One Stop Thought Shop

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.