it's an energy economy. Which would be fine if there was as much fuel as salt water in the seas...which of course is the entire problem.
Hail Marys and prayers have been the order of future planning for some time now.
Hell of a way to run a planet, wouldn't you say?

[alecifel]

Cities are terrible places, terrible and un-natural. Want to see a post-industrial major city? Look at ancient Rome. Population in excess of 1 million people, mostly stacked in filthy "flats", apartments little bigger than a storage locker, that cost 50% of their wages.

Has anyone stopped to consider the effects of PO on the infrastructure? People take for granted most of the public works system that keeps them alive.. sanitation, running water, all of these are driven by energy.

Those in the suburbs are in even worse shape. Suburbs are awful places, too.. all of the land divided into little postage stamps, not enough to grow enough cukes to make the year's pickles, let alone anything of trade value! No timber (except from cannibalizing McHomes), no game, nothing. Fingers and toes dependent on the extended arteries of sewer and water and power from the Cities. (what goes first in frostbite?)

People need to abandon the cities, give up on the dream, or should I say PIPE dream, of being able to still have Starbucks and their Ipod, concerts on Friday and Church on Sunday, work only 40 hours per week that a glut of wholesale fossil fuels has provided them.

"Many estates were spent in the getting, when women for tea forsook spinning and knitting;
and men for punch forsook hewing and splitting."

-- Ben Franklin ("Poor Richard")

[rogerhb]

$this->bbcode_second_pass_quote('spudbuddy', '(')I'm using standard measurment here, people: metric measur[e]ment is for scientists!)

[auscanman]

I agree with your observations on the situation in Toronto, Spudbuddy.

From October 2004-July 2005 I did a reverse commute from the east end of Toronto to Aurora (about 25 miles away to the north). The traffic going the opposite direction never ceased to amaze me. the norm was 15 miles of traffic on the highway moving no faster than 10mph (usually slower).

Any extra satisfaction derived from living in a larger house than one could afford to in the city would be outweighed many times over by the time wasted sitting in traffic IMHO. I think it's very different if you're able to commute by train, or some other means, since you can read and don't need ot be mind numbingly focussed on the road. Sitting in traffic itself has many side effects beyond the obvious economic costs of gas and vehicle wear and tear, as well as increased likelihood of a car accident:

1. Loss of interest- The long distance commuters I've known are amongst the dullest people I've met. You don't have enough time to develop any interests of your own when you spend 4 hour per day in a car.
2. Increased selfishness- Spending so much time alone whilst in the antagonizing position of facing 4 hours per day of solid traffic inevitably leads to people putting their own needs above those of others. This carries over both to home and work environments.
3. Greater likelihood of affairs and marriage breakup- Being home so little naturally leads to greater temptations in the workplace, and marriage suffering. Here in the Toronto area I would be interested to see the statistics on how much higher the incidence of affairs and divorces for the 905 (suburban) region is compared to the inner city.

In my opinion, even if commuting from 905 to Toronto were to cost nothing, the heavy external costs which 1-3 above represent would lead me to take the position that it doesn't make socioeconomic sense to do a long commute by car. When you add in the external benefits that a rational being should derive from having all they could want close at hand living in the inner city, long commutes from the suburb by car borders on lunacy.

[gwmss15]

well I live in thailand at the moment and i must say the people in the USA waste a lot of space on these homes

I live about 10km from the city and 3 KM from my work and we have a bus network on every road that comes every few mins 7days aweek

most people live in 1 room studio apartments including myself and have eveything i need with enough space in there to move around freely and my friend stays with me in this apartment which is 4.5 meters wide and 8 meters long in a nice modern well built 8 story building with about 3 apartents of similar size on each floor. some of these apartments have 4 people staying in them ie a family and there apartment is nicely laid out and liviable

I cant see the need for a single or a couple to have anything more than this to live in if they work 5 or 6 days week so why waste all that money on a huge home when you hardly spend time in it.

I used to live in (melbourne) australia before and i had a small 15 square 3 bed home (not sq meters) (no idea what that is in US measurments but my family lives happly in this home everyone has there own room and it even has nice garden but its 80 years old and very expensive now because 1 its close to a rail line with a sub 30 min trip to the city centre.

Again people should only build what they really need for living extra is just waste. NOW ok if people travel long distances like 100km aday eachway why not use a train its much nicer to sit in a train than drive a car for that distance. In Melbourne australia alot of people travel 2 hours by train everyday from the country area up 200km away from the city and thus are relaxed on arrival to work each day and it saves a huge amount of money each day on car costs.

the only reason why i dont live there now is the job market is so week for young uni grads that asia was a better deal even with 3 times less monthly pay sad isnt it that a local graduate for a top uni has to work overseas in a low paid job that doesnt even match his qualifcations. But nothing can be done for australia with it anti young workers attiude.

[shakespear1]

You ARE right but then Big Business in US would not be big. Home Depot and others would be small mom and pop operations and that would be BAD for Big Business.

In US you are conditioned to WANT MORE and BIGGER. You have to live there to see how it works. It Works to the detriment of peoples independence from Creditors!!! Hence zero saving rate in US. How Sad

[spudbuddy]

I like arretium's analysis. Nice piece of work.

I tend to look at it this way: If rising energy costs begin to suck more and more household income, then that money goes only one place: to the energy suppliers.

How much of that money comes back into the system, for society to use?

Every extra dollar that goes to pay for energy is one dollar less that can go anywhere else.

Think about financial prioritization: a Mcdinner may be a treat, certainly not a necessity. Baubles, bangles, trinkets, knick-knacks & paddywhacks from big box stores fall into the same category (as do any form of entertainment) whether that be Nascar, dvd's. cd's, major league sports....etc. on to ad infinitum.

Almost any service industry kind of job becomes vulnerable to this economic reality.
Where is America's job market growth? (You guessed it.)
What has fueled that growth? The home equity ATM.

The stats are there for anyone to find:
How many billionaires and millionaires existed in America in 1970?
How many exist today?
How much of America's public wealth has been privatised in the last 35 years?
There's the problem.

"Business as usual" falls into the exact corporate game plan as laid out long ago. It is not just "capital versus labor." It is greed versus people.
And I mean people as citizens of whichever "commonwealth" they happen to belong to.
This is going on all over the world. (some places more than others.)

Sometimes I think of the American economy as the equivalent of a junkie with no methadone treatment.
It runs along like a top, addicted to oversize and all the energy it takes to make that oversize go.
This has been ratcheting up for so long, that people just get depressed at the thought of scaling anything back....(Las Vegas sure looks pretty at night.)
Jumbo was a circus elephant - and famous only because he was big. That's all he had to do.
How does America deal with the sad fact that historically, there have been a couple of dozen administrations worth of bad choices? (exercising the right not to vote?) Yeah - in some places in the world, that's a federal crime...

I keep thinking of that phrase: Business as usual. And what it has really come to mean.
We're running out of ready cash to keep paying for the party. It may have been a helluva party, but when the beer kegs run dry, eventually comes a sober moment.

[grabby]

Ach! Yammer!
Itis all very eesy

Ve are yust spoilt rotten, unt
dunt know to to verk!

No vun vanst to get out uf de bed before it ist varm utside, and it ist more fun to vatch a movie den to clean up da garatch.

You cannot do anythink vit spoilt children!

Der, dat ist all.