he United States experienced a brief moment in history that was unique. In the years following World War II, the United States was the sole capitalist-industrial economy in the world that had not been reduced to rubble. Perhaps not in an orchestrated fashion, but this unique position was utilized to transfer massive amounts of wealth from around the world into the domestic economy. Resources were either exported raw or refashioned into produce and sold globally. Agricultural products were likewise exported around the world. Intellectual property was developed along with an infrastructure to support this economic expansion. There was enough coming in that the richest were able to spread it around a little bit and some social scientist that probably did not like the pro-labor propaganda of the previous generation created a new and sought after label of ‘middle class.’
Americans set up a society based on plenty. Plenty of resources, plenty of profits from international sales of domestic produce, plenty of government programs to train and care for those in need. What Americans, and more particularly “the greatest generation”, did not do is plan for any sort of change in circumstance. Over the next 50 years people came to expect certain things and over time what was once seen as a luxury – even what was once unattainable – became commonplace and taken for granted. Someone came up with this idea of the American Dream and most Americans bought right in. The house, the yard, the two shiny cars and all the other condiments of life the norm. We spread out and the extended family was demoted to the people you get together with on holidays.
The first thing that got in the way of the ubiquitousness of The Dream was that the rest of the world recovered. Parts of the world that had always bought what America had for sale started doing for themselves. As America struggled to adapt in the 70’s and 80’s, instead of building stuff the economy kept consuming but started bringing more and more from foreign markets. At the same time, the natural resources that had brought so much wealth to America began to decline. Government began regulating to mitigate the environmental impact economic activity was causing and the decline became more pronounced. Resources were routed to poorer regions that were so desperate for jobs the population didn’t care about the environmental degradation exploitation caused. The resource base slowly continued to shrink…
Meanwhile, the notion of a post-industrial economy began to take hold. America, so the idea goes, no longer needed to produce much domestically. Instead the people could just sell imported goods or provide services to one another to meet their needs. Wealth began to shift to the rest of the world that had started to catch up. The game of catch up helped on America’s end by lower real wages for the bottom rung as incomes around the world inched upward. The ‘middle class’ from the earlier generation became more elusive as good paying jobs became harder to come by. To make up for this, the credit market decided to make more and more money available at easier and easier terms. The people no longer needed to make as much to attain the ‘middle class’ lifestyle, they only had to make the minimum payments. The Dream now had reasonable financing options. To help things along, technology and communications – the internet – came along and produced a blip of perceived wealth for many – this was called ‘The 90’s.’
As technology bubble popped, things crept back to their previous slide. The Dream had to be maintained so even more friendly credit was made available to the people. The minimum payments lowered, as did the minimum requirements. As a result of late-night informercials and ‘reality’ TV shows, a class of people hooked on the easy money of the tech bubble turned their attention to housing. Credit was offered to nearly anyone willing to sign up and for a while that worked out and brought some hope to a mass of people that were now financially strapped from trying to maintain the quality of life they knew as children. All the while, the resource base continued to diminish.
Now stands America, populated by an indebted populace that is ever-more addicted to a high standard of living with no real means to pay the tab. To greet these fine folks as they move into the future awaits an economy ravaged by short-sighted number crunchers at the top of the food chain. The children of the Greatest Generation are now getting old and stand to pose an unprecedented burden on the social welfare programs that were originally set up to help bridge the gap between old/broke/sick and dead. The only problem is the Baby Boomers think these entitlement programs are their retirement policy and the only sector of the economy really left growing (outside of energy) is the portion set up to suck these government programs dry offering goods and services to keep these people alive (as paying customers) for as long as possible. Health Care is the last reasonably bright shining star in an economic landscape of shit piles.
The real problem, however, is that America thinks it deserves to live at the same level or better than previous generations and for the first time in history, there are natural limits slowly impeding this possibility. Globally, liquid fuel production has reached a point at which it can no longer sustain the level of economic growth – and the resulting lifestyle America has come to take for granted – necessary to the fabric of our understanding. The near future will likely be punctuated by drastic reductions in quality of life as most of the population of the world (including much of the United States) becomes priced out of the mix.
This is not about ‘running out’ of oil. If humans are around in 10,000 years I have no doubt they will still be extracting oil. This is about no longer having the transportable energy available in the quantity necessary to be able to continue to live the way Americans have in this, now ending, unique moment in history. This is also about how all of the waste built into The Dream, and the mentality it encourages, will make any sort of transition to anything recognizable an impossibility. The Doom Letter greets you today, in the last days of the American economic behemoth, with the bad news that you and the way that you think you understand everything around you are completely fucked.
Welcome, and thanks for stopping by…
Sunday, October 3, 2010
Reality vs. The Real World
I spent a half hour on hold this past Thursday waiting for the guest host of The Ed Schultz Show to get to my call. He was taking calls about gas prices, and there was a somewhat predictable stream of calls before mine. Most blamed OPEC and the big oil corps, some blamed Washington for preventing domestic drilling, some blamed the newest bad guy in the oil price story – the dark figure known only as the speculator – while one caller actually had the balls to indirectly blame American culture. The very nature of most talk radio is populist, so of course the guest host wasn’t having that. Working class Americans were just trying to get their kids to school and themselves to their jobs, and they just can’t afford these high prices.
Then came my turn. Previously Norman Goldman, the guest host of the show, posited that speculators had to be the explanation for the rise of prices. I explained to him that it was not speculation, or even some grand conspiracy by the oil companies that was driving up the price, it was worldwide supply stagnation. He didn’t like my explanation and told me that I shouldn’t think like an economist while people were hurting, I should think like a human being. In other words, the host of a national ‘progressive’ talk show was not interested in the facts, he was interested in finding someone to blame. Once the bad guy was labeled, he repeatedly said that government needed to ‘do something about it.’ I explained that part of the reason prices here were so high is precisely because other governments – particularly in Asia – have been ‘doing something about it’ by subsidizing consumption.
The phone call was probably fruitless as far as advancing awareness of peak oil – I did not mention the term. But it was instructive to the extent that all parties including the host were not interested in an explanation that was as boring as supply and demand. I think this is important because this is exactly what America is up against as prices continue to rise. Most people only seem to want someone to blame (other than themselves and their own behavior) and government to intervene and fix the problem. The sad fact is that there is no one person or group to blame, things just are not going to be the same and people are going to need to change the way they consume liquid fuels. Unfortunately not a sexy answer in comparison to the alternatives.
Americans may get what they want in one shape or another in the next few years, but there is no explanation as to how subsidies for consumers will even address the actual problem or how they will be paid for. On this 4th of July weekend, as we leisurely go about our lives, I wonder how much longer this frame of mind will continue to dominate American society. And I wonder how much more suffering we are causing the very people Norman Goldman wants to help by prolonging this way of life in one way or another. I realize I may not seem like I give a shit about Americans that are struggling. In a way I don’t but that is due to the fact that information is available to them (all over the internet now, and in all forms) and they don’t seem interested in finding it.
As always, we are fucked, so you may as well get used to it because things aren’t going to get rosy anytime soon.
Then came my turn. Previously Norman Goldman, the guest host of the show, posited that speculators had to be the explanation for the rise of prices. I explained to him that it was not speculation, or even some grand conspiracy by the oil companies that was driving up the price, it was worldwide supply stagnation. He didn’t like my explanation and told me that I shouldn’t think like an economist while people were hurting, I should think like a human being. In other words, the host of a national ‘progressive’ talk show was not interested in the facts, he was interested in finding someone to blame. Once the bad guy was labeled, he repeatedly said that government needed to ‘do something about it.’ I explained that part of the reason prices here were so high is precisely because other governments – particularly in Asia – have been ‘doing something about it’ by subsidizing consumption.
The phone call was probably fruitless as far as advancing awareness of peak oil – I did not mention the term. But it was instructive to the extent that all parties including the host were not interested in an explanation that was as boring as supply and demand. I think this is important because this is exactly what America is up against as prices continue to rise. Most people only seem to want someone to blame (other than themselves and their own behavior) and government to intervene and fix the problem. The sad fact is that there is no one person or group to blame, things just are not going to be the same and people are going to need to change the way they consume liquid fuels. Unfortunately not a sexy answer in comparison to the alternatives.
Americans may get what they want in one shape or another in the next few years, but there is no explanation as to how subsidies for consumers will even address the actual problem or how they will be paid for. On this 4th of July weekend, as we leisurely go about our lives, I wonder how much longer this frame of mind will continue to dominate American society. And I wonder how much more suffering we are causing the very people Norman Goldman wants to help by prolonging this way of life in one way or another. I realize I may not seem like I give a shit about Americans that are struggling. In a way I don’t but that is due to the fact that information is available to them (all over the internet now, and in all forms) and they don’t seem interested in finding it.
As always, we are fucked, so you may as well get used to it because things aren’t going to get rosy anytime soon.
A quick case for libertarianism
I posted the response below on a message board after being inspired by the following quote:
I don’t understand the Libertarian mindset. It’s an elitist mindset, which seems to me to say, “I’ve got mine; why should I care about anybody else?”
I can’t say that I know that much about Libertarianism, but I’m not convinced that it’s the way to go.
Maybe you’d care to educate us….
Sallie
Since Sallie asked, and generally I think that Libertarian ideas are misunderstood, I thought I would write this brief explanation of why the federal government should use libertarian solutions to many of the problems facing America today.
Federal Debt and Domestic Policy
The federal government is nearly bankrupt. It is trillions of dollars in debt and spends hundreds of billions of dollars a year to pay the interest on that debt. Although I don’t think that democrats and republicans intended to do this, it is difficult to expect real leadership on difficult issues when a seat at the table is awarded based solely on who is the best campaigner. Instead it is logical to expect exactly the behavior we see in our elected officials – paralytic finger pointing and expansion of ineffective governmental “solutions.” These solutions usually don’t go far enough to make a positive change and only really result in larger federal deficits.
The libertarian solution would be to drastically downsize the activity of federal government by focusing solely on the basic requirements called for in the Constitution. All other programs, if indeed a government solution is the best, would shift to state and local authority. Libertarian thought does not shirk the responsibilities of citizenry, rather it eliminates the hated middle-man role the federal government currently holds. In a truly libertarian society, all citizens would be expected to make a contribution (albeit a voluntary one) and those who do not would be ostracized for their selfishness.
Foreign Policy
The current foreign policy of interventionism and foreign aid is not only a contributing factor to the fiscal weakness of the federal government, but also a disastrous drain on international social and political capital.
A libertarian foreign policy would eliminate our foreign military presence – which does little for international stability and is mainly a subservient arm of big business. It would also eliminate all foreign aid as it most often only props up foreign regimes that are unpopular within and outside of their borders. Libertarian foreign policy is isolationist only in the sense that it is not empirical. The international role of ‘super power’ the US has played has reaped dreadful international costs and done little good for foreign or American citizens. An introduction of a more libertarian foreign policy would result in a great increase in international political and social capital that our diplomats could use to foster better relationships with currently alienated former allies.
When you get down to it, and ask why would it be better the answer is three-fold:
1. State and local governments are better equipped to address many social and economic problems we face today (different situations will require different solutions).
2. The federal government has proven inept and untrustworthy in its many functions. Whether it be FEMA, degradation of our civil rights, our total lack of national defense on 9/11, the rape of our social security funds, irrational and inhumane military operations, subservience (in both major parties) to corporate interests, etc. the federal government has failed the expectations of its citizens time and again.
3. The federal government can’t afford to continue operating as it is. It requires a drastic reduction in size in order to allow its citizens to be better able to face the challenges of the present and future.
Please discuss…
I don’t understand the Libertarian mindset. It’s an elitist mindset, which seems to me to say, “I’ve got mine; why should I care about anybody else?”
I can’t say that I know that much about Libertarianism, but I’m not convinced that it’s the way to go.
Maybe you’d care to educate us….
Sallie
Since Sallie asked, and generally I think that Libertarian ideas are misunderstood, I thought I would write this brief explanation of why the federal government should use libertarian solutions to many of the problems facing America today.
Federal Debt and Domestic Policy
The federal government is nearly bankrupt. It is trillions of dollars in debt and spends hundreds of billions of dollars a year to pay the interest on that debt. Although I don’t think that democrats and republicans intended to do this, it is difficult to expect real leadership on difficult issues when a seat at the table is awarded based solely on who is the best campaigner. Instead it is logical to expect exactly the behavior we see in our elected officials – paralytic finger pointing and expansion of ineffective governmental “solutions.” These solutions usually don’t go far enough to make a positive change and only really result in larger federal deficits.
The libertarian solution would be to drastically downsize the activity of federal government by focusing solely on the basic requirements called for in the Constitution. All other programs, if indeed a government solution is the best, would shift to state and local authority. Libertarian thought does not shirk the responsibilities of citizenry, rather it eliminates the hated middle-man role the federal government currently holds. In a truly libertarian society, all citizens would be expected to make a contribution (albeit a voluntary one) and those who do not would be ostracized for their selfishness.
Foreign Policy
The current foreign policy of interventionism and foreign aid is not only a contributing factor to the fiscal weakness of the federal government, but also a disastrous drain on international social and political capital.
A libertarian foreign policy would eliminate our foreign military presence – which does little for international stability and is mainly a subservient arm of big business. It would also eliminate all foreign aid as it most often only props up foreign regimes that are unpopular within and outside of their borders. Libertarian foreign policy is isolationist only in the sense that it is not empirical. The international role of ‘super power’ the US has played has reaped dreadful international costs and done little good for foreign or American citizens. An introduction of a more libertarian foreign policy would result in a great increase in international political and social capital that our diplomats could use to foster better relationships with currently alienated former allies.
When you get down to it, and ask why would it be better the answer is three-fold:
1. State and local governments are better equipped to address many social and economic problems we face today (different situations will require different solutions).
2. The federal government has proven inept and untrustworthy in its many functions. Whether it be FEMA, degradation of our civil rights, our total lack of national defense on 9/11, the rape of our social security funds, irrational and inhumane military operations, subservience (in both major parties) to corporate interests, etc. the federal government has failed the expectations of its citizens time and again.
3. The federal government can’t afford to continue operating as it is. It requires a drastic reduction in size in order to allow its citizens to be better able to face the challenges of the present and future.
Please discuss…
The Victim Complex
In times of great accomplishment, Americans celebrate their contribution. From the lowest rungs of the working class to the country’s elite, when things are going well all are recognized for their effort – even if it is simple lip service to serve some end. When things go wrong we don’t seem to so readily reach for our credit in the failing. Maybe it is just human nature. Maybe we are wired to think about the good stuff and drown out the bad. Whatever the reason, the majority of Americans today do not seem overly interested in talking about what they did to get our country, or more accurately our economy, to where it is today.
Everyone is pointing fingers, to Wall Street, to Washington, to the rich. No one is really saying a whole lot about the fact that we all did this, together. We were either willing participants or dimwitted accomplices. None of the people that are being blamed made us take out loans to finance our frivolous consumption. We asked them for it. In return, they did everything they could possibly do to accommodate our wishes. Now that the house of cards we helped build on empty promises is faltering we have nowhere to turn but to ourselves.
But we don’t, at least not for the most part. And neither do our government and economic inhibitors. They liked the way things were for the past 20 years or so. There was a definite appearance of prosperity. It was all a facade, sure, but it looked good to them and we liked it too. We couldn’t get enough of all of its shimmer. So they won’t tell you it is time to tighten up and start thinking long term like an actual leader would do in a time of crisis. Instead, they tell you what you want to hear and you believe them because you don’t want to think about the alternative.
In the media you will find plenty of reference to this recession and how it is an unfortunate but normal part of life in a capitalist system. But what few media outlets mention, whether out of a sort of lazy ignorance or a willful, fear-based omission, is that we are entering uncharted territory. We have always entered recessions with some hopeful sector on the other side, but there are only two such sectors and neither look that promising – they are health care and alternative energy. We have also always entered recessions with plenty of natural resources to exploit once growth is triggered again. Those supplies are now uncertain and a faltering economy does not encourage exploration compared to periods of growth.
So get out your pointer fingers America, and start wagging them around. I am sure it isn’t your fault, you were just doing as you were told.
We are gonna get fucked harder than we ever have before.
Love,
Mike
Everyone is pointing fingers, to Wall Street, to Washington, to the rich. No one is really saying a whole lot about the fact that we all did this, together. We were either willing participants or dimwitted accomplices. None of the people that are being blamed made us take out loans to finance our frivolous consumption. We asked them for it. In return, they did everything they could possibly do to accommodate our wishes. Now that the house of cards we helped build on empty promises is faltering we have nowhere to turn but to ourselves.
But we don’t, at least not for the most part. And neither do our government and economic inhibitors. They liked the way things were for the past 20 years or so. There was a definite appearance of prosperity. It was all a facade, sure, but it looked good to them and we liked it too. We couldn’t get enough of all of its shimmer. So they won’t tell you it is time to tighten up and start thinking long term like an actual leader would do in a time of crisis. Instead, they tell you what you want to hear and you believe them because you don’t want to think about the alternative.
In the media you will find plenty of reference to this recession and how it is an unfortunate but normal part of life in a capitalist system. But what few media outlets mention, whether out of a sort of lazy ignorance or a willful, fear-based omission, is that we are entering uncharted territory. We have always entered recessions with some hopeful sector on the other side, but there are only two such sectors and neither look that promising – they are health care and alternative energy. We have also always entered recessions with plenty of natural resources to exploit once growth is triggered again. Those supplies are now uncertain and a faltering economy does not encourage exploration compared to periods of growth.
So get out your pointer fingers America, and start wagging them around. I am sure it isn’t your fault, you were just doing as you were told.
We are gonna get fucked harder than we ever have before.
Love,
Mike
The Worst Generation
Don’t tell Tom Brokaw, but I think that if he could give the generation that won World War II credit for all of their accomplishments I should be able to blame them for their shortsightedness. In the late 1940’s the United States was literally on top of the world. The only industrialized economy not left in ruin, Americans were in an excellent position economically and politically. We still had a massive amount of natural resources along with a huge manufacturing infrastructure and the rest of the world wanted to buy. Over the next 25 years, the worst generation took this position, closed their eyes and started spending. We went from a nation of warriors to a nation of consumers in no time flat. And we fucked eachothers brains out.
Now, look today at what is left. Few jobs making something that can be exported with the exception of entertainment, weaponry and some high technology items. No oil for export – those now ‘classic’ cars didn’t fair to well in the mpg department. A network of unlivable communities based on the unrealistic expectation that we would all be flying around in nuclear powered spaceships by now. So we are left selling things made elsewhere to eachother and paying for it all with credit or what is left of our families spoils from the post-war period. So now, as we move into the post-plenty period of constant economic uncertainty, we are left with next to nothing to right the ship after the worst generation ran it into iceberg after iceberg.
We are also lucky enough to be stuck with the worst generation’s kids. They are the bunch that still hold on to the idea that they will get to live out their life even better than their parents. Only problem is there isn’t anything left to finance the life that Dennis Hopper is always on TV trying to sell them. Sure there are some shrewd investors that will surely come out ahead, but when the shit hits the fan, I don’t think I would want to be hanging out with them.
I realize that in this country it is only popular to mention responsibility when somebody did something good, but in this case, they all did something terribly wrong. After changing the world by ending Nazism and Japanese imperialism, they came home and went to sleep living their American dream. The only problem is that we all have to wake up now, and morning isn’t looking so good.
We are so utterly fucked, its hilarious.
Now, look today at what is left. Few jobs making something that can be exported with the exception of entertainment, weaponry and some high technology items. No oil for export – those now ‘classic’ cars didn’t fair to well in the mpg department. A network of unlivable communities based on the unrealistic expectation that we would all be flying around in nuclear powered spaceships by now. So we are left selling things made elsewhere to eachother and paying for it all with credit or what is left of our families spoils from the post-war period. So now, as we move into the post-plenty period of constant economic uncertainty, we are left with next to nothing to right the ship after the worst generation ran it into iceberg after iceberg.
We are also lucky enough to be stuck with the worst generation’s kids. They are the bunch that still hold on to the idea that they will get to live out their life even better than their parents. Only problem is there isn’t anything left to finance the life that Dennis Hopper is always on TV trying to sell them. Sure there are some shrewd investors that will surely come out ahead, but when the shit hits the fan, I don’t think I would want to be hanging out with them.
I realize that in this country it is only popular to mention responsibility when somebody did something good, but in this case, they all did something terribly wrong. After changing the world by ending Nazism and Japanese imperialism, they came home and went to sleep living their American dream. The only problem is that we all have to wake up now, and morning isn’t looking so good.
We are so utterly fucked, its hilarious.
The Myth of Deficit Spending
So, there is a common theme in political and media circles when it comes to deficit spending. They all like to say something along the lines of “they are making our kids and our grandkids pay for it” by pushing government spending beyond tax revenues. This insinuates some sort of a plan to pay for this debt that does not exist.
The government has almost always spent more than it brought in with taxes. This deficit spending, it tough economic times, has some economic rationale behind it. The idea goes that in lean years, government spends money to keep things afloat until growth starts back up. This is the half of the theory that is very popular with politicians. They all (with a couple of exceptions) like to spend money that did not previously exist. The other half of the theory is that in robust years, government raises taxes to cover some of their losses. Obviously this is not the popular side of this economic theory.
So politicians of all stripes are guilty of spending a lot of money then rallying around their pet demographic (Republicans like the “small businessperson” and Democrats like the “middle class family”) when the bill comes due and they need an excuse to keep taxes low. None of them, not in any piece of legislation that has ever passed, lay out exactly how the debts they run up will be paid off. And for the most part, they don’t talk about it either. If they do mention it, it is always framed in a particular way. Like they are going to “cut the deficit” (read “not go as far into debt”). Back in the late 90’s, when budget surpluses were actually forecasted (using overly optimistic economic estimates no one really believed) there was very little discussion about using the money to actually pay off some of the debt.
I want to take a few words to mention that the already existing debt which no one plans to pay off already costs the government hundreds of billions (100,000,000,000’s) every year. You see, rich people buy US Treasury securities and every year we have to pay them interest. The scary thing that could possibly happen some day is that rich people will stop buying these bonds or a whole bunch of people will want to cash them in – this sort of run on the bank would make the mess in the financial sector right now look like a cakewalk by comparison.
So government, in order to keep up the appearance of stability. Will continue to go deeper and deeper into debt and will never pay any of it off until it reaches a point at which it is completely bankrupt and can’t borrow another dime. That is the real plan. Whether or not anyone actually admits to it or not, that is what they are doing. The really fucked up thing is that most of them believe that they are actually doing it for you.
So next time you get a chance, thank your friendly politician for completely ruining any chance that your government has at a sustainable economic future. They are doing all they can for you, that will keep them in office. And they will postpone the inevitable cascade of fucked-dom that will unfold upon you in your future.
Fucked as I ever was,
Mike
The government has almost always spent more than it brought in with taxes. This deficit spending, it tough economic times, has some economic rationale behind it. The idea goes that in lean years, government spends money to keep things afloat until growth starts back up. This is the half of the theory that is very popular with politicians. They all (with a couple of exceptions) like to spend money that did not previously exist. The other half of the theory is that in robust years, government raises taxes to cover some of their losses. Obviously this is not the popular side of this economic theory.
So politicians of all stripes are guilty of spending a lot of money then rallying around their pet demographic (Republicans like the “small businessperson” and Democrats like the “middle class family”) when the bill comes due and they need an excuse to keep taxes low. None of them, not in any piece of legislation that has ever passed, lay out exactly how the debts they run up will be paid off. And for the most part, they don’t talk about it either. If they do mention it, it is always framed in a particular way. Like they are going to “cut the deficit” (read “not go as far into debt”). Back in the late 90’s, when budget surpluses were actually forecasted (using overly optimistic economic estimates no one really believed) there was very little discussion about using the money to actually pay off some of the debt.
I want to take a few words to mention that the already existing debt which no one plans to pay off already costs the government hundreds of billions (100,000,000,000’s) every year. You see, rich people buy US Treasury securities and every year we have to pay them interest. The scary thing that could possibly happen some day is that rich people will stop buying these bonds or a whole bunch of people will want to cash them in – this sort of run on the bank would make the mess in the financial sector right now look like a cakewalk by comparison.
So government, in order to keep up the appearance of stability. Will continue to go deeper and deeper into debt and will never pay any of it off until it reaches a point at which it is completely bankrupt and can’t borrow another dime. That is the real plan. Whether or not anyone actually admits to it or not, that is what they are doing. The really fucked up thing is that most of them believe that they are actually doing it for you.
So next time you get a chance, thank your friendly politician for completely ruining any chance that your government has at a sustainable economic future. They are doing all they can for you, that will keep them in office. And they will postpone the inevitable cascade of fucked-dom that will unfold upon you in your future.
Fucked as I ever was,
Mike
You don't Deserve Retirement
Dear Baby Boomers,
You have turned the US into a shit hole and you don’t deserve to retire.
Alright, I don’t know if I can back that statement up with much, but I just read about $2 trillion reasons. The point of this post, if any, is to talk a little bit about the short history of retirement. Then I will talk a little bit about the short future it has as well. Enjoy Boomers!
The idea of retirement was dreamed up by some old white guy, somewhere in Europe early on in the industrial revolution. The theory went that, really old sick people probably shouldn’t work 16 hour days in factories anymore. Since their extended families likely no longer had a tie to the land and were no longer able to keep them busy sweeping the dirt floors – and other menial old people tasks – in their family huts society decided to give them a pension that barely kept them alive. Until they died. Over time these old people started to ask for more and more for their retirement. After all, they had a shit load of time on their hands.
Then the politicians got involved and really screwed things up. They figured out this great plan in which all working people would pay for really old people to live. No real reason for this, but it gave politicians an excellent means to sway voters. Remember, with all of that time on their hands, these old people have plenty of time between doctor appointments and funerals to attend political rallies. Now in America we have a whole bunch of old people that serve no real purpose other than someone to drink coffee and take up space at fast food restaurants – and they all cost money and don’t seem to be dying as quickly as they once did.
The problem is that there is not a significant enough economic surplus to keep them pumped full of drugs or keep those $5 birthday checks churning out. No one has the balls to tell them, and everyone seems to think that they will get to spend their golden years walking around aimlessly in malls on someone else’s dime.
Unfortunately, that isn’t going to happen. For the vast majority of America’s next generation to hit retirement age they will be struck by the realization that things just didn’t work out the way they planned. It will force a lot of us to live the way that most of the rest of the world lives – under one roof with several generations of a family.
This sucks royal balls…
Mike
You have turned the US into a shit hole and you don’t deserve to retire.
Alright, I don’t know if I can back that statement up with much, but I just read about $2 trillion reasons. The point of this post, if any, is to talk a little bit about the short history of retirement. Then I will talk a little bit about the short future it has as well. Enjoy Boomers!
The idea of retirement was dreamed up by some old white guy, somewhere in Europe early on in the industrial revolution. The theory went that, really old sick people probably shouldn’t work 16 hour days in factories anymore. Since their extended families likely no longer had a tie to the land and were no longer able to keep them busy sweeping the dirt floors – and other menial old people tasks – in their family huts society decided to give them a pension that barely kept them alive. Until they died. Over time these old people started to ask for more and more for their retirement. After all, they had a shit load of time on their hands.
Then the politicians got involved and really screwed things up. They figured out this great plan in which all working people would pay for really old people to live. No real reason for this, but it gave politicians an excellent means to sway voters. Remember, with all of that time on their hands, these old people have plenty of time between doctor appointments and funerals to attend political rallies. Now in America we have a whole bunch of old people that serve no real purpose other than someone to drink coffee and take up space at fast food restaurants – and they all cost money and don’t seem to be dying as quickly as they once did.
The problem is that there is not a significant enough economic surplus to keep them pumped full of drugs or keep those $5 birthday checks churning out. No one has the balls to tell them, and everyone seems to think that they will get to spend their golden years walking around aimlessly in malls on someone else’s dime.
Unfortunately, that isn’t going to happen. For the vast majority of America’s next generation to hit retirement age they will be struck by the realization that things just didn’t work out the way they planned. It will force a lot of us to live the way that most of the rest of the world lives – under one roof with several generations of a family.
This sucks royal balls…
Mike
The Peril of Financial Wisdom
So, I went to Yahoo to check my email and I saw this story on their main page. The gist of the story goes something like, “now is a terrible time to take your money out of equities because the market is down.” This is wise investment advice informed by decades of careful observation. But, is there anything missing.
As a point of full disclosure, I liquidated my equity position in late 2003 (I had 6 shares of stock in a railroad company). So I am ‘bullish’ on the markets.
To get back to the idea in the article, I believe that they are missing three fundamental differences between all past recessions and today.
1.
The US no longer has a significant natural resource base to exploit. Without this, there is not enough domestic surplus available to provide raw materials and energy for economic recovery. We will call this the lack of fuel to start the economic fire.
2.
The United States is losing hundreds of billions from the economy every year due to the fact that the US is a net importer. This means that we are not selling to the rest of the world, we are buying from them. This was a major source of wealth creation in the past, and it is gone.
3.
The United States government likely will not be able to buy our way out of this mess. They are trying, but no matter how much debt they take on, without a prospect for growth on the other side the economy has no where to turn.
The problem is that financial advice is the interpretation of the past. The economic rules have changed, there essentially are no rules. The financial advisors either don’t want to admit that, or they want you to keep your money in the market which they hope will prevent an all out crash from unfolding. Or to be more cynical, they want you to keep your money in the market, thereby keeping it inflated, until after they get their money out. But that would mean they actually know what is coming, and I am not convinced of that. I think they are still true believers.
Time will tell. I will say that these modern supercapitalists kept this ride going for two years longer than I figured it would last. They are not to be underestimated, for that reason if no other.
More fucked than they think we are,
Mike
As a point of full disclosure, I liquidated my equity position in late 2003 (I had 6 shares of stock in a railroad company). So I am ‘bullish’ on the markets.
To get back to the idea in the article, I believe that they are missing three fundamental differences between all past recessions and today.
1.
The US no longer has a significant natural resource base to exploit. Without this, there is not enough domestic surplus available to provide raw materials and energy for economic recovery. We will call this the lack of fuel to start the economic fire.
2.
The United States is losing hundreds of billions from the economy every year due to the fact that the US is a net importer. This means that we are not selling to the rest of the world, we are buying from them. This was a major source of wealth creation in the past, and it is gone.
3.
The United States government likely will not be able to buy our way out of this mess. They are trying, but no matter how much debt they take on, without a prospect for growth on the other side the economy has no where to turn.
The problem is that financial advice is the interpretation of the past. The economic rules have changed, there essentially are no rules. The financial advisors either don’t want to admit that, or they want you to keep your money in the market which they hope will prevent an all out crash from unfolding. Or to be more cynical, they want you to keep your money in the market, thereby keeping it inflated, until after they get their money out. But that would mean they actually know what is coming, and I am not convinced of that. I think they are still true believers.
Time will tell. I will say that these modern supercapitalists kept this ride going for two years longer than I figured it would last. They are not to be underestimated, for that reason if no other.
More fucked than they think we are,
Mike
What Domestic Oil?
This is a response to William Balgord’s guest column in Sunday’s (10/12/08) Wisconsin State Journal. In the column, Mr. Balgord more-or-less takes the “Drill Baby Drill” chant from the GOP’s convention and stretches it out for 800 words or so.
The article makes the following points, to which I will respond:
1. The “windfall profits” tax the congressional Democrats have been touting will hurt the average American investor.
To some extent, this may be true. However, it is not a good argument against corporate taxes proposed to address a specific situation. I don’t like the idea of corporate taxes at all – I think that the people who profit should be taxed, not entities – but this sort of populist propaganda (he specifically mentions “retirees, union workers and other hard-working individuals”) misses the mark. Any investor making income on stock should pay the same tax that any “other hard-working individual” does on payroll income. If there is a decent argument against these tax proposals it should be that it takes money away from exploration.
2. There are billions of extractable barrels of reserves around the world that are currently not being exploited (the author includes the Arctic, Oil Shale and off-shore deposits).
The problem with the three sources mentioned is the price point of oil at which these reserves are profitable. If oil is $150-200/barrel, many of the reserves the author mentioned would be worth it financially to exploit. There are two problems there, the first is the infrastructure necessary to exploit these deposits does not currently exist. It can be built, but when? Who pays? The second problem is that these price points are not affordable economically as was demonstrated over the summer.
The author states that “these are available and their use will be necessary to make an orderly transition to the future.” The problem is that they are still available because they are not affordable. There are some regions that can and should be explored including ANWAR and the continental shelf. I contend that any environmental cost that may be felt would be offset by the economic benefit of not exporting our collective wealth to any state willing to sell us their oil. The exploitation of the North Sea has shown that offshore drilling can be done relatively responsibly as well.
3. Stagnating oil production is all OPEC’s fault.
This is 20th century thinking at its worst. You can look at hard numbers to find out that exploration worldwide has boomed since the spike in oil prices in the past 5 years. The problem with OPEC is that they have very little excess capacity to bring online at current production levels.
4. Stagnating oil production is because of poor deployment of technology.
Mr. Balgord states that “Russia and Mexico are lagging behind in modernizing their oil fields.” So, the problem is a lack of technology improvements on existing fields. The problem with his argument here is two-fold as well. First, the modernized infrastructure is not readily available for deployment. Second, again as North Sea exploitation shows, the implementation of the most modern extraction techniques cause earlier well peaks, and higher decline rates. In other words, the aging fields in Russia and Mexico would only benefit for a short while from the introduction of such technology, with higher post-peak decline rates.
5. More areas need to be opened to exploration.
The author clearly doesn’t understand what is important in energy economics. Reserves are essentially meaningless. The only thing that matters is flow rates. Barrels produced per day are the measure of success, and of survival. Finding new oil in up-to-now unexplored regions mean nothing until they produce. The exploration really can’t even get underway in a serious way because the exploratory rigs and expertise required to run them do not exist. It will take years, and billions of dollars, to build and staff these rigs. In case Mr. Balgord hasn’t noticed, these are two resources America is short of at the moment.
6. Recently high oil prices are a result of speculation and the OPEC cartel.
This is absolutely false. Recently high oil prices were the result of market mechanisms (high demand and limited spare production capacity), a weak dollar and geopolitical instability. Speculation is integral to finding price points in a market. Without these free market principles, prices would not react and shortages would soon follow.
7. “Access to the outer continental shelf would ultimately increase our domestic reserves by more than 500%.”
Whether or not this number is accurate, as I stated before “reserves” mean absolutely nothing. For example, you can have a million dollars buried in your back yard (you might want to check), but if you don’t have the tools to dig it up and start pulling it out, it serves absolutely no purpose.
Conclusion
Mr. Balgord’s proposals regarding oil merit little place in a serious discussion about America’s energy future. His solutions are not feasible at reasonable price points or they are unrealistic all together. The United States will likely never produce much more oil than it does today due to the fact that the best reserves have already been exploited beyond their peak production levels. This means that just to keep up with current levels of production we need to bring more and more oil online, but the new production would only be temporary. The newer sources of production will also be an order of magnitude lower than previous projects. Easing environmental regulations and opening the most promising regions up to exploration is a great idea if energy is the only metric. It is still reasonable, but not quite so appealing, even when environmental degradation is taken into account. However, any supply side solution should be accompanied by ambitious conservation measures, which is something that Republican or Democratic politicians will likely be unable to accomplish until the problem is past a point of reasonable resolution. It is also my opinion that we are already well past that point, by the way.
Sincerely Fucked,
mike
The article makes the following points, to which I will respond:
1. The “windfall profits” tax the congressional Democrats have been touting will hurt the average American investor.
To some extent, this may be true. However, it is not a good argument against corporate taxes proposed to address a specific situation. I don’t like the idea of corporate taxes at all – I think that the people who profit should be taxed, not entities – but this sort of populist propaganda (he specifically mentions “retirees, union workers and other hard-working individuals”) misses the mark. Any investor making income on stock should pay the same tax that any “other hard-working individual” does on payroll income. If there is a decent argument against these tax proposals it should be that it takes money away from exploration.
2. There are billions of extractable barrels of reserves around the world that are currently not being exploited (the author includes the Arctic, Oil Shale and off-shore deposits).
The problem with the three sources mentioned is the price point of oil at which these reserves are profitable. If oil is $150-200/barrel, many of the reserves the author mentioned would be worth it financially to exploit. There are two problems there, the first is the infrastructure necessary to exploit these deposits does not currently exist. It can be built, but when? Who pays? The second problem is that these price points are not affordable economically as was demonstrated over the summer.
The author states that “these are available and their use will be necessary to make an orderly transition to the future.” The problem is that they are still available because they are not affordable. There are some regions that can and should be explored including ANWAR and the continental shelf. I contend that any environmental cost that may be felt would be offset by the economic benefit of not exporting our collective wealth to any state willing to sell us their oil. The exploitation of the North Sea has shown that offshore drilling can be done relatively responsibly as well.
3. Stagnating oil production is all OPEC’s fault.
This is 20th century thinking at its worst. You can look at hard numbers to find out that exploration worldwide has boomed since the spike in oil prices in the past 5 years. The problem with OPEC is that they have very little excess capacity to bring online at current production levels.
4. Stagnating oil production is because of poor deployment of technology.
Mr. Balgord states that “Russia and Mexico are lagging behind in modernizing their oil fields.” So, the problem is a lack of technology improvements on existing fields. The problem with his argument here is two-fold as well. First, the modernized infrastructure is not readily available for deployment. Second, again as North Sea exploitation shows, the implementation of the most modern extraction techniques cause earlier well peaks, and higher decline rates. In other words, the aging fields in Russia and Mexico would only benefit for a short while from the introduction of such technology, with higher post-peak decline rates.
5. More areas need to be opened to exploration.
The author clearly doesn’t understand what is important in energy economics. Reserves are essentially meaningless. The only thing that matters is flow rates. Barrels produced per day are the measure of success, and of survival. Finding new oil in up-to-now unexplored regions mean nothing until they produce. The exploration really can’t even get underway in a serious way because the exploratory rigs and expertise required to run them do not exist. It will take years, and billions of dollars, to build and staff these rigs. In case Mr. Balgord hasn’t noticed, these are two resources America is short of at the moment.
6. Recently high oil prices are a result of speculation and the OPEC cartel.
This is absolutely false. Recently high oil prices were the result of market mechanisms (high demand and limited spare production capacity), a weak dollar and geopolitical instability. Speculation is integral to finding price points in a market. Without these free market principles, prices would not react and shortages would soon follow.
7. “Access to the outer continental shelf would ultimately increase our domestic reserves by more than 500%.”
Whether or not this number is accurate, as I stated before “reserves” mean absolutely nothing. For example, you can have a million dollars buried in your back yard (you might want to check), but if you don’t have the tools to dig it up and start pulling it out, it serves absolutely no purpose.
Conclusion
Mr. Balgord’s proposals regarding oil merit little place in a serious discussion about America’s energy future. His solutions are not feasible at reasonable price points or they are unrealistic all together. The United States will likely never produce much more oil than it does today due to the fact that the best reserves have already been exploited beyond their peak production levels. This means that just to keep up with current levels of production we need to bring more and more oil online, but the new production would only be temporary. The newer sources of production will also be an order of magnitude lower than previous projects. Easing environmental regulations and opening the most promising regions up to exploration is a great idea if energy is the only metric. It is still reasonable, but not quite so appealing, even when environmental degradation is taken into account. However, any supply side solution should be accompanied by ambitious conservation measures, which is something that Republican or Democratic politicians will likely be unable to accomplish until the problem is past a point of reasonable resolution. It is also my opinion that we are already well past that point, by the way.
Sincerely Fucked,
mike
the Black Hole of Political Action
Here in Madison, it is difficult to make the commute home after work without seeing at least one person on the corner picketing for Obama. Now given, this is Madison, so it makes plenty of sense. And I like their passion, you can tell that a lot of people here are genuinely excited about the prospect of his victory. The same is likely true of McCain supporters, but I am not sure – as I said, I am in Madison. Anyway, I see these guys on the street corner with homemade signs hawking Obama and it just seems like a huge waste of resources to me. These people have allocated their time to stand around so that someone they don’t know, and will likely never meet, will get a job. I get this sinking feeling every time I see them.
It is part of the American Psyche, I guess. If we have problems with something, we address these problems to our political leaders. We also (some of us) go out of our way to elect political leaders that we think get it right. There are a lot of problems with the assumption that political leaders will solve our problems in any meaningful way. This in turn means that if our assumption of a functional political system is flawed, then so is any political action.
You may be thinking, “what the fuck are you getting at?” Well, my thesis is pretty simple. There is a limited spectrum of ideas and possible actions that acts as a framework for politicians. This spectrum is somewhat fluid in that different ideas can come in and out of reasonability – slavery, civil rights for women and minorities, gay rights, nuclear power, government ownership of corporations, etc. The spectrum fluctuates, but within a very limited range and the introduction of new ideas is only allowed after a certain level of acceptance in mainstream non-political thought brings an idea from unthinkable to controversial. This introduction takes time and money, or in absence of money a shit load of leg work.
Now that you know where I am coming from, let me get back to my primary point about the futility of political action, why it doesn’t adequately solve problems, and what we should be doing instead.
I do not see political action as being a valuable use of time or money – in this case holding a sign on the corner is not likely to sway anyone to vote a particular way. For a moment, lets assume I am wrong about that thought – because there is something to be said for herd behavior. Now, if this type of political action is effective, what is the result of successful activity in this case. Success would be that enough people mobilized on street corners to get the word out that for Madison, the best thing to do is to vote for Barack Obama. So, they have achieved success, but what does that success mean for the guy holding the sign on the street corner? Likely, his life will be unchanged whether or not Obama or McCain is the next president. Regardless of who wins, that guy will be in basically the same boat economically (the president doesn’t control the economy in a free country). So the difference is really only emotional. If Obama wins, regardless of what he does or does not do (he won’t do much) the picketer will only derive some sort of emotional satisfaction from knowing that his guy won. It is like being a fan of a particular sports team. If they win, you feel good even though your life is just as shitty as when they lose. If you find my position that there is little difference between Obama and McCain, look at some issues and you will see that either they are the same, or the difference is nuanced.
So what if this guy (and all the other political campaign volunteers) actually spent that time and money addressing a problem facing their community. Madison has plenty of uphill battles ahead of them so why not make a sign that actually says something about your town? Even better, why not just fucking do something instead of standing around with a sign on a street corner? This is the essence of my beef with political action in America’s national political system. I just don’t see the point.
This may also reflect my general distaste for Madison. Instead of doing something, it seems that people here would much rather go to a meeting and talk about doing something. Or better yet, tell someone else that they need to do something about their problems. To me, direct action (actually taking an active role in bringing about some sort of change) is the solution necessary.
Political action is the byproduct of a brainwashed mass of people that are doing as they were taught. Under this type of thinking, if you want something to change, the best way to go about changing it is to publicize your position. That way, the people that you allow to make decisions for you might catch on and take your advice. This is fine under different circumstances, but if you understand the problems that we face in the future then you should understand that minds are not going to be changed enough to actually make things better. Society is broken. Government is broken. We can’t change it from within. There is no time and there is not enough support. The establishment is too strong in this country. Take the bailout bill as an example, it was extremely unpopular with the American people based on their gut reaction. They knew it stunk. But the people that we they selected to make decisions for them were under the influence of the true power in this country. That is why so few stood up to protest. The Iraq war was another good example as well. There was no way to make a rational case against the war to the politicians. They were briefed on top secret stuff (lies and distortions) that the public didn’t know about at the time. But the public could have easily listened to the likes of Scott Ritter and others who were speaking up and saying that there is no threat there.
The bulk of the American people don’t want to think about the future. It is an inconvenience. It gets in their way and bums them out. They also probably “don’t have the time” to think about it. They want it easy, clean and well-groomed. The problem is that the future isn’t making concessions for the ignorant.
It is only worth helping those that are willing to help themselves. I would add that they should also want to help you back.
If the people standing on the corner are any indication, we are fucked.
-Mike
It is part of the American Psyche, I guess. If we have problems with something, we address these problems to our political leaders. We also (some of us) go out of our way to elect political leaders that we think get it right. There are a lot of problems with the assumption that political leaders will solve our problems in any meaningful way. This in turn means that if our assumption of a functional political system is flawed, then so is any political action.
You may be thinking, “what the fuck are you getting at?” Well, my thesis is pretty simple. There is a limited spectrum of ideas and possible actions that acts as a framework for politicians. This spectrum is somewhat fluid in that different ideas can come in and out of reasonability – slavery, civil rights for women and minorities, gay rights, nuclear power, government ownership of corporations, etc. The spectrum fluctuates, but within a very limited range and the introduction of new ideas is only allowed after a certain level of acceptance in mainstream non-political thought brings an idea from unthinkable to controversial. This introduction takes time and money, or in absence of money a shit load of leg work.
Now that you know where I am coming from, let me get back to my primary point about the futility of political action, why it doesn’t adequately solve problems, and what we should be doing instead.
I do not see political action as being a valuable use of time or money – in this case holding a sign on the corner is not likely to sway anyone to vote a particular way. For a moment, lets assume I am wrong about that thought – because there is something to be said for herd behavior. Now, if this type of political action is effective, what is the result of successful activity in this case. Success would be that enough people mobilized on street corners to get the word out that for Madison, the best thing to do is to vote for Barack Obama. So, they have achieved success, but what does that success mean for the guy holding the sign on the street corner? Likely, his life will be unchanged whether or not Obama or McCain is the next president. Regardless of who wins, that guy will be in basically the same boat economically (the president doesn’t control the economy in a free country). So the difference is really only emotional. If Obama wins, regardless of what he does or does not do (he won’t do much) the picketer will only derive some sort of emotional satisfaction from knowing that his guy won. It is like being a fan of a particular sports team. If they win, you feel good even though your life is just as shitty as when they lose. If you find my position that there is little difference between Obama and McCain, look at some issues and you will see that either they are the same, or the difference is nuanced.
So what if this guy (and all the other political campaign volunteers) actually spent that time and money addressing a problem facing their community. Madison has plenty of uphill battles ahead of them so why not make a sign that actually says something about your town? Even better, why not just fucking do something instead of standing around with a sign on a street corner? This is the essence of my beef with political action in America’s national political system. I just don’t see the point.
This may also reflect my general distaste for Madison. Instead of doing something, it seems that people here would much rather go to a meeting and talk about doing something. Or better yet, tell someone else that they need to do something about their problems. To me, direct action (actually taking an active role in bringing about some sort of change) is the solution necessary.
Political action is the byproduct of a brainwashed mass of people that are doing as they were taught. Under this type of thinking, if you want something to change, the best way to go about changing it is to publicize your position. That way, the people that you allow to make decisions for you might catch on and take your advice. This is fine under different circumstances, but if you understand the problems that we face in the future then you should understand that minds are not going to be changed enough to actually make things better. Society is broken. Government is broken. We can’t change it from within. There is no time and there is not enough support. The establishment is too strong in this country. Take the bailout bill as an example, it was extremely unpopular with the American people based on their gut reaction. They knew it stunk. But the people that we they selected to make decisions for them were under the influence of the true power in this country. That is why so few stood up to protest. The Iraq war was another good example as well. There was no way to make a rational case against the war to the politicians. They were briefed on top secret stuff (lies and distortions) that the public didn’t know about at the time. But the public could have easily listened to the likes of Scott Ritter and others who were speaking up and saying that there is no threat there.
The bulk of the American people don’t want to think about the future. It is an inconvenience. It gets in their way and bums them out. They also probably “don’t have the time” to think about it. They want it easy, clean and well-groomed. The problem is that the future isn’t making concessions for the ignorant.
It is only worth helping those that are willing to help themselves. I would add that they should also want to help you back.
If the people standing on the corner are any indication, we are fucked.
-Mike
Techno-fuckery
As far as I am concerned, there are two types of people in the world. It may or may not be their fault that they are the way they are, but the psyche of the American citizen is disturbing to me. I am becoming increasingly disinterested in communicating with these people beyond pleasantries. They are not interested in any point of view that may challenge their own comfortable futures they have mapped out for themselves.
No matter how much you want a future of space travel, floating skateboards and cars that run on garbage, it is not going to happen because even technology has limits…
1. Cornucopian Techno-Fuckers
These are people who – mostly ignorantly – look at the future and see some technology (battery, hydrogen or biofuel-ed cars) that will be developed to maintain the status quo. What they do not take into account is that there are no realistic alternatives. Even Boone Pickens’ natural gas wet dream requires an overhaul of 40-60% of the American vehicle fleet in 5 years. Given the spectre of dire economic times over the next few years, this seems all but impossible.
Instead, they kneel down in front of technology and start sucking. Periodically, they come up for air and mention that there is hope in whatever they have read about most recently. When challenged, they inevitably fall back on some anecdote from history to prove that the sky won’t fall because it hasn’t before. The problem, of course, is that the future isn’t history. Whether it rhymes or not, it won’t necessarily rhyme with the happy times they want it to sound like.
2. Pessimistic Reality-Fuckers
People like me will tell you that your way of life is fucked and there is not some shiny new technology waiting on the other side of the global oil peak. Sure, some of these technologies may produce some decent products. But there is no reason to believe that the government or the private sector will somehow conjure up a cure for our impending lack of liquid fuels. In the best possible circumstances, they might be able to buy you some time. But they are interested in only short term profits or superficial results they can campaign on for the next election, respectively. As investors and voters, we have made them that way.
Given that the first section of the population is the vast (+90%) majority, we are in a lot of trouble. The biggest hurdle to any serious risk mitigation strategy on any level is the mentality of this majority. They consume optimistic conjecture relayed to them from press releases (AKA Mainstream Journalism) and assume it is true. They have also developed a sort of expectation of future returns for themselves. From business they assume continued flow of cheap goods and services that will enrich their lives. From government they expect both continuation and expansion of government programs to support them and their extended families without feeling a burden (read paying for it all). Both business and government continue to oblige because they don’t want to upset their current standing. If anything, they promise you even more in the future.
At a time when real leaders should be standing up to tell you that your life will most likely not be as easy as your parents’ generation, we elected a President that wants to prop up a failed system with resources that don’t exist. Needless to say, this will not work. All of you techno-fuckers need to either educate yourself about how the world actually works and wake up or just give up now. You will be taking up valuable space and resources in the future, and you are expendable.
No matter how much you want a future of space travel, floating skateboards and cars that run on garbage, it is not going to happen because even technology has limits…
1. Cornucopian Techno-Fuckers
These are people who – mostly ignorantly – look at the future and see some technology (battery, hydrogen or biofuel-ed cars) that will be developed to maintain the status quo. What they do not take into account is that there are no realistic alternatives. Even Boone Pickens’ natural gas wet dream requires an overhaul of 40-60% of the American vehicle fleet in 5 years. Given the spectre of dire economic times over the next few years, this seems all but impossible.
Instead, they kneel down in front of technology and start sucking. Periodically, they come up for air and mention that there is hope in whatever they have read about most recently. When challenged, they inevitably fall back on some anecdote from history to prove that the sky won’t fall because it hasn’t before. The problem, of course, is that the future isn’t history. Whether it rhymes or not, it won’t necessarily rhyme with the happy times they want it to sound like.
2. Pessimistic Reality-Fuckers
People like me will tell you that your way of life is fucked and there is not some shiny new technology waiting on the other side of the global oil peak. Sure, some of these technologies may produce some decent products. But there is no reason to believe that the government or the private sector will somehow conjure up a cure for our impending lack of liquid fuels. In the best possible circumstances, they might be able to buy you some time. But they are interested in only short term profits or superficial results they can campaign on for the next election, respectively. As investors and voters, we have made them that way.
Given that the first section of the population is the vast (+90%) majority, we are in a lot of trouble. The biggest hurdle to any serious risk mitigation strategy on any level is the mentality of this majority. They consume optimistic conjecture relayed to them from press releases (AKA Mainstream Journalism) and assume it is true. They have also developed a sort of expectation of future returns for themselves. From business they assume continued flow of cheap goods and services that will enrich their lives. From government they expect both continuation and expansion of government programs to support them and their extended families without feeling a burden (read paying for it all). Both business and government continue to oblige because they don’t want to upset their current standing. If anything, they promise you even more in the future.
At a time when real leaders should be standing up to tell you that your life will most likely not be as easy as your parents’ generation, we elected a President that wants to prop up a failed system with resources that don’t exist. Needless to say, this will not work. All of you techno-fuckers need to either educate yourself about how the world actually works and wake up or just give up now. You will be taking up valuable space and resources in the future, and you are expendable.
The Lack of a Future of Education
This may seem a little off of the beaten path I have laid out for myself since starting this site, but I wanted to write about education. Personally speaking, I have no children. The little interaction I have with my niece and nephew is the extent of my own experience with the educational system. I am 13 years removed from my own state-funded indoctrination, so it is not fresh for me from a student’s point of view either. But, I have absolutely no problem assuming a position of knowledge in spite of my ignorance on the issue. So, enjoy, as I do my damnedest to destroy any hope you may have harbored about the future of our education culture – class is in session.
the state of the public education system
Instead of pointing fingers at those responsible for the problem of education in America, I will skip that part and move right into the meat of the matter. Besides, they are too numerous to name, and I only have so many fingers…
A Brief History of State-Funded Indoctrination
From the beginning of history up to around WWII, the vast majority of Americans (rich people don’t count) were limited in education to the three R’s – if this is any indication of how well that was going, two of the three R’s are spelled wrong. After WWII, some well intentioned people decided that Americans would be better off if we were all educated. The logic was that rich people were well educated, and they were rich – so it should work about the same for the rest of us. And so it was, the Education Industrial Complex developed from humble beginnings and good intentions. As time went by it became clear that large swaths of the country were not as enthusiastic about this whole education thing as others. So in order to try to equalize the system to some degree, some basic requirements were instituted. The federal government, under President Carter in 1979, decided that there should be a chunk of executive branch bureaucracy dedicated to running this system. The indoctrination of youth has since been federalized and runs an annual tab of about $70 billion/year.
The Idea and the Product
Today we have a system that does next to nothing to educate students. The purpose of education in America today is two fold.
1. Churn out product for the market (the market is funded, monitored, micro-managed and generally cluster-fucked into oblivion by government).
2. Introduce and reinforce the idea.
First let me talk a little bit about what I mean when I say product. A child enters elementary school and from that point until completion of high school it is taught basic information and tested to verify a minimal level of understanding. Context of information, intellectual curiousity, independent thinking and individual mental freedom is discouraged. Creativity and contrary opinions on matters is likewise discouraged or not tolerated. The low-level government bureaucrat in charge of developing the product is under-trained, under-paid and often continuing their own education so they don’t have to teach anymore, so they are basically indifferent.It is therefore no surprise that the product of such a system is an insecure, standardized, de-individualized, chemically balanced empty soul otherwise known as a “graduate.”
After 13 years of indoctrination the product is now ready for either further systematic validation in college or a case study in failure centered on one of the following; early pregnancy, drug abuse, anti-social behavior, sexual deviancy or military service.
Assuming some relative value, at this point in the process, the product chooses its profession and is indoctrinated not only into that profession, but also into the universal idea that being a product of the education system is not only necessary but should be sought after by all. This is reinforced to all product at different points in time by various authority figures in both the public and private sector. The idea can dually be used as an explanation of failure – you are a fry cook because you didn’t go to college – or as a means to reinforce cooperation on the part of the product – you are able to get this high paying job testing new fry grease because you have been extensively indoctrinated.
The idea is also instilled in all product that all of this pointless nonsense somehow entitles them to a higher standard of living than the lesser-indoctrinated product that did not progress so far. You will notice this superiority complex in a lot of product as they look down upon the mere working class – from which they are separated by a piece of paper and a couple of lucky breaks. Anyone in a profession involving manual labor is generally discounted by the product, particularly if the trade is one that pays a decent wage. Product can’t stand this sort of information. No plumber or electrician should ever make as much as them. After all, they have a piece of paper…
So after 4-10 years of additional indoctrination, the product is now ready for the “real world.” Here they take a position and most of them spend their first few weeks learning all of the information that they need to do their job. Even though they likely did not possess any experience or specific knowledge to perform properly, the idea is reinforced by the product’s employer that all of that “education” was necessary and somehow qualified them for the job. The truth is that the vast majority of professions require no “higher” education at all to perform them. The point is to indoctrinate you into the idea and to provide a level of job protection for those that have access to education. Simply allowing anyone off the street to apply for a job would level the playing field out for all potential employees.
I don’t want to sound conspiratorial about this. I honestly don’t think that the powers that be consciously think about it this way at all. They are true believers in the system and since the system has done so much for them, it is beyond questioning. To them, education is necessary. They believe in that idea. Never mind the fact that it is all a waste of time and resources to get through the system.
I digress. There you have the three levels of the education system. They disguise it all under the veil of meritocracy, but in reality that is simply not the case. Those with a natural advantage that are predisposed to conformity and structured learning will excel along with birthright products that had it handed to them every step of the way. The idea teaches you to worship the overly ambitious product. They are the embodiment of the American dream. The latter type of product is more of a product of what I would call the American reality.
Enough Already, Onto the Future
Today there are millions of units of product at various stages of development. These units are being instilled with the same bullshit as their predecessors, but they do not face the same future. Unfortunately, the lies being told to the next generation of product will not be so easily maintained. The facade will begin to come unraveled. In the face of this slow unraveling, the next generation of finished product will be produced and spit out into reality without a clue as to how they will survive. They were educated in abstractions and distractions in the name of bettering themselves when all they have really done is dumb themselves into a trap of specialization. They can’t think beyond their professions, they feel entitled to the high standard of living they have been teased with as a “reward” for “success” and they will refuse to accept that their reality is anything but what they invisioned.
I don’t blame the product completely. They were doing as they were told. They were following the path of least resistance and they were never encouraged to know better. They were washed clean of any remnants of their possible salt of the earth origin.
Seriously Though, What about the Future?
As resource depletion and its ramifications become more apparent, the fraud of education will be exposed and hopefully treated reasonably as a waste of time and money in many cases. Increasingly, the populations of the United States and other countries of the global north will be separated into two camps. In one camp, rich people and a few hangers on that have made themselves indispensable to the rich will continue on in some version of society that vaguely resembles today with decreased financial incentives. They will educate one another and keep the education industrial complex going on a scaled down level. In the other camp, the vast majority of the rest of us will continue on in the reality of how education was before the brief period from 1948-2008. We will learn what is necessary and I imagine will pick up some extras as knowledge is so much more readily available due to 60 years of educational and informational expansion.
the state of the public education system
Instead of pointing fingers at those responsible for the problem of education in America, I will skip that part and move right into the meat of the matter. Besides, they are too numerous to name, and I only have so many fingers…
A Brief History of State-Funded Indoctrination
From the beginning of history up to around WWII, the vast majority of Americans (rich people don’t count) were limited in education to the three R’s – if this is any indication of how well that was going, two of the three R’s are spelled wrong. After WWII, some well intentioned people decided that Americans would be better off if we were all educated. The logic was that rich people were well educated, and they were rich – so it should work about the same for the rest of us. And so it was, the Education Industrial Complex developed from humble beginnings and good intentions. As time went by it became clear that large swaths of the country were not as enthusiastic about this whole education thing as others. So in order to try to equalize the system to some degree, some basic requirements were instituted. The federal government, under President Carter in 1979, decided that there should be a chunk of executive branch bureaucracy dedicated to running this system. The indoctrination of youth has since been federalized and runs an annual tab of about $70 billion/year.
The Idea and the Product
Today we have a system that does next to nothing to educate students. The purpose of education in America today is two fold.
1. Churn out product for the market (the market is funded, monitored, micro-managed and generally cluster-fucked into oblivion by government).
2. Introduce and reinforce the idea.
First let me talk a little bit about what I mean when I say product. A child enters elementary school and from that point until completion of high school it is taught basic information and tested to verify a minimal level of understanding. Context of information, intellectual curiousity, independent thinking and individual mental freedom is discouraged. Creativity and contrary opinions on matters is likewise discouraged or not tolerated. The low-level government bureaucrat in charge of developing the product is under-trained, under-paid and often continuing their own education so they don’t have to teach anymore, so they are basically indifferent.It is therefore no surprise that the product of such a system is an insecure, standardized, de-individualized, chemically balanced empty soul otherwise known as a “graduate.”
After 13 years of indoctrination the product is now ready for either further systematic validation in college or a case study in failure centered on one of the following; early pregnancy, drug abuse, anti-social behavior, sexual deviancy or military service.
Assuming some relative value, at this point in the process, the product chooses its profession and is indoctrinated not only into that profession, but also into the universal idea that being a product of the education system is not only necessary but should be sought after by all. This is reinforced to all product at different points in time by various authority figures in both the public and private sector. The idea can dually be used as an explanation of failure – you are a fry cook because you didn’t go to college – or as a means to reinforce cooperation on the part of the product – you are able to get this high paying job testing new fry grease because you have been extensively indoctrinated.
The idea is also instilled in all product that all of this pointless nonsense somehow entitles them to a higher standard of living than the lesser-indoctrinated product that did not progress so far. You will notice this superiority complex in a lot of product as they look down upon the mere working class – from which they are separated by a piece of paper and a couple of lucky breaks. Anyone in a profession involving manual labor is generally discounted by the product, particularly if the trade is one that pays a decent wage. Product can’t stand this sort of information. No plumber or electrician should ever make as much as them. After all, they have a piece of paper…
So after 4-10 years of additional indoctrination, the product is now ready for the “real world.” Here they take a position and most of them spend their first few weeks learning all of the information that they need to do their job. Even though they likely did not possess any experience or specific knowledge to perform properly, the idea is reinforced by the product’s employer that all of that “education” was necessary and somehow qualified them for the job. The truth is that the vast majority of professions require no “higher” education at all to perform them. The point is to indoctrinate you into the idea and to provide a level of job protection for those that have access to education. Simply allowing anyone off the street to apply for a job would level the playing field out for all potential employees.
I don’t want to sound conspiratorial about this. I honestly don’t think that the powers that be consciously think about it this way at all. They are true believers in the system and since the system has done so much for them, it is beyond questioning. To them, education is necessary. They believe in that idea. Never mind the fact that it is all a waste of time and resources to get through the system.
I digress. There you have the three levels of the education system. They disguise it all under the veil of meritocracy, but in reality that is simply not the case. Those with a natural advantage that are predisposed to conformity and structured learning will excel along with birthright products that had it handed to them every step of the way. The idea teaches you to worship the overly ambitious product. They are the embodiment of the American dream. The latter type of product is more of a product of what I would call the American reality.
Enough Already, Onto the Future
Today there are millions of units of product at various stages of development. These units are being instilled with the same bullshit as their predecessors, but they do not face the same future. Unfortunately, the lies being told to the next generation of product will not be so easily maintained. The facade will begin to come unraveled. In the face of this slow unraveling, the next generation of finished product will be produced and spit out into reality without a clue as to how they will survive. They were educated in abstractions and distractions in the name of bettering themselves when all they have really done is dumb themselves into a trap of specialization. They can’t think beyond their professions, they feel entitled to the high standard of living they have been teased with as a “reward” for “success” and they will refuse to accept that their reality is anything but what they invisioned.
I don’t blame the product completely. They were doing as they were told. They were following the path of least resistance and they were never encouraged to know better. They were washed clean of any remnants of their possible salt of the earth origin.
Seriously Though, What about the Future?
As resource depletion and its ramifications become more apparent, the fraud of education will be exposed and hopefully treated reasonably as a waste of time and money in many cases. Increasingly, the populations of the United States and other countries of the global north will be separated into two camps. In one camp, rich people and a few hangers on that have made themselves indispensable to the rich will continue on in some version of society that vaguely resembles today with decreased financial incentives. They will educate one another and keep the education industrial complex going on a scaled down level. In the other camp, the vast majority of the rest of us will continue on in the reality of how education was before the brief period from 1948-2008. We will learn what is necessary and I imagine will pick up some extras as knowledge is so much more readily available due to 60 years of educational and informational expansion.
Fuck Rachel Maddow
I listened to Rachel Maddow on the way home from work today and her take on the loans to the Big 3 really got under my skin.
Specifically, she said:
1. Southern politicians not supporting domestic auto makers while fawning over foreign auto makers is tantamount to treason.
2. She inferred that the only opposition to this idea is coming from “the plantation caucus” which consists of southern republicans (when did Maddow get so bawdy? Making up a pejorative for these pols that conjures visions of slavery…).
3. She compared state and local tax incentives received by foreign automakers to a bail out loan.
4. She also stated that incentivization is counter to free market principles.
Bullshit, bullshit, bullshit.
1. It is not treasonous to withhold monetary support for failing businesses. It makes sense. I doubt some of the opponents have such a pristine position – I believe the union-busting jive being played up is accurate since republicans don’t like unions. Maddow, and many other lefty commentators, have the whole situation twisted. Giving a $XX billion loan to companies that are not functional (GM and Chrysler) now that SUV and truck demand has dropped off does nothing to save any union jobs. GM and Chrysler have been slowly dismantling and undermining their unionized workforce for 30 years.
2. I don’t know why an otherwise sharp and reasonable person would reduce herself to something as juvenile as “the plantation caucus.” Olbermann would do it, but Maddow isn’t Olbermann. At least she wasn’t before.
3. When state and local governments make deals with companies that limit their tax exposure, they are trying to create an environment that will be beneficial for the rich people behind the corporation as well as people in the area that need work. It isn’t ‘corporate welfare’ to not tax a business, it is fair. A business does not benefit from the existence of government and its services, the owners of the business do. Corporate taxation is ridiculous because corporations are not people, they simply treat taxes as a portion of their overhead and pass their cost along to consumers. Corporate taxes are just a way for politicians to make it look like they are making companies ‘pay their fair share.’ They don’t pay anything, the end user does. Here is a simple example:
Company A wants to make a profit of $5 after all of their costs to produce a unit are factored in to the price of the product. It costs them $10 to design, build and market the product. The government(s) charge a tax of $1 per unit. Company A does not say “OK, we will sell it for $15 and just cut our profit by 20%.” They sell the product for $16, treat the tax as a cost and still make their $5 profit per unit.
Taxes shouldn’t be levied on a construct (a figment of our collective imagination) that passes costs onto consumers. Taxes should be levied (if at all) on the people that benefit from the profits (in this case the employees, owners and stockholders of Company A). This will never happen because then democrats wouldn’t have anything to show they were working hard to make corporate America pay, and all of the corporate machinery in place to deal with corporate taxes (accountants, attorneys, etc) would be out of a job. And republicans would have to allow the American investor to pay the same taxes on their investment income that people that work for a living pay on their wages.
4. When a government offers tax breaks to companies to do business in their area, it is not against the free market. In a truly free market, the government would not tax companies at all. If anything, tax breaks actually create a more free market.
No, Really. Fuck Rachel Maddow
Of course, Rachel Maddow doesn’t care about any of this. She wants to make a childish political point and carry water for the democratic party. In doing so, she has shown she will stoop to using words that stir up America’s racist history as well as twist the information available to make it look like the republicans that oppose the bail out are all hypocrites. Hypocrites and politicians are basically the same beast to me and I will show you an example which is regularly talked about by Maddow and her ilk, socialized medicine. The left claims that socialized medicine will free the corporations from the burden of providing health care for their employees. This is a perfect example of a government incentive, the only difference between it and tax breaks for Honda in Alabama is that Alabama gets jobs out of it, with government-sponsored health care, the people get the same thing they get now, but the corporation gets free from the equation…
It is also depressing that they think these loans will somehow save Detroit and all the jobs associated with GM, Ford and Chrysler. However, a loan isn’t going to save them any more than a loan would save a consulting firm offering Y2K compliance services. The Big 3 are a part of American history, they are not a part of the future – and they shouldn’t be after the way that they have turned their back on the American worker. And don’t give me that shit about the 250,000 union jobs associated with the Big 3. In 20 years if they are still around those “union” jobs won’t be any better than the non-union jobs because the UAW, just like the railroad unions and countless others, have sold away their future members to better their workers today. A union used to stand for something, now it is just a way to protect the interests of senior members and screwing anyone that comes along in the future.
As long as people like Maddow get tapped to have prime-time TV talk shows, we are fucked. And it sucks to say that because I used to like her a lot. My like just dropped a rung today.
Specifically, she said:
1. Southern politicians not supporting domestic auto makers while fawning over foreign auto makers is tantamount to treason.
2. She inferred that the only opposition to this idea is coming from “the plantation caucus” which consists of southern republicans (when did Maddow get so bawdy? Making up a pejorative for these pols that conjures visions of slavery…).
3. She compared state and local tax incentives received by foreign automakers to a bail out loan.
4. She also stated that incentivization is counter to free market principles.
Bullshit, bullshit, bullshit.
1. It is not treasonous to withhold monetary support for failing businesses. It makes sense. I doubt some of the opponents have such a pristine position – I believe the union-busting jive being played up is accurate since republicans don’t like unions. Maddow, and many other lefty commentators, have the whole situation twisted. Giving a $XX billion loan to companies that are not functional (GM and Chrysler) now that SUV and truck demand has dropped off does nothing to save any union jobs. GM and Chrysler have been slowly dismantling and undermining their unionized workforce for 30 years.
2. I don’t know why an otherwise sharp and reasonable person would reduce herself to something as juvenile as “the plantation caucus.” Olbermann would do it, but Maddow isn’t Olbermann. At least she wasn’t before.
3. When state and local governments make deals with companies that limit their tax exposure, they are trying to create an environment that will be beneficial for the rich people behind the corporation as well as people in the area that need work. It isn’t ‘corporate welfare’ to not tax a business, it is fair. A business does not benefit from the existence of government and its services, the owners of the business do. Corporate taxation is ridiculous because corporations are not people, they simply treat taxes as a portion of their overhead and pass their cost along to consumers. Corporate taxes are just a way for politicians to make it look like they are making companies ‘pay their fair share.’ They don’t pay anything, the end user does. Here is a simple example:
Company A wants to make a profit of $5 after all of their costs to produce a unit are factored in to the price of the product. It costs them $10 to design, build and market the product. The government(s) charge a tax of $1 per unit. Company A does not say “OK, we will sell it for $15 and just cut our profit by 20%.” They sell the product for $16, treat the tax as a cost and still make their $5 profit per unit.
Taxes shouldn’t be levied on a construct (a figment of our collective imagination) that passes costs onto consumers. Taxes should be levied (if at all) on the people that benefit from the profits (in this case the employees, owners and stockholders of Company A). This will never happen because then democrats wouldn’t have anything to show they were working hard to make corporate America pay, and all of the corporate machinery in place to deal with corporate taxes (accountants, attorneys, etc) would be out of a job. And republicans would have to allow the American investor to pay the same taxes on their investment income that people that work for a living pay on their wages.
4. When a government offers tax breaks to companies to do business in their area, it is not against the free market. In a truly free market, the government would not tax companies at all. If anything, tax breaks actually create a more free market.
No, Really. Fuck Rachel Maddow
Of course, Rachel Maddow doesn’t care about any of this. She wants to make a childish political point and carry water for the democratic party. In doing so, she has shown she will stoop to using words that stir up America’s racist history as well as twist the information available to make it look like the republicans that oppose the bail out are all hypocrites. Hypocrites and politicians are basically the same beast to me and I will show you an example which is regularly talked about by Maddow and her ilk, socialized medicine. The left claims that socialized medicine will free the corporations from the burden of providing health care for their employees. This is a perfect example of a government incentive, the only difference between it and tax breaks for Honda in Alabama is that Alabama gets jobs out of it, with government-sponsored health care, the people get the same thing they get now, but the corporation gets free from the equation…
It is also depressing that they think these loans will somehow save Detroit and all the jobs associated with GM, Ford and Chrysler. However, a loan isn’t going to save them any more than a loan would save a consulting firm offering Y2K compliance services. The Big 3 are a part of American history, they are not a part of the future – and they shouldn’t be after the way that they have turned their back on the American worker. And don’t give me that shit about the 250,000 union jobs associated with the Big 3. In 20 years if they are still around those “union” jobs won’t be any better than the non-union jobs because the UAW, just like the railroad unions and countless others, have sold away their future members to better their workers today. A union used to stand for something, now it is just a way to protect the interests of senior members and screwing anyone that comes along in the future.
As long as people like Maddow get tapped to have prime-time TV talk shows, we are fucked. And it sucks to say that because I used to like her a lot. My like just dropped a rung today.
The price of oil
here is plenty of noise out there that since oil prices have gone down, the threat of peak oil has went the way of Y2K, Planet X, Sinbad, and all other threats to society as we know it. Of course, there is a fundamental misunderstanding about what peak oil is, and what it has to do with price.
I will admit that up until recently, I thought that there was really no where for oil to go but up. Sure there would be price volatility, but I had read plenty of peak oil proponents talk about how the price would fluctuate within a range and with a general upward trend – notably Matt Simmons said that oil would see higher highs and higher lows. That was until it didn’t. Oil at around $40/barrel does not fit in any particular up trend I can fathom. So clearly, this was one point that the peak oil community got wrong, or did not explain clearly enough. We were so obsessed with chattering up the price that we didn’t stop to think about a few issues, and we still are not, largely because its drop has been so stunning. I decided that now is as good a time as any to take a look at several different ideas I have read about before and after the price spike.
Awareness and the “peak oil premium”
Earlier in the year, it was fairly common to find mention of a peak oil premium being priced into the oil price. That is, journalists and pundits began to seize on the idea that peak oil was a real concern and that a portion of the oil price could be explained because of it. I credit this much to websites like Energy Bulletin and The Oil Drum for providing a strong technical background for more mainstream journalists to go to when formulating stories about the rise in oil price. These sites and many others also acted as an echo chamber for any peak oil news of note. In fact, recognition of peak oil by the mainstream media was something that was regularly celebrated on peak oil oriented websites.
But the peak oil crowd missed something, and so did I. No matter how strongly I believe peak oil to be either taking place or on the verge of taking place, I do not trade oil. Even some players in the oil game that believe peak oil is a reality are not listened to by the rest of the market. In other words, oil is priced by a huge number of traders and very few of them believe peak oil is a reality now. They also don’t think that the idea of peak oil is one which they should take into consideration regarding the oil price. Without traders believing peak oil is an important issue and factoring it into their bids, there will not be a “peak oil premium” priced into the market. I also have my doubts about whether traders have the long term vision to think beyond factors they are trained to consider when bidding oil prices up and down.
So, 2008 was the year that awareness of the notion of peak oil increased, it was not the year that the awareness translated into a premium in the oil price.
Dollar fluctuation
The value of the dollar has changed dramatically in the past few months, along with the price of oil. Here is a graph of the exchange rate between the Canadian Dollar and the US Dollar, June 25th to present:
graph copied from xrates.com
You can see that as recently as September 24th, the exchange rate was about one to one (CAD to USD). On September 24th, the price of oil was $105.73 (found here) and the price on 12/12 $42.07 which is a change of $63.66 or about 60%. There has been an increase of about 25% in the value of the US dollar in this same time span. So, a part of the change in the oil price has been the rally in the dollar – it can also be said that a big part of the high oil price earlier in the year was the result of a weaker dollar. If we were to value oil in Canadian Dollars instead of US dollars, the price on 12/12 would have about $52.50 which would be a change of 53.23 or about 50% from September 24th.
So, even though the changing value of the dollar can provide some explanation, it does not adequately explain the huge fluctuation.
Oil, the equity markets and other commodities
Whether it should be treated this way or not, oil futures contracts are treated as an investment by some large investors. Given that the whole financial system took a hit in 2008, oil’s price drop does make some sense in connection to the broader market. But in looking at the changes in the short run (as seen below) it does not show a clear indication of movement along with the stock market.
I am not the best at making sexy graphs but here are few of oil’s price decline in relation to the S&P and other commodities (I awe at the skill of CR and several contributors at TOD).
Here is the S&P 500 closing price (the red line) and NYMEX oil price (the blue shaded area) from Sept 24th to December 19th.
S&P 500 and Oil price graphs, Sept 24 to December 19
You can see that both have experienced a devaluation, and there is far more noise in the S&P graph than the oil price graph. In this span, the S&P lost about 25% of its value while oil lost 59%. Sorry I couldn’t make the difference more pronounced, I mainly wanted to show that movement was generally similar, but not directly related.
To give broader perspective of the two, here is the S&P 500 closing price (the red line) and NYMEX oil price (the green line) from 1982 to present.
You can clearly see the two bubbles in the S&P 500. You can also see that early on that the two prices have historically responded independently of one another, but they have shared upward and downward trends in the past. That is, different inputs go into the pricing of equities in the S&P 500 than do in oil.
So again, the overall deflation of the economy should be a component, but it isn’t a full explanation.
Demand Destruction
The idea of demand destruction is one which is regularly talked about in peak oil circles. The idea is basically that once oil reaches a certain price – assuming that the free market is allowed to function – marginal consumption will become too expensive and some demand will be curtailed. Unfortunately, finding numbers for consumption of oil is not easy to do. Instead, I will use this graph from Rembrandt at theoildrum.com for production.
Keeping in mind that production does not take oil stocks (oil already purchased and in storage awaiting resale or refinement) which are high right now. Even with that in mind, you can see a drop in production starting just around July or August 2008. Although this could be a demonstration of a lack of supply, it is more likely showing the reaction of producers to lower demand forecasts. For the record, I do not think this is demand destruction as outlined above. What we are seeing instead is external realities in the greater economy driving down demand through lower economic activity. Although oil was outrageous over the summer, I don’t think it was high enough to effectively destroy any significant portion of existing demand. I do believe that it did play some role in curtailing future demand as both individuals and organizations had to start thinking differently about their petroleum consumption at higher prices. Again, this is another unfortunate side effect of the price crash in the second half of 2008. The economic incentive to consume less oil has been removed for the vast majority of the world.
Conclusion
Taking all of the information into account shows that thereare a number of different inputs that impact the trading price for oil contracts. In looking at everything, there is not one clear explanation to explain it all away.
As oil price was on its way up, traditional indicators (stocks, forecast production, forecast demand and “above ground issues) all pushed the price higher. The spike in price over the summer at least partially had to do (given what we know now) with people looking at the economic trends and taking investment positions in the market based on their assumptions about future economic activity.
I think the most interesting thing about all of it is that it unraveled so quickly and so dramatically. Given the present circumstances, I am sure that I will no longer look to oil price for an indication of the status of peak oil. I also think that it is unfortunate, given that I believe in the immediacy of peak oil, that the people involved in the market are still using yesterday’s analysis methods to determine the fair market price.
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I will admit that up until recently, I thought that there was really no where for oil to go but up. Sure there would be price volatility, but I had read plenty of peak oil proponents talk about how the price would fluctuate within a range and with a general upward trend – notably Matt Simmons said that oil would see higher highs and higher lows. That was until it didn’t. Oil at around $40/barrel does not fit in any particular up trend I can fathom. So clearly, this was one point that the peak oil community got wrong, or did not explain clearly enough. We were so obsessed with chattering up the price that we didn’t stop to think about a few issues, and we still are not, largely because its drop has been so stunning. I decided that now is as good a time as any to take a look at several different ideas I have read about before and after the price spike.
Awareness and the “peak oil premium”
Earlier in the year, it was fairly common to find mention of a peak oil premium being priced into the oil price. That is, journalists and pundits began to seize on the idea that peak oil was a real concern and that a portion of the oil price could be explained because of it. I credit this much to websites like Energy Bulletin and The Oil Drum for providing a strong technical background for more mainstream journalists to go to when formulating stories about the rise in oil price. These sites and many others also acted as an echo chamber for any peak oil news of note. In fact, recognition of peak oil by the mainstream media was something that was regularly celebrated on peak oil oriented websites.
But the peak oil crowd missed something, and so did I. No matter how strongly I believe peak oil to be either taking place or on the verge of taking place, I do not trade oil. Even some players in the oil game that believe peak oil is a reality are not listened to by the rest of the market. In other words, oil is priced by a huge number of traders and very few of them believe peak oil is a reality now. They also don’t think that the idea of peak oil is one which they should take into consideration regarding the oil price. Without traders believing peak oil is an important issue and factoring it into their bids, there will not be a “peak oil premium” priced into the market. I also have my doubts about whether traders have the long term vision to think beyond factors they are trained to consider when bidding oil prices up and down.
So, 2008 was the year that awareness of the notion of peak oil increased, it was not the year that the awareness translated into a premium in the oil price.
Dollar fluctuation
The value of the dollar has changed dramatically in the past few months, along with the price of oil. Here is a graph of the exchange rate between the Canadian Dollar and the US Dollar, June 25th to present:
graph copied from xrates.com
You can see that as recently as September 24th, the exchange rate was about one to one (CAD to USD). On September 24th, the price of oil was $105.73 (found here) and the price on 12/12 $42.07 which is a change of $63.66 or about 60%. There has been an increase of about 25% in the value of the US dollar in this same time span. So, a part of the change in the oil price has been the rally in the dollar – it can also be said that a big part of the high oil price earlier in the year was the result of a weaker dollar. If we were to value oil in Canadian Dollars instead of US dollars, the price on 12/12 would have about $52.50 which would be a change of 53.23 or about 50% from September 24th.
So, even though the changing value of the dollar can provide some explanation, it does not adequately explain the huge fluctuation.
Oil, the equity markets and other commodities
Whether it should be treated this way or not, oil futures contracts are treated as an investment by some large investors. Given that the whole financial system took a hit in 2008, oil’s price drop does make some sense in connection to the broader market. But in looking at the changes in the short run (as seen below) it does not show a clear indication of movement along with the stock market.
I am not the best at making sexy graphs but here are few of oil’s price decline in relation to the S&P and other commodities (I awe at the skill of CR and several contributors at TOD).
Here is the S&P 500 closing price (the red line) and NYMEX oil price (the blue shaded area) from Sept 24th to December 19th.
S&P 500 and Oil price graphs, Sept 24 to December 19
You can see that both have experienced a devaluation, and there is far more noise in the S&P graph than the oil price graph. In this span, the S&P lost about 25% of its value while oil lost 59%. Sorry I couldn’t make the difference more pronounced, I mainly wanted to show that movement was generally similar, but not directly related.
To give broader perspective of the two, here is the S&P 500 closing price (the red line) and NYMEX oil price (the green line) from 1982 to present.
You can clearly see the two bubbles in the S&P 500. You can also see that early on that the two prices have historically responded independently of one another, but they have shared upward and downward trends in the past. That is, different inputs go into the pricing of equities in the S&P 500 than do in oil.
So again, the overall deflation of the economy should be a component, but it isn’t a full explanation.
Demand Destruction
The idea of demand destruction is one which is regularly talked about in peak oil circles. The idea is basically that once oil reaches a certain price – assuming that the free market is allowed to function – marginal consumption will become too expensive and some demand will be curtailed. Unfortunately, finding numbers for consumption of oil is not easy to do. Instead, I will use this graph from Rembrandt at theoildrum.com for production.
Keeping in mind that production does not take oil stocks (oil already purchased and in storage awaiting resale or refinement) which are high right now. Even with that in mind, you can see a drop in production starting just around July or August 2008. Although this could be a demonstration of a lack of supply, it is more likely showing the reaction of producers to lower demand forecasts. For the record, I do not think this is demand destruction as outlined above. What we are seeing instead is external realities in the greater economy driving down demand through lower economic activity. Although oil was outrageous over the summer, I don’t think it was high enough to effectively destroy any significant portion of existing demand. I do believe that it did play some role in curtailing future demand as both individuals and organizations had to start thinking differently about their petroleum consumption at higher prices. Again, this is another unfortunate side effect of the price crash in the second half of 2008. The economic incentive to consume less oil has been removed for the vast majority of the world.
Conclusion
Taking all of the information into account shows that thereare a number of different inputs that impact the trading price for oil contracts. In looking at everything, there is not one clear explanation to explain it all away.
As oil price was on its way up, traditional indicators (stocks, forecast production, forecast demand and “above ground issues) all pushed the price higher. The spike in price over the summer at least partially had to do (given what we know now) with people looking at the economic trends and taking investment positions in the market based on their assumptions about future economic activity.
I think the most interesting thing about all of it is that it unraveled so quickly and so dramatically. Given the present circumstances, I am sure that I will no longer look to oil price for an indication of the status of peak oil. I also think that it is unfortunate, given that I believe in the immediacy of peak oil, that the people involved in the market are still using yesterday’s analysis methods to determine the fair market price.
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A letter to me in 2001
Dear Mike,
I hope this letter finds you well. I appreciate that you sat down for a few minutes to read this. Don’t worry, your drugs and erowid.org aren’t going anywhere. I thought I would drop you a line to tell you about the next 8 years of the world generally and your life in particular. Don’t worry, I am not writing this to attempt to change you in any way, I just want you to know some stuff.
Me, in 2001, wearing my favorite pink shirt
Aside from the normal things that happen to most men as they age (your hair is falling out and your balls are sagging) I wanted to let you know that things are pretty much the same with you in 2009. The only bad news I have for you is that sometime around 2003 you will realize that you can’t afford all of those drugs you are doing – so enjoy them while the money is still around to be spent. You almost finished college, you met a woman and fell in love. You think about weird things like feminism and anarchy. You travel some and you finally buy a Honda, and it is awesome. Overall, life continues to treat you pretty well in spite of yourself. In 2003 you get your heart broken and decide to write a book. In 2004 you realize you are a terrible story teller and stop trying to write fiction. You get a cool job working the night shift at a gas station in Charleston SC and you were never happier. You try and fail to learn how to surf but blame it on your short board and the wimpy SC waves. You read books for a while but then you realize that they are about 5% information and 95% ego masturbation. You continue to masturbate regularly. You continue to be on the verge of something spectacular. You eat food from dumpsters, that is right, you eat junk. You meet some cool people and you really miss people that you knew for a long time and don’t see anymore. You try to reconnect and it is hit and miss. You start playing waaaaay too much poker. Your pink shirt breaks down from wear. Sorry about that one, but it happens.
Enough about you, I mean me, whatever. Later on in 2001 some terrorists crash planes into buildings in NYC and DC. People around you lose their fucking minds. You don’t lose your mind but you begin to pay attention to what is going on around you and realize that people are an utter disappointment. You get angry. You realize the people protesting the crazy people are pieces of shit and you stop. You get jaded. Oh, boy, do you get jaded. You become convinced that the attacks were possibly orchestrated by the government, and at the least either they knew about it or no one was doing their jobs. You become disinterested from who is or is not responsible. Hundreds of thousands of people die in a war. You become even less interested. In 2004, the crazy people or the voting machines elect Bush as president for 4 more years. You join the ACLU, then give up on them too. You do this with a lot of other groups. You become obsessed with the idea of peak oil and you read a lot about it. You even read a few books again, then remember that they suck ass. Oil prices start to go up – yes, you pay attention to oil prices – and you get excited thinking people will wake up. You get disappointed when they don’t. The economy starts to collapse and again you think people will start to change. Again they don’t, but this time you pretty much expect it.
Other things that will surprise you include the following:
1. The US elects a black guy from Chicago as president in 2008
2. You start to not like John McCain
3. George Bush gives you $600
4. Kmart files for bankruptcy
5. The Cubs win a world series
Ok, the last one is bullshit but I swear the rest are true.
But before all of this happens, you read this and you don’t believe a word of it. You don’t believe it because even though life itself is pretty much the same, all of these things don’t fit into the way you see the world right now.
boat drinks,
mike in Jan. 2009
I hope this letter finds you well. I appreciate that you sat down for a few minutes to read this. Don’t worry, your drugs and erowid.org aren’t going anywhere. I thought I would drop you a line to tell you about the next 8 years of the world generally and your life in particular. Don’t worry, I am not writing this to attempt to change you in any way, I just want you to know some stuff.
Me, in 2001, wearing my favorite pink shirt
Aside from the normal things that happen to most men as they age (your hair is falling out and your balls are sagging) I wanted to let you know that things are pretty much the same with you in 2009. The only bad news I have for you is that sometime around 2003 you will realize that you can’t afford all of those drugs you are doing – so enjoy them while the money is still around to be spent. You almost finished college, you met a woman and fell in love. You think about weird things like feminism and anarchy. You travel some and you finally buy a Honda, and it is awesome. Overall, life continues to treat you pretty well in spite of yourself. In 2003 you get your heart broken and decide to write a book. In 2004 you realize you are a terrible story teller and stop trying to write fiction. You get a cool job working the night shift at a gas station in Charleston SC and you were never happier. You try and fail to learn how to surf but blame it on your short board and the wimpy SC waves. You read books for a while but then you realize that they are about 5% information and 95% ego masturbation. You continue to masturbate regularly. You continue to be on the verge of something spectacular. You eat food from dumpsters, that is right, you eat junk. You meet some cool people and you really miss people that you knew for a long time and don’t see anymore. You try to reconnect and it is hit and miss. You start playing waaaaay too much poker. Your pink shirt breaks down from wear. Sorry about that one, but it happens.
Enough about you, I mean me, whatever. Later on in 2001 some terrorists crash planes into buildings in NYC and DC. People around you lose their fucking minds. You don’t lose your mind but you begin to pay attention to what is going on around you and realize that people are an utter disappointment. You get angry. You realize the people protesting the crazy people are pieces of shit and you stop. You get jaded. Oh, boy, do you get jaded. You become convinced that the attacks were possibly orchestrated by the government, and at the least either they knew about it or no one was doing their jobs. You become disinterested from who is or is not responsible. Hundreds of thousands of people die in a war. You become even less interested. In 2004, the crazy people or the voting machines elect Bush as president for 4 more years. You join the ACLU, then give up on them too. You do this with a lot of other groups. You become obsessed with the idea of peak oil and you read a lot about it. You even read a few books again, then remember that they suck ass. Oil prices start to go up – yes, you pay attention to oil prices – and you get excited thinking people will wake up. You get disappointed when they don’t. The economy starts to collapse and again you think people will start to change. Again they don’t, but this time you pretty much expect it.
Other things that will surprise you include the following:
1. The US elects a black guy from Chicago as president in 2008
2. You start to not like John McCain
3. George Bush gives you $600
4. Kmart files for bankruptcy
5. The Cubs win a world series
Ok, the last one is bullshit but I swear the rest are true.
But before all of this happens, you read this and you don’t believe a word of it. You don’t believe it because even though life itself is pretty much the same, all of these things don’t fit into the way you see the world right now.
boat drinks,
mike in Jan. 2009
Fuck your Sense of Patriotism
Last year, I received an email from a family member (text is at the bottom of the post) that played up the sense of selflessness a fallen soldier had and how warm President Bush was when he met this fallen soldiers family. Now, there is something to be said for standing up and fighting for something you believe in. I have no problem with that. My problem lies more in the twisted rhetoric that is often employed by people who are a product of the American indoctrination system when they talk about military men and women.
If what you have read so far offends your sensibilities, you should stop reading now…
Me (on the right) and some other Marines serving our country proudly with the “suck it” salute…
Now, before I get into my anti-patriotism screed, I want to start by saying that I have never been one to be swept up in the ideas of patriotism, religion or any other constuct that is essentially romanticized bullshit. It is so easy to find holes in our collective notions about service, faith or loyalty that I don’t feel like I need to get into it. It is a charade. We all play it, and I am just as guilty of countless others in the exploitation of the charade. Also, I do not have a fundamental beef with violence. In fact, I think violence is an excellent tool in conflict resolution. I do have a problem with government ordered violence under most circumstances. The only exception would be if there was a real foreign threat (no, Bin Laden doesn’t count) or if government continues down its path toward authoritarianism.
Nobility of Soldierdom
There is nothing particularly noble about military service in and of itself. You can find plenty of examples of exceptional behavior in the face of adversity in military history, but you can also find it just as commonly in civilian history. Being in the military doesn’t make you a hero or otherwise noble, it makes you an armed servant to the government. Since I don’t have a lot of respect for government, obviously I don’t hold their killing forces in high regard either. Government, and its brainwashed minions, encourage the romancification of military service and because we naturally look to leadership for behavioral example the vast majority of America buys into it. I hate the saying “thank you for your service” or other such nonsense like the US military is really doing much of anything in the way of serving the people of this country. The vast majority of the duty of the military is to protect the global interests of the monied elite, both American and foreign. Iraq and Afghanistan have absolutely nothing to do with security, freedom or protection of the American way of life. They have a whole lot to do with shaping and maintaining an international status that is conducive to business interests that are allied with the US government.
Clearly, there is not anything noble about what I just described for 99.9% of America. It does not help us, it hurts us. If you, or if someone you know is in the military, you need to understand that their decency is in no way associated with their military experience. Either they are a good person, or they are not. Service members and veterans are not special.
The cost of freedom
Another saying that seems ingrained into the American psyche is that freedom isn’t free, it is paid for with the lives of American fighting men and women. Obviously, I have my problems with this too. It is my opinion that the greatest impediment to personal freedom in America is the activities of the federal government. A lot of people would respond to this with some reference to the bill of rights or some other such nonsense. Well, let me give you a quick history lesson, the founding fathers (rich, white paranoid men) wrote the bill of rights to protect the people from government, not from some perceived outside threat. Osama Bin Laden or whatever other bad guy you want to create will never take away my freedom – but the US government is slowly eroding away at it. To say that you believe the military is protecting your freedom is indicative of your level of intellectual curiousity and nothing more.
I would say that freedom is free and we are all stupid enough to pay the government to take it away from us. Just a thought. Also, as you will notice in my reply to the email I received that sparked some of this in the first place, our freedom is more directly tied to whether or not the government perceives what we are doing with our freedom as a threat. An American that is interested in going to work during the week and spending time with friends or watching sports or some other form of entertainment will always be free under the current system. On the other hand, an American who is dedicated to the opposition of tyranny and intervention may find out the limits of freedom pretty quickly.
With that, I will close this out with the email chain that got me so worked up in the first place.
enjoy,
mike
The email chain
Mr Mayberry,
Thank you for taking the time to spout your trite rhetoric to the entire email chain. I know better than to try and reason with a person who is so clearly jaded. I also know better than to call into question the opinions that you quite casually state as fact. The only thing it would accomplish is to re-re-annoy all of the people on this chain.
I do, however, take umbrage with you insinuating that our Men and Women selflessly offering their lives for the country are mere pawns…further insinuating that they are not intelligent enough to understand the decision they have made.
Fortunately, there are still people in this country who do things, not because they are mindless pawns, but because they believe in said things. I could not be prouder of my Brother-in-law…or of my friends, family, and countless people I don’t know personally that made the same brave decision that he did. Their actions and the actions of generations before them are the only reason you and I have the freedom of voicing such divergent opinions.
There are still people who are not so paralyzed by their own cynicism and anger that they can proudly and unapologetically believe in something (even if it’s unpopular). Hopefully someday you’ll know or remember what that feels like.
Until then:
Please do not send me any other emails like this. And please don’t write me off as some republican complaining about democrats. I hope that if Obama is elected he would actually have the fortitude and vision to make the right decisions in the interest of the country. I also hope the same for McCain. There are many national politicians who are trash, but to resign ourselves to them all being bad is irresponsible and akin to resigning our nation to collapse. Apathy and actionless complaining accomplish nothing.
There is no need to respond as we’ll likely never see eye to eye. But if you choose to respond, please do everyone on the chain the service of removing their names first. Nobody is interested in seeing two very opinionated people argue their points in vain. I simply wanted to let Zac and others know that your opinion (as loud and invasive as it may have been) is not one shared by all or even most of the people he will encounter.
Respectfully,
Rob
This garbage really makes me angry. I don’t doubt the president’s sincerity, I don’t even doubt that the events occurred as outlined in this email. I believe that the president truly does feel a deep gratitude to all fallen service members for their sacrifice.
The thing about this story, and other emails like this, is that it only tells the human side of the story about the president. George W Bush made a terrible decision to start a war and then haphazardly occupy Iraq. Due to this decision, this guy’s kid is dead. If I knew the dead kid I probably would not have liked him very much – from the way he was described he was the kind of person that most people I knew in the military couldn’t stand to be around.
He went to Africa to tell people that the God they believed in was the wrong god and that he was right. Missionaries do some good, but they are only doing it to spread their religious views. The Mormon view is no more valid than any other religious view so I think it is disgusting that they travel around the world trying to brainwash other people into believing in Mormonism.
So after being a pawn for a religious theology, he became a pawn for the US government’s expansion of their power in the world. I don’t see either aspect of this guy’s “service” as particularly noble. Shawn strikes me as the type of guy that never thought about anything beyond what he was told to think. That is the biggest shame that I take away from this story. This kid is dead because he went along with what he was told and in the process made his contribution to one of the greatest mistakes this country has ever made. Thousands of Americans dead, tens of thousands of Iraqis and Afghanis dead so that America can position their corporations to profit from the exploitation of a far away region’s natural resources. We are all guilty of being a pawn in this game. We have all laid down and not made any noise about what our government has done in our names.
The foreign policy of the past seven years is nothing to be celebrated the way that it is in this email. It should be a source of great shame. I hope that you take a minute to think about this, and think about our collective inaction as American people to control the future of our country.
Please do not send me any other emails like this. And please don’t right me off as some democrat complaining about republicans. I don’t think Obama would actually have the fortitude to make any major changes to US foreign policy. I also don’t think McCain will do anything good. They are national politicians because they are good at raising money and saying the things that they need to say to get elected.
Sincerely,
Mike Mayberry
My boss sent this article to me and I wanted to share it with some of my special friends. The story is even more moving and unique because Brittany (my wonderful daughter-in-law) has a brother named Zachary that joined the Air Force this past year and is serving at Eielson AFB in Alaska.
Zak was selected to stand guard outside the Presidential plane during its time on the ground while at Eielson. Thank you Zak, for your selfless sacrifice to protect and serve our country.
Commentary by Lt. Col. Mark Murphy
354th Maintenance Group deputy commander
8/15/2008 - EIELSON AIR FORCE BASE, Alaska – I learned a big lesson on service Aug. 4, 2008, when Eielson had the rare honor of hosting President Bush on a refueling stop as he traveled to Asia.
It was an event Eielson will never forget — a hangar full of Airmen and Soldiers getting to see the Commander in Chief up close, and perhaps even shaking his hand. An incredible amount of effort goes into presidential travel because of all of the logistics, security, protocol, etc … so it was remarkable to see Air Force One land at Eielson on time at precisely 4:30 p.m.–however, when he left less than two hours later, the President was 15 minutes behind schedule.
That’s a big slip for something so tightly choreographed, but very few people know why it happened. Here’s why.
On Dec. 10, 2006, our son, Shawn, was a paratrooper deployed on the outskirts of Baghdad. He was supposed to spend the night in camp, but when a fellow soldier became ill Shawn volunteered to take his place on a nighttime patrol–in the convoy’s most exposed position as turret gunner in the lead Humvee. He was killed instantly with two other soldiers when an IED ripped through their vehicle.
I was thinking about that as my family and I sat in the audience listening to the President’s speech, looking at the turret on the up-armored Humvee the explosive ordnance disposal flight had put at the edge of the stage as a static display.
When the speech was over and the President was working the crowd line, I
felt a tap on my shoulder and turned to see a White House staff member. She asked me and my wife to come with her, because the President wanted to meet us.
Stunned, we grabbed our two sons that were with us and followed her back into a conference room. It was a shock to go from a crowded, noisy hangar, past all of those security people, to find ourselves suddenly alone in a quiet room.
The only thing we could hear was a cell phone vibrating, and noticed that it was coming from the jacket Senator Stevens left on a chair. We didn’t answer.
A short time later, the Secret Service opened the door and President Bush walked in. I thought we might get to shake his hand as he went through. But instead, he walked up to my wife with his arms wide, pulled her in for a hug and a kiss, and said, ‘I wish I could heal the hole in your heart.’ He
then grabbed me for a hug, as well as each of our sons. Then he turned and said, ‘Everybody out.’
A few seconds later, the four of us were completely alone behind closed doors with the President of the United States and not a Secret Service agent in sight.
He said, ‘Come on, let’s sit down and talk.’ He pulled up a chair at the side of the room, and we sat down next to him. He looked a little tired from his trip, and he noticed that his shoes were scuffed up from leaning over concrete barriers to shake hands and pose for photos. He slumped down the chair, completely relaxed, smiled, and suddenly was no longer the President – he was just a guy with a job, sitting around talking with us like a family member at a barbeque.
For the next 15 or 20 minutes, he talked with us about our son, Iraq, his family, faith, convictions, and shared his feelings about nearing the end of his presidency. He asked each of our teenaged sons what they wanted to do in life and counseled them to set goals, stick to their convictions, and not worry about being the ‘cool’ guy.
He said that he’d taken a lot of heat during his tenure and was under a lot of pressure to do what’s politically expedient, but was proud to say that he never sold his soul. Sometimes he laughed, and at others he teared up. He said that what he’ll miss most after leaving office will be his role as Commander in Chief.
One of the somber moments was when he thanked us for the opportunity to meet, because he feels a heavy responsibility knowing that our son died because of a decision he made. He was incredibly humble, full of warmth, and completely without pretense. We were seeing the man his family sees.
We couldn’t believe how long he was talking to us, but he seemed to be in no hurry whatsoever. In the end, he thanked us again for the visit and for the opportunity to get off his feet for a few minutes. He then said, ‘Let’s get some pictures.’ The doors flew open, Secret Service and the White House photographer came in, and suddenly he was the President again. We posed for individual pictures as he gave each of us one of his coins, and then he posed for family pictures. A few more thank yous, a few more hugs, and he was gone.
The remarkable thing about the whole event was that he didn’t have to see us at all. If he wanted to do more, he could’ve just given a quick handshake and said, ‘Thanks for your sacrifice.’ But he didn’t – he put everything and everyone in his life on hold to meet privately with the family of a Private First Class who gave his life in the service of his country.
What an incredible lesson on service. If the President of the United States is willing to drop everything on his plate to visit with a family, surely the rest of us can do it. No one is above serving another person, and no one is so lofty that he or she can’t treat others with dignity and respect.
We often think of service in terms of sacrificing ourselves for someone in a position above us, but how often do we remember that serving someone below us can be much more important? If you’re in a leadership capacity, take a good look at how you’re treating your people, and remember that your role involves serving the people you rely on every day.
If what you have read so far offends your sensibilities, you should stop reading now…
Me (on the right) and some other Marines serving our country proudly with the “suck it” salute…
Now, before I get into my anti-patriotism screed, I want to start by saying that I have never been one to be swept up in the ideas of patriotism, religion or any other constuct that is essentially romanticized bullshit. It is so easy to find holes in our collective notions about service, faith or loyalty that I don’t feel like I need to get into it. It is a charade. We all play it, and I am just as guilty of countless others in the exploitation of the charade. Also, I do not have a fundamental beef with violence. In fact, I think violence is an excellent tool in conflict resolution. I do have a problem with government ordered violence under most circumstances. The only exception would be if there was a real foreign threat (no, Bin Laden doesn’t count) or if government continues down its path toward authoritarianism.
Nobility of Soldierdom
There is nothing particularly noble about military service in and of itself. You can find plenty of examples of exceptional behavior in the face of adversity in military history, but you can also find it just as commonly in civilian history. Being in the military doesn’t make you a hero or otherwise noble, it makes you an armed servant to the government. Since I don’t have a lot of respect for government, obviously I don’t hold their killing forces in high regard either. Government, and its brainwashed minions, encourage the romancification of military service and because we naturally look to leadership for behavioral example the vast majority of America buys into it. I hate the saying “thank you for your service” or other such nonsense like the US military is really doing much of anything in the way of serving the people of this country. The vast majority of the duty of the military is to protect the global interests of the monied elite, both American and foreign. Iraq and Afghanistan have absolutely nothing to do with security, freedom or protection of the American way of life. They have a whole lot to do with shaping and maintaining an international status that is conducive to business interests that are allied with the US government.
Clearly, there is not anything noble about what I just described for 99.9% of America. It does not help us, it hurts us. If you, or if someone you know is in the military, you need to understand that their decency is in no way associated with their military experience. Either they are a good person, or they are not. Service members and veterans are not special.
The cost of freedom
Another saying that seems ingrained into the American psyche is that freedom isn’t free, it is paid for with the lives of American fighting men and women. Obviously, I have my problems with this too. It is my opinion that the greatest impediment to personal freedom in America is the activities of the federal government. A lot of people would respond to this with some reference to the bill of rights or some other such nonsense. Well, let me give you a quick history lesson, the founding fathers (rich, white paranoid men) wrote the bill of rights to protect the people from government, not from some perceived outside threat. Osama Bin Laden or whatever other bad guy you want to create will never take away my freedom – but the US government is slowly eroding away at it. To say that you believe the military is protecting your freedom is indicative of your level of intellectual curiousity and nothing more.
I would say that freedom is free and we are all stupid enough to pay the government to take it away from us. Just a thought. Also, as you will notice in my reply to the email I received that sparked some of this in the first place, our freedom is more directly tied to whether or not the government perceives what we are doing with our freedom as a threat. An American that is interested in going to work during the week and spending time with friends or watching sports or some other form of entertainment will always be free under the current system. On the other hand, an American who is dedicated to the opposition of tyranny and intervention may find out the limits of freedom pretty quickly.
With that, I will close this out with the email chain that got me so worked up in the first place.
enjoy,
mike
The email chain
Mr Mayberry,
Thank you for taking the time to spout your trite rhetoric to the entire email chain. I know better than to try and reason with a person who is so clearly jaded. I also know better than to call into question the opinions that you quite casually state as fact. The only thing it would accomplish is to re-re-annoy all of the people on this chain.
I do, however, take umbrage with you insinuating that our Men and Women selflessly offering their lives for the country are mere pawns…further insinuating that they are not intelligent enough to understand the decision they have made.
Fortunately, there are still people in this country who do things, not because they are mindless pawns, but because they believe in said things. I could not be prouder of my Brother-in-law…or of my friends, family, and countless people I don’t know personally that made the same brave decision that he did. Their actions and the actions of generations before them are the only reason you and I have the freedom of voicing such divergent opinions.
There are still people who are not so paralyzed by their own cynicism and anger that they can proudly and unapologetically believe in something (even if it’s unpopular). Hopefully someday you’ll know or remember what that feels like.
Until then:
Please do not send me any other emails like this. And please don’t write me off as some republican complaining about democrats. I hope that if Obama is elected he would actually have the fortitude and vision to make the right decisions in the interest of the country. I also hope the same for McCain. There are many national politicians who are trash, but to resign ourselves to them all being bad is irresponsible and akin to resigning our nation to collapse. Apathy and actionless complaining accomplish nothing.
There is no need to respond as we’ll likely never see eye to eye. But if you choose to respond, please do everyone on the chain the service of removing their names first. Nobody is interested in seeing two very opinionated people argue their points in vain. I simply wanted to let Zac and others know that your opinion (as loud and invasive as it may have been) is not one shared by all or even most of the people he will encounter.
Respectfully,
Rob
This garbage really makes me angry. I don’t doubt the president’s sincerity, I don’t even doubt that the events occurred as outlined in this email. I believe that the president truly does feel a deep gratitude to all fallen service members for their sacrifice.
The thing about this story, and other emails like this, is that it only tells the human side of the story about the president. George W Bush made a terrible decision to start a war and then haphazardly occupy Iraq. Due to this decision, this guy’s kid is dead. If I knew the dead kid I probably would not have liked him very much – from the way he was described he was the kind of person that most people I knew in the military couldn’t stand to be around.
He went to Africa to tell people that the God they believed in was the wrong god and that he was right. Missionaries do some good, but they are only doing it to spread their religious views. The Mormon view is no more valid than any other religious view so I think it is disgusting that they travel around the world trying to brainwash other people into believing in Mormonism.
So after being a pawn for a religious theology, he became a pawn for the US government’s expansion of their power in the world. I don’t see either aspect of this guy’s “service” as particularly noble. Shawn strikes me as the type of guy that never thought about anything beyond what he was told to think. That is the biggest shame that I take away from this story. This kid is dead because he went along with what he was told and in the process made his contribution to one of the greatest mistakes this country has ever made. Thousands of Americans dead, tens of thousands of Iraqis and Afghanis dead so that America can position their corporations to profit from the exploitation of a far away region’s natural resources. We are all guilty of being a pawn in this game. We have all laid down and not made any noise about what our government has done in our names.
The foreign policy of the past seven years is nothing to be celebrated the way that it is in this email. It should be a source of great shame. I hope that you take a minute to think about this, and think about our collective inaction as American people to control the future of our country.
Please do not send me any other emails like this. And please don’t right me off as some democrat complaining about republicans. I don’t think Obama would actually have the fortitude to make any major changes to US foreign policy. I also don’t think McCain will do anything good. They are national politicians because they are good at raising money and saying the things that they need to say to get elected.
Sincerely,
Mike Mayberry
My boss sent this article to me and I wanted to share it with some of my special friends. The story is even more moving and unique because Brittany (my wonderful daughter-in-law) has a brother named Zachary that joined the Air Force this past year and is serving at Eielson AFB in Alaska.
Zak was selected to stand guard outside the Presidential plane during its time on the ground while at Eielson. Thank you Zak, for your selfless sacrifice to protect and serve our country.
Commentary by Lt. Col. Mark Murphy
354th Maintenance Group deputy commander
8/15/2008 - EIELSON AIR FORCE BASE, Alaska – I learned a big lesson on service Aug. 4, 2008, when Eielson had the rare honor of hosting President Bush on a refueling stop as he traveled to Asia.
It was an event Eielson will never forget — a hangar full of Airmen and Soldiers getting to see the Commander in Chief up close, and perhaps even shaking his hand. An incredible amount of effort goes into presidential travel because of all of the logistics, security, protocol, etc … so it was remarkable to see Air Force One land at Eielson on time at precisely 4:30 p.m.–however, when he left less than two hours later, the President was 15 minutes behind schedule.
That’s a big slip for something so tightly choreographed, but very few people know why it happened. Here’s why.
On Dec. 10, 2006, our son, Shawn, was a paratrooper deployed on the outskirts of Baghdad. He was supposed to spend the night in camp, but when a fellow soldier became ill Shawn volunteered to take his place on a nighttime patrol–in the convoy’s most exposed position as turret gunner in the lead Humvee. He was killed instantly with two other soldiers when an IED ripped through their vehicle.
I was thinking about that as my family and I sat in the audience listening to the President’s speech, looking at the turret on the up-armored Humvee the explosive ordnance disposal flight had put at the edge of the stage as a static display.
When the speech was over and the President was working the crowd line, I
felt a tap on my shoulder and turned to see a White House staff member. She asked me and my wife to come with her, because the President wanted to meet us.
Stunned, we grabbed our two sons that were with us and followed her back into a conference room. It was a shock to go from a crowded, noisy hangar, past all of those security people, to find ourselves suddenly alone in a quiet room.
The only thing we could hear was a cell phone vibrating, and noticed that it was coming from the jacket Senator Stevens left on a chair. We didn’t answer.
A short time later, the Secret Service opened the door and President Bush walked in. I thought we might get to shake his hand as he went through. But instead, he walked up to my wife with his arms wide, pulled her in for a hug and a kiss, and said, ‘I wish I could heal the hole in your heart.’ He
then grabbed me for a hug, as well as each of our sons. Then he turned and said, ‘Everybody out.’
A few seconds later, the four of us were completely alone behind closed doors with the President of the United States and not a Secret Service agent in sight.
He said, ‘Come on, let’s sit down and talk.’ He pulled up a chair at the side of the room, and we sat down next to him. He looked a little tired from his trip, and he noticed that his shoes were scuffed up from leaning over concrete barriers to shake hands and pose for photos. He slumped down the chair, completely relaxed, smiled, and suddenly was no longer the President – he was just a guy with a job, sitting around talking with us like a family member at a barbeque.
For the next 15 or 20 minutes, he talked with us about our son, Iraq, his family, faith, convictions, and shared his feelings about nearing the end of his presidency. He asked each of our teenaged sons what they wanted to do in life and counseled them to set goals, stick to their convictions, and not worry about being the ‘cool’ guy.
He said that he’d taken a lot of heat during his tenure and was under a lot of pressure to do what’s politically expedient, but was proud to say that he never sold his soul. Sometimes he laughed, and at others he teared up. He said that what he’ll miss most after leaving office will be his role as Commander in Chief.
One of the somber moments was when he thanked us for the opportunity to meet, because he feels a heavy responsibility knowing that our son died because of a decision he made. He was incredibly humble, full of warmth, and completely without pretense. We were seeing the man his family sees.
We couldn’t believe how long he was talking to us, but he seemed to be in no hurry whatsoever. In the end, he thanked us again for the visit and for the opportunity to get off his feet for a few minutes. He then said, ‘Let’s get some pictures.’ The doors flew open, Secret Service and the White House photographer came in, and suddenly he was the President again. We posed for individual pictures as he gave each of us one of his coins, and then he posed for family pictures. A few more thank yous, a few more hugs, and he was gone.
The remarkable thing about the whole event was that he didn’t have to see us at all. If he wanted to do more, he could’ve just given a quick handshake and said, ‘Thanks for your sacrifice.’ But he didn’t – he put everything and everyone in his life on hold to meet privately with the family of a Private First Class who gave his life in the service of his country.
What an incredible lesson on service. If the President of the United States is willing to drop everything on his plate to visit with a family, surely the rest of us can do it. No one is above serving another person, and no one is so lofty that he or she can’t treat others with dignity and respect.
We often think of service in terms of sacrificing ourselves for someone in a position above us, but how often do we remember that serving someone below us can be much more important? If you’re in a leadership capacity, take a good look at how you’re treating your people, and remember that your role involves serving the people you rely on every day.
what we are up against, and a story
I do menial tasks for a occupational health clinic – that means I have a job because other people get hurt at work or take a new job that requires a physical. Part of my job is to attend meetings with the rest of the staff and listen to management talk about how business is doing. Not surprisingly, business right now sucks. Interestingly, the two main “managers” of the clinic seem to think that better days are right around the corner and it is only a matter of time before the drop in business turns into a boom again. I have only had this job for 2 months, so I do not feel comfortable sharing with my co-workers and management that there is the possibility (I would call it a probability) that the best days are probably behind the clinic and business may not pick up the way that they are planning.
So, why should you care? Well, it is pretty simple. The two managers I referenced are not stupid people. They are just average Americans that haven’t taken the time to read about the possibility of prolonged economic contraction or stagnation. It is my opinion that economic productivity is at or near its all-time high mark for the US (other countries may still grow some, but they will be nations of the Global South). It is pretty easy to figure that out by looking at what solutions business and government assholes (there isn’t a big distinction between the two) have for the economic cluster fuck. All of the solutions (more credit, more consumer spending, higher real estate values) contributed to the collapse of confidence in the American Dream over the past 18 months. That means the government and business are out of ideas and there is no turning back. There are no silver bullets, not enough fingers to plug the holes, not enough cliches to explain that we are living through the end of the world as we know it.
This means I understand why the doctors at the clinic are upset about the future prospects of their business. They are starting to see the writing on the wall that we are speeding toward. Just because I understand doesn’t mean I sympathize. If you are smart enough to become a doctor then you are smart enough to realize this wasn’t going to last. And since they should have realized it by now, they shouldn’t act like whiney little bitches when they face the prospect that their cushy little lives may have to require a return to working for a living which they haven’t experienced for some time.
Talking about all of this reminds me of a friend I made when I was in Nigeria. I met Lawal A in 1997, when he was 42years old. He was from a priviledged family so by the time he was 26 he had a law degree, was part of a small law firm with 8 other lawyers and operated an import business with his brother. As a muslim, he had twice made his Haaj and had also visited London, New York and Houston. At 30, Lwal was a millionaire due to his growing law firm and his stake in the import business. He took 30 members of his extended family to visit relatives in Houston, Texas. That same year his father died and as the eldest son he inherited a well appointed estate outside of Lagos.
Then in 1982, at the age of 31, he lost it all. The Nigerian economy collapsed and the currency went through a period of high inflation. When the inflation stopped and the economy stabilized he had lost his import business. Due to his political affiliations, he was disbarred and his law firm was closed by the government. By 1985, many of the 30 family members he took to the US a few short years before were now living with him on his inherited land, along with a few new additions.
By the time I met him he was working as a driver for the American Embassy in Lagos making $275 a month. He still had many amenities left from his wealthy past – a few aging Mercedes, some gold rings and a very fancy watch. Most of all Lawal had a lot of stories about how quickly everything changed for him economically.
The reason Lawal’s story is on my mind is because he never thought all of that was going to happen until it did. Even after all of it, it took him years to realize that he would never get back to where he once was economically. I don’t think that the US is set for such a precipitous fall, but I do think the end results will be similar.
Globally doomed,
mike
So, why should you care? Well, it is pretty simple. The two managers I referenced are not stupid people. They are just average Americans that haven’t taken the time to read about the possibility of prolonged economic contraction or stagnation. It is my opinion that economic productivity is at or near its all-time high mark for the US (other countries may still grow some, but they will be nations of the Global South). It is pretty easy to figure that out by looking at what solutions business and government assholes (there isn’t a big distinction between the two) have for the economic cluster fuck. All of the solutions (more credit, more consumer spending, higher real estate values) contributed to the collapse of confidence in the American Dream over the past 18 months. That means the government and business are out of ideas and there is no turning back. There are no silver bullets, not enough fingers to plug the holes, not enough cliches to explain that we are living through the end of the world as we know it.
This means I understand why the doctors at the clinic are upset about the future prospects of their business. They are starting to see the writing on the wall that we are speeding toward. Just because I understand doesn’t mean I sympathize. If you are smart enough to become a doctor then you are smart enough to realize this wasn’t going to last. And since they should have realized it by now, they shouldn’t act like whiney little bitches when they face the prospect that their cushy little lives may have to require a return to working for a living which they haven’t experienced for some time.
Talking about all of this reminds me of a friend I made when I was in Nigeria. I met Lawal A in 1997, when he was 42years old. He was from a priviledged family so by the time he was 26 he had a law degree, was part of a small law firm with 8 other lawyers and operated an import business with his brother. As a muslim, he had twice made his Haaj and had also visited London, New York and Houston. At 30, Lwal was a millionaire due to his growing law firm and his stake in the import business. He took 30 members of his extended family to visit relatives in Houston, Texas. That same year his father died and as the eldest son he inherited a well appointed estate outside of Lagos.
Then in 1982, at the age of 31, he lost it all. The Nigerian economy collapsed and the currency went through a period of high inflation. When the inflation stopped and the economy stabilized he had lost his import business. Due to his political affiliations, he was disbarred and his law firm was closed by the government. By 1985, many of the 30 family members he took to the US a few short years before were now living with him on his inherited land, along with a few new additions.
By the time I met him he was working as a driver for the American Embassy in Lagos making $275 a month. He still had many amenities left from his wealthy past – a few aging Mercedes, some gold rings and a very fancy watch. Most of all Lawal had a lot of stories about how quickly everything changed for him economically.
The reason Lawal’s story is on my mind is because he never thought all of that was going to happen until it did. Even after all of it, it took him years to realize that he would never get back to where he once was economically. I don’t think that the US is set for such a precipitous fall, but I do think the end results will be similar.
Globally doomed,
mike
America, Global South. Global South, America
The term Global South was originated by some guilt-ridden, elitist academic type somewhere to describe the majority of the world that lives in shit conditions compared to their fellow humans in the Global North. It is the new way of saying “third world” or “developing countries” and it just got bigger. Today, the United States stands at the peak of its existence. As a people, Americans have divvied up the land and its contents, created and sold real and intellectual property and just generally capitalized on their geographical luck with zero foresight. The government has played a big role in encouraging, enabling and financing this disaster. The rest of the world has too, to some extent.
Now, the citizens of the US are faced with many problems that did not burden their ancestors. Peak Oil, the National Debt and a credit-fueled culture of consumerism have forced the US into an untenable position. With trillions of unfunded liabilities (both public and private), the financial strain of multiple wars and the economic burdens of maintaining the economic empire, the US has reached the peak of its prosperity and global dominance. Does that mean that we will all relocate to a shanty at our nearest landfill? Not exactly. What it certainly means is the end of a few things that most of America has come to take for granted.
Retirement
When I first started this website, I wrote an entry called “you don’t deserve to retire.”
In it I explained that if you are putting money in your 401k, planning to take out a reverse mortgage and/or depending on your pension to retire and you are under 55 you are delusional. Your golden years will be the leanest of your life, if you live to see them. The boomer generation, along with your parents’ “greatest generation” put absolutely no thought at all into a sustainable future. You all consented to the status quo and wasted our formerly-abundant natural resources on shit like 1/4 acre lots adorned with poorly constructed housing, the American car culture, cheap and shitty food, worthless consumer goods and copious amounts of alcohol and drugs (prescription and illegal). You also offered up your consent to the insanity you now call your federal and state governments who delusionally try to figure out new and exciting schemes to keep you under their boot heel. All the while, you forgot the lessons of your Grandparents and Great-Grandparents who generally lived more sustainable and self-reliant lifestyles.
Health Care
America has somehow managed the feat of extending our collective life expectancy while simultaneously increasing our obesity and pumping us all full of harmful chemicals via what we decided to call “food.” As the baby boomers are aging the burden on our health care system is increasing dramatically. This will inevitably culminate in the slow deterioration of health care for the vast majority of your progeny. For that, on behalf of my and future generations, I thank you. To make matters worse you also instilled in us, through the education system along with other social structures, a severe sense of entitlement on government institutions with quickly-emptying coffers.
Education
Speaking of the education system in America, it is another sacred cow of the establishment along with the health care system. Education is largely publicly funded and is another example of infrastructure that was designed and developed around mid-20th century notions of prosperity and need for certified cogs in the growth machine. That educational model has left us with an extremely over-educated population in fields that don’t merit a quarter of the population. Too few engineers and hard scientists, too many liberally educated social scientists and health care specialists. And far too many MBAs and lawyers. Most people could thrive in their profession with a fraction of the education they had to receive to qualify.
Conclusion, we’re fucked
All of this means that the world you leave behind when you finally croak will be a much harsher place than the one you inherited. Instead of taking advantage of the opportunities you had to plan for a beautiful and sustainable country, you have milked it to the verge of bankruptcy and sunk the majority of the population into a new poverty. The middle class will disappear and the US will slowly come to resemble much of the rest of the world with a few very rich elites and a whole lot of really poor people.
Now, the citizens of the US are faced with many problems that did not burden their ancestors. Peak Oil, the National Debt and a credit-fueled culture of consumerism have forced the US into an untenable position. With trillions of unfunded liabilities (both public and private), the financial strain of multiple wars and the economic burdens of maintaining the economic empire, the US has reached the peak of its prosperity and global dominance. Does that mean that we will all relocate to a shanty at our nearest landfill? Not exactly. What it certainly means is the end of a few things that most of America has come to take for granted.
Retirement
When I first started this website, I wrote an entry called “you don’t deserve to retire.”
In it I explained that if you are putting money in your 401k, planning to take out a reverse mortgage and/or depending on your pension to retire and you are under 55 you are delusional. Your golden years will be the leanest of your life, if you live to see them. The boomer generation, along with your parents’ “greatest generation” put absolutely no thought at all into a sustainable future. You all consented to the status quo and wasted our formerly-abundant natural resources on shit like 1/4 acre lots adorned with poorly constructed housing, the American car culture, cheap and shitty food, worthless consumer goods and copious amounts of alcohol and drugs (prescription and illegal). You also offered up your consent to the insanity you now call your federal and state governments who delusionally try to figure out new and exciting schemes to keep you under their boot heel. All the while, you forgot the lessons of your Grandparents and Great-Grandparents who generally lived more sustainable and self-reliant lifestyles.
Health Care
America has somehow managed the feat of extending our collective life expectancy while simultaneously increasing our obesity and pumping us all full of harmful chemicals via what we decided to call “food.” As the baby boomers are aging the burden on our health care system is increasing dramatically. This will inevitably culminate in the slow deterioration of health care for the vast majority of your progeny. For that, on behalf of my and future generations, I thank you. To make matters worse you also instilled in us, through the education system along with other social structures, a severe sense of entitlement on government institutions with quickly-emptying coffers.
Education
Speaking of the education system in America, it is another sacred cow of the establishment along with the health care system. Education is largely publicly funded and is another example of infrastructure that was designed and developed around mid-20th century notions of prosperity and need for certified cogs in the growth machine. That educational model has left us with an extremely over-educated population in fields that don’t merit a quarter of the population. Too few engineers and hard scientists, too many liberally educated social scientists and health care specialists. And far too many MBAs and lawyers. Most people could thrive in their profession with a fraction of the education they had to receive to qualify.
Conclusion, we’re fucked
All of this means that the world you leave behind when you finally croak will be a much harsher place than the one you inherited. Instead of taking advantage of the opportunities you had to plan for a beautiful and sustainable country, you have milked it to the verge of bankruptcy and sunk the majority of the population into a new poverty. The middle class will disappear and the US will slowly come to resemble much of the rest of the world with a few very rich elites and a whole lot of really poor people.
Bubble Recovery
In order for the economy to rebound, some sector of the economy will have to begin growing in a meaningful way which will ignite growth across other sectors. We have seen supposed “jobless recoveries” from the last two recessions. Both of the last two recessions were not that severe and the recoveries that followed them had a lot more to do with public and private debt accrual and high level manipulation of the monetary policy. The public debt accrual is continuing at a record pace as I have discussed before, and monetary manipulation is at its highest levels ever – I am speaking about all of the different programs being run through the Federal Reserve and the Department of Treasury. But these two components alone can’t spur a recovery. In order for the economy to return to growth, credit-backed consumption has to return and then surpass pre-recession levels. We have all decided that is not a good idea and Americans have started saving money instead of going deeper into debt. Even the banks that previously fulfilled our every credit-related desire are having second thoughts about the economic soundness of some of their lending activities. So now what? Well, as I said, some sector of the economy has to start growing and part of that growth will mean that they will start employing more people. Herein lies that problem.
The graph above is from this article at the New York Times which shows private sector employment growth has been on the decline for the past eight years. This is not good news considering the US population is growing at a rate of 0.975% annually (notably, this figure does not include illegal immigration, but the employment growth data does). Put these two statistics together and the news goes from not good to downright bad. It means that more people are looking for work while fewer jobs are being created.
Since the decline in private sector employment growth did not start as a result of the current recession, there is no reason to assume a significant uptick after the recession subsides. In fact, the shrinking growth rate is following a general downward trend with a few small upticks that started as far back as about 1986.
Before I get into ramifications from this information, I want to reference a few other pieces of information from the Times article mentioned above.
In the above table of information you can see that all non-farm, private sector employment categories shrunk over the last ten years except for professional and business services, education, food services and health care. I would say that the only truly private sector field out of all of them would be food services. One could make a case for the private nature of the professional and business services category as well, although I don’t know if the data backing up this information differentiates between governmental and non-governmental servicing. As for education and health care, I do not consider these to be true parts of the private sector at all since billions of government and/or private debt go into propping up these portions of the economy. This makes looking at the above information all the more dismal. Without the piles of government money being borrowed and the bundles of money people are borrowing to continue their education, these two sectors would likely be in contraction as well. I have said before that health care and education are the two sacred bubbles left in the economy and they will be the last to pop because both are so politically-charged and are also both something that Americans have come to expect.
What we are seeing in the other sectors is the result of globalization that I have referred to in earlier posts. We are not making as much as we have in the past for sale to the rest of the world. That means there are not as many dollars to spread around as there were before. And as we all know, particularly in lean times, the private sector is not exactly known for its generosity so the money that is left tends to pool at the top and lower-level jobs get cut. Now that the rest of the world has caught up, there isn’t much that we can do either. The people in charge know this and that is why all of the solutions coming from D.C. and NYC are new spins on what got us here in the first place. More government funding through borrowing will not cure any of the problems that ail our economy, but they sure are popular. And if you can’t fix anything, why not try to keep people as docile as possible for as long as possible…
The graph above is from this article at the New York Times which shows private sector employment growth has been on the decline for the past eight years. This is not good news considering the US population is growing at a rate of 0.975% annually (notably, this figure does not include illegal immigration, but the employment growth data does). Put these two statistics together and the news goes from not good to downright bad. It means that more people are looking for work while fewer jobs are being created.
Since the decline in private sector employment growth did not start as a result of the current recession, there is no reason to assume a significant uptick after the recession subsides. In fact, the shrinking growth rate is following a general downward trend with a few small upticks that started as far back as about 1986.
Before I get into ramifications from this information, I want to reference a few other pieces of information from the Times article mentioned above.
In the above table of information you can see that all non-farm, private sector employment categories shrunk over the last ten years except for professional and business services, education, food services and health care. I would say that the only truly private sector field out of all of them would be food services. One could make a case for the private nature of the professional and business services category as well, although I don’t know if the data backing up this information differentiates between governmental and non-governmental servicing. As for education and health care, I do not consider these to be true parts of the private sector at all since billions of government and/or private debt go into propping up these portions of the economy. This makes looking at the above information all the more dismal. Without the piles of government money being borrowed and the bundles of money people are borrowing to continue their education, these two sectors would likely be in contraction as well. I have said before that health care and education are the two sacred bubbles left in the economy and they will be the last to pop because both are so politically-charged and are also both something that Americans have come to expect.
What we are seeing in the other sectors is the result of globalization that I have referred to in earlier posts. We are not making as much as we have in the past for sale to the rest of the world. That means there are not as many dollars to spread around as there were before. And as we all know, particularly in lean times, the private sector is not exactly known for its generosity so the money that is left tends to pool at the top and lower-level jobs get cut. Now that the rest of the world has caught up, there isn’t much that we can do either. The people in charge know this and that is why all of the solutions coming from D.C. and NYC are new spins on what got us here in the first place. More government funding through borrowing will not cure any of the problems that ail our economy, but they sure are popular. And if you can’t fix anything, why not try to keep people as docile as possible for as long as possible…
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