"Would it have Taikonauts space-walking overhead while the chairman of the Federal Reserve is on his knees?"

Charlie Stross is bummed that the collapse of the USA is making it hard to write science fiction:
Put yourself in the shoes of an SF author trying to construct an accurate (or at least believable) scenario for the USA in 2019. Imagine you are constructing your future-USA in 2006, then again in 2007, and finally now, with talk of $700Bn bailouts and nationalization of banks in the background. Each of those projections is going to come out looking different. Back in 2006 the sub-prime crisis wasn't even on the horizon but the big scandal was FEMA's response (or lack thereof) to Hurricane Katrina. In 2007, the sub-prime ARM bubble began to burst and the markets were beginning to turn bearish. (Oh, and it looked as if the 2008 presidential election would probably be down to a fight between Hilary Clinton and Rudy Giuliani.) Now, in late 2008 the fiscal sky is falling; things may not end as badly as they did for the USSR, but it's definitely an epochal, historic crisis.

Now extend the thought-experiment back to 1996 and 1986. Your future-USA in the 1986 scenario almost certainly faced a strong USSR in 2019, because the idea that a 70 year old Adversary could fall apart in a matter of months, like a paper tiger left out in a rain storm, simply boggles the mind. It's preposterous; it doesn't fit with our outlook on the way history works.

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10 Responses:

  1. Wow, that belongs in White Whine.

  2. bdu says:

    Anybody who says the mortgage crisis wasn't on the horizon in 2006 wasn't paying attention.

    • autopope says:

      "mortgage crisis" != "sub-prime crisis".

      We Europeans look at your crazy-ass interest-only-and-we'll-pay-the-capital-out-of-the-profits mortgages with disbelief; why do you think so many British (and French, and German) banks got caught with their trousers down holding junk CDOs coughed up and spat out by trans-Atlantic barrow boys?

      • bdu says:

        No, our mortgage crisis and our "sub-prime crisis" are one and the same. I call it the former rather than the latter due to the inherent assumption in the latter that the problems are sequestered to those with marginal credit ratings or low income, when that is clearly not the case. There is no such thing as "sub-prime" here anymore, even buyers with good credit were taking out the alternative whacky loans you describe in order to buy even more house, the overall effect of which raised prices, which meant that in order to buy at all you were taking out a whacky loan, etc etc. It's not distinct and disconnected, we had a nasty bubble because our financial industry was allowed to get too inventive for anyone's good.

        Anyone paying attention, even as far back as 2003/2004, knew something was amiss and was either going to crash small soon or crash large later.

        • 33mhz says:

          Yeah, people have been talking about the housing bubble and its potential collapse long enough that there was even a 1-2 year period where people were saying, "So where's that housing collapse all you naysayers were crying about?"

          Here it is! Kisses.

      • waider says:

        Hmm, not to burst the colonial bubble, but interest-only mortgages are in fact available on this side of the pond also. And I still don't quite understand the concept. (YMMV; Ireland, like every other European country, presumably operates a different set of mortgage rules to every other European country. Generalising about "We Europeans" isn't teriffically useful in many cases.)

        • autopope says:

          Sure interest-only mortgages are available here; what you don't see is mortgages where not only do they not repay the capital at maturation, the repayments don't even repay all the compound interest that has accrued -- they're expected to pay off the compound interest by selling the property at a profit!

        • gryazi says:

          "Interest-only" is essentially a teaser rate; a mortgagee has to hope that they'll either have increased income or be able to refi at a better rate before they have to start paying down the principal as well.

          One of the many things that bit "homeowners" is that the payments were variable at all; people either chose to ignore that part of the agreement or (for "subprime" borrowers) figured they had to eat those terms to have a place to live. A lot of these loans were to people who really should have known better, including new-home-builders who thought they could build and flip before higher payments kicked in; a lot were also to regular stupid (or financially inexperienced) people at the "guidance" of mortgage brokers.

          This 'system' completely collapses when property values fall and the people who planned to refi don't have the collateral to secure a new loan big enough to pay off the old one. The homebuilders have no incentive not to default once it becomes unprofitable (especially if the loan was made to a disposable speculative entity, like a corporation); the poor suckers might want to keep their homes but probably couldn't afford them in the first place.

          What nobody in the US wants to face up to, yet, is that we can't seem to weather any sort of economic boom without driving housing prices to unsustainable levels. When you factor in things like job insecurity, the only "rational" home purchase for an average 'merkin family would be a tenement apartment or a three-room cabin 120 miles from wherever the jobs are -- the latter of which doesn't do us any favors re: fuel.

  3. bdu says:

    Second point: this is why the best tact for a sci-fi author is to be plausibly audacious when fabricating the near to mid-term future. It's not likely to come true, but it usually brings about interesting concepts/scenarios.

  4. romulusnr says:

    the idea that a 70 year old Adversary could fall apart in a matter of months, like a paper tiger left out in a rain storm, simply boggles the mind. It's preposterous; it doesn't fit with our outlook on the way history works.

    I think that's because we have a piss-poor understanding of how history actually does work.