The Economy Is Like a Circus

The economy is like a circus. It comes to town, and eventually it leaves town. We get paid in tickets to this circus. As long as the circus stays in town, we can use our tickets. Once the circus leaves town, we are pretty much out of luck.1

The reason the circus stays in town is because the economy stays in sufficient balance that the economy can go on. This is much like the way many other self-organized systems function. For example, our bodies continue to function as long as there are suitable balances in many different areas (oxygen, food, water, air pressure). Ecosystems continue to function as long as there is sufficient rain, adequate temperatures, and enough sunlight.

There are many different views as to what limits we reach in a finite world. Some people think we will “run out” of oil, or of energy products. Some think that the energy return will fall too low, as measured in some manner. I see the adequacy of the energy return as being very much tied to the financial system. Thus, the forecast by US Atlanta Fed GDPNow indicating that first quarter 2017 US GDP growth will only be 0.5% is likely to be a problem, assuming it is correct.

Our economy operates on economies of scale. Once we get too close to shrinking, or actually start shrinking, we reach a point where the economic circus starts to leave town. At some point, we will discover the circus is gone. The economy we thought we had, will have left us. If some people are survivors, they will need to pick up the pieces and start over with an entirely new system.

What the Economy Needs to Do to Keep Functioning

For our economy to continue functioning, a number of variables are important:

  • Prices of commodities – Prices cannot be too high for the consumer to afford goods made with them. They also cannot be too low for producers. If prices of oil and other commodities are too low for producers (as they are now), producers need to keep raising debt levels to stay in business. There is a risk that production will stop from lack of adequate new investment, or from the bankruptcy of producers.
  • Wages of non-elite workers – These wages need to be high enough so that workers can afford goods made with commodities, such as cars, homes and computers. These big purchases tend to use commodities even after they are made, adding to “demand” for commodities. If commodity prices such as oil are too low (as they are now), it is likely related to the inadequate wages of non-elite workers.
  • Mandatory payments required of non-elite workers, such as taxes, health care, and education – It is not just wages of non-elite workers that are important. So are required payments, such as payments for taxes, healthcare and education. Clearly, the lower these payments are for non-elite workers, the better the economy functions.
  • Interest rates – Low interest rates are helpful for some parts of the economy, while high interest rates are good for other parts. Low interest rates help create affordable monthly payments for goods such as homes and cars. If interest rates decline, the market prices of assets such as real estate, shares of stock, and bonds tend to rise. These rising values are of great benefit to owners of these assets, since they can sell these assets and use the proceeds to add to current consumption. Conversely, high interest rates are important to pension plans and to others depending on investment income. Banks have a problem if there is not a big enough “spread” between short and long interest rates.
  • Increase in debt – An increase in debt indirectly makes the economy “look” much better. Increasing debt acts to raise wages, since some of this growing debt adds to funds available for wages. The higher wages tend to increase demand for goods, and thus indirectly raise commodity prices. A virtuous circle starts, pushing up economic growth, provided an adequate quantity of very cheap energy products is available (under $20 barrel oil, for example) that can be used to make goods and services. Increased debt works less and less well, as the price of energy products increases.
  • Inflation rates – The higher the inflation rate, the easier it is to repay debt with interest, since most debt is not adjusted for inflation. Also, high inflation rates help keep prices of homes and other buildings from falling as they age, making the use of mortgages more feasible. If the price of a commodity, such as oil or coal, is high and then falls, debt based on the prior high value of the commodity is likely to become a problem.
  • Quantity of energy products affordable by economy – It takes energy products to produce goods and services. If the price of commodities is low, it is possible for buyers to purchase a large quantity of these products, even on a low budget. Current relatively low prices tend to help the economy, even if producers cannot afford to make adequate investment in new production with such low prices. Thus, today’s low energy prices make the economy look good for at a short time. Afterwards, the outlook is less rosy.

Ultimately, the issue at hand in determining whether the “circus will leave town” is whether non-elite workers are able to adequately make a living. We know from biology that the return on the labor of animals must be adequate (animals must be able to get enough food by walking, swimming, or flying) or their populations will collapse. The same thing is true for humans. We also know that prior civilizations that collapsed often had wage disparity problems. When this happened, non-elite workers were no longer able to pay adequate taxes. Their nutrition became poorer. They tended to become more susceptible to epidemics. These were things that pushed the economy toward collapse.

The goods and services that non-elite workers can buy with their wages represent the benefits of our fossil fuel powered energy system, as distributed to the most vulnerable workers in the system. Once these benefits start falling too low, the system can no longer function.

There are some indications that benefits are already too low for the economy to keep functioning in a “normal” manner. A major such indication is the fact that energy prices have remained far too low since mid-2014. It is becoming increasingly clear that there really is no oil price which is both high enough for producers and low enough for consumers. We may be living on “borrowed time,” using an increasing amount of debt to support energy producers.

Thus, world economic growth rates may already be too low to keep the world economy operating. Regulators who consider only the US do not seem to understand the world situation. Because of this, they can easily make moves that make the situation worse, rather than better. For example, they have already started raising interest rates and are planning to sell securities currently held by the Federal Reserve.

A Few Graphs Giving Hints of Our Problem

Economists have not understood what our problems really are, so they have tended to omit some important issues from their analyses. I put together a few graphs that might give a little insight as to what is happening.

Interest Paid by Households 

Interest paid by households is important because this money is transferred to banks, insurance companies, and pension plans. It leaves the households who paid this interest poorer. Buying goods using debt is convenient, but it has a cost involved.

BEA Table 7.11 shows a category called, “Interest Paid by Households.” If we compare this to BEA “Wages and Salaries,” we find the relationship shown in Figure 1. Admittedly this is not an exact comparison; there are some people who are not wage earners who are making interest payments, for example. I have not tried to offset “interest paid by households” against “interest received by households,” because the households benefiting from interest payments are likely very different households from those making interest payments. They are likely richer, and at a later stage in their lives.

Figure 1. US Household Interest Paid (from BEA Table 7.11 Interest Paid and Received by Sector and Legal Form of Organization) divided by Wages and Salaries from BEA Table 2.11, “Personal Income and its Disposition.”

The pattern might be described as follows:

  • A rapid run-up in interest payments that took place until about 1986
  • A general flattening, with new peak in 2007
  • A rapid fall starting in 2008

It seems to me that the pattern up to 1986 reflects the general run-up in consumer debt levels during this period. The amount of interest paid is also affected by interest rates, such as ten-year treasury rates.

Figure 2. US Federal Bonds 10 year interest rates. Graph produced by FRED (Federal Reserve Economic Data).

Interest rates started falling in 1981. These higher rates only gradually worked their way into the system because many people had bought houses earlier and were able to keep their existing mortgages at low interest rates. The amount of debt outstanding continued to rise, allowing the total amount of interest paid to continue to rise until 1986.

After 1986, rising debt amounts and falling interest rates came closer to offsetting each other (Figure 1). By 2008, the economy was in a severe recession. In order to help get out of the recession, interest rates were lowered through Quantitative Easing. These lower interest rates, besides helping the economy in general, helped oil prices gradually increase back to the $100+ per barrel price level that they needed to be profitable. Oil prices had temporarily dropped below $40 per barrel in December 2008.

Figure 1 shows that interest payments for several years amounted to about 12% of wages for households. Interest payments are now down to 8% of wages. Even at this level they are significant. They are likely higher than this for those with low wages and high debt. If interest rates rise significantly, the most vulnerable are likely to find their discretionary income reduced.

Rising Healthcare Costs 

Figure 3 shows a comparison of US healthcare costs to GDP and to wages. A huge increase in costs is evident in the 2001-2005 periods, and also in the 2008-2010 period, especially compared to wages.

Figure 3. US Healthcare costs as a percentage of GDP and as a percentage of wages. Healthcare costs from cms.gov. Wages and salaries and GDP from BEA.

The increase in healthcare costs since 2008 is one of the costs putting pressure on the economy, and leading to a need for lower interest rates.

The Affordable Care Act should be affecting amounts for the latest years, since the ACA started increasing the number of people with insurance starting about 2014.

Figure 4. Kaiser Family Foundation chart of percentages of non-elderly people without healthcare insurance, from this Source.

A person might wonder why 2014 and 2015 costs didn’t rise more, with so many more people added to the system. Perhaps care that was being given “free” by hospitals is now being charged back to patients. Or perhaps many of the people choosing to purchase coverage through the program were already insured elsewhere in the system, so were not really added to the healthcare system through the Affordable Care Act.

One very recent US healthcare change is the addition of an automatic penalty for not having healthcare insurance. This penalty began for tax year 2016, filed in the beginning of 2017. This provision particularly hurts young people, because rates are structured in such a way that the rates for young people subsidize the rates for older people. Thus, young people often find that buying health insurance is far more expensive than their out of pocket costs for health care would have been, without insurance.

Young people who are affected by this new requirement will find that they need to cut back on other expenditures (such as restaurant visits), if they are meet the requirements of the law–either buy healthcare insurance or pay the mandated penalty. This change will begin to adversely affect the economy in 2016. Bigger impacts are likely in early 2017, when taxes are filed.

Falling Wages Relative to GDP, and Rising Wage Disparity

The path to lower wages as a percentage of GDP has been a bumpy one. The general pattern is that when the economy is booming, wages tend to grow as a percentage of GDP. Recession tends to send wages down as a percentage of GDP. US wages seem to have increased somewhat since 2013, perhaps because the price of oil is down, and the US dollar has risen to a relatively high level. This is part of what allows some people to talk about the “tightening labor market,” and gives them confidence in the economy.

Figure 5. US wages and salaries divided by US GDP, based on BEA data.

There has been significant growth in wage disparity since about 1980, both in the US and in many other developed countries. Figure 6 shows some data for the US.

Figure 6. United States Income Distribution_1947-2007 in 2007$. The data source is “Table F-1. Income Limits for Each Fifth and Top 5 Percent of Families (All Races): 1947 to 2007”, U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements. Graph is from Wikimedia Commons http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1947-2007.svg

As the economy becomes more “complex,” in other words, “specialized,” wage disparity tends to be more of a problem. Work that could previously be done by manual laborers is done by machinery, or is transferred to low wage countries. Many people lose their jobs, and have difficulty finding good-paying replacement jobs. All of this contributes to inadequate wages for non-elite workers.

Role of Inflation and Rising Commodity Prices in the Economy

We rarely stop to think how important inflation is to the economy. For example, if inflation is sufficiently high, it will slightly offset normal depreciation in values of homes and business properties. Thus, home and business property values will tend to slightly rise over time. If banks can count on values of structures rising, rather than falling, over time, lenders can assume that mortgage loans are fairly risk-free, because the lender can count on getting its money back through the sale of the property, if the mortgage-holder defaults.

This same principle holds when energy properties, such as coal mines and oil fields, are financed. As long as energy prices keep rising, there is a good chance loans can be repaid. Once energy prices fall, debt defaults become a problem. Oil exporting countries also find that the taxes they can collect fall significantly. As a result, energy-exporting countries are in a far worse economic position once energy prices fall. Exporters of other commodities, such as metals, have a similar problem if prices fall.

In the last two paragraphs, I mentioned the impact on lenders and governments of rising or falling prices. Owners of properties are also affected by rising or falling prices. If prices rise, these owners can sell their assets, and make a profit. In fact, these owners have often purchased their properties with debt. If the price of the property rises, but the amount of debt is unaffected by inflation, the owner of the property can often get a disproportionate benefit of the price rise. Of course, if the value of a property falls, the property-owner is disproportionately affected by the fall of the price.

We are so used to a rising-price scenario that we have little understanding of how a flat or falling price scenario might work.

To get a little idea of how much inflation has in the past been working through to asset prices in the United States, I looked at some information provided by the US Bureau of Economic Analysis. I compared these amounts to GDP, rather than asset prices, to get an idea of how much impact they have, relative to each current year’s activities (Figure 7). There is about $3 of assets of the types BEA analyzes for every dollar of GDP, so the impact, relative to GDP, is about three times as high it would be, relative to the asset prices themselves.

If this same relationship holds elsewhere, a person can see why a commodity-producing country might have a big problem, if the price of that commodity suddenly falls. There is huge “balance sheet” impact that doesn’t directly affect current GDP as reported (since GDP has to do with current goods and services produced). But it can have a major impact on the country, as it goes forward, because affected loans are much less likely to be repaid. Countries often try to be lenient with lenders, hoping that commodity prices will rise again. But if the drop in prices is permanent, countries must use more and more extreme measures to hide the problem of loans that have a low probability of repayment in a low-priced commodity environment. Eventually, these loans seem likely to default, if prices do not rise sufficiently. China and many commodity-exporting countries seem to be affected by this problem.

 

Figure 7. Changes to US Fixed Assets, based on BEA Table 5.10, Changes in Net Stocks of Produced Assets.

BEA shows three amounts of interest with respect to US assets (Figure 7):

  1. Inflation – Changes in asset values based on changes in the general price level
  2. Re-evaluation total – Changes to asset prices in particular; includes changes because assets are taken out of service because of disaster or because a business is no longer profitable. Note the spikes related to the housing bubble of the 2003-2006 period and the corresponding dip during the Great Recession of 2007-2009.
  3. Depreciation – Expected amount of new investment needed to offset “consumption of fixed capital.” This rate is quite high, (about 15.7% of GDP recently) because the asset base includes fairly rapidly depreciating assets, such as cars and computers, besides buildings of all types, and intellectual property such as computer programs.

The last year shown is 2015. Inflation (relative to GDP) was only 1.2%, and the re-evaluation total was only 0.3% of GDP. (Calculated as percentages of the assets involved, these inflation rates would be only a third of these amounts.) These low inflation rates make it very difficult to operate a debt-based economy. A shift from inflation to deflation would be a major problem. Unfortunately, it is very difficult to get much inflation, if the wages of non-elite workers remain very low.

Conclusion

We have kept our economy expanding through growing debt use and growing energy use. I described this process in my post, What has gone wrong with oil prices, debt, and GDP growth?

Now we seem to be reaching the end of the line. The economy is getting very close to shrinking. When this happens, we are getting close to economic collapse–the economic circus is starting to “leave town.”

People who think our only problem is “running out” and “high oil prices” don’t see the problems the economy is developing right now. These problems are much more subtle, but they can have a devastating effect. The Federal Reserve talks about inflation rates above 2% being too high, but inflation rates below 2% are at least equally problematic. Somehow, the debt system needs to keep operating for the whole system to work.

We are now at the point where the economy is decidedly unstable. Little things can affect it, like the Affordable Care Act requirement that uninsured people buy healthcare insurance, or pay a penalty. Low commodity prices make debt repayment more difficult in countries producing those commodities.

We should not be too surprised if the economic circus starts to leave town. There are simply too many pieces that are now unstable. The US Government is facing a shutdown in the near future, unless its debt ceiling can be raised and funding can be enacted. The world is depending on China for economic growth, but China’s debt is becoming unmanageably high. Japan’s debt is also unreasonably high. Oil exporters are becoming increasingly unstable, with continued low prices. We can find problems in almost every country of the world. It looks like it is only a matter of time, until one of these problems starts a downward spiral.

 

Note:

[1] Thanks to commenter “Lastcall” for this analogy.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
This entry was posted in Financial Implications and tagged , , . Bookmark the permalink.

1,952 Responses to The Economy Is Like a Circus

  1. Cliffhanger says:

    Once the oil shortages hit in 2020. The government will go to rationing something like 20 gallons a person. Then after two years owning gasoline will be strictly illegal except for the military and agriculture. Government will become a dictatorship overnight! And will seize all sources of land and energy. Things will break down. Economic collapse looking something like this…

    Oh and the reason the movie never got made was the director went crazy and murdered his family and himself…

    • Fast Eddy says:

      Once BAU begins to shrink it will collapse — which means the financial system will implode… and total chaos will result.

      What’s the point in rationing? This is not an emergency situation – it is the end of civilization…

      People will be killing and eating each other soon after collapse hits — I hardly think anyone is going to queue up at a petrol station for for their fill up.

      And to top it off – there will be NO electricity – you cannot pump gas without electricity.

      Who is going to deliver more petrol to the stations – would you volunteer? If so why? How would rationing petrol help when BAU is collapsed? Nobody will have a job to drive to — so what use would petrol be?

      When the power goes off — expect nothing — no food – no electricity – no police — no medical assistance – no water supply — no sewage disposal – no garbage pick up

      Nothing.

      • Artleads says:

        And why, knowing this, would one choose to sit and wait for it to happen?

        • CTG says:

          And why, knowing this, would one choose to sit and wait for it to happen?
          Normalcy Bias – it will not happen until it happens

          • Artleads says:

            Or maybe, too, normalcy bias is toward the networked global system that we see as either working or not working. I gather that it only worked (briefly) because of coal and oil. Beyond that, it can’t work. But what about the local community? Recently, there has been a novel spate of break ins and theft in this normally “safe” village (sitting on a main road). People come to a meeting to talk about security. Cameras are planned for. But I struggling to get 20 people to donate $5 each toward the first camera, not sure they’ll ever step up. This is normalcy bias too. The general society out there is fine. Things will be fine. It’s not our problem. Let’s go have a drink, or talk whatever bullshit thing we keep talking. So there is no understanding that security starts locally.

            • Greg Machala says:

              There is a lot of wisdom in the saying that everything is fine no matter how bad it is for everyone else – until it something happens to you.

            • Artleads says:

              “The battle has begun between the shaman/artist
              and the cyber/technocrat. We are living at a
              place of crucifixion in a crossroad of time.
              Opposites cross. Polarities collide. Industry and
              technology have succeeded for two centuries
              by moving in complete indifference and denial
              toward nature.”

              August 2015 issue of THE magazine / Santa Fe, NM

              FRITZ SCHOLDER: NON-INDIAN INDIAN

              Fritz Scholder painted Indians. Often the Indians were monsters.
              Sometimes the monstrous Indians were self-portraits. Scholder’s
              work forces Indian people of a certain generation to remember
              that we used to have short hair and wear IHS glasses. That we
              passed for whites. That we drink. That we weren’t always about
              tradition. That we often hated ourselves, and sometimes we
              still do. That life is ugly and beautiful, that monsters are real.
              And that death is never far away.
              — Paul Chatt Smith

              Fritz Scholder was one-quarter Luiseno, but said he grew up as
              a non-Indian. He swore that he would never paint Indians.
              He maintained that he was not an Indian artist.
              He claimed his art was not political, but it polarized
              the art world. For every position Scholder took,
              he also investigated the opposite viewpoint.
              His paintings posed questions: What is Indian art?
              Who is an Indian artist? To what extent must
              a person have lived an Indian life to be an Indian
              artist? And what of the non-Indian who employs
              traditional Indian styles or treats Indian subjects?

              The perception of American Indian art was
              changed in the sixties and seventies by artists
              like Scholder who fought against the cliche of the
              American Indian. From 1964 to 1969 Scholder
              taught painting and art history at the Institute
              of American Indian Arts in Santa Fe, where he
              steered his Native American students away from
              so-called Indian art. One student recalls, “Initially,
              Scholder was tyrannical in his view that he would
              never get any place painting Indians. He made
              me destroy many of my works. He wanted us all
              to be Abstract Expressionists.” Scholder utterly
              demolished Dorothy Dunn’s Studio School, which
              had dominated Indian art with romantic cliches
              of genre art on Indian themes — flat perspectves
              romanticizing nature and Indian life. Scholder
              stated that these Indian paintings were not only a
              “visual cliche, they were a psychological cliche.”

              By 1967, Scolder realized that someone
              needed to paint the Indian differently. “ With
              Indian No. 1 people were freaked-out. I knew
              they would be, as the first Indian had green hair.
              I felt it to be a compliment when I was told that
              I had destroyed the traditional style of Indian
              art.” He went on to say, “ An artist must walk
              the tightrope between accident and discipline.
              By walking that tightrope and putting down
              something on a canvas from your gut, you have
              a chance of making marks that will live longer
              than you. It is completely up to you to be your
              own worst critic. I take each work to the brink
              of disaster and then pull it back until it defies
              me to go any further, and then I know it’s done.
              I give thanks every day that I’ve been able to
              take my craziness and make it work for me.”

              Scholder created an extraordinary fusion of
              Abstract Expressionism, Surrealism, and Pop
              Art to express his vision of the Southwest and
              the Indian experience. Fritz Scholder — prolific
              painter, sculptor, lithographer, teacher, mentor,
              and bookmaker — an abstractionist who turned
              to figuration and changed Indian art forever.

              Words of wisdom by Scholder to students at the
              University of Oklahoma commencement address,
              in 2002: You must be yourself on purpose. First,
              find out who you are and fully accept it. Fall in
              love with your life and live your life with finesse
              and manners. Be a role model for yourself any
              many will be influenced. To truly keep something,
              you must give it away. Beware of progress, a myth
              made false by the true lies and factoids of our
              history. Like the Greek mask of tragedy, man’s
              excellence is equal to his more tragic flaws.
              Are we, the best and brightest, watching out
              planet dimming? The cybernetic age challenges
              each of us. The digital landscape quakes.
              Overpopulation and disease run rampant.
              The battle has begun between the shaman/artist
              and the cyber/technocrat. We are living at a
              place of crucifixion in a crossroad of time.
              Opposites cross. Polarities collide. Industry and
              technology have succeeded for two centuries
              by moving in complete indifference and denial
              toward nature. Reinvent yourself every day.
              Each day can be a new adventure in your quest
              for truth.

              PIRATES AND FARMERS by Dave Hickey

              inside front cover:
              I ADVOCATE site-specific optimism.
              Hope for a better tomorrow is delusional, but we can still look forward
              to the next few hours with a high heart. I may have
              sinned flagrantly in the past, broken your heart last year
              and inadvertently betrayed a trust four hours ago.
              Our Planet may suffer an asteroid implant tomorrow afternoon,
              or I may keel over in a shopping mall. I may even forget today
              tomorrow, but there is nothing prohibiting us from having
              a lovely lunch at Robuchon this afternoon, gobbling calamari,
              gossiping about Junior League lesbians, and telling jokes
              about radioactive art dealers. If things get dire, we might
              emulate the French dandy who began reading the Illiad
              in Greek on the night he went to the guillotine. I have no doubt
              that he folded down the page as he laid the book aside, just
              to make a tiny point about slaughtering knowledge. We all
              might be capable of such panache, if we didn’t believe Freud
              and the church, because they are wrong. We do not die
              bearing the burden of our original and subsequent sins.
              Death is sad, but it is not a bad thing.
              It’s punctuation. It makes room for the kids.

              and yet………

            • Artleads says:

              Formatting got messed up. Too bad.

    • dolph says:

      No big loss there. Movies can be recycled, we don’t need anymore of them, nor do we need anymore “directors” and actors who haven’t had a job their entire lives.

      Hope Hollywood goes bankrupt.

      • Fast Eddy says:

        We interrupt this discussion for breaking news…

        Fast Eddy has just ordered 200 Nespresso capsules that will be shipped all the way from Auckland to the south island direct to my post box.

        Fast Eddy will not be recycling these capsules because that would be pointless.

        The question is – will Fast Eddy finish the 200 capsules while there is still electricity to power the machine.

        That is all.

        • xabier says:

          Missing a trick there, FE: turn the capsules into an ‘ironic’ artwork installation ‘piece’ on Consumption and Doom.

          You could ‘take over’ (as ‘artists’ always seem to do today, in the past they just exhibited) the Met or Tate Modern. 🙂

          • Artleads says:

            Xabier, you might like this:

            “After Christie’s announced that “Balloon Dog (Orange),” Jeff Koons’s 10-foot-high sculpture resembling a child’s giant party favor, would be the star of its Nov. 12 postwar and contemporary-art auction, it started an international advertising campaign featuring the lovable pooch. The auction house also sent gushing e-mails to its top clients that read, “The Stage Is Set to Make History.”

            Cynics, of course, began to wonder how Sotheby’s would compete. It turns out that its big-ticket artwork, the cover of Sotheby’s Nov. 13 contemporary-art auction catalog, could not be more different. It is a gory image of a wrecked car wrapped around a tree, from Warhol’s “Death and Disaster” series.”

            Does this tell us that, through the art market, death and disaster have a market niche within the continuing (?????) spectrum of BAU?

        • Kenny Starfighter says:

          Meanwhile at the Fast-residence

          • Fast Eddy says:

            This could be a reality show…. participants vie to burn the most carbon … recycle the least … waste as much as possible … buy as much useless stuff as their credit card limit will allow….

            In support of the continuance of BAU … of course. It’s all about BAU

            Burn. Destroy. Waste.

        • Harry Gibbs says:

      • Greg Machala says:

        Hollywood is an abject waste of money, time and resources.

        • So is the internet as they seem to fill the same role, so I’m hoping that your criticism of film entertainment is observational rather than judgemental.

        • Fast Eddy says:

          I might watch one Hollywood movie per year…

          However it is a key pillar of the Elders PR Machine…. therefore one might argue it is extremely useful…. that is why ownership is kept in ‘friendly’ hands….

      • We need more productive people who have had real jobs, like physicians implicit in the productive insurance and pharmaceutical rackets

        • Artleads says:

          Could you explain this “better?”

          • There’s a reference to Dolph’s occupation in an effort to communicate my distaste of his claim that no actor or director has ever had a real job. Actors, directors and most people in the film industry work ten to twelve hour days during production and many who are following creative passions that seldom give steady film work have to work just like the rest of us to pay their bills. It’s hard not to be viscerally offended by the ignorance and smug judgement of what I imagine is an area of life he can’t relate to due to deficiencies in his brain’s development in infancy

            • Artleads says:

              “There’s a reference to Dolph’s occupation in an effort to communicate my distaste of his claim that no actor or director has ever had a real job. ”

              OK, got it. I didn’t understand what he said either. Thanks.

            • Fast Eddy says:

              But … they get to have a casting couch… as a fringe benefit!

    • Fast Eddy says:

      Looks like craziness!

  2. grayfox says:

    Well, in that case you’ll be glad that are fit and can run.
    Here’s a nice article on training to run a competitive 5k.
    http://strengthrunning.com/2013/07/how-to-train-for-a-5k/

    • jeremy890 says:

      Not a bad idea Grayfox. I, myself, trained for a half marathon (13.1 miles) for a year at age 55. Still in shape at age 59 to run a 10k race or about 6 miles. Judging from the lack of physical fitness of the younger generation, this may be a deciding factor in survival.
      Even if it would isn’t, it just makes you feel better and look better for about a hour a day!
      Please, don’t give me excuses that you can’t, there is a lady in her 80s still entering and finishing Marathons!

      • grayfox says:

        Yes, 100% right. Benefits the here and now, as well as the unknown future. I’m running in a 10k this Saturday @ 60 yrs. age. We have an 80+ age group award bracket in the race for men and women and they do OK.

        • jeremy890 says:

          What a coincidence! Both of us in the same league… Old Guys Rule!
          Remember Jim Fixx back in the 1970s? His books on running are good ones still to read.
          One thing is not to skimp on running shoes!!! Very important. If you can not afford good ones by the leading makers, such as, Brooks, Saucony, New Balance, Teva, look on EBay and there are sellers there’s that offer used or floor models at a fraction of the price.
          Also, put on double socks to prevent blisters!
          Other than that rehydrate and better to do the time running/trotting/walking than the distance. Enjoy the stride.
          PS Jim Fixx died fairly young at age 52

          Fixx died on July 20, 1984 at age 52 of a fulminant heart attack, during his daily run on Vermont Route 15 in Hardwick.[1] The autopsy revealed that atherosclerosis had blocked one coronary artery 95%, a second 85%, and a third 70%.[4]

          In 1986 exercise physiologist Kenneth Cooper published an inventory of the risk factors that might have contributed to Fixx’s death.[5] Granted access to his medical records and autopsy, and after interviewing his friends and family, Cooper concluded that Fixx was genetically predisposed – his father died of a heart attack at 43 after a previous one at 35, and Fixx himself had a congenitally enlarged heart – and had an unhealthy life: Fixx was a heavy smoker before beginning running at age 36, had a stressful occupation, had undergone a second divorce, and his weight before he took up running had ballooned to 214 pounds (97 kg).[6] Medical opinion continues to uphold the link between moderate exercise and longevity.[7

          So exercise did not kill him.

        • Duncan Idaho says:

          I’m 70, and still backpacking and surfing, swimming laps.
          A comrade I backpack with is almost 80.
          You quit moving and you are dead.

          Good luck on the run!

          • jeremy890 says:

            Duncan, that is so inspirational.
            I was floored when I read just doing a Fast paced walk provides 70% of the benefit as going for a jogging run!
            You are so right, once you become a coach slug you have one foot in the grave.
            Get checked out before you start by a Doctor as Jim Fixx should have done.

          • jeremy890 says:

            Believe me, Snorp, there are more than a million more reasons NOT to do it.
            Yours is just one of the more obvious.
            It will make you look better…at least inbetween your ears!

            💪

    • Fast Eddy says:

      Be all that you can be?

      In the interview, broadcast on the Discovery Channel in the UK, Armstrong then admitted to taking performance-enhancing drugs Erythropoietin (EPO), testosterone, cortisone and human growth hormone as well as having blood transfusions.

  3. Cliffhanger says:

    Ok Eddy is this more like it?

  4. Cliffhanger says:

    T-Rex Drillerson- The evidence is clear Iran’s provocative actions threaten the U.S., the region and the world.”

    http://www.nbcnews.com/news/us-news/tillerson-iran-left-unchecked-could-follow-north-korea-s-path-n748496

    • Bergen Johnson says:

      This administration is backing themselves into a corner from which the only course of action will be war with Korea and or Iran with potentially millions dying. Whatever happened to MAD, Mutually Assured Destruction? So far it’s worked to keep nuclear armed countries from launching, so why wouldn’t it work in the future? For example, both India and Pakistan have nukes and both hate each other yet neither has decided to push the button. I just think We need to keep in mind Trump has never before been a politician so he is coming from a different perspective, a business one in which he wants conclusive action taken, but in this case those actions would likely lead to war, instead of just relying on MAD.

      • Fast Eddy says:

        ‘Mutually Assured Destruction’

        Not such a bad idea … given the alternative is eating Human Burgers… and when that runs out … starving to death.

        • Greg Machala says:

          I agree. Almost every country is facing intractable problems. And these problems will only get worse with time. The ruling class really does not want the war machine and its weapons to go to waste while there is one more shot at world ward for their entertainment.

      • Bergen Johnson says:

        Let me modify that – yes, I know the US dropped nukes on Japan in WWII, but at the time they were the only one’s with the device, so there was no MUTUALLY involved.

        • Bergen Johnson says:

          I didn’t read your post FE, but did glancingly noticed it was there. I don’t read your posts or respond to them.

          • Fast Eddy says:

            You wouldn’t understand them anyway … so better you just keep reading your Archie Comic books… and regurgitating MSM stories….

      • “Don’t believe the hype dude”

        It’s time for you to wean yourself off the media kool-aid and stop listening to the ward drums beaten by politicians.

      • Nonsense. Trump`s admin isn’t being backed into a corner because it has some idea of removing a future nuclear threat.

        Trump had to come out of the meeting with Xi without egg on his face. Merkel made him look oafish and Netanyahu made him a lapdog. The trade dispute is intractable because the U.S. makes nothing China would import (no thanks to weapons, bbqs, and cars only a fool would buy) No quick victories to be had there.

        So make NK an issue. China doesn’t mind as it’s not so foolish as to think that NK or Trump wants to do anything than bluster.

        Couple of statements a few days later about the axis of evil make this appear strategic but really send a message to the switched on that there’s nothing to worry about in terms of actual strikes because this is the same game of domestic titillation American politics has been bullshi.tting about forever

        • Greg Machala says:

          “the U.S. makes nothing China would import” – this is not a correct statement. GM is selling a lot of vehicles in China! So much so that China has allowed GM to post sales numbers over 10 million in 2016 – a new record for GM. From http://money.cnn.com/2017/02/07/news/companies/gm-record-sales-profits/ “China is now GM’s largest market” China is a crucial player in maintaining growth.

          • The cars are not imports you t.
            Wit. They are all manufactured in China.

          • Ok so maybe you were saying China would ‘like’ to import GM cars, not that they are currently importing cars. Sorry that’s probably your point. But it’s still silly. Consumers liking cars made in China with a GM badge is not the same as China being willing to import cars made in the U.S with a GM badge. Why? because GM is not the only getting profits off Chinese made cadillacs. Important state associated partners take half the profits out of the Chinese made cars. As you may be aware the auto industry is about the only industrial scale investment making money in China right now and the Party will be relying on its performance for stability. China is also developing local brands to compete that would be threatened if more competitively priced GM products were allowed to take even more market share. On top of this is a general trend to reorient Chinese industry for domestic consumption. Now is anlikely time for China to bend quickly to American demands, which as I stated is the proximate reason for the NK ‘escalation’ of late. I’ll stand by my claim that China doesn’t want to import anything America makes, (even though American branded products may be doing well here and there)

            • Greg Machala says:

              I’ll have what he’s having

            • Greg Machala says:

              Toyota is built here in the USA and is still considered an import car. I don’t really understand your point. The bottom line is that China and the USA need growth to stay viable. If it is building cars in China with US sourced components or building cars in the USA with Chinese sourced components it does not matter. Companies are all global now and will do whatever it takes to keep growth alive by any means necessary. Yes, even if it takes bombing a country to oblivion. Whatever it takes to maintain growth.

            • Brick wall, head.

              No the cars are not assembled in China, they are manufactured there. The link you have made between the bombing of NK as a way to increase car production is curious. So your theory is that Xi and Trump agreed to the status quo in tariffs to boost the Chinese arm of GM a little while unleashing a humanitarian crisis on its border.America can benefit from having destabilised a region it wants to steal resources from? I wasn’t aware that the Korean peninsula has oil.

          • meliorismnow says:

            FSA is correct, there is a massive tariff on imported autos in China (25% + more for luxury, ultra luxury, or large engines). And any manufactured in country has to be done by an entity majority owned by Chinese via joint venture. So I believe 51% of GM’s profits in China (for cars manufactured there) go to a Chinese corp that can kick GM out of the facility at any time. It’s a “deal with the devil” situation but if you don’t do it your competition takes the market…

    • Alfred Melbourne says:

      What evidence?
      The fact is that they are helping eradicate the proxies of the USA, UK, France, Israel, Saudi Arabia etc. from Syria

    • Thank for your insightful comment on this…

      Or are you trying to sensationalise things by discussions of how nuclear war is about to start?

      WWIII has been about to start since 1949. Don’t stain your pants.

      • Froggman says:

        Wouldn’t it be great if on his first day they gave Donald a suitcase with a key and lock and a big red button inside, and told him that it was the launch box? And then, we watch all this drama unfold, and one day he opens it, dramatically turns the key and presses the button, and Ashton Kutcher pops out and tells him he’s been punked, they’d never actually give him the launch codes? Maybe some sparklers would pop out the top of the suitcase and Stars and Stripes Forever would play.

        • Greg Machala says:

          The real question is: Who has the codes and physical ability to actually launch a nuclear strike? Someone does. And I guarantee you it isn’t the president. Presidents come and go so, someone maintains the authority over the nuclear program. But who?

          • Christian says:

            During Cold War there were three or four episodes in which nuclear attack order was launched, or has to be launched because some atmosferic abnormality tricked the radar systems or such… But at some point in the command chain an officer, or many, disobeyed, cancelling the attack

            This happened both in the us and the soviet union

          • Fast Eddy says:

            Simon Cowell?

  5. Pingback: Our Intellectual Bankruptcy: The “Religion” of Economics, UBI and Medicare For All - You-Blog.Club

  6. dolph says:

    On the question of TPTB lying about growth, or anything else. First of all, we do know that they lie, and lie frequently. Second, we do know that as things go south, they will continue to lie about more and more.

    Even if there is a depression, they will never announce it as such. The game is perception and confidence, keep people guessing and believing anything. If you haven’t figured out by now, that’s how the whole American system operates. Confidence won WW2, confidence won the Cold War, confidence keeps the young men signing up for the military and the workers trudging to their dead end jobs so they can go into debt and buy a car and house and pretend they are living the dream.

    We are at a strange point in history, where we are at peak, but the lie is that the peak can continue indefinitely, or even go higher. The global system operates around a country, America, that has believed in infinite growth and progress since the beginning. There is nobody left to challenge this, they long ago died off. The best Russia and China can do is try to create work arounds, a parallel system to fill in the gaps of the present one, and they will probably lie about everything as well.

    • adonis says:

      i dont know how they will do it but you could be right Dolph maybe the movie ‘Soylent Green’ is the future we are heading too and you still get to eat human.

    • Artleads says:

      Fine post. Again, I’m looking for a like button.

      So it’s a game of smoke and mirrors, which lies in the annals of art and tourism, whether it’s Jeff Koons or Disney World.

      • I remember my first post on this site and feeling glad that you complimented it while being consternated that FE chastised it for being superfluous.

        Two years later the complete opposite is true. Your approval of anything has become objectionable and I`m quite happy to receive criticism from FE given he is one of the few here who seems fit to administer it.

        • Greg Machala says:

          Unfortunately, this isn’t Facebook where you strive for likes to stroke your ego.

          • my post was a misrepresentation of events that makes me look foolish.

            Oh dear, motivated to defend my ego what shall I do?

            What do others here do that might guide me? I could post something clever about turkeys… or point to the Roman empire as the model of all collapses…Or mutter the Fourth turning is coming…Or accuse everyone of forgetting that virtuality is the new reality
            … Or that cardboard might transform us…Or rant at those who doubt my eggplants’ power to combat knife attacks….And if I repeat my clever thoughts of how much it’s possible for me personally to avoid the collapse I seem to want petulantly because there’s a better way to live if only people would listen to my ideas

          • One doesn’t stroke the ego here by seeking approval or agreement.

            One rather reminds themselves of superiority over fools by spending time wading in their nonsense.

            One can be petty at times. Even Peter the Great used fools for his sport.

        • Is that an observation of the nature of commenting in different forms of social media or is it a snide comment?

          I’m quite eager to share thoughts on the former as it’s been an area of interest to me. As for the latter, I’m happy to refer to the post today where you revealed that you are intellectually challenged and claimed that cars made in Chinese factories were actually made in American factories and supplied the evidence to ridicule your claim yourself.

          • No? You weren’t claiming that GM is exporting sbhtloods to China?

            You were instead claiming an American branded Chinese made car is currently selling well in China so ipso facto China wants to import U.S made cars?

            It’s creative leaps of imaginative thought like that that made America great for that one week back in the summer of 1955 or whenever it was you Americans call your golden age. You know sometime after that awkward proof that capitalism was as destructive as communism for a country and before you let women and negroes and unio unionists speak out of turn.

    • DJ says:

      “go into debt and buy a car and house and pretend they are living the dream.”

      Or go into debt without buying a car or a house and pretend they are living green and actualizing themselves.

    • Artleads says:

      “We are at a strange point in history, where we are at peak, but the lie is that the peak can continue indefinitely, or even go higher. ”

      Futures…,

      Not sure what part of this or my post you object to. The above resonates with me, because it invites discussion as to how the emphasis on quantity–just counting the numbers of cars or whatever–as compared with quality can affect the economic system. A new car is at once a weapon of mass destruction (including through the cost of its manufacture) and the most awesome miracle of technological power. Looking at a new car in awe–the paint job, the quiet operation, the luxurious sears, the computer systems–one senses that it is profoundly undervalued (as in for its system-wide costs). It is an IMMENSE accomplishment, but the cost to the entire planetary survival system seems way too much. Dolph hinted (to my mind) at this, which is why I liked his post, although I do tend to find his posts innovative. And I remember wanting to press a like button for a recent FE post as well. I’m not taking sides, since everyone here is my teacher. Art economics (which interests me) tends to lean toward quality rather than quantity, but that hasn’t had much discussion so far on FW..

      • doomphd says:

        Almost by definition, one cannot go higher than the peak. Perhaps in the case of the peak referring to another form of matter/energy, like a mountain, and you flying above it in a winged suit, jet pack, small plane, helicopter, etc., where you are suspended in another form of matter/energy.

        • Artleads says:

          As far as I understand this, it sounds pretty apt. I was considering “energy” that keeps the wheels turning, but not in the same “physical” and quantitative sense as before. And also something that holds on to (and sucks value out of) that peak for dear life.

  7. Pingback: OUR INTELLECTUAL BANKRUPTCY: THE “RELIGION” OF ECONOMICS, UBI AND MEDICARE FOR ALL | NewZSentinel

  8. When no`ones thoughts on anything matter, whether perceived imperfectly or held confidently, then disinformation will have little role to play.

    Thoughts matter little in cataclysms.

    Let’s say that we`ll only have a depression.

    Can you outline the major shifts in society that occurred in society since 2008 that support your assumption that it will be ignorable through disiNformation.

    In 2008 we had major recession and it was widely reported on, even the uberfool made an address on TV about it. Most people either lost a job or were afraid of losing it major corporations and banks were known to be life support. Given that and the fact that the same open society today with a media that still reports on dramatic real world events at its own discretion and TPTB don’t yet have the ability to morph themselves into every editor of every news outlet…

    • Here’s an example on the kind of essay question a first year student at university would use to discover the unsubstantiality of these perception, control and disinformation claims.

      Compare and contrast the Chinese Communist Party’s ability to temporarily prevent widespread knowledge of the Great Famine with the unsuccessful attempts by the current government of Venezuela to prevent the beginnings of a civil war in response to food price inflation and economic malaise.

  9. Duncan Idaho says:

    “The National Flood Insurance Program is up for reauthorization this year; fiscal conservatives have said they want to use that opportunity to reduce the program’s subsidies, so that people are paying something closer to the full cost of their risk.
    A cut in federal subsidies would particularly hurt Florida, which despite its exposure pays the lowest average flood-insurance premiums in the country, according to FEMA data.

    Laura Reynolds is the former executive director of the Tropical Audubon Society, Miami’s oldest environmental group; she’s lived in her house in Cutler Bay, an hour’s drive south of Miami, for 13 years. She said she had once hoped to pass it on to her niece or nephew, but now plans to sell.

    “The future of our coastline is completely doomed,” Reynolds said. “The question is, how long will we have?””

    • Greg Machala says:

      Yep, our coastlines are doomed for sure. But, it is just one of many limits to growth we are reaching. It should be interesting to watch property values on Miami Beach.

Comments are closed.