Running on empty: The global economic crash marked a surprising 2008


Editor’s Note: This is the first of Ochenski’s three-part look at the year that was and how it will shape 2009.

When 2008 started there wasn’t a single person on the face of the earth who could have predicted or expected what happened. For many, only one thing was really important—the fact that we were finally, after two long, grueling terms, coming to the end of the disastrous Bush presidency. That was reason enough for a New Year celebration. But little did we know what really was in store, or how the cumulative effect of the Bush policies would push us into global recession.

Here in Montana, we were overjoyed to see 2008 start with substantial snowfall that lasted through April and then led into a cool, wet spring. Taken together, the runoff and precipitation kept the rivers flowing, crops growing and held the forest fires to the lowest level in years. And given the huge amount of dead, beetle-killed timber, most of us expected to be breathing smoke and looking into red skies this summer.

An unforeseen and unfortunate surprise, however, was the skyrocketing price of energy, which sent everyone into a tailspin. Suddenly, oil was $150 a barrel and gasoline $4.50 a gallon with diesel even higher. How, we asked ourselves, was it possible to live when it was costing $40 to fill up even small cars while the big rigs were sucking down $100 or more at the pump every week? As it turned out, for many people the pinch at the pump meant something else had to go and, as the tourism numbers now show, those few who did drive hundreds of miles to visit Montana spent almost no money once they arrived. The tourist shops, restaurants, hotels and roadside attractions were, for the first time in years, nearly devoid of customers.

Unfortunately, the same cost of oil hit farmers, who use oil-based fertilizers, diesel and gasoline, equally hard—and what they raised still had to be transported to market. Considering that the food we eat travels approximately 1,200 miles from point of production to point of consumption, the transportation costs on top of production costs sent prices skyrocketing, again putting the pinch on pocketbooks and, again, forcing families to cut back somewhere else just to keep food on the table. To top it off, Montana’s Public Service Commissioners were issuing dire warnings of runaway prices for natural gas this winter that would be, like the price of oil, far beyond what anyone had predicted.

For the nation, the energy crisis took top billing along with the Iraq War as the issues of greatest concern. Responding to the polls, the campaigns across the country threw out tired old lines about “energy independence” and stopping reliance on foreign oil. Here at home, Gov. Brian Schweitzer was going full blast hawking his favorite coal-as-savior theories with coal-to-liquids being the most prominent. As wind turbines sprouted from the prairie fields, greedy eyes turned toward Montana’s energy resources, especially with a governor who seemed more than willing to turn the state into an energy colony for the nation.

But then something happened. What, exactly, remains somewhat unclear, but the whole ball of string suddenly started to unravel. Faced with untenable prices for their consumption-heavy lifestyle, Americans began to cut back across the board, starting with their driving. As more people drove and flew fewer miles, the demand for oil began to erode and the price per barrel began to retract. What seemed unimaginable in mid-summer—that gas prices would come down—began a wholesale collapse of the entire fossil fuels-based economy.

No one shed any tears for the giant oil companies that had been reaping obscene record profits on the backs of average citizens, but then the collapse reached into the very heart of America’s waning industrial core—the automotive industry. Stung by the earlier gas prices, suddenly the lumbering gas-hogs being sold by the Big Three automakers were left sitting on the lots as people looked for vehicles that would deliver higher fuel efficiency.

Remember what Bush told us after 9/11? “Go shopping” was his sage advice for a shell-shocked nation. But now, America’s mighty economy, driven primarily by conspicuous over-consumption, was tottering as people simply quit shopping. Necessities, of course, were still being purchased, but luxuries, in whatever form they were perceived by the various levels of income, were flaking off people’s priority lists like a heat shield on atmospheric re-entry.

The über-wealthy, we were reassured, were still shopping, still buying Rolexes, yachts, vacation homes, limousines and jets. But the other 98 percent of the population was pulling inward, conserving funds the way a hypothermic body keeps the heat deep within the core while the extremities are sacrificed to the cold.

And then, so fast it remains difficult to comprehend let alone explain, Wall Street, the playground of the powerful, began to crumble, and lo, how the mighty have fallen. By summer’s end the scope of the economic disaster began to come into focus as the Dow Jones began to plummet. Within two months, millions of people had lost trillions of dollars in stocks, IRAs were slashed in half, pension checks suddenly quit coming as major institutions like Washington Mutual, Lehmann Brothers and Merrill Lynch began to realize their fatal mistakes—and the price they would pay for their overwhelming greed.

In one of his last acts of lunacy, Bush demanded that Congress immediately pass an almost trillion dollar bailout measure for his high-rolling friends from Wall Street. And just like they did for the Patriot Act and the Iraq War resolution, a dysfunctional Congress, this time led by Democrats, caved into the lamest of the lame duck’s requests without, once again, taking the time to consider the implications of their actions or read the fine print.

While Wall Street financiers reveled in the billions of taxpayer dollars Bush’s Treasury Secretary was only too glad to shovel their way, ordinary citizens sunk deeper into despair, foreclosures and frustration from which they have yet to emerge.

Helena’s George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at


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