Debt Rattle Jun 9 2014: Stupidity Is Not A Valid Defense For Us

 

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  • #13402

    Howard Hollem Times Square and vicinity on D-Day June 6, 1944 When I see a headline like this one at Bloomberg today, World Needs Record Saudi Oil Sup
    [See the full post at: Debt Rattle Jun 9 2014: Stupidity Is Not A Valid Defense For Us]

    #13403
    sprocketsanjay
    Participant

    I went to an ecosocialism gathering this weekend at a University of London college. Ecology and Socialism are dirty words in southern England. Free market is the god. Even whilst this triple A rated economy is on a life ventilator of cheap money and public and private debt is higher than Mount Everest the free market remains alter of worship.

    Anyway, they held a series of interesting workshops. A phrase stuck in my mind. Production for living not for profit. Not catchy but made me think. The speaker argued that a 3 day week would be more than sufficient for producing goods and services to allow us to live a comfortable but not excessive lifestyle. The argument was compelling when he talked of how much is produced and simply thrown away. If we didn’t produce it we would wouldn’t have to work to produce it. Taking it further the need for profit drives excessive production. Remove the profit motive and progressively transition to a culture of producing for a comfortable but sustainable living model and we would gain a better quality of life and maybe also be informed enough to protect the natural environment.

    Ecosocialism as a philosophy makes much more sense than capitalism ever did. But even as capiltalism is on a life ventilator the West still worships it. It is bankrupt of ideas as it is of cash.

    With a three day collective working week education could be for life. Two days could be used to continue education both vocational and otherwise. A more intelligent and informed population might be able to steer its community better and not allow the rich to take control to further their greed.

    It makes sense much more sense than a dying dinosaur.

    #13404

    I like it when you talk about growth per se.

    It is the basic problem of mankind and needs to take precedence over -isms such as capitalism and globalism.

    I agree with what you have said in this post and what Sanjay says above (I notice you comment on the same subject matter I do). The problem is, and this is what I’d like to ask everyone about, how to have a nucleus, an island of sustainable living e.g. a town or a country, without it being outcompeted by it’s surrounding regions which have adopted short termist growth strategies. I think this hold the key to the only way sustainability can be achieved bottom up (which IMO is the only way it can be achieved)

    This question of mine has links to group selection in eveolutionary theory and also something called the Maximum Power Principle (IIRC) which is a heuristic from biology which describes how organisms in nature, all else being equal, have a higher chace of survival if they have a higher power throughput.

    How do we get around this stuff in order to have no-growth regions? I am sure there won’t be multi lateral agreement.

    Carbon

    #13405
    Ken Barrows
    Participant

    No, oil is inexhaustible!

    Or so many still think.

    #13406
    rapier
    Participant

    The financial markets are so well managed now it’s difficult to discern what could upset them on any short term. Say till the end of this year. Not that I have a theory about later besides the end of the Treasury purchase side of QE. (The MBS purchases probably won’t end and we can assume the Fed will continue to redeploy the money from their maturing bonds) A traders sense says when everyone is all in and things look like blue skies forever, beware.

    Related to well managed markets is this article which fits into a broad theory about the convergence of interests among the worlds 1% which transcends nationality. My crackpot idea is nations are becoming obsolete as corporations are now becoming the dominant model of human organization. Those controlling corporations thus having the most power, and wealth of course, as corporation now function mainly to funnel wealth to their leaders and friends. Then corporations Co Opt and/or replacing government in most areas.

    https://atimes.com/atimes/World/WOR-01-090614.html

    #13407

    Hi Rapier,

    My feeling is that your crackpot idea might be right. Corporations can be multinational after all, and their driving force is pure, I.e profit. Nations cannot be multinational, an even when allied, have conflicting driving forces, this limits their maximum influence compared to corporations. When corporations and governments fully align in their interests, you have fascism as Mussolini defined it.

    #13408
    Raleigh
    Participant

    rapier – “My crackpot idea is nations are becoming obsolete as corporations are now becoming the dominant model of human organization.” Yes, that’s what I think too. Here’s what I think they want (and I think obviously planned for years ago): surplus labor and lower wages in the West, and rising wages and, therefore, consumerism in the East.

    It’s all about selling their products. The West is just about saturated with cell phones, TV’s, blah, blah, but the East is not. I think their thinking was that if we can just get the East going (help China out by developing her), we’ll make vast amounts of money when these ships turn around and start buying our products.

    It seems apparent by now that the corporations have the executive, legislative and judicial arms in their back pockets. They are moulding the West to accept less, live with less, while the East develops.

    It’s a planned destruction/construction project on the grandest scale. Seems they are long-term thinkers after all. Nixon’s visit to Asia probably won over the elite that there were riches to be had.

    I guess I have trouble thinking that China could ever have made it (so quickly) without a lot of help from her friends in the West. What do others think? And don’t tell me there’s no collusion. That’s what the G8 is all about.

    If true, what’s a good name for these corporations? Corposites (a mix between corporations and parasites)?

    #13409

    The Maximum Power Principle (Lotka, Odum) provides a useful point of view, albeit one that casts grave doubt on our ability to reason our way out of our more primitive brain segments. It comes very close to a definition of life itself.

    In Human And Natural Systems Oppose The 2nd Law Of Thermodynamics By Importing Inputs For Replacement And Maintenance, Jay Hanson gives this definition:

    The Maximum Power Principle states that all open systems (Bernard cells, ecosystems, people, societies, etc.) evolve to degrade as much energy as possible while allowing for the continued existence of the larger systems they are part of.

    In 1991, Kay and Schneider explained Lotka’s (1922) suggestion that living systems will maximize their energy flow, H. T. Odum’s (1955) Maximum Power Principle for ecosystems, and Lieth’s (1976) maximum energy conductivity. https://merkury.orconhosting.net.nz/lifeas.pdf . Energy efficiency is tuned for maximum power. Energy conservation leads to more power production. https://www.uh.edu/admin/engines/epi984.htm

    Odum’s Emergy principles are also important in this regard.

    As for the three day work week ecosocialism seems to think is enough, I have to question that. Maybe they think imports will still be continued “as usual”. If we have to do everything ourselves, and that’s as inevitable as diminishing oil supplies, and we have these hugely larger population numbers, 7 days may not suffice. Which is probably why Jay’s newer site is called warsocialism, not ecosocialism.

    #13410
    pipefit
    Participant

    We’re at a bit of a disadvantage, since other countries have highways filled with tiny, high mileage cars, and we’re still driving gas guzzlers. Anyway, there seems to be pretty good supply/demand balance when it comes to the world oil market. The fact that the oil price is firm, even with a sluggish world economy is not a good sign for future economic growth.

    The human race had many decades of cheap oil with which to use a transition tool to the next epoch, but we decided to not to use it. Opting instead to wait for the current phase of expensive oil to start the transition will prove costly.

    We still want to import oil, but we don’t have enough exports to pay for it. Therefore, we will print the difference. At some point, I’m guessing below $10/gal gasoline, the system will fall apart. Places like NYC, with excellent public transportation, will be o.k. Places without much public transportation will be devastated.

    #13418
    Diogenes Shrugged
    Participant

    Pipefit:

    You wrote, “At some point, I’m guessing below $10/gal gasoline, the system will fall apart. Places like NYC, with excellent public transportation, will be o.k.”

    Everybody abandoning the highways and going to the subway sounds crowded to me. My guess is that no place will be okay except for places where gasoline isn’t an issue, like deep in the Amazon rainforest.

    https://en.wikipedia.org/wiki/Yanomami

    TAE has extensively addressed the building of a lifeboat, but wIth $10 gasoline, building a rickshaw might also be useful.

    https://www.google.com/search?client=safari&rls=en&q=how+to+build+a+rickshaw&ie=UTF-8&oe=UTF-8

    And if you’re into growth, two rickshaws and a rickshaw boy. That frees up the wife to do the plowing.

    Don’t laugh.

    #13421
    Dr. Diablo
    Participant

    Not especially. Systems will change and generally take whatever time they need to do so. Yes, N.A. infrastructure is built to be energy-intensive. But no, this has not so much to do with what we NEED (as opening article, above). What do we spend most of our petrol budget on? Tractors, right? Electric lines? Food transport? Of course not. It’s driving 10 miles 4x a day to go to kid’s soccer, grocery, work, eating out, etc. Almost none of that is necessary, we do it because the price point says we can. If we each drove 1/2 as far to work, the US would be an oil exporter. That easy.

    When gas rises, we won’t drive 25 miles to the grocer. Suddenly, there will be thousands of cheap bodegas in wiped-out strip malls or rural garages selling bulk commodities, food grown in the vacant lot next door, and nothing else. Drive time: zero. You won’t own a car: you will be walking or biking. NYC, with its vaunted public transport, will NOT be helped, but more probably hurt, as although the PEOPLE don’t drive, every piddling little service they depend on requires transport of food from the heartland, water from the Catskills, clothes from China via South American cotton, jobs that involve worldwide transport, shipping, internet, trade, and all those things that will be bedridden in a major sling. In compound traction. In the country, or even the suburbs, you can always shrink back, make food in your front yard and burn local firewood on a painfully small scale. You won’t like it, but it’s possible. Cities’ historical answer to this is to have the army sack the surrounding countryside until it’s stripped, then starve like idiots because they’ve destroyed their own production base. That’s not much of a moral high ground.

    But city services come and go in hard times. Concentration tends to keep services like medical and electrical running in cities, however if you tip over the edge, they also tend to have burroughs sacrificed, amputated, to maintain the richer section, and/or get into wars suddenly, all at once. In the country, the trouble tends to be poor conditions that erode continuously, slowly reducing lifespan via misfortune, not all at once. So I’m not necessarily advising one over the other, just pointing out that your green cars and electric trams are no help a’tall, while having no public transport just means your life is small and local–a practice historically well-worn, with an easier slide to the bottom as, if you’re anywhere in rural North America, you’re already approaching third world conditions.

    The transition to less oil isn’t hard to do. At all. The issue is that we WON’T do it.

    You open one or two tiny general stores every 5 miles. The buildings are already there, watered and wired and ready to go. The roads are there. Trucks or other transport, ready to go and easy to operate more efficiently than at present, pony-express style. Millions of tiny lots, already cleared with access to transport, drainage, irrigation, and storage, ready to go. We call them “suburbs”. Millions of bicycles collecting dust in garages, check. Millions of new rakes and shovels used 1 hour a year, check. Millions of sound, empty buildings with firm roofs and street access, check. Millions of workers waiting for a useful task, check. But we’re not really going to DO anything with them –at all– until it hurts so bad we can’t stand it, and spend years proving that blaming and complaining doesn’t work.

    Bonus question. We have all three ingredients to life in spades, so who’s keeping the work, workers, and tools apart from each other and idle? What kind of persistant, daily force does it take to enforce that? And why?

    #13423
    technocrat
    Participant

    I am surprised technocratic approaches are not discussed more. The central idea is to replace money by a yearly equal allotment of energy chits which expire if not used within the year. Society can be thus constrained to operate on a sustainable energy flow while retaining the theoretical efficiencies of a free market.

    Those with money have every incentive to suppress such blatant anti-capitalism but the ideas were much in public view in the 1930s. Energy chits would seem a natural extension of the human labor “bank accounts” used in some intentional communities.

    https://en.wikipedia.org/wiki/Technocracy_movement

    Much of the original study guide was written by M.King Hubbert:
    https://archive.org/details/TechnocracyStudyCourseUnabridged

    [Edit: How in heck did it pick up my gravitar? That’s Ludwig Boltzmann and yes I am an entropy-hugger]

    #13426
    Dr. Diablo
    Participant

    Gee, that sounds like a great idea. So who’s going to issue the chits, be in control of the chit system, and punish those who cheat? Whoever you put in the center of that system will abuse it in no time at all. What you’re describing the the soviet system, which created a wealthy oligarchy and astonishing environmental destruction.

    This is true of any centralized system, which concentrate. The reason we don’t use a chit system is exactly this. We need a distributed power system to avoid the present errors, not a concentrated one.

    #13428
    Diogenes Shrugged
    Participant

    There’s an awful lot of “we” and “us” talk around here at times that makes me feel pretty uneasy.

    I’ve had the impression that the chief message at TAE is to get to know your neighbors and learn to cooperate in a bottom-up sort of way. You pull me to the farmer’s market this morning in my rickshaw and I’ll come till your fields this afternoon. Maybe we can get that crazy guy down the road to part with a little of his moonshine tonight if we agree to patch his roof or weld his broken rake.

    If anybody here is thinking of changing mankind in some fundamental way, as with a well-placed pdf or pithy Tweet, dream on. That sort of thing has been tried to the point of exhaustion for millennia without success by a lot of people. If anybody here is thinking their pet political or economic philosophy can be forcefully imposed and administered successfully from the top down, you might as well advocate for global rule by North Korea. I’m not saying it won’t work here and there for a while, I’m just not sure life will be worth living any more.

    (But if you can get me a job with the central planning committee, count me in.)

    Please, somebody reassure me here. Tell me TAE isn’t just cleverly baiting us all to become good communists.

    #13430
    pipefit
    Participant

    Diogenes–You don’t know me very well. As far as I can tell, I’m one of the few posters at TAE who actually uses the word ‘permaculture’ as part of my regular vocabulary, lol. I think a few others might mention it in passing.

    I tried to engage Nicole Foss in a discussion of permacuture techniques, on a couple of her permaculture threads, and she ignored me, as far as I know. It’s not like she she won’t respond to me. She always offers a solid counter argument every time I whisper ‘hyperinflation’, lol.

    And yes, I really do have a food forest in Appalachia. If it gets overrun, everyone else will already be dead, locked up, or starving, so I’m not too worried.

    As far as the other fellow’s idea of folks opening small stores in suburbia, I have my doubts. Suburbia is serviced by a huge web of infrastructure. This is paid for by two or more persons per household driving to relatively good paying jobs in gasoline powered cars. Take away the cars and there is no way to pay for electricity, natural gas, drinking water, sewer service, garbage pickup, homeowners’ assn., etc.

    So yes, there will be little stores selling soft drinks, chips, and phone cards. But that is not the only similarity to Latin America, lol. The neighborhoods will deteriorate to match.

    #13431
    technocrat
    Participant

    Not a technocrat myself, just an objective reader of ideas. Energy chits don’t require centralized control, enter last year’s energy production, divide by population, issue chits. The population decides how to use the energy in whatever sized group and political form they choose, people, towns, cities, countries can decide to grow crops, build roads, manufacture arms, etc. Kickstarter methods could be used for global efforts like space travel, cold fusion, etc. It’s the free market without money, some make good decisions, some bad, and humanity evolves in a sustainable fashion.

    Nothing to do with any political system but methinks favors democracy since each person has an equal energy “vote”. Certainly not communism in which the central committee decides how many tractors to build.

    #13432
    Diogenes Shrugged
    Participant

    technocrat: Tugging your beard here, but I think Diablo asked some good questions. I came up with a dozen of my own, but in the interest of brevity, I’m just curious how you might suppose a group of technocrats would address the leaky Mexican border. Being scientists and engineers, would you suppose another Great Wall? Or would the decision be left to the border towns according to how they wish to spend their chits? In any case, I would think that establishing conversions between things like electricity, gasoline, food production and wall building might be awfully tricky and subject to dispute.

    #13433
    technocrat
    Participant

    Of course there would be dispute, but no more so from assigning fictitious resources to various activities and a lot less once people learn that sustainable power comes from the Sun. Energy conversions are not difficult, google joules if you are impaired.

    Leaky Mexican border? Those who don’l like it enough can donate energy to plug it. Fundamentally more rational than allocating money in hopeful efforts.

    #13435
    kito
    Participant

    We can lead very wonderful and fulfilling lives without economic growth, people have done it for 100,000 years and more.

    raul, you are a tad naive. there is no possibility of any grand, wonderous life for the masses once the current growth paradigm ends. our population has only exploded because of the model of exploding debt and credit. like deer on a lease, the human population has flourished, fattened up and overrun its habitat. once the artificial feedings on a lease stop, the area returns to population equilibrium. there is going to be a huge decrease in population once the excesses are trimmed. the only hope is that this somehow occurs in a non painful manner.

    #13436
    Diogenes Shrugged
    Participant

    kito: “our population has only exploded because of the model of exploding debt and credit.”

    Our population has exploded only because of exploding petroleum (energy) exploitation. FIFY. (Fixed it for you.)

    “there is going to be a huge decrease in population once the excesses are trimmed. the only hope is that this somehow occurs in a non painful manner.”

    Wow. Good luck with that. That’s “hope” with a double-digit exponent.

    My personal concern is that radical population reduction might not occur as a consequence of negative growth, but rather as a deliberate effort on the part of people like Paul Ehrlich, Bill Gates, Ted Turner, and the usual rich, power hungry, psychopathic suspects.

    #13438

    We can lead very wonderful and fulfilling lives without economic growth, people have done it for 100,000 years and more.

    raul, you are a tad naive.

    No, I’m not. We did live those lives, or our ancestors did. What comes now is a different story. And I have zero naive or rosy ideas about that.

    #13457
    Dr. Diablo
    Participant

    I’m missing something here, WHO types in the year’s production, WHO audits the population, and WHO issues the chits? How could that possibly be anything but centralized? Indeed, more centralized than our present system, more centralized than any system has ever been.

    So who are these people who do this and don’t issue a few chits to themselves on the side, don’t allow the chit system to be gamed on the trading/exchange side, and don’t decide, “Hey this project — Global Warming, for instance — is truly a priority. Let’s give more chits that way, thereby taking them from ‘less important’ projects and people.”?

    There are no human beings, on planet earth, anywhere in history, that ever behaved in such an exemplary manner.

    Besides, the system you describe is the one we have, just further on a bit. The chits are called “money”, they represent labor, energy, ideas, and goods. They are centrally issued, and the central issuers, be they governments or banks, cheat the system blind, hold the chits in paperless, unauditable forms like MERS or the DTCC, and are provably and demonstrably issuing more chit claims than exist. Companies have bought every share to take a company private only to find the shares trading briskly by the thousands or millions. Foreclosures have shown up to find 2 or more claimants to a house, or indeed foreclose on houses that have no mortgage. New US Treasuries were issued for the month, say $4B, only to find $8B hitting the private system, showing that the banks had electronically counterfieted multi-billions of them.

    Men are not particularly trustworthy, all in all. Modern news is a catalogue of why men need a non-man based trust-and-exchange system. Bizarrely, this is why gold is used. It’s a useless rock. You trust no man. You either have it or you don’t, and once it’s exchanged the matter is settled. You could use other things: seashells, cows, grain, but the principle is the same. Any system run by a group of men leads to catastrophic evil.

    #13458
    Dr. Diablo
    Participant

    For the suburbs, I didn’t say they would go on as usual, only that they’ll adjust. Sure, as a positive adjustment opening stores in someone’s garage happens because no one can afford to drive, but at the same time 2 in 3 houses are condemned, fall in, victims of arson, while the families move into one unit or more concentrated, defensible structures nearby. Sure, ‘burbs depend every bit as much on long-distance services as cities, but then so does the furthest countryside–rural houses no less depend on water pumps, Home Depot, and fuel oil. The question is, can they adjust, how, and how fast.

    In the east, out of the dry, even with most services things taken out, Suburbs specialize in enclosed space, irrigation, drainage, and areable land. If you were landed on a vacant planet made of abandoned suburbs, you’d think it was candyland compared to landing in the woods. Or a city, where the green is shaded out and eliminated by permanent, hardscape our best heavy-equipment can hardly move.

    So suburbs don’t “depend” on 2 workers driving to a job leaving a vacant house open to raid. The suburban model does. The money model does. The “suburbs” is just a bunch of buildings connected by tarmac, landscaped for pasture, with accentuated drainage and the option of centralized water and power, if running.

    Not using Detroit as a model, because we’re still learning from it, but already the lots are considered worthless, written off and sold for farm value or under ($1k/acre). That’s not including scrap, which could make the cost free. What do you suppose houses are “worth” now in Detroit? So, thinking they’re happy to pay the $1500/mo average mortgage when they can swap to the forclosed house next door for $200/mo? So then do you need two jobs and a car to support that? No. All gone. Mortgage, bank, taxes, tax base, all gone. Support structure, gone, as the water and power are abandoned in districts. With it, the financial system as we know it, and “employment” as well. All that’s left after are the houses, the land, the roads, and the climate, starting over after the apocalypse, which, for Detroiters, or Cleveland, or Niagara Falls, or Utica, Camden, or wherever, already happened. Past tense. You’re writing on a computer which suggests it hasn’t happened to you. Yet. But yes, the 2-car, 2-job, $2k mortgage system is unsustainable. It’s already not being sustained, and already collapsed in hundreds of places all around you. Even what I’m suggesting is past-tense, as places already find themselves in a 19th-century-like retail system. It happened. We can now see how it already happened and record it, rather than suggesting how this-might-that.

    And it’s coming for you, wherever you are.

    #13459

    That’s a very good rant, diablo, well written, true, real, the lot. Compliments. Stay angry. Write me an article like that.

    #13462
    pipefit
    Participant

    “If you were landed on a vacant planet made of abandoned suburbs, you’d think it was candyland compared to landing in the woods.”

    Not really. Suburbs are designed to make it very easy for rainwater to get out of the subdivision as fast as possible. You could say the same for most paved areas.

    You are going to want to be in the woods, with a huge clearing for a garden. Woods are structured to hold rain water, slowly releasing it.

    After the great reset, there will no income pouring into the suburbs in the form of paychecks or social security checks. You can trade your excess tomatoes for a neighbor’s excess apples, but what about clothing, maintenance or your bicycle, guitar lessons, or whatever?

    What if someone gets sick? And the nearest doctor (more likely nurse) is a cab ride that costs the equivalent of week’s worth of sales from your store? (not to mention what the nurse charges)

    The suburbs will be a horrible existence after the great reset. Far better off in the country where you can actually build some wealth. Your view is distorted. You think one can build all sorts of wealth out of a quarter acre piece of land. Not going to happen. You are going to need several acres to build a decent amount of wealth, probably more than five acres.

    Also, the suburbs will be easy pickings for marauding gangs.

    The other posters have nailed it. There are too many people on the planet. The excess are alive because we have rifled through our savings, and have devised schemes to borrow the next two or three generations’ savings. The only hope is to find a place where you can build wealth. Even if you get three or four suburban houses for free, they will be deteriorating assets requiring a huge amount of maintenance. They should be considered a stop gap way station will you plot your escape.

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