Destroying Dreams the Peak Oil Way
Article by Kurt Cobb
It is with some trepidation that I prepare for a trip that includes an appearance before college students who generally find the idea of peak oil so disturbing that they do not want to even hear about it. And, I can’t blame them. They must think that I have come to destroy their dreams, dreams premised on a future of ever expanding material prosperity and career advancement.
Certainly, a persistent, irreversible decline in world oil production would reshape nearly every facet of our lives. I like to think that we don’t need to give up on our dreams, just choose different ones that are achievable in the challenging environment we are likely to encounter as the coming decades unfold. And, I like to think that those dreams can be as much, if not more, satisfying than our current ones.
That’s cold comfort to those whose entire education is designed to prepare them for exceedingly narrow occupational niches, niches which they’ve been told will bring them wealth and security. It is an unfortunate truth that in a world climbing down from unsustainable complexity (fostered by previously cheap energy supplies), many of those niches will disappear.
I’ve come to understand that most people cannot imagine a future that is different from the recent past–and by that I mean the past few decades. And, this tells me that until the past few decades are a fading memory, most people will find imagining an entirely different future an insuperable task. Even as conditions worsen, they will assume that if governments will just take the right steps, then the world will return to its former path of exponential growth and unlimited opportunity. They will assume this because opposition parties will tell them so just to get elected.
As the world’s financial markets gyrate wildly, I find myself in conversations that touch on investing with both family and friends. With family members I am much more forthright about how I perceive the risks we face. I know that my family members will forgive my brash interventions into their lives and that, in any case, they are all strong enough to ignore me and think for themselves. But with friends I am reluctant to speak about such matters and only discuss them when others introduce the topic. If I am asked for my opinion, I currently urge extreme caution. (Full disclosure: I exercise exactly two levels of care in investing: caution and extreme caution.)
The response more often than not is that, while stocks are down, they always go back up, and so naturally, it’s not smart to sell your stocks when they’re down. This sounds suspiciously like the person who is losing at roulette and sticks around in hopes of winning her money back. It’s hard to counter people’s recent experience, i.e., the last three decades which delivered the greatest bull market of all time in stocks. And, it’s even harder to convince them that history is replete with examples of stocks falling to a rather small fraction of their highs under conditions very similar to those which prevail today. Japan–whose market is down more than 75 percent since 1989–comes to mind.
But I now realize that there is a dynamic here similar to that which I experience with college students.Middle-aged people with retirement savings have dreams, too. And, my suggestion to exercise extreme caution, i.e., get out of the stock market and into cash, is tantamount to telling them that they cannot have their dreams. So many who have saved for retirement by investing in the casino called the stock market believe that said stock market will provide the money to pay for dreams their regular salaries could never have financed.
This dynamic, unfortunately, is yet another roadblock hindering people from taking steps to salvage what future they can. Would-be destroyers of dreams, beware! You will have the ear of fewer and fewer people over time as many tune you out in order to preserve the image of the future they have in mind. Of course, I could be wrong in my views and miss out on participating in and getting rich from a great economic boom ahead that will inevitably come after our leaders clear away the few small hindrances that remain. But then I’m not sure I really want what that path has to offer, even if it turns out to be available. In that sense, I’m covered for both positive and negative outcomes since our present arrangements, economic, social, political and occupational, seem less and less alluring with each passing day. Maybe that’s the key to giving up on the dreams we’ve been taught to dream and dreaming something altogether new.