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But -- and this may surprise many of those readers who have e-mailed me lately about my doom-and-gloom columns -- I don't think prospects in the long term are nearly as gloomy as these authors do.
I believe that the world will somehow muddle through with a lower standard of living in the United States, with much higher taxes to pay for the liabilities we refuse to fund today and with a painful disruption of our lives because we refuse to plan for an orderly transition away from oil. But still, it will be nothing resembling the apocalypse these authors envision.
Why not? Three reasons.
What isn't factored in
First, these books underestimate the power of feedback to change current trends. The very fears expressed in books like these motivate people to find solutions. So do rising market prices.With oil over $100 a barrel, for example, entrepreneurs get really, really motivated to find solutions because the reward is immense. Would the transition be easier if we had invested more money sooner or if we actually had a national energy plan? Quite probably. But I'm certain that things won't look as bleak on the energy front in five years as they do today.
I think there are similar feedback loops operating against a collapse of the dollar. (Think about what the aging of the European and Japanese populations will do to the euro and the yen when demographics really start to bite in 2013 or so.) Sometimes one of these doom trends actually works as a feedback loop to put the brakes on another one. For example, a growing U.S. debt burden leads to higher U.S. interest rates that help to support the U.S. dollar. Does that lower U.S. growth and living standards? Sure. But it also prevents a collapse in the U.S. currency.
Second, the catastrophes in these books are quaintly U.S.-centric. Globalization changes the way that any financial disaster in any one of the world's dominant economies -- including that of the biggest, the U.S. -- would play out. When Rome fell (a favorite comparison in this kind of book) it was an unmitigated disaster for everyone who lived in Western Europe because the imperial economy was the only game in town.
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When Rome fell, people in this economy lost their only currency. A collapse in the U.S. dollar would leave the world with euros, yen, yuan and more. When Rome fell, people lost their livelihoods even though the economies of Constantinople, Alexandria, Xi'an and Ctesiphon were doing quite well, thank you.
Today, jobs are outsourced to India and Poland -- and could be outsourced to New Jersey and California. Economies such as China's and India's can chug on ahead even when the U.S. economy slows down.
We tend to focus on the costs of the global economy in U.S. jobs or the loss of market share by U.S. companies. We don't take much note of the way that the global economy is likely to act as a safety net in the case of the kind of disasters these books describe. In a global economy, apocalypse just isn't what it used to be.
Third, a good part of the extremes to which these books want to take these trends -- the difference between my short-term pessimism about the economy and stock market over the next 12 months and these books' long-term gloom over decades -- comes from the way these books are grounded in American guilt that stretches back to the colonists who scratched farms out of the dark forests.
The language in these books, even the references to Armageddon, apocalypses, the end of days and the final battle between God and Satan, ties our economic doom to our moral failure. We deserve the punishment of these dooms because we've strayed from the path. We're not thrifty. We're gluttonous consumers. We can't control our lust for consumption.
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Yet these books don't follow that logic to the end. If this is the battle at the end of time, if we really are looking at certain doom, then these books shouldn't end with chapters on how you can avoid doom by buying gold or investing in certificates of deposit until the chaos is over, or by buying the stocks of this company or that.
But they all do, and those are the happy endings that all fairy tales must have. Turk and Rubin's book on the collapse of the dollar adds "and How to Profit From It" to the title. Panzner's book on financial Armageddon adds a cover line promising that inside you'll learn how to "Protect Your Future from Economic Collapse." Leeb and Strathy promise to tell you "How You Can Thrive When Oil Costs $200 a Barrel."
If doom is truly upon us, there's nothing we can do, and we might as well just keep on with our lives. If the doom can be avoided, as these books suggest, by something as simple as buying gold or real estate or inflation-indexed Treasury notes, then it's not much of a doom, and we will see forces come into play to change the direction of the economy before it runs off a cliff.
Sometimes, though, we just enjoy being scared out of our wits. Stephen King and Michael Crichton have made nice careers out of putting nightmares between book covers, and tales of financial horror wouldn't be published in such numbers if there weren't a market for them. So if you're among the many who indulge a taste for apocalypse, just try to remember, as my daughter says after hearing one of her scary stories, "It's just fiction, Dad."
Continued: Developments on past columns
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