The American economy exists in the "Petroleum Paradigm." That paradigm is visible in a host of ways, the fundamental idea is that value is created by turning petroleum into consumption, and using petroleum driven transportation to act as a "wind" that expands the size of the suburban land bubble. Think of it like a balloon, with people driving being the pressure that keeps it inflated.
People "make" money by creating communities, and drawing in waves of people afterward who are willing to pay more for houses. In this way public goods of community, economy, and education, are turned into private goods that require that people buy houses in the right places, or drive farther. Much of the Reagan revision to the structure of the American economy was to prop up these suburban land rents by a variety of means.
As long as the petroleum paradigm exists, any efficiencies will be plowed back into generating more sprawl, and attempting to maintain the land rents in the form of higher housing prices.
More on this in a moment, below the fold. Stirling went on to argue that there were two distinct primary ways of trying to manage this paradigm, representing fundamentally different political blocks, and another block that realizes the need to transition away from the paradigm:
The present break down of political forces follows three different views of this thesis. The first view is that the land casino merely needs to be allowed to run. This is the "Confederate" wing of American politics. The second view is that the land casino can continue longer, but only if carefully managed, this is the "Moderate" view. The third view is that it requires careful management to transition away from the land casino, or the "Progressive" view. The Confederate view has between 30% and 40% of the voting population nationally, with local majorities in swathes of the empty reaches of the country and in the South. The Moderate view commands between 35% and 45% of the country, with local majorities in the metro-suburbs and some cities. The Progressive view has approximately 20% support, with local majorities in scattered areas. America's three wings of politics are not a spectrum. The Moderates do not live between the Progressives and the Confederates, but in a direction away from both.
Now, I agree with essaywhuman's intent to bring this thesis into the discussion, as I think it has some very valuable insights to offer (plus a shitload of links). But I also think that Stirling's approach is more poetic than analytical, and that some things-such as the relative strengths of the blocks he referse to above-are not just speculative, but almost certainly wrong. For example, later on he writes:
Each of the three wings of American politics are based on a particular thesis. The Confederate believe in the Imperium Thesis. The Imperium Thesis states that America's providing of security is an irreplaceable asset, and that therefore other nations will fund their parts of the American system of rents indefinitely. The corollary to this is that other activities that do not fund American Imperium crowd out that debt. Namely all social programs and infrastructure not tied to the military sector and so on.
Now, as I read Stirling, what he's saying here is not that everyone involved consciously subscribes to this thesis, or even that a lot of them do, but that the logic of what they do consciously believe inherently implies the acceptance of this thesis. But this is where cold hard facts argue for considerably more nuance, since those who think we're spending too little on defense (from the General Social Survey) also think we're spending too little on a broad index of social spending:
Now, it's obvious that those who think we're spending too little on the military are less supportive of social spending most broadly (4-6 items) than others are, but they're still far more likely to say we're spending too little on social programs than to say we're spending too much. And thus, while I think Stirling is definitely onto something very important in his diary, his argument needs to be taken with a grain of salt on some of the details.
That said, I'd like to highlight what I think Stirling got right:
(1) First off, picking up where I left off quoting the introduction passage about the "Petroleum Paradigm", Stirling got this right about the enormous special interest baggage that comes with the paradigm--as well as the cruise-control complacency that enables it to continue:
And so it has been, the keys: a financial system to continue borrowing from abroad, housing prices, and other constricting access to the keys of a middle class life, particularly higher education that confers connections, and health care, have been the key priorities of Obama's administration. His stimulus bill was a partial rebate on the inflation tax in oil that we are seeing.
This is the first thing that people must realize about the petroleum paradigm: we are paying very high indirect taxes. One form of taxation is the stagnation tax, where governments do not stimulate the economy to full employment, because doing so would radically increase their borrowing costs. Thus ordinary people have much lower wages, much lower job prospects, and much less stability. The millions out of work now, are paying the stagnation tax. Another form of taxation is insurance company profits. These profits go into markets, such as stocks, which raise the prices of stocks, which foreign investors buy....
As long as the possibility of starting up the land casino is there, as long as the present generation can believe that the next generation will pay heavily for access to it, there will be no substantial change in the American political landscape. The question will be between two wings of the political spectrum over which can best maintain the present system.
(2) Second, in a passage already quoted above, Stirling perfectly captures the fact that progressives are as much about gradual and carefully-managed transitions as anyone else. They are not about radical jump-off-the-cliff changes. But what they are about is moving away from continued subsidizing of and subservience to the dinosaur special interests that are bleeding us dry:
The second view is that the land casino can continue longer, but only if carefully managed, this is the "Moderate" view. The third view is that it requires careful management to transition away from the land casino, or the "Progressive" view.
This captures perfectly the difference between progressives and Obama, as well as capturing why it's been hard for many progressives to see how he differs from us.
(3) Third, Stirling nails the essence of the moderate wing perfectly:
The Moderate thesis can be called the 2% thesis. If, over time, 2% of effort is shifted, then eventually America will be transformed without major disruption. It is the thesis behind, for example Cass Sunstien's Nudge or Matthew Miller's 2% Solution.
Rhetorically, this fits in with the middle class idea of piling up little advantages over time. It is what the middle class is trained to do: Hit the tax break, fly when it is cheap, pick up the resume line. However, we have a proof-by-example of what really happens to small accumulations of efficiency: The automobile industry. The automotive industry lives on small improvements to engine efficiency, for example, different means of injecting fuel, or creating turbulence in the oil flow to reduce friction. What happens to these improvements? They get poured into making larger and larger vehicles.
(4) Fourth--although I think Stirling's analysis of finance capital splitting with the Confederates was premature--the following passage needs to be read as a whole to really appreciate the part that Stirling totally nailed: Obama as a normalizing continuation of Bush:
The Confederate problem is that their own base's ideology is in favor of allowing the financial system to collapse. The financial elites have, as a result, pulled support from the Confederate wing of American politics for majority building. The Republicans look bad, because they don't have the money to look good, and the internal contradiction of socialists, that is poor Appalachia and the hinterlands, voting for elite plutocrats, has finally riven their own coalition. They also seem crazy: The people who they put in charge were not capable of managing the very core of the project. Hence financial elite money and support shifted to the Moderates, on the proviso that the Moderates did not disturb the Confederate architecture of George W. Bush. No major part of the Bush legacy has been overturned by Obama. None. No major part of the Bush legacy is on the calendar to be overturned. None. Obama's money mandate is to Do Bush Right.
In short, Obama and the moderates are de facto executors of the Confederate's will, even as the Confederates themselves go ballistic about it.
(5) Stirling is also correct about this, particularly the second paragraph, which echoes a point I've been making for some time--that our current realignment is muc more like the ambiguous realignment of 1896 than the razor-sharp realignment of 1932:
Even in the short run, the Progressive movement can begin to play the same role that the Confederate movement played early in its existence: as the fortunes of the coalition's senior partner ebb, and they will ebb, and if the Progressive movement can hold its gains, then the Moderates will have two choices: capitulate more and more to the Confederates, as Clinton did late in his executive, with catastrophic results such as the repeal of Glass-Steagal, or turn to the Progressives more and more. Right now the Moderates have votes to give, but in a Congress where 20 current Blue Dogs are Repbulicans, they will not.
This is, perhaps, not what people wanted. But it is not 1930, with a new economy ready to rule the world, but closer to 1900, with a new economy beginning to assert greater and greater dominance, and an old order that is hobbling towards its final crisis. As with the first generation of liberals, this generation of Progressives must lay the foundations for later days, when the handwriting truly is on the wall, and the last SUV has been driven to the last development, with the last barrel of cheap oil.
The first paragraph of the above may or may not be the case, though it does show where some possibilities may lie.
In my next diary, I'll continue by discussing some factors that Stirling didn't touch on, and how I see his outlook and mine fitting into a larger framework.
[UPDATE] I'm going to hold the followup diary till tomorrow, in favor of running a diary about Marcy Winograd later today.