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Formerly vibrant neighborhoods

Formerly vibrant neighborhoods

The credit crisis is grabbing the headlines in America, as Fannie and Freddie starve on the empty calories of their bad loans, IndyMac Bank goes into federal conservatorship, and so on. The latest Harper’s Index gives the underlying numbers:

Chance that a U.S. home is currently vacant: 1 in 35

Rank of this among the highest recorded vacancy rates in U.S. history: 1

An article in The Economist (July 12) backs up the numbers: 18,600,000 U.S. housing units stand empty. It goes on to say that “formerly vibrant neighborhoods have taken on the dilapidated air of ghost towns” and “municipal taxes go unpaid” and “boarded-up homes invite looting, drugs and other criminal activity” – all outcomes foreseen in the WWO game. What we didn’t foresee: that cities would respond by demolishing the homes. But that’s actually being contemplated, according to the article.

The media hasn’t yet connected the 2008 credit crisis to the 2008 oil crisis, but again WWO teaches us the connection is there. As explained in an earlier post, the Petro Razor is at work here. Communities with forced commutes are on the wrong side of the Razor are likely never to recover; I’ve already heard anecdotal evidence that this process is underway.

Meanwhile, in a short article on Page 10A, we learn that Russia has reduced oil flow to the Czech Republic without warning or explanation. The move comes three days after the CR inked an agreement enabling the U.S. to build a missile-tracking radar station on Czech soil, So now begins the petropower plays among nations, also foreseen in WWO? The event that set off the global oil crisis was this: oil suppliers “unilaterally renegotiated their contracts,” delivering less oil than promised, which is exactly what’s happening to the Czech Republic. So is this a one-off, or a canary going thud in the coal mine? Stay tuned. Photo by judepics via Flickr.

by wallygIn the public forums you often hear concern expressed about “the economy” – what will we do to “the economy” if we take measures about changing our energy systems, if we take action about climate change, etc. And to measure what’s happening to “the economy” people invariably use the Gross Domestic Product, or GDP.

But as Jonathan Rowe spells out in a speech to Congress, the GDP was never intended to be used in this way, and actually the guy who developed it warned – nay, begged – government never to do so. But that warning went unheeded and now here we are: as Jonathan shows, the hero of “the economy” is someone with a heart condition going through a bitter divorce, and the villains are people who conserve, grow their own food and share with others, care for their own children, and so on.

Where GDP really gets it wrong, however, is when it tries to assess a resource such as oil. Its accounting is unable to apprehend the idea of limit or depletion, so again in Jonathan’s able phrase, it’s like a fuel gauge that reads fuller and fuller as it empties. I can’t help but think of the historical lessons in Collapse, the book by Jared Diamond, in which this sort of negative feedback loop spells doom for previous human civilizations.

Take a few minutes and read the transcript of Jonathan Rowe’s speech (pdf). And thanks to Harper’s Magazine, which published the speech in its June issue (subscription needed). Photo by wallyg via Flickr.

It was the world's first serious alternate reality game, a cooperative pre-imagining of a global oil crisis. Over 1900 players collaborated in May 2007 to chronicle the oil crisis with their own personal blog posts, videos, images and voicemails. The game ended after simulating the first 32 weeks of the oil shock, but its effects continue, as game designers analyze its unique gameplay and we all watch the continuing drama with global oil prices and supply.