Steve Skojec

Out of Iowa today comes a story about truckers, some of whom are planning to go on strike on April 1st. What they intend to accomplish by the strike is unclear. They appear to stand more to lose than to gain. But as one trucker put it, “In no way, shape or form do truckers want to hurt this country. My whole deal on this thing is that I’m shutting down on April 1. Call it a strike, a shutdown or just flat-ass going broke.”

If you don’t know why they’re striking, the answer is simple: rising fuel costs and insurance premiums are causing them to lose money on every load. Diesel has, according to this story, climbed above $4 a gallon in 17 states. A truck that does long haul runs can have tanks that reach capacities of up to 200 gallons of fuel. Imagine that - one fillup costs around 800 dollars, and by at least one account I’ve heard, that lasts for only a day-and-a-half.

Many truck drivers are owner-operators. Their rigs are their bread and butter, but making a profit with them has never been an easy living. With these additional costs, many are going out of business entirely. Some are taking out mortgages on their homes in order to subsidize their costs - and this in a market where equity is leaking like a sieve.

If the truckers have to stop, what happens to you? Think about it - just about everything you eat, wear, or use is shipped across the country, if not the world. I live in Virginia. I ate some strawberries this morning on my cereal that came from Florida. The tea in my desk drawer came from China, as did my shoes, and my phone is from Taiwan. The magazine that I have in my inbox was published in Detroit. My pen comes from Japan. My notepad, Brazil. My tissues, New York.

You know this already, but I wanted to paint the picture. Very little of what we consume and use and take for granted on a daily basis gets to us without truckers. This is yet another reason why at my house, we’re stocking up on food a little bit. Why we’re looking forward to the return of the farmer’s market in a couple weeks. Why we’re growing a garden, baking our own bread, trying to find local suppliers of meat and dairy and flour. This summer, we’ll be learning how to make cheese and beer at home.

Local economies need to be re-established, I think, or things or going to get really tough. The bright side of this is that jobs can be created out of necessity, not government programs, farmers can make a living, small businesses can flourish, and the price of oil can affect us all just a little bit less. We’ll never do away with our globalized economy, but we’re entirely too addicted to it. It’s time to be proactive about having a backup plan.

The truckers are the canary in a big, scary commerce coal mine.

The Associated Press is reporting this morning that the U.S. Economy slowed in the fourth quarter of 2007 to a virtual standstill.

Recession talk grows louder, the housing market continues to decline, the dollar fell again this week as inflation went up after the Fed cut the interest rate and oil prices are setting records like an Olympic prodigy.

I don’t know if it’s better to be rich or poor when this happens. If you’re rich, you weather the storm better, but if you’re poor, you have a lot less to lose.

That’s what Professor Nouriel Roubini of New York University’s Stern School of Business thinks we’re facing, according to a story in yesterday’s Financial Times:

Recently, Professor Roubini’s scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is “a rising probability of a ‘catastrophic’ financial and economic outcome”**. The characteristics of this scenario are, he argues: “A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.”

The piece is too long to do justice to in excerpts, but it’s a perspective worth reading. As dire as the predictions contained in it seem to be, what they don’t take into sufficient account is the level of debt and future obligations this country has, to the tune of $53 trillion dollars. Professor Roubini does mention the significance of America being a debtor rather than a creditor nation: “[The United States] must keep the trust of foreigners. Should it fail to do so, the inflationary solution becomes probable. This is quite enough to explain why gold costs $920 an ounce.”

What the consequences of losing the trust of foreigners will be is not specified. David Walker, U.S. Comptroller General and head of the Government Accountability Office - who will resign his long-standing position next month to be able to have the political freedom to take a more proactive role to save our economy - does talk about some of the consequences of foreign-owned U.S. debt.

I can’t embed this video here, but I urge you to watch it in its entirety. If you live in this country, this affects you profoundly. We can’t ignore it anymore.