Heinberg: "A Time for Action"

For a one-hour audio interview with peak oil educator Richard Heinberg about peak oil, his "Peak Oil Trilogy" (The Party's Over, Powerdown, and The Oil Depletion Protocol), and the ASPO-USA 2006 Boston World Oil Conference (REGISTER NOW!), "Time for Action: A Midnight Ride for Peak Oil," scheduled for October 26-27, 2006, in Boston, Massachusetts, go to this link or access the interview directly on the Peak Oil/Global Warming Channel.


I'm first!
Horrible audio, it sounded like they recorded it at a 200 Hz sampling rate with the microphone hidden in a kazoo, on a hissy tape recorder.  Otherwise, good stuff.
don't forget the gimp mask in there somewhere, wht...definitely had a latexy sound to it.
Gimp mask, latex ... sounds like a reference to Pulp Fiction

"Bring out the gimp!"

Hello TODers,

I am all in favor of Heinberg's efforts, but I wonder if the rate of social change will be fast enough to prevent widespread violence and senseless infrastructure decimation.  AMPOD has an excellent article at LATOC called "When is the Revolution Coming?" linked here.

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

Best. Matt. Savinar. Article. EVER.

One of the best all-time Peal Oil/Dieoff articles EVER.





Read Matt's article, then go check out the recent Chomsky paper where Cheerful Noam says the kind of mind necessary to have high intelligence and live sustainably on this planet is probably not attainable through the process of evolution. Or not, that's the one interesting point in the Chomsky article, that it may not be possible to get a self-limiting cooperative being out of a competitive process like evolution.

Matt's article is pure gold.

OK I meant peak oil not peal oil or peel oil.....
weird. I wrote that in about 30 minutes. I've had other articles spent 2 weeks rewriting and revising. You never know what will resonate with people.
Hello AMPOD,

Just wanted to make sure you saw AngryChimp's link to the BBC video series: "The Century of Self" on Google Video.

Bob Shaw in Phx,Az  Are HumansSmarter than Yeast?

Finally sat through it.
As Freud would say, "Velly interesting".

Have you see this, "Oh my God" google video? (named "what we saw")

I watched it last night.  I own a retail store and spend plenty on advertising, I learned a few things.  Wow!  Are we sheep or what.
Are we sheep or what?

Well, yes.
Part of us is sheep= herd animal.
Part of us lizard= terrorized lizard brain.

And a wee teeny part of us is rational ... but not in control.

Weird. Because it's excellent!
Dunno if you read the off-topic forum for latoc.net or not; there is a post there regarding display issues with latoc.net.
Congratulations, Matt

You just got your first Neo-Nazi follower. Apparently you are not aware of fleam's writing. That's OK. Any acolyte is a good one, right?

His ideas might repulse you, but certainly he can head up your AlphaMonkey Ministry of Hate. That might come in handy.

By the way, have you read Shirer's "Rise and Fall of the Third Reich?"

I'll be across the hall whenever you want to borrow a cup of sugar.


I wrote that in about 30 minutes

Liar. No one writes 2000 words in 30 minutes and formats HTML to boot.  I also think you did a very good job in writing and advancing your argument, but by boasting how fast you wrote it, it looks like you are flaunting your own "gourd".  Just goes to show that everyone is on an ego trip, as the seeking of adulation remains a permament part of human nature.

:) :) :)

I'm an attorney by training. You ever sit through a law school final? They're called "horseraces" typically. You sit and spew bullshit as though there's no tomorrow.
Are you a BAR BRI graduate or from that other school of legal thought?
Actually, the article seems purely American.

Has anyone noticed that societies like Germany are actually building things, such as an electric grid which integrates wind power in a realistic, daily life way? Do you really think that the reason such large industrial scale projects are being built because the engineers get more chicks? Or that recycling and using less chemicals in agriculture is not based on hard headed pragmatism, since utterly destroying where you live is a surefire way to bow out of the evolutionary race.

Or to keep this (flawed in my view) evolutionary analogy going - do you think the society that can keep more children alive when it is freezing will lose out to the society which is concerned about meaningless displays of pomp to attract chicks, since obviously, it is having the women that matters, not whether in a decade or two, the women's children grow up.

Perfect example of why America seems incapable of handling anything but celebrity or money as a measure of human existence while simultaneously denying that planning or engineering play any significant role in human affairs. Oddly, it wasn't celebrity which seemed to drive the success of the German Greens, it was the fact that a program of sustainable living and pacifism made sense to a large number of people living here, for a number of reasons, most of them based on self-interest - such as the idea that having your children grow up in a post WWIII landscape was not considered attractive, at least in Germany.

Sure, celebrity plays a role in human affairs, but it is pretty hard to flip a light switch without having an electrical system in place - regardless of how magical it seems, a grid is not the result of magic, it is the result of engineering. This attitude that one's external possessions are the only measure of human value drove me crazy in America, to be honest. But then, I live in the world's largest exporter, not the world's largest importer.

Strange - hard to find many well known German celebrities, but it seems a majority of the entire world's celebrities and powerful prefer Porsche, Mercedes, BMW (and those vehicles were not gifts from the companies, by the way). Hmmm - must be a correlation there somewhere. Probably has something to do with reality.

I've written about this before.

Organisations, companies, military forces, societies, civilisations all correspond to an ecological model.

When they are in their particular ecological 'niche' they outperform other creatures and dominate.  Think the Giant Sloth, the Dire Wolf, Ursus Major, the Tyranosaurus Rex.

Every so often, external forces change the environment.  The entity is then threatened with extinction, or significant marginalisation.

Western Civilisation is optimised around individual autonomy and personal freedom, and cheap energy, and a benign environmental context (not too hot, not too cold).  And the US is the canonical, and most powerful example of that adaptation to its niche. It outperforms all other western economies in size, demographics, growth, productivity etc.

Change that, and we have a problem.

What then becomes important is the ability of the company, military organisation, society etc. to recognise, plan and adapt to the new environment.  changing that environment is usually less possible.

So Cuba, a socialist and totalitarian state, could survive what was at least a 60% fall in its energy inputs in the course of a couple of years.  Not survive easily (the average Cuban lost something like 20 lbs I believe), but survive they have without evident civil chaos or mass starvation.

I don't think any western society could have survived that without serious social chaos.  In Cuba if you go on strike, you go to prison.  In Britain, if you block a petrol refinery in protest at high fuel prices, you become a national hero.

I wouldn't say Germany is going to survive a crisis of the kind that Peak Oil moots, nor necessarily the challenge of Global Warming.  But being a more centralised, socialist state than the USA, with stronger forces of law and order (eg the illegality of private firearms), it has a chance to make very rapid adjustments based on collective decisions.

The US has innate advantages: huge potential non fossil fueled resources (wind and solar), lots of coal (bad for global warming, good for Peak Oil), military power to compel energy supplies from its neighbours (Canada, Mexico, even Venezuela).  Borders and dominates only 2 countries, and one is a cultural satellite (Canada).  Best universities in the world.  Adaptable and resilient populace.

What Germany (or even better, Sweden and Denmark) show is how a smaller country, without those natural advantages, can plan ahead, and plan to survive.

But being a more centralised, socialist state than the USA, with stronger forces of law and order (eg the illegality of private firearms), it has a chance to make very rapid adjustments based on collective decisions.

There's absolutely no correlation, in fact strong centralized states are historically more likely to ride their established power structures down the tube. That being said, the US is very centralized state, it's controlled by large corporations, the government works for them. I love how people think because tne US government has completely abandoned any social or egalitarian ethics, that it somehow isn't centralized, in fact it shows just the opposite.

I think many here underestimate the capability for change the US can still hold.  Not saying it will execute that change when it is critical, but the potential is there.

One of the problems with the US in prepping for PO is I think the fact that we are NOT very centrist.  In a representative form of government the populace is going to be more apt to reactively behave instead of proactively behave.  So long as the status QUO is "good" then no changes in voting(at least on energy policy) will occur.

Once things get bad, that is when changes occur.  The old saying "Its the economy stupid" is a perfect example of American (Democracy) reactiveness.  So long as the Economy is "good" voters tend to not rock the boat.  When the economy is bad, that is when politicians go changing(even though politicians don't have as much influence as most voters think).

I really don't think America is going to make an effort to transition until it has something more substantial than a few dollars of gas price increase to react to.

Its a morbid thought, but I almost think forcing Iran into a war, and causing a major oil shock for the world right now could be the best thing for the US in terms of its energy planning(the oil shocks would force us to deal with the problem now as opposed to later when supply is truly diminished instead of artificially diminished through war) and possibly the best thing for the rest of the world as they would see that building their version of the "American Dream" means setting themselves up for dependence.  

Dependence is a notion most nations are keen on only when economic benefits are overwhelming.  Without oil, the economic benefits will disappear and a return to self reliance and localization would have to follow for those countries which want to remain viable.

I'm not underestimating the ability for America to change, it's the only hope we have. My point is the idea that centralization better effects change is ahistoric, in fact it's just the opposite.

The other thing is that just because the government is not doing what you think it should be doing, doesn't mean it has no power or that it's too distributed, it's just the opposite. There's some very large forces and institutions that think how the government operates is just fine and they pay very close attention to it, that the American people in general don't is a problem, but they have now been socialized to think they have no control -- that's a big problem.

Fair point!

I suppose in this extreme 'war time' scenario (which is what Cuba went through) I was thinking of examples like:

  • Russia 1941-45.  Lost 25 million people, but still managed to beat the Wehrmacht, which was probably the best Army in history up to that point

  • Britain 1939-45.  By nearly complete socialisation of the economy, managed to (in 1942) produce more armaments than Germany, despite submarine war.  Highest level of civilian mobilisation achieved by any country other than Russia

(Germany by contrast was a totalitarian state, but only managed to fully mobilise for war in 1944-- so you could argue it either way)

More generally, countries with more decentralised decision making may be able to adjust more rapidly.  I can just imagine an American version of decision making which includes considerable civil disorder.

The problem is if the market gives signals early enough.  Right now it gives no signal on CO2, and if PO is a reality, precious little signal of that (I don't count an oil price below its 1980 peak as a signal of PO).

I am a big admirer of the Scandinavian states, eg Denmark, which have obviously taken a long term view of energy supply and self sufficiency.  That said, the Swedes have ducked the problem (they are not for new nuclear, but they don't have a replacement for the nukes they have now).

Also these nations are small, and homogeneous.

Exactly. The reason the US is not adapting is due to institutional and cultural inertia and our perceived huge power.
Um, what is the current ethanol debate, if not infighting during adaption?

We say " the US is not adapting" when we really mean "the US is not adapting fast enough to suit me."  I actually agree with the latter sentiment, but I try to keep things straight.

We do not have a straw man, non-adapting, nation to shoot holes in.

Oh, I wouldn't say it's a strawman. If you consider three decades ago the idea of limited oil supply entered the American conscience and since that time oil consumption has risen 25%, I'd say non-adaption is pretty accurate.

In the long run -- which Keynes says didn't matter casue were all dead -- the rate of adaption would seem the long thing that does matter.

Why does California work so hard to get everyone on Energy Star appliances?

Why do so many states have targets in play for renewable energy?

... if we ignore that stuff, and just call it "no action" we are simply lying to ourselves.  Of course it is a strawman, and one that allows us to overlook all the troublesome details in energy policy.

I'll repeat, if you have a fairly fixed deadline, say peak oil, then the rate of change is all that counts. For the United States, the present problem isn't one of details, it's a  a culture of gross waste encouraged by some very large, centralized, powerful actors. Until there is significant popular mindshift on how we do energy in this country, worrying about all the details is self-delusion.
What does this have to do with my point?  Are you moving the goalposts so you can get away from my complaint, and just agree with me?

I said in my very first post that we weren't responding fast enough for me.

I hope you aren't claiming that since this "isn't fast enough" we get to rationally believe that is the same as not at all.

Excuse a simplistic analogy:

If your driving a hundred miles an hour toward a cliff that's a half mile away and you begin slowly turning the wheel, but only enough so that you go over the cliff at a 45 degree angle instead of 90, what difference does it make?

The only thing that matters is the rate of adaption because all future possibilities are tied to the environments created by that rate of change. If you believe peak is in the next two decades our current rate of adaption leads to a pretty grim future environment, hardly a strawman or changing goal posts.

Of course you just changed your goalposts.  Believing "peak is in the next two decades our current rate of adaption leads to a pretty grim future environment" is not the same as saying, as the poster did above, "The reason the US is not adapting is due [...]"

BTW, I think the question below about rates of change in adaption, acceleration, relates to whether fixing on "our current rate of adaption" might also be a strawman.

These last two years, of all times, should show that rate of response is not fixed.

Jesus, we're adapting to something.
BTW, extra credit question:

Has the rate of adaption remained fixed as energy prices increased over the last 2-3 years, or did those prices result in an acceleration and greater public focus.

IMO, the State Of The Union "addicted to oil" blurb coincided nicely with a rebirth of alt-energy schemes and investment.

Silicon Valley was not gaga on alt-eng 5 years ago.

But a number of other countries are further ahead.

Germany is ahead in use of wind power.  So is Spain and Denmark.

Japanese companies dominate solar cell production. A Japanese auto company has driven the Hybrid Car technology forward.

The US is the world's biggest (large) consumer of oil per capita.  It's clearly not been a priority for the last 20 or so years.

I read that solar water heater Carter put on the roof of the White House, and Reagan ripped off, is still in use at a college in Maine.  We may come to think of the Carter era as a lost opportunity.

That's true too.  I think it's very fortunate for us that the Japanese, dependent as they are on energy imports, are also a source of design and technology for us.

They are "leading" of necessity.

I'll repeat, if you have a fairly fixed deadline, say peak oil, then the rate of change is all that counts.

And pray tell when is that deadline?  Is that not the subject of debate amongst these forums.  GUESSES range anywhere from now to 50 years from now.  That is a pretty big window of GUESSES.

I agree the pace probably needs to be picked up, but to say no action is being taken is false.  It may be slow action, but action is beginning to snowball.  How many solar and wind initiatives did you see 10 years ago in the US?  How many do you see now?  

How popular was high fuel efficiency 10 years ago, how popular is it now?

How much awareness was there to oil issues, and global warming issues 10 years ago?  How much awareness is there now?

There is quite a bit of change going on, but it doesn't happen over night.

Well one deadline came, we're in Iraq spending trillions of dollars trying to secure remaining reserves, which I personally find despicable.

My friend we wasted 30 years. I unfortunately am old enough to remember the 70s when energy was on the front page every day and then disappeared for two decades. I haven't argued things aren't being done, I'm arguing the rate of change isn't fast enough. We haven't even cut off the grossest fat to this point and little of the debate about change is not fessing up to Americans that they have to change their lifestyles(for example were all going to run a cars on switch gas, when that becomes the focus of the debate, I'll say we're getting somewhere.

$70 a barrel and other factors may in fact have tanked the economy. We may be going into a recession, in which case energy prices will drop and the little progress made will falter. How are you going to keep the focus on energy in a recession and convince Americans that all the New Dealers and Free Marketeer garbage about bringing back gross consumption is wrong.

All' I've heard from the NRDC and other enviro groups the past decade is how potemkin programs were great. It's not enough and we shouldnt fool ourselves or others that it is.

Ah so you admit that the US is doing something even if at a slow speed:
I haven't argued things aren't being done, I'm arguing the rate of change isn't fast enough

My, that seems a far cry from the strawman you were promoting a few minutes earlier:

I'd say non-adaption is pretty accurate

Doing Nothing = 0 progress
Doing something Slow > 0 Progress

Doing something slow may still not be enough to save us, but its not the same as doing nothing.

Well if that makes you feel better. Evolutionary wise, too slow adaptation to a changing environment leads to extinction, I'd rather focus on what would bring success.
I'd rather focus on what will work also.  And in that vein, the fact that awareness and projects are increasing means that there is momentum and inertia.  Its got a lot of counter inertia to fight, but its something.  If we can snowball the inertia of alternatives then we might be able to just turn this ship around.  And rather than denying things are happening we need to be trumping up the things that are happening to encourage more of it.
BTW, note that you make the argument "we aren't moving fast enough" which is probably valid, but you want to call it "we aren't moving."
Ethanol strikes me as a (mostly) political solution.

Real ethanol commitment would be to buy ethanol from the Brasilians (the low cost producer).

And it doesn't really do anything about the CO2 problem.

I've often called our actions in the US a "messy response" to peak oil.
Fair point, but the question is not whether we are changing fast enough to survive, but whether we are changing fast enough to avoid some of the more serious consequences of inaction.
Yes, and in my opinion it will come down to the rate of global produciton decline.
No it could be whether 'changing fast enough to survive'.

I think the bigger threat is Global Warming, there there is every evidence that as a civilisation, we are not doing enough, fast enough.

On Peak Oil I am more agnostic.  We'll find out if the US (and other countries) were doing enough as and when oil production really does peak.  Obviously the fall-off rate is the key, then.  If it is 2% pa that is one set of problems.

If it is 8% that really is another set of problems.

When they are in their particular ecological 'niche' they outperform other creatures and dominate.  Think the Giant Sloth, the Dire Wolf, Ursus Major, the Tyranosaurus Rex.

The Dodo.

Germany is not more centralised than the US. Its 1949 constitution is based very closely on that of the US. Like the US, it has a federal system. The German States (Länder) are akin to US states and have similarly devolved powers. They have a Supreme Court (Bundesverfassungsgericht = federal constitutional court) which has a similar role to yours in the US.

As far as I know, it isn't illegal to own a firearm in Germany. It is more regulated and gun ownership is not nearly as common as in the US. I would say that it's culture/tradition, rather than law/regulation, that plays at the bigger part in constraining private gun ownership.
I had thought it was virtually impossible to own a gun in germany, unless you had a hunting license (and then types heavily restricted).  By contrast in many US states you can own a military weapon.

This being a hangover of the Red Army Faction/ Baader Meinhof days.

In terms of centralisation, I probably should have been more specific.  My general impression is Germany has a lot of laws which are applied universally and at each level, the government is quite strong and very involved in managing the economy and society.

I'd certainly heard that Germany is really a confederation of Lander, rather than a nation! ;-).  Frei Stat Bayern, no less ;-).

By contrast the US (I'm not American) really is amazingly fragmented.  Many states have no income tax or other significant tax raising powers.  Private companies are far more powerful and independent politically- it's hard to imagine a German state having the US equivalent of 'employment at will' (ie they can fire you with no cause and no notice or right of redress).

If you go to a place like Texas or Alabama, then the legislature is by law part time, and the governor has almost no power.  The Texas legislature meets only 6 months every 2 years, I believe.  Alabama's Constitution forbids an income tax, I believe.

You'd never find an American state government on the Board of a company like VW, whereas VW is part owned by the State, as are many banks still in Germany, I think.

'national policy' in the US is really quite a fragmentary thing.  It's not like the Chancellor/President proposes a bill which becomes law-- instead both houses pick the thing to bits and amend it left right and centre.

If you go to a place like Texas or Alabama, then the legislature is by law part time, and the governor has almost no power.

And we like it like that dammit.  But yes traditionally Texans have preferred more limited government.  Our lack of Income Tax I don't believe hurts us either, and we make up for it in property taxes, and sales taxes.

And oddly enough Texas is to me one of the reasons why I'd rather see less government involvement in the energy game.  Texas is pursuing Wind power and I've heard rumblings of solar in West Texas.  We also have one of the more reliable grids compared to Eastern or Western US/Canadian grids.

Not saying Texas is perfectly suited yet, but I rather like my odds here compared to other places in a PO world.

Yes, a lot of Americans are very confused by weapon ownership in Germany. Essentially, it is illegal to have a weapon in your home.

Instead, you need to have a weapon permit, belong to a 'gun club' (trust me, hard to translate - but you have to be a member of a Verein to get your permit), and your weapon(s) are kept at the gun club's shooting range.

Of course, the major difference is that Germans don't think weapons bring about peace - they think weapons bring about death and injury. As so often true here, hard to argue with such a clearly pragmatic viewpoint - after all, German weapon manufacturers try their best to manufature high quality weapons that do just that - and in constant competition with high quality armor manufacturers trying to prevent just that, by the way. Neither the weapon makers or the armorers having any romantic notions about what they do - they are engineers in a very demanding profession, after all.

The number of weapons is certainly much lower than where I grew up in Northern Virginia - but to suggest weapons are illegal, or that a small German community could not produce a few hundred weapons (from handguns to rifles), communally, to meet any realistic threat in an hour or two, is just silly. Notice 'communal' - a lot of weapon owners in American shy away from that concept - it is one of the major reasons they own weapons, to avoid being forced to participate in communal actions. It is equally silly to believe any threat requiring hundreds of weapons to meet it will materialize in anyone's normal existence.

After all, America has just made torture legal and suspended habeas corpus, it seems, and where are the millions of weapon armed patriots on the streets defending liberty and the American Constitution? A lot of delusions in America, a lot of delusions. But the emergency rooms do know how to handle gun shot victims much better than in Germany - the Americans get a lot more daily practice, after all.

Best. Matt. Savinar. Article. EVER.

I respectfully disagree. Matt Savinar's best article is the one quoted on the floor of Congress, his home page that methodicaly delineates Peak Oil and the consequences thereof. Beautiful work there.

His article referenced above, however, seems to me to be lacking in depth.

For another perspective, check out this interview with Elisabet Sahtouris.

According to Elisabet Sahtouris, co-operation is a necessary foundation for survival and success. After the hostile competition of young species, they learn to negotiate differences and work out co-operation schemes to their mutual benefit. According to Sahtouris, co-operation is a necessary stage for sustainable success. She has worked out her version of this Theory of Everything in her book, EarthDance: Living Systems in Evolution (iUniverse, 2000).

AMPOD might take notes from the Biblical prophets. They did more than just predict a doomed future. They offered possibilities of better outcomes if the people would have a change of heart and direction.

Heinberg acknowledges that the Last Man Standing is our present course, and probably most likely outcome, but this does not deter him from advocating for Powerdown.  Pat Murphy acknowledges that 'Plan D' (Die Off) is not altogether unlikely, but he advocates for the 'Plan C'; David Korten says the Great Unravelling is the course we are on. The Great Turning is not a prediction, but it is a choice that is ours to make. These folks that are pushing for change in our culture and society are making a moral choice to stand up for what they believe in.  We should do likewise. Not to try is to give up too easily.

My friend Dave Ewoldt recently made the following comment.

It is also instructive and empowering to realize that we are far from alone in the desire to consciously make new choices that are in balance with natural systems. The voluntary simplicity, Cultural Creative, and relocalization movements toward a post-corporate and post-carbon economy can combine with political progressives to make up about 45% of the electorate. It is estimated that about 90 million people in the U.S. are included in these groups, which makes them about nine times larger than the radical right of Christian fundamentalists, and three times larger than either the current Democratic or Republican Parties.

A few points:

  1. My screenname aside, I have no desire to be a "prophet" which really means a demagogue which really means a wanna-be-dictator.

  2. My guess is you're the guy who shows up to his relocalization meeting in the $30,000 Prius or the $3,000 scooter Maybe the brand new bicycle. You're NOT the guy who shows up to his meetings on the used bicycle, are you?

My example probably rubbed you the wrong way b/c deep down you realize it is true. And as (my guees) your world view and social circle are dependent on the idea of a possiblbe Great Turning the truth of what I wrote makes uncomfortable.

You're not the guy who is willing to give up his coal-powered computer, we already know that just by you being here.  If the Great Turning is a choice, and you want me to believe you that you are serious about it, I want to see you choose to give up this frivolous use of a device that is as much a part of the Great Unraveling (spewing C02 as you read this, constructed with toxic chemicals, will become E-waste etc.) as anything.

What rationale do you have for destroying the environment as you are doing as you read this? Don't you want to "be the change you want to see"? If we are to powerdown or to live in small scale sustainable communities ala Community Solutions, we are going to need to give up most use of fossil fuels. This includes all non-frivilous use of the computer. How many people in Cuba, which is often cited as an example of how to repsond to PO, have personal access to computers as you do? Why aren't you willing to follow their example?

I would love nothing more than for us to transition to the type of thing Pat has envisioned. But so long as people aren't willing to do so much as turn off their damn computers, it ain't going to happen.

I'm not willing to turn mine off and you aren't willing to turn yours off, that is why I don't tell people there is hope for the Great Turning. If you and I are not willing to do what it takes, why should I and I ask/advocate others do the same.?

3. Your friend David is full of it. Of the 90 million, I bet 90% are:

A. banking at the same banks as the 10 million rabid religious fanatics (RRFs)

B. buying of their energy from the same giant companies as the 10 million RRFs

C. buying their food from the same giant companies as the 10 million RRFs

D. making personal use of the car, just as the 10 million RRFs

E. consuming as many BTUs as the 10 million RRFs

F. spitting out as much C02 as the 10 million RRFs.

So are 90% of the 90 million people really all that different than the 10 million RRFs or have they (and your friend) simply deluded themselves into percieving themselves as different?

And which is more dangerous? Being a RFF and being aware of it or living a lifestyle virtually indistinguishable from that of the RFF but deluding yourself into believing you are doing something otherwise?

2. My guess is you're the guy who shows up to his relocalization meeting in the $30,000 Prius or the $3,000 scooter Maybe the brand new bicycle. You're NOT the guy who shows up to his meetings on the used bicycle, are you?

Actually, I literally was the guy on the USED bike when I went to relocalization meetings last year. Sorry. Since you hedged your guess to include both the scooter and the new bike along with the Prius, what are the chances that you'd be wrong? 3 to 1 odds, and you lost. And I don't think any of us got more or less attention because of our mode of transport.

My example probably rubbed you the wrong way b/c deep down you realize it is true. And as (my guees) your world view and social circle are dependent on the idea of a possiblbe Great Turning the truth of what I wrote makes uncomfortable.

You're not the guy who is willing to give up his coal-powered computer, we already know that just by you being here.

Your example didn't rub me the wrong way, but I do love the idea of a possible Great Turning.

Guilty as charged on the computer use. You didn't have to guess on that one.

Sorry if I offended by saying your article lacked depth. I just think the concepts of cooperation and reciprocity in evolution need to be explored alongside the competitive aspects. Your website overall is excellent, and I will continue to point people to it. I appreciate your emphasis on personal and family preparedness, but I also appreciate the emphasis of Heinberg and the others named in my previous comment.

How Did Cooperative Behavior Evolve?

Howard Bloom: The Global Brain

I'd summarize it thus:

  1. Society isn't reducing energy use very fast
  2. Based on his view of human nature that is understandable
  3. Since his view of human nature trumps future economic changes, we're doomed.

I'm actually with him on point 1, but I think by 2 he veers off to personal hobby-horses, again.

The most glaring unsupported and hidden assertion amongst those hobby-horses is that we must immediately leap to some rock-bottom energy consumption.  In other words, "Prius guy" must become "used bicycle guy" for us to survive.

Nobody has ever calculated that based on the energy supplies, but it makes great emotional copy.

The danger with human beings is that when a resource becomes scarce, instead of collaborating about economising with the remaining resource, they fight for it.

Both tendencies are rich in human history.  The Japanese imposed strong constraints to stop deforestation (but also froze technology development and outside contact).

The British sailed overseas to find new supplies of timber: first Russia and Scandinavia, and then North America-- trade and then conquest.  For fuel, they discovered coal.  

Human beings are very dangerous ;-), but I don't think that is what's really shaping our response right now.

The real problem is that energy does not command the concentrated daily attention of the US population.  Most people have bigger problems.  The only time we really see concentrated awareness is in price spikes ... but that fades.

It fades because prices are still low.

Now we all here (including me) have a warped worldview because we spend at least a little time thinking about this every day.  Of course we wonder what's up with other people (even as they, perhaps, wonder what's up with us).

I think the bottom line (no intended allusion to Jennifer Lopez), is that we can't see what's over the horizon.  We don't really know what the intense daily preoccupation of the population on energy will bring.

My guess is that it will bring demands to government, and a restructuring along the lines of The New Deal.  But that's just my before-the-horizon guess ... YMMV.

We will continue pretty much as we have continued and, in that sense, we will suffer the consequences of our inaction. Some will suffer more than others.  Some will be prepared; most will not. In that sense, we are "doomed".  Beyond that, however, is the question, "what will this doom look like?"  

Since we , in the United States, largely rely on market signals to help us make decisions, we make it even more likely that will be continue pretty much as we have continued. We will not change those signals because those who run this country believe that any significant alteration of the market through higher prices through taxation or otherwise will cause them to lose power.

All is well. Gas prices are down and the most important issue in America right now is a congressman sending sexually oriented emails to 16 years old.  Forget Iraq.  That is what may push this election over the edge.

Given the nanosecond theory of history,however, even doom may exist within a nanosecond. Give us a million years. We can fix all this.

I largely agree, but here is the bit that seems undetermined to me:

Since we , in the United States, largely rely on market signals to help us make decisions, we make it even more likely that will be continue pretty much as we have continued.

We don't know what the market signals will actually be.

I do notice that pessimists predict a sudden and late price signal ... but that seems to be the same predictions reinforcing themselves, again.

In the other thread *trader said that he saw this as a decades long bull market for energy.  That would imply to me that it is at least possible that the price signal could be long term and sustained.

The problem is the political system is so finely balanced.

Most people who pay attention to the issues long ago had a partisan identification, and know who they are going to vote for.  If you live in 95% of Congressional seats and perhaps 80% (?) of States in a presidential election, the vote is already almost a foregone conclusion due to the gerrymandering of districts/ the Electoral College.

So it is that small minority of undecideds who both parties target.  And they make their minds up on emotional issues.  policy isn't really their bag.

Bob, Yes, an interesting article.  Almost certainly true.  But we do have some cultures (very few) that don't incorporate wastful consumption.  The Amish and Indians come to mind.  Also, the stone age tribe referred to in the article did practice social one-upmanship but did not practice conspicuous consumption.  There is some hope.  The problem is a social one that can be changed, but it doesn't look like a solution that we can use in any relevant time-frame.  Easter Island is the most likely outcome.  We will find out.
Thanks AMPOD for the food for thought, but I think there are some big issues with that article.  Just a few:

He equates "overconsume during times of plenty" with "insuring a little was socked away for the lean times".  But those are actually opposites.  True "consumption" means using something up, not saving for the future.  AMPOD himself, as he says, does not own a car so that he can save up the money for other purposes later.  Alas most Americans are consuming like there's no tommorrow - a self-fulfilling prophecy.

Some types of conspicuous display are not using up much resources.  The display is of strength or prowess, but it is mostly a display of resources or strength that could be used for real.  More like a military parade than a military attack.  Those penis sheaths are an example.  (But they probably prove nothing, only remind the onlookers of the existing social standing of the wearer.)

As to the question in the article title, "When is the Revolution Coming?", I agree with Ibon on this:

I have naively hoped that if the resource, energy, that drives the global culture of consumption starts depleting, then stresses will build up in the status quo to force political or economic change toward sustainability.

 - it is indeed naive to think that the start of depletion, the signs that we here on TOD see, are enough to shake the status quo.  It needs to be much more obvious.  That means that long-term proactive planning will not happen, but it does not mean that a cultural change will not happen eventually.  But it won't be pretty.

TOD'ers. I will be going to the ASPO event in Boston - any others?
Hello Nate,

I think AlanfromBigEasy is going. I cannot go.  Hope you at least tried to get Jay Hanson to go to the Conf.

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

I am also going. My daughter lives in Boston, so I can visit her as well.
For all those who think the US is bankrupt:

Debt as a % of GDP in G7 countries.

1 _158.0% Japan
2 _108.8% Italy
3 _ 69.6% Canada
4 _ 67.3% Germany
5 _ 66.2% France
6 _ 64.7% United States
7 _ 43.1% United Kingdom

Debt as a % of GDP trend over six years. The US has gone from 34% to 37%.

Time period 2000 2001 2002 2003 2004 2005
Luxembourg 3  3  3  2  1  1  
Australia 12  10  9  8  7  7  
Norway 19  18  19  22  19  18  
Iceland 34  40  36  34  29  20  
Mexico 23  22  24  24  23  22  
New Zealand 33  30  29  27  24  23  
Czech Republic 13  15  16  19  21  24  
Ireland 35  31  28  27  25  24  
Switzerland 26  25  28  28  28  29  
Korea (Republic of) 17  18  19  22  25  30  
Canada 41  40  38  36  32  30  
Slovak Republic 24  36  35  36  39  34  
Spain 50  46  44  41  39  37  
United States 34  33  34  35  36  37  
Finland 48  45  42  44  43  39  
Denmark 55  52  52  49  47  39  
Germany 34  35  36  38  39  40  
Netherlands 44  41  41  43  44  43  
Poland 36  36  41  45  44  45  
United Kingdom 43  40  40  40  42  46  
Sweden 58  50  48  49  48  48  
France 47  48  50  52  53  54  
Hungary 54  51  55  57  57  58  
Austria 60  60  60  60  61  61  
Turkey 51  100  87  79  74  68  
Portugal 54  56  59  61  64  69  
Belgium 100  99  98  96  94  93  
Italy 104  103  100  97  96  98  
Greece 119  121  119  117  119  119  
Japan 106  124  137  141  157  ..

The debt % at the top of the table does not match (and in some cases is nowhere near the number) in the main table.

e.g US 64.7% at the top - 2005 number 37%

GDP is a meaningless measurement anyway.
I think you'd have to look at Average Citizen Indebtedness or something like that to determine if a society is going to take a big shit. I think the US is #1 in that, with the UK another country doing poorly in that department, and the UK seems to be undergoing some kind of personal debt and real estate meltdown....

Interestingly, while the US toughened up its bankruptcy laws, the UK made theirs more lax.

I am guessing that if you knew what that meant you would have tried to explain it.

GDP is hardly a perfect measure, but it does create a standard for comparison. While GDP may not measure the actual wellbeing of a country or its ability to pay beack debt, it does create a standardization that reveals that the US has far lower levels of debt then many other countries.

Actually, I am just having fun posting this because my impression is that the level of discussion of the financial position of the US and future repercussions at TOD is very low. The standard comments are "The US is bankrupt", "The US is so in debt it can't do anything" and "If China stops lending money the US is dead". I came across these fgures and posted them to give some perspective, but also to try to move the discussion forward.

I do think the US has some very significant fiscal problems, but relative level of debt is not one of the main ones. The government spending more than it is earning, people consuming everything that they earn and future obligations growing too fast are all worse.

I think Bush's economic stewardship has been a disaster and that the prospects for a weaker dollar are great. I think these factors combuine to introduce a level of risk into the system that is not tolerable, although a crash is only one of the possible outcomes.

OK, now surprise me. Tell me why GDP is "meaningless" and suggest a better way of evaluating and comparing the US debt levels.


this was not really the post I intended to write tonight, if I intended to write any, but since you have not received a reply to you question,

 "OK, now surprise me. Tell me why GDP is "meaningless" and suggest a better way of evaluating and comparing the US debt levels."

Let me have a second on this one...first, let me say that I am probably more in agreement with you than most here on the three major points you seem to make, (a )the debt of the U.S. is not as great as it is made out to be on a comparision basis (b) it does not seem to be an immediate threat and (c)GDP is a valid measure, at least the best we have at the moment.  If I am correct in my assessment of your major points, let's return to you question.

The argument against the GDP has always been that it measures all economic activity, regardless of how useless or even destructive.  This of course encourages economic activity, but at the same time encourages waste and ineffeciency.  The more steps that can be added to a process the better from a GDP perspective.  

Since this board is essentially about energy, let's use it as an example, and take a comparison between say ethonal, and a VERY efficient solar panal and battery set.

With ethanol, you get this great variety of steps, from the production of the seed corn, to the selling and the shipping of the seed corn, to the provision for equipment and equipment maintainence to prep the ground, the fuel provision to equipment to spread fertilizer, plant the corn, to the harvesting of the corn, the hauling of the corn, the distilling of the corn, the fuel required to distill the corn, which provides anothor secondary industry in the use of either natural gas or coal to distill the corn, which means the drilling of natural gas and its transport, or the mining of coal and it's transport, to the transport of the finished product, to the mixing of the finished product with gasoline, to the retail of the finished product.....

As we can see, this is a dream come true from a GDP point of view, as the multiple steps and needed side industries become each one a contributor to GDP.  But of course, each added step contributes to loses in efficiency from a return on energy invested point of view.

Now take the other example, the solar and battery set.  The raw materials to build the battery are brought together, the raw materials to build the solar panel are brought together.  The factories at each site assemble the product.  The products are sold by contract, online or catalog to a contractor, who recieves them from a shipping company, delivered to site.  They are installed, wired and tested.  They begin producing kilowatts.  There is no more fuel to haul to the panel, and no more waste to haul away from the panel for it's life cycle.  The battery requires nothing for it's life cycle.  If the panal could take freshwater and electrolyze it to hydrogen, it would go into a car sitting in the garage.  No fuel to, no waste away from.   Or, the solar power could charge batteries on board the car.  No more fuel to, no more waste away from for the life cycle.  The battery and solar panel would be returned to recycle at the end of it's life cycle, redeeming most of the original energy.

If it could work, a big IF, but if it could, it would be a dream come true, right?

Not from a GDP viewpoint.  It would be a catastrophic failure.  As the efficiency of production and recycling improved, it would be horrible for GDP.

So there, in a nutshell, is the GDP problem.  We now have for instance a situation where coal is mined, and then someone gets paid to try to redeem the ground it came from (adds to GDP), and it is burned, and then someone gets paid to try scrub and sequester the acid and CO2 (it adds to GDP) so that coals filthy ways are a great contributor to the economy!  

Your question of what method would be better is a tough one.  GDP is far from meaningless, but it surely needs to become more inclusive of the difference between real wealth production and wasted steps.

One thought has been to use a "national inventory of assets".  This would be a formula to measure all hard assets (harbors, airports, roads, bridges, mines factories, shops, machine tools, computers, hot water heaters, indoor plumbing, etc., AND natural assets,  land space, mineral assets, standing forests and clean fresh water, and divide by the number of persons in the country.  As minerals were depleted, or water reached a certain level of unusability, or forests were cut, they would go "off inventory.  As built hardware (whether it be cars, trucks, roads, farm equipment, computers, aircraft etc., was depreciated, it would go off inventory.  Interestingly, since all "built" assets' must come out of the stock of natural assets, plus what is imported, your get a formula of wealth...the more natural asset means more future wealth, while the less compared to already depreciated built assets (called "junk" in the real world) would be a formula for less wealth.  

The population would be the middle bridge between natural assets and built assets, and be in both columns, both as talant and labor pool, and consumer/customer.  But if the population middle compared to the ends of the equation was low, you would get efficiency, as the nation would be building more with less, thus holding natural asset stock abnormally high, but still with a nice sized asset stock of built assets.  As far as debt levels, they would be measured against the built stock/natural stock equation, by population.

This sounds more complex than it is, and is no more complicated in many ways that GDP measurement.....for example, 1000x personal self propelled cars at 2 years depreciated, 1000x persons, 10000x raw materials, fuels and water to create replacement 1000x self propelled cars, equals enough material to create 10 years worth of cars, so if the cars last for 10 years, only 8000x is needed in upcoming decade, since stock of cars is only 2 years depreciated.  If efficiency can be doubled in production, only 4000x needed for decade, giving enough for 16 years, or if cars can be stretched to 20 years depreciation, and replacement units double in efficiency of production, wealth is again doubled out to 32 years, etc.  If there are only 500x cars for 1000x persons, however, this may be a sign of economic weakness, but if there is a shortage of raw material compared to number of cars or they are late in their depreciation, this could be, etc.  This would apply to machine tools, trains, planes, computers and every other catagory, right down to winter coats and shoes.  The idea would be to have as much built weath as needed per person, but as much remaining natural asset as possible per person.  The number of wasted transactions would be a marginal effect on the wealth measure.

I realize that is a very rough example, but it indicates the way in which some way to measure efficiency and not just action must be undertaken.  We must also find a way to add incentive to build quality, long lasting goods.

I will close by taking as an example the DC-3  aircraft.  It is almost organic in it's abiltiy to fill the niches, and survive in some form.  Originally, it was the top line, military, civilian, the best aviation could build.  But as larger aircraft began to fill that gap, it's efficiency, long durability airframe, and good handling nature made in an excellent second tier commuter and transport plane around the world.
In recent decades, highly efficient turbine engines have been adapted to the airframe, making it an excellent small faster and more efficient turboprop plane, just the right size for shorter routes and small lot hauling.  Now, it is beginning to fade away, but the metal is easily recycled, and the turbines removed for renovation and use elsewhere.  Not bad, given the first ones were built in about 1938, and most were built in the second world war!

This is real wealth development and preservation.  But, again, no good for GDP as they consumed too little, lasted too long, and returned too much with not enough steps.

These are the kinds of examples though, that bring a tear to the corner of the eye of a technician, efficiency expert, and engineer....;_-)   (oh, and they can't make an environmentalist too sad either....., even if they did run on fossil fuel :-)

Roger Conner  known to you as ThatsItImout

Good post and a longer answer than I expected. Actually I only asked Sunspot because usually these throw away answers indicate that the person has no clue what they are talking about, but 100% conviction that they are right. Whenever I ask them to back up their bold assertions, they vanish.

I agree with your critique of GDP. However, I do think that if you want to understand the magnitude of debt you have to compare it against something. GDP is not meaningless and is probably the best measure we have. In that regard, the absolute level of US debt is fairly manageable.

My main objective in the post was to try to elevate the discussion on the US debt/fiscal position to a higher level.

As I noted above, there are frequent cries about how the US has so much debt it won't be able to do anything in the future, the dollar will crash and the country is at the mercy of the Chinese. As I noted above, usually the person making the statement has absolutely no idea what they are talking about, but is sure they are right. Their knowledge to conviction ratio approaches zero.

While these claims are largely inaccurate, the US does have significant longer term fiscal issues and may face severe negative consequences from them. As I suggested above, this has much more to do with government and individuals spending beyond their means and the looming set of future obligations.

Since many posters seem to need to frequently comment on how doomed the US is from a fiscal standpoint, I thought it would help to provide a bit of a primer. I thought people would like to be right for the right reason, rather than being right for the wrong reason.

The overall issue that US fiscal policy is on an unsustainable trajectory is correct, although the current magnitude of indebtedness is not the problem. It is also correct that the current administration has made the problem worse.

"My main objective in the post was to try to elevate the discussion on the US debt/fiscal position to a higher leve...."

Well, did I try to do my part.....?

Ya can't accuse of a soundbite reply....:-)

RC  known to you as ThatsItImout

Jack: I am sure you are aware that the US current account deficit is the problem. Yes, Japan has a high internal debt, but it is not being held by China and some other foreign power. It is starting to sound like you are trying to convince yourself. However, it is nice to see that you have finally given up on GWB. It is possible you are the canary in the coal mine for the Rethugs.

Try to find one single post where I have ever supported Bush.

This is just more of your petty attempts to smear an argument that you can't deal with intellectually. In fact, the only association with me and Bush was when I disagreed with your love fest for the Iran Oil Bourse which you said would crash the dollar. Since you couldn't argue with me on that issue, you tries to call me a neo-con and Bush supporter.

So, I am calling you out as a liar and a perpetrator of ad hominim attacks to avoid a discussion. Try to find a single example in my two years of posting here where I have supported Bush - just one - or admit you are lying and smearing.

Jack: I had no intention to smear or attack you. From reading your posts I had gathered (according to you, mistakenly) the impression that you were a BushCo supporter. Glad to see you aren't.
OK. Misunderstanding on both sides.

But I do think there is an important point here. There are more than two stories in the world. In fact there are billions. It is tempting to think that because someone disagrees with you on something they are the enemy and should be labeled as such.

But maybe they just disagree. Maybe when you discuss and debate the issues with them one of you will change your mind.

That is why I abhor all this labelling and dismissing arguments by belittling the person who makes the argument. I used to think that people came to The Oil Drum to learn, and would welcome a chance to debate.

I have been surprised by how many actually seem to think they know everything and look at their participation as a chance to advocate, sell, and win.

Fortunately, there are enough people with open minds and enough opportunities to open others including my own. I have learned a lot here and fopund out I was wrong about some things.

There are so many smart people in this forum from so many different backgrounds. If anyone here hasn't changed their mind about something, it can only be because they are determined not to.

The sources are different. One is CIA and one is OECD.
My guess is that the lower numbers are for federal governments only, while the higher numbers include lower level governments such as states.
I took the data and concept from here:


They discuss a bit of the possible reasons for differences in the figures. It seems the larger list from the OECD is better.

I am sure many people here won't even be able to get past the name of the blog, however, it is a very good description of one perspective on the US national debt and fiscal position.

I would be happy to hear other view points and refutations. However, overall, I think this is a pretty good look at the situation and a lot more informed and balanced than much of the hysteria here.

Again, I do think Bush has mismanaged the US fiscal position terribly and that there are potential problems ahead for the US economy.

However, if we are going to be screaming about how the US economy is doomed, we might as well come up with a scenario that makes sense. Now, who can disagree with that?


"However, if we are going to be screaming about how the US economy is doomed, we might as well come up with a scenario that makes sense. Now, who can disagree with that?"

this gives me a nifty turn to the thought that has been on my mind today.

Just over 5 years after the 9-11 attack, the Dow has returned to an all time high.  Oil prices, as I last looked, had tried to get back to $58.60, but since then have fallen back to 58.20, not cheap, but compared to the inflation rate on everything else since the last greatest bull market in history began in 1982, givaway cheap.  To those howling that oil is too high, I would say that I would gladly take this price from now on as long as it lasts, with no further drop in price.  In fact, further drops in price to anything below $50 would be catastrophic in the longer view, encouraging waste, and killing incentives for alternatives.  This is the sweet spot.

The question becomes this, and we have to ask it, even if we do not think it is likely:
If energy can be provided at the current rate plus inflation, in both supply and price terms for the foreseeable future, what threat does the U.S. economy face?
My argument has been only one:  Lack of young, well and modernly educated and ambitious talant.  That is the threat.  We are seeing other nations develop alternatives in the energy production area that are astounding.  We have been lagging now for long periods.  We do interesting small experiments, and make fascinating proposals, but the talent to convert them to workable and marketable projects seems lacking.  Even when the technical talent exists, the broad and forward looking thinking needed by the banking community, the investment communtiy, and the knowledgable customer is lacking.  

Real forward looking design can only sell in a "culture of design".  For too many years, the underpinnings of sophisticated judgement in these areas has been allowed to lapse. Lacking is knowledge of the visual arts, of basic product design and engineering, and of efficiency throughout the life cycle of real and meaningfully advanced products (as opposed to the "new and improved" on the label).  The heart of the culture that can birth, sustain, and grow the Design culture with a big D, as opposed to buy the designer label, is education and exposure to advanced ideas, advanced aesthetics, advanced integration of architecture, transportation, communication, entertainment, and social structure into a culture that is beautiful, efficient, sustainable, modern, and most of all, humane.  "All the world is a stage" it is said, and in many ways, we are constantly in the process of designing the "theatre" of our existance here on Earth, where we play out our short act.  We are given the materials long before we are born, the natural world around us, and the culture of man handed down by history.  What we make of the materials is what determines the look, the quality, the survivability, the "humaneness" of the world we live in, love in, experience in, and die in.  It is, more importantly, the stage we leave to our children, and their children, on into the long future.

The great British scholar, writer and poet  W.H. Auden said that the goal of ANY great culture has always been, "Variety achieved with Unity retained."

Going back to the stone ages are not an option.  Barreling forward into a glitzy shopping mall world of chaos and waste is not an option, not if we hope for a humane world.  We do not need to create a world of "Bladerunner" vs. "Mad Max", they are both called "nightmare" visions for a reason.

There is a sane, stable, modern middle ground, if we develop the talent to design, to engineer, to beautify it, to build the "theatre" of humane existance.

It is, as it has always been, a philosophical and aesthetic choice.  As we tell our young, you will live with the consequences of your actions.  It is true of a person, and it is true of a culture.  

Now, right now, today, even with gas prices falling, and the Dow at a high, when it is easy to get complacent, to go back to the tely,  is the time to look very hard at our lives, our cities, our nation, and our children, and ask:

At the deepest level, at it's very core, what kind of a nation, what kind of a world, do I WANT?  How am I and we as a nation developing our way there?  Where is the talent, the leaders, the bankers who will get us there?  What actions can I, can we, take to move, even if in small steps, in that direction?
What can we do to make these actions fun, interesting, challenging, and lend real meaning and feeling of community to the actions we take?

The questions above, in the bigger scheme of things, long after you and I are dead and gone from this mortal concern, will matter a helll of a lot more than the oil price or the price of gasoline ever could.

Roger Conner  known to you as ThatsItImout

If energy can be provided at the current rate plus inflation, in both supply and price terms for the foreseeable future, what threat does the U.S. economy face?

I believe that growth at the inflation rate is the model for a renewable resource. Even if energy grows at above inflation, but we use it more efficiently (more economic output per BTU) the end result is similar. While I think the future is utterly unpredictable and a wide range of things could happen, I do think this is one possibility.

As you note, regardless of what we think will happen with energy, it is worth asking "What other issues do we face in developing the country for the future?"

Going back to the stone ages are not an option.  Barreling forward into a glitzy shopping mall world of chaos and waste is not an option, not if we hope for a humane world.  We do not need to create a world of "Bladerunner" vs. "Mad Max", they are both called "nightmare" visions for a reason.

There is a sane, stable, modern middle ground, if we develop the talent to design, to engineer, to beautify it, to build the "theatre" of humane existence.

I think this is right. Many of us are uncomfortable with the future and do wonder if it can keep going. But you can't turn back the clock.  

I do think there is a theoretical middle ground, but much depends on big picture issues that are beyond the scope of this discussion. Right now the US is struggling to maintain its position at the top of the pyramid. But does the US need to be at the top? Is there another order that will work? Maybe.

On a tangible level, I am not all that worried about the US at the national level.  I do think at some point a massive adjustment has to take place in which the current situation of citizens and government spending more than they have reverse and becomes spending (and consuming) less. This will be painful, but not fatal.

However, I worry the most about a bifurcation in society.  While it may seem that the Republican policy is the cause of the divide between rich and poor, unfortunately, I think the issue is deeper and more enduring.

I think the top of the US can compete with anyone and maintain the high standard of living they have now. I do think the US economy unleashes creative forces that create value. Google, apple, eBay, and Amazon are just the biggest of companies created by the match of US talent, capital and a supportive system.

However, I am not sure about the average person. I think that right now, if someone stumbles or makes a mistake in their youth - dropping out of school, getting pregnant, getting arrested for doing what the rest of us got away with - they may never recover.  How is the US going to be able to provide an acceptable living for the majority of people?

The solution is not at all clear. I think the Republicans want to ignore the problem and the Democrats want to go back in time. Neither will work.

However, I think the problem is permanent and structural. The world is open and can not be closed.  Poor Indians, Chinese, etc. are now able to compete and gain the benefits we have been able to horde for years. And they deserve them no less than we do.

I have left the US and now live in Asia. I may stay here, I may not. But I do feel that the benefits that future offers compared with the present are greater here than anywhere else. In the US, can you realistically say life will be better for the next generation than this one? It's an easiest case to make over here.

So I may have just restated the problem, but it's a start. And all I can do for now. I don't really have an answer.

The short answer is that the US has always been able to keep growing, and growing GDP per head.  Loss of jobs in one area inevitably leads to the creation of jobs elsewhere in the economy.  That's not just Panglossian, it also corresponds to experience.

Britain has effectively de-industrialised, but our economy is doing better than our Continental European partners.

The US has better demographics than any European country (or Japan, or South Korea) and so it will keep growing when they struggle.

The issues for the US are the growing gap between the middle and the bottom, and the middle and the top.  The top 1% of all income earners are taking most of the real income gains.

In addition, in a world of Global Warming, let alone Peak Oil, the magic of economic growth may just not be there, in the same way.

valuethinker says:Loss of jobs in one area inevitably leads to the creation of jobs elsewhere in the economy.  That's not just Panglossian, it also corresponds to experience.

Ya Wallmart has a job for you! Apply now before thousands apply because there are so many good jobs out there.

Do you want fries with that?

But there is also Target and Costco, which pay better and have better benefits.

And not all manufacturing jobs pay better than WalMart, or are inherently nicer places to work.

I wasn't arguing the distribution of income would be ideal (I am for redistributive taxation, to a point), but rather that the economy can, and will, produce jobs.

The propaganda of the free market is being used as a cover for capital to destroy worker's wealth.  It is a direct transfer of wealth from the workers into the owners of these corporations when jobs are outsourced outside the country.  It is a corporate theft.Yes according to your principles NAFTA solved the Mexican problem and brought new industry and jobs here from the mexico's purchases. The mexican's have stayed in mexico because of all the jobs created there.Free market indeed.

A simple solution. Corporations that want to sell in the US market must have a large per-centage of personell, assets in the US.  Like Wallmart did to its suppliers.

Remember corporations are largely owned by individuals via pension funds and mutual funds.

There are issues with the distribution of wealth and income, but higher profits benefits those Americans who are part of pension schemes or have stock investments.

The largest investor after all is a public one: California Public Employees Retirement Scheme (CALPERS).

For too many years the most talented young people I've known only find job opportunities remotely commensurate with their abilities abroad. Here in the States it's about sucking up and playing the game and making Big Deals, having talent and intelligence is seen more as a threat than as something useful.
Of the young and hyper-talented I've known most prefer to stay at home in the US and work at teaching or miscellaneous survival jobs far far below their abilities
There is this squeeze on the professional class going on.

if you look at the data, the rise in real incomes in the US since 1980 has been almost entirely in the top 10% of incomes.  The rest has stagnated.

However, it's actually in the top 1/10th of that, ie 1%, and in fact, the really big increases in real income have come in the top 0.1% of that.  Even amongst lawyers, say, the very well paid have gotten even more well paid than the average.

The data is so pronounced the Congress has passed (is passing?) a law to zero out the collection of that data.  It's just too embarassing.

So you can see how even the average college educated kid is going to feel squeezed.  It's not enough to go to a good private or state college, it has to be an Ivy.  It's not enough to go to law school, it has to be a top10.  It's not enough to associate at a city law firm, it has to be a legal top 10.

It's not just about being a fund manager now, used to be fund managers got paid the equivalent of $250k and that was that.  The top mutual fund managers maybe $1m at Fidelity, and the state pension fund managers maybe $120k.  That was the range in the early 90s.

Now the top hedge fund managers get paid over $100m, some nearly $1bn and a goodish one can get $10m.  The rewards to winning have gotten a lot bigger, at the same time as marginal tax rates have come down (the fall in capital gains taxes has a disproportionate impact because the very highly paid typically make a lot of capital gains through stock options, restricted stock etc).

Inevitably the things such managers buy have gone up in price.  Jack Grubman was enticed to write a buy on Enron by Sandy Weil promising to get his kid into an elite upper west side nursery school.  Fixer uppers in the Hamptons go for $10m.  Apartments on the Upper East side go for $5m.  Houses in Notting Hill in London (where the Tory leader of the Opposition lives, on a salary of £80,000 a year) go for £5m.

Things are less pronounced in other countries, although the same trend is evident.  The UK and Canada are number 2 and 3 in the same trend.

Just over 5 years after the 9-11 attack, the Dow has returned to an all time high.

Same nominal high.  And how much inflation has happened since?

S&P 500 is a better measure as the Dow changes composition so much.

It is about 9% below the all time high.

NASDAQ is about half its high.

Dividends were also paid out. So even if the index is at a lower nominal level, investors could still have made money - even if they bought at the absolute peak.

I would guess NASDAQ companies pay out less, and in any event dividends couldn't make up for a 50% drop.

The yield on the SP500 at the peak in 2000 was about 2%, gross of tax.

Since then dividends have grown faster than inflation, so I would guess the compound return is about 15% from dividends only.

Over the very long run (since 1890 or so) about 60-66% of total real returns from owning US stocks have come from dividends.  As they say 'who knew?'

Several fairly quick notes, while generally agreeing with the main points -

  1. The German debt figures quoted in the media here are in terms of Germany complying with EU obligations are for all public debt, from the federal government to the smallest town. I doubt that the U.S. figure is comparable, though it is certainly possible in terms of OECD statistics. (Extra note - in Germany, it is against the Grundgesetz - German constitution - for the government to use debt unless it is balanced by 'investment' - obviously, this is very open to manipulation, but budgets with too much debt have been rejected by the German Supreme Court.)

  2. When you strip out East Germany from German statistics, the numbers look much, much better. For example, just imagine that the U.S. suddenly increased its pensions obligations for 20% more people who had never paid into the system.

  3. How much of American GDP is imaginary? - yes, I know, this sounds ignorant, but how much value do realtors bring to an economy, for example? Especially in an age where there is little need for their services in terms of interlinked databases. And yet, all the money 'earned' on these commissions (especially in a time when the asset in question was appreciating in price) is part of GDP, even though nothing of value (speaking broadly) has been generated at all. To put it into TOD terms - when the price of gasoline or natural gas or electricity goes up, their contribution to American GDP rises also. Yes, doubling the price of gasoline is a way to increase GDP in one sense, which leads to the last point.

  4. In any system where a hurricane like Katrina is considered a boost to GDP due to all the reconstruction work, something is clearly flawed in the statistical picture.
I also agree with your main points. Number four, and other variations on it, are a very succinct way of showing the the measurement is ultimately flawed.

However, I think imaginary in point number three is a bit strong a word. In a market system, real estate agents, like all sales people, theoretically bring a supply gap and hence add value to the system. If there was really little need for them, they wouldn't exist unless they were able to "cheat" the system.

At the same time, how much of American and all countries GDP is the opposite - real but not counted? I read last week that Greece's GDP went up something like 20% because they changed how they counted and include things like prostitution.  (I just looked for a link, but couldn't find one).

So, I think we all agree that GDP is a flawed measure. However, to a large degree it is flawed across the board. So for comparision purposes it is useful, if not strictly speaking accurate.

I don't think it is reasonable to dismiss the claim that the level of US debt is not all that high realtive to other countries, just because GDP isn't a perfect measurement.

The King of Bhutan espouses Gross National Happiness, a concept that was oddly echoes by the leaders of the muilitary coup here in Bangkok. I think this may be an equally useful concept - but try measuring it.

The key as you have said elsewhere with the US is not the Federal Debt burden because

  • the US has positive demographics.  there will be new workers to support the Baby Boomers in their dotage.  Most of Europe doesn't have this advantage.  US Social Security will peak at 6.5% GDP vs. 4.5% now, by contrast the Italian equivalent is already 11% and could rise to 20% of GDP-- that will be unsustainable

  • the US has borrowed in its own currency. Argentina borrowed in someone else's

That said, the US has:

  • had a consumer boom based on rising house prices which have risen far ahead of fundamentals like population and income.  A consumer boom in the sense that personal debt levels have soared, and personal savings rates have fallen into negative levels.  When the latter (house price rises) stops, the former will stop.  A lot of resources in the economy will need to be reallocated away from housing and housing related consumption activity.  This happened in the UK and Sweden in the early 90s, and in Canada (eastern), and it can be pretty brutal.

  • a huge current account deficit, and history says these do not last forever, at least not at 7% of GDP.  It is very likely that to close that, the US will either have to have a nasty domestic recession (see above) and/or a significant devaluation of the currency (c. 40%).  The latter will trigger a reallocation from non-traded goods (think mortgage brokers) to traded goods and import substituting industries.  Another way of putting that is that 8 million people or so will lose their jobs in the former, and move into the latter.

If that process happens dramatically, the disruption to the US economy, and the world economy, will be quite painful.

The US is hardly the next Argentina, but it is 'living beyond its means'.

The real questions are-------- When did Denny Hastert know and what did he know?-----What did Pelosi know? ----- When did Soros know?--- What do the following have in common?------ Natalee Holloway, Terry Schaivo, Lacey Peterson, Micheal Jackson, Mark Foley----------- The MSM spent 1000 times more time, money, and effort on them than they will ever spend on our energy situation until people start jumping out of buildings. Good luck on educating the masses. For now it is just the choir.
This bit is interesting:

One oil company, Chevron, is actually taking out ads talking about it. It has a website called willyoujoinus.com. Evidently Chevron executives are concerned that as prices go up the people of the world will start looking for someone to blame and the oil companies will of course be at top of many people's lists. So if we can tell the people of the world that "by golly! we're all in this together, we're out there looking for the stuff and its getting harder."

Actually I was speculating about why Chevron was paying million of dollars for this PR campaign and then I was giving a talk at UC Berkeley to some graduate students on this subject and I went through this little routine, showed this slide, and everyone in the audience well there were 15 students in the room and they were all in their late 20s early 30s but there was one gentlemen who was obviously in his 60s. I didn't think anything about it, he came up to me afterwards and introduced himself; he was the father of one of the graduate students and he had asked if he could come and sit it.

He happened to be the recently retired head of PR for ChevronTexaco. I asked him if he knew anything about this ad campaign and he said, "Oh, yes, I designed it," and I said, "Well, is my suspicion correct as to the motives for this?" And he said, "Oh, yes," and he went on to say "David O'Reilly, the CEO of ChevronTexaco, is actually very concerned about peak oil.  He doesn't actually want to talk about it but he is deeply concerned and that's why we have done this ad campaign."

"David O'Reilly, the CEO of ChevronTexaco, is actually very concerned about peak oil.  He doesn't actually want to talk about it but he is deeply concerned and that's why we have done this ad campaign."

That is very interesting, Leanan. That's from the Heinberg interview?

I posted these before. Glad to do it again. I can understand why Americans don't like the indebtedness idea, but the situation is really bad. Negative personal savings is something unique in a western society. US wealth is locked up to a large extent in property ownership, and it is obvious that housing prices can lose 30% overnight, as can shares. That is the danger. Just as the greenback is just a piece of paper, so much of the wealth sits in things that have no absolute value.

Estimates of total US debt obligations range anywhere for $44 trillion to $67 trillion, depending on how much future Medicare etc. is added. The White House "calculations" favour not adding that kind of thing, because "Congress might change the laws". So their official numbers are based on the idea that no-one gets a penny. But assuming the total is $60 trillion, every child is born with a $200.000 debt. At 5% interest, $3 trillion, or 25% of GDP, goes to just paying off the interest.

And there is no manufacturing base left in the US, it can't produce anything anymore. The same is true in Europe, but the debt level is much lower there, so it doesn't have to produce so much just to pay off the debt.

Current Account Balance Ranking by Country - 2006

1 Japan $158,300,000,000
2 China $129,100,000,000
3 Germany $119,800,000,000
4 Russia $89,310,000,000
5 Saudi Arabia $87,100,000,000
6 Norway $51,500,000,000
7 Switzerland $49,660,000,000
8 Kuwait $31,510,000,000
9 Sweden $25,680,000,000
10 United Arab Emirates $25,660,000,000

140 Greece -$14,500,000,000
141 Portugal -$15,000,000,000
142 Turkey -$22,000,000,000
143 Italy -$27,620,000,000
144 France -$30,110,000,000
145 United Kingdom -$38,400,000,000
146 Australia -$41,100,000,000
147 Spain -$64,620,000,000
148 United States -$829,100,000,000

A few glimmers of optimism:

- be careful of those Kotlikoff debt numbers-- I read the book and it is not entirely convincing.

The Social Security debt is funded, like all pension debts, on the future incomes of wage earners.  In fact, the US is in about the best position demographically of any developed nation (and arguably as good as China)-- it has one of the highest population growth rates.

 Social Security will go from 4.5% to 6.5% of GDP, as planned, at peak, and the actual 'shortfall' is about 7% of total benefits payable.  A 1.5% increase in SS deductions now would cover the forecast future deficit.  This is nothing like the crisis that Ronald Reagan faced.

  Germany, Italy, France, Japan are facing far worse problems, and countries like Taiwan, South Korea are beginning to face serious demographic issues.

Remember the Baby Boom starts to die at an increasing rate after about 2015, so the problem peaks in 2035 or so and then falls away. (speaking as one of those Baby Boomers ;-).

- On Medicare there is a real problem.  But the problem is uncontrolled growth in benefits faster than national income, which reflects (partly) societal choice about better healthcare (I also think it reflects gross inefficiencies in the way the US pays for healthcare, but that is another issue).  Americans might choose, for example, in the future, to only spend as much on healthcare as the French, or the Swedes.

So society at the time will choose how much healthcare to have.  In that deficit number, we are talking about retiree healthcare benefits, in part, for people who haven't been born yet.  So let's not panic.

- The US Current Account deficit is financed in its own currency.  This means, if the dollar falls, the Asian central banks take a bath.  So the costs of that dollar fall will not, by and large, be born by Americans.

The problem is at some point the CA deficit becomes unfinance-able because of the risk of devaluation.  then interest rates go up, and the US has a nasty recession and/or the US dollar falls.  The trick is to have that happen not too violently.

So the costs of that dollar fall will not, by and large, be born by Americans

Except that after that, every time we buy shoes or underwear (we won't be buying many more DVD players at that point), we here in the USA will pay a lot more.  Until enough of the former real estate agents get jobs in newly built shoe factories.

It could be painful.  Just as losing all those industrial jobs was painful.

What I see is the likes of Toyota moving a lot more production to America.  Europe is already hurting badly with the strong euro (which does make energy prices cheaper).  Boeing will lap Airbus even more.  Caterpillar will go like a train.

Most of what Americans consume is nonetheless services: think healthcare, education etc.  So there will be pain, but the deflation in consumer goods price has been so dramatic the last few years (the China effect) that I don't think the price rises will be out of control.

It's just if it happens fast, there could be a lot of unemployment.