Understanding Our Pandemic – Economy Predicament

The world’s number one problem today is that the world’s population is too large for its resource base. Some people have called this situation overshoot. The world economy is ripe for a major change, such as the current pandemic, to bring the situation into balance. The change doesn’t necessarily come from the coronavirus itself. Instead, it is likely to come from the whole chain reaction that has been started by the coronavirus and the response of governments around the world to the coronavirus.

Let me explain more about what is happening.

[1] The world economy is reaching Limits to Growth, as described in the book with a similar title.

One way of seeing the predicament we are in is the modeling of resource consumption and population growth described in the 1972 book, The Limits to Growth, by Donella Meadows et al. Its base scenario seems to suggest that the world will reach limits about now. Chart 1 shows the base forecast from that book, together with a line I added giving my impression of where the economy really was in 2019, relative to resource availability.

Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil,” with dotted line added corresponding to where the world economy seems to be in 2019.

In 2019, the world economy seemed to be very close to starting a downhill trajectory. Now, it appears to me that we have reached the turning point and are on our way down. The pandemic is the catalyst for this change to a downward trend. It certainly is not the whole cause of the change. If the underlying dynamics had not been in place, the impact of the virus would likely have been much less.

The 1972 model leaves out two important parts of the economy that probably make the downhill trajectory steeper than shown in Figure 1. First, the model leaves out debt and, in fact, the whole financial system. After the 2008 crisis, many people strongly suspected that the financial system would play an important role as we reach the limits of a finite world because debt defaults are likely to disturb the worldwide financial system.

The model also leaves out humans’ continual battle with pathogens. The problem with pathogens becomes greater as world population becomes denser, facilitating transmission. The problem also becomes greater as a larger share of the population becomes more susceptible, either because they are elderly or because they have underlying health conditions that have been hidden by an increasingly complex and expensive medical system.

As a result, we cannot really believe the part of Figure 1 that is after 2020. The future downslopes of population, industrial production per capita, and food per capita all seem likely to be steeper than shown on the chart because both the debt and pathogen problems are likely to increase the speed at which the economy declines.

[2] It is far more than the population that has overshot limits.

The issue isn’t simply that there are too many people relative to resources. The world seems to have

  • Too many shopping malls and stores
  • Too many businesses of all kinds, with many not very profitable for their owners
  • Governments with too extensive programs, which taxpayers cannot really afford
  • Too much debt
  • An unaffordable amount of pension promises
  • Too low interest rates
  • Too many people with low wages or no wages at all
  • Too expensive a healthcare system
  • Too expensive an educational system

The world economy needs to shrink back in many ways at once, simultaneously, to manage within its resource limits. It is not clear how much of an economy (or multiple smaller economies) will be left after this shrinkage occurs.

[3] The economy is in many ways like the human body. In physics terms, both are dissipative structures. They are both self-organizing systems powered by energy (food for humans; a mixture of energy products including oil, coal, natural gas, burned biomass and electricity for the economy).

The human body will try to fix minor problems. For example, if someone’s hand is cut, blood will tend to clot to prevent too much blood loss, and skin will tend to grow to substitute for the missing skin. Similarly, if businesses in an area disappear because of a tornado, the prior owners will either tend to rebuild them or new businesses will tend to come in to replace them, as long as adequate resources are available.

In both systems, there is a point beyond which problems cannot be fixed, however. We know that many people die in car accidents if injuries are too serious, for example. Similarly, the world economy may “collapse” if conditions deviate too far from what is necessary for economic growth to continue. In fact, at this point, the world economy may be so close to the edge with respect to resources, particularly energy resources, that even a minor pandemic could push the world economy into a permanent cycle of contraction.

[4] World governments are in a poor position to fix the current resource and pandemic crisis.

In our networked economy, too low a resource base relative to population manifests itself in a strange way: It appears as an affordability crisis that leads to very low prices for oil. It also appears as terribly low prices for many other commodities, including copper, lithium, coal and even wholesale electricity. These low prices occur because too large a share of the population cannot afford finished goods, such as cars and homes, made with these commodities. Recent shutdowns have suddenly increased the number of people with low income or no income, pushing commodity prices even lower.

If resources were more plentiful and very inexpensive to produce, as they were 50 or 70 years ago, wages of workers could be much higher, relative to the cost of resources. Factory workers would be able to afford to buy vehicles, for example, and thus help keep the demand for automobiles up. If we look more deeply into this, we find that energy resources of many kinds (fossil fuel energy, nuclear energy, burned biomass and other renewable energy) must be extraordinarily cheap and abundant to keep the system growing. Without “surplus energy” from many sources, which grows with population, the whole system tends to collapse.

World governments cannot print resources. What they can print is debt. Debt can be viewed as a promise of future goods and services, whether or not it is reasonable to believe that these future goods and services will actually materialize, given resource constraints.

We are finding that using shutdowns to solve COVID-19 problems causes a huge amount of economic damage. The cost of mitigating this damage seems to be unreasonably high. For example, in the United States, antibody studies suggest that roughly 5% of the population has been infected with COVID-19. The total number of deaths associated with this 5% infection level is perhaps 100,000, assuming that reported deaths to date (about 80,000) need to be increased somewhat, to match the approximately 5% of the population that has, knowingly or unknowingly, already experienced the infection.

If we estimate that the mean number of years of life lost is 13 years per person, then the total years of life lost would be about 1,300,000. If we estimate that the US treasury needed to borrow $3 trillion dollars to mitigate this damage, the cost per year of life lost is $3 trillion divided by 1.3 million, or $2.3 million per year of life lost. This amount is utterly absurd.

This approach is clearly not something the United States can scale up, as the share of the population affected by COVID-19 relentlessly rises from 5% to something like 70% or 80%, in the absence of a vaccine. We have no choice but to use a different approach.

[5] COVID-19 would have the least impact on the world economy if people could pay little attention to the pandemic and just “let it run.” Of course, even without mitigation attempts, COVID-19 might bring the world economy down, given the distressed level of today’s economy and the shutdowns experienced to date.

Shutting down an economy has a huge adverse impact on that economy because quite a few workers who are in good health are no longer able to make goods and services. As a result, they have no wages, so their “demand” goes way down. If the economy was already having an affordability crisis for goods made with commodities, shutting down the economy tends to greatly add to the affordability crisis. Prices of commodities tend to fall even lower than they were before the crisis.

Back in 1957-1958, the Asian pandemic, which also started in China, hit the world. The number of deaths was up in the range of the current pandemic, relative to population. The estimated worldwide death rate was 0.67%.  This is not too dissimilar from a death rate of 0.61% for COVID-19, which can be calculated using my estimate above (100,000 deaths relative to 5% of the US population of 33o million).

Virtually nothing was shut down in the US for the 1957-58 pandemic. When doctors or nurses became sick themselves, wards were simply closed. Would-be patients were told to stay at home and take aspirin, unless a severe case developed. With this approach, the US still faced a short recession, but the economy was soon growing again. Populations seemed to reach herd immunity quite quickly.

If the world could somehow have adopted a similar approach this time, there still would have been some adverse impact on the economy. A small percentage of the population would have died. Some businesses might have needed to be closed for a short time when too many workers were out sick. But the huge burden of job loss by a substantial share of the economy could have been avoided. The economy would have had at least a small chance of rebounding quickly.

[6] The virus that causes COVID-19 looks a great deal like a laboratory cross between SARS and HIV, making the likelihood of a quick vaccine low.

In fact, Professor Luc Montagnier, co-discoverer of the AIDS virus and winner of a Nobel Prize in Medicine, claims that the new coronavirus is the result of an attempt to manufacture a vaccine against the AIDS virus. He believes that the accidental release of this virus is what is causing today’s pandemic.

If COVID-19 were simply another influenza virus, similar to many we have seen, then getting a vaccine that would work passably well would be a relatively easy exercise. At least one of the vaccine trials that have been started could be reasonably expected to work, and a solution would not be far away.

Unfortunately, SARS and HIV are fairly different from influenza viruses. We have never found a vaccine for either one. If a person has had SARS once, and is later exposed to a slightly mutated version of SARS, the symptoms of the second infection seem to be worse than the first. This characteristic interferes with finding a suitable vaccine. We don’t know whether the virus causing COVID-19 will have a similar characteristic.

We know that scientists from a number of countries have been working on so-called “gain of function” experiments with viruses. These very risky experiments are aimed at making viruses either more virulent, or more transmissible, or both. In fact, experiments were going on in Wuhan, in two different laboratories, with viruses that seem to be not too different from the virus causing COVID-19.

We don’t know for certain whether there was an accident that caused the release of one of these gain of function viruses in Wuhan. We do know, however, that China has been doing a lot of cover-up activity to deter others from finding out what actually happened in Wuhan.

We also know that Dr. Fauci, a well-known COVID-19 advisor, had his hand in this Chinese research activity. Fauci’s organization, the National Institute for Allergy and Infectious Diseases, provided partial funding for the gain of function experiments on bat coronaviruses in Wuhan. While the intent of the experiments seems to have been for the good of mankind, it would seem that Dr. Fauci’s judgment erred in the direction of allowing too much risk for the world’s population.

[7] We are probably kidding ourselves about ever being able to contain the virus that causes COVID-19. 

We are gradually learning that the virus causing COVID-19 is easily spread, even by people who do not show any symptoms of the disease. The virus can spread long distances through the air. Tests to see if people are ill tend to produce a lot of false negatives; because of this, it is close to impossible to know whether a particular person has the illness or not.

China is finding that it cannot really contain the virus that causes COVID-19. A recent South China Morning Post article indicates that roughly 14 million people are to be tested in the Wuhan area in the next ten days to try to control a new outbreak of the virus.

It is becoming clear, as well, that even within China, the lockdowns have had a very negative impact on the economy. The Wall Street Journal reports, China Economic Data Indicate V-Shaped Recovery Is Unlikely. Supply chains were broken; wholesale commodity prices (excluding food) have tended to fall. Joblessness is increasingly a problem.

[8] If we look at deaths per million by country, it is difficult to see that lockdowns are very helpful in reducing the spread of disease. Masks seem to be more beneficial.

If we compare death rates for mask-wearing East Asian countries to death rates elsewhere, we see that death rates in mask-wearing East Asian countries are dramatically lower.

Figure 2. Death rates per million population of selected countries with long-term exposure to the virus causing COVID-19, based on Johns Hopkins death data as of May 11, 2020.

Looking at the chart, a person almost wonders whether lockdowns are a response to requests from citizens to “do something” in response to an already evident surge in cases. The countries known for their severe lockdowns are at the top of the chart, not the bottom.

In fact, a preprint academic paper by Thomas Meunier is titled, “Full lockdown policies in Western Europe countries have no evident impacts on the COVID-19 epidemic.” The abstract says, “Comparing the trajectory of the epidemic before and after the lockdown, we find no evidence of any discontinuity in the growth rate, doubling time, or reproduction number trends.  .  . We also show that neighboring countries applying less restrictive social distancing measures (as opposed to police-enforced home containment) experience a very similar time evolution of the epidemic.”

It appears to me that lockdowns have been popular with governments around the world for a whole host of reasons that have little to do with the spread of COVID-19:

  • Lockdowns give an excuse for closing borders to visitors and goods from outside. This was a direction in which many countries were already headed, in an attempt to raise the wages of local workers.
  • Lockdowns can be used to hide the fact that factories need to be closed because of breaks in supply lines elsewhere in the world.
  • Many countries have been faced with governmental protests because of low wages compared to the prices of basic services. Lockdowns tend to keep protesters inside.
  • Lockdowns give the appearance of protecting the elderly. Since there are many elderly voters, politicians need to court these voters.

[9] A person wonders whether Dr. Fauci and members of the World Health Organization are influenced by the wishes of vaccine and big pharmaceutical companies.

The recommendation to try to “flatten the curve” is, in part, an attempt to give vaccine and pharmaceutical makers more time to work on their products. Is this really the best recommendation? Perhaps I am being overly suspicious, but we recently have been dealing with an opioid epidemic which was encouraged by manufacturers of Oxycontin and other opioids. We don’t need another similar experience, this time sponsored by vaccine and other pharmaceutical makers.

The temptation of researchers is to choose solutions that would be best from the point of their own business interests. If a researcher gets much of his funding from vaccine and big pharmaceutical interests, the temptation will be to “push” solutions that are beneficial to these interests. In some cases, researchers are able to patent approaches, even when the research is paid for by governmental grants. In this case they can directly benefit from a new vaccine or drug.

When potential solutions are discussed by Dr. Fauci and the World Health Organization, no one brings up improving people’s immunity so that they can better fight off the novel coronavirus. Few bring up masks. Instead, we keep being warned about “opening up too soon.” In a way, this sounds like, “Please leave us lots of customers who might be willing to pay a high price for our vaccine.”

[10] One way the combination of (a) the activity of the virus and (b) our responses to the virus may play out is as a slow-motion, controlled demolition of the world economy. 

I think of what we are experiencing as being somewhat similar to a toggle bolt going around and around, moving down a screw. As the toggle bolt moves around, I picture it as being similar to the virus and our responses to the viruses hitting different parts of the world economy.

Figure 3. Image of how the author sees COVID-19 as being able to hit the economy multiple times, in multiple ways, as its impact keeps impacting different parts of the world.

If we look back, the virus and reactions to the virus first hit China. China’s recovery is moving slowly, in part because of reduced demand from outside of China now that the virus is hitting other parts of the world. In fact, additional layoffs occurred after Chinese shutdowns ended, because it then became clear that some employers needed to permanently scale back operations to meet the new lower demand for their product.

Commodity prices, including oil prices, are now depressed because of low demand around the world. These low prices can be expected to gradually lead to closures of wells and mines extracting these commodities. Processing centers will also close, making these commodities less available even if demand temporarily rises.

As one country is hit by illnesses and/or shutdowns, we can expect supply lines for manufacturing around the world to be disrupted. This will lead to yet more business closures, some of them permanent. Debt defaults tend to happen as businesses close and layoffs occur.

With all of the layoffs, governments will find that their tax collections are lower. The resulting governmental funding issues can be expected to lead to new rounds of layoffs.

Natural disasters such as hurricanes, tornadoes, floods, earthquakes and forest fires can be expected to continue to happen. Social distancing requirements, inadequate tax revenue and broken supply lines will make mitigation of all of these disasters more difficult. Electrical lines that fall down may stay down permanently; bridges that are damaged may never be repaired.

Initially, rich countries can be expected to try to help as many laid-off workers as possible with loans and temporary stipends. But, after a few months, even with this approach, many individual citizens and businesses will likely not be able to pay their rent. Default rates on home mortgages and auto loans can be expected to rise for a similar reason.

We can expect to see round after round of business failures and layoffs of employees. Financial systems will become more and more stressed. Pensions are likely to default. Death rates will rise, in part from epidemics of various kinds and in part from growing problems with starvation. In fact, in some poor countries, lower-income citizens are already having difficulty being able to afford adequate food. Eventually we can expect collapsing governments (similar to the collapse of the central government of the Soviet Union) and overthrown governments.

Longer-term, after this demolition ends, there may be some surviving pieces of economies. These new economies will be much smaller and less dependent upon each other, however. Currencies are likely to be less interchangeable. The remaining people will need to learn to make do with many fewer goods than are available today. It will be a very different world.

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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2,994 Responses to Understanding Our Pandemic – Economy Predicament

  1. Herbie R Ficklestein says:

    Fast Eddy…have you started your survival garden yet!? Just asking…😜

    Eddie, you got to get online…start a YouTube channel!😳

    • Fast Eddy says:

      The survival garden was tried and rejected when FE gave up his DelusiSTAN passport.

      One quickly realizes when on on tries the FE Challenge … that it is futile… someone will kill you for an apple and gardening without BAU is drudgery and doomed to failure(that’s why no doomie has ever tried it)..

      Then FE stumbled across the spent fuel pond issue and said to himself ‘what the fkkkk am I wasting my time pulling these fkkkking weeds… when I could be enjoying the winter in the mountains of Otago’

      A few days after that epiphany FE and M Fast were in the car to QT to look at houses… and within two months of that the moving van was in the driveway….

      I have thought about a YT channel where I film myself doing various FE Challenges… then forcing doomies to tune in to see their future….

      That inevitably would end up with me cursing and bitching about how brutal it is cutting and splitting a tree with an axe then dragging the wood to the house…

      One episode I’d planned (actually written the script) would have involved M Fast spending an entire day washing clothes using a rock … she of course nixed that asking me if I’d lost my mind….

      Needless to say… there shan’t be a FE YT channel anytime soon.

      • Dennis L. says:

        Very well described, cut to music in the background: “It don’t come easy.”

        Dennis L.

        • Adam says:

          You guys are bleak, I like pulling weeds.

          • JMS says:

            I’m ultra bleak, I love weeds (free soil nutrients) and I like to pull them (gratifying exercise).
            As clint eastwood would say it; there’s (at least) three kind of people in this world, my friend.

            • Country Joe says:

              I thought weeds were dip sticks that God gave us so we could pull them up and check the conditions in the root zone, so we’re know how things are for our plants. And while you’re already down on your knees, your all set to give some thanks.

            • JMS says:

              I’m afraid my knowledge of plants don’t go that deep. I’m a shallow gardener. I’m not as good as happy at it.

        • Tim Groves says:

          There are basically two kinds of weeds: those that are decorative and a pleasure to behold; and those that are a bloody pain and simply have to be pulled.

          Sometimes it’s a matter of where a weed is growing that makes it a weed. I know people who treat Goldenrod as an ornamental, but I suspect most people eradicate it without mercy.

          If you are into gardening, you are likely armed with a vision in your imagination of how you would like the lawn, the shrubbery or the veggie patch to look, and weeding is one of the strategies you can employ to make what you see in the real-world more closely resemble what you envision in your imaginary garden.

          “Work can be fun, and men can enjoy it; then it’s not labour.” In all my fieldwork endeavors, I apply that philosophy, which was elaborated laboriously by D.H. Lawrence in his poem A Sane Revolution

          If you make a revolution, make it for fun,
          don’t make it in ghastly seriousness,
          don’t do it in deadly earnest,
          do it for fun.

          Don’t do it because you hate people,
          do it just to spit in their eye.

          Don’t do it for the money,
          do it and be damned to the money.

          Don’t do it for equality,
          do it because we’ve got too much equality
          and it would be fun to upset the apple-cart
          and see which way the apples would go a-rolling.

          Don’t do it for the working classes.
          Do it so that we can all of us be little aristocracies on our own
          and kick our heels like jolly escaped asses.

          Don’t do it, anyhow, for international Labour.
          Labour is the one thing a man has had too much of.
          Let’s abolish labour, let’s have done with labouring!
          Work can be fun, and men can enjoy it; then it’s not labour.
          Let’s have it so! Let’s make a revolution for fun!

          • JesseJames says:

            Tim, I eliminate unwanted weeds by pulling them. If you do it enough and for enough years you “may” eliminate it from your land. It is hard work that many are too lazy, or unable to do. We eliminated well entrenched deadly nightshade on my place in Tx. Here in Alabama, I am clearing my place of some Kudzu patches (easy) and then Invasive Chinese Privet (hard). Then there is Japanese Honeysuckle and Cogon grass (dangerous). All of these weeds are invasive. Chinese privet is extremely dangerous as it will destroy forest completely over time.
            I once had a Roundup resistant Palmer Ameranth crop up on my place seemingly overnight. I pulled all of it by hand, and eliminated it. It is extremely dangerous.

            These are not plants that are just irritating to look at, they can destroy complete ecosystems. The average person has no comprehension of what lies before us when machines and chemicals no longer can be used to fight these weeds. Utter destruction of ecosystems, crops and wild lands. The weed apocalypse.

            • Tim Groves says:

              Thanks for making some interesting observations and experiences, Jesse.

              The land in my rural part of Japan is mostly mountains and canyons and 90% or more is currently forested. The Japanese honeysuckle hangs down some of the cliffs and steep banks that were carved out of the mountains when building roads. It’s in bloom now and the fragrance is wonderful. I’ve been watching it every year and it hasn’t taken over anywhere. It seems to expand for a few years and then die back.

              Kuzdo is a bigger problem but it can be mowed, and wisteria vines will grow as thick as your legs and strangle even the largest trees to death if you leave them in peace for enough decades. But perhaps our biggest invasive species is Phyllostachys edulis, the moso or tortoise-shell bamboo. It’s a very useful plant, but again, if left untended for enough decades, it can spread through a forest and kill off all but the tallest trees by depriving them of sunlight.

            • Matthew Krajcik says:

              It makes sense that Japanese honeysuckle would be a native, non-invasive plant in Japan. If it is adapted to that environment, it should be able to maintain a balance with its ecosystem and not take over, wiping everything else out.

            • Fast Eddy says:

              We seem to expand .. and never die back… spent fuel pond radiation will take care of that.

            • JesseJames says:

              There is a type of bamboo (invasive) here in Alabama….the word is once it gets established you CANNOT get rid of it. Even bulldozers will get stuck when trying to scrape the roots out.
              The Japanese Honeysuckle is rated the worst invasive species here in Alabama and probably much of the south.

            • Lidia17 says:

              What is often called “bamboo” in my part of the US is Japanese knotweed (. I have terrible problems with it (has invaded the foundation of my garage). It does very strange things to the soil around it, too, making it loose and crumbly and nothing else wants to grow there. They have huge problems with it in the UK, as well, to the point where you may not get a mortgage if the property is deemed to have it. It has turned large swathes of native riparian zones into a knotweed monoculture.

            • Fast Eddy says:

              Twitch is fun! If you leave even a tiny bit in the ground it will unleash itself…. The only way I could control it was to dig half a metre into the ground and pull as much of it out as possible….

              Try that when you have a dozen raised beds that are 6m x 1.5 m…..

              Fortunately it was around this time that I discovered the spent fuel pond issue

              My solution to that nightmare?

  2. Sven Røgeberg says:

    The Economists view of the crisis:
    But as we explain this week (see article) the pandemic both reveals the size of the challenge ahead and also creates a unique chance to enact government policies that steer the economy away from carbon at a lower financial, social and political cost than might otherwise have been the case. Rock-bottom energy prices make it easier to cut subsidies for fossil fuels and to introduce a tax on carbon. The revenues from that tax over the next decade can help repair battered government finances. The businesses at the heart of the fossil-fuel economy—oil and gas firms, steel producers, carmakers—are already going through the agony of shrinking their long-term capacity and employment. Getting economies in medically induced comas back on their feet is a circumstance tailor-made for investment in climate-friendly infrastructure that boosts growth and creates new jobs. Low interest rates make the bill smaller than ever.

    Take carbon-pricing first. Long cherished by economists (and The Economist), such schemes use the power of the market to incentivise consumers and firms to cut their emissions, thus ensuring that the shift from carbon happens in the most efficient way possible. The timing is particularly propitious because such prices have the most immediate effects when they tip the balance between two already available technologies. In the past it was possible to argue that, although prices might entrench an advantage for cleaner gas over dirtier coal, renewable technologies were too immature to benefit. But over the past decade the costs of wind and solar power have tumbled. A relatively small push from a carbon price could give renewables a decisive advantage—one which would become permanent as wider deployment made them cheaper still. There may never have been a time when carbon prices could achieve so much so quickly.
    https://www.economist.com/leaders/2020/05/21/countries-should-seize-the-moment-to-flatten-the-climate-curve

    • Artleads says:

      This mentions growth. So renewables will power endless growth, albeit downsized? Of course, it will also be top down and centralized?

    • These economists live in “La-La Land.” The world needs inexpensive to produce energy. Our problem now is that it is not available. So-called renewables do practically nothing for us. There will be no economy to tax, because it will collapse. Forget this idea.

    • Slow Paul says:

      “Rock-bottom energy prices make it easier to cut subsidies for fossil fuels and to introduce a tax on carbon.”

      This makes zero sense. How are you going to tax fossil fuel producers more when they are going bankrupt? These economists are in for a rude awakening…

      • Slow Paul says:

        Sorry, I might have misunderstood. They probably meant increased tax at the pump.

        • It is close to the same difference. You can raise the price at the pump with a tax. The consumers cannot afford to pay more, so the quantity sold falls and the price tends to fall even further. The government perhaps gets a little in taxes (small quantity, low price). The oil companies end up worse off than they were before, because of both the low quantity and low price.

    • Robert Firth says:

      “Rock-bottom energy prices make it easier to cut subsidies for fossil fuels and to introduce a tax on carbon.”

      Are they really that stupid? I rather think not. Energy prices are at rock bottom. So producers of energy cannot make a profit. The proposal: fewer subsidies and more takes, so pushing the producers further down the hole. Until they stop producing, and the taxes yield no revenue.

      No, they are not that stupid: they are pushing their green propaganda even in the face of reason.

  3. Pingback: What will we do with our world when this is over? – Simple Living In Somerset

  4. Marco Bruciati says:

    In September world Will declare peace and safety and After big distruction Will be. In october Will start a great tribulation as never was before and never Will be more

    • That could be. The programs put into effect are temporary and very expensive.

      What makes you think that October will start the great tribulation?

    • beidawei says:

      And in November, if none of this happens, you will admit your error?

      • Covidinamonthorayearoradecade says:

        well, Italy would have to still have the internet etc…

        in its own particular way, the beginning of the “school year” brings a certain sense that things are going “back to normal”… Summer and its vacation season is a change of pace from the “normal” lives of many/most people… September comes, the Labor Day holiday on the first Monday, and then families are back to parents working, children back to school…

        that’s the USA version that most readers probably know…

        so when September 2020 rolls around, what happens when most families still have one or more unemployed adults, and many of their older teens can’t go back to college, and can’t get a job either?

        October won’t be the end of the world, but by then there will be no possible propaganda to deflect most people from the new normal of a severely lower reset economy…

        it will be fascinating to see how this unfolds…

        probably shocking to those who lack an OFW type education…

    • JesseJames says:

      There will definitely be a more severe food crisis by this fall, on top of the economic depression. This will lead to political instability and ultimately, mass immigration and war over time.

  5. Harry McGibbs says:

    “When the United States and China signed their historic trade deal in January, many believed that mounting tensions were beginning to thaw. I wrote then on these pages that the Phase One trade agreement was a mere cease-fire in an ongoing conflict between the world’s dominant superpower and its near-peer competitor.

    “I was also incredulous over the Administration taking China’s promises to purchase $189 billion in US goods and services by 2021 at face value. Over $30 billion of those were earmarked for importing U.S. energy products.

    “Today it is clear that China is nowhere close to meeting its January promises… The Phase One Agreement has failed dramatically.”

    https://www.forbes.com/sites/arielcohen/2020/05/21/phase-one-us-china-trade-deal-fails-in-energy-and-beyond/#574dc0b86d3a

    • Harry McGibbs says:

      “Even if China’s imports of U.S. energy rise in the months ahead, the trade deal commitments will be impossible to reach. Again, it’s simple math: Fulfilling the energy part of the deal would require China to spend an average of $2.9 billion per month from April through December to buy U.S. energy—at $30 per barrel (the U.S. government’s projected average price for 2020), that’s equivalent to about 3 million barrels of oil per day, or the total of all U.S. daily crude exports in 2019.

      “That China would buy every last drop of exported U.S. oil is unrealistic enough—but today, that oil is not even available, as U.S. oil exports are projected to fall this year along with the collapse in U.S. shale output, which is projected to drop by roughly one-third over the next year.

      “Moreover, China could not take 3 million barrels per day of U.S. crude oil even if it were available. Even if China were to replace all of its oil imports from Saudi Arabia, currently its largest supplier, with U.S. oil, that would only be 1.8 million barrels per day. Beijing could meet its targets by buying other fuels as well, but other types of energy such as liquefied natural gas, liquefied petroleum gas, and coal represent only a fraction of the value of crude oil exports. China would need to dramatically shift its entire energy import portfolio from its current suppliers to the United States. Even then, the math does not add up.”

      https://foreignpolicy.com/2020/05/22/trump-trade-deal-china-dead-coronavirus-pandemic/

  6. avocado says:

    It’s unlikely that this happens in many places

    ” Over the last two months unemployment in the United States has risen to levels not seen since the Great Depression. However, US billionaires got even richer during the same period of coronavirus pandemic.

    “A new report by Americans for Tax Fairness (ATF) and the Institute for Policy Studies showed their fortunes soared by $434 billion or 15 percent during the nation’s lockdown between mid-March and mid-May. The billionaires’ combined net worth rose from $2.948 trillion to $3.382 trillion.”

    https://www.rt.com/business/489466-billionaires-wealth-growth-pandemic/

    • More and more wage and wealth disparity, as we approach limits!

    • frankly step-by-step says:

      No problem for me. I am not rich. Not in the way it is normally intended.

      https://www.theguardian.com/notesandqueries/query/0,5753,-25583,00.html
      https://biblehub.com/matthew/19-24.htm

    • Adam says:

      It almost seems pointless to focus on these numbers anymore. If someone is 1000 times more wealthy than me or 10000 times the end result is similar.

      It’s more of a question of confidence in the system, to keep it functioning on the whole so the upper crust can continue to enjoy their position.

      I think the EROI vise is closing hard now and the pressure will only increase. If its true that gross energy/materials were still rising into the 2010s allowing the agencies to show us graphs that continue to rise, while the “net” available to society was slipping.

      If we now have slippage in the gross numbers, its going to become pretty obvious to most, then what?

  7. Harry McGibbs says:

    “Pandemic strains shipping, air and rail freight operators:

    “It would be easy watching the freight trains rumbling through Camden Road station in central London to assume that everything in the world’s logistics system was working as normal…

    “Yet the apparent normality masks a profound trauma affecting the world’s logistics system. Earlier this year it was hit by coronavirus-related disruption in China’s factories and is now suffering from an unprecedented collapse in demand in North America and Europe.”

    https://www.ft.com/content/8403ddbc-9363-11ea-899a-f62a20d54625

  8. Dennis L. says:

    While doom and gloom is the fashion these days, there may be some incredible, positive changes coming.

    Amazon changed the retail market, no one thought it possible, Warren laments missing something obvious in retrospect.

    Education may be next. Harvard is good at networking, raising money, and maybe education, certainly the students a very bright. But, there are hints, I have not read this, the quality of their online education is being questioned.

    https://www.campusreform.org/?ID=14907

    Recently I completed a course via Zoom, it was good. Perhaps the future of education will require a different skill set. Coursera and MIT have also pioneered this area, all that is lacking is credentialing and we have the example of medical boards.. We have a president who is getting rid of regulations and with that probably a fair number of people who administer them. Medicine seems to be opening, once credentialing is possible, a classroom becomes a luxury with associated costs.

    Large universities are probably not the most adaptable organizations in the world, if a lecture is given in the room and there is nobody to hear it, will it make a sound? Well, a stretch.

    It seems NASA does distance monitoring of astronauts, most of the technology is probably present for clinical medicine.

    It’s not all bad. Think of Amazon like reviews of physicians, hospitals, schools, universities, etc. When you shop, do you look at the Amazon rating? I do, if it is not positive next.

    Underlying all of this is scarcity of raw materials.

    Interesting times,

    Dennis L.

    • If universities don’t have enough funds, the cheapest classes are those taught by adjunct faculty, over the internet, to large classes. Today’s expensive textbooks often come with slides for a faculty member to use, to give his/her talks to students. There are even some classes (in math, for example) where computer programs give a student three chances to solve a problem, before giving a new problem. Faculty members are given a large test bank of questions to select from for exams. The computer will grade the courses.

      Of course, testing long distance becomes somewhat of a problem. How does one prevent cheating, for example?

      • Dennis L. says:

        That is being done, there are testing centers for licensure where nothing is allowed in the testing room, all personal belongings are placed in a locker prior to the exam, there is a time limit on the exam and when it ends, the testing program ends, this is done for many state licenses.

        The problem sets in math, Knewton in my case as they currently stand tend to want an exact answer, it is easy to use a modern day calculator such as TI nspire and not learn much. To do well on the exam, get problems in the form of the exam; this used to be called a gouge in the fraternities. Everyone is different, for me to learn, get out a notebook, make notes, do problems by hand. It is really two different games.

        There are also very good programs, e.g. Mathematica alpha which are free to students or at a nominal charge which will take any problem and not only provide a solution but walk through it step by step. I suspect Mathematica would be superior to many of the problem sets out there, but Mathematica does not sell textbooks, same old game. Mathematica basically is office hours in place of a professor.

        The text books have become very good, some things do improve. But then, you know all this as your husband is a math prof. Much is in place, someone is going to use it, commercial firms such as Pearson are going across not only academics but professional areas as well.

        Note: As in so many areas the value added is moving outside to central entities. Knewton and the like are addons, the money goes to the corporation, the teaching staff is adding less value.

        Dennis L.

        • Those taking the tests need to get to the testing sites. This is not always possible.

        • Robert Firth says:

          Dennis, when working for a university, I stipulated that students were free to bring calculators into the examination room. I then made sure to set questions for which calculators would be no help whatsoever. Example: verify Pappus of Alexandria’s proof of the “pons asinorum” (Euclid, Elements, Book I Proposition 5)

      • adonis says:

        home schooling will increase and cheating would be impossible to stop my sister is a teacher and was told that she would have to teach online classes she done it for a week and said she could not handle it , if this became the new normal she would quit her job that is why i think home schooling will replace schools

    • Rodster says:

      “Amazon changed the retail market, no one thought it possible”

      They did but in reality they are just a progression of the “Big Box” formula. They decided to create an online Big Box store but let us take a look at their business model. It’s all dependent on cheap energy. Amazon for the BILLIONS in revenue they take in, their profits are really low. So what will happen to Amazon if the trucks stop rolling or the ships no longer come in from China as frequently?

      Amazon is pretty susceptible as a business model to the flow of cheap energy. It’s one reason why they started their own freight company and dumped UPS. The USPS gives Amazon some reduced prices but there are several US Gov’t officials who want to remove those advantages.

      Amazon is constantly forced to raise prices, they now charge sales tax in most States which was another advantage for them. Amazon may be the last man standing but they will also suffer defeat along with other Big retailers such as Walmart.

      • Dennis L. says:

        In part what you say is true, but energy wise for me it is a ten mile round trip to the big box hardware store(I go there because they have variety, searching takes time), I just finished purchasing a $6 part and it will be here Sunday. Using my car at $.50/mile would cost $5 plus the part. Paying sales tax does not bother me, I am part of a society.

        At a big box there is no voting on the shopping experience or the goods sold. Take it, lump it, return it and stand in line for the one or two staff members at a counter. Amazon, request a return, if it is their issue, free pickup and choice of refund or similar item. I use the rating system to shop wisely. If you are not in a hurry, sometimes they give a credit for a free movie.

        In math education a Field’s Medal is not necessary to do a good job teaching the first two years of college math – that two year education is a very powerful tool in learning other things. In a university education we are subsidizing the upper level professors with tuition paid for mostly lower level courses. There is an irony here. If the student is so good he/she requires a Field’s Medal level teacher, there are so few of those students that universities will fight over them and most likely give them scholarships. Modern materials have changed, distance learning is pretty damn good, currently it seems to stop about the second year, but Mathematica may go further(disclaimer, there are probably others, this is what I know.)

        All the best,

        Dennis L.

        • Jason says:

          50 cents a mile? what do you drive around in a dump truck? Also, who’s wife is going to let them wait 3 days every time they need something from the hardware store. You sound like an oldtimer telling yarns about them gold old days.

          • Dennis L. says:

            100,000 miles is $50K. Fuel, insurance, license, maintenance(tires, etc.) and depreciation fairly close number. Ford F150’s were the largest proportion of vehicles sold in MN in the last few years, make that $.75/mile. I have a Camry hybrid, drive them into the ground, battery failed at about 100k miles, $4K plus to replace.

            I am an old timer now, 73, next year, diff. eq., keeping my resume polished, you never know. I have a positive outlook on life and I can’t garden worth a damn. Latin would be nice so I could keep up with Robert.

            Dennis L.

      • Fast Eddy says:

        If the cloud service revenues are stripped out (much of that cash is generated by employing lobbyists who secure lucrative government contracts … using bribery of course)… I think Amazon would be losing money as I believe the core business is not profitable.

  9. horseofadifferentcolor says:

    Calling mockingjay. Ah that was fiction. Riding into sunset.

  10. horseofadifferentcolor says:

    Graphic content. Apache engages taliban. ADULT VIEWERS ONLY!

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