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The train to nowhere. (Image from Google Earth)
It’s a picture that’s worth a thousand choruses of “Don’t Worry, Be Happy.” Here in the Seventh Straight Successful Year of the Recovery from the Great Recession, tucked into a corner of the Arizona Desert, is a line of parked Union Pacific locomotives. It was discovered on Google Earth, so it is, as they say, visible from space. There are 292 of them, baking in the sun like so many dinosaur skeletons, in a line stretching almost five miles. They, and the people who used to run them, are now “excess capacity” for one of the country’s largest freight haulers. In this, the Seventh Straight Successful Year of the Great Recovery.
No one should be surprised. But even when you know that trade — the buying and selling of stuff — has been slowing down all over the world for years, it is startling to see such stark, graphic evidence that we are all in deep trouble.
- Rail freight tonnage in the U.S. is down — by 11% in April compared with April 2015. Volumes of oil, coal, and shipping containers are off even more sharply. Somewhere there are graveyards for excess railroad cars that dwarf the locomotive park.
- The world’s great fleets of oil tankers, container ships and dry-cargo vessels, along with the world’s largest ports, are contracting calamitously as the volumes of cargo shrink implacably.
- China, the “economic miracle” of the past decade, with its ten-percent-per-year growth and bottomless appetite for oil, coal, and raw materials, is staggering to a hard landing. China now has a bottomless appetite for debt, which can only delay the landing, not soften it.
- Corporate profits reported so far for the first quarter of 2016 (by the S&P 500) are down 8%, the third quarter of declining profits and the worst drop since 2009.
- Corporate defaults — failure to pay loans when due — are running at levels last seen in 2009 (nearly 50 companies so far this year.
Only two people I know of seem to understand the root of this problem: Henry Ford and Howard Davidowitz. Ford, according to persistent legend, doubled his workers’ wages because he realized that if they weren’t making enough money to afford to buy one of his cars he would go out of business. (Never mind whether the story is true or not, it contains an important truth.) Davidowitz, a world class consultant to retail merchants, said upon analysis he found that the problem was that the consumers on whom everyone is relying to save the economy don’t have — and I’m quoting here — “any fucking money.”
Lord knows we’ve tried to help, mainly by allowing him to borrow more. We showed him how to use his house as an ATM cash dispenser until he was so far in debt and under water he tanked the economy of most of the civilized world. We raised the limits on his credit cards until they were all maxed out. We made financing a new car easier than buying a gun in Chicago, and that worked for a while.
But. Everything has to be paid for, eventually. Borrowed money has to be returned, eventually, along with the interest. That’s not just a theory, like evolution. It’s a fact, like gravity.
We and much of the rest of the world have turned ourselves into a consumer economy just when the world’s consumers, like the unfortunate pilot, ran out of airspeed, altitude and ideas. A nation of bartenders and short-order cooks is unable to support the shopping malls we have provided for them.
How did we ever convince ourselves that we could prosper by consuming, without making anything? Now that we know we can’t, what are we going to do? Elect Donald Trump?
July 2015 – Grand Junction, CO “Trains stashed by parkway until business picks up” <> http://www.gjsentinel.com/news/articles/trains-stashed-by-parkway-until-business-picks-up
Feb 2016 – Tuscon RC Multi-Rotor Group aerial photo shoot event at the Benson siding http://www.meetup.com/Tucson-RC-Multi-Rotor-Group/events/228879082/
Feb 2016 – Flying Among the Locos https://vimeo.com/156998418 by the same group
From the article (above)…
How did we ever convince ourselves that we could prosper by consuming, without making anything?
First, another outstanding article, Mr. Lewis!! However, in answer to the cited question, as I’ve stated many times before (and astute observation AND reason will bear out)…
“THE PROBLEM” is NOT too many people (or any number of the myriad of associated symptoms), it IS too many stupid people.
Please note, by stupid _I_ MEAN ignorant, irrational, ill-informed and utterly, completely narcissistic. Whether that condition exists as a matter of genetics, cultural programming or both is irrelevant. There IS only one way this mess sorts itself out and there won’t be any fun involved… unless one has murderous predilections.
Though the transportation industry seems to be stalling out, YOU, Mr. Lewis are on a roll.
Your essay today ties in nicely with Mr. Snyder’s post:
11 Signs That The U.S. Economy Is Rapidly Deteriorating Even As The Stock Market Soars
http://theeconomiccollapseblog.com/archives/11-signs-that-the-u-s-economy-is-rapidly-deteriorating-even-as-the-stock-market-soars
[where we find this]
#6 U.S. rail traffic was 11 percent lower last month than it was during the same month in 2015. Right now there are 292 Union Pacific engines sitting idle in the middle of the Arizona desert because there is literally nothing for them to do.
[with these two indicating it’s only going to get worse]
#8 According to Challenger, Gray & Christmas, U.S. firms announced 35 percent more job cuts during April than they did in March. This indicates that our employment problems are accelerating.
#9 So far this year, job cut announcements are running 24 percent above the exact same period in 2015.
[leading to the obvious ‘answer’ to why it is this way that your essay highlighted]
‘the problem was that the consumers on whom everyone is relying to save the economy don’t have — and I’m quoting here — “any fucking money.”’
PRECISELY!
Actually, gravity is a theory just like evolution. Both are tested every day, and both always work, but they are both theories.
If people got more money/higher wages, could the earth afford what they then could afford? The system is its own “worst enemy”.
I second that…
When watching the economy scale down, I observe corporate government becoming far more rapacious with the Natural World. The use of “wildfire” as a tool for corporate government profit and power, for example, goes unnoticed by most. Yet enlargement of natural fires, with the resultant punishment of local populations, both human and other, is a multibillion dollar “industry”, as is the lying about this phenomenon.
In a related case…
There is much handwringing over the impending death of Apple, but none over their stellar record of criminal activity. Crime, it seems, only applies to subjects-oops-citizens who are accountable for everything according to the crooks.
Two thousand years ago an odd assortment of so-called madmen and madwomen saw through the lies and were murdered for their clarity. The murderers took charge and declared themselves sane. It is the descendants of those murderers who still declare themselves sane today, and they still hold the reins of temporal power.
You are spot on, Mike Kay! I’ve watched wildfires that were totally under control get reassigned to another fire department and spread completely out of control – I’ve seen this happen many times over the last number of years! There’s big money in in wildfires! As in ANY kind of catastrophe that a state can turn to the Fed for financial help. History is definitely repeating itself on a number of cycles recently – they just look a little different due to technology, a different time period, etc.
I am commenting from Sydney, Australia. I live on a road called The Cumberland Highway, which is a surface street that has no freeway alternate, and where I live is basically the only road entry point between tropical Australia and Sydney. When we moved here 6 1/2 years ago from the USA, the number of heavy semi trucks was very high and continued 24/7/363 (Christmas and New Year’s were very light). Now the volume of these trucks is pretty far down, and there is more quiet at nighttime than there used to be. However, the rate of car horn honks has skyrocketed. It is like everyone is so much more on edge. I know we are on edge. Because we are awake and understand what is really unravelling here. Anyways, thanks for your article. I am certain no university or craporation will fund research into these phenomena, so our anecdotal researching and sharing may be as good as it gets for confirmation. Ta.
The horn honking is CIA psyops.
Evolution is a fact too, not a theory. But then you’re an American writing this. ‘Nuff said.
Actually I should admit that I Iike your site and have put it into my feed. So there ;-)