This morning the halfwits on National Propaganda Radio reported that both Hopey-Changey and the Bane Capitalist (sic.) are trying to "lower expectations" as the first face-to-face debate approaches. That got me thinking about "confidence" and "hope" and the like. There are measurements (indices, achieved through polling) for the former, but I rarely discuss them. I should, though, for are they not the closest thing we have to a direct gauge of just how deluded Americans are?
Let's start with Tim Iacono's remarkable consumer sentiment/S&P 500 graph.
Tim says "Here’s another data point on the remarkable improvement in the American mood that, according to Gallup data reported in this item earlier in the week, has been due almost exclusively to those aligned with one political party. As shown below, the Reuters/University of Michigan consumer sentiment index fell slightly from a mid-month reading of 79.2 to 78.3 in the final September reading, up sharply from 74.3 in August."
You can see the seemingly significant correlation between "consumer" sentiment and the stock market. If we look at the Gallup data Tim mentions, as reported by Brad Plumer, we see that it is mostly Democrats who are upbeat.
So what’s driving this spike? One obvious possibility is that the economy is improving and consumers are feeling upbeat.
I have more to say about this "obvious possibility" below.
Another theory is
that consumer confidence is a largely useless economic statistic
that simply tracks the stock market, which is the indicator that
flashes on television most frequently.
But a third possibility is that
the confidence boom is mainly driven by the election and partisan
politics. Check out this chart from Gallup:
Thus Americans who identify themselves as Democrats might as well be on acid or doing mushrooms or whatever floats their boat. You can see how this ties in to my recent remarks about the inestimable Paul Krugman, who (in my words) seems to think the economy is poised for take-off.
Back in the Real World, the world which exists outside of malfunctioning Big Brains and Bad Programming, the economy is going down the tubes. In their third and final estimate, the Bureau of Economic Analysis (BEA) decided things were actually worse in the 2nd quarter than first reported, as e-mail correspondent Rick Davis of the Consumer Metrics Institute explains—
In their second and "final" revision to their estimate of the second quarter 2012 GDP, the BEA found that the annualized rate of U.S. domestic economic growth
was 1.26%, down about a half percent from last month's estimate — and
down about three quarters of a percent from the 1.97% reported for the
prior quarter (and down nearly three percent from the 4.10% growth rate
for the 4th quarter of 2011).
The changes in the GDP growth shown in
this report do not represent actual month-to-month changes in the
economy, but merely a refined understanding of the previously reported
data for the second quarter.
But it was this alarming chart from Lance Roberts that seems to clinch the deal.
Lance says — "The chart shows the annual changes in Durable Goods Orders as well as Nondefense Capital Goods Ex-Aircraft. Historically, when the annual rate of change of these two indexes have simultaneously printed a negative reading the economy was in, or near, a recession. As of the most recent report Durable Goods Orders showed a -6.7% annual decline while Nondefense Capital Goods showed a -3.1% decline."
If that chart is something to go by, and it appears to be something we can take seriously, Americans are stepping into some deep, deep shit as the election approaches. If the election were not taking place, the recession we're in, or are going to be in shortly, would surely be the almost the only thing people would be talking about. As things stand, Democrats think we're on the verge of Economic Greatness, presumably because they think Hopey-Changey is a shoo-in.
Allow me to make a small prediction about our immediate future. Think of the economy and our confidence about it as a dirigible, aka. a blimp or zeppelin. When this election is over, and one of these clowns has been elected to the Highest, Most Important Office ever conceived, the helium hydrogen is going to rush out of this Gigantic Gas Bag with a Mighty Whoosh.
The German-made dirigible the Hindenberg goes down in flames (1937)
This event will be akin to the extraordinary hangover one feels after a three-day binge, or in this case, a 22-month political bender which is fast approaching its necessarily unhappy conclusion.
Democrats may be feeling confident at the moment, but just you wait and see. These Democrats are very likely going to get what they want, not heeding the warning which says you should careful about what you wish for because you might just get it.
I've had reason to quote a couple of Terry Gilliam films lately, so I thought I would play some clips from his movies today. A former member of Monty Python—he's the one who did the animation— Gilliam has been a great filmmaker for nearly 40 years. Like his stuff or not, it's always visually amazing and the scripts are great too. Gilliam has never pandered for popularity. He doesn't compromise. So financing has always been a problem for him.
Here's the playlist—
Evil explains how God fouled things up — from Time Bandits, 1981
Terry Gilliam explains why Steve Spielberg is a hack
The Coconuts scene — from Monty Python and The Holy Grail, 1975
Harry Tuttle, heating engineer — from Brazil, 1985
I quit writing the Saturday Oil Report because oil prices make no sense. Why should I waste my time reacting to artificial demand created out of thin air by oil traders? And to add insult to injury, these traders often work for the world's largest banks, which make billions of dollars each year buying and selling crude oil.
God didn't put me on Earth to be jerked around by a bunch of greedy assholes, or at least I'd like to believe that, because it seems to me now, as I look back, that I spent most of my life being jerked around—directly or indirectly—by a bunch of greedy assholes. I only caught onto that game when I started paying attention to it.
But now a 2010 story has re-surfaced (and here, and here) which reminds us that oil prices always reflect the fundamentals—supply and demand—just as economists insist they do. But supply and demand of what?
On June 30, 2009 oil mysteriously jumped by more than $1.50 a
barrel during the night, to reach its highest price in eight months, the
kind of swing that is caused by a major geopolitical event.
The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA).
Although
not authorised to invest company cash in trades, Steve Perkins, a long
standing, senior broker at PVM Oil Futures, had managed to spend $520
million on oil futures contracts throughout the night.
On the
morning of the 30th an admin clerk called Mr Perkins to ask why he had
bought 7 million barrels of crude during the night. Mr Perkins had no
recollection of the transactions, and it turned out that he had made the
trades during a “drunken blackout.”
By the time PVM had realised the transactions had not been authorised by a client, they had incurred losses of $9,763,252.
Between the hours of 1:22 am and 3:41 am, Mr Perkins gradually bought [a large share] of the global market, whilst driving prices up from $71.40 to
$73.05, by bidding higher each time.
At 6: 30 am, presumably
sobering up and realising what he’d done, he sent a message to his
managing director claiming an unwell relative meant he would not be able
to make it into work.
Following an official investigation Mr
Perkins admitted to having a drinking problem, had his trading license
revoked for five years, and was given a fine of £72,000.
The FSA
have said that they will re-approve his license after the five year
period, if he has recovered from his drink problem, although they warned
that "Mr Perkins poses an extreme risk to the market when drunk."
You are mercifully free from the ravages of intelligence — the Evil One could have been referring to Paul Krugman, from Terry Gilliam's Time Bandits (1981)
I haven't gone after Paul Krugman for some time now, but that's an itch I just have to scratch once in a while. I'm going to tear Krugman a new asshole today, and I'm going to enjoy every minute of it. I started to go after him in yesterday's post, but stopped short. That just made the itch worse. It is regrettable that those of us who are burdened by the ravages of intelligence must endure such a man.
Let's move on to the offense itself. This following text and graph are from Krugman's blog post Is The Economy On The Mend? (dated September 5, 2012). I'm going to make this really easy for you. Look for the red text in the quote below.
But is the economy being cleaned up?
The best case for that proposition, I think, comes if you believe
that excessive household debt was at the core of the issue. Obviously
this is a view I like; Gauti Eggertsson and I have done some formal modeling (pdf), and Atif Mian and Amir Sufi (pdf) have provided strong empirical evidence.
And if that’s what you think the problem is, we have in fact made
significant progress. Here’s the ratio of household liabilities to GDP: [graph below]
Between debt repayment, defaults, and — since recovery began in mid-2009 — rising income, the US has made a lot of progress in deleveraging. Add in the fact that we’ve worked off the excess
construction from the Bush years, and there’s a pretty good case that the stage has been set for a much stronger recovery over the next few years.
The Household Liabilities (Debt)/GDP Ratio. Krugman used a non-zero-scaled graph to
mislead you about how much deleveraging there has been. See here for a longer, deeper perspective (St. Louis Fed, CMDEBT/GDP).
Even if that’s true, by the way, inadequate stimulus and debt relief
have inflicted huge, gratuitous suffering. But the case that we have
been healing all the same is pretty good.
The median income of American households decreased by as much in the
two years after the official end of the Great Recession as it did during
the recession itself. The latest estimates from the Census Bureau show
that the median income for U.S. households in 2011 was $50,054. In 2009, the year the Great Recession ended,
the median income of U.S. households had been $52,195 (in 2011
dollars). Thus, in the two years since the end of the recession, median
household income has fallen by 4.1%.
The decrease in household income from 2009 to 2011 almost exactly
equaled the decrease in income in the two years of the recession. During
the Great Recession, the median U.S. household income (in 2011 dollars)
dropped from $54,489 in 2007 to $52,195 in 2009, a loss of 4.2%. By
this yardstick, the recovery from the Great Recession is bypassing the
nation’s households...
From the Pew report referenced above — "The continuing decline in household income means that 12 years have
now passed without the median exceeding a previous peak. Estimates of
household income from the Census Bureau are available starting from
1967. The highest level recorded for median household income since that
year is $54,932 in 1999 (inflation adjusted to 2011 dollars). That was
the end result of a record-long economic expansion in the 1990s.
The recession in 2001 triggered a significant decline in household
income through 2004. As the recovery strengthened, the median household
income in 2007—$54,489—stood at a level that was approximately the same
as in 1999 [at the end of the soon-to-collapse Housing Bubble]. However, the plunge caused by the Great Recession was swift
and rapid. The median income in 2011—$50,054—was 8.9% less than its
level in 1999."
To sum up, median income has fallen as much during the two years since the "recovery" began as it did during the recession itself, despite the fact that Obama claims that some 4.5 million jobs have been created on his watch. In fact, according to the Bureau of Lies And Obfuscations, or BLO(W), also known as the Bureau of Labor Statistics, the total number of jobs in the United States has just gone net positive for the four years Obama has been in office.
How many jobs do we have now compared to January of 2009? "The revised data show that the economy added about 125,000 jobs since
Mr. Obama took office, for a new total of nearly 133.7 million jobs" according to newly revised BLO(W) data. And what happened to median household income in the four years it took to add those 125,000 net jobs? It declined 4.2% in 2007-2009, and another 4.1% in 2009-2011.
Lately Mr. Krugman has dedicated his life to shilling for Hopey-Changey, or as is his wont, against the Bain Capitalist. There’s a pretty good case that the stage has been set for a much stronger recovery over the next few years, saith St. Paul. And why? Because of debt repayment, defaults, and — since recovery began in mid-2009 — rising income.
Yeah, we're poised for take-off now
We might define an economist as someone who is paid to look the other way. Kind of like a Mafia lawyer or an SEC or DOJ prosecutor. I will be posting about the uselessness of economics soon, but I'll go in a different direction today.
Paul Krugman is the living personification of the DOTE aphorism Politics Makes You Stupid. This phrase can be understood in a number of different ways—they are all illuminating—but the sense I have in mind today goes as follows: the politically partisan are blind. There are no significant exceptions to this rule. And the more fiercely partisan a person is, the less discerning he becomes. No one is more politically partisan than Paul Krugman. He is hardcore. Consequently, Krugman is as blind as a bat.
Of course, I have just scratched the surface of The Krugman here today. He lives in world of delusions within delusions within delusions... These delusions serve to make him quite popular and successful here on Earth.
Well, I don't call it Planet Stupid for nothing.
You know, I have high blood pressure. I take medication for it. I don't need this shit. Nobel Prize! Princeton University! New York Times! It just goes on and on. It never stops! Jesus Fucking Christ! (See here.)
Yeah, I know, I should get over it. Mea culpa.
Well, I have scratched that annoying itch. I feel better now. Krugman Blows.
The Federal Reserve's Z.1 Flow Funds report came out on September 20, 2012. For the first time since the first quarter of 2008, household debt rose. Robert Oak at Economic Populistshows us the data.
Household debt jumped 1.25% and was the largest increase since 2008.
Consumer credit increased 6.25%. These figures are annualized.
Household debt has been declining since Q2 2008 and from Q1 2012 dropped
another 2%.
This quarter means, oh yeah, we can all go into more debt
once again. Believe this or not, increases in household debt are taken
as a positive economic sign, except for those of us who have to make the
payments.
Annualized rate of change. Total borrowing by U.S. households rose by $157.3 billion in the second
quarter, only the second of the last 17 quarters to show an increase.
Total U.S. household debt is just a shade under $13 trillion.
One quarter of rising debt does not a trend make, but any rise in household debt should be sending off alarm bells among policymakers at this juncture. Unfortunately, as Oak points out, increases in household debt are taken as a positive economic sign. That's patently absurd, but Neo-Keynesian economic theory doesn't care. Household debt rises when incomes do not meet expenses. This is not Rocket Science. So this is a good time to show the longer-term income chart, from Robert Oak's The Rich And The Rest Of Us.
Data from the 2011 Census report. The household median income is 8.1% lower than it was in 2007 and 8.9% lower than it was in 1999.
Debt compensates for lost income, or unrealized income gains (chart above). To get some insight into the economic "thinking" behind income and debt, let us turn to Paul Krugman—who else?—to explain it. This text is from his August 2, 2012 column Debt, Depression, DeMarco.
Some background: many economists believe that the overhang of excess
household debt, a legacy of the bubble years, is the biggest factor
holding back economic recovery. Loosely speaking, excess debt has
created a situation in which everyone is trying to spend less than their
income. Since this is collectively impossible — my spending is your
income, and your spending is my income — the result is a persistently
depressed economy.
Needless to say, most American households are not spending less than their income. Americans can't make ends meet! Krugman wants Americans to spend all of their incomes, or more. I'll give you Tim Iacono's take on this absurdity.
Now, there is an argument to be made that debt needs to be written
down in order for a more sustainable economic recovery to develop and,
as a non-economist, I’m probably missing something here about spending
and income as it relates to how economists think of these terms, but, to
suggest that the fundamental problem in the U.S. economy today is that
people are spending less than their income is just ludicrous.
The only way you spend all or more of your income is to take on debt, so, the natural response to having taken on too much
debt in years past is to take some of your current income to pay down
that debt and that’s what’s happening now – the bill has come due and
we’re paying it.
Just when you thought that the conventional wisdom amongst some
prominent economists that “aggregate demand is the only thing that
matters” couldn’t get any more bizarre, it does.
I would go further than Tim. If you are forced to spend all of your income or more than your income to get by day-to-day, your only alternatives are to take on debt or cut expenses. If frugality has run its course, and anything you might cut now is for necessary expenditures (food, mortgage or rent payments, gas, electricity bills, etc.), your only choice is to take on more debt.
And that, I believe, is what the Fed's flow of funds report is showing us. Most of the "delevering" that has gone on was in mortgage debt, and most of that was due to foreclosures, short sales, walk-aways, etc. The data (chart above) shows that median household income has decreased since 2008. Also see my recent post The Sound Of One Hand Clapping.
Few people seemed to notice that household debt increased in the 2nd quarter of 2012. And it wasn't due to rising mortgage debt; that continued to decline. Which means what? More student debt, more car loans—consumer credit rose 6.25% at an annualized rate. Does anyone care?
I can tell you this much—Americans are not taking on more debt because they think Happy Days Are Here Again.
Rising consumer credit debt is a disaster. It's also disgusting. I find it more and more difficult to get over that disgust and report on the economy.
Bonus Video — Happy Days, Ben Selvin and His Orchestra, 1930
I am going to outline a proper, high-level view of human history in this short post. I don't intend to go into detail today.
I have often talked about the "myth" of Progress in human societies. I've been reading political philosopher John Gray, who reinforces (in some ways) views I've already put forward. Progress is largely a myth in the social and political realms, but no one can deny that there has been substantial material Progress in the last two centuries. Everywhere we look, continuing Progress is assumed. Where does our quasi-religious faith in Progress come from?
First, there was the birth of scientific thinking in the 16th and 17th centuries, a trend which continues to the present day in the form of great technological advances (applied science). In the 17th and 18th centuries, we got the Enlightenment, sometimes called the Age of Reason—
The Enlightenment is the period in the history of western thought
and culture, stretching roughly from the mid-decades of the seventeenth
century through the eighteenth century, characterized by dramatic
revolutions in science, philosophy, society and politics; these
revolutions swept away the medieval world-view and ushered in our
modern western world.
Enlightenment thought culminates
historically in the political upheaval of the French Revolution, in
which the traditional hierarchical political and social orders (the
French monarchy, the privileges of the French nobility, the political
power and authority of the Catholic Church) were violently destroyed
and replaced by a political and social order informed by the
Enlightenment ideals of freedom and equality for all, founded,
ostensibly, upon principles of human reason.
The Enlightenment
begins with the scientific revolution of the sixteenth and
seventeenth centuries. The rise of the new science progressively
undermines not only the ancient geocentric conception of the cosmos,
but, with it, the entire set of presuppositions that had served to
constrain and guide philosophical inquiry. The dramatic success of the
new science in explaining the natural world, in accounting for a wide
variety of phenomena by appeal to a relatively small number of elegant
mathematical formulae, promotes philosophy (in the broad sense of the
time, which includes natural science) from a handmaiden of theology,
constrained by its purposes and methods, to an independent force with
the power and authority to challenge the old and construct the new, in
the realms both of theory and practice, on the basis of its own
principles.
D'Alembert, a leading figure of the French
Enlightenment, characterizes his eighteenth century, in the midst of
it, as “the century of philosophy par excellence”,
because of the tremendous intellectual progress of the age, the advance
of the sciences, and the enthusiasm for that progress, but also because
of the characteristic expectation of the age that philosophy (in this
broad sense) would dramatically improve human life.
We are all children of the arrival of Science and the Enlightenment project.
And we did get Progress, at least as compared to the immediately preceding Middle Ages and all other ages which preceded these breakthroughs in human thinking. Humans were able to manipulate Nature to serve their own ends. Starting with Adam Smith in the 18th century—he was a moral philosopher—and continuing from there, the "science" of Economics was born.
The principal means by which human ends were achieved, in so far as they have been—the material Progress we have benefited from—was entirely dependent upon the energy which Fossil Fuels provided. Coal burning predominated early on, in the 18th century, and that was followed by the ever-increasing exploitation of crude oil and other liquid hydrocarbons after Edwin Drake drilled the first oil well in 1859. And then we humans became adept at extracting natural gas (methane). These trends continue to the present day.
What is often forgotten is that it is Physics that dominates human history, not only in the last three centuries, but throughout, from before the first seeds were planted in the ground. Before the birth of Science, and the Age of Reason, and the successful exploitation of Fossil Fuels, humans were "stuck" in a low-energy world. They used domesticated animals and each other (slaves) to provide all the energy they could not get from food.
We live in the House That Fossil Fuels Built. None of this Progress imagined by Enlightenment thinkers would have ever materialized without those Fossil Fuels. I can not emphasize that enough.
And then humans became arrogant. And blind. The ancient Greeks said these were basically the same thing. They called this lethal combination hubris. Humans forgot that it is Physics which has always dominated their history. The aforementioned Economists (and many, many others) came to think that Progress existed separately from the energy which made it possible. In philosophical terms, humans reified the idea of Progress. Continuing material Progress was no longer contingent; rather, it was assumed to be our Natural State.
This was easy to do in so far as great scientific and technological advances in other areas of human life obscured the fundamental Physics/Progress connection which makes modern life possible. It was but a short step to the deeply flawed conclusion that energy was not a limiting factor in furthering material advances. Energy became a mere commodity, just like any other, natural or human-made. The connection with Physics was entirely forgotten, or if not forgotten, dismissed as unimportant. If the supply of energy was in jeopardy, or causing other problems—these are called externalities—further technological advances would serve to increase the energy available, or its quality, whether that meant more Fossil Fuels, or some new form of cheap, "clean" energy heretofore unexploited.
And that, leaving out a thousand details, is where we stand in the early 21st century. Ironically, the very energy which made all this astonishing material Progress possible is now killing us in the form of global warming, and in a myriad of other ways made possible by human exploitation of the natural world which was in turn made possible by the energy provided by Fossil Fuels.
One might think that human arrogance would be deflated by that very fact, but it has not been. The Greeks would have called this tragedy. Ask economists, or environmentalists, or politicians or just about anyone with some clout in human affairs, and they will tell you that Progress can continue unabated. A new form of energy will miraculously appear, or Something Good will happen. We are required to have Faith.
Unfortunately, nobody can tell you, without the required Faith, what that might be.
Americans are blithely unaware of how bad things have gotten here in the Greatest Country On Earth. That's not terribly surprising, for is it not true that a fish is the last one to figure out that the water it swims in is polluted? Of course it is. That's the situation in the United States, a place where delusion is a way of life and the bullshit runs deep.
I'm glad Johnston does this because somebody has got to do it. I'm way too disgusted to try to dig up those kind of details, and nobody is paying me to do it. Muckraking is almost a lost art in contemporary America, though it has a long tradition here (e.g. H. L. Mencken).
The latest fiasco concerns the speed and cost of internet service here in the Land of the Free. It turns out that we Americans are paying out mucho dollars to get some of the poorest internet connection speeds on Earth. In the interview below, we learn that internet service is faster and cheaper in Norway, Lithuania, the Ukraine, Moldavia and a host of other places. In Johnston's book, we find out that—
Americans pay four times as much as the French for an Internet
triple-play package—phone, cable TV and Internet—at an average of $160
per month versus $38 per month.
The French get global free calling and worldwide live television.
Their Internet is also 10 times faster at downloading information and 20
times faster uploading it.
America has gone from #1 in Internet speed (when we invented it) to 29th in the world and falling.
Bulgaria is among the countries with faster Internet service.
Americans pay 38 times as much as the Japanese for Internet data.
AT&T, Verizon, Comcast and others were paid by Congress to build out a high-speed fiber-optic network, and they promised to do it, but also made sure that legislative language did not require them to actually do it. So they didn't, and consequently we are slaves to the profitable monopolies they intended to create and subsequently did create. There is more than one way to skin a cat. You're the cat.
Read Johnston's book, or the Daily Ticker story, or watch the interview below for the details. In that interview, you will find the following exchange:
Aaron Task — What they call high-speed internet in this country, they would laugh at in almost any other [place].
David Cay Johnston — They do. I was in Korea this year, and people literally laughed at how bad the American internet was when I interviewed people.
Koreans are laughing at us for the simplest of reasons—it is because we are a joke. And a bad one, I might add. We are the laughing stock of the developed (and not-so-developed) world.
So go ahead, vote for Republicans or vote for Democrats this fall, but don't expect your internet service to get faster and cheaper. Don't wait for it, as the late, great George Carlin said, be happy with what you've got, because the owners of this country, the real owners, don't want you to get that faster cheaper internet service.
I am not going to stop writing this blog, but I might as well stop because as far as I'm concerned, the story below tells you everything you will ever need to know about the Human Condition. I will never top this story, and anything I might add to it would be superfluous. However, it does help to set the context. You probably know that—
Global tuna stocks are fast reaching
the limits of fishing sustainability, decimated by a lack of
comprehensive, science-based catch limits.
Five of the world's eight tuna species are already classified as
threatened or nearly threatened with extinction, according to the Red
List of Threatened Species compiled by the International Union for
Conservation of Nature (IUCN).
In fact, a giant bluefin tuna recently fetched $736,700 in Japan, proving once again that markets are efficient and price discovery always reflects supply & demand.
Would-be terrorists hoping to sneak weapons and other contraband
through U.S. ports on and in the hulls of ships may be thwarted by a
robotic tuna fish under development for the government.
The
BIOSwimmer robofish is able to overcome so-called position-keeping
problems experienced by traditional underwater robots that are powered
by vertical and horizontal thrusters, according to the David Taylor,
program manager for the robot at the Department of Homeland Security's Science and Technology Directorate.
The robot “can sit in the water and go through a swimming motion like
a fish and give you a better position-keeping capability,” he told me
on Thursday.
Such steadiness could be important, for example,
while the robot uses an array of sensors to inspect grated cavities in
ship hulls called sea chests where contraband could be stashed.
Control
is via a tether attached to a laptop computer. The tether is long
enough to inspect ship hulls more than 500 feet in length, Taylor noted.
The
robot can also operate autonomously, he added, but when it is not
hooked to the tether “sending data up through the water column is
somewhat challenging.”
To get around that, the robot would have
to be periodically brought back to the surface for data downloading,
which limits real-time inspection capabilities.
The Department of
Homeland Security is in discussions with an undisclosed custom’s port to
begin testing a prototype of the robot within a year.
Regarding every single point about the Human Condition I've ever tried to make on this blog, I rest my case.
It's really a jungle out there! — NASA scientist David Morrison, talking about the Mayan Apocalypse on the internet
It seems pointless to write this blog, or for that matter, do anything which doesn't have an immediate payoff, if the widely anticipated End Of The World arrives on December 21st, a mere 88 days from now. How many people are "looking forward" to this singular event? One in ten worldwide, according to a poll conducted by Reuters last May. That's about 700 million people. And one in seven expect the end to arrive during their lifetimes. We can contemplate what "the end" actually means, but if I were 19 years old, instead of 59, I might think that too
Nearly 15 percent of people worldwide believe the world will end during
their lifetime and 10 percent think the Mayan calendar could signify it
will happen in 2012, according to a new poll.
The end of the Mayan calendar, which spans about 5,125 years, on December 21, 2012 has sparked interpretations and suggestions that it marks the end of the world.
"Whether they think it will come to an end through the hands of God, or a natural disaster or a political event, whatever the reason, one in seven thinks the end of the world is coming," said Keren Gottfried, research manager at Ipsos Global Public Affairs which conducted the poll for Reuters.
"Perhaps it is because of the media attention coming from one interpretation of the Mayan prophecy that states the world 'ends' in our calendar year 2012," Gottfried said, adding that some Mayan scholars have disputed the interpretation.
Responses to the international poll of 16,262 people in more than 20 countries
varied widely with only six percent of French residents believing in an impending Armageddon in their lifetime, compared to 22 percent in Turkey and the United States and slightly less in South Africa and Argentina.
More than one in five Americans (and Turks?) believe the world will end during their lifetimes! What's up with those Turks? Why isn't DOTE more popular?
But only seven percent in Belgium and eight percent in Great Britain feared an end to the world during their lives.
About one in 10 people globally also said they were experiencing fear or
anxiety about the impending end of the world in 2012. The greatest
numbers were in Russia and Poland, the fewest in Great Britain.
People are feeling pretty pessimistic in Poland and Russia, and why not? In Russia, the world already ended back in 1991. And if I were a citizen of the U.K., I wouldn't be so sanguine about my prospects. This next part was interesting.
Gottfried also said that people with lower
education or household income levels, as well as those under 35 years
old, were more likely to believe in an apocalypse during their lifetime
or in 2012, or have anxiety over the prospect.
"Perhaps those who are older have lived long enough to not be as concerned with what happens to their future," she explained.
Precisely. Older, highly educated people—you know, economists like Paul Krugman, for example—would never think the world is going to end in their lifetimes or later this year. That's patently absurd!
OK, I'll be semi-serious for a moment. Suppose you lived on Planet Stupid, you were intelligent and well informed, and you had noticed that the oceans are being trashed, the planet is warming very rapidly—in no time at all on the Geological timescale—a mass extinction is underway, etc., and the agents of these changes were making things worse all the time. You might entirely agree with those "with lower education" or who are "under 35 years old" in thinking they will be screwed some time during their lifetimes. And of course, for those with "lower household income levels" (or no income at all) the "world" has already ended! No surprise there.
Still, there is the impending Mayan Calendar Apocalypse to worry about
I am happy to report that Rocket Scientists have stepped in to educate the public and save the day. On The Media's Brooke Gladstone interviewed NASA scientist David Morrison, who is now in the debunking business. I've included the audio.
Citing the Mayan calendar, many people believe that the world will end
on December 21, 2012. Some of those people email NASA scientist David
Morrison who, unlike most scientists, takes their concerns seriously
enough to explain
that there is no science to back up the 2012 prophecy. Brooke speaks to
Morrison about the possibility of dissuading people from believing the
end of the world is near.
Morrison has found, in the words of Brooke, that—
People can be highly
resistant to facts they don't like
Maybe this keen observation could serve as the
official DOTE motto!
The supreme irony of writing a blog like DOTE is that one is apt to be confused with those who think the world is coming to an "end" sometime real soon, perhaps next week, maybe this year, maybe next. See my post Contemporary Eschatology, which is about people I call Doomers.
But imagine being in David Morrison's shoes. Like economists, who believe markets are full of wholly rational actors who are like calculating machines, Morrison believes he can persaude total wackos through rational arguments that the world is not going to end four days before Christmas. At some point, the question becomes who is crazier? The Mayan Doomers? Or Morrison, whose mental model of how people work assumes that such people can be rationally persuaded to stop worrying if he points out some incontrovertible facts about rogue planets and killer comets?
In short, poor David Morrison operates under the assumption that other people function just like he does.
We've got two videos. The first is the trailer for The Mayan Apocalypse 2012. The second is David Morrison debunking the impending end of the world.
—
Nothing to worry about — the Solar System is as solid as a rock!
I hope Jeremy Grantham, who runs GMO, "a global investment management firm committed to providing
sophisticated clients with superior asset management solutions and
services," will not mind that I've borrowed the title of his latest newsletter and reprinted the summary which appears on pages 1-4. The full letter is 22 pages long. Grantham's believes we are five years into a severe global crisis which will last for decades.
There are references to the year 2050 in Grantham's report, and that's where he and I diverge. I criticized political philosopher John Gray for largely ignoring (or understating) what the science is telling us about life in 2050 and beyond. I could level the same criticism at Grantham, but for now let's focus on the abiding food crisis. I'll save my remarks for the end.
Summary of the Summary
We are five years into a severe global food crisis that is very unlikely to go away. It will threaten poor countries with increased malnutrition and starvation and even collapse. Resource squabbles and waves of food-induced migration will threaten global stability and global growth.
This threat is badly underestimated by almost everybody and all institutions with the possible exception of some military establishments.
Summary
1. Last year we reported the data that showed that we are 10 years into a paradigm shift or phase change from falling resource prices into quite rapidly rising real prices.
2. It now appears that we are also about five years into a chronic global food crisis that is unlikely to fade for many decades, at least until the global population has considerably declined from its likely peak of over nine billion in 2050.
3. The general assumption is that we need to increase food production by 60% to 100% by 2050 to feed at least a modest sufficiency of calories to all 9 billion+ people plus to deliver much more meat to the rapidly increasing middle classes of the developing world.
4. It is also widely assumed that at least the lower end of this target will be achieved. I believe that this is substantially optimistic. At very best, if we reach that level we will not be able to hold it. Much more likely, we will not come close because there are too many factors that will make growth in food output increasingly difficult where it used to be easy:
• Grain productivityhas fallen decade by decade since 1970 from 3.5% to 1.5%. Quite probably, the most efficient grain producers are approaching a “glass ceiling” where further increases in productivity per acre approach zero at the grain species’ limit (just as race horses do not run materially faster now than in the 1920s). Remarkably, investment in agricultural research has steadily fallen globally, as a percent of GDP.
• Water problems will increase to a point where gains from increased irrigation will be offset by the loss of underground water and the salination of the soil.
• Persistent bad farming practices perpetuate land degradation, which will continue to undermine our longterm sustainable productive capacity.
• Incremental returns from increasing fertilizer use will steadily decline on the margin for fertilizer use has increased five-fold in the last 50 years and the easy pickings are behind us.
• There will be increased weather instability, notably floods and droughts, but also steadily increasing heat. The last three years of global weather were so bad that to draw three such years randomly would have been a remote possibility. The climate is changing.
• The costs of fertilizer and fuel will rise rapidly.
5. Even if we could produce enough food globally to feed everyone satisfactorily, the continued steady rise in the cost of inputs will mean increasing numbers will not be able to afford the food we produce. This is a key point that is often missed.
6. On the positive side, scientists are now very optimistic that they will be able to engineer more efficient photosynthesizing “C4” genes (corn belongs to that family) into relatively inefficient but vital “C3” plants such as rice and wheat, in 20 to 30 years. If successful this would increase output up to 50% and would buy time for a less painful transition to a sustainable population.
7. Many of these increasing difficulties were reflected in the original 2008 food crisis and the 2011 rebound. The last six weeks’ price rise is more threatening because it occurred despite very much larger plantings than were available in 2008. Global demand is now so high and rising so fast and reserves are so low that price sensitivity to weather setbacks has become extreme.
8. It seems likely that several countries dependent on foreign grain imports have in fact never recovered from the 2008 shock. Countries like Egypt saw the percent of their consumer budget for food rise to 40%. At this level, social pressures may be at an extreme and probably have already contributed to the Arab Spring. Any price increases from here may cause social collapse and a wave of immigration on a scale never before experienced in peacetime. Another doubling in grain prices would be catastrophic.
9. Strong countermeasures to prevent a food crisis would be effective in curtailing the current crisis and preventing the development of a much greater crisis, but these measures will likely not be taken. This is because the price signals for the rich countries are too weak – they can afford the higher price – and there is inertia in all parts of the system. Also, the problems of malnutrition in distant countries are not generally felt as high-order priorities in the richer countries.
10. If food pressures recur and are reinforced by fuel price increases, the risks of social collapse and global instability increase to a point where they probably become the major source of international confrontations. China is particularly concerned (even slightly desperate) about resource scarcity, especially food.
11. The general public, the media, the financial markets, and governments badly underestimate these risks. Only the military of some countries, including the U.S. and the U.K., seem to appreciate them appropriately.
12. Natural gas supply increases buy some time, mainly for the U.S., but seem more likely to create complacency and continued dependence on hydrocarbons. The energy situation is less pressing globally in the short term than is the food problem. Supplies are sufficient to cause merely a slow and erratic price increase. The main problem with oil is in its contribution to the food problem through higher farming costs and generally increasing cost pressures on poorer countries.
13. In the longer term, in contrast, energy costs and absolute shortage in the case of oil form a serious problem second only to food shortages and will result in prices so high that they will impact global growth and even the viability of modern, rather fragile, economies.
14. On paper, though, the energy problem can be relatively easily addressed through very large investments in renewables and smart grids. Those countries that do this will, in several decades, eventually emerge with large advantages in lower marginal costs and in energy security. Most countries including the U.S. will not muster the political will to overcome inertia, wishful thinking, and the enormous political power of the energy interests to embark on these expensive programs. They risk being left behind in competiveness.
15. Availability of metals is, in contrast, a minor problem in the next few decades. The prices will steadily rise but the consequences will be less. In the long run though, metals are the most intractable problem. There is no brain-intensive solution as there is for agriculture (i.e., organic farming), nor is there any capital-intensive or technology-intensive solution as there is for energy. We will just slowly run out and prices will rise.
16. The results of these problems will be felt mainly as price pressure in rich countries. The need to obtain adequate resources will squeeze national budgets, profit margins, and economic growth. For poor countries, though, it is literally a matter of survival.
17. We are badly designed to deal with this problem: regrettably we are not the efficient species of investment theory, but ill-informed, manipulated, full of inertia, and corruptible. Only once in a blue moon – like World War II – do we perform anywhere near our theoretical capabilities and this time the enemy is amorphous and delivers its attack very, very slowly. But the stakes globally are very high indeed. We must try harder.
18. The following comments on this topic are mine personally and reflect my Foundation’s portfolio...
I have left out the investment advice stuff.
Grantham's point #14 is the "technology will save us" clause with respect to energy. I disagree, and in any case, huge investments will not be made in "renewables and smart grids." The capitalistic , "free" market expansion of the 20th century has mostly run it course. The expansion will not continue in the 21st century, at least not for long.
Point #17 is the "crooked timber" clause. We are not the efficient species of economic theory. No kidding! See my recent post The Crooked Timber of Humanity.
Only Point # 4(e) mentions the changing climate, although he does mention it a few times in his detailed text. DOTE readers will be interested in this quote.
As renewable projects for solar and wind go forward they should be accompanied by research and financial encouragement for other promising renewables. This would include converting algae and other vegetal matter into liquid fuels, perhaps research into Thorium-based nuclear, and possibly even fusion, for which the risks (of eventual failure) are high, but so are the returns – almost infinite supplies of incremental energy.
It is probably worth mentioning here that, courtesy of the second law of thermodynamics, you cannot indefinitely heat up the world. All heat must be dissipated through infrared radiation. This is why cities with more waste heat are warmer than the countryside. Given energy growth of just 2.3% a year, for 400 years, even if the supply is 100% renewable or fusion [to remove the need to consider the greenhouse effect], the planet’s temperature would reach the boiling point and only a few recently discovered organisms would be left...
In earlier pieces I tried to convey the sheer impossibility of any perpetual rate of steady growth in people or physical output: 1% compounded for 3000 years, I noted, would multiply people or possessions by seven trillion times the original number.
But for those with shorter horizons, the thermodynamic effect on its own, as we’ve seen, puts a quite separate ceiling of a mere 400 years’ growth in energy use at a modest 2.3% growth a year.
Throw in climate change effects and our species would be toast long before 400 years would pass if present trends continue.
We will be toast long before 400 years would pass? At a "modest" but unattainable growth rate of 2.3%/year in energy use? Well, yes, but I think we should deal with what's right in front us. I don't see the usefulness of quoting this theoretical ceiling
How about 40 to 90 years? That's my own estimate. Privately, I tend to think about the future in 20-year increments. By 2030, at current consumption rates for food, crude oil, coal, etc., industrial civilizations are teetering on the edge of chaos, barely keeping things together. By 2050, human life is becoming untenable, and chaos rules the world. We might call the period 2030-2050 the Final Transition. By 2070, it's pretty much all over. A few decades either way simply do not matter.
We simply cannot have exponential growth on a finite planet, but no politicians (understandably) and almost no economists (almost unbelievably) will deal with this topic. The longer we delay in facing up to resource shortage, especially the need to go to renewables, the more severe the problem becomes.
For example, by the time hydrocarbon prices go “critical,” some countries may not have the capability — political, social, or economic — to meet the substantial investments required and they will be left more or less permanently floundering behind.
In the late 1930s, Churchill faced intractable unwillingness to deal with unpleasant news — German rearmament and hostile intentions — on the part of both politicians and the general public. Finally, as the problem became obvious even to the most block-headed, he could not resist a little “I told you so.” He said, “The era of procrastination, of half measures … of delays is coming to its close … In its place we are entering a period of consequences.”
This time we can already see the early consequences but we still delay.
When people do not pay sufficient attention to what the science says, they are not able to consider that science with the seriousness it
deserves. From what I can gather, privately, many scientists in various fields of study are terrified about what future holds, especially if they have children or grandchildren. Leaving out large parts of Reality is a sophisticated form
of denial by omission. I'm sorry to have to say that, but that's just the way it is. Ignorance is not an excuse. I'm not merely some mean, arrogant bully taking greatly respected observers like John Gray and Jeremy Grantham to task. If it appears that way, I apologize.
For example, look at the climate effects we're getting with the relatively little warming we've had so far, which is less than 1° centigrade. Now throw in an additional 2-3° centigrade (up to 5.4° fahrenheit) in average surface warming by (roughly) 2100, assuming some catastrophic non-linear environmental event does not occur. We're going to reach the 400 ppm "milestone" (CO2 in the atmosphere) in a few years. We still depend on fossil fuels for about 80% of the energy we use globally, and climate change will negatively affect (and is already affecting) other sources (e.g. hydroelectric, nuclear) due to water problems. I think you get the idea.
If we take seriously
what's happening in the Arctic and northern lattitudes generally, with the climate generally, in
terrestrial ecosystems (e.g. destruction of rainforests), in the oceans, with crucial resources like crude oil, and so on, it becomes increasingly harder to believe that humanity will not be toast by the end of this century if we stay on our present course. You have to look at these trends
altogether, taking the widest possible available view. Once you've done that, the unknowable future comes into clearer focus, again assuming that current trends continue. The Big Picture not a pretty picture.
To paraphrase Winston Churchill, the Era of Procrastination is ending, and the Age of Consequences has begun. The permanent food crisis Grantham talks about is one of those consequences.
Bonus Video — Timescale Matters, a short video from NOAA
