A lot of people are focused right now on whether we're heading into a recession. To me, a more important question is whether we're careening toward a major economic collapse--maybe not this year, maybe not next year, but soon, and for a looong time. (Think 1929, not 2001.) A recent New York Magazine article explored the reasons this might happen: the housing market could continue to fall, the derivatives market could collapse, consumers could finally stop spending like there's no tomorrow, the dollar could crash further. This is probably an unpopular view among Inc.'s readers, since entrepreneurs are relentlessly optimistic. And so, it seems, are Americans in general. In the discussions surrounding the country's current economic woes, there is talk about recession, but rarely does anyone mention the prospect of anything more serious.
Recessions are unpleasant; no one likes them. But in the last two decades they have been relatively short and mild, and followed by years of incredible prosperity. Past performance, however, is no guarantee of future results. Could something much worse be in store? A few prophets of doom seem to think so; Peter Schiff is one of the most commonly quoted. If the economy does collapse, he'll be hailed as an oracle, which may be why he seems almost gleeful when he makes his predictions.
But I'm starting to believe him, and the main reason is that I recently read Collapse by Jared Diamond, who won the Pulitzer Prize for Guns, Germs and Steel. When a society collapses, it is sometimes slow and steady, sometimes fast and furious. The signs are there, but few people heed them--understandably, since before the collapse, the society has usually reached the peak of its power. While reaching that peak, the society has completely destroyed the environment upon which it depends. That's happening today. Sure, it's trendy to fight global warming. But as this excellent BusinessWeek article explains, many corporate green efforts are a penny more than worthless. We're still destroying more of the environment than we're saving, which in my book means we're still headed in the wrong direction. We're starting to think about decelerating, but no one has put on the brakes.