Will the World Economy Continue to “Roll Along” in 2018?

Once upon a time, we worried about oil and other energy. Now, a song from 1930 seems to be appropriate:

Today, we have a surplus of oil, which we are trying to use up. That never happened before, or did it? Well, actually, it did, back around 1930. As most of us remember, that was not a pleasant time. It was during the Great Depression.

Figure 1. US ending stocks of crude oil, excluding the Strategic Petroleum Reserve. Amounts will include crude oil in pipelines and in “tank farms,” awaiting processing. Businesses normally do not hold more crude oil than they need in the immediate future, because holding this excess inventory has a cost involved. Figure produced by EIA. Amounts through early 2016.

A surplus of a major energy commodity is a sign of economic illness; the economy is not balancing itself correctly. Energy supplies are available for use, but the economy is not adequately utilizing them. It is a sign that something is seriously wrong in the economy–perhaps too much income disparity.

Figure 2. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

If incomes are relatively equal, it is possible for even the poorest citizens of the economy to be able to buy necessary goods and services. Things like food, homes, and transportation become affordable by all. It is easy for “Demand” and “Supply” to balance out, because a very large share of the population has incomes that are adequate to buy the goods and services created by the economy.

It is when we have too much income and wage disparity that we have gluts of oil and food supplies. Food gluts happened in the 1930s and are happening again now. We lose sight of the extent to which the economy can actually absorb rising quantities of commodities of many types, if they are inexpensive, compared to wages. The word “Demand” might better be replaced by the term “Quantity Affordable.” Top wage earners can always afford goods and services for their families; the question is whether earners lower in the wage hierarchy can. In today’s world, some of these low-wage earners are in India and Africa, or have no employment at all.

What is Going Right, As We Enter 2018?

[1] The stock market keeps rising.

The stock market keeps rising, month after month. Volatility is very low. In fact, the growth in the stock market looks rigged. A recent Seeking Alpha article notes that in 2017, the S&P 500 showed positive returns for all 12 months of the year, something that has never happened before in the last 90 years.

Very long runs of rising stock prices are not necessarily a good sign. According to the same article, the S&P 500 rose in 22 of 23 months between April 1935 and February 1937, in response to government spending aimed at jumpstarting the economy. By late 1937, the economy was again back in recession. The market experienced a severe correction that it would not fully recover from until after World War II.

The year 2006 was another notable year for stock market rise, with increases in 11 out of 12 months. According to the article,

Equity markets rallied amidst a volatility void in the lead-up to the Great Recession. Markets would make new all-time highs in late 2007 before collapsing in 2008, marking the worst annual returns (-37%) since the aforementioned infamous 1937 correction.

So while the stock market consistently rising looks like a good sign, it is not necessarily a good sign for market performance 6 to 24 months later. It could simply represent a bubble forming, which will later pop.

[2] Oil and other commodity prices are recently somewhat higher.

Recently, oil prices have been too low for most producers. Now, things are looking up. While prices still aren’t at an adequate level, they are somewhat higher. This gives producers (and lenders) hope that prices will eventually rise sufficiently that oil companies can make an adequate profit, and governments of oil exporters can collect adequate taxes to keep their economies operating.

Figure 3. Monthly average spot Brent oil prices, through December 2017, based on EIA data.

A major reason for the recent upward trend in commodity prices seems to be a shift in currency relativities for Emerging Markets.

Figure 4. Figure from Financial Times showing currency relativities based on the MSCI Emerging Market currency index.

While the currency relativities for emerging markets had fallen quite low when commodity prices first dropped, they have now made up most of their lost ground. This makes commodities more affordable in Emerging Market countries, and allows them to do more manufacturing, thus stimulating the world economy.

Of course, if China runs into debt problems, or if India runs into problems of some sort, or if oil prices rise further than they have to date, the run-up in currency relativities might run right back down again.

[3] US tax cuts create a bubble of wealth for corporations and the 1%.

With low commodity prices, returns have been far too low for many corporations involved with commodity production. “Fixing” the tax law will help these corporations continue to operate, even if commodity prices remain low, because taxes will be lower. These lower tax rates are important in helping commodity producers to avoid collapsing as a result of low commodity prices.

The problem that occurs is that the change in tax law opens up all kinds of opportunities for companies to improve their tax situation, either by changing the form of the corporation, or by merging with another company with a suitable tax situation, allowing the combined taxes to be minimized. See this recent Michael Hudson video for a discussion of some of the issues involved. This link is to a related Hudson video.

Groups evaluating the expected impact of the proposed tax law did their evaluations as if corporate structure would remain unchanged. We know that tax accountants will help companies quickly make changes to maximize the benefit of the new tax law. This is likely to mean that US governmental debt will need to rise much more than most forecasts have predicted.

In a way, this is a “good” impact, because more debt helps keep commodity prices and production to rise, and thus helps keep the economy from collapsing. But it does raise the question of how long, and by how much, governmental debt can rise. Will the addition of all of this new debt raise interest rates even above other planned interest rate increases?

[4] We have been experiencing artificially low oil prices since 2013. This helps the economic growth to be higher than it otherwise would be. 

In February 2014, I published an article documenting that back in 2013, oil prices were too low for oil producers. If a person looks at Figure 3, oil prices were over $100 per barrel that year. Clearly, oil prices have been much too low for producers since that time.

Unfortunately, it looks like these artificially low oil prices may be coming to an end, simply because the “glut” of oil that developed is gradually being reduced. Figure 5 shows the timing of the recent glut of oil. It seems to have started early in 2014.

Figure 5. US Stocks of crude oil and petroleum products (including Strategic Petroleum Reserve), based on EIA data.

If we look at the combination of oil prices and amount of oil in storage, a person can make a rough estimate of how this glut of oil might disappear. Quite a bit of it may be gone by the end of 2018 (Figure 6).

Figure 6. Figure showing US oil stocks (crude plus oil products) together with the corresponding oil prices. Rough guess of how balance might disappear and future prices by author.

Of course, one of the big issues is that consumers cannot really afford high-priced oil products. If consumers could not afford $100+ prices back in 2013, how would it be possible for oil prices to rise to something like $97 per barrel by the end of 2018?

I am not certain that oil prices can really rise this high, or that they can stay at this level very long. Certainly, we cannot expect oil prices to rise to the level they did in July 2008, without recession causing oil prices to crash back down.

What the Economy Needs Is Rising Energy Per Capita

I have published energy per capita graphs in the past. Flat spots tend to represent problem periods.

Figure 7. World per Capita Energy Consumption with two circles relating to flat consumption. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

The 1920-1940 flat period came shortly after the United Kingdom reached Peak Coal in 1913.

Figure 8. United Kingdom coal production since 1855, in figure by David Strahan. First published in New Scientist, 17 January 2008.

In fact, the UK invaded Mesopotamia (Iraq) in 1914, to protect its oil interests. The UK wasn’t stupid; it knew that if it didn’t have sufficient coal, it would need oil, instead.

There were many other disturbing events during this period, including World War I, the 1918 flu pandemic, the Great Depression, and World War II. If there are not enough energy resources to go around, many things tend to go wrong: countries tend to fight for available resources; jobs that pay well become less available; deflation becomes more likely; population becomes weakened, and epidemics become more likely. I wrote about the 1920 to 1940 period in a recent post, The Depression of the 1930s Was an Energy Crisis.

The 1980-2000 flat period included the collapse of the Soviet Union, in 1991. The Soviet Union was an oil producer. The Soviet Union collapsed after prices had been low for a long time.

Figure 9. Former Soviet Union oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.

Even many years after the collapse of the Soviet Union, population growth in former Soviet Union countries and its affiliates was much lower than in the rest of the world.

Figure 10. World population growth rates between 2005 and 2010. Source: https://en.wikipedia.org/wiki/List_of_countries_by_population_growth_rate

Lower population (through falling birth rates, rising death rates, or rising emigration) are a major way that economies self-adjust because of falling energy per capita. Economies tend to fix the low-energy per capita problem by adjusting the population downward.

Recently, we have again been hitting flat periods in energy consumption per capita.

Figure 11. World per capita consumption of oil and of total energy, based on BP Statistical Review of World Energy data and UN 2017 population data.

The slowdown in world energy consumption per capita in 2008-2009 was clearly a major problem. Oil, coal and natural gas consumption fell simultaneously. Oil consumption per capita fell more than the overall mix, especially affecting countries heavily dependent on oil (Greece with its tourism, but also the US, Japan, and Europe).

The recent shift in political strategy to more isolationist stances also seems to be the result of flat energy consumption per capita. It is doubtful that Donald Trump would have been elected in the US, if world energy consumption per capita had been growing robustly, and if wage disparity had been less of a problem.

The primary cause of the 2013 to 2016 flat trend in world energy consumption per capita (Figure 11) is falling coal consumption (Figure 12). Many people think coal is unimportant, but it is the world’s second largest source of energy, after oil. We don’t have a good way of getting natural gas production to rise enough, to make up for loss of coal production.

Figure 12

Wind and solar simply do not work for solving our problem of flat or shrinking energy consumption per capita. After spending trillions of dollars on them, they make up only a tiny (1%) share of world energy supply, according to the International Energy Agency. They are part of the little gray “Other” sliver on Figure 13.

Figure 13. Figure prepared by IEA showing Total Primary Energy Supply by type from this IEA document.

Something Has to “Give” When There Is Not Enough Energy Consumption per Capita

The predicament we are facing is that energy consumption per capita seems to be reaching a maximum. This happens because of affordability issues. Over time, the price of energy products needs to rise to keep up with the rising cost of creating these energy products. But if energy prices do rise, workers earning low wages cannot afford to buy goods and services made with high-priced energy products, plus honor all of their other commitments (such as mortgages, auto loans, and student loans). This leads to debt defaults, as it did in the 2008-2009 recession.

At some point, the affordability problem can be expected to hold down energy consumption. This could happen in many ways. Spiking prices and affordability issues could lead to a worse rerun of the 2008-2009 recession. Or if oil prices stay fairly low, oil-exporting countries (such as Venezuela) may collapse because of low prices. Even if oil prices do rise, we may find that higher prices do not lead to sufficient additional supply because investment in new oil fields has been low for many years, because of past low prices.

As long as the world economy is expanding (Figure 14), individual citizens can expect to benefit. Jobs that pay well are likely to be available, and citizens can afford to buy goods with their growing wages. People who sell shares of stock and people who get pension benefits can all receive part of this growing economic output.

Figure 14. Author’s image of an expanding economy.

Once the economy starts to shrink (Figure 15), we start having problems with dividing up the goods and services that are available. How much should retirees get? Governments? Today’s workers? Holders of shares of stocks and bonds? Not all commitments can be honored, simultaneously.

Figure 15. Author’s image of declining economy.

 

One obvious problem in a shrinking economy is that loans become harder to repay. The problem is that there is less left over for other goods and services, after debt plus interest is subtracted, in a shrinking economy.

Figure 16. Figure by author.

Changing interest rates can to some extent help offset problems related to higher energy prices and shrinking supply. The danger is that interest rates can move in the wrong direction and make our problems worse. In the lead-up to the Great Recession of 2008-2009, the US raised short-term interest rates, helping to puncture the sub-prime mortgage debt bubble.

Figure 17. Figure comparing Case-Shiller Seasonally Adjusted Home Price Index and Federal Reserve End of Quarter Target Interest Rates. See Oil Supply Limits and the Continuing Financial Crisis for details.

We now hear a lot of talk about raising interest rates and selling QE securities (which would also tend to raise interest rates). If growth in energy consumption per capita is already flat, these changes could make the problems that the economy is facing even worse.

Our Economy Works Like a Bicycle

Have you ever wondered why a two-wheeled bicycle is able to stay upright? Research shows that a bicycle will stay upright, as long as its speed is greater than 2.3 meters (7.5 feet) per second. This is the result of the physics of the situation. A related academic article states, “This stability typically can occur at forward speeds v near to the square root of (gL), where g is gravity and L is a characteristic length (about 1 m for a modern bicycle).”

Thus, a bicycle will be able to continue in an upright manner, as long as it goes fast enough. If it slows down too much, it will fall down. Our economy is similar.

Gravity plays an important role in determining the speed of a bicycle. If the bicycle is going downhill, gravity gives an important boost to the speed of the bicycle. If the bicycle is going uphill, gravity very much pulls back on the bicycle.

I think of the situation of an economy having rising energy consumption per capita as being very much like riding on a bicycle, speeding down a hill. The person operating the bicycle would not need to provide much extra energy to keep the bicycle going.

If energy consumption per capita is flat, the person riding the bicycle must provide the energy to make it go fast enough, so it doesn’t fall over. This is somewhat of a problem. If energy consumption per capita actually falls, it is a true disaster. The bicyclist himself must provide the energy necessary to push the bicycle and rider uphill.

In fact, there are other ways that a speeding bicycle is analogous to the world economy.

Figure 18. Author’s view of analogies of speeding upright bicycle to speeding economy.

The economy needs a constant flow of outside energy. In the case of the bicycle, the human rider can provide the energy flow. In the case of the economy, the energy flow comes from a mixture of various fuel types, typically dominated by fossil fuels.

Growing debt (front wheel) is important as well. It tends to pull the economy along, because this debt can be used to pay wages and to buy materials to make additional goods and services. Thus, the effect of this increase in debt is indirect; it ultimately works through the bicyclist, the gears, and the back wheel.

In fact, the financial system as a whole is important for the “steering” of the economy. It tells investors which investments are likely to be profitable.

The gearing system of the bicycle plays a modest role in the system. Changing gears allows greater efficiency in the use of the energy that is available, under certain circumstances. But energy efficiency, by itself, cannot operate the system.

If the human rider does not provide sufficient energy for the bicycle to go rapidly enough, the bicycle glides for a while, and then falls over. The world economy seems to be similar. If the world economy does not obtain enough energy per capita, economic growth tends to slow and eventually collapses. The collapse can relate to the whole world economy, or to parts of the economy.

The Problem of Parts of the Economy Not Getting Enough Energy

We can think of the economy as being made up of many bicycles, operated by bicycle riders. At the beginning of the post, I talked about the problem of wage disparity. This issue occurred at the time of the 1930’s Great Depression and is occurring again now.

We might call wage disparity “too low a return on the labor of some workers.” In groups of animals in ecosystems, too low a return on the effort of these animals is what causes ecosystems to collapse. For example, if fish have to swim too far to obtain additional food, their population will collapse. It should not be surprising that economies tend to collapse, when the return on the efforts of part of their workers falls too low.

Wage disparity has to do with how well the operators of bicycles are doing. Are the operators of these bicycles receiving enough calories, so that they can keep pumping their bicycles fast enough so that the speed is high enough to remain upright?

If energy consumption per capita is growing, this greatly helps the operation of the economic system. If there is growing availability of inexpensive energy, machines of various types, including trucks, can be used to increasingly leverage the labor of workers. This increased leveraging helps each worker to become more “productive.” This growing productivity, thanks to growing energy consumption, allows more goods and services to be produced in total. It also allows the wages of the workers to stay high enough that they can afford to buy a reasonable share of the output of the economy. When this happens, “gluts” of unaffordable goods are less of a problem.

If energy consumption per capita is flat (or worse yet, falling), greater “complexity” is needed, to keep output of goods and services rising. Greater complexity involves more specialization and more training of individual members of the economy. Greater complexity leads to larger companies, more government services, and more wage disparity. Unfortunately, there are diminishing returns to complexity, according to Joseph Tainter in “The Collapse of Complex Societies.” Ultimately, increased complexity fails to provide an adequate number of high-paying jobs. Wage disparity becomes a problem that can cause an economy to collapse.

If there is not enough economic output, the physics of the economy tries to “freeze out” workers at the bottom of the hierarchy. Workers with low wages cannot afford homes and families. The incidence of depression rises. Debt levels of disadvantaged groups (such as young people in the US) may rise.

So the situation may not be that the whole world economy fails; it may be that parts of the economy collapse. In fact, we are already seeing evidence that this is taking place. For example, life expectancies for US men have been falling for two years, because of growing problems with drug overdoses.

Conclusions

In 2017, the world economy seemed to be gliding smoothly along because the economy has been able to get the benefit of artificially low energy prices and artificially low interest rates. These artificially low prices and interest rates have given a temporary boost to the world economy. Countries using large amounts of energy products, including the US, especially benefitted.

We cannot expect this temporary condition to continue, however. Low oil prices have already started to disappear, with Brent oil prices at nearly $69 per barrel at this writing. The trends in oil prices and oil stocks in Figure 6 are disturbing. If oil prices begin to rise toward the price needed by oil producers, they are likely to trigger a recession and a drop in world energy consumption, just as spiking prices did in 2008-2009. There is a significant chance of collapse in the next 12 to 24 months. It is hard to know how widespread such a collapse may be; it may primarily affect particular countries and population groups.

To make matters worse, our leaders do not seem to understand the situation. The world economy badly needs rising energy consumption per capita. Plans to raise interest rates and sell QE securities, when the economy is already “at the edge,” are playing with fire. If we are to keep the world economy operating, large quantities of additional energy supplies need to be found at very low cost. It is hard to be optimistic about this happening. High-cost energy supplies are worthless when it comes to operating the economy because they are unaffordable.

Many followers of the oil situation have had great faith in Energy Returned on Energy Invested (EROI) analysis telling us which kinds of energy supplies we should increase. Unfortunately, EROI doesn’t tell us enough. It doesn’t tell us if a particular product is scalable at reasonable cost. Wind and solar are great disappointments, when total costs, including the cost of mitigating intermittency on the grid, are considered. They do not appear to be solutions on any major scale.

Other researchers looking at the energy situation have not understood how “baked into the cake” the need for economic growth, rising per capita energy consumption, and rising debt levels really are. Rising debt is not an error in how the financial system is put together; a bicycle needs a front wheel, or it cannot operate at all (Figure 18). I have written other articles regarding why debt is needed to pull the economic system forward.

This economic growth cannot be “fake growth” either, where a debt Ponzi Scheme seems to allow purchases that real-life consumers cannot afford. Quite a bit of what is reported as world GDP today is of a very “iffy” nature. If China builds a huge number of apartments that citizens cannot afford without subsidies, should these be counted as true GDP growth? How about unneeded roads, built using the rising debt of the Japanese government? Or recycling performed around the world, because it makes people “feel good,” but really requires substantial subsidies?

At this point, it is hard for us to know where we really are, because every government wants to make GDP results look as favorable as possible. It is clear, however, that 2018 and 2019 can be expected to have more challenges than 2017. We have interesting times ahead!

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 financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,782 Responses to Will the World Economy Continue to “Roll Along” in 2018?

  1. jupiviv says:

    Responding to Davidetcetc’s comment earlier about Greer’s ‘stair step’ collapse: that sort of collapse scenario doesn’t make sense if the stairs go all the way down. At some point they have to run into a cliff edge. Also, not everything will decline in a stair step pattern.

    That’s why I advocate a ‘stepwise’ collapse model, where every step is a point in the collapse where some aspect of BAU is sacrificed to keep some other aspect going, with consequences that affect the nearness and severity of the next step. Technically, there is no decline in the part of BAU that is sacrificed; it just isn’t there anymore. Whatever part isn’t sacrificed is then held to be the *real* BAU and therefore worth saving at any cost.

    An example would be what is happening right now with the stock gains being used to prioritize handouts to the rich over the rest of the economy. Another would be pogroms against immigrants – based on race, religion or nationality. When enough native people in the developed countries cannot access the middle class standard of living, they will want to deprive the foreign hordes of their standard of living regardless of whether they earn it or not.

    • Davidin100millionbilliontrillionzillionyears says:

      thanks for your reply…

      your middle paragraph is especially good… what is most interesting to me is that it is a very close fit to Greer’s idea of catabolic collapse. I reread a bit of his blogs about this idea, and it fits your explanation like a glove.

      too bad he took the Archdruid Report offline (he’s having it published as a 10 volume set to make some money, since after all, his income is as a writer)…

      but you can search, like I did, for Archdruid Report catabolic collapse, and you should get the results you need, to see that your thinking is fairly closely aligned with his.

      • Davidin100millionbilliontrillionzillionyears says:

        and… a brief summary of the whereabouts of JMG… FYI to anybody who cares…

        like I said, his old blog is gone… 10 years of writing about energy resources and their economic and political consequences, and the inevitable demise of our modern IC, and many historical examples of the demise of past civilizations…

        too bad that his new blog at ecosophiadotnet is different in a lesser way… perhaps he was burning out on “peak oil” and all of its related issues… or simply wanted to shift gears… midlife crisis(?)… who knows…

        but there’s still a bit of value there… I prefer OFW now… in their own way, it seems that Gail does some great writing more about the mathematics of IC, while Greer is more about the history of IC…

        it would be great to have both, but it seems Greer’s shipped may have sailed.

        • Davidin100millionbilliontrillionzillionyears says:

          and… here’s another very interesting idea that Greer brought up many times over the years… (I hope I can relay it accurately)…

          he often wrote about 2 types of feeble minded persons (he didn’t use the word feeble, but I think it works well enough)…

          1… the type of person who believes in Progress, and that it must continue onward and upward, and if and when humanity runs into severe issues, then “somebody will think of something”…

          2… the type of person who gains some knowledge of the fact that all civilizations come to inevitable demise, and then comes around to thinking that there soon must be a cataclysmic ending to this civilization, because things don’t look good, and as an escape from the monotony of reality, their minds conclude that the end is coming really really soon, and in an extreme way.

          • Davidin100millionbilliontrillionzillionyears says:

            so these 2 types are very much opposites when they are thinking about the future of IC…

            but Greer makes the point that both types fail to grasp the history of civilizations, and that their demise is pretty much ALWAYS a long drawn out decline…

            then he brings up the idea that people will say “this time it’s different”… he would scoff at that, but I’m not so sure…

            IC is unique to all other civilizations, and we of course can’t know the future, so IC could collapse suddenly, but his point is that it would be the first such sudden collapse.

            • Davidin100millionbilliontrillionzillionyears says:

              so, sort of in conclusion…

              we here at OFW almost universally scoff at those who are feeble minded enough to think that Progress must continue… or at least that BAU must continue indefinitely, because “they will think of something”…

              but I think there should be some scoffing (maybe nice and in good fun!) at those who think that the demise of IC inevitably MUST be fast and extremely horrible to all 7 billion of us…

              it’s one thing to state a case strongly for the reasons why a fast collapse MIGHT happen soon…

              but it’s another thing to claim to know the future.

            • Tango Oscar says:

              As a general rule I don’t listen to anything from archdruids, only warlocks.

      • jupiviv says:

        “your middle paragraph is especially good… what is most interesting to me is that it is a very close fit to Greer’s idea of catabolic collapse.”

        I admit I haven’t read much of his stuff, but I think the difference between my theory and his is that he believes the economy/ies of the world will simply scale down (in “stair steps”), i.e., less stuff online/accessible to everyone, but still more or less functioning as it did before. I also can’t agree that the collapse will be in “slow boil” mode for long. The argument is that the collapse has been occurring for a “long time”, but that is a case of equivocating two definitions of collapse – a broad, historical one and a narrow practical one.

        Like I say, each “step” will be nearer and more severe than the last, due to stacking effects. If total collapse of industrial civilisation happens in – say – 2030, the IC of ’29 won’t resemble the IC of ’18 or ’19.

        • Davidin100millionbilliontrillionzillionyears says:

          okay…

          you might be close to what actually will happen…

          who knows?

          but…

          you still could do a search for “archdruid report catabolic collapse” and find the reading material that you seem to be avoiding.

      • I have visited with John Michael Greer quite a few times. He is a pleasant fellow to talk to.

        I have read some of his work, and there are parts of his writing that are quite good. He has done a lot of research in quite a few different areas.

        In his writings, one of the things he focuses on is what happened in past collapses. I am doubtful that this is necessarily the best model for what is ahead. Back hundreds of years ago, the majority of the population were farmers. They could align themselves with a neighboring group, and continue their work. Even craftsmen could do this. Today we have software developers and actuaries and all kinds of other specialized workers. If there is no electricity, or if the international trade system doesn’t work, our way of life is likely to collapse.

        • JesseJames says:

          In the comparison of the collapse of the Roman economy and ours, I propose an illustration. The Roman economy was a pedaled bicycle. Our economy is a motorcycle. Even after collapse, the Roman bicycle can keep being pushed forward by human power, albeit, as food and wood energy becomes harder to acquire, it slows down and eventually falls over. When the fuel runs out, our economy stops and the motorcycle falls over (unless we keep it upright with our own energy, but it is no longer moving) and we have to resort to hand pushing the heavy motorcycle. No, the collapse scenarios are not even close to the same. Our collapse will be much more rapid and drastic with the gas runs out.

        • xabier says:

          Not only were there a lot of essentially inter-changeable farmers (they were imported into Western Europe, for example, from Eastern Europe after the Black Death to help make up losses – there are Polish surnames in Spain from that time); but all the small settlements had their carpenters and blacksmiths, every small town a full range of craftsmen: easy to see how such a dispersed model could recover after even a terrible disaster or war, so long as the soil produced crops. Specialization of trades was at a low enough level not to threaten resilience. What happened in such societies is therefore no real model for us.

  2. I am concerned about the threat of a possible United States government shutdown tonight at midnight. This has happened before. Each year, trying to produce a reasonable budget becomes more and more impossible. The current vote is not even on a budget for the coming year; it is simply a resolution to spend as we have in the past, for another month. At this point, there doesn’t seem to be any deal to avoid a shutdown.

    I am concerned because the budget problems are major, and cannot really be fixed. We can perhaps push the problem down the road a bit, but we are then back to where we were before. Most of what the government spends is in entitlements. As the population ages, the amount of these entitlements grows. There is no politically palatable way of cutting back the spending entitlements, and there is no way to collect enough taxes for all of what is being spent.

    This is a chart of US spending in the 2015 budget.

    I am concerned that eventually, this shutdown, or another shutdown, could eventually lead to the loss of the US Federal Government, in a way analogous to the loss of the Soviet Union government in 1991. Maybe this is a crazy idea, but it is something I think we should keep in mind. We would then have 50 states, each with their own money systems (or not), no Social Security system, and an interesting time regulating things such as airplane navigation and the Internet.

    A perhaps smaller but more immediate concern is a likely loss of EIA data. I discovered during the 2013 shutdown that not only was the EIA data site down, but also none of the files I had downloaded in the past had data in them. Apparently, I was only getting an Internet version of these reports. I found this disconcerting. I expect this will happen again, if the government closes down.

    • Energy^2 says:

      Back to 2007, listening to Ron Paul messages over the Internet, two Iraqis, a blogger and photoshop expert, felt something is not quite right going on even in America, not only in their home country, and have mocked below image, where the proposed ‘Blood Line’ New Middle East map, produced by a war Academy belonging to the US Army in 2000, projected over the US map.

      Gail’s concerns today were felt 10 years ago by two people who have not seen the US ever (one of them became a US citizen later, though!).

      Social transformation programs take 15 years for each of their stages to accomplish, some ex intelligent service Soviet experts report. Without abundant fossil fuels energy, that process would take ages, owing to the maximum of how much humans can capture of solar energy a year, at 1% photosynthesis rates, similar to living plants.

      Peters’ “Blood borders” map

      • I am concerned that it is not really possible to cut back major programs like Social Security and Medicaid. Governments may fail, because they have “over-promised” relative to what is available. This is really a “peak oil” impact, but it is not what peak oilers have been looking for. But collapse came about when governments were not able to fund needed programs. It is the top level government that is hardest to keep going.

        • HideAway says:

          So after politicians vote in a tax cut for the rich, they then cannot agree on a budget for the coming year, nor how much extra debt to create for another month. they have no idea how dumb they look from the other side of the world.

          I can see how you could be correct with how the next large scale step down collapse happens one of these years/months when the Fed govt of the US closes down and for whatever reason does not reopen. Within weeks markets will be in full blown panic and banks will not know who to trust, effectively stifling international trade. Within months ‘spare parts’ in our Just In Time world will have rendered many industries across the world unable to continue because of some minor part unavailable.

          Following this thought through further, it is easy to see how dumb total globalisation of everything, and JIT together for businesses has rendered us so vulnerable. Peak energy, peak net energy and the huge increases in debt everywhere to compensate for this, just exacerbates the problem, meaning one small nudge for huge consequences.

          Yet US politicians seem to play this game of brinkmanship all the time.

          • Peak per capita energy is what is causing our problem. Population keeps rising, but energy consumption does not rise enough sufficiently to keep up growing population. There is too much wage disparity. Too much is spent on non-solutions, like wind and solar added to the electric grid. Debt is what we use to keep the whole system operating, but ultimately it will become un-payable.

    • Baby Doomer says:

      Simple cut the military budget in half and transfer it to social security…Problem solved.

      • Next you fix Medicare.

        • Energy^2 says:

          Cut the other half!.

          Who would travel all the way to attack America, to keep the military? Everyone in the world are busy improving their homeland and fighting to stay above poverty line, seriously.

          Tribes & Nations should be embraced by the UN as its successor.

          Tribes & Nations acknowledges Social Darwinism in its doctrine, rather than masking it against powerless nations, decade-in decade-out.

          Let the world be busy building the Sun Road and Earth carrying capacity II, instead of endless international wars (local wars are left to humans to sort them out, though!).

          Here are another two problems solved in one shot, for you, Gail! 🙂 🙂 🙂

        • roc says:

          wat’s happend about : Shutdown ?

        • Baby Doomer says:

          Switch to universal healthcare system..It would be half the cost and ten times better service. We pay currently the highest healthcare cost in the entire world for the 37th best healthcare system according to the World Health Organization.

          • Good luck on passing that! Part of our high health care cost relates to what we eat–way too much meat and sweets; too many calories in total. Also, too little exercise.

    • The website with the EIA data is still up! Hurray!

  3. Baby Doomer says:

    The US appears to be quietly preparing for nuclear war with North Korea

    The US has quietly moved heavy firepower, like nuclear bombers and aircraft carriers, to the region.
    http://www.businessinsider.com/us-appears-quietly-preparing-nuclear-war-north-korea-2018-1

    • psile says:

      There’ll be no war on the Korean peninsula, unless it’s one started by the Koreans themselves. China has stated, time and again, that it would come to the aid of its North Korean ally, if it were attacked. The Russians would also no doubt get involved, seeing they also share a border.

      This is as much about Russia and China as North Korea. Note that the other day the nazi regime in Kiev voted to shelve the Minsk agreements, whereby a peaceful resolution to the Donbass issue could have been be made. These agreements were brokered and guaranteed by Russia, France and Germany, with Ukraine and the breakaway regions the parties to the arrangement.

      Ukraine now intends to try and retake the territory by force, again. This could only be at Washington’s direction, since the fascists were first put into power there by a U.S. sponsored coup back in 2014.

    • If the US can’t keep its government open, how does it think it can attack North Korea?

      I agree with psile. There will be no war on the Korean peninsula, unless it is one started by the Koreans themselves.

      • Sungr says:

        “If the US can’t keep its government open, how does it think it can attack North Korea?”

        Very good point.

        One perspective says that the US empire is past date and that all the current wars are just an attempt to play divide/conquer before the empire gas tank points to empty.

        Empires are expensive

  4. psile says:

    Which big city will totally collapse first?

    Drought-hit Cape Town at “point of no return”, tightens water targets

    CAPE TOWN, Jan 18 (Reuters) – South Africa’s drought-stricken Cape Town told residents on Wednesday they would need to cut their daily water consumption by almost half from next month as authorities scramble to prevent the city running out of water as soon as in April.

    Struggling to cope with its worst drought in a century, Cape Town, South Africa’s second-largest city and a major tourist hub, last cut water consumption targets in October but its mayor said on Wednesday that too few residents were paying them any heed.

    From Feb. 1, the target for water consumption per person would be lowered to 50 litres (13 gallons) from 87 litres a day, and the collective consumption target to 450 million litres from 500 million litres a day, Mayor Patricia de Lille said.

    According to an official, Cape Town as a whole consumed 618 million litres of water on Monday.

    “We have reached a point of no return,” De Lille said in a statement. The new targets will remain in place for 150 days before the city reassesses the situation.

    “Day Zero” – the day the taps run dry – is now expected on April 21, a day earlier than previously forecast, according to the statement.

    • JH Wyoming says:

      I wonder if anyone in the world will be smart enough to figure out what caused this?

      • JH Wyoming says:

        And I mean the cause of the drought, not just the drought itself. That is the bigger Q here.

      • DJ says:

        To many people. Easy.

      • Tim Groves says:

        Your problem is that you have no sense of nor interest in history. Before you can judge something as abnormal, you need to have a grasp of the bounds of what is normal.

        Normal for South Africa is periodic drought. Find out what caused the droughts of more than a century ago and you’ll have your culprit!

        Actually, the last South African drought of comparable severity to the one they are having now was occurred in the early 1930s, so that lets “black majority rule” off the hook.

        Back then, they were calling it “the worst outlook for 50 years”.

        I haven’t looked up the detailed historical meteorological records for South Africa, but if we go back to 1802, we find the region of the Zulu was plagued by drought and accompanying famine which led to internal strife and social dislocation within the Zulu chiefdoms. The drought also produced thousands of internal refugees.

        Then in 1842, severe drought hit in the eastern region including the Cape Colony. This led to cattle theft by both settlers and Xhosa. It marked the decline of the treaty system introduced by Stockenström in 1836 and set the scene for yet another war on the frontier.

        Incidentally, the population of the regions now contained within the Republic of South Africa was less than 1.5 million in 1802 and less than 2 million in 1840. By comparison, it is about 55 million today.

    • I found some articles related to this earlier. The problem has been a long time building. It has been blamed on a lot of things, including political corruption that allocated too much water to agriculture. The city of Cape Town has been asking for help for a long time, but the higher levels of government have gotten it into the mess where it is today, at least in one view.

      • This is a link to the article on political problems related to Cape Town’s problems.

        https://theconversation.com/cape-towns-water-crisis-driven-by-politics-more-than-drought-88191

        I am sure rising population played a role as well.

      • psile says:

        This used to be one of the wettest parts of Southern Africa, now it’s becoming one of the driest. There’s only so much politics and human ingenuity can do to alleviate the consequences of a mega drought.

        • I understand that in the US, water allocations of the Colorado River were based on one of the wettest periods in history. Drought is terribly common, all over the world.

          • psile says:

            But every now and again we have prolonged periods of drought, or mega-droughts, which can rage for 50 years, or more. Cape Town has been in the grip of its drought for 30 already. I think one of the reasons Mayan civilisation succumbed was because of one of these 50 year mega-droughts, followed by incredible levels of flash flooding, once the dry cycle ended. Saddled with many other self-inflicted problems, it broke them.

            It’s not difficult to imagine that in Cape Town’s case, the demise of BAU will be exacerbated by climatic extremes. Same can be said of other increasing vulnerable places, like southeastern Australia, which is also in the grip of the biggest housing bubble in human history.

          • Fast Eddy says:

            What Changed The Green Sahara Into A Desert?

            Most scientists believe the Sahara dried up due to a change in the Earth’s orbit, which affects solar insolation, or the amount of electromagnetic energy the Earth receives from the Sun. Or to use simpler words, insolation refers to the amount of sunlight shining down on a particular area at a certain time. It depends on factors such as the geographic location, time of day, season, landscape and local weather.

            Climate scientist Gavin Schmidt, of NASA’s Goddard Institute for Space Studies, explained that around 8,000 years ago, the Earth’s orbit was slightly different to how it is today. The tilt changed from around 24.1 degrees to the present-day 23.5 degrees.

            http://www.messagetoeagle.com/changed-green-sahara-desert/

            The kkkklimate she is a chagin….

            Funny how when confronted with evidence that the kkklimate has always been changin the green groopies ALWAYS respond with ‘but ya — those changes took thousands of years….

            I know this — because I used to be a parrot as well — the MSM TOLD ME TO THINK THAT.

            And I was too stooopid to think to challenge that ‘truth’

            Well if you challenge it you will find that it is NOT a truth. The kkklimate has changed DRAMATICALLY in many places within very short periods of time … decades

        • Fast Eddy says:

          Funny how these things happen… and have always happened… for billions of years.

      • Fast Eddy says:

        More people … require more water…

        Cape Town Population 2018 (Demographics, Maps, Graphs)
        worldpopulationreview.com/world-cities/cape-town-population/

        Oct 20, 2017 – Cape Town grew 2.6% from 2001 to 2011, reaching a metro population of 3.75 million. In 2013, the Western Cape was one of 4 provinces in South Africa that showed significant growth, with the Western Cape’s population growing by nearly 1.5 million people over twelve years.

    • Fast Eddy says:

      Roll back the population — and the problem would be solved

      Cape Town Population Growth. Cape Town grew 2.6% from 2001 to 2011, reaching a metro population of 3.75 million. In 2013, the Western Cape was one of 4 provinces in South Africa that showed significant growth, with the Western Cape’s population growing by nearly 1.5 million people over twelve years

  5. JH Wyoming says:

    http://www.cnn.com/2018/01/19/politics/government-shutdown-trump-congress-latest/index.html

    “Government shuts down as lawmakers still searching for a deal”

    “The federal government shut down at midnight Friday as senators continued to scramble to reach a deal to fund the government.

    This is the first modern government shutdown with Congress and the White House controlled by the same party, and it comes on the on-year anniversary of President Donald Trump’s inauguration.

    Sixty votes were needed to advance the bill to keep the government open for four weeks. Republicans only control 51 seats, so GOP leaders needed Democratic votes to cross that threshold. As of midnight on the East Coast, the vote was still technically ongoing but enough senators had voted against the plan to prevent it from advancing.”

    • psile says:

      You do realise that this is just Kabuki Theatre? That the printing presses will keep rolling, no matter what?

      • JH Wyoming says:

        It can lead to govt. credit rating downgrades and other more serious consequences as govt. employees don’t get paid and contractors for the govt. don’t get paid either. I think Trump wanted this and intends to stretch this out as long as possible to build to a point in which the Russian investigation pales in comparison. Then he’ll demand the investigation be closed before restarting the govt. He’s a ‘Master Manipulator’ and this is the type of situation he will definitely play havoc with. I guarantee that right now he’s chuckling in between bites of the best chocolate cake in the world. Then he’ll start tweeting hateful stuff early in the morning to initiate another entertainment basket of loony accusations to generate another news cycle. It’s all reality TV drama for him and manipulations.

        • psile says:

          You need to stop absorbing so much mainstream news. Start by turning your telly into a relaxing screensaver instead…

          • xabier says:

            Hmm, those fish make me think of going to the dentist when a kid, they always have those damn tanks.

            Cute baby elephants might do the trick.

      • The printing presses will keep rolling for a while, anyhow.

        We need our current system, however, and any transition to another system will be difficult at best.

        At this point, only parts of the US federal government are shutting down. But if funding cannot be figured out, all of the Federal Government shuts down. US debt of any duration doesn’t get paid. Mail service stops running. No one is on staff to collect taxes, much less disburse payments related to Medicare and Social Security.

        I am sure that there would be an attempt to form a new government–perhaps “Federated Union of States” with a new constitution. Or individual groupings of states could go together to form new governments. But doing this would take time, if it could happen at all. If we look back at why collapse took place in the past, inadequate funding of government seems to be high on the list of problems.

        • Dennis L. says:

          In this case doesn’t the president have line item authority in budget items? If memory serves me correctly, he can pick and chose which bills to pay or not pay. This should get someone’s attention, let’s say the ninth court of appeals doesn’t receive their checks.

          • I don’t think so. I think it would apply to removing an item from legislation that had otherwise passed. Our problem is that we cannot pass a budget. Instead, we have for quite some time (since the 2015 fiscal year?) simply passed “continuing resolutions,” that we would continue to spend as in the past.

            We have a system that seems to require a 60-40 majority vote in the Senate (but only a simple majority in the House of Representatives) for a spending bill. The actual vote yesterday was 50-49. This was a simple majority, but not enough to pass the bill.

            I don’t understand what it would take to change the Senate rules for passing spending bills. It would seem like this would be a place to start, in order to fix the problem. Getting 60-40 agreement (or 60-39 agreement, if one of the 100 senators is unable to vote) is almost impossible, if people are very divided on what kinds of major changes are needed to try to fix spending.

        • jupiviv says:

          I agree with Psile. This looks like a farce to get the public (& markets) riled up. This fake reflation rally has bought on any/every piece of news since it began, so this time should be no different. At this point, only stark reality can temper our collective oiled up ego trip.

          • You think that the printing presses will keep going? I am not sure that this works. At some point the system “breaks,” but I don’t know in what way that it breaks.

  6. psile says:

    When hyperinflation calls…

    In Venezuela, money has stopped working

    A friend recently sent me a photograph that tells a powerful story about the situation Venezuelans find themselves in now. It’s not a very good picture, really, just a blurry cellphone shot of trash: some wrapping material, an old CD — the detritus left behind after a store was looted last week in San Felix, a city in the country’s southeast.

    And yet I can’t stop thinking about it, because strewn about in the trash are at least a dozen 20-bolivar bills, small-denomination currency now so worthless even looters didn’t think it was worth their time to stop and pick them up.

    The photo stopped me dead in my tracks. In theory, according to the “official” exchange rate, which long ago lost even a hint of connection with reality, each of those bills is worth $2. In fact, as Venezuela sinks deeper and deeper into the first hyperinflation the Western Hemisphere has seen in a generation, bolivar banknotes have come to be worth basically nothing: Each bill is worth about $0.0001 at the current exchange rate, meaning you need to have 100 of them to equal one penny.

    t’s easy to see why the thieves left them behind.

    Hyperinflation is disorienting. Five or six years ago, the 500 bolivars on the floor would’ve bought you a meal for two with wine at the best restaurant in Caracas. As late as early last year, they would’ve bought you at least a cup of coffee. At the end of 2016, they still bought you a cup of café con leche, at least. Today, they buy you essentially nothing … well, except for 132 gallons of the world’s most extravagantly subsidized gasoline.

    • MG says:

      The collapse is a stillstand. Any hurry for additional stuff allowing for an increased population, always ends up in collapse.

  7. I promised myself to stop blogging in 2018 because there are lots of repetitions, meaning the issues are well covered from every angle; however, psile commenting, especially the first paragraph, I found disturbing.
    C’mon. Koreans are not going to war. Koreans tried to unify after WW2. Even the Russians supported their unification, because they didn’t want to see Americans there. US blocked it.
    Koreans will be provoked into war.
    So will be India and East European nations.
    Any place that boarders Russia, China, and Iran as well as these nations’ offshore interests are susceptible to wars as a way to destabilize those nations.
    The only war that won’t happen is in the US soil, because that will lead to a nuclear war.

    Second, as long as there’s capitalism, there will be fascism. Look at Trump. The only social-order that you couldn’t find fascism is in anarchism. Even socialism is susceptible to fascism, because socialism has some embedded capitalism.

    Third, US internal problems, such as government shutdown, won’t stop US neocons externally actions. It wouldn’t surprise me that the shutdown would help them by keeping the general population away from geopolitical issues/news.

    • JesseJames says:

      “Second, as long as there’s capitalism, there will be fascism. Look at Trump.”

      correction
      “Second, as long as there’s socialism, there will be fascism. Look at the leftwing movement today in the US.”

      • As long as there are not enough resources (especially energy resources) to go around, there will be sharp divisions of belief on how to “fix” the system. All of these divisions will overlook the basic underlying energy per capita problem.

        • Sven Røgeberg says:

          As long as there are not enough resources (especially energy resources) to go around, there will be sharp divisions of belief on how to “fix” the system.
          Worth reading this article about post-work: the radical idea of a world without jobs. Here is American anthropologist David Graeber dreaming of a new and better world: “People will come up with stuff to do if you give them. I lived in a village in Madagascar once. There was this intricate sociability. People would hang around in cafes, gossiping, having affairs, using magic. It was a very complex drama – the kind that can only develop when you have enough time. They certainly weren’t bored!” In western countries too, he argues, the absence of work would produce a richer culture. “The postwar years, when people worked less and it was easier to be on the dole, produced beat poetry, avant garde theatre, 50-minute drum solos, and all Britain’s great pop music – art forms that take time to produce and consume.”
          https://www.theguardian.com/news/2018/jan/19/post-work-the-radical-idea-of-a-world-without-jobs?utm_source=esp&utm_medium=Email&utm_campaign=The+Long+Read+-+Collections+2017&utm_term=261224&subid=23725399&CMP=longread_collection

          • Somehow, we need to provide basic goods and services to people, though, and our current system is mixed up with an unsustainable self-organized economic system. I don’t see how it can continue.

            • Theblondbeast says:

              David grabber has an excellent book on the history of debt – Debt, the First Five Thousand Years. What he doesnt’t understand as an anarchist is the nature of energy resources and unequal distribution in terms of capital formation. Debt is worth a read, however.

            • I have the book and have read it.

          • xabier says:

            Curious argument which the author proposes regarding a work-less society: equally, one might suggest that too much leisure with every need provided for would result in despairing, aimless, people taking refuge in drink and drugs, strange cults and perversions, desperate for stimulation or forgetfulness.

            I would almost certainly go to pieces under the intense pressure of no-work, ever, even though I’m never at a loss as to what to do in leisure time.

          • MG says:

            Britain desperately needs imported workforce. As many countries around the world. Such ideas like that we do not need human labor are phantasies that create furhter pressure on lowering tha wages of those who work and redistribution of the resources to those who are not productive.

            All these things about jobless societies are pure nonsense… The limit to machines is the amount of service and maintenance personal, besides those who produce them. The machines, computers and robots are not created out of nothing, via self-propagation, they are produced by humans.

            • xabier says:

              Very true, MG. British agriculture would certainly collapse without Eastern Europeans – they are tough.

              The immigrants in the cities just don’t have the physical fitness or work ethic – totally urban and soft even when not dysfunctional. Nor do the snowflake whites.

              Unfortunately, that is the segment of the population – urban, volatile, low-skilled and unassimilated – which is reproducing at the greatest rate throughout Western Europe. The snowflakes will just die out.

          • Duncan Idaho says:

            I’m a Graeber fan, but few on this board would know who he is.
            The political and physical jump is beyond this board.

            • MG says:

              “The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the ’60s).”

              This sounds like somebody else behind the scene is responsible. It is not that way: the culprit is the cheap energy, including suitable cheap workforce, which is declining.

              The word “energy” is not mentioned at all in the given article.

              In that way, Graeber is one of those who do bullshit jobs writing bullshit… His views are very simplistic, not taking into account the dependence of the population on the cheap energy. With high complexity and the lack of cheap energy, the population implodes. It is not the debt that makes slaves from the people, but the system built on the cheap energy that runs into debt, once the cheap energy and workforce are gone.

            • MG says:

              The quotation was from this article: https://strikemag.org/bullshit-jobs/

            • DJ says:

              Graeber like most leftist believe all humans must just wake up and change their values and behaviour and then everything will work out fine.

            • Nature seems to have a major distinction: Ingroups and outgroups.

              Sharing with in-groups seems to be optimal, but sharing with out-groups doesn’t work well at all. The problem is one of not enough resource to go around. Graeber might be right, if he could keep his analysis to within particular groups. This is why, “Thou shalt not kill,” does not seem to apply to fighting wars with neighbors. It just applies to not killing off neighbors.

          • Kim says:

            “The postwar years, when people worked less and it was easier to be on the dole, produced beat poetry, avant garde theatre, 50-minute drum solos, and all Britain’s great pop music – art forms that take time to produce and consume.”

            The runaway naivety and refusal to face realities always leaves me feeling defeated.

            It does not matter what arguments you make, how closely argued or logical they may be, how undeniable the premises or how closely the observed facts align with your arguments. If they don’t like it, if it doesn’t paint what they think is a pretty picture, it is just like you never said a word.

            And yes, without a doubt, 50 minute drum solos take at least 50 minutes to produce and it is very difficult to consume them faster.That’s just a fact! When you think about it, my God, how right he is! And if we put out shoulders to the grindstone and get everyone on the dole, who knows what we might be able to achieve? 24 hour drum solos! We can dream!

            Please Fast Eddie, keep posting.

            • Yorchichan says:

              Please Fast Eddie, keep posting.

              Agreed. Whether right or wrong, Fast Eddy is always 100 times more entertaining than any article by JMG. The way he wears his heart on his sleeve is endearing also.

              BTW, thanks Kim for the link you posted last September to Understanding Human History by Michael Hart. It was a good read.

            • Fast Eddy says:

              I’ve been a bit light on the posts that past couple of days…

              That’s because I am in Queenstown looking at ANTI-doomsteads… as I consider selling the pointless doomstead which is taking too much of my time to maintain (F789 THE WEEDS F789 THE WEEDS)…. and trading into a shack on the side of a mountain looking at a lake…. growing sweet f789 all….

              Nothing with a garden… absolutely no solar panels …. all I ask is enough space to ram my 20footer in ….

              Time to walk the walk … enough of this faux farm boy bullsh it….

            • Yorchichan says:

              How about a permaculture farm where all the food you’ll ever need grows all by itself with minimal maintenance required by you?

            • Yorchichan says:

              In case you were wondering, there should have been a “sarc” tag at the end of that.

          • A Real Black Person says:

            You need a surplus or a low human population to resource ratio in order for people to have time for complex drama and art.

            Madagascar has one of the most unusual racial mixes I’ve ever seen–asian and African (black). These groups usually don’t mix too much.

      • Baby Doomer says:

        Left wingers are the most open and tolerant people in America. And you think they are marching us towards fascism? I bet Leo DiCaprio would make an evil dictator! LOL

        • Kim says:

          “Left wingers are the most open and tolerant people in America.”

          This is exactly what I taking about. There is absolutely no point in me making any factual observations about this to someone who could say such a thing. It would be like spitting on a tortoise. What would be the point?

          • xabier says:

            Exactly, all totalitarian ideologies – Left or Right – are intolerant, corrupt and oppressive when push comes to shove.

            Nothing worse than those who think that they alone are virtuous, a very common fault on the Left.

      • Fascism has different flavors. There are left fascism and right fascism.
        Left fascism is more class oriented. Right is race oriented.
        Another way to look at fascism: Hitler vs. Trump.
        If you look at Hitler, Hitler was a POLITICAL FASCIST, meaning, Hitler cares about jobs so he spent heavily on Germany. Hitler wasn’t looking for profits, for the economic side. Hitler even created another currency to bypass the German Mark (private money). Hitler cared about the welfare of the German people, such as in job creation (military buildup, Volkswagen, autobahn), public healthcare, and public education. Even land had no rights. Land to be expropriate for public utilities.
        Trump is the opposite. TRUMP IS AN ECONOMIC FASCIST.
        Hitler did favor usury and government to benefit the state, meaning the German people.
        Trump favors usury and privatization to benefit private power, meaning the wealth Americans.
        That’s why I believe US economy will be worse off; it will crash faster under conservatism fascism than liberalism fascism.

        Core of Socialism: The workers, the craftsmen, and the artists own their production, meaning, they are not hourly wage-slave of people with capital.
        Core of Capitalism: You, and your government work for the owners of capital, the bankers/investors.
        Core of Communism: Means of production and money issuance reside within the state, meaning, communism is super-capitalism.
        Core of Religion: You don’t need proof (high faculty brain), you need faith.
        Core of Fascism: When both capitalism and communism structures fail. Fascism has different flavors, but, basically, it boils down to nationalism and race.
        Fascism is a by-product of power structures, it comes from the right. Fascism could never be implemented in a socialist/anarchist system because those don’t come with power structures —with bosses.
        Socialism doesn’t’ exist in America but in ones brain.
        America is state-capitalism, a system of private/centralized power run by ‘the smart’ class with lots of cronyism —welfare state.

        • Ed says:

          The owning class and the AI class and no humans will be less harm to the planet. It is the future.

          • jupiviv says:

            We only have to figure out how to substitute the ready and flexible access to resources and services provided by global human activity with countless robots designed for very specific tasks.

            Giving rights to the robots may encourage them to take the initiative and repair/modify both the system and their own operation as and when (i.e. frequently) required.

            • Sure! (sarc) And who designs and makes the robots, from finding the ore to all the energy steps needed?

            • JH Wyoming says:

              “The owning class and the AI class and no humans will be less harm to the planet. It is the future.”

              I agree. We ‘The People’ have been targeted for termination via robot replacement. It’s not a hard leap to take either because people are demanding, use huge amounts of resources, unpredictable, will collude to riot, get sick, tired, moody, and age causing lots of medical, care & housing expenses. In a world with the wealthy getting super absolutely incredibly wealthier all the time, coupled with increasing AI capability, why should the ‘Job Creators’ have to put up with us? They aren’t and you’re right Ed.

              Anyone that cannot see the writing on the wall, will have a rude awakening when they go to buy a TV and an AI salesperson walks up and starts a conversation about TV’s, then go to McDonald’s and it’s fully automated and an AI hands out the food and says “Have a nice day”, then leaving the parking lot an AI controlled McD’s truck will be leaving after making it’s automated delivery. At some threshold of that nature people will finally get it – that they’re being replaced. Huge parking lots of people living in cars will spring up, then one by one they will pass away and all that will be left will be as Ed stated is “…the owning class and the AI class.” The empty cars in the lot will be picked up by an AI and recycled by AI. It’s not even one possible future, it is the future, it’s a lock. It’s happening now.

              And it’s obvious, because those people that are developing that technology always act like the only problem is the sci-fi concern that AI will turn on people and kill them. No, that is a false argument to distract from the real concern, which is they will replace the need for regular people.

            • Kim says:

              The future is beatnik robots playing all-day drum solos while spewing out mountains of beat poetry. People of the world, our future is secure!

              I now completely understand Fast Eddie’s method. The only answer is unrelenting sarcasm, even if only as a way to retain our own sanity.

            • Fast Eddy says:

              It is the only way…

            • smite says:

              As if the capital would care if the workers are made from flesh and bone, or plastic, silicon and metal. As long as the job gets done, and trust me, it will. Indeed, when the ‘cheap an’ nasty’ surplus energy inevitably will be used up, so will the utility evaporate for the large swaths of mostly nonproductive and irrelevant humans.

              The dwellers who notoriously post sarcastic comments regarding the immense automation, AI and robotification push which the capital currently is heavily pursuing, are those who never worked in a productive trade or an advanced technical field and certainly never have experienced the profoundness of a fully ‘lights-out’ “robots making robots” manufacturing plant.

              I use to think of those deprived minds as complexed ignorants, intellectual posers with no properly grounded clue about the whereabouts of the economic development trajectory due to a lack of scientific and engineering knowledge.

            • jupiviv says:

              “a fully ‘lights-out’ “robots making robots” manufacturing plant.”

              Which you presumably saw during a field trip for the ‘special gang’. Name any crucial aspect of automation that doesn’t require economies of scale. If it was a deliberate attempt at holocaust, the deployment would most certainly not occur in sectors that themselves depend upon economies of scale.

            • all robots have to do is make stuff to sell to each other

              then all we humans have to do is sit back and cream off the profits.

              took me a while to reply to this—access to a computer is strictly limited in this particular funny farm

            • smite says:

              “Name any crucial aspect of automation that doesn’t require economies of scale”

              Software.

              The complexities of IC moves ever faster into the realm of computation where it is no longer bound by the law of diminishing returns.

              Software never wear out or require energy for its storage. It is only when it is being developed or executed, energy has to be provided.

              Modern semiconductors which are executing the [software] programs is the backbone, besides energy, of basically all relevant economic activity, and for all intents and purposes, is indestructible and does neither wear down with time, provided they are kept working within spec.

              So there you go, once we reach a certain level of advancement in technology, economies of scale becomes irrelevant as long as the complexity for its reinstatement can be upheld through time within the domain of computation.

            • I am not certain that software never wears out. If nothing else, the machines on which it is being used are constantly changing. It is constantly being stored in different places. I would expect that the number of software programs from 2007 that are still operating, without change, is fairly small. We discovered in 1999 that leaving only a two digit date field was not a good idea, for example.

              Software do require energy for storage. Even something that a person writes by hand with a pen on paper requires energy for storage. This energy is involved in making the paper, the pen, the ink, and giving the human operator enough energy to store the program. Storing the software somewhere (local hard drive or cloud, perhaps) requires energy both to make the devices involved, and for the storage process. More energy is required for executing the program. Needless to say, these are part of much larger systems. If the electric grid is not working, computer program storage will not work, unless a suitable backup generator or battery is available.

              When it comes to economies of scale, companies develop multipurpose software that can be used by many companies. One such program I am aware of is Salesforce software. It can be adapted for many purposes; I have heard you can even order your lunch to be delivered on it. It has applications designed to cover sales, service, marketing, commerce, teamwork, and cloud use. Its programers are considered “Salesforce engineers.” According to some, this is a step down from a full programmer. Another place where economies of scale are used is in developing database programs that can be adapted for use by many companies.

            • jupiviv says:

              “Software never wear out or require energy for its storage.”

              Hard drives require energy to run and produce. Databases (the basis of all modern software including AI/robotics) require more and more hard drives with time in order to carry out their function.

              Besides, why the hell are we talking about software? Software can’t create resources or energy. At best, it can *facilitate* their creation or consumption, but still entirely within economies of scale.

            • smite says:

              “all robots have to do is make stuff to sell to each other“

              They are only obliged to serve their owners.

              In the words of late George Carlin:

              “Forget the politicians. The politicians are put there to give you the idea you have freedom of choice. You don’t. You have no choice. You have owners. They own you”

              So you see, just like the robots, you have owners. A human is merely a machine made from flesh and bone with some cognitive abilities, and you have the audacity to think that you somehow are special? A unique kind that deserves a chair at the banquet together with the wealthy once resource scarcity arrives in your neighborhood?

            • i was being mildly facetious

            • smite says:

              “i was being mildly facetious”

              +1

              It is interesting that you have changed your mind on the subject.

              😉

            • smite says:

              “Software do require energy for storage.”

              Not at all, once you have stored your data onto a hard/solid state drive, you can safely power off that drive, no more energy required. However, manufacturing data storage devices and other computer parts obviously requires energy and raw material inputs.

              “I would expect that the number of software programs from 2007 that are still operating, without change, is fairly small.”

              You would be surprised to know the reality.

              One of the world’s largest software project – The Linux Kernel, started it’s development 1991 and that piece of software is more relevant than ever and is continuously being developed and improved upon by tens of thousands of developers.

              And by software, I am not merely speaking about compiled programs that are executable on a computer, but rather source code with general implementations and algorithms such as for sorting, search, graph, maths. Many of which algorithms was discovered/invented already in the 40’s and put into source code which still lives on today just like any timeless piece of science and mathematics knowledge.

            • jupiviv says:

              “Not at all, once you have stored your data onto a hard/solid state drive, you can safely power off that drive”

              It would be useless then, so this point is a red herring. Actually, it fails even on its own terms, e.g. disk failure (hence backup).

              I’m baffled you even picked software of all things as an example of something that *doesn’t* depend on economies of scale, since they have no inherent application or use *without* the current interwoven economies of scale we all live under. Software/IT jobs will be among the first to go in the next crash.

            • DJ says:

              Can you say software doesn’t depend on scale when it runs on a computer, the computer has an OS, the source code is compiled by a compiler, most likely you use third party components, or at least reuse code, probably internet connections, maybe storing on the cloud and on and on.

            • smite says:

              “Can you say software doesn’t depend on scale when it runs on a computer, the computer has an OS, the source code is compiled by a compiler, most likely you use third party components, or at least reuse code, probably internet connections, maybe storing on the cloud and on and on.”

              “economies of scale”, not scale.

              Once the software is created, it can be copied without effort and with minimal energy and resource use.

              Try that with any physical stuff and you quite fast hit a resource limit, but perhaps you’ll first run out of money manufacturing that “stuff”.

            • jupiviv says:

              “Once the software is created, it can be copied without effort and with minimal energy and resource use.”

              This again is a red herring because nothing is gained by merely copying software or code. It can only be useful within a non-software context. What’s the point of, say, G-code without processed materials? Or ArchiCAD without real estate demand?

            • DJ says:

              How many programmers are there in the world? 10 millons? Add engineers, economists, statisticans etc that do some programming and you may be approaching 100 millions. That is scale.

            • smite says:

              Well, you wanted one crucial aspect of automation that does not demand economies of scale and I gave you one.

              And as you already concluded. CNC machines, robots and other aspects of automation removes jobs. As a side benefit it makes production cheaper and more reliable since no humans are involved.

              But don’t you for a second forget that once resource limits hit hard, the same computer generated G-code will only serve their owners and not the hoi-polio.

            • jupiviv says:

              “And as you already concluded. CNC machines, robots and other aspects of automation removes jobs.”

              That wasn’t my conclusion, so this is yet another red herring. I’ll just assume that you are either too dumb or too stubborn to understand my arguments, and leave it at that.

            • smite says:

              “How many programmers are there in the world? 10 millons?”

              Why don’t you go find out? Is it even possible to know? There are more programmable computational devices, by orders of magnitude, than there are humans on earth. Just because they are so cheap, and increasingly more so, to produce with regards to both pricing and energy.

              Software is indeed a huge industry, people play games, check Facebook , twitter and even entertain themselves by posting here, all on their computers and yet no physical items are being moved, we are immensely amused and entertained by the virtual, that it has spawned one of the largest and most profitable industries in the history of mankind.

              Thus no goods are being manufactured and shipped by the creation and use of a computer program. It mostly reside outside of the realm of ‘economies of scale’.

              Yet software is fundamental in the day to day operation for the economies of scale for BAU.

              Just because a printing press is required for mass producing books does not mean that the words within the press plates and book itself require a printing press. Although, that book and press plates might as well contain drawings on how to manufacture said press, or poetry.

            • smite says:

              “Software/IT jobs will be among the first to go in the next crash.”

              It’s the only jobs that will remain.

              The rest of the fossil fueled fake jobs programs will burn and starve together with the hoi-polloi already rendered unemployable by their intellectual shortcomings.

            • Not without grid electricity. A bunch of programmers, each with their own solar panels and batteries, aren’t going to be able to do much.

          • AI?
            Who cares. This is a temporary distraction mainly for the smart class. Actually, technology is working very well for them. Much better than I first though.
            The President’s job is to make sure his or her nation is the last one standing. And Trump, conservatives, is a huge mistake, in my opinion.
            Anyway, post collapse (2027/2032) these won’t matter. Only enterprise that will survive is religion and societies with low complexity, opposite of the American ‘middle class myth’ dream, such as in Australian aborigines.
            Perhaps these tribes too will survive, because they know how to live with little……….and very little complexity:

            • Nope.avi says:

              There is no level of complexity that is immune to collapse.
              Given enough scarcity, even the most basic of human social organizations,families can disintegrate.

            • xabier says:

              Prepare for collapse: found a religion or cult, become a shaman or faith healer!

            • Post collapse western culture will go the way of the Neanderthals, meaning disappear faster than any other culture while taking many other cultures with.
              Not that matter too much, because the end point of all evolutionary process is extinction.
              So, enjoy as much as you can. Western culture will end in horror.
              Matter of 15 years, if that.

        • JesseJames says:

          I think you really mean “exploitive” fascism. I would lump the US government supported takeover of Indian lands in this category as it was state sponsored pillage.

          I don’t buy that Trump being a businessman, a wheeler dealer, makes him a fascist. You obviously are part of our society that want to paint him that way but that does not make it true. If he builds a $10M dollar casino and takes tax credits, well, that is the law that congress created that he is following. They created that law with a purpose…to encourage private development in a disadvantaged area. Did they buy some families out of their homes in the process…probably. How do you have development in that area with out impacting someone?

          If any leader of any society makes a decision that some people think is exploitive of something like the environment, does that make them a fascist? That is a ridiculous watering down of what fascism has been historically.

          How do you say a socialist system doesn’t come with power structures? Are you delusional?

          Every society has elites who make decisions for their own good…in any system. To call capitalists fascists is silly. Socialist states have elites who do the same thing…pad their pockets. Let’s look at examples of leftwing facsists….Hitler/Nazis, PolPot, Stalin, Maoists, the Red Guards. The problem with leftwing fascism is it historically becomes murderous in a genocidal way. People such as you that like to throw around the word fascism like to ignore history.

          If you don’t like capitalism that is fine, but to equate it to fascism is silly. It is a meme that you want to propagate. No contest to the fact that the US system has been captured by corporate interests. I think the failings of our system and of men, allowing this to happen are the common failure of man…greed. The eternal quest of mankind to find a system of government that avoids this failing will never succeed.

          Man is saddled with this contradiction. We do things that are not in humanities best interest. Our leaders mostly do this. This is part of what Gail refers to as the self organizing system.

          • Nope.avi says:

            Right! Whatever we accuse the wealthy of doing, non-rich people have been observed doing when given an opportunity. The wealthy do not have a monopoly on greed and selfishness.

          • JesseJamess:
            US government supported takeover of Indian lands……Exactly. US was built on genocide, slave, and colonization over salty water. US is working exactly like it was planned by the founding fathers. Remarkable well, if I may say.

            How do you say a socialist system doesn’t come with power structures? Are you delusional?
            No, because socialism lost to capitalism. Also, socialism cannot compete with capitalism, because socialism is a local product, and money is issued locally. However, capitalism is a global product. Capital flows everywhere, because it’s private money issued by banks and corporations.
            This should help, so we don’t talk in circles.
            Is Russia a socialist nation? NO.
            Are Norway, Sweden, Denmark, and many other socialist? NO.
            But why are these nation called socialists?
            Propaganda. These are all state capitalism structures, so is South Korea, Japan, Germany, France, Brazil…………
            Italy, followed by Spain, tried to be socialists, but they were crashed by the capitalists and communists. Italy almost bankrupted the CIA from the end of WW2 through the 60’s. Spain tried in 34, but it last about 10 months. Vietnam tried, but they were destroyed. The only nation that succeeds was China in 49 but, by the 70’s they knew that they had to embrace capitalism or otherwise they will be invaded.

            Socialist states have elites who do the same thing…pad their pockets. Correct, because, as I said before, socialism has some embedded capitalism.

            Let’s look at examples of leftwing facsists….Hitler/Nazis, PolPot, Stalin, Maoists, the Red Guards…. Wrong. Hitler, politically speaking, is to the left of Trump. But, does it make Hitler a left? No. Because left are not nationalists. Nationalism is a right wing product so were Hitler and the Nazis.
            Pol Pot inherited a destroyed nation. Second, there was lots of bad press such as that Pol Pot killed 2 million people, which was a fabrication. Pol Pot is not a good example.
            Stalin left? Your history is really distorted. Stalin was a hatter of the peasants and working classes. Stalin dismantled most, if not all, organs of popular power while telling them that he was working for the common men. Stalin killed, pretty much, everyone from his left, even that these were right wingers.
            How much of a dictator was Stalin?
            Here’s one example. It’s by Republican Senator Jeff Flake:
            “It bears noting that so fraught with malice was the phrase ’enemy of the people’ that even Nikita Khrushchev forbade its use, telling the Soviet Communist Party that the phrase had been introduced by Stalin for the purpose of ’annihilating such individuals’ who disagreed with the supreme leader,” Flake continued, Trump’s “repulsive” statements show he has it backward — “despotism is the enemy of the people.

            If you don’t like capitalism that is fine, but to equate it to fascism is silly.
            Ok. Let’s say that you’re right. So, if fascism is not a capitalism failure outcome, what then creates fascism? Does religion creates Fascism? Well, accordingly to Chris Hedges, the Christians right fascists will be as bad as the Muslin fascists when the economy tanks, which it will.
            Anyway, what is the difference between fascism and capitalism?
            Fascism arises when the money is not enough to keep the owners of the nation and its workers all parting.
            Now, to be fare to the right spectrum ‘conservatives’ capitalism is a left creation. It must too. However, the fascism within capitalism comes from the right, because the right ‘conservatives’ can’t stand sharing, especially if there are minorities involved.

            This is part of what Gail refers to as the self organizing system….Exactly, because industrialization and capitalism are complexes products so they must be organized. However, complexities don’t suit most societies, because complexities are left ‘liberal’ products.
            I am a liberal, so I am very happy with industrialization and capitalism, but, under state supervision. Liberals don’t trust the private sector or believe in socialism. The first is dangerous. The second mediocre.

            • JesseJames says:

              Peace to all. My “ideal” government would be socialist in that it would provide medical care, but leave our lives to ourselves with minimal intervention. It would provide basic regulatory protections to society (from corporations primarily) for pollution control, safety, etc. The problem with governments is they begin to exist for their own perpetuity and power. There is our problem.

            • the ultimate problem with any society is that it expands beyond the level of its own sustainability (unless you’re prepared to live in the stone age)

              when that happens, then problem 2 kicks in—how to get hold of sufficient energy to support itself.

              the business of government is finding that energy, and keeping it, and getting more—because people always demand more–and vote for those who promise more–even if it means stealing it from someone else.

              universal contentment is a myth i’m afraid

            • DJ says:

              There used to exist nations where cars and food and houses were produced by corporations but health care, the grid and the police was run by the state.

              Nowadays health care, the grid and police is run by corporations and cars and foods and houses are built (or at least subsidied) by the state.

  8. Ed says:

    As long as there are people who desire to rule over others there will be oppressive government. It does not matter what you call it or them.

    • JH Wyoming says:

      True enough, because people seek power positions to have ‘power over’ people to feel superior and have the opportunity to put something in their own pocket (corruption-greed). Only the rare individual seeks power to actually help ‘The People’. It’s called oppressive because the longer a group of people in power remain in power, the more they collude (agree they all want to be greedier) to skim even more cream off for themselves, which is of course taken from ‘The People’. For this reason we can all be assured that it is not in our best interest to be ruled by people, because they cannot be trusted to do what is best for the people. Fact is we’d be better off being ruled by a computer program, but then who is it that would program the computer? If that person was in charge of that for long enough, he/she would start programming it to skim cream off the top for themselves. “Oh, I got 5% of all taxes deposited into my bank account because of a glitch in the program. It’s since been fixed, ha-ha.”

      There is no way around this and will continue to be a problem as long as there are people that have power over the people.

      • Nope.avi says:

        This is a problem of civilization. Social stratification is less of an issue in societies with smaller populations.

    • DJ says:

      As long as there are people who desire to be ruled there will be oppressive government.

  9. Nope.avi says:

    Gail stated earlier, in the comments sections to an earlier blog entry, that poor people are under pressure to work all the time to make ends meet. It seems to me like highly paid, high status salaried workers are also under a lot of pressure to work all the time. The fields of law, finance, and medicine are known for long hours. If lawyers, bankers, and doctors are so productive, why do they end up working so many hours??

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