DrumBeat: December 1, 2008

A Shore Thing? Why Offshore Wind Power Will Likely Struggle

Offshore wind power is the Holy Grail of renewable energy: It’s clean, abundant, and out of sight. Now that energy security is meshing with environmental concerns inside the White House, is offshore wind power ready to come of age?

Probably not as fast as wind-power boosters would hope. If the economics of onshore wind are tricky enough to give T. Boone Pickens pause, the challenges facing offshore wind are even greater.

Take the new proposal for the world’s biggest wind farm by another Texas oil man, peak oil prophet Matt Simmons. His Ocean Energy Institute proposes building a 5,000 megawatt deepwater wind farm in the Gulf of Maine, blessed with some of the world’s strongest sustained winds.

The problem is that, as envisioned, the Maine offshore wind farm would be very expensive—and that vision includes some very optimistic assumptions.

Global Trends 2025

One hopes that the churches take up and address the agenda of thinking proposed by Global Trends 2005. It will demand a kind of moral fortitude and unflinching long look at the real to sustain the kind of long-term planning needed to address the issues of justice, poverty, war, terrorism, global warming and environmental responsibility the trend data seems to cry out for. It will also entail a needed infusion of hope. Sorry, Tip O' Neil, all politics is no longer local! Sorry, American exceptionalists, the United States is no longer the exception! Sorry, determinists, human agency and leadership can still make a profound difference!

Factors close to home dictate 'fair' oil price

For the first time in almost a decade, Saudi Arabia, the world’s oil superpower, has named its price.

In an interview in a Kuwaiti newspaper published on the day of Opec’s emergency meeting last Saturday, King Abdullah said $75 a barrel was a “fair price” for oil.

Set against this summer’s high of $147 a barrel, the target might seem modest.

But compared with the current price of $55, not to mention a historical average closer to $40, it begins to look rather optimistic from the king’s point of view.

Oilpatch spending plans soften

CALGARY – Oilpatch players are expected to ring in the new year with more modest budgets, as they grapple with plunging commodity prices and a credit crunch that has made it harder and pricier to finance projects.

Chevron Postpones Budget Announcement Until January

(Bloomberg) -- Chevron Corp., the world’s fourth- largest oil company, postponed its 2009 capital-spending announcement by a month, until January, after crude lost two- thirds of its value and recessions in the world’s biggest economies crimped fuel demand.

Chevron cleared of Nigeria abuses

SAN FRANCISCO (AP) -- A federal jury has cleared Chevron Corp. of responsibility for any human rights abuses during a violent protest on a company oil platform in Nigeria a decade ago.

Kuwait's crude oil exports to Japan up 16.3 pct

TOKYO (KUNA) -- Kuwait's crude oil exports to Japan rose 16.3 percent in October from a year earlier to 9.65 million barrels, or 311,000 barrels per day, up for the third straight month, according to the latest report released by the government agency.

Japan is Kuwait's largest oil buyer, taking around 20 percent of its shipments annually.

Putin clears new Baltic pipeline to cut oil transit

MOSCOW (Reuters) - Russia's Prime Minister Vladimir Putin signed on Monday a decree ordering the construction of a new oil pipeline to the Baltic Sea, designed to further cut exports of Russian crude via Ukraine, Belarus and Poland.

The government said on its website Putin ordered a one million barrels-per-day pipeline be built to the Baltic port of Ust Luga, near Russia's largest oil port of Primorsk, with the first stage to ship 600,000 bpd from the third quarter of 2012.

Russia's oil wealth funds rise to $206.2 bln

MOSCOW (Reuters) - Russia's two oil wealth funds totalled 5.76 billion roubles ($206.2 million) up from $197.4 billion a month ago, Finance Ministry data showed on Monday.

The Reserve Fund, which serves as a safety cushion for the budget and is set to stay at around 10 percent of Russia's GDP, totalled $132.6 billion, down from $134.60 billion on Nov 1.

Hard times here to stay: With peak oil past, our civilisation could be in for a long, slow decline - and that we should plan for a permanent recession

French President Nicolas Sarkozy calls for a new Bretton Woods, and rightly so, for without doubt one is needed.

In the same breath though, he calls for renewed growth, and in doing so epitomises the endemic dissonance which may be the downfall of our current civilisation.

If he had bothered to work out why the current system failed (extended leverage is a symptom, not a cause) he would not be making the second call.

Make no bones about it, every past civilisation has decayed into the dry leaves of history - why should this one be different?

Energy Tribune Speaks with Charley Maxwell

It’s an example of where Exxon has, in effect, lost vision. And I think they’ve lost vision in a number of areas – in environmental they’ve lost vision, in pricing they’ve lost vision, [and they don’t care about] Hubbert’s peak.

Someone asked him about Hubbert’s Peak at a press conference in 2006 or 2005, and he said, “Hubbert who?” Now he knew perfectly well what the question was. But he was just saying, I don’t recognize this fellow.

I’m not particularly upset that I’m a believer and he is not, that this is a moral issue. But I’m using that as an example that he didn’t seem to see anything that was happening around him. And that’s the case that the relatives of John Rockefeller made when they went to the meeting – that Exxon was in an insular field.

U.S. Energy Department to Resume Oil-Reserve Fill in January

(Bloomberg) -- The U.S. Energy Department will resume filling the nation’s Strategic Petroleum Reserve next month, once Congressional restrictions expire, a spokeswoman said.

“The return of SPR emergency exchange oil as a result of damages caused by Hurricanes Gustav and Ike is scheduled to start in January 2009,” Healy Baumgardner, spokeswoman for the department, said in an e-mail today.

Oil falls after OPEC doesn’t cut output

Crude oil fell below $50 a barrel after the Organization of Petroleum Exporting Countries deferred a decision to reduce output until its next meeting on Dec. 17.

Peak oil keeps on peaking

WELL, so-called 'peak oil' hasn't filtered Down Under quite just yet.

Australian oil production has remained pretty constant around 30 million barrels a quarter since mid-2006.

The reason is basic. As individual old fields, like Bass Strait, do peak and decline, new ones come on.

And we'd have a lot more coming on if we actually directed some of the hundreds of millions of dollars wasted on useless wind 'energy' to promoting real carbon energy.

Revving up the race for better fuel efficiency

One car of the not-so-distant future is powered in part by a battery weighing more than two fully grown men. Another lacks side doors in the interest of reducing drag. And dozens of teams from around the world — both amateur and professional — are racing to build sleek, ultra-fuel efficient cars powered by alternative energy and attractive to cash-conscious consumers.

But what about the cars we already own?

Amid the push toward plug-in electric hybrids, hydrogen fuel cells and biodiesel-friendly roadsters, new research suggests that impressive increases in fuel economy could be obtained by integrating innovative devices into the nation’s fleet of gas-guzzling vehicles.

And Then There Was One: Distilling the Big Three into a single player could save Detroit

So this is how it ends for Detroit? After more than a century of putting the world on wheels, the American auto industry collapses amid squabbling over clueless CEOs and their private jets? Not necessarily. There is another way forward: the Big Three could become the Big One.

Kurt Cobb: The overoptimized society

What all this tell us is that the pablum we've been fed about the merits of globalization has masked its dreadful vulnerabilities. We have created a system that nobody understands and nobody can fix when it falters. We were told that the global marketplace could heal itself and correct imbalances. Well, obviously it can't, not without mowing down an awful lot of people who did nothing to cause the current financial meltdown.

That's the problem with a complex, tightly interconnected network. When it spirals out of control, it tends to create a cascade of problems everywhere. Nassim Taleb says he used to get up in the morning and worry about what will happen to our out-of-control financial system. Now, he wakes up in the middle of the night and wonders how bad it could get.

Oil drops 6% after OPEC keeps output unchanged

NEW YORK (MarketWatch) -- Oil futures tumbled 6% early Monday, coming under pressure after the OPEC oil cartel decided to keep output unchanged at a weekend meeting.

Crude oil for January delivery fell $3.15, or 6%, to $51.34 a barrel in electronic trading on Globex.

The contract hit an intraday low of $51.20 a barrel.

Asphalt prices put damper on road work

The recent energy crisis sent asphalt prices into the stratosphere. It also helped bring about an innovation that could well keep them there.

As it is with motor fuels, petroleum is a key ingredient of asphalt. The paving material is a mixture of rock, sand and the sludge left over from oil refining.

Rodney Carmical, executive director of the Tennessee County Highways Officials Association, said asphalt prices probably won't go down any time soon. While gasoline prices are at a five-year low, asphalt prices have dropped only slightly.

That's because when oil prices shot up, refineries installed new equipment to increase the fuel output. The consequence for the asphalt industry was that less of the by-product it needs is available.

Carmical said the cost to surface a mile of road had gone from about $50,000 to $100,000 in a year.

Air Canada, Out in Cold, Learns Fuel Self-Reliance

The ACE Aviation Holdings Inc. unit is building fuel-storage depots, pipelines and docks and leasing rail cars, trucks and barges. It is also scouring the globe for vessel shipments of refined jet fuel and buying the precious liquid with its own credit from as far away as Saudi Arabia, Nigeria and Venezuela. In March, Air Canada and the rest of the airlines that serve Toronto Pearson International Airport will open a satellite tank farm, pipeline and rail siding to bolster supplies at the nation's busiest airport.

"We want to own it, control it," says Paul Whitty, the carrier's director of fuel purchasing and supply, who recalls a time a few years ago when the shortage was so dire that the Toronto airport storage-depot operator used manual pumps to get every last drop of fuel from the tanks. "The only thing we're not doing is buying the crude and processing it" into jet fuel, he says.

Somali pirates 'to free Saudi tanker within 48 hours'

CAIRO (RIA Novosti) - The Saudi supertanker the Sirius Star, seized by Somali pirates on November 15, will be released within the next two days, the Saudi Arabian ambassador to Kenya said on Monday.

Price drop surprises farmers

Last summer farmers like Schoenherr were enjoying record-high prices for their crops, a result of a greater worldwide demand for grains and meats and fears about a shortage of supplies because of spring flooding in the Midwest. But food commodities prices have been spiraling downward the past several weeks, a result of global financial woes, a plentiful harvest and investment banks and hedge funds -- desperate to liquidate -- pulling out of the grain market.

"It's the perfect storm," said Bob Boehm, manager of commodity and marketing at the Michigan Farm Bureau. "What we have is a whole lot of volatility (in the grain market) and no one likes that."

Visiting environmentalist delivers grim message

Global warming is the biggest problem facing the world today, and time is running out to find a remedy. That was the grim message delivered by environmental author and activist Bill McKibben — whose 1989 work "The End of Nature" addressed the issue — to a small audience at the New Bedford Whaling Museum last week.

"The best guess now is that there may be no sea ice in the Arctic by 2015. You burn fossil fuels, melt the ice and 80 percent of the sun's radiation, which used to be reflected back into the atmosphere, is now absorbed by blue water. Once you set these processes in motion it is very difficult to get them back under control," Mr. McKibben said.

Bill McKibben: Multiplication Saves the Day

Let’s assume, generously, that 5 percent of Americans are deeply concerned about climate change— concerned enough that they will change all their light bulbs, scrimp and save to put a solar thermal hot water system on the roof (or really scrimp and save to put some photovoltaic electricity up there), unplug all their vampire appliances when not in use, cut the number of car trips that they make in half and use a hybrid for the remaining journeys, buy only local food in season, use a clothesline to dry their clothes whenever the temperature tops fifty degrees (1,016 pounds of carbon saved right there), cut their air travel by two-thirds and learn to enjoy the pleasure of “staycations,” take showers with an egg timer so they don’t stay under too long (350 pounds of carbon), and do all the other things that every website recommends for reducing your carbon footprint. And then let’s assume that they go buy offsets for the rest from a company like NativeEnergy, which will use the money to build windmills on Indian reservations.

Okay, add it up, carry the one, dum de dum, here we go, yes—the impact on the amount of carbon in the atmosphere is, hmm, zero.

Green army

THE rich world abounds in environmental ideals but lacks biodiversity. The number of animals and plants that thrive in Europe and much of North America is only a fraction of those found in tropical regions. Too often people see environmental problems like climate change, deforestation, wildlife exploitation and loss of biodiversity as things that happen elsewhere—when in fact, developed countries have plenty to worry about: industrial and automotive pollution, the loss of marine life in their over-fished waters, the decline of songbirds in the countryside, and the effects of climate change on everything and everyone.

Could people get as motivated about the beetles down the road as the rainforest in Brazil? That is the hope of a new project in Britain called Open Air Laboratories (OPAL), which aims to mobilise the British population to become more engaged with nature. If the idea works it will create a small green army of ordinary citizens who will create community environmental reports and contribute to national surveys of soil, air, water, biodiversity and climate.

UK climate body's targets will raise energy bills

LONDON (Reuters) - Hundreds of thousands of British households could face big rises in their energy bills under plans to reduce the role of fossil fuels and cut planet-warming greenhouse gas emissions by more than a third by 2020, Britain's chief climate change adviser said on Monday.

The big green challenge

Community enterprises, with their roots in co-operatives and credit unions, are now emerging as powerful models to combat climate change.

Liquefied Natural Gas and Fossil Capitalism

The contemporary ecological crisis places a new spin on the notion of the “resource curse,” evoking widespread concerns regarding hydrocarbon dependency. Whether environmental, in the form of global warming, or socio-political, through wars over oil, “fossil capitalism” is now understood as a global problem. The development of a global market in natural gas, heavily dependent on the development of the Liquefied Natural Gas (LNG) industry, offers an example of a corporate-endorsed solution to the simultaneous ecological and economic “crises” associated with fossil capitalism. Yet, since 2004 a cross-continental mobilization against the development of LNG terminals in North America has successfully challenged the installation of some LNG infrastructure on the West Coast. These movements stress that the investment required to build the global gas industry displaces investment in renewables.

OPEC Failure Foretells Decline 10 Years After $10 Oil

(Bloomberg) -- A decade after OPEC failed to prevent oil from collapsing to $10 a barrel, the world’s biggest producers are delaying actions needed to arrest the steepest slide in energy prices.

...“They are riding the economic wave just like the rest of us,” Adam Sieminski, Deutsche Bank AG’s chief energy economist, said in a telephone interview in Washington. “In the past when there has been a big economic downturn, OPEC has had to go through a series of cuts to stabilize the oil market.”

They haven’t done enough this time around to halt the 67 percent drop. Merrill Lynch & Co., forecasting the first contraction in global demand in a quarter century, sees crude bottoming at an average $43 a barrel in the first quarter, 21 percent below where it ended last week. In December 1998, crude tumbled 61 percent from its peak to as low as $10.35 when OPEC failed to eliminate a supply glut.

OPEC Will Cut Oil Output This Month, El-Badri Says

(Bloomberg) -- OPEC, supplier of more than 40 percent of the world’s oil, will reduce crude production when it meets this month in Algeria and is confident Russia will join OPEC in restraining oil supply, the group’s Secretary General Abdalla el-Badri said.

“For sure there will be action” at the OPEC meeting in Oran, Algeria, on Dec. 17, el-Badri told reporters in Tehran today, declining to specify the amount of output that may be reduced. “Everybody is in favor of a cut in the Algeria meeting - we are all gearing toward a cut.”

OPEC to slash December output: secretary general

TEHRAN, (AFP) – The Organisation of Petroleum Exporting Countries (OPEC) will cut its December production by a "good amount," its secretary general Abdalla Salem El-Badri told reporters on Monday.

"We can't say how much the output cut will be in December but for sure there will be an action because we're seeing that stocks are high," he said, adding that the cut would be a "good amount."

OPEC braces for tough times as global recession bites

CAIRO, (AFP) – The OPEC oil exporting cartel, suffering from plummeting oil prices, faces further pain next year as a worldwide recession dampens demand for crude even more, analysts believe.

"OPEC is dealing with tough circumstances, the toughest in 10 if not 30 years," Raad AlKadiri of PFC Energy told AFP on the sidelines of OPEC's informal gathering in the Egyptian capital.

Although OPEC ministers decided on Saturday to keep output unchanged, they also vowed to cut production next month in the face of flagging demand and despite the global financial crisis.

"We took note of the serious deterioration in the world economy and its serious consequence on the oil price," OPEC President Chakib Khelil said, adding that "negative growth in (oil) demand is possible" next year.

Iranian state TV: OPEC cut of 1.5M barrels likely

TEHRAN, Iran (AP) -- Iranian state TV is reporting that OPEC's Secretary-General says a daily oil production cut of between 1 million and 1.5 million barrels is likely in December.

Secretary-General Abdullah El-Badri was quoted Monday on the station's Web site saying that the Organization of Petroleum Exporting Countries is facing a very difficult situation and plans to "restore oil prices to $90 per barrel."

Minister: Kuwait is reviewing 5-year development plan because of oil price drop, global crisis

KUWAIT CITY (AP) _ A Kuwaiti Cabinet minister says the government is reviewing a 35-billion dinar — about $128 billion — development plan because of lower oil prices and the effects of the global financial crisis.

Petrobras May Delay Upgrade of Japan Refinery on Oil

(Bloomberg) -- Nansei Sekiyu K.K., a Japanese refiner majority owned by Brazil’s state oil company, Petroleo Brasileiro SA, may delay a proposed expansion of its Okinawa refinery because of the drop in oil prices and the global credit crisis.

Kuwait eyes $2 bln cut in Dow petchem deal - source

KUWAIT (Reuters) - Kuwait is looking to reduce its portion of the cost of a planned petrochemical joint venture with Dow Chemical by as much as $2 billion, a Kuwaiti oil official said on Monday.

"Kuwait is looking to pay about $7.5 billion for the JV," said the official, who declined to be identified.

Russia slashes oil export duty by 33%

MOSCOW (RIA Novosti) - The Russian government lowered oil export duty by 33% as of Monday, from $287.3 per metric ton to $192.1, to take into account the lower global oil price.

Export duty on light petroleum products is down from $205.9 to $141.8, while duty on dark oil products is down to $76.4 from $110.9 per ton.

As of December 1, the government has decided to reset the oil duty rate each month, rather than every two months as previously. A corresponding bill has been approved by both houses of parliament, and is pending presidential approval.

Despite drop in oil, Americans seal up for winter

NEW YORK (Reuters) – When crude oil prices climbed to a record $147.27 a barrel this summer, many Americans -- their thoughts turning to winter heating bills -- rushed to line their homes with insulation and replace drafty windows.

Now, with the U.S. economy in tatters, many figure they still cannot afford to let money escape through the cracks in their homes, even though oil has fallen to $50 a barrel.

Across the northern United States, contractors, home improvement retailers and nonprofit groups report that such weatherization efforts continue apace, as Americans prepare for a frigid winter.

Price swings in heating oil lash New England

Heating oil dealers are for the most part mom-and-pop operations in the Northeast and a bad decision in the current environment could be crippling.

"This is the most extraordinary circumstance I've seen in 30 years," said Chris Keyser, owner of Services in central Vermont that sells fuel products to about 5,000 customers.

In these conditions where oil prices swing wildly from one day to the next, one bad choice could put dealers out of business, said Shane Sweet, president and chief executive of the New England Fuel Institute, which represents about 1,100 dealers.

"If you bet wrong in this environment, there is no room for error," Sweet said.

My Overview of a Special Year 2008

When I wrote “My Ten Predictions for 2008”, crude oil was traded around $90. I only gave out a target of $100 since oil had been doubled in 2007 from $50 to almost $100 and I expected that there should be a correction in 2008. But oil had a good run in late December and at the 1st trading day of 2008, it already hit $100. I knew then that I set the target too low, and I should’ve predicted $125. Well, even so, it was still too low since oil went all the way to $147.

However, I don’t think the current collapse of crude to $50 has anything to do with demand and supply, nor did the $147 oil. The high was purely greed out of speculation and now the low is purely fear that people will go back and live in caves again to stop using energy. The reality is demand will grow more slowly than previously anticipated, but it will still remain at least flat, if not up, especially with the larger population from emerging market countries demanding more energy. In addition, peak oil is a fact, and it is always a big question whether fast economic growth and higher living standards, especially in emerging market, will be able to accommodate the fast growing population on mother earth.

Options Traders Bet June Crude Oil Will Rise Above $75 a Barrel

(Bloomberg) -- Oil traders placed bets that crude oil for June delivery will rise above $75 a barrel, a day before OPEC ministers meet in Cairo to discuss production levels.

June $75 calls, the fourth-most actively traded option, rose 18 cents to $3.95 a barrel, or $3,950 a contract, at 2:01 p.m. on the New York Mercantile Exchange. A total of 100 lots traded, down from 1,125 on Nov. 26. The Nymex was closed yesterday for the U.S. Thanksgiving Holiday.

Australia: Oil drops, but demand keeps diesel prices high

More pressure on diesel prices will come from developing countries, with BP estimating there will be greater demand for the product in the coming decades.

But while dismissing concerns about peak oil as "unfounded", Langford says demand may force refineries to use spare capacity, of which Saudi Arabia is the only country with significant amounts.

Pipelines race out of the mountains, into yards

DENVER (AP) — In the push toward more energy independence, massive infrastructure projects that will help to deliver it have clashed with cherished rights of land ownership.

Talisman Energy Considers Floating LNG Plant for PNG Gas Field

(Bloomberg) -- Talisman Energy Inc., the Canadian oil and gas producer with interests in Papua New Guinea, said it’s studying the use of a floating liquefied natural gas plant for its Pandora discovery in the Gulf of Papua.

The company believes the technology, which has yet to be used in a commercial project, may be suitable for developing the field, which is estimated to hold at least 1.5 trillion cubic feet of gas, Terry Buchy, manager of engineering business development at Talisman, said today in Sydney.

Ukraine stops electric power imports from Russia

Ukraine began to import Russia’s electric power in mid-September. However, the world economic crisis led to the reduction in consumption of energy resources in Ukraine, including of coal, gas and electric power. As a result, Ukraine even temporarily shut down one of the six rectors of the Zaporozhye nuclear power plant.

Head of British-Russian oil firm resigns

MOSCOW (AFP) – The chief of Russian-British oil joint venture TNK-BP resigned on Monday, in line with an accord which ended months of wrangling between its shareholders over control of the firm, the company said.

"TNK-BP received the resignation of its CEO Robert Dudley in accordance with the memorandum of understanding between Alfa Access-Renova (AAR) and BP in early September," the firm said in a statement.

"Mr Dudley's resignation is effective from today, December 1."

Big Oil is a Big Cheapskate to Charity

Strip away these choreographed, self-aggrandizing messages and you will find a corporation that needs to cut back on spin and instead pump up its charitable giving. ExxonMobil is in fact out-and-out chintzy when it comes to charitable giving—but then so are the other two largest U.S. oil producers, Chevron (CVX) and ConocoPhillips (COP).

Annual donations by the Big Three oil companies as measured by a percent of pretax net income (the standard yardstick for gauging corporate philanthropy) are consistently below half the national average for businesses that make tax-deductible charitable contributions.

Detroit's auto bubble pain

Automakers are suffering because sales were artificially boosted by cheap credit and the Big Three thought this could last forever.

Chavez seeks reelection, eyes presidency through 2021

CARACAS, Venezuela (AFP) – Venezuelan President Hugo Chavez on Sunday announced he was seeking a constitutional amendment to allow himself to seek reelection again, saying he hoped to lead the OPEC nation until 2021.

China, India Drop Inflation Controls as Economic Growth Slows

(Bloomberg) -- China and India lifted controls targeting prices of products from vegetable oil to natural rubber after inflation eased in the world’s fastest-growing major economies.

China today stopped requiring companies to seek approval for some food-price increases, the government said. India dropped a ban on futures trading in natural rubber, soybean oil, potatoes and chickpeas, the consumer affairs ministry said.

Finding fuels of the future

As the population of the Earth grows and demand for energy increases, more effort is put into the research of alternative fuels - and more fuel is added to a broader debate.

The National Corn-to-Ethanol Research Center on the campus of Southern Illinois University Edwardsville has been open for five years and is leading the charge in ethanol research and workforce development and training in the field.

US ethanol sector to shrink

Speaking at the American Bankers Assn.'s Agricultural Bankers Conference in November, Mark Lakers of Agribusiness & Food Associates said as many as 40 ethanol plants could be bankrupt by early next year of the roughly 175 plants currently under construction or on line.

Mandates driving surge to the river for hydropower

HAMILTON, Ohio (AP) — Many decades ago, cost-conscious Henry Ford turned to hydroelectric plants to power his car factories like the one by the Great Miami River, near this Cincinnati suburb. That assembly plant is long gone, but the power plant and the technology behind it isn't.

Far from it. The push to get electricity from moving water is only picking up steam.

Higher power

What if some nuns in Wrentham decided to put up a wind turbine? And then high school officials in Worcester? And a Canton bank chairman? And pretty soon, the question wasn't where do wind farms belong, but how many windmills can we squeeze in to every last available space? That day is coming.

Avista puts wind farm on hold

Avista will delay building a wind farm south of Reardan, Lincoln County, by at least two years, citing the high cost of wind turbines.

The Economic Crisis as a Window of Opportunity

Although some people are currently being lulled into complacency, by the “temporary” low per barrel price of oil (just under $50.00 per barrel at the time of this writing as opposed to $140.00 per barrel last summer). The price of oil will resume it's upward trajectory, soon after current contract hedging abates. During this lull in high oil prices, we can begin a major conversion of our automobile manufacturers into public transportation manufacturers.

After all is their any written law that dictates that the only legitimate form of transportation is the private automobile? What will happen, sometime down the road, when perhaps a renewed upward price spiral in oil prices places the automobile out of the price range of all but the wealthiest individuals. Some people will respond, "well we'll just utilize biodiesel or some other alternate form of energy for automobiles". Without even investigating this unproven possibility, why not consider transportation in a broader context, one that is not only tethered to “moving people from point A to point B", but in a much broader context that takes into serious consideration the important role of land use in transportation and energy expenditure.

From Poverty to Power

To spend or not to spend. Is that the question? With a financial crisis well and truly upon us, should we be doing all we can to get back in the old game or should we look to change the rules altogether? Duncan Green, Head of Research at Oxfam, suggests that, from the current financial turmoil must emerge a new and fairer global economic and environmental order

IF THE 1930s are any guide, the seismic shock hitting the global economy has a long way to go.

UN climate conf. concerned about financial crisis

POZNAN, Poland – A U.N. climate conference has opened with warnings that the global financial crisis must not divert efforts to reach a new treaty on controlling greenhouse gas emissions.

The prime ministers of Poland and Denmark have told some 10,000 delegates that the financial crisis will pass, but global warming will only get worse.

Climate change juggernaut on the horizon, UN talks told

POZNAN, Poland (AFP) – War, hunger, poverty and sickness will stalk humanity if the world fails to tackle climate change, a 12-day UN conference on global warming heard on Monday.

A volley of grim warnings sounded out at the start of the marathon talks, a step to a new worldwide treaty to reduce greenhouse gases and help countries exposed to the wrath of an altered climate.

I'm putting together a list of important books related to the world's energy situation, its consequences, and what to do about it for inclusion in my next column in the Times Argus and Rutland Herald. I'm thinking of books for people who want a basic overview of the situation, or who want to put something in the hands of friends and relatives to give them that overview.

Any suggestions? If so, please leave them in comments.

Here's a preliminary list (in no particular order) compiled through random notes scribbled down. I intend to go through the bibliography in A Crash Course and Depletion and Abundance for a more systemic review.

John Michael Greer, The Long Descent: A user's guide to the end of the industrial age

Dmitri Orlov, Reinventing Collapse: Soviet example and American prospects

Sharon Astyk, Depletion and Abundance: Life on the new home front

Richard Heinberg, The Party's Over

James Howard Kunstler, The Long Emergency

Rob Hopkins, The Transition Handbook

Zachary Nowak, A Crash Course

How about something on the economic crisis or economics in general for the post-peak-oil age? Krugman's The Return of Depression Economics and the Crisis of 2008 is due out tomorrow and is probably excellent (as far as it goes), but I haven't read it. Any recommendations for a good book on understanding the big picture current economic situation? Bill McKibben's Deep Economy is the closest I can think of.

And how about climate change? From listening to author Philip Sutton's conversations with Jason Bradford on The Reality Report, I expect Climate Code Red to be excellent. From reading Elizabeth Kolbert's articles in The New Yorker, I expect Field Notes from a Catastrophe to be good, if perhaps outdated two-and-a-half years after its publication. Other suggestions?

"The Last Hours of Ancient Sunlight," by Thom Hartmann


Author Thom Hartmann, in his book, “The Last Hours of Ancient Sunlight,” described a high tech company that he consulted for that went through several rounds of start up financing, and then collapsed, without ever delivering a real product. At the peak of their activity, that had several employees and lavish office space--until they ran out of capital. His point was that this company was analogous to a large portion of the US economy, which has the appearance of considerable activity and uses vast amounts of energy, but how much of this economic activity delivers essential goods and services?

Reading Last Hours of Ancient Sunlight, Overshoot (Catton) and Ishmael (Quinn), caused me to shut down my hedge fund and start learning about these topics full time.

And Orwell was right in 1984 - Ignorance is Bliss....

Hornborg, "The Power of the Machine" or Odum, "Environment, Power and Society" for energy/entropy/thermodynamics

Monbiot, "Heat" or Lynas "Six Degrees" (I think that's the name) vs Kolbert

Klein's "Shock Doctrine" or Phillips' "Bad Money" for economics

Homer-Dixon "Upside of Down" fits in with McKibben's "Deep Economy". "Limits to Growth - 30 Year Update"

cfm in Gray, ME

Climate Code Red is going to be expanded into book form? It's already Stephen King sized for a pdf.

Plan C is a well written tome, more balanced than some of your other choices - Orlov and Kunstler I'd say are closer to polemics.

A couple very important ones;

Overshoot: The Ecological Basis of Revolutionary Change, by william Catton


Limits to Growth: The 30-Year Update
by Donella H. Meadows (Author), Jorgen Randers (Author), Dennis L. Meadows (Author)


I second Soup's choice of Overshoot. I have read most of the books mentioned above and perhaps 25 or 30 others on the subject. Overshoot is by far the very best of all. It was written in 1980 and that what was and is happening should be obvious to anyone with true insight.

My second choice would not be a book at all but an essay you can read in about 20 minutes,
Energy and Human Evolution by David Price. Price's essay was written in 1995. Price died in 1998.

Ron Patterson

Thanks for the link! Very interesting :-)


I also second Catton's classic.

Add Georgescu-Roegen's 'The Entropy Law and the Economic Process':


Although these might seem kind of out in left field, they do offer practical advice of what people can do to become more self-reliant and, in the process, probably reduce their energy impact.

Emery - The Encyclopedia of Country Living

Storey Publications - Country Wisdom and Know-How

Faralones Institute - The Integral Urban House

Bradford and Vena Angier - Wilderness Wife


For some historical perspective on the confluence between economic and environmental disaster, set against a backdrop of human nature and drama, I’d suggest “The Worst Hard Time” by Timothy Egan.

It focuses on the dust bowl years, centered on Cimarron County in the Oklahoma panhandle.

A very sobering, cautionary tale that shows that humans do indeed have the capacity to alter the climate, and it was only about 70 years ago that we did it, with often gruesome results.

A better book than Egan's "Worst Hard Times" is Donald Worster's "Dust Bowl: The Southern Plains in the 1930s." 1979 More ecology in the latter work, and less of the tedious "human interest" stories.

I loved those "tedious human interest" stories.

It gives you a feel for the daily life during a depression. Im my experience, it seems those are the stories the "regular joe/jane" can relate too.

These two are just a couple that are companions to "crisis" tomes that speak to some of the values-shifts (values re acquired) necessary as we seek solutions:

The Art Of The Commonplace, The Agrarian Essays Of Wendell Berry, 2002

Animal, Vegetable, Miracle by Barbara Kingsolver, 2007

Although it's bound to be a controversial nomination, I would add Michael Ruppert's "Crossing the Rubicon" to the list. I've been re-reading much of it in recent days; he definitely understood Peak Oil long before many others, and I think his map of the broader political implications is at least worth seriously considering.

Phil - I agree about rubicon and in fact I find myself refering back to it often as things unfold.

With Speed and Violence - Fred Pearce

Homer Dixon's The Upside of Down is the best synthesis of the varied threats. I have been using it as a text in my Environmental Politics course.

Hi Carl,

For your book list:

ORDER BOOKS NOW - they will be sold out after an emergency, and then maybe you can never get them.

* Antibiotic Alernative: Natural Guide to Fighting Infection and Maintaining a Healthy Immune System, Cindy L. A. Jones
* Composting Toilet System: A Practical Guide, David Del Porto
* Crisis Preparedness Handbook: Guide to Home Storage and Physical Survival, Jack A. Spigarelli
* Doctors Book of Home Remedies, Series, Eds. of Prevention Mag.
* Donde no hay Dentista, Murray Dickson
* Donde no hay Doctor Para Mujeres, A. August Burns
* Donde no hay Doctor, David Werner
* Emergency Food Storage & Survival Handbook, Peggy Layton
* Encyclopedia of Country Living, Carla Emery
* Encyclopedia of Natural Medicine, 2nd ed. Michael Murray
* Gardening When it Counts: Growing Food in Hard Times, Steve Solomon
* Green Pharmacy, James A. Duke
* Herbal Antibiotitcs: Natural Alternatives for Treating Drug Resistant Bacteria, Stephen Harrod Buhner
* Human Manure Handbook: A Guide to Composting Human Manure, Joseph Jenkins
* Natural Alternatives to Antibiotics, Dr. John McKenna
* New Organic Grower, Eliot Coleman
* Organic Gardner's Handbook of Natural Insect and Disease Control, Ed. Barbara W. Ellis
* Oxford Handook of Tropical Medicine, 2nd ed., Michael Eddleston
* Practical Encyclopedia of Natural Healing, Mark Bricklin
* Rainwater Catchment Systems for Domestic Supply, John Gould
* Rodale's All-New Encyclopedia of Organic Gardenting, Robert Rodale
* Seed to Seed: Seed Saving and Growing, Suzanne Ashworth
* Storey's Basic Country Skills, John and Martha Storey
* The Herbal Medicine Maker's Handbook: A Home Manual, James Green
* Water Storage: Tanks, Cisterns, Aquifers and Ponds, Art Ludwig
* Where there is No Dentist, Murray Dickson
* Where there is No Doctor: A Village Health Care Handbook, David Werner
* Where Women have No Doctor: A Health Guide for Women, A. August Burns
* Wilderness Medicine: Beyond First Aid, William W. Fogey, MD

And I sent you an email.

Be Prepared (the Boy Scott motto)


Cliff Wirth

Hey thanks, and some (where there is no doctor for instance) are available online for free.

Thanks for the list cj. Just in time for Christmas:)

I found it here (you gotta give them some info):

I really like Nicholas Georgescu-Roegen's "The Entropy Law and the Economic Process". I believe it was published in the 1970s but it is a classic and not out of date. Particularly good are his explanations of what an elite class is and how elites function in a society. I feel when I read certain passages of this book like I am navigating the deep aquifers, heretofore unexposed, that connect humans to the earth and the universe. I read this book over and over again and I never get bored, there is so much in it. Some of the popular titles you listed (I have read most of them) are good and functional but for poetry and depth and the transcendent get "The Entropy Law and the Economic Process" and you can fill hours meandering through his excellent prose, almost IMHO a sacred forest. (OK I'll stop now!)

Also Tainter's "The Collapse of Complex Societies" is great.

Thanks to all for the suggestions! The column length is too short to incorporate them all, but several of them I hadn't thought of will definitely make it in. And some classics I've never gotten to, like Georgescu-Roegen, will be bumped higher up my to-read list.

The column is published every other Sunday; if Leanan's powerful search engine doesn't root out the column, I'll post a link here Sunday or Monday.


Some parents rethink toy-buying

"Parents have trouble saying no," said Allison Pugh, a University of Virginia sociology professor. She says parents often buy toys to avoid guilt and ensure their children feel in sync with school classmates.

"Even under circumstances of dire financial straits, that's the last thing parents give up," said Pugh. "They'll contain their own buying for themselves before they'll make their child feel different at school."

Amanda Almodovar says she encounters such families in her work as an elementary school social worker in Alamance County, N.C., where homelessness and unemployment are rising.

"I had one parent who said she'd prostitute herself to get what her child wants," Almodovar said. "It's heartbreaking. They feel inadequate as parents."

Insanity. Do they really think that's what their kids want?

One of the objections to the ELP Plan (linked above) was from someone who was concerned that moving to smaller, less expensive housing would handicap his son's future social prospects, because they would be perceived as having less wealth.

Somewhat along the same lines, after Alan Drake and a VP for DART (Dallas Area Rapid Transit) were interviewed on the local NPR station in Dallas, the assistant producer complained that he was living the lifestyle that they recommended--no car, walking, biking, taking mass transit--but he was finding, in almost all cases, that as soon as prospective dates found out that he had no car, they dropped him like a hot potato.

However, one would think that all of this is in the process of changing, at least for the more perceptive. One would think that a lavish lifestyle is going to be increasingly seen as a sign of stupidity.

There are going to be a lot of wives dropping husbands like a hot potatos once he can't deliver the life style she married him for. People would be better finding a mate who might want to marry you for your hoe and wheelbarrow and not your Hummer (at least he four wheeled Hummer.. LOL)

In the future that's barreling up fast, I'd rather stay single with my 1,000 square foot house and Prius than marry someone who wants a 3,000 square foot house and a Hummer.

"In the future that's barreling up fast,"

In that future if you have a 1000 sq' house you will have the pick of the litter (no women were harmed in this post).

I'm very, very glad that I married someone that, first, knew about all this stuff before I did, and two doesn't give a rats ass about how much money I make as long as I'm not a lazy SOB.

Doesn't this relate to the main problem with our brain hardwiring that Nate likes to talk about. It's all linked to status. Without a car in America, the assistant producer might be seen as low status and hence not worthy of female attention. There was a really extreme case of this reported by the telegraph,When the money goes, so does the toxic wife

'You loser!" screamed Katie, aiming a vase at her husband. "You've destroyed my life,'' she continued, hurling it. "Just look at my hair, look at my nails! You loser, you jerk, you nobody."
Katie's husband, Jack, whose property portfolio disintegrated in the financial crash, had just told his wife that she would have to cut back on her thrice-weekly visits to Nicky Clarke, the nail salon in Harvey Nichols, and the oxygen facials, chemical peels and seaweed wraps at Space NK.

Not only that, but they no longer had the money to pay for an army of bullied Eastern Europeans to wait on her hand and foot.

Worse was to come – the brow-lift would have to be cancelled; her black Amex card would have to be snipped in half; and there was no way, he told her, that he could carry on spending £28,000 a year on Henry's school fees at Eton.

Chloe, too, would have to leave the marginally cheaper (only £25,000 pa) Wycombe Abbey immediately.
Such was the aggression and verbal and physical abuse that followed that Jack was left with cut lips and blood streaming from a broken nose.

I artificially promote the idea that I don't have money. Not only does driving a 23 year old, $350 beater with 291,000 miles on it promote the idea of low monetary value to gold-digger wives, it also promotes the idea to people who might want to car-jack or mug me. I've also discovered the uglier your car, the more space people give you on the highway.

Once a girl has discovered who I am, then she discovers that I can afford that BMW that I will never buy. But by that point in time, she'll realize that I will NEVER buy that BMW, even if buying it with cash is pocket-change. It's not who I am.

Durandal, you write:

Once a girl has discovered who I am, then she discovers that I can afford that BMW that I will never buy.

No,no, no -- girls 'discover' who you are (in terms of IQ, social class, current and potential future income) from a distance of 100 versts. Even when wearing blindfolds.

Remember, if she's not a gold-digger, she's certainly a silver-digger.

See below under 'paydar'.

So if they can still tell that I make good money due to their "paydar" they should also be able to tell that I'm frugal by my mode of travel? Then again, even though a person may be frugal on things such as cars or house, that doesn't necessarily mean that the person is also frugal in doting upon others.

But I do enjoy a certain quote regarding the poor and those with wealth and humility- "A King may choose his garment as he will: there is no certain test: but a beggar cannot hide his poverty."

"A King may choose his garment as he will: there is no certain test: but a beggar cannot hide his poverty."

The rest of the quote (paraphrasing from memory):

"Therefore, love all, least one be a king concealed. Say you so? Fool! If one be a king concealed thou cansn't not harm him. Therefore strike hard and low and to hell with them..."

Liber al vel Legis

This is why it is a good idea not to have a car; that way the woman you end up with won't be disappointed when you get rid of your bling; you never had it in the first place. It's good to find out what the woman is made of before you get married. Also, you are, after all, talking about Dallas. My guess is that things would be a bit different here in Boulder County,Colorado.

Not Rich Enough to Drive a Buick

Speaking of Dallas, I am reminded of my favorite Dallas story, in "D" Magazine. A couple decided that they needed a new, larger SUV, because they had a baby on the way, in addition to the toddler they already had. This was of course an excuse. The truth was that they had the smallest SUV, a small Lexus, of their peer group. So, they were shopping for a large SUV, the $80,000 plus large Lexus, which was the "norm" for their peer group.

The husband went shopping and found that a new large Buick SUV, with the same size and luxury touches as the Lexus, could be bought for less than half the cost of the Lexus. The wife replied that she could not drive a Buick. Husband noted that Ross Perot drives a Ford Crown Victoria, why couldn't she drive a Buick? Wife replied that Ross Perot is a billionaire; he can drive whatever he wants to drive. Husband said, there it was. They were not rich enough to drive a Buick. So, they bought the large Lexus SUV.

Boy, I love those local 'lifestyle' mags, don't you? The local one here did a special on being green a while back... just advertisement for things like bamboo flooring and hybrids.

They did a 'report' on the local water management district that turned out to be paid advertisement. About a half page vaguely describing what the St. Johns River WMD does, a half page of fluff on the director, and 2 full page full color spreads of the director lounging around in what looked like very expensive, very stylish clothing.

neon9 - are you in Jacksonville?

Are there peak oil or sustainable living groups there?

I saw a "living green" issue of the Folio weekly when I was visiting. I am trying to push my mom into getting solar panels for her home, but I have no idea if there are any decent local installers. Do you have any info?

Thanks -

Orlando. No formal groups I am aware of. Those weekly alternative mags are interesting reading sometimes, but you get what you pay for usually (i.e., nothing). I looked into getting solar panels last year and never went through with it, I needed to get some trees trimmed first. Now I'm hoping the price drops more due to the credit crisis.

A word of warning, the state fund that helps pay for PV and such is out of money again. I did get a quote from 'Sunworks' www.sunworkssolar.com in J-ville and I was going to go with them due to the competitive price and better panels they offer.

Thanks for the info.

I hear you about the weeklies. Still, the Jax one is fun to read.

It is a shame that the only serious attempt at public light rail transport in Jax is a real laughing stock. Unfortunately, the city is sooooo spread out, the population density probably just doesn't work. But having the system serve a limited portion of downtown is not enough to be viable. Really need to have a spur come in from the beaches, but that is a 30+ mile line at least. I think that sort of idea is DOA in car(truck)-centric northeast FL.

I will look into the state solar rebate info, and the company you mentioned.

Yeah, I don't think the car thing would be a big deal in New York or Boston. Lots of people who have plenty of money choose not to own cars in those cities. It's more trouble than it's worth.

As for the trophy wives...what did they expect? Old, overweight, and/or unattractive rich guys marry women half their age who look like supermodels...are they really surprised to find out that when the money's gone, so is she?

And speaking of women and cars... Watching football yesterday, I noticed a lot more car ads aimed at women. Not surprising; market research has shown that it's women who make the buying decision when it comes to cars. And they don't really know how to appeal to women. They tried makeup mirrors and cup holders, but women tended to be more insulted than impressed.

Now, the trend seems to be selling cars as a fashion accessory. You wouldn't want to be seen driving last year's SUV, would you?

Uh, boy. They still don't get it. I don't think many women will be buying $35,000 fashion accessories in this economy.

... but he was finding, in almost all cases, that as soon as prospective dates found out that he had no car, they dropped him like a hot potato.

However, one would think that all of this is in the process of changing, at least for the more perceptive. One would think that a lavish lifestyle is going to be increasingly seen as a sign of stupidity.

Perhaps display of a lavish lifestyle will no longer be acceptable -- e.g. girls won't lie back on demand just because you own the proverbial Hummer with a giant technicolor phallus projecting from its bonnet.

But discreetly displayed wealth will never harm the male in his search for a partner. In fact, the male doesn't normally have to display anything, since most women possess a kind of 'paydar'.

See Urban Dictionary:

paydar - 1 definition - A built-in device that allows a woman to sense a man's income from a distance. Cf. "gaydar".

You could be right.

Discreet luxury sign of the times

Don't expect to see a big Patek Philippe logo splashed across the face or band. The artisanal brand is recognizable to those in the know, which is how its clientele prefers it.

Especially these days. Patek Philippe is the perfect example of the discreet luxury brand.

Personally, I think it's insane to buy a million dollar watch. I don't think I would do it even if I were Bill Gates.

it all boils down to the need - want mixup. we as adults often don't know how to make the difference, so why should we expect this from children intoxicated by advertising?

kids say they "need" stuff all the time, brandware clothes, gadgets, toys, and whatnot. it's a parent's duty to teach him to make a difference

I think it's more than that. I think it's a reflection of what has in the past couple of decades become an extremely child-centric society. Perhaps because working parents feel guilty about not spending more time with their kids, or are simply too tired to discipline them. Perhaps because Boomers have carried their idealism into the child-rearing arena. Perhaps because smaller families mean children can be doted on in a way that wasn't possible when families were larger. Many of my friends with kids don't teach them any manners because they "don't want to stifle their creativity." Even toilet training is happening much later these days. My mom, a teacher, has to teach "self esteem" now along with the three R's.

I think the kids will probably be fine, no matter how coddled they are in childhood. Their parents are another matter. I suspect they'll have a much harder time adjusting to the new reality than the kids.

There's all those factors, and there's also the extreme cruelty of kids to each other in school - some of them will bully anyone who seems the least different. Lazy school authorities are often happy to leave the bullies at complete liberty, as the only thing that may move them off their plush bottoms is the possibility of looking bad on TV news should the bullying clearly impinge on the special privileges of a "protected category". Otherwise, they certainly don't want to spoil their fine day by facing down the negligent, selfish, uncaring parents, who will often respond furiously whenever their wild, wicked, bullying little dear is called to account in even the smallest way. That parental attitude may be where the "self esteem" movement has finally come full circle, and, utterly predictably, not in a nice way. (Oh, and those un-"stifled" wild things hardly ever "create" anything except havoc.)

But yes, the kids might still be able to adapt, while their parents will indeed be another matter.

"become an extremely child-centric society"

I agree completely. But I would add that at this point in history, most adults in the West are little more than children with adult bodies.

The more I read about the illness our western culture has become, the more I feel this is a good time for a die-off. The sooner the better.

Reading accounts of life 100 years ago, most children were working pretty hard by the time they were 10, either helping on the farm or running errands, working in a shop etc. Now I know many 10 year olds and they are pretty bored in school. They do sports in order to burn off their extra energy and connect with friends, but what a waste of time. I think they might be better off working, learning a trade, spending the day more freely doing productive things instead of sitting at a desk for 6 hours learning things that they would learn anyway or don't really need to learn.

Of course it's really taboo to voice these opinions! (A parent saying studying isn't important!! What next??)

And the parents' focus on material things is just another unhealthy manifestation of what used to be normal regard for children's well-being. In the industrial age this normal impulse (like so much else) becomes distorted by excess, so that kids "need" $200 electronic toys to keep up with friends. But I just say "no" and laugh when I am asked to buy one. Of course it's vastly annoying, because they aren't just content with simple things like kids were before, like a piece of ribbon or a tangerine.

It's all to do with advertising. The way supermarkets are designed nowadays is really a science in psychology and human behavior. The product placement, the fact that some of the items that kids are most likely to seek out are placed right at the bottom shelf and the way the products are branded and labeled are designed to attract the kids. Once most kids get new stuff, they chuck it out after playing with it a few times, It becomes boring, and than the next big want it and cry for it await.

Yes, I agree. We didn't have much money when I was growing up. I rarely got what I wanted, so when I did, it was memorable. And I have to confess: I didn't really want the things I thought I wanted. (Bob will be amused to hear that the one toy I really, really wanted when I was six was a little wheelbarrow. I got it, played with it briefly...then the man next door took it to use for his garden, and I let him.)

My favorite toys were given to me by my great-uncle, and were things I would not have picked out myself. Like Lego. I played with the Lego he gave me from the age of six until I went away to college. I also used an art supply set he gave me throughout my childhood, and still have and use parts of it today.

Brings back memories...the best 'toys' are the ones that allow people to create/make/build many different things...Legos, Erector Sets, Lincoln Logs, Tinker Toys, Kinex, art kits, easy-bake ovens, Playdoh...then graduate the tykes to science/electrics/chemistry lab kits, then hand tools, then power tools, pottery wheels, and teach them the fine arts of cooking and gardening when they are older. Train sets are cool too...especially if you have some room to build something fancier than the starter oval...and if you have the money to afford model train stuff...by the price of it nowadays, it seems as if it is made of gold. Real kites (as opposed to cheap toy kites)and model rockets and airplanes are great fun, but you need a lot of space where someone isn't going to chase you off their land/sue you/arrest you for violating some city/county ordinance.

I think the reason the toys I mentioned withstood the test of time for me were because 1) they were suited to my interests and 2) they were the kind of thing that kids of all ages can play with.

My great-uncle didn't live near us, and didn't have any children of his own. He didn't know much about kids, so he would ask my mother what I liked. Therefore, the toys he bought were tailored to my talents. (I grew up to be a mechanical engineer who moonlights as an artist - interests that were evident even when I was a kid.) Nobody else did that. My parents tended to buy me things I needed, like school clothes, or things I bugged them for. My other relatives had children of their own, and bought things for me that their kids liked. A lot of girly things like dolls and dresses. But I wasn't really a girly kid, and didn't play with dolls very often.

My opinion:
I think it's all a throw-back to our pre-revolutionary colonial society. American society is just a transplanted English society. If you study the way the "nobility," aristocracy, landed gentry, yeoman, working classes, etc. were transplanted across the ocean one can begin to see that social status (in general) is driven by the way money is earned (or appears to be earned).

These preoccupations with the earning of money affect everything from keeping up with the Jones' ... to how town and national politics are run... to the entertainment industry... and so on. Alexis de Tocqueville saw and recognized it... it's no different now than it was back then.

As long as we are (and probably forever will be) trapped in the facade of keeping up appearances no progress towards enjoying Life can ever be made.

Leanan - I grew up in southern cal across the street from Mattel. One day a group of old (We were 6 to 10) folks came out of the complex and handed us kids each an etch-O-sketch to gage our interest.

I loved it and started to crank out structures. Most of the other kids scribbled then lost interest.

I later learned you had to have the ability to think in multi dimensions to enjoy it as a kid. Now it drives me nuts. I still don't know how it was marketable.

I'll take solidworks or even macs Graphite any day.

Our kids taught themselves all sorts of stuff I could not do (still can't), like tying complex knots, juggling, stilt walking, the tin whistle, fly-fishing in the local river and giving brilliant parties for small kids. A bit handicapped in adult life by not having the advanced thumb brain connections for hand-held IT, but they remain talented enough and think for themselves and learn fast.

We would not even think about letting children dictate the content of lessons at school, so why would parents even consider letting children dictate the learning content of things at home (ie toys, TV, video games, etc.....)? Parents should make the decisions on what children get or see or play with to ensure the childrens learning environment.
All children need someone like your great-uncle!
I guess I will never understand how "the majority" of people think.

We would not even think about letting children dictate the content of lessons at school

What do you mean "we," Kemosabe? Lots of parents do indeed let their children choose what to study.

"We would not even think about letting children dictate the content of lessons at school ... " Which is indeed a shame that the experiences and local needs of the children are not even considered.

Because children learn lightning-fast when it's something they want or need to learn. And the overwhelming bulk of the educational experience never addresses the individual's needs.

And there's also the issue that not all people need to learn the same thing at the same time at the same rate in the same place from the same person. Do they?

We don't inherit the world from our parents, we borrow it from our children, and we'd do well to pay more effective attention to their environments. And to remember what it was like to be children ourselves.

Hello Leanan,

Kudos on wanting a wheelbarrow as a child. One of my earliest memories is being given fast and swooping wheelbarrow rides as a toddler: the angle-banking into turns, the swirling scenery, my dad changing the elevational view by moving the handles up & down while moving along, my sensing of the g-forces, wind in the face, changing sunlight angle,etc. :)

My father [died 2005], before meeting my mother, for a short time had a WWII surplus single-engine plane: He was trying to impart to me the thrill of flight with the wheelbarrow ride.

The best present I ever got was my first bicycle so I could repeat the swooping and speed thrills. Lots of bicycles and motorcycles later--> still nothing compares to 'knees in the breeze' while carving a sharp series of turns over undulating terrain.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Bob, thanks for rekindling an old memory. The wheelbarrow ride was a treat.

Hello Ergman,

Yep, every parent or older sibling should give a toddler great circling, swirling, and spinning wheelbarrow rides--great fun.

If, in the years to come, if it in fact turns out that my last 'free ride' is to repeat the increasingly iconic photo of a deathly sick and/or weak person being moved in a wheelbarrow: I plan to calm myself by constantly murmuring the 'Circle of Life':

[young boy sitting/smiling inside bright yellow wheelbarrow]

[bicycling to work while balancing an inverted wheelbarrow on head]

[Last ride?]

Saw the first 'last ride' pic- http://cache.daylife.com/imageserve/03aXeIW22e4sZ/610x.jpg - and what's sadly ironic is the election poster for Mugabe behind the person being wheelbarrowed. Most likely it was Mugabe's incompetence and greed that caused that poor person's need to be wheelbarrowed.


your last paragraph captures the joy of mountain biking perfectly, which is why it is my joy. Even better, one earns the "knees in the breeze" by climbing to the top with ones own lungs and muscles, as opposed to all the other fossil-fueled industrial "gravity sports"...skiing, snowboards, dirtbikes, atvs etc..a pox on them all !!

Admittedly self-righteous, Probe^3 :)

ps..love your posts

Of course, you wouldn't be doing the mountain biking without those other gravity sports, mainly skiing and snowboarding. I've done both, so I'm not self-righteous about either. Taking a ride up the lift is surely a lot easier than riding up on a bike, but the torture of the boots surely makes up for it. :)

I was really struck yesterday by a passage (I will quote below) in Paul Krugman's THE RETURN OF DEPRESSION ECONOMICS AND THE CRISIS OF 2008. Actually, I was reading an excerpt of the book that appears in the December 18 issue of THE NEW YORK REVIEW OF BOOKS.

TODers will know, of course, that Krugman is the NEW YORK TIMES columnist, Princeton economics professor, and winner of the 2008 Nobel Prize in Economics.

What is so striking about Krugman's take on the present crisis is that, despite his presenting it as something quite new and different, it seems simply to take for granted the paradigmatic presupposition of advanced capitalism that continual economic growth is both necessary and possible. The possibility that scarce resources could in any way be a problem is in fact explicitly ruled out.

Krugman's presupposition is remarkable both because his views will presumably be taken very seriously by President Elect Obama and his economic advisors and because they are so arguably off the mark.

Consider the following passage from a section in which Krugman is discussing "The Power of Ideas":
"The quintessential economic sentence is supposed to be 'There is no free lunch'; it says that there are limited resources, that to have more of one thing you must accept less of another, that there is no gain without pain. Depression economics, however, is the study of situations where there IS a free lunch, if we can only figure out how to get our hands on it, because there are unemployed resources that could be put to work. The true scarcity in Keynes's world--and ours--was therefore not of resources, or even of virtue, but of understanding.
"We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men."

Now, I'm no economist, but it strikes me that Krugman and those who take presuppositions like this seriously need to get out and about more often. One of the obsolete doctrines that seems to clutter the minds of many economists is the notion that continual growth is possible in a finite environment. It is astonishing to me that so few mainstream economists seem at all worried about the finite natural resources--including, of course, petroleum--that we humans have available to us.

The longer our thinking is dominated by the dubious assumption that the only obstacles to "world prosperity" are obsolete ideas, the more catastrophic will be our fall to earthly reality.

Yes, Krugman, like most economists - heck, like most people - doesn't accept limits to growth.

Surely you weren't expecting Obama to be any different in this respect? Job one for him will be to restore economic growth. That is how he will be judged as a president, and he knows it.

No, Leanan, I'm not expecting Obama to be any different. He could not act on the truth in this respect, even if he knew what it is. Nonetheless, I am astonished anew every time I read something such as Krugman's piece. It's the Emperor's Clothing once again.

Talk about fiddling while Rome burns! It seems as if we as a species are determined to drive ourselves off a cliff at top speed.

I try desperately not to give way to thoughts of doom and gloom, but willful ignorance and not wanting to face the most obvious truths by those in high places is really discouraging. Not that I'm a youngster given to emotional excesses (I'm 66 today!); and I am by professional training an historian of intellectual history, so I know a bit about willful ignorance and not facing obvious truths.

I suppose it's good that I never cease to be amazed by things, but these are not the things I'd like to be continually amazed by!

Sorry for the rant! :o)

And thanks to all you folks on TOD who continually provide information and analysis "about energy and our future."

Leanan, I think Krugman's views are more nuanced that those of 'most economists' (do we have a recent survey of economists views on the matter of limits to growth?)


"Will limited supplies of natural resources pose an obstacle to future world economic growth?

How you answer this question depends largely on what you believe is driving the rise in resource prices. Broadly speaking, there are three competing views.

The first is that it’s mainly speculation — that investors, looking for high returns at a time of low interest rates, have piled into commodity futures, driving up prices. On this view, someday soon the bubble will burst and high resource prices will go the way of Pets.com.

The second view is that soaring resource prices do, in fact, have a basis in fundamentals — especially rapidly growing demand from newly meat-eating, car-driving Chinese — but that given time we’ll drill more wells, plant more acres, and increased supply will push prices right back down again.

The third view is that the era of cheap resources is over for good — that we’re running out of oil, running out of land to expand food production and generally running out of planet to exploit.

I find myself somewhere between the second and third views."

Dunno about "most economists," but Krugman is on the record.


Your link has Krugman concluding:

"But anyway, while the Limits to Growth stuff of the 1970s was a mess, the history of energy technology doesn’t support extreme optimism, either."

Read the article, again, please. He is critical of the methodology to the Limits to Growth people, especially Jay Forrester. Krugman has also been disdainful of Galbraith (senior) for the same lack of technical competence he finds with the Limits to Growth people. That certainly didn't affect Krugman's embrace of liberalism.

Don't give up on Krugman, yet. He is obviously a guy impressed by evidence. His is a discipline challenged by its inability to move beyond its mechanistic analogue, to account for the perennial contribution of nature, to escape the idea that the economic process is not affected by qualitative change in the environment, including the resource base.(Georgescu-Roegen, 1971)

It is no easy matter, as I'm sure most ecological economists would attest. Paul Samuelson admired the cogency of Georgescu-Roegen's image of economics as an hourglass rather than an undamped pendulum, but he, himself, did not escape the mechanical analogue (pendulum). Maybe Krugman will. He's not going to be able to stay suspended between his second and third options for long.

Near as I can tell, he accepts that technology may not work as smoothly as we hope - that the economic dislocation may be painful while the adjustment occurs, and there may be unpleasant side effects, like pollution - but he doesn't make the jump. The one to the logical conclusion about infinite growth on a finite planet.

And I think it's because growth is how liberals and conservatives both justify inequality. The end of growth means accepting a permanent lower class to support us in the style to which we have become accustomed. That is really hard to swallow, especially for liberals like Krugman.

The end of growth is like the death of God; the hollow promises will then be seen as hollow; trickle down will be justly seen as the pissing in the wind that it really is. The poor are kept down because they are offered little pieces of the ever expanding pie, not noticing the rather larger pieces continuing to go the rich. Redistribution is necessary in a no growth world and is a prerequisite for making it tolerable. But we will soldier on a for awhile living the illusion of infinitude.

It is perhaps worth pointing out here for any people who are new to the site that the idea of Peak oil does not necessarily imply acceptance of the idea that we have at this point in time reached a stage beyond which no further growth is possible.

In practical terms it is clear that for many years at least growth is likely to be very difficult, but in fact the tautology that growth cannot continue forever in a finite system tells us very little about when such limits will be reached, and so although it may be something of an authorised version for many people here, it is not an article of faith for everyone who accepts the peak oil arguments.

Many constraints including those of water and soil and declining quality of ores undoubtedly give some real substance to arguments that such limits may be close, or indeed may have been exceeded.

By the time we actually reach overshoot, it will be too late to do anything about it. Agreed, that a whole host of resource factors will bring us to that point, peak oil just one amongst many. We can probably flog the planet a bit longer before we are actually forced to live with no growth in material product. No one knows when this point is, but perhaps we should consider leaving a little margin for error. In any event, when it comes, we will have to construct a different set of social and economic arrangments, or we will descend into anarchy and chaos. I think it is up to true leaders to help prepare the peeps for the inevitable.

We take the temperature of the economy on, literally, a second by second basis. In the morning, the time until the opening bell is measured to a hundredths of a second. Most of our brainpower seems to be devoted to the task of analyzing or figuring out how to game the economic and financial system. If we only spent a hundredth of the time and brainpower figuring out how to have a tolerable planet going forward, perhaps there might be some hope.

You refuse to read the 30 year update to limits to growth. Do you really expect anyone to take you seriously on this subject?

Perhaps you have not read what I said. I merely stated that there were a variety of opinions on this site and that the acceptance of the idea of peak oil does not necessarily imply acceptance of the rest, and that there are several people including many who have contributed articles here who would not agree.

As I have stated previously I do not go along with your notion of compulsory reading lists.


I just eliminated the -1 from your original post, because I think the issue you raise is one that needs to be seriously discussed. Your opinion on the matter stikes me as entirely valid and reasonable. Speaking for myself, I agree that the relationship between Peak Oil and Peak Growth is not an intrinsically necessary one, since other energy sources could in principal be substituted to enable growth to continue once oil peaks. However, I think that the nature of the current economic crash is demonstrating that, as a matter of non-necessary fact, the American economy and physical infrastructure have becoming so configured in the decades and more leading up to Peak Oil that their structural features do in fact imply that Peak Oil=Peak Growth. One obvious reason for this would be that the physically dispersed nature of American homes, businesses, and industry make the burning of oil derivatives a necessity in order for any other economic activity to take place. Then there is also the whole matter of limits on all alternatives to oil (i.e.: Peak Energy is not far distant), together with limits on the scalability and substitutability for oil of these alternatives.

Actually, IMHO, this entire question of whether Peak Oil = Peak Growth merits a thread all on its own. Perhaps someone like Gail the Actuary or Nate Hagens could give the question some thought and get us started with a post?

I'm actually undecided on the subject.

It seems to me that there are good reasons for confidence that enough energy can be found, which would make a lot of things easier to solve, for instance water shortages and lower ore grades, but in practise things may come apart too quickly to allow this, so the point may be moot.

I also tend to be rather uninterested in theoretical concerns, and as growth has stalled or gone into reverse for most of the world now, I would fully go along with those who are arguing that the attitudes and institutions appropriate to periods of high growth are totally unsuited to present conditions, and that a failure to face the fact that at least until energy supplies are sorted out then we are unlikely to grow at all, and that that will take many years, make the practical differences rather small.

However, it was not my intention to argue the case either way, but simply to state for those who might not know this that a large diversity of views exist on the subject within the group of people who are peak oil aware.

Another huge factor that many (myself included) tend to overlook is the variable of human freedom. Outcomes of the sort such as whether Peak Oil=Peak Growth are NOT determined solely on the basis of pre-existing physical conditions. (Well, actually, this particular matter might be more constrained than some others, such as whether it is reasonable to propose that society might transition gently into a steady-state economy.)

Much of my own profound pessimism re Peak Oil has to do with the fact that I think humanity will generally make the worst possible choices in response to the various aspects of Peak Oil. I think that this also implies that Peak Oil probably does equal Peak Growth, among other things.

Everybody but me seems to know what is going to happen.
Simple, immediate things like that we will get short of oil soon are fine, but as you go down the road too many variables come in.

Will we all blow ourselves up? Quite possible, and I am none to convinced by the arguments of those who think we will peacefully power down.

Will we manage to, say, build solar power at 30 cents Kw?
Quite possible, and that would change things greatly.

Then again, climate change could do for us all.

I don't think we know as much as we feel we do, and since I for one certainly did not expect the latest fall in oil prices, for instance, and not many did, I rather doubt my own or anyone else's ability to know how things will pan out.

As I have stated previously I do not go along with your notion of compulsory reading lists.

I do not understand your aversion to information.

You are clearly interested in the topic. The book is considered one of the most important and influential in the topic.

Even if it doesn't change your mind you will be at the very least better informed.

Not only that but it would go a long way to understanding the view points of other posters on this board (whom you have complained no longer wish to debate the subject with you).

Here is the synopsis for the 30 year update.
Its very short, a couple of minutes of reading.

Please at least read that. Then in the future you will be at least starting from the same reference point when discussing the issue.

I can't for the life of me think up a valid reason for refusing to read the book.

I would consider this to be an important read as well


I find the links provided do not differ substantially from my recollections from reading the original 30 years ago, and so your inference that I was uninformed was incorrect.

Dave, The models in TLTG have change very dramatically in the last 30 years. The best case scenarios 30 years ago are no longer even remotely possible. 30 years ago there existed the possibility that with dramatic effort pop overshoot could be avoided. In the 30 year update Meadows states again and again that human population has significantly overshot the carrying capacity of the earth. And the only way to get back to a sustainable pop while trying to limit the damage to the earth calls for unreasonable assumptions. For example you would need the adoption and enforcement of population control across the whole of the human pop starting immediately. And that was nearly 10 years ago when the modeling for the 30 year update was done.

There is no way you can approach this with an open mind and come to the conclusion you have. The conclusions of the original limits to growth and the conclusions of the 30 year update are completely different.

You are doing the equivalent of putting your fingers in your ears and chanting La La La I can't hear you...

I found the methodology of the original unconvincing and am no more persuaded by it's follow up.
I also find your continual harping on about it tiresome, together with a manner which can hardly appeal.
If you wish to discuss it further, please do so with those who are interested in the subject and in your opinions on it.

That's amazing because the methodologies have turned out to have been extremely accurate.


A Comparison of the Limits to Growth with Thirty years of Oeality.

This paper focuses on a comparison of recently collated historical data for 1970-2000 with scenarios presented in the Limits to Growth. The analysis shows that 30 years of historical data compares favorably with key features of a business-as-usual scenario called the "standard run" scenario, which result in collapse of the global system midway through the 21st Century. The data does not compare well with other scenarios involving comprehensive use of technology or stabilizing behaviour and policies.

What is unconvincing about that?

Accurate? I'm not sure what they've actually predicted considering there hasn't been any feedbacks that would actually stress the model: Like when resources actually run low and how they impact growth rates and resource substitution. Untill you actually hit resource depletion World3 model is identical to the unlimited resource fantasy, so saying its 'accurate' is a bit meaningless.

Whats unconvincing?

Assuming a constant consumption growth rate indefinately.
Static reserve rates when mineral resources are often clearly log normal in distribution (160 trillion tonnes of fissionables for instance)
Assuming static technology.

Its naive extrapolation of an exponential function, but its meaningless for making projections.

If growth rates slow or stop because resource prices go higher, the model fails to predict.
If resource substitution and reserve growth continues (and we have no reason to expect it wont for any log normal distributed resource) we have upper resource limits orders of magnitude larger than projected.
If technology continues to advance, the resource limits are further extended. At some point its not unreasonable to expect a majority of industrial activity off earth.

You didn't read the paper did you...

"Buy land, they're not making it anymore."- Mark Twain

I'm stuck on the third view because logically, it's the only one that makes sense.

The first might be correct short term... A few people are seeing the wall, made a big hubub about it and the herd mentality came and took over and pushed oil to $150/barrel. Now we're down to $50 (economically induced), and other commodities have crashed, this has taken the back burner again to the Economy, the latest terror attack, and Obama.

The second view assumes there is more land to drill or plant. We've taken all the good stuff already... We've fished out the good parts of the ocean, we've planted the good acres of plains... We're now stuck with the leftovers.

The third view is correct because we have a geometric demand on resources (world population doubles every 61 years) and a finite resource base. Bob Shaw- a.k.a. Totoneila- is absolutely right. We are yeast in a petri dish, expanding until we consume all the resources around us and die in our own waste.

Hi Geckolizard,

I agree with all you say until the last sentence. The difference between Homo sapiens and yeast or snowshoe hares is that we recognize cause and effect, can solve problems and do adapt rather quickly to changes. Given Peak Everything, there's a huge struggle in store. I have no idea how things will play out or when the situation in the developed world will get really serious but it isn't predestined that we'll roll over like yeast. Maybe we'll rise like yeast. (Ouch, sorry)

Just because humans understand cause and effect doesn't mean that we can overcome the evolutionary imperative to multiply to the absolute maximum possible and then just a bit more. Besides, yeast does not "roll over." Instead, it starves and dies despite all efforts to the contrary. I would say that the difference between humans and yeast is that we *know* that what we're doing is going to wind up with bad consequences.

I agree. When we say "humans understand..." what we really mean is a very small minority of humans understand.

The majority is barely, if at at all, aware of the problems facing us. And the majority of people do not understand anything beyond the rules of their daily/famly life routine.

The analogy is poor. You could say that the sugar is the stars and the vat is the universe, but all you're really saying is that human civilization will grow untill it can't.

Thanks for the feedback artaxt, sendoilplease and Denzakin. It is true that eventually Homo sapiens will either evolve or become another dead end on a cladogram. My point is that it is not yet determined which it will be. It is certainly not looking very good at the moment, I agree, but the outcome is not a done deal until the last human is dead.

One of the challenges communicating on TOD is time frame. What are we talking about? What will happen in one year? Five? Twenty? 100? 500? Ace and Khebab disclaim that after 2012 predicting oil production outcomes is far less certain than between 2009-12. I ask what can we do today to try and keep from becoming a dead end species and taking a bunch of others with us?

For we who read and write here, the problems are known and the window of opportunity to make a difference is our remaining useful lives. I have 30 years or so to make a difference and I'll not be sitting around like yeast. I'm pretty sure you all won't be either whether it means preparing beans, bullets and band aids, raising your activist voices, returning to the land or something else. I'm working on the first three and have a lot to do yet.

Hey Beingtime,

You'll like this from Chris Shaw:

Would you think me a jester if I said that the one true currency is energy? It always was and always will be. Economics is the game of Tiddlywinks that we can afford to play only in the midst of easy, abundant energy. Energy is the donut, economics is the hole.


Krugman lives in fantasy land. When was the last time that a right wing economist got the Nobel prize in economics? The economics Nobel prize winners as Nicholas Nassim Taleb (author of the black swan) says are a bunch of idiots. Anyone remember Long Term Capital Management, who were the owners? Nobel prize winners! I think one of them blew up a hedge fund this year as well, again.

It's all a warped ideology. The best source of insight into the crisis has been from Mish Shedlock, Charles Hugh Smith from oftwominds and The Automatic Earth.

add in jim puplava & tod commenter don sailorman; differing views from those u refer to though.

Add Chris Martenson, Karl Denninger (in parts), Robert Prechter, Peter Schiff (in parts)...

When was the last time that a right wing economist got the Nobel prize in economics?

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel is not a Nobel Prize

so, technically - never!

(I'll get me coat)


What is so striking about Krugman's take on the present crisis is that, despite his presenting it as something quite new and different, it seems simply to take for granted the paradigmatic presupposition of advanced capitalism that continual economic growth is both necessary and possible. The possibility that scarce resources could in any way be a problem is in fact explicitly ruled out.

I think you mis-read the Krugman quote above. I think he is saying that normal economics IS about the allocation of scarce resources, as in "'There is no free lunch'; it says that there are limited resources, that to have more of one thing you must accept less of another, that there is no gain without pain. ".

However, in discussing Depression Economics, he is saying in this case there "there are unemployed resources that could be put to work.". From the basic definition of a depression, in a depression there are always large numbers of un-employed people. These un-employed people are clearly a "resource that could be put to work".

And economics aside, everybody has the capability of doing something productive with their time, whether that production is weeding a garden or darning a sock. Krugman's point is that the issues for economists in a Depression environment are different from the usual concerns of economists, and finding ways to use the available and wasted time of the un-employed is central.

Although I have plenty of skepticism about mainstream economics, when someone calls Krugman an "idiot" the epithet says more about the commenter than Krugman. Krugman is clearly a brilliant man, as anyone who has made the effort to read his articles and books can see. Disagreeing with his conclusions with a rational arguement should be what TOD is all about, but calling Krugman an idiot is a waste of bandwidth.

Point noted on the "idiot" comment, it's my young age I believe, I become to passionate. I'll dig up some stuff on why his version of economics is wrong. What I personally believe is that there are a lot of brilliant economists out there but we tend to agree with those who have similar world views. Nouriel Roubini wasn't particularly famous or well liked because of his predictions, even the peak oil community is seen as a bunch of outsiders simply because we present ideas that are not in line with the world view.

The main problem with all these fiscal stimulus that Krugman suggests, to the tune of 700 billion dollars is that they are all completely missing the point. Everyone is trying to figure out a way on how to keep the credit bubble going, spend, spend, spend! 700 billion fiscal stimulus packages have been suggested for America, 586 billion for the Chinese. The root cause of the great depression was brilliantly explained by Murray Rothbard and the Austrian School of Economics. The problem can not be the same as the solution, the problem leading up to this crisis was excessive debt, malinvestment and spending recklessly. So spending more can't be the answer. Karl Denninger has it correct when he says that the Federal Reserve should be abolished and Ben Bernanke fired, everyone is hiding the fact that the US banking system is insolvent. The truth is not being let out and no amount of fiscal stimulus is going to get the economy going again. As it was a bubble economy to begin with.

Also let us assume that Krugmans theory is correct, his medicine is correct that we need a huge fiscal stimulus as well, it seems to me that current economic theory is highly incompatible with the limitations of a finite planet. If the economy recovers, it will only accelerate our downfall as we continue to hurtle full speed ahead toward the energy cliff. As modern economics is about more, more and more. More resources consumed, more waste etc. Jay Hanson's argument with regard to corporations is quite correct, when he says that corporations have become monstrous organizations that use up the earths resources and whose sole purpose is to convert them into garbage.

This is evidenced by the effects of climate change, the sea of plastic in the pacific ocean, the holes in the ozone layer, the cutting down of precious rainforests, global species extinction, melting of the polar ice caps etc.

Basically this article sums up the main qualms that I have with Krugman's ideas as well as other economists who want to spend their way out of trouble.

As if Paul Krugman winning the Nobel Prize in economics isn't reason enough for us to be less-than-sanguine about the future, everywhere we look we see well-respected analysts advocating increased government regulation and spending -- effectively the same policies that transformed a financial crisis into a drawn-out depression during the 1930s -- while completely ignoring the root of today's problems. ....

Whether the advocates of increased government spending and the various other re-inflation policies realize it or not, at the root of their proposed 'solutions' to the crisis is the idea that it is possible to get something for nothing. It is axiomatic that an increase in production must precede a sustained increase in consumption; that saving is the basis of long-term economic growth; that no individual can become rich by spending more than he earns; and that no country can become wealthy, or recover from a recession, by consuming more than it produces.

And yet, most commentators have deluded themselves into believing that you can get around the problem of inadequate real savings by simply increasing the supply of the medium of exchange, and that you can bypass the need for increased consumption to be funded by increased production by simply getting the government to spend like a drunken sailor.

Some more thoughts on regulation and fiat money and central banking

The current predicament was not caused by insufficient government regulation and the risk of future disruptions will not be mitigated by increased government regulation. The mortgage market was already heavily regulated prior to the crisis, but had it been even more regulated and had the regulations severely crimped, rather than boosted, the abilities and desires of financial corporations to expand the supply of mortgage-related instruments, then the focal point of the boom would have shifted;

However, bubbles would still have formed somewhere and these bubbles would subsequently have burst, leaving financial wreckage and major economic dislocations in their wake (the bust is always and everywhere a consequence of the preceding boom). The reason is that the boom was caused by the central bank fixing the price of short-term credit at an artificially low level for a prolonged period, thus encouraging trillions of dollars of investments and new business ventures that should never have seen the light of day.

With the bailout of the financial institutions in effect, the Federal Reserve has created an environment in which prudent lending practices were punished and reckless lending practices were rewarded.

Thanks for your comment, tommyvee. The interpretation you offer in your first two paragraphs had naturally occurred to me. Still, there is the final paragraph in that passage I quoted. As I read it, that paragraph clearly suggests that the only limits to "world prosperity" are our obsolete ideas. Perhaps this is just ill-chosen wording on Krugman's part, but I'm afraid I don't think so.

In any case, you didn't mean to suggest that I called Krugman an idiot. I did not. He is an knowledgeable, articulate, and clever thinker.

That his economic theorizing is based on dominant paradigms is no surprise. And notwithstanding my astonishment, I am familiar with the power of paradigms (T.S. Kuhn), absolute presuppositions (R.G. Collingwood), ideal of natural order (Stephen Toulmin)--whatever you call them--having done my dissertation under Toulmin's guidance. Nevertheless, I was astonished when I read Krugman.

Agree. The man is not an idiot and has provided many useful insights over the years with respect to the Bush administration, and things like the housing bubble. Just because I don't agree with the growth paradigm doesn't mean he doesn't have useful insights with respect to the current economic slump.

Even though I basically think we need to find a way to construct our society based on no and even negative growth principles, there is still a bit of hope in the way the current solution to the current slump is being framed. It will take massive resources to reverse the slump and Obama is talking about spending a lot of money on alternative energy as part of that plan. In my opinion, this is better than just putting a bunch of money out there without regard to what is really needed for the future. They should go, further, however, and do away with any tax cuts. These aren't as effective as direct expenditures, anyway, and will mostly be frittered away on imports of things like bigger TV sets.

Anyway, I disagree with the vast majority of economists and people, in general, about what we need to do going forward. This doesn't make them idiots. It just mainly means they have a different set of values and place less importance on things like oil depletion and global warming. This doesn't mean that some of them aren't idiots either.

Coupling that underemployed labor with existing public assets to create value added infrastructure is, IMHO, the "win-win-win". In my town, we have a park that was a wooded parcel in the 1920s. The CCC and WPA used locally-sourced stones to create a system of canals, park buildings, and trails that have been in use now for over 70 years. The park and its buildings add to the quality of life in my community and facilitate outdoor recreation for all ages, improving public health. Throughout Wisconsin and the nation, similar CCC projects utilized forest products from public lands and locally-sourced stone to create bridges, buildings, and other capital projects of lasting value. If at the time of their creation they needed to pass a cost-benefit analysis with a short-term payback period, none of them would have been green-lit. If the incipient Depression results in more of the same, then let's get on with it already.

..we have a park that was a wooded parcel in the 1920s. The CCC and WPA used locally-sourced stones to create a system of canals, park buildings, and trails..

A park is nice. An undisturbed "wooded parcel" is nicer.

personally I have always had doubts about Krugman as an economist since he revealed in an Economist article that he actually believed the old Soviet production statistics. I don't think even the party leadership did that.

Economists aren't what they think they are. They are an 'ideological priesthood' and worship at the alter of Mammon. What we call 'growth' is the second part of the holy trinity. The third is the 'invisible hand' which mysteriously 'self-regulates' all the flaws, dogma and bits that are incomprehensible and contradictory in our 'faith.

Deities have a way of outstaying their welcome, replaced by a newer, more modern version. What we need, at the very least, is an 'economic Reformation'. A new Martin Luther to re-interpret the holy texts. In my opinion Growth is Dead.

Don't look now, but there is another bubble forming. It will be a good one. Why?

- Fairly broad participation.

- It will make players a lot of money.

- It has government support.

- It is in a very large and liquid market.


Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks

The monetization/quantitative easing begins. This is the only way the US economy can function, leaping from bubble to bubble. There is no production, no reason, no real economic activity by anyone other than 'investors'. Is there any doubt what the outcome will be?


This was Prof. Krugman's take this morning:

Deficits and the Future

Right now there’s intense debate about how aggressive the United States government should be in its attempts to turn the economy around. Many economists, myself included, are calling for a very large fiscal expansion to keep the economy from going into free fall. Others, however, worry about the burden that large budget deficits will place on future generations.

But the deficit worriers have it all wrong.

BANG BANG BANG (Sound of my head banging against wall ... )

Paul Krugman, YOU are wrong! Wrong! Wrong and more wrong!

We are in our economic jam because we Anericans have 'growthed' ourselves over the edge of the 'cheap inputs' cliff. The scale of our economic infrastructure has increased the demand for and the cost of all inputs; energy, waste carrying capacity, arable land, water, ores and credit.

Having the government try to subsidize inputs in order for them to appear to remain cheap is nonproductive on its face. Inputs cost by percentage of economic activity what they cost.

Credit is a resource; it is collective - or aggregated - suspension of disbelief. When the suspension fails, it cannot be recovered.

The immediate danger lies in our energy supplies - another input - which come from the same people who would lend us money for any 'stimulus'. It is them ... who must be convinced we can pay our bills ... not rationalizing economists or politicians..

Better we stop beating the dead 'growth' horse and try to come up with something better. Of course, that will not happen. The bubble will grow, some bond traders will get rich and the bubble will burst. Late 2009.

Any guesses?

CalPERS Loses Over $65 Billion This Year
According to the latest CalPERS press release, the fund is down to "over $175 billion."

CalPERS is the nation’s largest public pension fund with more than $175 billion in market assets. It provides retirement and health benefits to 1.6 million public employees, retirees and their families.
2008 losses to date total $65 billion, or about $1,850 for every man, woman, and child in the State of California. That's also $40,625 per member. Thankfully, taxpayers will make up the difference in the years decades to come.

Manufacturing index at 26-year low

NEW YORK (CNNMoney.com) -- A closely watched index of the nation's manufacturing activity fell further in November, to a 26-year low, and remained at a level indicating overall economic contraction for the second straight month, according to a survey of purchasing managers released Monday.

Dow is down about 400 points. Oil is down to about $50.

Credit card industry may cut $2 trillion of lines: analyst

(Reuters) - The U.S. credit card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form or credit-card lines to decline by 45 percent."

I've had a bunch of credit cards canceled over the last week. Chase sent me a stack of form letters telling me my cards were canceled because I don't use them. I got one from WaMu, too, presumably because they were taken over by Chase.

I won't miss the cards. They were cards I signed up for to get short-term deals (free AOL service, a discount at Amazon.com, etc.) and never intended to use. It will probably have a negative effect on my credit rating, though. Not that I'm planning to take out any more credit or anything.

This bakes depression into the cake. Some are likely reliant on credit cards to give the cash flow to allow them to have the money for the mortgage, so this portends a greater fall in house prices as many more are repossessed.
Any remaining solvency in the banking system then goes out of the window.
One thing which will support the market to some degree but lead to an even bigger final bill is that Fannie and Freddie are being forced to continue to dish out mortgages.
They are unreformed in their lending practices and now all the risk falls on the American taxpayer, whilst people make commissions and no one has been held to account for selling mortgages on false premises.
These are defaults waiting to happen.

Here in the UK many are putting Christmas on their credit cards. They have no conception of what they are about to be hit by.
Those with some money are complaining that interest rates have dropped, and have no idea that their funds have in fact been spent, on housing at inflated prices and malls which will be forever empty after Christmas.
What they have is an account with several zeros on it, when in fact the solid backing for their savings does not exist, other than in the full faith of the UK Government, as no productive assets exist to show for the investment.

When I lived in Germany in the 80s, there was almost no use of credit cards and yet their economy wasn't imploding. Is it possible to return to a time without excessive use of credit cards and still have a reasonably functioning economy. Perhaps growth would be lower and it would be harder to crank up consumption. Also, perhaps, a greater percentage of GDP would be government spending, not necessarily a bad thing if the focus were on sustainability projects.

France, Germany and Italy all have much lower levels of personal debt.
In France's case it is achieved by strict limits on the investigations and information sharing that credit card companies are allowed to perform.

The Anglo-Saxon countries allowed the credit card companies, which Joe Biden is intimately involved in, to set their own terms.
This is one more folly of the bubble.

No-one doubts the desirability of having much less personal debt, but the consequences to the real economy of the deflation and deleveraging needed are going to be horrendous.

The pound has lost 25% of it's value against the dollar in a few months.

Job losses in the building and financial services industries which employ 25% of the British workforce have hardly begun.

A 50% fall in real incomes would seem to be a modest and conservative guess for the UK.

The banks are toast and the UK Government has not got the money to support them.

This is really strange. A bizarre symptom of a sick economy. A few weeks ago I commented about how difficult it was in the past for me to cancel credit cards. They were like leeches. They refused to let go.

I was talking to a friend today that had his limit reduced because of "lack of use." Risk aversion? This is a very different set of behaviors for these folks used to extending credit to anyone with a pulse.

It seems they are shooting themselves in the foot. No credit no revenue. The article says they're raising rates, too, to "protect against defaults." Won't detering purchases cause a greater economic spiral down?

"Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," the analyst said.

Don't get me wrong. I have little sympathy for these lenders and those with consumer debt problems. And pardon the dumb question but why would these people do this when it slows the economy and reduces their revenue? Somebody have a gun to their head?

We have also received letters from Chase canceling cards we don't use (as well as being badgered by Bank of America to borrow MORE, which makes me think JPMorgan Chase going down the tubes faster...).

We've also had offers with teaser rates "which may be modified at any time, for any reason", and warnings that if we default, our interest would rise to 30% (and if we don't like those terms, we can cancel the credit card and lose several thousand air miles...)

My reaction is to stop using credit cards altogether (after I use the air miles) and to build up 6-12 months of living expenses in a big hurry, something we did not feel we had to do when we had 5-6 credit cards we never used and a not-maxed-out credit line. That should impact the economy if anyone else is thinking like me.

I imagine the banks are expecting more unemployment no matter what they do. They are probably scrambling to adopt a business model that does not include revenue from credit cards.

And it came not long after the election, just as I predicted.

As Gomer Pyle would have said, "SUHRPRAHZ, SUHRPRAHZ, SUHRPRAHZ!!"

LOL, the denial runs deep here in Australia as well. I expect an official announcement next year. Infact there's a lot more room to fall here than the US even, house prices here in Melbourne were 8.5 times median income. Utterly ridiculous situation. Even in terms of GDP to Debt, the 177% ratio racked up by Ausis is probably amongst the world's highest.

EDIT: According to CNN Money, this is already the 3rd longest recession since WWII. Only the '73 to '75 and '81-'82 recessions were longer, that too by about 4 months. So this should be easily beaten.

For high drama Ambrose Evans has his own unique style, World stability hangs by a thread

The shocking detail in the World Bank's latest report on China is that wages have fallen from 52pc to 40pc of GDP since 1999. This is evidence of an economic model that is disastrously out of kilter, and unlikely to retain popular support.

The Communist Party lost its ideological mission long ago. The regime depends on perpetual boom to stay in power. As the economy sours, there must be a high risk that it will resort to the nationalist card instead.

Tokyo certainly thinks so. When I visited Japan's Defence Ministry last year the deputy minister showed me charts detailing the intrusion of China's fast-growing fleet of attack submarines into Japanese waters. "We see its warships in the Sea of Japan all the time," he said.

Shoichi Nakagawa, the head of the ruling LDP party, was even more explicit. "What happens when China attacks Japan? Will the US retaliate on our behalf?" he said.

I normally take a pretty non-interventionalist approach to world affairs as far as the US is concerned. Certain countries such as Israel tend to provoke trouble in my opinion, but after WWII, Japan has a very strict non-aggressive policy in place. For anyone to attack Japan would be automatically considered by me as unjustified, as I cannot comprehend them doing anything worthy of attack these days. Maybe I'm just a sucker for Japanese culture and the one time I bothered to go overseas I went to Tokyo for two weeks.

My personal opinion is that if Japan were attacked, the US and NATO forces would become involved very quickly. Other nearby countries wouldn't have quite the swift international reaction that Japan would, but that is pure speculation on my part. I personally think that if China were to make aggressive moves, they would go for other countries before Japan. Less international pressure from such a move, plus Japan doesn't have a massive resource base that would prove beneficial to China. I believe they are using Japan to test how well they can penetrate naval security, as their forces are likely as up to date as the US navy while also not angering the US as much as if they were testing the US fleet. Testing by proxy, if you will.

Wouldn't it be fair to say that Japan has simply sublimated their aggressiveness and keen competitiveness into the tech and industrial sectors? Not that I'm complaining.. that Mitsubishi block was the best part of my old K-car.. (but for solid, reliable wooden clothespins, I'll always buy American!)

It seems that Japan has kept a very honorable stance on international meddling, considering the memories of how hard it smacked them 63 years ago, but such reactions don't last forever. Pendulums swing both ways.


"...as their forces are likely as up to date as the US navy..."

Not friggin likely. The U.S. Navy is a scary, scary force in terms of what they could and would do to any opposition navy. My guess is that the Chinese would last about 72 hours as an intact force if they ever wound up fighting the U.S. Navy in a full-blown war.

Both China and Japan are facing massively bad economies. What better way to distract the populace and even the leaders than with some lovely thinly veiled threats followed by some blustering and perhaps some posturing on the side all chased down with a side order of fear mongering??

There was all this stuff about then PM Koizumi visiting the Yasukuni Shrine to pay respects to the Japanese soldiers killed in WW2 a few years back. The Chinese were furious, etc etc back and forth. Then the economy got better and they were all on the best terms (trade partners!). But now they are bored again it seems, as the economy limits the projects they can fund. What better way to fight boredom than to start a fight with your neighbor. It seems like kindergarten, but it's not particular to Japan and China.

There has also been a long standing disagreement over some gas resources in the east china sea.

Given Japan's extreme reliance on imported NG and the fact its largest exporter, Indonesia, is cutting off exports in 2010 I can easily see a conflict erupting over that.

That was a very scary article. There was one region not mentioned that surprised me - the Persian Gulf. The point of the article seems to be that global financial instability is increasing tensions and there are numerous flash points. At this moment there may be an elevated risk having US and UK troops in the Gulf.

Inflation vs deflation again: Regarding Why I’m not worried about inflation … at least for a good while yet by Sharon Astyk, who quotes "Ilagri":

Whereas currency inflation divides the real wealth pie into smaller and smaller pieces, devaluing each one in a form of forced loss sharing, credit expansion creates multiple and mutually exclusive claims to the same pieces of pie. This generates the appearance of a substantial increase in real wealth through leverage, but is an illusion. The apparent wealth is virtual, and once expansion morphs into contraction, the excess claims are rapidly extinguished in a chaotic real wealth grab. It is this prospect that we are currently facing today, as credit destruction is already well underway, and the destruction of credit is hugely deflationary.

I still don't get it: if the credit expansion is not real inflation, why would credit destruction be real deflation? The "multiple and mutually exclusive claims to the same pieces of pie" is similar to the description of the derivatives market as circular that I've posted a couple of times. So is it still possible to see price inflation (the type that affects all of us in daily life, never mind the other types of inflation) due to the trillions in government borrow-and-giveaway programs? Especially if and when the value of the dollar falls relative to other currencies, due to the attempt to borrow more trillions from other countries. The recent rise in the value of the dollar may be a temporary effect caused by margin calls on dollar-denominated speculation.

I don't think Stoneleigh was saying that credit inflation isn't real inflation. Ever since the Federal Reserve act of 1913, when a bank creates credit, it also creates currency. Prior to then, bank-created credit came in the form of bank notes, which were not legal tender. This has blurred the line between credit and currency and creates a lot of semantic confusion.

Perhaps the clearest example of pure currency inflation I can think of is Spain after the influx of gold from the New World caused rampant inflation and ultimately bankrupted the government. However, the US Congress has (unconstitutionally, IMO) delegated its right to print currency, so I can't think of how pure currency inflation would happen in modern America. The Fed doesn't print up new dollars, it loans them.

The main point I think she is trying to make -- that deleveraging is hugely deflationary -- is correct. Leverage multiplies gains in the expansion phase, and it multiplies losses in the contraction phase.

But in the current environment, 'loaning' credit into existence has a much smaller multiplier than it used to because a)banks are hoarding cash and b)consumers credit ratings are deteriorating. Given this fact, the government should take the opportunity to raise the fractional reserve requirement in ratchets -up to 20%, up to 30%, etc. over time. In this way the government can gradually remove itself from monetary policy and concentrate on fiscal policy. Why have extremely low reserve requirements if the loans aren't being made anyways? This is great opportunity to make some long term change for the better.

I agree that loaning credit into existence has little multiplier now. That's why it will be impossible to reflate the bubble: the unwinding of old credit will dwarf the effects of the creation of new credit.

As for increased reserve requirements, I don't see it happening, at least not any time soon. There are lots of sensible actions the government could take, but I'm not holding my breath. I think the government will try everything it can think of to reflate the bubble. Only after it capitulates and gives in is there a chance for sensible acdtions. Many of the (relatively) recent regulatory changes (sweeps, securitization, etc) have had the effect of lowering reserve requirements. They desperately want banks to loan money (despite excessive lending being what got us into the current mess). I think it is far morely likely they will lower reserve requirements in the hopes that it will stimulate lending than the reverse.

Sadly I agree. Maximum power (quality adjusted energy flow per unit time) is how nature is wired, including us. But in humans, since we use exosomatic energy, we 'act' towards money the same way the rest of nature acts towards energy.

The Maximum Power Principle (Odum, Lotka) posits that all open systems (ecosystems, people, societies, etc.) evolve to degrade the most energy they can while allowing for continued existence of the larger systems they are part of. As systems move from equilibrium they will take advantage of any means necessary to resist externally imposed reductions in power. (In this case we percieve it as social power that our brains associate with money - at least for now). So instead of reducing reserve requirements, investing in basic industry infrastructure and building solid longer term foundations, we will add cheap gas and credit make the coming conflagration bigger. I wish it were otherwise.

Excess credit expansion does lead to real price inflation, and severe credit destruction is deflationary. When I speak of "inflation" and "deflation" I'm talking about what is measured by the Consumer Price Index. (In other words, forget about the definitions used by the Austrian school of economics, at least for now.)

Suppose you have massive credit expansion, year after year. What happens? Total spending increases. Eventually total spending increases faster than output of goods and services can increase, and the result is inflation--too many dollars chasing too few goods.

Deflation is the opposite. A credit contraction reduces total spending, and as aggregate demand decreases prices tend to fall because of excess capacity to produce goods and services. In other words, there will be idle capacity--idle land (and idle resources such as those for oil production), idle labor, and idle capital (buildings, machines, tools, vehicles used in business). When there is an excess of anything in any market, prices tend to fall. This fall in prices is seen most dramatically in commodities, but it also applies to all sectors of the economy: Car prices tend to fall, TV prices tend to fall, and real wages tend to fall, as we can see especially in the lack of bonuses in 2008.

The biggest problem related to credit contraction is the idle labor, the unemployment caused by decreasing aggregate demand. Because of the increase in unemployment, public authorities regard declining real GDP as an unmitigated evil--something to fight with every weapon at hand. Unfortunately, the only way we know how to create more jobs is through growth in real GDP; hence the emphasis on growth.

Because of Peak Oil and declining oil production in years to come, I think real GDP will decline and unemployment rates will increase. Fiscal and monetary stimulus will not help to correct a problem caused by declining net oil imports and declining domestic production of oil. Macroeconomic stimulus will simply be inflationary where production is increasingly limited by high prices and diminishing production of oil.

We may have deflation in the short run; I give a short-term deflation a subjective probability of 50%. In the longer run the problem is going to be inflation--not necessarily hyperinflation but at least double-digit inflation. This inflation will be caused by increasing government deficits financed by easy monetary policy--monetizing the debt.

Regarding the inflation you predict: Do you think this will unfold in such a way that the financial elites/"smart money" crowd will be able to manage things in a way that their wealth manages to keep pace with inflation at the expense of leaving everyone else holding the bag?

Because it seems to me that if the answer to this question is "no," then we can expect all the stops to be pulled out to PREVENT the onset of runaway inflation - including the use of violence or threat of violence to shift the burden of monetizing the U.S. debt from the U.S. dollar itself and onto foreign countries.

Some financial elites will do well out of inflation; others will see their real assets decline drastically. If you look at historical inflations, the elite were never able to prevent them--nor is it clear that they wanted to prevent them. Smart money and financial elites normally have a substantial portion of their assets in real estate and stocks. Real estate benefits directly from inflation, and in the long term stocks at least keep up with inflation. (In the short term the rising nominal interest rates caused by inflation tend to lower stock prices, and the short term can last a decade or more.)

Probably at some point price, wage, and rent controls will be imposed in an attempt to restrain inflation. They will create shortages but will not stop inflation caused by enormously increasing government deficits and easy monetary policy.

Note that debtors benefit from unanticipated inflation, and there are a great many Americans who are deep in debt, including some who might be regarded as among the financial elite.

It's sure nice to have you back, Don. I'd missed your well informed and well thought out commentary. You have an ability to organize your thoughts on paper such that they are easily grasped. Maybe I'm just biased to your viewpoint, but let me say I rarely if ever feel the need to disagree with your comments. Sometimes no response is a sign of having said the right thing well.

Do you see inflation of prices without a runup in wages? What mechanisms will result in wages participating in an inflationary repudiation of debt? It seems as though the demise of the unions has precluded the possibility of any organized labor response to corporate cost cutting. How will the rapid rise in wages that we saw in the inflationary, WIN button 70's play out this time?

I think wage increases will lag behind price level increases. Indeed, that is one of the two big mechanisms by which falling oil production will lower our living standards; the other one is increasing unemployment.

My dark vision of the future can be shown simply in the following rough numbers provided for purposes of illustration only:

(1) Oil imports and domestic oil production fall at 5% per year.

(2) Because of (1) Real GDP falls at about 2% to 3% per year.

(3) Because of (2) unemployment keeps increasing, eventually rising to levels as high as 25% to 40%.

(4) Because of (3) fiscal and monetary policy are used aggresively to stimulate the economy, resulting in inflation of 10% per year.

(5) Those fortunate enough to be employed will see their wages rise at about 5% per year; thus their real wages fall at about 5% per year. Ultimately, real wages could, over the next fifteen to twenty years fall to about half of what they are now as real GDP per capita also falls to about half of what it is now.

Again, I want to emphasize that these numbers are given only for purposes of illustration; the actual magnitudes will obviously be different from those above.

One other thing: Printing money works only so far. I expect the real burden of taxes to increase substantially to finance benefits to the increasing number of unemployed citizens.

Assuming the US has the military muscle and finesse in using it to do so (which I know is controversial, but please indulge me for the sake of argument), what do you think the limits are on the extent to which the US could force foreign countries to eat up US debt and thus prop up the dollar, and how might the US go about doing this?

Also, what do you think would be the consequences of an outright default by the US on the trillions it owes other countries?

(I am thinking along the lines of Michael Hudson, by the way; perhaps you could also tell me what you think of him.)

I don't know anything about Michael Hudson. Should I?

There is no need for the U.S. to default on its obligations to other countries, because all these obligations are denominated in dollars. We can always print more dollars.

My guess is that most other countries will inflate their currencies even faster than the dollar eventually inflates, and hence I think the dollar will remain a relatively desirable currency. If the dollar were to depreciate against other currencies it would help our balance of trade. In my opinion the dollar now is substantially overvalued compared to other major currencies; this situation could change and eventually probably will, despite the best efforts of the Chinese and others to keep their currencies cheap against the dollar to stimulate exports.

Thanks for your thoughts. Michael Hudson is an international economomist who wrote a book called SUPERIMPERIALISM: THE ORIGINS AND FUNDAMENTALS OF U.S. WORLD DOMINANCE. It is sold and extensively reviewed at Amazon, and I would be grateful for any of your thoughts on where it is coming from.

Basically, his argument is that the U.S. has successfully used its ultimate control over the World Bank, the World Trade Organization and the International Monetary Fund, as instruments to dominate the rest of the world economically by means of its own debt. As such, the U.S. elites have long regarded budget and trade surpluses with benign neglect, since that debt in fact functions as the basis of a successful tribute system.

The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.The first lesson of politics is to disregard the first lesson of economics.

Thomas Sowell.

Governments can print all they want, but we can't print more oil, more fertilizer, more clean water, neither can they print the stars nor the woods! :D

One of the things i've been thinking of, is that GDP consists of a lot of value added stuff dependant on oil. Luxury yachts worth tens of millions of dollars and 250,000 dollar Bentley's and Ferrari's all add a lot more to GDP than a can of baked beans but, without fuel the Ferrari and the yacht are worthless and the the can of baked beans becomes priceless in a time of scarcity.

GDP doesn't measure the feeling one gets when maybe you pet your cat in the woods Don, or the feeling of warmth and satisfaction when one has finished a hard task or spending time with friends and family. GDP is an overrated measure IMO.

Great Graph by Kurt Cobb that shows how dependent we are on food & energy:


Published Jul 29 2007 by Resource Insights
Upside down economics
by Kurt Cobb

This method for depicting the economy was suggested to me by two things. First, Liebig's Law of the Minimum states that an organism's growth is limited by the amount of the least available essential nutrient. In the case of world society that nutrient would be food, though many would argue that fossil fuels are the essential nutrient since so much food production depends on the use of fossil fuels and their derivatives including fertilizers and pesticides. Second, a piece by Dmitry Podborits argues that it is nonsense to say that the U. S. economy is less vulnerable to oil supply disruptions today than in 1970s because it produces twice as much GDP per barrel of oil. Instead, Podborits suggests, we are more vulnerable to oil supply disruptions because we have so much more GDP balanced on each barrel of oil. The same argument might be made with respect to agriculture which in the United States in 1930 employed 21.5 percent of the workforce and made up 7.7 percent of GDP. In 2000 the numbers were 1.9 percent of the workforce and 0.7 percent of GDP. We are balancing an ever larger total economy on an agricultural economy that on a relative basis is shrinking. Certainly, we are getting more efficient, but are we becoming more vulnerable?

Question for all TODers: Is hugging a well-composted bag of O-NPK much safer than hugging a spouse going toxic?

You hit on the key issue: employment -- as you say we don't know how to maintain employment without increasing GDP. But then you also say, get used to it. So I take it that you expect increasing unemployment from here on out. This is why we need to figure out another way to increase employment or we need to just accept unemployment and focus on redistributing income in the form of something like a guaranteed income. We also need to eliminate the stigma associated with not being employed. Alternatively, we need an ongoing public works program to take up the slack.

The tight connection between GDP and employment prevents us from considering anything other than growth. No one in power will challenge that paradigm. That is why we are inexorably headed towards ecological disaster.

I think we need to find ways to adapt to increasing unemployment--and we do need to focus on ways to redistribute a shrinking economic pie.

Here are two ideas that have been around for a while:
1. Make government the employer of last resort. We could hope that many of these jobs would be doing something useful, such as building or rebuilding sidewalks, implementing Alan Drake's proposals, building sources of alternative energy or employing more teachers to reduce class sizes and improve education. Anybody can apply to government for a job, and a job will be found, though it might require re-education or moving to a new location. Government would pay for the needed education and help out with moving expenses. (The immobility of unemployed people is a big problem.) Thus we could keep up rates of employment, but tax rates would have to go up to finance government sponsored jobs (or else more money would have to be printed through even bigger government deficits being financed by the Fed).

2. The negative income tax: Here the idea is to provide a guaranteed income with the Internal Revenue Service as the agency to do the redistribution. Ideally, the negative income tax would replace our current system of welfare, Medicaid, food stamps, and all the other mess of confusing income redistribution programs we now have. If indeed the negative income tax turns out to be more effective and more efficient than existing programs it might (I emphasize "might") be able to implement this system with little in the way of tax increases, though I think there would have to be some increase in tax rates to keep the level of guaranteed income high enough to pay for medical insurance and a standard of living perhaps 1.5 times the official poverty level. A negative income tax could be introduced gradually, first as a supplement to existing programs, then increasingly as a substitute for them. The details of the negative income tax can be devised to provide a strong incentive to work--at all income levels. Current programs often have built into them a strong disincentive to work; for example losing Medicaid benefits if you get a minimum wage job.

The young folks here may not realize that Nixon proposed a negative income tax back in the day. I'd say have universal health care and do the NIT; eliminate all the other programs intended to help the poor and you're done. The stigma, though, is that our society can't stand the idea of something for nothing. We're also afraid of the supposed disincentive to work. Yeh, if there is very little work available, why should we worry about work incentives. And the vast majority of us are hardly content with an income just sufficient to get by.

The negative income tax proposal comes with strong incentives to work longer hours and to get a better job. The marginal income tax rate is set at, say, 30%; thus a person would always have an incentive to get a job, even a low-wage part-time job.

One huge problem with existing poverty programs is that most of them have built in a huge disincentive to work; in this respect the negative income tax proposal is far better than what we have now.

One problem with the negative income tax is that there is no guarantee that people will use their income for food, shelter, and clothing; they may spend it all on drugs and liquor. Thus there would probably still have to be interventions to get children out of households where they are starved or otherwise abused.

I'd like to see a new Civilian Conservation Corps. This time, they would be trained and organized as work crews to weatherize and insulate for energy efficiency the homes of those who are too poor or unable to get this done for themselves.

There is plenty of work to be done. We really can't afford to pay people to do nothing. Nor can we really afford for there to be masses of hungry, desperate people on the streets.

Obama hopefully has this in mind when he talks about creating a bunch of jobs in the near future. I think it is the right thing today and would definitely give alot of folks a sense of purpose and an income.

Don wrote:

Because of Peak Oil and declining oil production in years to come, I think real GDP will decline and unemployment rates will increase. Fiscal and monetary stimulus will not help to correct a problem caused by declining net oil imports and declining domestic production of oil. Macroeconomic stimulus will simply be inflationary where production is increasingly limited by high prices and diminishing production of oil.

I agree that other things being equal, you are likely to be correct. Simply throwing money out the helicopter window thru indiscriminate government spending to continue BAU would not work as this would not produce more oil. Spending on more roads, bridges and military hardware would only make things worse. However, it is to be hoped that focused spending on alternative energy sources could produce enough energy to satisfy minimal demand as oil production declines.

E. Swanson

You raise a good point as to the desirability of focused spending on alternative energy sources. IMO, such intelligent policies will be torpedoed by special interests and by business as usual. The "on the shelf" programs for increased spending by governments at various levels tend to be strongly weighted toward roads and bridges, airport expansions and a multitude of other projects that do nothing in the way of investment in alternative energies or expanding or electrifying railroads.

We can hope that Obama means it when he talks about five million jobs being created in the alternative energy sector. We'll have to see what he tries to get through Congress in his first hundred days.

Don -

Even if Obama is able to push through most of the programs he wants, for the life of me I cannot envision anything remotely close to five million jobs being created in the alternative energy sector. In fact, I would be surprised if one tenth that amount, or 500,000 permanent jobs actually get created in the alternative energy sector.

One needs to look at what comprises the alternative energy sector. We have wind power, solar power, bio-fuels, some wave and tidal power (both destined to be very minor in my opinion), geothermal, and not much else. Arguably, retrofitting homes with improved window, better insulation, and modern heating systems might, by a definitional stretch, also be included. However, I would not include electric vehicles, as that would overlap into the existing auto industry (such as it is).

So, aside from home retrofitting, none of the above is all that labor-intensive. Once a wind farm is built, it takes a relatively small work force to operate and maintain it. Ditto for solar, bio-fuels, and geothermal. Once a large labor bulge related to initial construction passes through the economy, I think that the so-called alternative energy sector, as a steady-state employer, will turn out to be disappointingly small.

I'm all for alternative energy, but I am highly skeptical that it is going to have much of an impact on the US employment situation. Of course, time will tell whether I am right or wrong.

I think this is somewhat analogous to how the environmental field was viewed during the early 1970s when it was first getting off the ground. There were all sorts of rosy projections about all the environmental jobs that would be created. As it turned out, many environmental jobs were created, but only a fraction of what was projected.


Except for underground coal mining, no part of the energy industry is particularly labor intensive. Thus I agree with you and see no way that five million jobs are going to come from new investment in alternative energy.

Indeed, in regard to energy, I worry about shortages of specialized labor, especially petroleum and chemical engineers, and also nuclear engineers. Too many expert people in the energy businesses are approaching retirement, and there are too few young people coming in. If I were Obama, one of the first things I'd do would be to subsidize the education of engineers for the energy industries--all of the industries, not just wind and solar. At the same time I'd put in big subsidies for non-fossil fueled energy industries--except that I'd drop the ethanol subsidy altogether. What a pity that it is politically impossible to pass a stiff tax on gasoline or a stiff carbon tax--but politics is the art of the possible.

In a shrinking economy, a 'pie' that's not growing, the allocation and size of the 'slices' delivered to various groups in society is going to become a source of intense debate, controversy and 'class warfare'.

So much of what we choose to call 'economics' is arguably really 'politics' in disguise, at least at the macro level - the fundamental ideology/dogma about how wealth and power in distributed in society.

Rising unemployment and falling growth and inflation and a semi-permanent Depression, is going to put our current social/economic/political paradigm, under intense and tremendous pressure.

Obviously the strongest members of society, the richest and most powerful, the 1% of Americans who control around 40% of national wealth, as much as the bottom 150,000,000 Americans, is going to resist sharing their collosal wealth with the rest of society - that might be considered 'Socialism' or worse!

We could, in theory, decide to create millions of well paid manual jobs, only this strategy would require a fundamental re-think of how we distribute both wealth and power in society. Once eventual leaders begin to stray into this very dangerous territory, they have a tendancy to 'disappear' one way or another.

The problem if we "decide to create millions of well paid manual jobs" is that most manual labor jobs do not produce much; if they are to be well-paid, then government (i.e. taxpayers) would have to subsidize these jobs heavily.

Both economists and sociologists agree that economic growth acts as a social lubricant. During times of sustained economic growth upward social mobility becomes a reality for large parts of the population. With the exception of the Great Depression, that was pretty much the story of the U.S. during the twentieth century. Improvements in race relations, for example, probably would not have been possible in an environment of economic decline, and improvements in the social status of women were also predicated on economic growth.

A welfare society need not be a socialist society. For example, Sweden is clearly a capitalist country (judging by ownership of the means of production), but it has a strong social safety net. In part, I like the negative income tax idea because it can be implemented without a big increase in government bureaucracies. Indeed, insofar as a negative income tax substitutes for other antipoverty programs, it could lead to fewer government bureaucrats. Thus I think the negative income tax wins on both effectiveness and efficiency criteria.

Don -

Well these days even underground coal mining isn't all that labor-intensive, as it has become highly mechanized (at least in the US). Not too many guys with picks and shovels loading their 'sixteen tons' anymore.

Regarding specialized technical labor in the energy field, I don't think the shortages are going to be as widespread or as critical as one might think. Engineers are pretty adaptable. A rookie engineer wouldn't take too long to master the basics of dealing with wind turbines or solar energy systems.

For example, in the design and construction of a nuclear power plant, probably over 90% of the routine engineering work really has little if anything to do with the fact that the power plant is a nuke rather than a coal-fired one. (Sure, there are different design criteria and different specs, but the basic design process is pretty much the same.) Ditto for an oil refinery, gas processing plant, or ethanol plant. It's all pretty much basic chemical/mechanical design engineering.

I think it's in some of the highly specialized areas, such as petroleum exploration geologist, petroleum field engineers, and the like where some critical shortages in expertise are problematic. But for much of the other engineering work, practically all you need to do is put an ad in some Indian newpapers, arrange for some HB-1 visas, and bingo: you have an engineering team. Well not quite that easy, but I think you see my point .... which is that much of engineering has become a commodity that one basically buys by the pound.

From various posters on TOD who are petroleum field engineers or petroleum geologists I get the impression that rookies are pretty much useless. In other words, you need not only a four-year degree but years of experience in the field before you become effective. Of course these are crusty old veterans who are writing, and they may exaggerate the importance of years of experience.

Does India actually have a large surplus of mechanical and civil engineers? Software engineers yes, but I wonder about the other kinds. This may have changed, but traditionally Indian students did not want to major in fields where their occupation would get their hands dirty. Of course the lack of enrollement by U.S. citizens in U.S. engineering schools is deplorable--but when you consider how shabbily many employers treat their engineers, it is understandable.

When you look at the ratio of lawyers to engineers that our universities turn out, you can see a classic case of misallocation of resources.

Don -

Well, there are areas where long experience is absolutely essential, and there are areas where it is not so important. Sometimes, what passes for experience is nothing more than doing the same old thing no better or worse than you did it thirty years ago.

India probably is pretty heavy in software engineers, but I know for a fact that there are plenty of Indian engineers of all sorts currently working in the US.

As far as not wanting to get one's hands dirty, I don't think the Indians have a monopoly on that mentality. I've noticed that a lot of young American engineers tend to have the same mindset, and view much of engineering as sitting in front of a monitor and manipulating a CAD drawing or plugging numbers into some canned program. Almost an extension of playing a video game.

I have also noticed that among many engineers younger than roughly 40 there seems to be less of an intuitive feel for physical things, or a feel for mentally envisioning magnitudes, or for doing rough manual back-of-the-envelope calculations. That's one thing using a slide rule teaches you: how to develop a feel for magnitudes and how to determine what is significant and what is not. Naturally, a calculator is vastly superior to a slide rule, but if you start off using one, there is a lot of 'eye-balling' skills you don't develop (simply because you don't need them).

If I had to pick some people for an ark to repopulate the world and start all over, I might pick some old fart engineer of the slide-rule era, but I think I might leave the young engineer behind in preference for some backwoods redneck subsistence farmer. (Of course I'd take along a few lawyers, solely as a protein supplement.)

I have also noticed that among many engineers younger than roughly 40 there seems to be less of an intuitive feel for physical things, ... [They] view much of engineering as sitting in front of a monitor and manipulating a CAD drawing or plugging numbers into some canned program. Almost an extension of playing a video game.


WEll said.
Also younger graduates from the Computer "Science" departments of universities appear to have almost no science training whatsoever (physics, chemistry, etc.) They view "software" as some sort of abstraction like math that exists in an idealized world of its own and has anthropomorphic attributes (i.e. software wants to be free).

The hardware (and energy to power the hardware) is/are irrelevant. The Singularity and its coming are inevitable. Resistance is futile. (And so are capacitance and inductance for that matter.)

I love the smell of fresh roasted solder flux in the morning --Apocalypse (Back Whenever)

I have also noticed that among many engineers younger than roughly 40 there seems to be less of an intuitive feel for physical things

As a 50 year old electronics engineer, I've noticed the same thing. I design embedded controls for semi-automated welding equipment. We've had a couple 3rd or 4th year engineering students working summer internships and to me it's remarkable what they don't know. I have to teach them how to solder, how to read BOMs, etc. I asked them if they do "projects" for their classes. They say, "Yes, we draw the schematic in Cad and then simulate it with PSpice". They might know how to program in Java, but we use C and assembler. I even have to hold their hand when they use basic test equipment like o'scopes and DVMs. And forget about having them do component level troubleshooting!

Hard to get good help these days.....

Hello TODers,

JHKunstler has a good, quick read today on our Peak situation. IMO, good for any newbies that need a rough sketch of our predicament:

Does Mr. O Know?

I think O ditched the blackberry. Otherwise, JHK might be able to get a word in. Frankly,I think O does know. But the peeps aren't ready for reality. Carter tried that and no one sense has dared reveal the wizard behind the curtain. After Carter we had no limits Reagan. It's been cornucopia land ever since. O will only break the mold if he intends to last only one term. Americans are still not ready to handle the truth.

The first priority of any government bureaucrat is to maximize his power, any other consideration is secondary:

Ontario’s car pool embargo

Governments want us to maximize car pooling to take excess cars off the road, to save energy, and to clean up the environment, right?

Wrong, if the government is Ontario and provincial. In Ontario, car pooling is a prohibited activity that can only be allowed under strict government control, as determined by a government regulatory agency set up to oversee such conduct. Those who violate the law – as did a nonplused outfit called PickupPal — can and will be punished with the full force of the law.With the government’s blessings, you can share expenses by car pooling from home to work and back again, but only under certain conditions. You have crossed the line if you try to car pool to work across a municipal boundary — the government frowns upon suburbanites who commute this way. As for car pooling for a frivolous, non-work purpose — to school, to the hockey arena, to the doctor’s office — this is outlawed outright, regardless of whether you cross a municipal boundary.

Ontario places other restrictions, too, on car pooling. First, you must demonstrate dedication by sticking to the same driver, day in day out. You can’t catch a ride with Peter on Mondays if Paul picks you up Tuesdays. And you must never, ever be prompt in reimbursing your driver for your share of the ride. Once a week or once a month is fine. Try to pay more frequently and you’ll get pulled off to the side of the road if you get caught.


Truly moronic.

Ahhhh, yet another fine group of Government employees, that need to be beaten about the head and thrown to the curb.

When will the people stand up? When?

Dow plunges 600 points
Stocks slump on economic woes as U.S. recession is officially called.

Stocks tumbled Monday afternoon, with fears about the economy driving a selloff as manufacturing slumped to a 26-year low and the U.S. economy was officially declared to be a recession...

Stocks sold off from the opening bell and continued sliding as the session wore on. The economic news and the official declaration of the recession added to the selling, but the market was already primed for a selloff after last week's run, analysts said.

After hitting multi-year lows a little over a week ago, the S&P 500 rallied 19% through last Friday, while the Dow and Nasdaq both gained just under 17%.

"We're going to continue to see this extreme volatility because there's no clear end in sight to all the crises," said Dean Barber, president at Barber Financial Group.

And for those who remember the greatest dow *gains* that ever happened did during the last depression, here's a repost:

Date Close Increase Percent
03/15/1933 62.10 8.26 15.34
10/06/1931 99.34 12.86 14.87
10/30/1929 258.47 28.40 12.34
10/28/2008 9065.12 889.35 11.88
09/21/1932 75.16 7.57 11.36
10/13/2008 9387.61 936.42 11.08
10/21/1987 2027.85 186.84 10.15
08/03/1932 58.22 5.06 9.52
02/11/1932 78.60 6.80 9.47
11/14/1929 217.28 18.59 9.36

Source: Wall Street Journal

So... When the market jumps up 300 points (which I beleive it will here and there throughout the year, along with the drops we've seen like today), it doesn't necessarily mean a good thing...

Yeah, another plunge. And my shorts are growing ever bigger. Nice game.
There are some idiots still in the field like this Chris Nelder with its book " profit from peak oil".
If you go to his webpage you can see it's all about Bakken formation.
Or the Haynesville or Marcellus shales etc. etc.

They recommended CHK, when it peaked at around 70 bucks. Now it is trading around 15 or so.

Those guys are nuts.

Chris Nelder and its website http://www.energyandcapital.com/ is just a propoganda site for nonconventional oil and gas.
Performance so far: minus 70%! congratulations!

Correction: -680 points, final score.

Cboe up to 68.60.

"Fasten your seatbelts, it's going to be a bumpy night!" - Margo Channing, All About Eve

What about buying low now and selling high later?

Schwarzenegger declares fiscal emergency in Calif.

Without quick action, the state is likely to run out of cash in February.

Funny you mention government responses to crises... I read the crawler above the story in your link. Here's government reponse to crises for you:

30-mile debris pile becomes symbol of FEMA delays

SMITH POINT, Texas (AP) - A 30-mile scar of debris along the Texas coast stands as a festering testament to what state and local officials say is FEMA's sluggish response to the 2008 hurricane season.

Two and a half months after Hurricane Ike blasted the shoreline, alligators and snakes crawl over vast piles of shattered building materials, lawn furniture, trees, boats, tanks of butane and other hazardous substances, thousands of animal carcasses, perhaps even the corpses of people killed by the storm.

State and local officials complain that the removal of the filth has gone almost nowhere because FEMA red tape has held up both the cleanup work and the release of the millions of dollars that Chambers County says it needs to pay for the project.

Elsewhere along the coast, similar complaints are heard: The Federal Emergency Management Agency has been slow to reimburse local governments for what they have already spent, putting the rural counties on the brink of financial collapse.

"I don't know all the internal workings of FEMA. But if they've had a lot of experience in hurricanes and disaster, it looks like they could come up with some kind of process that would work," said Chambers County Judge Jimmy Sylvia, the county's chief administrator.

If there's something strange
in your neighborhood
Who ya gonna call?

"Heckuva job, Brownie!"--The Shrub. I would make Chertoff take his shirt off, because he would be sweating hard personally wheelbarrowing that debris away.

Toto, I'd plus you a million if I could...

I wonder, will Obama, so enamoured with the concept of continuity and bi-partisanhip, and man who apparently believes he's channelling Lincoln, God, help us! I wonder if he'll get around to prosecuting anyone for their incompetence, corrupt practices and domestic and international crimes?

I think it is very appropriate that the Narcissist State with it's Actor-in-chief be among the first states to go belly up.

Hopefully Mad Max visits Hollywood first.

I think it is very appropriate that the Narcissist State with it's Actor-in-chief be among the first states to go belly up.

Hey there, I'm stuck in the state (you know the job thing, which was the only reason I came here in the first place), he better find some way to muddle through. He will probably going to wait until after Christmass, hoping Obama will leave something in his stocking.......

Schwarzenegger declares fiscal emergency

(12-01) 13:55 PST Sacramento, CA (AP) --

Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday and called lawmakers into a special budget session, warning that California was in danger of running out of daily operating cash within two months.

Here's a link.

I really wonder what states are going to do. I guess they can hope to hang on until the Obama bailout arrives.

Wisconsin cut their retirees' pension checks, but I'm not sure that's possible in other states. Yet, they can't run a deficit. They can't borrow money, because the credit markets are still frozen. And good luck trying to raise taxes in this economy.

California could always raise the taxes on transport fuels. States already collect most of the fuel taxes at present. Ol' Arnold could claim the tax was to reduce CO2 emissions. As a side bonus, higher fuel taxes would tend to keep the roving bands of malcontents closer to their home territories when Disney Land becomes Max Max World...

Naa, that's way too logical.

E. Swanson

Hello TODers,

If Peak Outreach is ever successful: the first thing we would do is abolish any outside night lighting [including Xmas lights]. Trying to get black asphalt to reflect photons is stupid. Personal flashlights/lamps and vehicle headlights/tailights should be plenty as we are evolved to sit in the dark.

[Images of the dark side of the Earth]:


The US at night, all lit up: what is that equal to in crude energy terms? 20 million bl/day? 40 million bl/day?

Or are we just going to wait until Olduvai snuffs out ALL lights?

There's just one little problem with your suggestion - it would make sense. Therefore, it's a non-starter...

When clearly what we need is to launch hundreds of solar-gathering satellites into orbit to beam down electricity via microwaves. Or cook some petroleum-like substance out of any rock on the planet with a trace of organic matter in it, at an EROEI of 1 or less. Of course, those are all just stopgap measures until the Fusion Power kicks in. And for that we'll mine tritium on the moon to make it all happen.

In case all that doesn't pan out, we naturally have a Plan B. Plan B is for the Pink Unicorns to land on the White House Lawn and reveal to humanity the secrets of zero-point energy.

Yes, the future looks bright!

We'll use concentrated light beams to flag down aliens to help us out...

Party at the Luxor!

Yep. People are f*ckin' DUMB - just plumb EAT UP with the dumbass. The ONLY thing that's gonna wake 'em up is when they start dying like flies ...

Bush is not done raiding yet: The Rape and Scrape Continues

WELL, so-called 'peak oil' hasn't filtered Down Under quite just yet. Australian oil production has remained pretty constant around 30 million barrels a quarter since mid-2006.


Huh? We have a long, long way to go. Even when they get the definition of peak oil right, they still don't understand it.

No offense to our Australian friends;)

First Commercial Ship Sails Over The Northwest Passage: “I Didn’t See One Cube Of Ice”

Desgagnés Transarctik used the MV Camilla Desgagnés because it is a super ice-class vessel, said Waguih Rayes, the general manager of the company’s Arctic division.

Rayes, who was on the vessel during its trip through the Northwest Passage, said the company informed the coast guard, which put an icebreaker on standby.

“They were ready to be there for us if we called them, but I didn’t see one cube of ice,” he said.

“They were informed about our presence [and] they were ready to give us the support needed. However, since there was no ice whatsoever, the service was not needed, we didn’t call for it.” No Ice In the Northwest Passage

That's fantastic! Imagine what that would do to shipping distances between east asia and the west? Global carbon emissions have already greatly speeded up in the last few years, from 0,9% annual growh in the 90s to 3,5% growth in the 2000s, much higher than even the "worst case scenario" by the UN. 400 ppm, the tipping point for the climate, will be reached in 5 years at current trends, already at 385 ppm. This should speed up the melting of the ice and increase warming further, with sunlight absorption and explosion in methane emissions from the siberian permafrost. The northeast passage will be ice-free, safe and commercial sooner than even the wildest dreamers had expected. A massive boom for world trade.