Category: economy

Robert Rapier has posted a peak oil piece based on a German military think tank study. The new report sees significant risks arising from an unavoidable peak in oil production:

1. Economies stop functioning: In addition to the gradual risks, there might be risks of non-linear events, where a reduction of economic output based on Peak Oil might affect market-driven economies in a way that they stop functioning altogether, leaving the range of a relatively steady downward trajectory.
2. Slow decline of trade: Such a scenario could pan out by an initially slow decline of trade and economic activity, combined with higher stress on government budgets from lower tax income, higher social cost and growing investment into alternative technologies.
3. Crash of markets: Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust into currencies and a break-up of value and supply chains – because trade is no longer possible.
4. Famine and total collapse: This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse.

Overall, the authors expect a reduction of ‘free market’ mechanisms in oil trade, and a rise in more protectionism, exchange deals, and political alliances between suppliers and customers, which could lead to significant geopolitical shifts.

Equally, the authors expect this interdependency to shape foreign affairs of oil importers, making them more tolerant towards rogue behavior of suppliers out of sheer need.

Higher volatility and loss of trust are seen as possible outcomes in a world where oil supplies are limited, increasing the need for ‘oil related diplomacy’ and thus increasing risks for moral hazard among all actors, which in turn decreases

A new regime can only arise after all current economists are dead. – Goldilocksisableachblonde

stunney said in reply to Goldilocksisableachblonde:

Yes, the best sustained period in U.S. economic history—best rates of output expansion, best real median wage growth, best employment figures, best poverty reduction rates, best expansion of higher education, best patterns of economic security, best infrastructure improvements, best progress in civil rights, most stable inflation rates, biggest reduction in national debt as a percentage of GDP etc—coincided with the least free market, least unregulated, most unionized, least floating currency exchange regime, highest tax rate period in U.S. economic history.

And to make sure America never has to endure such an affront to the genius of the most right wing conventional wisdom among economists, and to the naked avarice of the richest members of the citizenry, and to the most statesmen-like of our political scumbags, and to to the bright, shining lie that is our mainstream media, it is to be earnestly hoped that the Republicans win big in this election cycle, and begin at once to destroy this legacy, beating the crap out of the voting public in the process, so that said public will, in its rabid stupidity, blame it even on the big-eared black man in the White House.

Brought to you by:

The GOP Seniors Dementia Alliance

and by

The Ungrateful Undead Boomers Coalition

and by

The Free Market Fiction Association

and by

The Palinomics Anti-Refudiation League

Everything you want to know about placards and signs you do not see at a Tea Party rally.

Please notice America’s trade balance. Our economy is scooped out and scrubbed raw by crude oil. It isn’t the worn-out worry about China filling shopping malls that’s our deficit, but also Nigeria, Canada, Mexico, Angola, Kuwait, Venezuela and wherever there’s a contract for crude!

Steve Ludlum at Economic Undertow:

The majority of analysts believe that crude oil is simply another input like copper or wheat. If crude becomes in short supply, another fuel of some kind will replace it, all that is required is high enough prices to fund the replacement.

They believe our economies are declining because we are carrying unserviceable debt. They suggest debt remedies will cure the economic disease and allow a return to growth.

Undertow?! The oil industry is an economic rip current!

Technology has advanced almost all aspects of our lives, except in the design of cities.

Innovations in design and development have only automated the process of building to the minimums.

Those sitting on planning commissions and councils blame the developer for blandness, but the reality is those same commissioners and council members approved the ordinances that enforce unsustainable development in the first place.

The trouble, maybe the premier trouble with the American Dream, is we fail to see it’s not.

It’s not just the unemployed who are hurting.

Workers are barely scraping by on wages. A single person needs about $400/week pretax to pay bills, to eat. Tens of millions of American workers fall short.

Every day is a rainy day.

You’ll find many of them in food prep, where more than 11 million Americans command a median hourly wage of $8.24. There are another 4.5 million workers doing maintenance-related tasks for $10.18 an hour, 3.3 million in “personal care” at $9.50, and 14.5 million in retail jobs that pay $11.41.

 

The Bush Years: Meager wages pushed 6.2 million more Americans into poverty between 2000 and 2007. And that was before the banking industry imploded. More than 28 million people are on food stamps, up from 17 million in 2000. Republicans. Phooey.

…depressing American roadside detritus: tire stores, auto dealers, fast food restaurants and wholesale outlets all surrounded by asphalt and thousands of parked cars.

Steve from Virginia, Residue Is Our Economy:

It’s interesting to look at the world the way it is designed to be looked at in America, through a windshield. It is hard to escape the conclusion that we have ruined our country completely for the almighty dollar.

The highways themselves are the ‘Big Empty’ crammed with automobiles and semis, all going as fast as possible, all trying to live the ‘possibilities’ that are suggested by advertising. That is, racing down the ‘open road’ to experience the ‘thrill’ of driving for its own sake. The highways are therefore empty of everything other than what is required to focus concentration and reflexes … in order to keep oneself alive.

We are indeed rats in a (linear) maze. Why?

Integral to the highway ‘experience’ is the endless and futile highway repair process. The repairs are needed to keep up with ‘projected’ demand: the need for endless ‘growth’ suggests that the exponential doubling phase is here and now. In order to maintain the level of growth that carried forward up to the middle- aughts a duplication of the current Interstate highway system needs to be built and populated with a number of rolling metal boxes equal to what exists already. This on top of a system that is too large and complex to be properly maintained now.

For what, exactly? Do we exist to ‘serve’ growth or is it something that should serve us?

All that is needed is the escape from the thrall of the advertisers and their government lackeys.

It is politically unacceptable to make banks… The crisis was a textbook case of looting. The major firms are now more powerful by virtue of being bigger and fewer, and official denials to the contrary, are in a better position to loot than before.

If you know we’ve crashed, you don’t know who did it.

In the stone ages of investment banking, when firms were partnerships, it would have been unheard of to take on a lot of moderately long-dated, risky, illiquid, bespoke, hard to value assets and fund them in short term where they’d be exposed to rollover risks.

Go ahead. Be curious. You can meet the Devil on the path but you don’t have to shake his hand.

Umair Haque at Harvard  Business Review:

Dear Big Cheeses Who Run the World,

We regret to inform you that you’re fired.

We’re really, truly sorry about this, but we’re going to have to let you go. It’s time for you to pursue other opportunities.

In case you haven’t noticed times are pretty tough lately, and we’ve got to cut back somewhere.

In fact, that we’re beginning to suspect that maybe, just maybe the entire contract between us, you, and tomorrow … is fatally broken.

Value has simply been extracted — not actually created. Income isn’t translating into outcome and it’s outcomes that count.

Though we got a little bit richer, did we actually realize tangible, enduring benefits that mattered? Or did we just get more insecure, obese, unhappy, and disconnected?

Our economy’s engines and engineers — corporations, CEOs, investors — are uninterested in making stuff that actually makes us better off; they’re just interested in making a quick buck.

Forporations: Consider then, a radical idea: that the corporation as we know it just might be past its sell-by date, an obsolete tool that’s outlived its era.

Comments at Baseline Scenario:

Morgan Stanley yesterday said what we have all known for some time. There will be government defaults of various types on debts which have become unmanageable.

In a story from the UK Telegraph yesterday, a report claims the Tories are placing the greatest pain in managing their budget gaps on the backs of the less well to do, presumably protecting their more well to do constituency. No surprise to anyone if it is true. And yet this may not be enough unless the economy recovers and the great mass of the public can regain some reasonable level of organic economic activity.

In the States, the uber wealthy will be spending large sums to lobby against new taxes, and even removing tax cuts that were known to be untenable, and based on false economic assumptions, at the time they were passed under Bush. Instead they will point to more broadly public and regressive taxes such as VATs, and seek to curtail public programs like Medicare and Social Security, while leaving their own subsidies and welfare, such as those in the financial sector and corporate and dividend tax breaks, sacrosanct.

In the US the broad mass of consumers have been the economy’s golden goose….

More:

“Excessive consumer debt is an outcome of prolonged inequality – in trying to remain middle class, too many people borrowed too much, while unscrupulous lenders were only too willing to take advantage of such people.”

“But there is a striking similarity between the longstanding stated intention to “starve the beast” (meaning press for reduction in government by creating binding constraints, like a perceived crisis) and what we are seeing play out today.”

Prolonged inequality. Creating binding constraints. Perceived crisis. Yes. That’s the whole thing, for decades.

And to sum it up:

This is made needlessly complex, and that obscures the truth.

We are under assault by organized crime, nothing more and nothing less.

Neoliberalism is the ideology of legalized gangsterism, corporate welfare is robbery, the bailout was stepped up robbery, and now the calls for austerity are simply another robbery gambit.

All of this is crime, period. The finance and government elites are criminals, period. We should never let ourselves be distracted from the criminological view of this.

Would you stand and listen to someone literally breaking into your house explain abstruse ideological angles on the event? We the people shouldn’t do that with these equally brazen but infinitely worse robbers.

Robert Rapier:

I am no economist, but bear with me while I try to explain why I think we are in for a very long and difficult economic period.

My thesis for ‘The Long Recession’ goes something like this: Historically, when oil prices rose quickly and remained high the economy struggled. High oil prices lead to recessions and depressions, because they suck so much money out of the economy.

A person whose energy bills go up by $100 or $200 per month has that much less to spend on other things. It is essentially like a tax applied to everyone that uses energy — with a large chunk of the money exiting the U.S. and contributing to our trade deficit.

Historically after a period of high oil prices, people start to modify behaviors, and at the same time producers rush in to take advantage of higher prices. This generally leads to a decline in oil prices and the economy recovers.

But I believe this time is different.

I believe we are looking at an extended period of (at best) no-growth or very little growth.

Dana Blankenhorn:

The President’s biggest mistake in office, by far, is one that is completely hidden from view.

That is, his refusal to directly confront the real enemy. Not just the Koch brothers, but the economic interests they represent. We are still subsidizing coal, and oil, and natural gas. The aid we give green manufacturing pales in comparison.

The question and answer are simple, not complex. Changing our economy’s incentives will unleash a flood of capital and millions of jobs.

We need an industrial recovery, not a consumer one. Why delay?

Nuts.

Facebook.com is suing Teachbook.com for using the word book.

You cannot call this a Democracy!

‘Republican policy is based on the premise that the top income segment does not have enough income.’

The Congressional Budget Office shows a stunning shift in income in this country over the last three decades. This is not repaired with political tweaking.

‘America needs more inequality? Seems to me we have enough.’

If all these rich emigrated, would we miss the money we’ve already lost?

Power Trip: People in a position of power display behavior patterns commonly associated with damage to the portions of the cerebral cortex that govern empathy and the ability to imagine the world from others’ perspective.

Power kills the ability even to understand that there are other perspectives than those of the hierarchy.

Bonker theories gone bust.

←housing losses (,000) [stats]

No one has a good excuse for this except distraction and outright dereliction.

Our record lows are not merely economic.

As world’s population moves toward 9 billion, be ready to spend…

$350 trillion.
Seven times the global GDP !

Cities will spend $350 trillion on the construction, operation, and maintenance of infrastructure,  power and distribution, residential and commercial buildings, water and waste, roads and transport, and information technology.

Let’s get right to the point…

The Conquest of Cool:

So if you want a car that sticks out a little, you know just what to do.

1. Buy this. You will benefit.

Reality in Advertising, Rosser Reeves

“I’ve read some unkind reviews about this book. I challenge anyone to find a greater book for the advertising professional. I have some four decades of advertising experience under my belt and I learn each time I read this book. I value the words as if they were freshly found gold coins.

“If I had a choice of being a copywriter like Rosser Reeves and one of these ‘gurus’ of today who is so in love with his own words and style to showcase his own talents, I’ll choose Reeves. —Susanna K. Hutcheson

Housing prices due to sloppy Republican game and extraction theories. OK. So now we know the real story. Or do we?

“Many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg.

“The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.

“More than likely, that era is gone for good.”

Janes Kwak, economist:

The chart above shows simply that that era never existed; housing was flat for a long time, and then there was a bubble. Instead, we had the illusion of an era of housing appreciation, produced mainly by leverage and price illusion. That whole phenomenon was just a transfer of wealth within society.

House prices must go up?

“People think it’s a law of nature.”

We know it’s not. We know now that real demand, (caused by business expansion, household growth, and immigration), plus fake demand (caused by failed home finance regulation, and over-zealous homeownership bias) add up to a triple boom and a quadruple bust.

Pilfering our pockets, banks will maintain that they are merely recouping lost income….

Here’s a tidbit to clarify the tilt in our thinking: “The thirteen-digit ($1,250,000,000,000) number that’s being tossed around – the chin-scratching classes like to speak of ‘systemic risk’ – is designed to convince us little people that there is a crisis at hand and therefore, if we somehow end up paying for it, it’s for our own good. In other words, to save the king’s castle, it is necessary to destroy the people’s village.“

Credit cards have long been a critical tool for small business. This particular squeeze is market repression.

Here’s my theory: the problem with Google is that Eric Schmidt is creepy. I think he’s a really weird dude. Recall, for example, this comment of Schmidt’s from 2009, regarding Google and privacy: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”

John Gruber at Daring Fireball:

More and more, I get the feeling that if there’s a rift between the old “Don’t be evil” Google and the new “Let’s do whatever we want” Google, that it’s a rift between Schmidt and Larry/Sergey — if not personally, then at least culturally within the company. On the one side, the Larry/Sergey Google that makes amazing cool things — the search engine, Gmail, Android. On the other, the Schmidt Google that, in its efforts to serve ads as efficiently as possible, no longer seems concerned with the traditional Western concept of personal privacy.

At a time when the richest 1% of Americans own more than the bottom 90% combined… upper-class individuals may tend to preserve and hold onto their wealth… lower-class individuals may give more of their resources away… which is exacerbating economic inequality in society.

The researchers also found evidence that the likelihood of executing other compassionate, generous tasks and behaviors might be explained by their higher concern for equality and empathy for others.

Though on the other end, when researchers provoked compassion in the higher-class participants, they were just as much — if not more — socially conscious as the lower-class participants.

And while we ponder the other end, I’m stunned, stunned I tell you, that police confirm a patient’s claim that her anus had been sewn shut by a midwife suspected of taking revenge during the patient’s labor because she failed to receive a good tip. [link]

Definition of a psychopath:

‘social predators who charm, manipulate and ruthlessly plow their way through life … completely lacking in conscience and feeling for others, they selfishly take what they want and do as they please, violating social norms and expectations without the slightest sense of guilt or regret.’

But difficult for psychologists to research. Trouble is, a successful psychopath will not consent to being studied.

With more self-control and conscientiousness than criminal psychopaths often in prison, successful psychopaths end up as chief executives, university chancellors, top lawyers, politicians and mayors….

Describe the psychopath?	Type of success?
“Utter absence of empathy; manipulated women and children despite pain/damage caused, dishonest in business, superficial/forced emotionality; absence of remorse; chronic deceitfulness”	“Successful retail business financed through unscrupulous and larcenous behaviors”
“Remarkable capacity for furthering own interests at expense of others; glib, charming; I am taken in despite the number of times I’ve observed his act; uses seeming empathy to move others; likable despite all this”	“Succeeded in two careers; positions of power, is likable; gotten generally level-headed people to bend rules for him”
“Superficially charming, glib, exploitative of others, deceitful; lack of genuine empathy for others but aware enough to feign concern and empathy well when it was socially appropriate to do so; manipulative of others and would set up situations to sacrifice colleagues in order to advance himself”	Maintained a “managerial position in a government organization and commanded a good salary; interviewed well, could move jobs easily”
“All aspects of her life revolved around manipulating the system for personal gain or to dirty others for her pleasure”	“She destroyed at least three marriages/lives; she was prosecuted but the county attorney could not get a conviction, she was smooth”
“Total disregard for the rules of society and was completely unremorseful about it”	“Was considered a top notch police detective, a hero”

Outrageous! Would there be enough lamposts to hang them all!

That’s not the cry of economic downturn. That’s economic undertow.

While the banking industry joins Republicans in criticizing the administration for instituting stronger regulations, Wall Street is simultaneously lobbying for Fannie and Freddie to be formally merged into the government and automatically refinancing millions of home loans to help stimulate the economy, er, pad their profits.

What on earth are the protrusions and bulges on ATM machines? We have no idea. We do not know if required design or wonkish filagree, thus we do not discern if an ATM has been tampered with.

Criminals step in with ATM skimmers that easily blend into a cash machine’s hardware.

Kho Vinh is asking you, “Ask yourself: what exactly are all of those oddly proportioned boxes, varying planes, bizarre joins and strange angles that describe nearly every automated teller machine on the planet?

“Who among us who uses cash machines actually understands the purpose of all those expertly yet randomly fused-together shapes that are somehow intended to constitute a trustworthy money dispensing device?

“The fact of the matter is, the superfluously futuristic form of these machines is so nonsensical, so utterly impractical and useless that even a quickly grafted foreign appendage like a skimmer is indistinguishable from the native hardware.

“The thieves designing these ingenious tools have a much easier job of it because, like the ATMs onto which they’re attached, skimmers don’t have to look like anything you would understand, they just need to look like they might do something you don’t understand.”

Upcoming proposals for ATMs eliminate these easy opportunities to fool us.

h/t Douglas Bowman / StopDesign