Increased Violence Reflects an Energy Problem

Why are we seeing so much violence recently? One explanation is that people are sympathizing with those in the Minneapolis area who are upset at the death of George Floyd. They believe that a white cop used excessive force in subduing Floyd, leading to his death.

I believe that there is a much deeper story involved. As I wrote in my recent post, Understanding Our Pandemic – Economy Predicament, the problem we are facing is too many people relative to resources, particularly energy resources. This leads to a condition sometimes referred to as “overshoot and collapse.” The economy grows for a while, may stabilize for a time, and then heads in a downward direction, essentially because energy consumption per capita falls too low.

Strangely enough, this energy crisis looks like a crisis of affordability. The young and the poor, especially, cannot afford to buy goods and services that they need, such as a home in which to raise their children and a vehicle to drive. Trying to do so leaves them with excessive debt. If the affordability problem changes for the worse, the young and the poor are likely to protest. In fact, these protests may become violent. 

The pandemic tends to make the affordability problem worse for minorities and young people because they are disproportionately affected by job losses associated with lockdowns. In many cases, the poor catch COVID-19 more frequently because they live and/or work in crowded conditions where the disease spreads easily. In the US, blacks seem to be especially hard hit, both by COVID-19 and through the loss of jobs. These issues, plus the availability of guns, makes the situation particularly explosive in the US.

Let me explain these issues further.

[1] Energy is required for all aspects of the economy.

Energy is required by governments. Energy is required to operate police cars. Energy is required to build schools and to operate their heating and lighting. Energy is needed to build and maintain roads. Tax revenue represents available funds to buy energy products and goods and services made with energy products.

Energy is needed for any type of business. Operating a computer requires electricity, which is a form of energy. Heating or cooling a building requires energy. Growing food requires solar energy from the sun; liquid fuel is used to operate farm machinery and trucks that transport food to the locations where it is sold. Human energy is used for some of these processes. For example, human energy is used to operate computers and farm machinery. Human energy is sometimes used to pick the crops, as well.

Wages paid by governments and businesses indirectly go to buy energy products of many kinds. Food is, of course, an energy product. The heat to cook or bake the food is also an energy product. Metals of all kinds are made using energy products, and lumber is cut and transported using energy products. With sufficient wages, it is possible to buy or rent a home, and to purchase or lease an automobile.

Interest rates indirectly reflect the portion of goods and services produced by energy products that can be transferred to parts of the system that depend on interest earnings. For example, banks, insurance companies and those on pensions depend on interest earnings. If interest rates are high, benefits to pensioners can easily be paid and insurance companies can charge low rates for their products, because their interest earnings will help offset claim costs.

Interest rates are now about as low as they can go, indicating a likely shortage of energy for funding these interest rates. The last time interest rates were close to current levels was during the Great Depression of the 1930s.

Figure 1. Ten-year and three-month US Treasury interest rates, in chart made by FRED.

[2] When there is not enough energy to go around, the result can be low commodity prices, low wages and layoffs.

This is not an intuitive result. Most people assume (low energy = high prices), but this is the opposite of what actually happens. The problem is that the amount workers can afford to pay for finished goods and services needs to be high enough to make production of the commodities used in making the finished products profitable. When affordability falls too low, the system tends to collapse.

We are really dealing with a two-sided problem. The prices of commodities such as oil, wholesale electricity, steel, copper and food tend to fluctuate widely. Consumers need these prices to be low, in order for the price of finished goods made with these commodities to be affordable; producers need the prices of these commodities to rise ever-higher, to cover the cost of deeper wells and more batteries, to try to partially offset the intermittency of solar and wind electricity.

Most people assume that the situation will be resolved in the direction of commodity prices rising ever higher. In fact, commodity prices did rise higher, until mid 2008. Then, something snapped; commodity prices have been falling ever-lower since mid 2008. In fact, ever-lower commodity prices have been a world-wide problem, causing huge problems for countries trying to support their economies with export revenues based on commodity production.

Figure 2. CRB Commodity Price Index from 1995 to June 2, 2020. Chart prepared by Trading Economics. Composition is 39% energy, 41% agriculture, 7% precious metals and 13% industrial metals.

Even before the lockdowns, low commodity prices were leading to low wages of those working in commodity industries around the world. These low prices also led to low tax revenue, and this low tax revenue led to an inability of governments to afford the services that citizens expect, such as bus service and subsidized prices for certain essential goods/services. For example, South Africa (an exporter of coal and minerals) was experiencing public protests in September 2019, for reasons such as these. Chile is a major exporter of copper and lithium. Low prices of those commodities led to violent protests in 2019 for similar reasons.

Now, in 2020, lockdowns have led to even lower commodity prices. At times, farmers have been plowing their crops under. Oil companies are laying off workers. The trend toward lower commodity prices had been occurring for a long time; the recent drop in prices was “the straw that broke the camel’s back.” If prices stay this low, there is a danger of falling production of commodities that we depend on, including food, metals, electricity, and oil. Businesses producing these items will fail, and governments with falling tax revenue will be unable to support them.

[3] Historical energy consumption data shows that violence often accompanies periods when energy production is not growing fast enough to meet the needs of the growing population.

Figure 3 shows average annual growth in world energy consumption, for 10-year periods:

Figure 3. Average growth in energy consumption for 10 year periods, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent.

Economic growth encompasses both population growth and rising standards of living. Figure 4 below takes the same information used in Figure 3 and divides it into (a) the portion underlying population growth, and (b) the portion of the energy supply growth available for improved standards of living. During most periods, increased population absorbs over half of increased energy consumption.

Figure 4. Figure similar to Figure 3, except that energy devoted to population growth and growth in living standards are separated. A circle is also added showing the recent growth in energy is primarily the result of China’s temporary growth in coal supplies.

There are three dips in the Living Standards portion of Figure 4. The first one came in the 10 years ended 1860, just before the US Civil War. Most of us would say that was a period of violence.

The second one occurred in the 10 years ended 1930. This is the period when the Great Depression began. It came between World War I and World War II. This was another violent period of our history.

The third dip came in the 10-year period ended 2000. This was not a particularly violent period; instead, it reflects the collapse of the central government of the Soviet Union, leaving the member republics to continue on their own. There was a huge loss of demand (really, affordability) on the part of countries that were part of the Soviet Union or depended on the Soviet Union.

Figure 5. Chart showing the fall in Eastern Europe’s materials production, after the collapse of the central government of the Soviet Union in 1991.

[4] The world is facing a situation in which total energy consumption seems likely to drop by 5% per year, or perhaps more.

If we look back at Figure 3, we see that even in very “bad” times economically, energy consumption was rising. In fact, in one 10-year period, the average increase was more than 5% per year.

If the world economy is reaching a point in which we consumers, in the aggregate, cannot afford the goods and services made with commodities, unless commodity prices are very low, we will likely experience a huge drop in energy consumption. I don’t know exactly how much the annual change will be, but energy consumption growth and GDP growth tend to move together. We might guess that GDP growth is shifting to 5% GDP annual shrinkage, and energy consumption will be shrinking by a similar percentage.

Clearly, shrinkage of 5% per year would be far worse than the world economy has experienced in the last 200 years. In fact, for the 10-year periods shown in Figure 3, there has never been a reduction in energy consumption. Even if I am wrong and the shrinkage in energy consumption is “only” 2% per year, this would be far worse than the experience over any 10-year period. In fact, during the Great Recession, world energy consumption only shrank in one year (2009) and then by 1.4%.

History doesn’t give us much guidance regarding what impact a dramatic reduction in energy consumption would have on the economy, except that population reduction would likely be part of the change that takes place. If half or more of energy consumption growth goes toward rising population (Figure 4), then a shrinkage of energy consumption seems likely to reduce world population.

[5] What the world is really facing is a competition regarding which parts of the economy can stay, and which will need to be eliminated, if there is not enough energy to go around. It should not be surprising if this competition often leads to violence.

As I indicated in Section [1], all parts of the economy depend on energy. If there is not enough, some parts must shrink back. The big question is, “Which parts?”

(a) Do governments, and organizations that bind governments together, collapse? If countries are doing poorly, they will not want to contribute to the World Trade Organization, the United Nations or the European Union. Governments, such as the government of Saudi Arabia, could be overthrown, or may simply stop operating. In fact, any government, when it faces insurmountable problems, could simply stop operating and leave its functions to lower levels of government, such as states, provinces, or cities.

(b) Do pension plans stop operating? Are pensioners left “out in the cold”? How about Social Security recipients?

(c) Can international trade be kept operating? It is a big consumer of energy. Also, competition with low-wage countries tends to keep wages in developed nations low. Without international trade, many imported goods (including imported medicines) become unavailable.

(d) Which companies will collapse, leaving bond holders and stockholders with $0? People who formerly had jobs with these companies will also find themselves without jobs.

(e) If the world economy cannot support as many people as before, which ones will be left out? Is it people in rich countries who find themselves without jobs? Is it people who find themselves without imported medicines? Is it the ones who catch COVID-19? Or is it mostly citizens of very poor countries, whose income will fall so low that starvation becomes a concern?

[6] The violent demonstrations represent an effort to try to push the problems related to the shortfall in energy, and the goods and services that energy can provide, away from the protest groups, toward other segments of the economy.

In an ideal world:

(a) Jobs that pay well would be available to all.

(b) Governments would be able to afford to provide a wide range of services to all, including free health care for all and reimbursement for time off from work for being sick. They would also be able to provide adequate pensions for the elderly and low cost public transit.

(c) Police would treat all citizens well. No group would be so poor that a life of crime would seem to be a solution.

As indicated in Section [2], back in 2019, before COVID-19 hit, protests were already starting because of low commodity prices and the indirect impacts of low commodity prices. One reason why governments were so eager to adopt shutdowns is the fact that when people were required to stay inside because of COVID-19, the problem of protests could be stopped.

It should be no surprise, then, that the protests came back, once the lockdowns have ended. There are now more people out of work and more people who are concerned about not having full healthcare costs reimbursed. Social distancing requirements are making it more difficult for businesses to operate profitably, indirectly leading to fewer available jobs.

[7] Violent protests seem to push problems fueled by an inadequate supply of affordable energy toward (a) governments and (b) insurance companies.

In some cases, insurance companies will pay for damages caused by protesters. Eventually, costs could become too great for insurance companies. Most policies have exclusions for “acts of war.” If protests escalate, this exclusion might become applicable.

Governments of all kinds are already being stressed by shutdowns because when citizens are not working, there is less tax revenue. If, in addition, governments have been paying COVID-19 related costs, this creates an even bigger budget mismatch. Governments find themselves less and less able to pay their everyday expenses, such as hiring teachers, policemen, and firemen. All of these issues tend to push city governments toward bankruptcy and more layoffs.

[8] Dark skinned people living in America tend to be Vitamin D deficient, making them more prone to getting severe cases of COVID-19. Vitamin supplements may be an inexpensive way of reducing the severity of the COVID-19 epidemic and thus lessening its diversion of energy resources.

There are a number of reports out that suggest that having adequate Vitamin D from sunlight strengthens the immune system and helps reduce the mortality of COVID-19. Adequate Vitamin C is also helpful for the immune system for people in general, not just those with dark skin.

Dark skinned people are adapted to living near the equator. If they live in the United States or Europe, their bodies make less Vitamin D from the slanted rays available in those parts of the world than they would living near the equator. As a result, studies show that Vitamin D deficiency is more common in African Americans than other Americans.

Recent data shows that the COVID-19 mortality rate for black Americans is 2.4 times that of white Americans. COVID-19 hospitalization rates are no doubt higher as well. Encouraging Americans with dark skin to take Vitamin D supplements would seem to be at least a partial solution to the problem of greater disease severity for Blacks. Vitamin C supplements, or more fresh fruit, might be helpful for all people, not just those with low Vitamin D levels.

If the COVID-19 impact can be lessened in a very inexpensive way, this would seem to be helpful for the economy in general. High-cost solutions simply divert available resources toward fighting COVID-19, making the overall resource shortfall for the rest of the economy worse.

[9] Much more equal wages would seem to be a solution for wage disparity, but this doesn’t bring the wages of low earning workers up enough, in practice. 

There are a huge number of low-earning workers in many countries around the world. In order to increase commodity prices enough to make them profitable for producers, we really need wages in all countries to be much higher. For example, wages in Africa and in India need to be much higher, so that people in these parts of the world can afford goods such as cars, air conditioning and vacation travel. There is no way this can be done. Furthermore, such a change would add pollution and climate change issues.

There is a fundamental “not enough to go around” problem that we do not have an answer for. Historically, when there hasn’t been enough to go around, the attempted solution was fighting wars over what was available. In a way, the violence seen in cities around the globe is a new version of this violence. Governments of various kinds may ultimately be casualties of these uprisings. Remaining lower-level governments will be left with the problem of starting over again, issuing new currency and trying to make new alliances. In total, the new economy will be very different; it will probably bear little resemblance to today’s world economy.

 

 

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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2,617 Responses to Increased Violence Reflects an Energy Problem

  1. White Hills says:

    There are too many people and too much easy access to social media that shows how high status people live (The people who have the privilege to consume the most energy and status). Rich liberal white girls; it’s not smart to brag on Instagram while wearing a BLM shirt. They take it seriously, they don’t see it as a luxery signal like you do. Not everyone can gain that much status and there really isn’t that much room in the nicer areas. The bottom really doesn’t understand the social mannerisms of the umc and often times can’t even mimic the mannerisms of the (shrinking) middle. It’s time to stop pretending that everyone deserves an easy office job in the media (the least meaningful but highest status).

    Libtards still niavely believe spouting off empty platitudes and abstractions will calm this. They’re that immersed in their bubble thinking. Blacks will probably be worse off after all of this and policed more!

    The simple reality is that Democratic politicians, journalists, and pundits are petrified of questioning any of the dogmatic ideological assumptions underlying these protests/riots. Because they will be immediately ripped to shreds. Don’t even try to pretend this is not the case.

    • If the number of jobs for blacks and the level of wages for blacks rise, there will need to be cuts elsewhere in the economy. In fact, there will likely need to cuts elsewhere in the economy, even if number of jobs for blacks and their level rises.

      This is frustrating. I am sure that there are things that can be tried to fix the situation, such as better training for cops. But this doesn’t solve the problem of a huge number of people who are having a terrible time earning an adequate living. If they could not see other people faring much better than they are (on Facebook and television), the difficulty would be somewhat less. The fact that the situation is going downhill right now, thanks to changes made in response to COVID-19 and the inadequate energy situation, is a problem.

  2. Jarle says:

    “The George Floyd Protests – 20 unanswered questions”

    https://off-guardian.org/2020/05/31/the-george-floyd-protests-20-unanswered-questions/

  3. shastatodd says:

    i totally agree. the social angst we are witnessing is actually a repercussion of depleting resources (the limits to growth). i read somewhere that per capita net energy peaked in the USA in 1974. that was when we were finishing the interstate highway system and put people on the moon. it has been all down hill since.

    • I was thinking that inflation adjusted median wages for men stagnated about the 1970s, but I am having trouble finding a time series that goes back that far.

      Things certainly have not been going well for workers. There is constant creep in added features in everything a person buys (cars, homes, education, medical treatment, computer software). With these added features, there are added costs. These added features are not considered inflationary, because they (supposedly) provide a desired benefit. But they make the items unaffordable.

  4. Lastcall says:

    ‘In total, the new economy will be very different; it will probably bear little resemblance to today’s world economy.’
    I would imagine large areas of the world will tumble out of contention for resources and we will return to ‘city-states’. These city states will most likely be places where ports, railways and local resources are managed by a very lean leadership coterie with a diversity of skills, but not of political views. Feudalism, initially without titles.
    The flyover/forbidden lands will exist under agrarian anrchy. The tour de France has a great view of this structure with its small evenly spaced townships dominated by castles on the hill. History has figured this out before.

    • Interesting idea!

      It is not clear to me what, if any, of our current infrastructure we can support. Will we have railroads and ports, for example? The ones we have now will need replacement parts, and we likely won’t have them. Energy supplies, even hydroelectric, suffer from this same problem.

      Looking at the past gives us any idea of what might work. The castles grew up on the hills for a couple of reasons, I believe:

      (1) It was much easier to defend, from such a vantage point.
      (2) A lot of diseases thrived in low-lying areas. Of course, low-lying areas were also good for crops and they often had the majority of the fertile land, which had washed down from hillsides.

      Where to live probably depended upon the climate and population of the particular area. What worked in India might different from what worked in the Southwest USA, and these might be different from what worked in central Europe.

  5. Hubbs says:

    Don’t forget the increasing consumer debt, which is creeping into people of ever higher socioeconomic levels in order to maintain living standards. Kind of like women leaving the household in search of jobs to make up the difference, resulting in hollowing out of the traditional family, but today worsened also by the subterfuge of government single parent supplements, SNAP, EBT cards etc.
    Increasing debt allows increased living standards for a while, but the downside becomes much worse.

    • Yes, increased debt is a problem.

      Part of the problem has been the escalating costs of automobiles and homes thanks to “feature creep.” Health care and education have had the same problem. Television has given people the idea that having more and more stuff is important, too. It gives the idea that the “Joneses” are living substantially better than a given person is.

      Businesses have needed to grow, in order to get economies of scale and satisfy stockholders. But this has been difficult, without families being as big. Instead, the have relied on feature creep, including more mandated features in housing. Globalization was supposed to add more markets, but that now seems to be going away.

      Debt works, as long as everything is getting better, and people can get and hold jobs. It doesn’t work when a lot of people are laid off. We will figure this out, when the supplemental funds these people are receiving start slowing down.

  6. Too many rats in the cage causes violence: NO LIVES MATTER

    • shastatodd says:

      sad but true!

    • Tim says:

      Yes, it seems you are correct.

      • doomphd says:

        this is the sad truth about the thermodynamics of the situation. suddenly, there is a need to cull the herd, to match the diminishing resources.

        somehow, the lemmings sensed this need. I always thought they were seeking the lost continent of Atlantis, which foundered on them.

  7. You make some interesting points but I don’t believe energy is necessarily the problem as electricity could be distributed and amassed differently..it is more about power being held and the continuance of the same hands holding and manipulating that power. As white I find it hard to believe that a black president could rise to power in a country where black are continually discriminated against…and serve two terms. I watched with horror as my social media accounts were over run with images of Floyd’s death…almost as it was happening..then almost immediately the propaganda started pushing the story that there was a cover up… it moved so fast that there had to be bots behind it. I like blacklives matter as all lives do matter and that is what they believe. However, most of the social media content is anti white – these two things are not the same. This is divisive for a reason…whether it’s energy, I’m not convinced although your argument is good. I’m still thinking religious fractions are heavily behind this…of which Saudi Arabia and UAE would be happy to sponsor.

    • JMS says:

      Samantha, i’m afraid you have a lot of Gail Tverberg’s posts to read.

    • One thing I would point out is that electricity is a form of energy. Getting electricity from wind and solar is problematic, because it comes at times that we don’t need it and it doesn’t come when we need it.

      Trying to transfer the electrical output of wind and solar to when we need it is a huge obstacle. We have only a few minutes of batteries at this point in time. Battery costs rapidly exceed the cost of wind and solar.

      Using fossil fuels to provide backup to wind and solar doesn’t work well for a number of reasons. One reason is that backup providers are not being paid enough for the value of this service. There are a lot of fixed costs involved.

      Another reason is that the price of wholesale electricity falls far too low and drives other electricity producers out of business. These rates are often negative. Nuclear is particularly at risk of being driven out of business, because it cannot easily “turn off” electricity production. Coal and natural gas are at risk as well. The whole system looks like it is headed in the direction of failure from low prices.

      • As an electrical engineer I am aware of the problems and have written my suggestions to fix this..they are simpler. People are so used to doing things a certain way. The thought of tearing down the national grid and doing something more local distribution is the answer.

        • from an electrical engineer, I am surprised at such a naive idea

          I can only suggest you read Prof. David MacKay’s book: Sustainable Energy without the hot air.
          (It’s free to download)

          http://www.withouthotair.com/Contents.html

          ‘local’ energy (presumably the house you live in) consumes about 1/50th of the energy consumed by the environment you live in (and need to sustain you)

  8. Tom K says:

    Gail,
    Always find your analyses interesting and useful, however I think this one ignores the elephant in the room: the systemic racism embedded in the US, e.g., Real estate Redlining, the legacy of Jim Crow, educational disparities, hiring etc. I get that social issues may not be in your wheelhouse, but to offer an analysis of these demonstrations without acknowledging fundamental causation elements, and only the exacerbating resources problems, is inaccurate.

    • Jarle says:

      The’s a lot of racism and police violence, what’s special about this incident?

      • Jarle says:

        Nothing as I see it = people are angry for a whole lot of reasons …

        • Kim says:

          I am very angry. I think I will go burn down my local shopping center and loot a jewelery store. Then I will have a Rolex and be able to complain that I live in a “food desert”. Because whitey did it.

          The protesters in these incidents are the most pampered and deluded class of parasitic non-contributors in history. And the media – for ther own reasons – encourages them in their delusions and guilt-trips you. And you fall for it.

          People like to mouth platitudes and say the “right” thing on these issues, but there is a very simple litmus test:

          1) Would you be willing to live in an area that was heavily (more than 10% and the real criminality starts) of the notorious demographic?

          2) Do your children attend to a school with a more than 1-2% of this demographic? Because above that level and the school standards start to plunge as chaos and dysfunction enters.

          • Before my children were of school age, we lived in a townhouse development within the city limits of Chicago that was literally across the street from a low rise public housing development. Depending on how a person drew the lines, the I suppose the demographic of the area had a fairly large black percentage. We saw a lot of black women and their children outside the housing project. I don’t remember any problems. The owners of the townhomes were predominantly white.

            We now live in an area that has some black families and some mixed race families. It doesn’t seem to be a problem.

            I do agree, however, that schools can be a problem, if the population is not homogeneous. I am not sure that the racial mix necessarily is the problem, however. I would expect large populations coming from the Middle East might be a problem in some European schools, for example. Or a large population of children of migrant workers, moving in and out.

            We ended up finding alternative schooling options for all three of our children, at least for part of the time, because the schools were not really adequate in our area. For example, we were told, “We teach to the middle of the class. We don’t have enough staff to try to provide extra resources for those who are above or below the middle.” My husband and I ended up home schooling our daughter for one year. We sent our sons to a private school for several years.

            Housing prices tend to be very much higher in areas where schools are deemed to be “good.” These areas tend to have high tax revenue, so that they can support a range of programs to meet the needs of all of the students.

          • Jarle says:

            “The protesters in these incidents are the most pampered and deluded class of parasitic non-contributors in history.”

            Have you tried having little/nothing?

    • Very Far Frank says:

      The only “fundamental causation elements” Tom relate directly to energy: social movements, political predilection and even how permissive somone is. It’s all directly linked, ultimately, to resource scarcity.

      The way society seems to work is that it takes these assymetries in resource scarcity, and amplifies them. Those with little, are ascribed little, and are provided less political weight. Those with much are ascribed to be worth much socially, and are afforded greater protection.

      Now, personally, I couldn’t care less about assymetries if they carry from differences in hard work, and every black I’ve been around has a case of avolition.The point being that the social issues derive from the resource issues, which flow back into the social issues. It’sfolly to thik that can be ‘fixed’ by precriptive thinking.

    • Philip Bogdonoff says:

      Agree. Also the wealth disparities: When then richest 6-8 people have a combined wealth equal to the poorest half of the rest of the world, there is something wrong with the picture. Those inequities and the racial discrimination that has persisted for many decades are the primary drivers of this eruption. The underlying fundamentals you point to may be at play, but are not consciously part of this for most people now. But as the coming decade unfolds, they will be. Thanks as always for your analyses — *and* this particular one has a bit of a feel of a hammer looking for a nail.

      • Lidia17 says:

        Philip, I keep hearing the disparity argument more and more but—perhaps unlike other times in history—a lot of that “wealth” is fake digits nowadays.

        • Philip Bogdonoff says:

          Yes, but if you have 10 fake digits and you are competing in the marketplace against someone who has 10,000, you are not going to be able to claim as many of the resources as the “wealthier” person, no matter how fake those digits are. The equalization will only come when enough people lose confidence in those “dollars” — and then we all will be sc3wed.

        • Kim says:

          I don’t care how many $200 million Picassos (yet another great 20th C con-job) someone has. No skin off my nose at all. It isn’t wealth. Practically speaking, it’s just the future of kindling.

          • Lidia17 says:

            Hah.. what about that shark-in-formaldehyde that needs constant refurbishment (including shark replacement)? Prime example of an “asset” that is really a liability.. kind of like a shopping mall or a nuclear power plant.

    • Robert Firth says:

      Good point, Tom. Affirmative action: social housing reserved for blacks; welfare showered abundantly on blacks; jobs reserved for blacks; university places and appointments reserved for blacks. And blacks allowed to spout race hatred on mass media and social media unchecked and unreproved. Yes, systematic racism indeed.

  9. The Australian broadcaster has this regular show:

    The Chaser’s Chas Licciardello and the ABC’s John Barron set out to discover the real America — its politics and its people — with US and Australian experts coming along for the ride!
    https://www.abc.net.au/news/programs/planet-america/

    Some say America’s problems started with 9/11

    The energy turning point was the Iraq war

    I wrote this on the 10th anniversary

    16/3/2013
    Iraq war and its aftermath failed to stop the beginning of peak oil in 2005
    http://crudeoilpeak.info/iraq-war-and-its-aftermath-failed-to-stop-the-beginning-of-peak-oil-in-2005

    The subprime mortgage crisis started in the car and therefore oil dependent US suburbia

    Then we had quantitative easing QE1-QE3 which financed the unconventional shale oil boom WITHOUT reducing oil prices.

    China also printed money, their debt is now >300% of GDP. What’s more, that increasing debt has driven oil demand to ever higher levels. The graph is here:

    http://crudeoilpeak.info/china-peak-oil

    I was always intrigued by the question how the conflict between growing Chinese oil consumption and stagnating oil production will be resolved. I Imagined the Corona virus could do that.

    Gordon G Chang, an American lawyer with a Chinese father argues that the Chinese government – after realizing in December 2019 that the Chinese economy was damaged – allowed the virus to spread to other countries in order to “level the geopolitical playing field”

    His latest article is on Zerohedge

    https://www.zerohedge.com/markets/gordon-chang-china-what-we-must-do-what-we-must-not-do

    I go one step further and argue that China can now consume the oil the West can’t consume due to the evolving recession and job losses. Some clever strategists must have speculated that China can for example padlock flats but that democracies.can’t do that.

    Insofar the virus has damaged America – including triggering race riots – more than China itself.

    So what we see is a kind of oil war, but not with conventional weapons.

    • Thanks for all of the links.

      I wasn’t involved with oil back in 2003, so it was interesting to read about some of the things that were connected together at that time.

      Oil is definitely needed by many systems, and wars have been fought over oil before. Now that we are reaching limits, it would not be too surprising if there is some sort of “war” between the US and China. The catch is that we are so dependent on each other that it is hard to have a war, of any conventional kind. The lack of sufficient energy in total pretty much makes certain that globalization has to take a big step backward.

      By the way, I found another article supporting the idea of the virus causing COVID-19 escaping from a laboratory in China. Did the SARS-CoV-2 virus arise from a bat coronavirus research program in a Chinese laboratory? Very possibly.

      The article is by Milton Leitenberg, a senior research associate at the Center for International and Security Studies at the University of Maryland. It is published in the Bulletin of Atomic Scientists.

  10. Charlene Grant says:

    Gail says that world trade uses a lot of energy. I would really like to see an article that tells how much energy the U.S. military uses. We have military bases all over the world, and some of those are fairly luxurious (Germany and Japan, for example) with lots of supplies flown in regularly. Then we have ships all over the world (in the Persian Gulf and the South China Sea, for example). Then there are the airplanes dropping bombs all over the place, and, of course, the constant, never ending wars. Every year the military swallows up more and more money. Sometimes I think our government wants to spend as much money as possible on killing people and as little money as possible on keeping people alive (Medicare, etc).

    • Spending money on the military tends to pay young people who need jobs.

      Keeping people whose bodies are already declining alive leads to huge costs. These people may have hobbies, but most of them are not working in the paid economy. It is hard to make a growth economy out of rising nursing home admissions. It works much better to support young people.

      • SomeoneInAsia says:

        Wouldn’t it be great if the elderly could be kept healthy and productive through a reversal of the aging process? Then the problem of keeping people whose bodies are declining would vanish. 🙂

        Of course, all this research assumes BAU can continue much longer for our modern world — which, alas, is looking most unlikely…

    • TomK says:

      “The federal government is the largest energy consumer in the United States. Within the federal government, the U.S. Department of Defense (DOD) consumes more energy than any other agency. In FY2017, DOD consumed 707.9 trillion British thermal units (Btu) of energy—roughly 16 times that of the second largest consumer in the federal government, the U.S. Postal Service…”
      Source: Congressional Research Service, Sept., 2019. https://fas.org/sgp/crs/natsec/R45832.pdf

    • Kim says:

      This is nothing new. It certainly isn’t a special feature of the USA. War has been a mainstay of human society for just about forever I suppose. Since agriculture maybe. Certainly ever since the horse was domesticated. That was a gamechanger.

      Once one group of people has an advantage like that over another group, they will use it to take resources. The Normans were good at war. The invaded England and killed and took and ruled. They invaded Italy and killed and took and ruled. Some people are nice. But a crucial and determined portion of people are most decidedly not nice. In fact, they are evil.

      China is no better. Nor is your neighbor. Other people will enslave you if they can. After an apocalyptic crash your neighbor down the road will enslave you and your kids.

      This is human beings. This is how they are.

      • SomeoneInAsia says:

        (Premodern) China left others alone for the better part of a millennium since the 10th century AD. She could have taken over the world easily during the early 15th Century — as witness the naval power of Zheng He’s treasure fleets — but to her credit she didn’t.

        Your view of human nature seems to me… excessively Hobbesian.

        • Kim says:

          China did no such thing. In fact, she was in a constant state of war all along her borders. Who do you think the Qing were? Neighbors dropping in for a cup of tea? Did the Ming just dry up one day and blow away? And China buttressed those borders with vassal (militarily subject) states such as Korea. Did the Koreans volunteer to be subject to the Chinese or was it the result of the constant threat of force?

          As for “Hobbesian” – meaning I suppose that violence is the root of power in human societies – perhaps you could provide me some examples of societies where violence is not the ultimate arbiter, i.e., no war, no slavery, no violent crime, no corporal punishment.

          • SomeoneInAsia says:

            From what I read, China was rarely the aggressor in all those conflicts you mentioned. The Han didn’t attack the Manchus first — quite the opposite. And it was their attacks that eventually ended the Ming. As for Korea, I’d like to know if China had ever attempted to annex her by military force so she’d become part of China. No, right?

            Russians also acknowledge that in the last millennium they had only one armed conflict with (premodern) China; by comparison there were many more with Europe.

            It is of course inevitable that there will always be at least some conflict in all human societies. But there have been some in which such conflict has in fact been minimized. The native Americans, for example. In the 18th century, Thomas Paine, a founding father of the United States, and French aristocrat Michel Guillaume Jean de Crevecouer were deeply impressed by the ways in which native American societies organized themselves. A woman by the name of Mary Jemison was adopted by a native American family, and this is what she had to say: “We had no master to oversee or drive us, so that we could work as leisurely as we pleased. No people can live more happy than the Indians did in times of peace…their lives were a continual round of pleasures.”

            But at the end of the day, I see no point in debating with anyone here, looking at the mess towards which we’re all now headed. If you want to insist your POV is correct, then all I have to say is: let’s just agree to disagree, and go our separate ways. (Shrugs.)

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