Majoring in the Minors:
Good Friday morning out there in reality land; your King of Simple News is on the air.
On the sidebar of my blog site, there appear two of my original quotes. One states, “When you find that you’re on the wrong train, get off at the next stop; it’s a much shorter trip back home.”
The other reads, “I’m not all that concerned about being low on fuel when the engine is on fire.”
Both go to the same logic; focus on solving the core problem rather than dwelling on the symptoms and peripherals.
Keeping with the theme of addressing our most urgent issues, today I’m going to post my shortest article ever along with a link to a very sobering article that was sent to me by King of Simple News friend and often commenter, Greg.
The United States reached peak oil production in 1970. Today we produce some 40% less oil than in 1970 and utilize some 40% more. In some months we are 75% dependent on foreign nations to provide us with our life sustaining oil.
Thirty nine years after peak U.S. oil, our plan is to grow the economy, utilize more oil, sell more cars, reduce green house gases, build more highways, export more jobs to foreign nations, grow our population by importing millions of poor non-English speaking people, increase per-capita production resulting in greater resource use and increased unemployment, increase the deficit spending and the National Debt, engage in additional foreign wars, grow the government, and get free health care.
http://energybulletin.net/50079
Give me your thoughts.
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But I love the candy coating that keeps the ugly truth from melting in our hands.
WOW, Head of the Whitehouse’s National Economic Council, Lawrance Summers, once President of Harvard University had this to say,
“I don’t think,” Summers told the Peterson Institute crowd - deviating again from his text - “that anyone fully understands this phenomenon.” And that raises some worrying questions. Will creating jobs be that much slower too? Will double-digit unemployment persist even after we emerge from this recession? Has the idea of full employment rather suddenly become antiquated? Is there something fundamentally broken in the heart of our economy? And if so, how can we fix it?
Here is the entire article for those who wish to read it in depth. http://www.time.com/time/business/article/0,8599,1921439,00.html?xid=rss-topstories
Mr. Summers apparently doesn’t read the King of Simple News or the Show-Stopper (employment) if he believes that “no one” understands this phenomenon.
Scary folks, really, really scary.
You mean to tell me the candy coating is melting?
How could that be?
How’s this for economic recovery? U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month!
That’s 1.8 Million foreclosures since March, 2009!
http://www.bloomberg.com/apps/news?pid=20601103&sid=a3dnPxhcGAxs
“During the age that is coming to an end, the billion or so of us who have lived in the industrial world have enjoyed comforts and opportunities that our species had never known before and almost certainly will never know again.”
I tell this to my kids all the time… savor these moments, so you can tell your children how you lived during the glory days of The Empire.
My kids think I am nuts
From December 2007 to August 2009, the US economy has jettisoned nearly 7 million jobs.
America Out of Work: Is Double-Digit Unemployment Here to Stay? Real Unemployment hits 16.8% in August.
http://www.ethiopianreview.com/articles/30121
“America now faces the direst employment landscape since the Depression. It’s troubling not simply for its sheer scale but also because the labor market, shaped by globalization and technology and financial meltdown, may be fundamentally different from anything we’ve seen before. And if the result is that we’re stuck with persistent 9%-to-11% unemployment for a while – a range whose mathematical congruence with that other 9/11 is impossible to miss – we may be looking at a problem that will define the first term of Barack Obama’s presidency the way the original 9/11 defined George W. Bush’s. Like that 9/11, this one demands a careful refiguring of some of the most basic tenets of national policy. And just as the shock of Sept. 11 prompted long-overdue (and still not cemented) reforms in intelligence and defense, the jobs crisis will force us to examine a climate that has been deteriorating for years. The total number of nonfarm jobs in the U.S. economy is about the same now – roughly 131 million – as it was in 1999. And the Federal Reserve is predicting moderate growth at best. That means more than a decade without real employment expansion.
We’re a long way from Hoovervilles, of course. But it’s not hard to imagine, if we’re not careful, a country sprouting listless Obamavilles: idled workers minivanning aimlessly through overleveraged cul-de-sacs with no way to pay their mortgages, no health care, little hope of meaningful work and only the hot comfort of angry politics.
This is why the problem of how America works needs to become the focus of an urgent national debate.” - JOSHUA COOPER RAMO
George,
Good information. The new movie, Harsh Reality, will be playing all over America soon.
If any logical person were to read America’s economic plan as outlined in my article, they would first laugh and then cry when they realized it was true.
William Henry, Good advice for your kids. They will be able to spin yarns bigger than Paul Bunyan, with one difference; theirs will be true!
Here’s a sub plot of the movie, Harsh Reality,
“Kern County, CA authorities estimated that 145,000 of the 850,000 acres that are typically irrigated were idled or under-irrigated last year. The loss was pegged at $100 million in the county alone. A study by UC-Davis estimated San Joaquin Valley farm revenue losses to range from $482 million to $647 million. Total California agricultural economic losses could hit $3 billion this year.”
“But those are just abstract financial numbers. Behind those figures are real people, farmers and business owners and families who are losing livelihoods and are being forced to uproot and flee. The UC-Davis study conservatively suggested 24,000 to 32,000 Central Valley jobs were destroyed by environmental rulings designed to protect endangered wildlife. It further estimated job losses could approach 80,000 or more if restrictions intensified. Communities are withering for a government-imposed lack of water. It is little exaggeration to say that the farmers of the most valuable farming region in the nation are facing extinction.” - Max Schulz
To put it in simple terms 11% of the nations agricultural production will not be realized this year. You can also add that Nevada, New Mexico, Arizona, and Texas are also suffering from a prolonged drought and agricultural production is down there as well. Add to this our neighbors to the south in Mexico have a water crisis amid drought, crops are wilting in the countryside, and the capital’s water shortage has turned dire as Mexico grapples with its worst drought in more than half a century.
Cost of food will be going way up this fall and well in to the winter. I’d recommend stock up if you haven’t already. A 6 month supply of food is worth more than the equivalent amount of dollars in the bank.
Here’s the link to the article I referenced above.
http://spectator.org/archives/2009/09/11/emptying-reservoirs-in-the-mid/print
A portion of the water shortage may be governmentally imposed on a particular area, but overall there is a severe lack of fresh water on the planet and in the US west in particular.
The global cooling period , YES, I SAID GLOBAL COOLING, that we are in is having a really detrimental effect on the California coast. AS the ocean cools, the air dries and there is less rainfall.
Weather channel Meterologist Joe Bastardi says it is likely to last for several more years.
In another article published in February, 2009 it is projected that “The droughts plaguing the world’s biggest agricultural regions should end the debate about deflation in 2009. The demand for agricultural commodities is relatively immune to developments in the business cycles (at least compared to that of energy or base metals), and, with a 20 to 40 percent decline in world production, already rising food prices are headed significantly higher.”
http://www.globalresearch.ca/PrintArticle.php?articleId=12252
Maybe 6 months of food reserve isn’t enough. I guess I’ll get another pickup truck full of canned goods next week from Costco. I think I’ll also expand my garden from 1/3 of my back yard to 2/3 of the back yard next spring.
Predictions of growth or recovery are fantasy. One of Mish’s readers dubbed it the “recoveryless recovery”. We’re watching the economic end game play out. But you wouldn’t know the economy was in such dire shape to watch the corporatist cheerleaders on CNBC. 5 minutes of those smug, smirking, puffy pundits is about all I can take.
The other media outlets spin machines are in overdrive every time a new jobs report is released to carefully spin it. They’re good. I have to tip my hat to anyone who can turn a frown upside down over the loss of 200,000+ jobs in a one month. It’s not so bad compared with say, January.
One astute observer pointed out that what we’re seeing isn’t a recession, it’s a collapse. The recession of 1990 seemed pretty bad with 4 figure job losses. But the dot com bust was an order of magnitude worse with 5 digit losses. Today’s 6 digit losses go way past the tipping point. Once we’re in 6 figures, the losses beget more foreclosures and less spending which begets more job losses. This is a positive feedback loop. The worse it gets, the worse it will get. Once the money runs out, the former middle class becomes part of the underclass. So much for continued growth.
Peak Oil? Like Kunstler, I wonder how long our newly minted underclass will be able to afford to keep a car on the road. And freight is way down across the board. That being said, traffic is still purdy heavy. I guess people haven’t run out of money yet.
What they have not run out of is plastic cards and denial. Ask the 63 year old couple who just refinanced their home with a 30 year mortgage. You read this right. The bank rewrote their mortgage at a time when retirement with no pension and no savings was looming. Why? Because they couldn’t pay the old ARM mortgage and the credit card bills so they rolled the whole thing together in one loan that can’t possibly be paid off unless one of the kids assumes the mortgage and in 30 years finally pays off the dinner his parents put on plastic in 1999. Talk denial! Now, with no balance on the Visa card, this couple is talking about redoing the dining room as it will add resale value to the house. Say what? BTW, the house is still not worth the $90.000.00 mortgage on it. Nothing has sold in that neighborhood in 18 months but they do have a pool.
Thanks to everyone for keeping this discussion both interesting and informative.
As Clyde stated, fresh water is a critical issue that parallels oil. Not to be poll-parrot, but that is why I wrote Show-Stoppers, we cannot afford to allow ourselves to stop and focus on one single issue.
I agree with George, a six month supply of food is worth more than the equivalent money in the bank or other investment.
In the end, this entire problem is created by over population of the human species. Humans are unique in the animal kingdom in that we have the ability to borrow against the future. We call it progress. I call it hammered stupid, calloused greed, and hubris.
Bobcat said,
“One astute observer pointed out that what we’re seeing isn’t a recession, it’s a collapse.”
I couldn’t agree more. When is the last time that had the government not thrown $TRILLIONS at the problem, the banks, airlines, auto industry, and insurance industry would have failed? Housing had already failed and commercial real estate will certainly follow. And we call this a recession?
Kathy,
What a pathetic story. Interesting that you posted this particular subject. Cathy and I were just discussing that exact thing. What is going to happen to all of these people who are at retirement age and can never stop working without failing financially?
Your suggestion of the kids (moving in) and taking over the mortgage is probably true. In Europe, generational renters and mortgagee’s are quite common.
Lot’s of major PERMANENT changes are on the horizon.