Decline of the Empire

America On The Move!

Reader Mike thought I could do something with the recent story Obama, in Florida, unveils plan to boost tourism. He was right, I think there's something there, a useful lesson for all of us.

LAKE BUENA VISTA, Fla. (AP) — President Barack Obama planted his political flag in Florida on Thursday ahead of the state's Jan. 31 Republican presidential primary, promising a fresh boost to the economy by making it easier for foreign tourists to travel to the U.S.

Obama sought his piece of Florida's political spotlight with a high-profile appearance at Walt Disney World, where he announced initiatives aimed at making it easier for citizens of China and Brazil to visit the United States.

"America is open for business," Obama declared against the backdrop of Disney's Cinderella castle and picture-perfect blue skies. "We want to welcome you"...

While Obama carried Florida in 2008, the state is a top target for Republicans in the November elections. Florida twice backed Republican George W. Bush, providing the decisive electoral votes in the cliffhanger 2000 election that was decided after a 36-day recount.

Tourism is a key component to the economy in Florida, which has been battered by 10 percent unemployment and rampant home foreclosures.

The White House said more than 1 million U.S. jobs could be created over the next decade, according to industry projections, if the U.S. increases its share of the international travel market.

That's a pretty lousy view of Cinderella castle. Here's a much, much better one.

That's Walt and Mickey welcoming visitors to The Magic Kingdom. Cinderella Castle is in the background

What did Obama do after his inspirational visit to The Magic Kingdom?

From Florida, Obama headed to New York City for four glitzy campaign fundraisers, including an event at the famed Apollo Theater featuring performances by Al Green and India.Arie. Tickets to that fundraiser start at $100.

The president also was to attend a $35,800 per ticket fundraiser at the home of director Spike Lee, and two small fundraisers at Daniel, an exclusive Manhattan restaurant. Tickets start at $5,000 for the first restaurant fundraiser and $15,000 for the second.

Obama raised more than $220 million for his campaign and the Democratic National Committee through the end of 2011.

I know there are some doubters reading this. Dour pessimists who don't have that "Can-Do" American spirit. Shame on you. You should stop thinking of Obama's bullshit tourism initiative as sad and pathetic, not to mention disrespectful, haughty and manipulative. Let's look on the Bright Side. This glass is half full.

After all, as Hopey-Changey himself notes in the video below, fantasy—he calls it "tourism"—is America's biggest export. And those xenophobic Republicans are not going to make it easier for Brazilian and Chinese tourists to visit the Magic Kingdom. They'll probably order strip searches of all foreigners at America's airports, which might create some jobs in Homeland Security, but will do nothing to boost tourism revenues in Florida, where the "official" unemployment rate is 10% and you can't go outside without tripping over a foreclosed house.

Most importantly, Brazilian and Chinese tourists will smoothly replace all those Americans who can no longer afford to visit Disney World. Toward that noble end, I propose the America On The Move!™ tour package designed especially to lure those Brazilians and Chinese to our native shores.

America On The Move!

You'll be happy to know that the Greatest Country on Earth is now open for business. Whether you're from Hong Kong or São Paulo, you take pride in your own country, right?

And what is better for boosting your pride & patriotism than Schadenfreude?

To that end, we introduce the America On The Move!™ package designed to make your American stay a happy one.

• Your journey kicks off with a tour of foreclosed homes in Riverside, California and Las Vegas, Nevada. After viewing the disaster in Nevada, you can boost the revenues of America's failing casinos by gambling the night away!


• The journey continues with a visit to a welfare/supplemental nutrition assistance office in Tempe, Arizona. Don't know what supplemental nutrition assistance is? Not to worry! Here in America we call it Food Stamps. Did you know that over 46 million Americans—if you're from Europe, that may be more people than there are in your whole country!—would starve if they didn't receive this assistance? Your pride in your native land will swell and swell as you watch these pathetic Americans trying to stay alive.
  


• Your pleasurable trip to the welfare office will be followed by a trip to a local public library—if we can find one that's still open!—to see how America's homeless spend their days reading Vogue or Fortune magazines. Nobody knows what they do at night!
  


• If you've purchased our Special Package, get ready because there's Big Fun coming! Yes, you will visit famous Detroit city, formerly the Automaking Capital of the World and now a burnt-out husk.

  
  Dismantling Detroit — The filmmakers Heidi Ewing and Rachel Grady look at young men who salvage scrap metal from Detroit’s derelict buildings, set against the backdrop of globalization. One of the men, who had come up from Kentucky to scrap after losing a job in a coal mine, stands out in our minds. Taking a short break from the action, he looked up and said with disgust, “All that’s left here are the remnants of what was.”

The Schadenfreude (and the fun!) never stops on the America On The Move tour. What could possibly be better than taking pleasure in the misery of these ignorant, insufferable assholes? Watch them grovel! They're not entitled anymore!

Contact us at Magic Kingdom Travel to book your reservations today.

Bonus Video — Hopey-Changey Speaks To The Nation

 

Remedy du Jour -- January 21, 2012

When we look back musically, we might ask who was good? Whose stuff stays with us, makes us smile again when we hear it?

I'm a sucker for Bob Seger. When I hear his soulful ballads of the 1970s/early 1980s, I get happy. I wish I were young in the 1970s again and knew what I know now. I'd know what to do.

Youth is wasted on the young.

• We've Got Tonight
• Main Street
• Turn The Page
• Against The Wind

 

 

 

 

Saturday Oil Report -- January 21, 2012

Oil prices fell slightly at the end of the week, with Nymex WTI futures going for $98.33 per barrel and the  Brent (dated spot) at $109.63. There isn't much going on in the oil markets. Prices are being driven by the usual factors (the dollar index, fears about Europe, possible Iran sanctions, maybe even supply and demand). The alarm level in the previous Saturday report is unchanged.

Oil Alarm Level — Orange

The seeming calm has brought forth an important discussion of the issues around how we would replace Iran's exports if these were cut off for one reason or another. (They won't be, so don't worry about it.)

The discussion has focused on Saudi Arabia's spare capacity. Thus it took a fabricated crisis to get this crucial subject out in the open. Iran currently exports a little over 2 million barrels per day (b/d) according to the JODI database. Saudi Arabia has said they can replace all that oil.  CNN gives us the story in Oil minister: Saudi Arabia can make up for Iranian crude.

Saudi Arabia can make up for any loss of crude oil production if sanctions are placed on Iran, the country's oil minister told CNN in an exclusive interview set to air Monday.

"I believe we can easily get up to 11.4, 11.8 (million barrels a day) almost immediately, in a few days, because all we need is to turn valves," Saudi Oil Minister Ali al-Naimi told CNN's John Defterios. "Now to get to the next 700 or so, we probably need about 90 days."

When asked about whether Saudi Arabia could make up for Iran's exports of 2.2 million barrels a day, al-Naimi said the country has a spare capacity "to respond to emergencies worldwide, to respond to our customer demand, and that is really the focus. Our focus is not on who drops out from production, but who wants more"...

He also discussed his outlook for oil prices in 2012 amid tensions in the Gulf region.

"Our wish and hope is we can stabilize this oil price and keep it at a level around $100" for the average barrel of crude, al-Naimi said.

Iran has threatened to close the Strait of Hormuz, the only outlet from the Persian Gulf, as it faces increased scrutiny over its nuclear program. The critical shipping lane had 17 million barrels of oil per day passing through in 2011, according to the U.S. Energy Information Agency.

But al-Naimi dismissed the concern.

"I personally do not believe that the strait, if it were shut, will be shut for any length of time. The world cannot stand for that," he said.

This "good news" comes on the heels of the revelation that Saudi Arabia pumped more than 10 million barrels per day in November (including condensates and natural gas liquids) as reported by Bloomberg.

OPEC’s largest crude producer, increased output and exports in November to the highest levels in more than 30 years, according to the Joint Organization Data Initiative (JODI).

The country pumped 10.047 million barrels a day of crude, up from 9.36 million in October, statistics posted today on JODI’s website show. The kingdom’s exports increased by 721,000 barrels a day, more than 10 percent, to 7.8 million barrels a day, according to the figures, which include condensates and exclude natural-gas liquids.

We should be skeptical of al-Naimi's claim that the Saudis can simply turn a few valves to get up to "11.4, 11.8" million b/d of crude oil. Which is it? 11.4? or 11.8? This is one of those we'll believe it when we see it moments. Moreover, in so far as al-Naimi says it would take 3 months to get that other 700,000 b/d onstream, we can not count that as spare capacity according to the EIA's definition of the term. The EIA definition (as of 2005) requires that oil be brought online within 1 month to count as spare capacity.

Spare capacity refers to the "maximum sustainable production capacity, defined as the maximum amount of production that: 1) could be brought online within a period of 30 days; and 2) sustained for at least 90 days.

It is easy for al-Naimi to make these claims because the odds are very small that Iranian exports would fall to zero. The odds are even slimmer that Iran will close the Strait of Hormuz. The odds are somewhat higher that the paranoid Israelis will simply go ahead and bomb Iran. Nobody is going to heed American calls to forego crude oil from Iran to make a phony, election-year crisis worse.

The more interesting revelation is the new Saudi price target—$100 per barrel. In the past the Saudis have said $75 was a reasonable target. As Stuart Staniford argues, there is an excellent chance the Saudis would make drastic production cuts to support prices if there is a severe global economic downturn. This is far more believable than al-Naimi's claims about spare capacity.

Are we any wiser than we were yesterday? Only if al-Naimi's claims are true. But the only way to verify that would be to put those claims to the test. And the chance of this test occuring is very small, for events which lead to Iran's exports falling to zero would also cause the oil price to shoot up to $200 per barrel or more, which would bring the global economy to its knees.

What will the oil price be in two weeks? I think it will be about where it is now. If the Saudis get their way, it will always be about where it is now. Or higher

Mainstream Media Reporting — The Truth Gap

People went wild when the public editor of the New York Times Arthur Brisbane asked Should The Times Be a Truth Vigilante?  The public editor is an ombudsman, so it's his job to interact with the hoi polloi (the public). In short, Brisbane has no clout. Thus the entire exercise is like masturbation in so far as it feels good but no babies could possibly come from it. Still, I think DOTE readers will be amused by this tempest in a teapot for what it reveals about Fair & Balanced reporting in the media.

I'll quote Jay Rosen (Press Think — "the ghost of democracy in the media machine") on Brisbane's question. His reaction was called So whaddaya think: should we put truthtelling back up there at number one?  As usual, quotes within quotes (from Brisbane in this case) are highlighted in light blue.

Somewhere along the way, telling truth from falsehood was surpassed by other priorities to which the press felt a stronger duty. Arthur Brisbane, public editor of the New York Times, was unaware of this history when he asked users of the Times whether reporters should call out false statements.

Brisbane’s post ... exploded onto the web today, startling user after user, and journalist after journalist, all of whom reacted with some version of: Why is this even a question? Alright, I’ll tell you why.

Brisbane wrote: “I’m looking for reader input on whether and when New York Times news reporters should challenge ‘facts’ that are asserted by newsmakers they write about.” For example:

On the campaign trail, Mitt Romney often says President Obama has made speeches “apologizing for America,” a phrase to which Paul Krugman objected in a December 23 column arguing that politics has advanced to the “post-truth” stage.

As an Op-Ed columnist, Mr. Krugman clearly has the freedom to call out what he thinks is a lie. My question for readers is: should news reporters do the same?

If so, then perhaps the next time Mr. Romney says the president has a habit of apologizing for his country, the reporter should insert a paragraph saying, more or less:

“The president has never used the word ‘apologize’ in a speech about U.S. policy or history. Any assertion that he has apologized for U.S. actions rests on a misleading interpretation of the president’s words.”

Brisbane said he gets a lot of mail from “readers who, fed up with the distortions and evasions that are common in public life, look to The Times to set the record straight. They worry less about reporters imposing their judgment on what is false and what is true.” Then he got to the meat of his question, which was to us, the users.

Is that the prevailing view? And if so, how can The Times do this in a way that is objective and fair? Is it possible to be objective and fair when the reporter is choosing to correct one fact over another? Are there other problems that The Times would face that I haven’t mentioned here?

The comments at Brisbane’s blog post are blistering. They reveal the deep divide between “traditionalists” in the press, of which is Brisbane is one, and current users. I will just quote one to give you the tone. Matt Talbot in California:

“That this should even be an open question is a sign that our supposedly independent press is a cowed and timid shadow of its former self.”

There will be plenty more said about this column because a lot led up to it. For now I want make one observation, and let that stand as my reaction.

Something happened in our press over the last 40 years or so that never got acknowledged and to this day would be denied by a majority of newsroom professionals.

This is worth highlighting in a different font.

Somewhere along the way, truthtelling was surpassed by other priorities the mainstream press felt a stronger duty to. These include such things as “maintaining objectivity,” “not imposing a judgment,” “refusing to take sides” and sticking to what I have called the View from Nowhere.

Rosen is talking about Fair & Balanced reporting. Like on climate change science, for example.

No one knows exactly how it happened, for it’s not like a policy decision came down at some point. Rather, the drift of professional practice over time was to bracket or suspend sharp questions of truth and falsehood in order to avoid charges of bias, or excessive editorializing. Journalists felt better, safer, on firmer professional ground–more like pros–when they stopped short of reporting substantially untrue statements as false. One way to describe it (and I believe this is the correct way) is that truthtelling moved down the list of newsroom priorities. Other things now ranked ahead of it.

But wait a minute: how can telling the truth ever take a back seat in the serious business of reporting the news? That’s like saying medical doctors no longer put “saving lives” or “the health of the patient” ahead of securing payment from insurance companies. It puts the lie to the entire contraption. It devastates journalism as a public service and honorable profession.

And so officially, this event (“truthtelling moved down the list of newsroom priorities”) never occurred, even though in reality it did. Because no one was ready for that devastation. Therefore no reckoning (wait: how could this happen?) ever took place. Denial was successfully maintained, even as criticism built and journalists inside the fraternity announced what was happening. Professional practice even shifted to take account of the drift.

Arthur Brisbane, public editor of the New York Times, skipped onto this scene seemingly unaware of these events. And he basically blurted out what I just explained to you when he asked the users of the New York Times: so whaaddaya think… should we put truthtelling back up there at number one?

Yes, that is what he said. Look at his post again. He tells us that readers are “fed up with the distortions and evasions” and they “look to The Times to set the record straight.” This seems to be their number one priority, he muses. “They worry less about reporters imposing their judgment on what is false and what is true.” (Which is what always stopped us before.) And so Brisbane wants to know: should we run with that? It would mean changing our practices, but we could do it. Hey, what do you guys think?

And then came the reply, which was… devastating.

As far as it goes, Rosen's summary is pretty good. Unfortunately, it doesn't go nearly far enough. The mainstream media is one of our favorite whipping boys, and why not? They deserve a good whipping.

What is missing in Rosen's description is the propaganda function of the corporate-owned media. If you give equal time to lies, and thus assert in effect that truth is a relative thing, then Truth, in so far as we can ascertain it, no longer exists in media reporting. Somebody's self-serving bullshit can then fill this truth vacuum, or as Stanley Kubrick would have put it in Dr. Strangelove, The Truth Gap. This is the essence of Fair & Balanced reporting. In short, it serves little purpose outside of propaganda.

There are exceptions to this rule but they are rare—for example, see the New York Times reporting on shale gas economics as discussed in my post The Shale Gas Scam Goes Public. When exceptions are rare, which is why we notice them, they only serve to prove the rule.

Thus “maintaining objectivity,” “not imposing a judgment,” “refusing to take sides” means in effect that the special interests who have the gold make the rules, for they can fill the Truth Gap in our value-free media—"it's all relative"—with all sorts of propaganda messages which are never seriously challenged.

If Truth is relative, then Truth does not exist. Of course Truth still exists, as far as we can discern it, but it is hidden from the naive public to whom every "point of view" appears to have equal weight. And where there is no Truth in journalism, there is only somebody's bullshit. The powerful few can set the agenda. And certainly there is no Democracy.

Have a nice weekend.

Bonus Video — Dr. Strangelove

 

They Tried To Teach My Baby Science!

It's bad enough that humans are trashing the Earth, and in the process, making it doubtful that our astonishing Blue-Green Planet will be habitable by large, big-brained, bipedal primates by the year 2100. No, these humans must also deny that they are trashing this singular, precious planet, which strongly indicates that those big brains are malfunctioning in a most distressing way.

This brings up the related question of why those big brains evolved in the first place—no other animal acquired this trait during the 543 million years of the Phanerozoic Eon—but that's not my subject today. Viewed this way, Homo sapiens is an anomaly.

Wired tells us about malfunctioning big brains in The New Science Classroom Battleground: Climate Change.

The National Center for Science Education has been defending the teaching of evolution since before Edwards vs. Aguillard, the 1987 Supreme Court decision that declared the teaching of creationism an unconstitutional promotion of religion. Although its primary focus is on supporting teachers and students by helping them handle public controversies caused by science education, the organization played a critical role in the Dover case, which blocked the teaching of creationism’s descendent, intelligent design.

Although the organization’s title refers to science education generally, evolution has been the primary area of science that has been under attack for reasons that have nothing to do with the latest research. But over the last several years, that’s changed as more and more bills have been introduced that target both evolution and climate change. With times changing, the NCSE is changing with them. Today, it’s announcing that its support of students and educators will be broadened to include climate change. We talked with the NCSE’s executive director, Eugenie Scott, about the decision.

Scott said that the NCSE’s work with teachers on evolution made them aware that teaching climate science was becoming controversial. “It’s been a growing realization of ours that, just as teachers get hammered for teaching evolution, they also are getting hammered for teaching global warming and other climate change topics,” she told Ars. “They’ll start talking about global warming and a student’s hand will shoot up, ‘teacher, my dad says global warming is a hoax.’ We’ve had accounts where students would get up and walk out of the room.”

They're trying teach her baby science!!!  The Los Angeles Times reports on the horrors of teaching science to impressionable youngsters in Climate change skepticism seeps into science classrooms.

Reporting from Washington — A flash point has emerged in American science education that echoes the battle over evolution, as scientists and educators report mounting resistance to the study of man-made climate change in middle and high schools.

Although scientific evidence increasingly shows that fossil fuel consumption has caused the climate to change rapidly, the issue has grown so politicized that skepticism of the broad scientific consensus has seeped into classrooms...

Texas and Louisiana have introduced education standards that require educators to teach climate change denial as a valid scientific position. South Dakota and Utah passed resolutions denying climate change. Tennessee and Oklahoma also have introduced legislation to give climate change skeptics a place in the classroom.

In May, a school board in Los Alamitos, Calif., passed a measure, later rescinded, identifying climate science as a controversial topic that required special instructional oversight.

"Any time we have a meeting of 100 teachers, if you ask whether they're running into pushback on teaching climate change, 50 will raise their hands," said Frank Niepold, climate education coordinator for the National Oceanic and Atmospheric Administration, who meets with hundreds of teachers annually. "We ask questions about how sizable it is, and they tell us it is [sizable] and pretty persistent, from many places: your administration, parents, students, even your own family."

Is science being taught in our schools? Should children be exposed to facts? Things like "Darwinian evolution occurred" or "the Earth is warming and the only reasonable, probable cause is human burning of fossil fuels".

These are really profound, really deep questions for a big-brained, super-intelligent species like Homo sapiens. You can read my related post Ignorance Is Bliss if you haven't already done so. Or read it again. It will never grow old.

Do you know what the supreme irony of this deplorable situation is? It was basic scientific research and the technology which followed in its wake like the steam engine or television, combined with a shitload of fossil fuels, that made possible the sometimes extravagant, often comfortable (and wasteful, unsustainable) lifestyle so many ignorant humans enjoy today.  Few are willing to give up the comfort science, technology and fossil fuels have provided.

But now with our best science telling the humans they are obviously a bunch of fuck-ups, these same comfortable humans don't want to hear it. And why not? Because that depressing message is totally out of sync with their own view of themselves, with who they want to believe they are.

Bonus Videos — Turbo Encabulator and RCA's The Story Of Television

 

 

The Big Banks Pick The Winner — It's Willard Romney

In a story that didn't get nearly the attention it deserves, McClatchy's Andrew Dunn informs us that Big banks have picked their candidate, and it's Romney. The story appeared in the Charlotte Observer because that's where Bank of America is headquartered. Let's give this story a little love, shall we?

CHARLOTTE, N.C. — The country's biggest banks are overwhelmingly supporting Mitt Romney's bid for the Republican presidential nomination, an analysis of federal campaign contributions shows.

[left, a cartoon from the America's original Gilded Age, source.]

Employees at the five largest U.S. banks by assets, including Bank of America Corp. and Wells Fargo & Co., had given Romney about $600,000 through the first three quarters of 2011, according to the most recent filings available from the Federal Election Commission.

The second-largest recipient of bank employee contributions, President Barack Obama, had far less, about $200,000, the analysis showed. The Republican presidential hopeful with the second-highest total, former Minnesota Gov. Tim Pawlenty, dropped out of the race in mid-August.

Romney received more from employees of those top five banks than all the other candidates combined, helping make the former Massachusetts governor the best-financed candidate in the Republican nomination battle, which is heating up in South Carolina ahead of Saturday's primary.

$600,000 going to Mitt Romney is a drop in the bucket. The more interesting data came later in Dunn's piece.

Charlotte-based Bank of America's employees and PACs have given more than $1 million to candidates for president and Congress this cycle, according to the latest data from the research group Center for Responsive Politics. That's half of what peer Goldman Sachs has donated so far.

The commercial banking industry as a whole has donated more than $10 million, the center's data show. The entire finance, insurance and real estate sector is the top political giver this election cycle, with more than $135 million so far.

"The financial sector at large is continuing to be the largest sector in terms of campaign contributions and trying to influence policy through political money," said David Donnelly, national campaigns director at Public Campaign, an organization that pushes for campaign reform. "Even as the economy is not doing so well, campaign contributions from the banking sector seem to be increasing."

Now we're talking! That phrase "the finance, insurance and real estate sector" may be familiar to you. It is often abbreviated as the FIRE sector of the economy, meaning the parasitic, non-productive, wealth-extracting, rent-seeking sector of the economy. Looking at past bribes campaign donations from finance alone, the numbers are staggering.

"We've seen a massive shift from Obama to the Republican candidates on the part of the financial industry," said Carmen Balber of Consumer Watchdog, a California nonprofit that advocates for taxpayers and consumers. "Obviously, part of that has to do with a competitive primary. But we've definitely seen the financial services industry publicly chastise the president for going after financial reform."

But with the stakes so high, some consumer advocates believe the financial services field will take advantage of the unshackling afforded by Citizens United.

"We have no doubt that the industry will wade in significantly once the players are set," Balber said.

The influence of corporate money has long been decried by consumer advocates, and giving from banks even more so in the wake of the financial meltdown.

The final report from the Financial Crisis Inquiry Commission cited the fact that between 1999 and 2008, the financial sector spent more than $1 billion on campaigns as a factor.

"What troubled us was the extent to which the nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability," the report reads.

And here come the super PACs.

The influence of deep-pocketed donors is under particular scrutiny this year with the growing influence of super PACs. Those organizations can accept unlimited contributions from corporations or individuals so long as they do not coordinate directly with a candidate.

They were created after the landmark Citizens United case in 2010, in which the U.S. Supreme Court ruled that campaign contributions are political speech protected by the Constitution.

Even I must admit that this story is stale. The story is always the same — No Change or Things Getting Worse (e.g. Citizens United). So let's liven this discussion up a bit. As you may know, Stephen Colbert formed his own super Pac and handed off control of the money to Jon Stewart (Bonus Video below). Apparently, Colbert has raised a lot of money (unlike this blog) and has even started putting out political ads on TV.

And what are Colbert and Stewart doing with their money? Live and learn (60 seconds).

 

This is the same kind of partisan nonsense that you might expect any special interest to run. Hopey-Changey knows that corporations are people too. He just doesn't say it outloud like Romney does. Colbert could be using his super PAC money to satirize the role of money in politics. Hopeless.

Bonus Video — From the Comedy Channel

Wealth And Energy Consumption Are Inseparable

Today we will briefly explore the work of atmospheric sciences researcher Tim Garrett. I first wrote about his work in my study Economic Growth And Climate Change — No Way Out? I concluded that there is no way out —you can't have economic growth and mitigate anthropogenic climate change by reducing CO₂ emissions. If we make reasonable assumptions about the future, you can do one or the other (XOR, exclusive or).

This conclusion is contrary to the commonly accepted "wisdom" that we can have our cake (economic growth) and eat it too (reduce emissions). I must confess that this discussion is becoming more and more academic because there is overwhelming evidence telling us that humankind is not going to do anything about global warming in any case, i.e. humans will not substantially change their behavior. See my posts What Will The Humans Do?,  For Humans, The Economy Is Everything and How To Think About The Future. Economic growth, if it is achievable, will always be the preferred path.

In addition to his work in the Aerosol-Cloud-Climate-Systems Group at the University of Utah, Tim has also done some groundbreaking work in helping us to understand the link between the global economy and energy consumption. Using reasonable assumptions—for example, we can not build the equivalent of about one new nuclear power plant per day as we de-carbonize—Garrett arrived at the same conclusions (exclusivity) about economic growth and mitigating climate change which I arrived at in my No Way Out? article, which is why I originally cited his work.

I'm going to keep this as simple as possible in so far as the degree of difficulty for the non-mathematician/non-physicist in Tim's published studies is extreme. Perhaps the best introduction to his first paper (Garrett, 2011) can be found in the first part of the abstract of his second paper No Way Out? The double-bind in seeking global prosperity alongside mitigated climate change.

In a prior study (Garrett, 2011), I introduced a simple economic growth model designed to be consistent with general thermodynamic laws. Unlike traditional economic models, civilization is viewed only as a well-mixed global whole with no distinction made between individual nations, economic sectors, labor, or capital investments. At the model core is a hypothesis that the global economy's current rate of primary energy consumption is tied through a constant to a very general representation of its historically accumulated wealth. Observations support this hypothesis, and indicate that the constant's value is λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. It is this link that allows for treatment of seemingly complex economic systems as simple physical systems.

This graph is from Tim's website and illustrates the relationship λ (lambda) between the world't total accumulated wealth (C, the integral) and our ever-accelerating energy consumption rate (a, measured in 10²¹ joules per year). λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. That's how much energy is required to increase the world's economic wealth as measured in 1990 dollars. The growth rate 1.87% for energy consumption is an average for the period 1970-2006. The average growth rate for the total accumulated wealth was 1.82% over that period. Note that this an empirical result and thus stands outside any particular theory or framework, although it falls out of Garrett's hypothesis (thermodynamic model) that some constant like λ must exist.

This is a fundamental result, a finding whose singular importance can not be overstated. Here's how Tim put it in an e-mail.

A consequence of global wealth being tied to its current capacity to consume primary energy reserves is that the inflation-adjusted GDP at global scales is tied to how fast civilization is able to accelerate its rate of energy consumption. This means that, if growing our primary energy consumption rate becomes too difficult, either due to reserve depletion or accelerating environmental disasters, then the GDP will necessarily fail. All our efforts to sustain real production will be more than offset by inflation and decay. This does not mean that energy consumption won't continue. In fact, it may even be higher than it is today. But declining energy consumption necessitates a collapse of the fiscally measurable exchanges that we account for in the GDP.

There are indications that decreasing oil consumption is already occurring, and this may presage a decline in other sources of fuel as well. In the past, Europe sustained its growth by replacing wood with coal. Perhaps in the future oil will cede to natural gas or nuclear power. But if so, these alternative sources will have to more than offset the decline in oil in order to sustain a positive inflation-adjusted GDP.

Bogus claims are made all the time that if we just use energy more efficiently or switch to "renewable" energy sources as we go, the global economy will continue to grow and grow. On the contrary, here is some of the fallout from Tim's linkage of the economic and physical worlds. This text is from Tim's website (cited in the text accompanying the graph above). I have reproduced it verbatim.

1. If the global economy is able to achieve gains in energy efficiency or energy productivity, it will accelerate energy consumption by accelerating healthy civilization growth into new energy reserves. Efficiency gains create a “super-exponential” acceleration of energy consumption and carbon dioxide emissions while growing the GDP. Expressed in terms of economic demand, this effect has been termed “backfire” or “Jevons’ Paradox”.

2. Growing global wealth requires increasing global emissions of carbon dioxide because both are linked to energy consumption rates. The two go hand in hand ... unless we change civilization’s fuel mix.  If we are to simply stabilize CO₂ emissions at current growth rates, this would require building the equivalent of about one new nuclear power plant per day.

3. If global warming becomes so severe that it causes civilization collapse despite our best efforts to avoid it, it will manifest itself economically through hyper-inflation.

4. Stabilizing atmospheric CO₂ concentrations below a level of 450 ppmv that might be considered dangerous requires civilization to begin a collapse of its wealth almost immediately.

This is all very bad news for those making standard assumptions about economic growth in the 21st century. However, Garrett's use of the terms collapse (decay) and hyperinflation should not be understood as they are in textbook economics or in common usage. A "positive inflation-adjusted GDP" is possible in Tim's model only if energy consumption is rising at a sufficient rate. What would actually happen on the ground if humans fail to grow primary energy at the rate required is not well defined.

For example, Garrett is modeling the global economy. What might happen in one locale on Earth might differ considerably from what would happen in other places. Tim's model (as currently constituted) does not fully explain what happens during recessions when GDP shrinks and energy consumption falls off. (He tells me this may be a time-scale problem—recessions are relatively short, intra-decadal events.)

In a peak oil scenario—for example, the one outlined by former IEA analyst Olivier Rech in which the global liquids supply enters an inevitable, inexorable decline during the latter part of this decade—and assuming that substitutes (coal-to-liquids, gas-to-liquids, electric or natural gas transportation) do not come to the rescue, Garrett predicts that we will enter a phase of "hyperinflation and decay."  This scenario directly implies a shrinking global economy (total wealth, as measured in cumulative GDP).

Does this constitute a collapse? I know some of you are very fond of that word, and no doubt a few will take the EOTWAWKI ball and run with it without fully understanding Garrett's difficult work. My own view is that the end of world as we know it (at least here in America) has already occurred. I expect to see further decay, although this deterioration may play out in ways we don't fully understand now.

I will finish up by quoting again from the abstract of Tim's second paper.

Extending the model to the future, the model suggests that the well-known IPCC SRES scenarios substantially underestimate how much CO₂ levels will rise for a given level of future economic prosperity. For one, global CO₂ emission rates cannot be decoupled from wealth through efficiency gains. For another, like a long-term natural disaster, future greenhouse warming can be expected to act as an inflationary drag on the real growth of global wealth. For atmospheric CO₂ concentrations to remain below a "dangerous" level of 450 ppmv (Hansen et al., 2007), model forecasts suggest that there will have to be some combination of an unrealistically rapid rate of energy decarbonization and nearly immediate reductions in global civilization wealth.

And on that happy note, I bid you adieu.

Bonus Video — Tim's 3-part lecture on his work in the first study. I've included Part I here. You can also watch Part 2 and Part 3. The video quality is not as good as we might hope.

 

Laissez Les Bon Temps Roulez!

The title is a Cajun expression meaning Let The Good Times Roll!

I rarely write about the Federal Reserve, although the subject is very much in the news because of Ron Paul's candidacy—abolish the Fed! But I used to write about it in the early days of this blog. I know that others like my colleague Bill Hicks have already done this story, but some temptations, like a great glass of Pinot Grigio or unbridled fornication, are just too sweet to resist.

I'll quote the New York Times story Inside the Fed in 2006: A Coming Crisis, and Banter.

WASHINGTON — As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

There's plenty more where that came from. Read the Times article in its entirety or look at Tim Iacono's Greenspan's Sycophants In Praise Of Susan Bies.

I am unaccustomed to speechlessness, so I am glad to have some older posts to fall back on. These are The Wisdom Of The Federal Reserve, Ben Bernanke Week and Nobody F**ks With The Jesus. All were written in the first half of 2010. I will reprint the latter two posts here.

Ben Bernanke Week (DOTE, January 26, 2010)

Fed Chairman Ben Bernanke's reappointment is up for a vote this week in the Senate. Those interested in his unbelievable obtuseness on the Housing Bubble should read Barry Ritholtz's Observations On Bernanke. To this day, Bernanke denies that Greenspan's low interest rates after the 2001 recession had anything to do with inflating the bubble.

Allow me to quote from John Kenneth Galbraith's The Great Crash 1929, pages 26-27.

The regulation of economic activity is without doubt the most inelegant and unrewarding of public endeavors...

The great exception to this dreary story is the regulatory activity of the central bank—with us, the Federal Reserve System. Here is regulation of a seemly and becoming sort. No one apologizes for it; men of impeccable conservatism would rise to espouse such regulation were they call upon to do so, which they almost never are. This regulation is not the work of thousands of clerks... Rather it emerges in the measured and orderly discussion of men of quiet and dignified mien, each at his accustomed place around a handsome table in a richly paneled and richly draperied room. These men do not issue orders; at most they suggest. Chiefly, they move interest rates, buy or sell securities, and, in doing so, nudge the economy here and restrain it there.

Because the meanings of their actions are not understood by the great majority of the people, they can reasonably be assumed to have superior wisdom. Their actions will on occasion be criticized. More often they will be scrutinized for hidden meaning.

Such is the mystique of central banking. Such was the awe-inspiring role in 1929 of the Federal Reserve Board in Washington, the policy-making body which guided and directed the twelve Federal Reserve banks. However, there was a jarring difficulty. The Federal Reserve Board in those times was body of startling incompetence.

And this is also the story of 2006 when Bernanke became Fed Chairman, and before that during the Greenspan Era when Bernanke was merely a cheerleader for the now discredited Bubble Master. Did Bernanke suggest there was trouble in 2006? No. Did Bernanke nudge the economy here, restrain it there? No.

Galbraith goes on to explain that when the economy is booming as it was during the Housing Bubble, government officials (or central bankers) will never use their regulatory powers or powers of persuasion to end the madness. For if they were to intervene to prevent economic catastrophe, to prevent the bubble from blowing up, they would need to blow it up. This is a delicate matter requiring deft maneuvering. Think of a balloon. Does it make any difference in the effect if you prick it with a pin, as opposed to dropping an anvil on it? Still, it could have been done or at the very least, warnings could have been issued. This would have required great courage.

Money was being made. People were being fleeced. All was right with the world, especially the banking world. As the Cajuns say, Laissez les Bon Temps Roulez! But had action been taken, everyone would know exactly who was to blame for ending the Good Times. They would know exactly who the party poopers were. Here's Galbraith again—

The very effectiveness of such a measure was the problem. Of all the weapons in the Federal Reserve arsenal, words were the most unpredictable in their consequences. Their effect might be sudden and terrible. Moreover, these consequences could have been attributed with the greatest of precision to the person or persons who uttered the words. Retribution would follow. To the more cautious of the Federal Reserve officials in the early part of 1929 silence seemed literally golden.

As Galbraith said in another context, Ben Bernanke was not a man "to expedite his own demise." Neither was Alan Greenspan. So the Housing Bubble was allowed to run its course right up to the inevitable crash while Bernanke, just like Greenspan before him, said plain vanilla things like this—

I think over a period of time, the housing prices are likely to stabilize. I don’t expect them to keep rising at this rate indefinitely; I don’t think anybody really does. But, again, I do think that the bulk of the increases are associated with strong economic fundamentals. (9 Aug 2005)

And later this—

Home prices, which have climbed at double-digit rates in recent years, still appear to be rising for the nation as a whole, though significantly less rapidly than before. These developments in the housing market are not particularly surprising, as the sustained run-up in housing prices, together with some increase in mortgage rates, has reduced affordability and thus the demand for new homes.” (9 July 2006).

Etc. So, should we let the Chairman continue in his job? Of course not.

The Federal Reserve Board in those times was body of startling incompetence. And I would add, startling timidity (at least right up to the day the financial system melted down). Bernanke still defends his indefensible stance. Ben says bubbles can't be identified. What he knows and doesn't know follows directly from an overpowering impulse to cover his ass. But History will not treat him well. And where are short-term interest rates? They're at 0.25%. Here we go again!

It is what it is. And what it is is what it was in 1929.

I would only add now that the Federal Reserve Board in more recent times was a body of startling cluelessness. And now...

Nobody F**ks With The Jesus (DOTE, January 29, 2010)

 

DOTE Two-Year Anniversary

Tomorrow will mark the two-year anniversary of Decline Of The Empire (DOTE). I thought you would like to see the statistics, so here they are. The beginning of time was January 16, 2010.

• 851373 Lifetime Pageviews
• 1167.86 Pageviews/Day (average since the beginning)
• 891 Total Posts

DOTE traffic with a linear trend line

I was hoping to get to 1 million pageviews during this past year and average at least 2000 pageviews per day. It didn't happen. So it goes.

Some Thoughts On The Empire's Decline

I couldn't believe my luck 2 years ago when the domain name declineoftheempire.com was available. You might have thought as I did that somebody had grabbed that name already. Apparently, people don't think in those terms.

Looking back, it was a seminal historical moment when the debt-based, petroleum-based growth machine finally blew up in September and October of 2008. It was a turning point, although those of us caught up in the midst of the crisis could be forgiven at that moment for not seeing the forest for the trees.

The longer term economic data (e.g. rising household debt, stagnant incomes in the middle and bottom, rising health care costs, rising tuition costs, etc.) pointed to a decline which had been ongoing for nearly 30 years. However, the corrosive underlying trends were hidden by the rising (debt-based) consumption and (mal-) investment we saw during the Bubble Era (1995-2007). Growth seemed robust, a trend those in the business and political elites had every reason to encourage. But it only seemed that way. Most of that growth was as phony as a 3-dollar bill.

Despite our dire historical situation, economists (like Paul Krugman) still call upon the government to re-flate the debt-based growth party of the recent past. For them, it's as though nothing happened over these last 30 years. And indeed, within their limited, ahistorical economic models, which assume that growth is inevitable and everlasting, nothing did.

But despite the debt-inflated growth and rising oil prices since 2003, it was what happened in the aftermath of the financial crisis which confirmed the Empire's decline beyond all doubt. With keen hindsight, we can see that the crash of the economy after the Housing Bubble collapsed was inevitable, but what mattered most was the response to this crisis. It's only after the shit hits the fan that you find out whether there is anything Good & True left to rebuild upon. We would find out whether America still had the Right Stuff.

The chief virtue of adversity is that you find out then, and only then, what the truth of a situation really is. All the superficial rah-rah stuff goes out the window. That's when you find out about character, as opposed to fluff.

As historical accident would have it, we were in the midst of the most important political election since at least 1980 (and perhaps 1932) when the meltdown occurred. Barack Obama was elected with a clear mandate for change in November, 2008. It was clear that we were in serious need of reform at all levels of our society. Obama had portrayed himself as the candidate of Hope and Change. Consequently, despite the rapid disintegration engulfing millions of Americans, hopes were high.

The Hope and Change was an illusion. Smoke & Mirrors. There was nothing real about it.

Now is not the time to recount the sorry history of what has happened since Obama took office. I do that most days on this blog. Needless to say, the Empire's decline and fall became a fait accompli. There was no Franklin Roosevelt. There was no friend of the working man and woman. There was just more and more of the same corruption and catering to special interests which had preceded the crisis. Cynics (realists) said at the time in late 2008 and early 2009 that nothing would change.

And the cynics were right—nothing changed. America was too far gone for meaningful change to occur. We had traveled too far down the Road to Perdition. There was no turning back. And that is the situation we find ourselves in today. Only deterioration is possible now. Optimistic talk about a resurgence of growth and jobs is simply bullshit. Wages for the working man will continue to fall. The rich will get richer, the poor will get poorer. There will be more Imperial wars, more political dysfunction, more corruption, more rip-offs by those in the "financial services" industry. American society is disintegrating. Well before the meltdown in late 2008, the late George Carlin called it circling the drain.

It doesn't bother me that most Americans refuse to accept the grim truth of their situation. As far as humans go in the general case, that's just par for the course. So Americans continue to delude themselves, clinging to the absurd notion that one political party or the other—the two wings of the Elite-Gravy Train-Theft Party—will solve their problems. Two types of people believe in our rotten political/money system: those benefiting from it and those who are as blind as bats. The rest of us are waiting for the other shoe to drop.

Thanks for reading.

Bonus Videos — George Carlin

 

 

Remedy du Jour -- January 14, 2012

I'm in an Aimee Mann mood today. She's one of the best singer/songwriters out there and has been for a long time now. I listened to Aimee fronting Til Tuesday in the 1980s, but I lost track of her after that. About three years ago she came to my attention again and I'm glad she did. She writes such beautiful, smart, poignant songs. Pleasant surprises are so rare in this world.

Here are a few of my favorite Aimee tunes.

• Calling It Quits
• The Scientist (a Coldplay cover)
• It's Not
• Today's The Day