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Musings
Although I have not been posting as much here recently (hmmm, maybe my marriage back in June had something to do with that ;-) ) I have still been keeping up with the various topics of interest to me.
Frankly, I am a bit worried.
As we all know, in spite of academics' fervent wishes that everything that happens in the world did so in a neat little vacuum, separated from the other events, it just ain't so. What happens in the realm of politics affects what happens in business and they both affect what happens in the economy, and all are influenced by weather, natural disasters, and geological limits the laws of physics and nature.
We also have seen time and time again, that, as Upton Sinclair so aptly put it, "It is difficult to get a man to understand something when his job depends on not understanding it."
America's political system is such that the only ones that can manage to get elected, are those who don't deserve it. As Richard Jordan's Jeffery Pelt character in "Hunt for Red October" described his job as the National Security Advisor, "I am a politician. That means I am a liar and a cheat. It means I will kiss a baby, then steal its lollipop." sadly, this is the norm for our politicians.
Because of the way that election campaigns are financed here, most politicians are beholden to the corporations that donate money. This means that people like Sen. James Inhoefe (R-OK) are not only beholden to the interests of his campaign donors, not only refuse to believe that climate change is happening, but stand as obstructionists in the government, trying to trip up and derail any and all attempts to mitigate climate change in this country. To see just what I am talking about, I point you towards the following speech he gave before the US Senate This past Friday to see just what I am talking about. 2007 - GLOBAL WARMING ALARMISM REACHES A ‘TIPPING POINT’
In this, he rants against "Hollywood," fear of world government, demagogic use of children, and meticulously stitches together every flat-earth skeptic fairy tale he could find to paint a bleak picture of how everything is one giant conspiracy against the American public's god given right to use natural resources for any thing they want, regardless of the harmful consequences. He might as well be the sweaty guy in the overcoat on the street corner, with his collage of newspaper clippings, the one that reveals the conspiracy They Don't Want You to Know. Only this guy's a United States Senator.
Our Presidential team is not much better, whether it is Cheney showing his disinterest and lack of compassion for those who lost their homes in the California wildfires by falling asleep during a cabinet meeting on the topic, or the White House Press Office defending its assertation that climate change would bring some "health benefits" to humans despite the study they used as a basis for this red herring firmly stating that the advantages would be "outweighed by the negative health effects of rising temperatures worldwide, especially in developing countries."
Combine all of this with our major political discourse for the last six months being over who will be elected the next president even though the elections are not until November of 2008. And we have a mess on our hands.
The republicans are in a quandary, as they have pandered to the extremes of the party and used propaganda to espouse the message that anyone who disagrees with Bush & Co.'s current is a 'ragin' librul, and only a hair's breadth away from being a communist pinko fag. This is despite the rampant dissatisfaction evidenced in Job Rating Polls, where even the Republican propaganda arm Fox News can not find any more than 35% of Americans approving of Bush. Of course, I am sure they will spin it such that they point out that he is doing better than the hated liberals Democrats in control of Congress, as Congress only has a 25% job approval rating. Is there any wonder that 66% of Americans feel that this country is going in the wrong direction, (which looks better than it is, as only 23% feel it is going in the right direction; the rest have no opinion).
all polling numbers taken from here: http://www.pollingreport.com/
Then there is the fact the most sane of the potential Republican candidates, the one that most closely resembles the old, Regean-esque Libertarian Republicans, namely, Ron Paul, is being subjected to a smear campaign by the neo-conservatives. The far-right, neo-con community website, RedState.com recently banned Ron Paul supporters from their site, claiming that they are just a bunch of Liberals prentending to be Republicans. This despite the fact that their anointed saint, the most holy of holy Ronald Regean, is on record stating that “The heart and soul of conservatism is libertarianism.” and the fact that Ron Paul is a Libertarian leaning, Conservative, small government, non-interventionist candidate (this last is one of the reasons he opposes the war in Iraq) has them scared and labeling him as a Liberal, as if that is some sort of death knell. For a good discussion of this, read the NYT's article/post about it here: A Ban on Ron Paul Supporters Be sure and read the comments, as they are very enlightening on the current state of supporters and neo-cons.
Honestly, I don't think there is an electable candidate that will be able to implement anything remotely resembling an acceptable path for our country to take. No matter what candidate wins, they are going to have headache after headache, whether it be trying to keep the country's economy from collapsing, dealing with the realities of climate change, dealing with the harsh realities of unlimited growth in a finite world being a pipe dream, dealing with the polarization of the populace into warring factions, the list goes on and on and on.
So where does that leave us?
It leaves us to do what many in this country have forgotten how to do, fend for ourselves. We must make moves in our lives to protect ourselves and our loved ones.
My grim outlook for the next decade is not pretty.
A number of things, which in and of themselves will be difficult to deal with will converge into a "Perfect Storm" that will mean hardships galore.
Climate Change:
Like it or not, climate change is occurring. And it is occurring at a faster rate than most people are willing to admit to. We have heard the shrill cries of what it will mean and ignored them as crack pot, chicken little, Liberal rantings. Yet it is occurring, no matter how vehemently it is denied. Whether it is man-made (I believe it is) or not, is beside the point, as it is going to affect us all. The most touted changes will be the rise in sea levels, but the most noticeable will be the change in weather patterns. The drought in the Southeast U.S. is just a portent of what is to come, as the patterns change. The government projects that at least 36 states will face water shortages within five years because of a combination of rising temperatures, drought, population growth, urban sprawl, waste and excess. Can anything be done about it? Not really, but if we don't reduce our carbon outputs as a civilization, we will subject ourselves to far harsher conditions.
I will let Mr. Gore explain climate change to you (that is of course, if you are open minded enough to listen to him. as he does a much better job than I could. I would not (and did not) vote for him in an election (despite my being from his home state) due to my not caring for his record while he was my US Senator, but his message on climate change is thorough and mostly accurate (some of his fact and figures presented in the film "An Inconvenient Truth have since it was filmed, been superseded with new data).
National Debt:
Our national debt is over 9 Trillion Dollars. Thats 9 followed by 12 zeros, or $9,000,000,000,000. It has increased at an average of $1.42 billion per day since September 29, 2006. The estimated population of the United States is 303,370,931 so each citizen's share of this debt is $29,874.06. The ironic part of this is that Republicans have the reputation of being Since 1945, Republican presidents have borrowed more than Democratic presidents regardless of the inflation rate.
I think the reason that Republicans hate Clinton so much is that whereas they talked about being the small government, fiscally responsible party, Clinton actually did something about it. President Regean, despite the convention wisdom of being a financially responsible president, actually grew the debt at an average of 13.8% per year from just under $1 Trillion to over $2.6 Trillion. Bush Sr. was not much better. He only grew the debt an average of 11.8% a year during his four years. In his last year, he reneged on his famous promise of "No New Taxes" and raised them, bringing the tax income back to where the rate of debt increase was not so high. The Neo-conservatives promptly threw him out of office by ensuring he did not get reelected. He left Clinton with a $4.5 Trillion debt load.
Thanks to his policies, Clinton managed to get the growth of the debt down to 0.32% (one third of one percent) his last year in office. Had his policies been followed for one more year the debt would have been reduced for the first time since the Kennedy administration. The last year Mr. Clinton was in office the nation borrowed 18 billion dollars.
When Bush Jr. came into power with his promise to cut taxes, he had to borrow 133 billion to compensate. It has only gotten worse since then, as Bush has in his seven years as President, grown the National Debt from Just under to $6 Trillion Dollars to it's current $9 Trillion Dollar level. That is an average of $428,571,428,571 per year.
facts and figures lifted from here: United States National Debt (1938 to Present) - An Analysis of the Presidents Who Are Responsible for the Borrowing by Steve McGourty
The massive amount of debt that we have outstanding is mostly owned by the members of OPEC and China. They bought the debt as a way to perpetuate our "non-negotiable way of life", as it propped up the American economy. Plus, they had to have somewhere to stash all of that income that they made off of our buying their oil and cheap manufactured goods.
In recent times, there have been rumblings about the ability of the United States to service (pay the interest) on all of this debt. When the Fed "prints" more money by waving it's magic wand and allowing more money to be pumped into the economy, the devaluation of the Dollar that results is known as inflation. This has caused the U.S. Dollar to fall in value as compared to the currencies of other, more fiscally responsible nations. To wit, for the first time in ages( if not ever) the Canadian Dollar is worth more than the U.S. Dollar. This means that products that we purchase from overseas will cost us more. Considering that the manufacturing base of our economy has shifted overseas in the last 20 years, this affects almost everything we buy.
The Housing Collapse:
The housing market has had a long and profitable run. Since 1997, home prices have skyrocketed across the nation. In inflation adjusted numbers, a house that sold for $92,000 in 1997 appreciated $171,000 by the beginning of 2006. see the NY Times graph to support these figures at http://pics.livejournal.com/tnrkitect/pic/000wa2pd This was in part fueled by the Fed's dropping of interest rates as a way to stimulate the economy after 9/11, and further exacerbated by the shenanigans of mortgage companies.
Potential home buyers were enticed with low interest rates, and were constantly inundated with the message that home ownership is the only way to live, that only losers rented, and that it was an American's inalienable right to live the American Dream © with a big house on a acre of land in the Suburbs.
Mortgage companies dreamed up new ways of financing those who did not qualify for a traditional fixed rate loan, such as adjustable rate mortgages (where a low teaser rate is offered for the first "x" number of years, then it adjusts to whatever the market rate is), interest only loans (only the interest on the loan is paid, leaving the amount owed unchanged), and simple shoddy lending practices (lending money for more house than a person can afford).
This worked great while house prices continued to rise, as people were able to sell their house for more than they paid for it should they get into financial trouble. Bankers on wall street came up with a new way of slicing and dicing risky loans and selling them as investments, seemingly removing the risk from the loans as far as they were concerned.
People also were getting into trouble by taking out 2nd and 3rd mortgages on their homes, which were sold to them under the innocuous name of "Equity Line of Credit". So long as the value of their home kept increasing, they were fine. But few lenders explained to their clients what would happen should home prices start falling.
A major portion of the economy was based around the massive number of new housing going up, and the subsequent furnishing of said houses by the new owners, not to mention all of the useless accoutrement that the new owners felt they needed to maintain their house (whoever decided leaf blowers wee a good idea should be shot). And if they bought a used house instead of a new one, then there were all of the upgrades and renovations they had to do to make it their own. We won't even mention the way people super-sized their houses, adding rooms, or merely square footage to every room, necessitating more cooling and heating, and more upkeep.
As the news has been telling us recently, the bubble has burst. This is having ramifications all across the economy, as foreclosures and bankruptcies are up (bankruptcies are up despite the new laws the administration pushed through making them harder to obtain).
All of this is taking a toll on the economy, and reducing people's ability to spend money.
For a complete dissection of the housing boom, see the Wikipedia article here: http://en.wikipedia.org/wiki/United_States_housing_bubble
Suburban Sprawl:
This is related to The housing bubble, in that the skyrocketing prices of housing drove many people to the suburbs and the exburbs to find reasonable pricing. Farmers found out that the most profitable legal crop that they could grow in their fields was new housing. Contractors rushed to knock together housing as cheaply as possible for those who the lenders threw money at, jacking up the cost by adding square footage, upgraded finishes, and making the construction techniques used more complex just to raise the prices.
As the population spread out, density went down, commutes went up, and unforeseen ills began to crop up. Communities could no longer afford to build or maintain the infrastructure to support their new, spread out populace, and either had to raise taxes or go broke. Zoning was enacted that categorized and isolated the elements that are needed to make a vibrant community, and segregated them into their own little enclaves, making it nearly impossible to do much of anything with out a vehicle.
To really get a good synopsis of the ills I am talking about I will point you towards James Howard Kunstler's Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape
Peak Oil:
There have been reams of information and books written on the topic, but I'll do my best to make it as succinct as possible. "Peak oil" is the catch phrase that describes the phenomenon of the world reaching its peak in oil production, and the subsequent problems arising therein. It is not that we are running out of oil, (we are not) but rather, it is the point at which the production begins it inexorable decline regardless of the demand for oil or the amount of additional drilling and attempts to boost production.
Considering that oil underpins every facet of our post-industrial society, this will be a problem. Considering that the signs are pointing to the peak occurring anywhere from 2 years ago to 2012, this problem will occur in our lifetimes, and actually quite soon. Considering that China and India, the two most populous countries in the world are just now beginning to elevate their economies to "be like America" and adding their demand for oil to that of the U.S., it is a problem. Considering that oil was the basis for the "Green Revolution" in agriculture, in which the use of tractors, chemical based fertilizers, chemical based pesticides, and irrigation pumps increased the crops exponentially and thus increased the number people that could be fed, this will be a problem.
Sensing a theme here?
The alternative energy sources available aren't up to the task of supplanting oil any time soon. Projections currently have them making up a paltry 4% of our national needs by 2015, and taking until 2035 to even meet 35% of them.
To get a more thorough grounding on the topic of peak oil, I point you to this Peak Oil Primer on Energy Bulletin.net and invite you to look at another Howard Kunstler book, The Long Emergency
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So what does it all mean?
Well, as I stated at the beginning, any one of these problems would be difficult to overcome solo, combined together and it is a true recipe for disaster.
Global climate change is on a time delay, in that even if we immediately stopped producing any and all greenhouse gases, we would still continue warming for another decade or so. This is due to the majority of the Earth being made of water, which as we know, takes longer to heat up and cool down than air does. So the inputs that are causing the effects we are seeing now actually occurred about a decade ago.
In a way, we are lucky. Thanks to Peak Oil, we have no chance of keep on in a business as usual aspect, regardless of the wishes of those in positions of power. The climatic predictions that are so dire are based on this business as usual scenario, and thus we will not experience them, unless they are too meek of predictions. (Climate scientists are flipping out about the record breaking loss of ice coverage in the Arctic Ocean this past summer, as their models did not predict that amount of ice loss for another couple of decades.)
There is not enough time to develop the alternative sources of energy to replace oil. Even if there were, there is not the political backbone in any of our officials to do what it takes to do so.
The next few years are going to be tough for all of us. As the demand for oil begins to outstrip supply, prices will skyrocket. If we think $90 a barrel oil is bad, (it reached a peak of $92 this past week) wait a few years. Since our entire way of life is built on oil, all the products that make use of oil in some fashion will skyrocket along with it.
Food production is going to drop, as there will be no way for the farmers to afford to buy fertilizer for their fields. The massive amounts of chemicals that have been poured intobthe fields have resulted in killing all the microfauna and microflora that make the soil rich in nutrients for the crops. The typical large farm has soil that is little better than sand now, and requires the massive amounts of fertilizer to maintain crop yields. They will either deal with greatly reduced crop yields, or switch back to a more sustainable way of farming where the soils fecundity is rebuilt using organic matter. Regardless, in the short term, it will not be pretty.
What is left may be diverted into ethanol production, as the agricultural corporations (like Archer Daniels Midland) are heavily invested in ethanol plants. Since they are the suppliers of seed to the farmers, there is a good chance that the farmers will have no choice but to sell the crops back to them, if they want seed for the next crop.
Meat and Dairy prices are already feeling the effects of one quarter of the corn crop being diverted into ethanol production for fuel. This is because the demand for the corn has driven the prices up, making the ranchers and dairy farmers have to pay more for feed for their cows. Imagine what it will be like if there is less to go around, and the ethanol plants demand to get the same amount of corn.
So there will be a scarcity of food to feed the populace. History teaches that when a populace goes hungry while the rulers enjoy their feasts, revolutions take place. We will come back to that topic in a bit.
We already know about the sad state of the roads and bridges in the nation. The collapse of the I-35 bridge in Minneapolis earlier this year was just a precursor of what is to come. You think the potholes are bad now, consider for a moment all of those miles of asphalt. Now consider that asphalt is an oil byproduct, at one point considered a waste, but now often refined into higher grades of fuel. Less oil means more is made into fuel, leaving even less for asphalt production. No asphalt means fewer and fewer potholes get filled in, and the roads begin to revert back to dirt paths.
Not that this will matter that much, since the primary use for the roads is the delivery of goods via trucking. When you consider that fuel is getting more and more expensive, and that the oil that make the tires and lubricants for the engines and axles are getting more and more expensive, what do you think happens to freight rates? Pretty soon, the cost of trucking goods across the nation will become cost prohibitive. Some of the freight will divert to the railroads, but those same railroads will not be able to carry the additional freight without major upgrades to their infrastructure.
Even more worrisome is that many communities no longer have any rail service, as the trucking lines were able to take all of the railroads business while oil was so cheap. This drove the railroads out of business, or at least out the towns they once served. Many towns and cities have turned the old railroad right of ways into bike paths and jogging paths, which although nice to have, only serve the locals, and can no longer serve as connections with the outside world.
Personal transport is going to be affected in a major fashion as well. Currently, if you don't have an automobile, you are a second class citizen. As the effects of peak oil take firmer hold, more and more people will be forced to curtail their driving due to not being able to afford to fuel up. this is problematic due to the development patterns (sprawl) that have shaped our nation over the past 60 years. This of course assumes that these people are still living in their houses in the suburbs and exburbs, as the rates of foreclosures are skyrocketing.
Many people will be forced out of the middle class back into the poor house. I fear that rates of suicide, violence, and murder will skyrocket along with the growth of the dispossessed. People will resort to any means necessary to feed and clothe themselves, to merely survive. We may see the military mobilized against our own citizens. Society will take a blind eye to this destruction of the last vestiges of our Republic, as it devolves into a dictatorship.
Big business will transform itself, from global entities back to regional and local entities. The production of luxury goods will crash, while those things necessary to survive will gain prominence. This transition will result in massive upheaval in the economy, and may be akin to a second Great Depression.
There is a good chance that it will be the surviving big business calling the shots politically, and I would not be surprised to see the virtual enslavement of those members of the populace that are in default on their debts as a way to work them off. After all, if there is no fuel to run the tractors and harvesters, someone will have to do the work of sowing, weeding, and harvesting by hand. Indentured servitude may reappear in our society. Life will become cheap, and existence hard.
If we are lucky, our political leadership will rise above the partisan bickering and pandering to big business and take measures to ameliorate the worst of the hardships. I'll leave it to you to decide the likelihood of that happening.
What to do?
GET. OUT. OF. DEBT.
This is the first, and most important thing that you can do to protect yourself. If you are beholden to no one, then no one has any leverage over you. If all you need is to find food, clothing and shelter, rather than to figure out how to repay your debts, life will be much easier. You will be able to get by on much less, and do what you want instead of what those you are indebted to want.
Get rid of the cable or satellite TV, bring your own lunch instead of eating out every day, learn to do with less. You get by by doing without. Pay down your debts. If your old car is running fine, there is no need to get a new one. Don't try to "keep up with the Joneses" unless you plan on continuing to keep up with them in debtor's prison.
Start learning and using new skills that will be useful in an energy constrained world, such as knitting, sewing, woodworking, gardening, et al. If you gain the skills now while they are still unnecessary, then you will have a leg up on those around you when you need them, and therefore better prepared to get by comfortably.
If at all possible, move closer to your work. The less you spend on fuel, the more you can spend on debt reduction. Also, when the time comes that you can't afford fuel, or it becomes scarce, your commute will still be possible if you are close enough to ride a bike.
Conversely, make note of your local public transportation, and figure out how to use it to get to and from work. (this of course assumes that you have public transit in your community).
Postpone spending on luxuries such as travel until after you are debt free and can afford to pay cash for it.
True, what you have read above sounds grim, bleak, and hopeless, but there is hope to found in it as well. The transition period, which will most likely be referred to as the "Terrible Teens" in future history books, will cause a great deal of upheaval, but it will pass. Those who prepare for it will position themselves to have the easiest time of it all.
I for one hope to be pleasantly surprised by what unfolds, that it ends up being a lot less harsh than that I depict above. In reality, I would hope for a scenario similar to that which Alan Drake, a public transit expert with expertise in redeveloping systems, recently posted on The Oil Drum.
His scenario was developed to give life to the dry facts and figures being generated by the models being studied at the Millennium Institute. It is a vision much more upbeat and positive than the results of most of the scenarios run by them, yet there is still a lot to be concerned about.
Check it out here: USA 2034: A Look Back at the 25th Anniversary Year
Regardless, the times are interesting, and change is in the wind. The best that you can do is get your house in order, prepare for the worst, and hope for the best.
Frankly, I am a bit worried.
As we all know, in spite of academics' fervent wishes that everything that happens in the world did so in a neat little vacuum, separated from the other events, it just ain't so. What happens in the realm of politics affects what happens in business and they both affect what happens in the economy, and all are influenced by weather, natural disasters, and geological limits the laws of physics and nature.
We also have seen time and time again, that, as Upton Sinclair so aptly put it, "It is difficult to get a man to understand something when his job depends on not understanding it."
America's political system is such that the only ones that can manage to get elected, are those who don't deserve it. As Richard Jordan's Jeffery Pelt character in "Hunt for Red October" described his job as the National Security Advisor, "I am a politician. That means I am a liar and a cheat. It means I will kiss a baby, then steal its lollipop." sadly, this is the norm for our politicians.
Because of the way that election campaigns are financed here, most politicians are beholden to the corporations that donate money. This means that people like Sen. James Inhoefe (R-OK) are not only beholden to the interests of his campaign donors, not only refuse to believe that climate change is happening, but stand as obstructionists in the government, trying to trip up and derail any and all attempts to mitigate climate change in this country. To see just what I am talking about, I point you towards the following speech he gave before the US Senate This past Friday to see just what I am talking about. 2007 - GLOBAL WARMING ALARMISM REACHES A ‘TIPPING POINT’
In this, he rants against "Hollywood," fear of world government, demagogic use of children, and meticulously stitches together every flat-earth skeptic fairy tale he could find to paint a bleak picture of how everything is one giant conspiracy against the American public's god given right to use natural resources for any thing they want, regardless of the harmful consequences. He might as well be the sweaty guy in the overcoat on the street corner, with his collage of newspaper clippings, the one that reveals the conspiracy They Don't Want You to Know. Only this guy's a United States Senator.
Our Presidential team is not much better, whether it is Cheney showing his disinterest and lack of compassion for those who lost their homes in the California wildfires by falling asleep during a cabinet meeting on the topic, or the White House Press Office defending its assertation that climate change would bring some "health benefits" to humans despite the study they used as a basis for this red herring firmly stating that the advantages would be "outweighed by the negative health effects of rising temperatures worldwide, especially in developing countries."
Combine all of this with our major political discourse for the last six months being over who will be elected the next president even though the elections are not until November of 2008. And we have a mess on our hands.
The republicans are in a quandary, as they have pandered to the extremes of the party and used propaganda to espouse the message that anyone who disagrees with Bush & Co.'s current is a 'ragin' librul, and only a hair's breadth away from being a communist pinko fag. This is despite the rampant dissatisfaction evidenced in Job Rating Polls, where even
all polling numbers taken from here: http://www.pollingreport.com/
Then there is the fact the most sane of the potential Republican candidates, the one that most closely resembles the old, Regean-esque Libertarian Republicans, namely, Ron Paul, is being subjected to a smear campaign by the neo-conservatives. The far-right, neo-con community website, RedState.com recently banned Ron Paul supporters from their site, claiming that they are just a bunch of Liberals prentending to be Republicans. This despite the fact that their anointed saint, the most holy of holy Ronald Regean, is on record stating that “The heart and soul of conservatism is libertarianism.” and the fact that Ron Paul is a Libertarian leaning, Conservative, small government, non-interventionist candidate (this last is one of the reasons he opposes the war in Iraq) has them scared and labeling him as a Liberal, as if that is some sort of death knell. For a good discussion of this, read the NYT's article/post about it here: A Ban on Ron Paul Supporters Be sure and read the comments, as they are very enlightening on the current state of supporters and neo-cons.
Honestly, I don't think there is an electable candidate that will be able to implement anything remotely resembling an acceptable path for our country to take. No matter what candidate wins, they are going to have headache after headache, whether it be trying to keep the country's economy from collapsing, dealing with the realities of climate change, dealing with the harsh realities of unlimited growth in a finite world being a pipe dream, dealing with the polarization of the populace into warring factions, the list goes on and on and on.
So where does that leave us?
It leaves us to do what many in this country have forgotten how to do, fend for ourselves. We must make moves in our lives to protect ourselves and our loved ones.
My grim outlook for the next decade is not pretty.
A number of things, which in and of themselves will be difficult to deal with will converge into a "Perfect Storm" that will mean hardships galore.
Climate Change:
Like it or not, climate change is occurring. And it is occurring at a faster rate than most people are willing to admit to. We have heard the shrill cries of what it will mean and ignored them as crack pot, chicken little, Liberal rantings. Yet it is occurring, no matter how vehemently it is denied. Whether it is man-made (I believe it is) or not, is beside the point, as it is going to affect us all. The most touted changes will be the rise in sea levels, but the most noticeable will be the change in weather patterns. The drought in the Southeast U.S. is just a portent of what is to come, as the patterns change. The government projects that at least 36 states will face water shortages within five years because of a combination of rising temperatures, drought, population growth, urban sprawl, waste and excess. Can anything be done about it? Not really, but if we don't reduce our carbon outputs as a civilization, we will subject ourselves to far harsher conditions.
I will let Mr. Gore explain climate change to you (that is of course, if you are open minded enough to listen to him. as he does a much better job than I could. I would not (and did not) vote for him in an election (despite my being from his home state) due to my not caring for his record while he was my US Senator, but his message on climate change is thorough and mostly accurate (some of his fact and figures presented in the film "An Inconvenient Truth have since it was filmed, been superseded with new data).
National Debt:
Our national debt is over 9 Trillion Dollars. Thats 9 followed by 12 zeros, or $9,000,000,000,000. It has increased at an average of $1.42 billion per day since September 29, 2006. The estimated population of the United States is 303,370,931 so each citizen's share of this debt is $29,874.06. The ironic part of this is that Republicans have the reputation of being Since 1945, Republican presidents have borrowed more than Democratic presidents regardless of the inflation rate.
I think the reason that Republicans hate Clinton so much is that whereas they talked about being the small government, fiscally responsible party, Clinton actually did something about it. President Regean, despite the convention wisdom of being a financially responsible president, actually grew the debt at an average of 13.8% per year from just under $1 Trillion to over $2.6 Trillion. Bush Sr. was not much better. He only grew the debt an average of 11.8% a year during his four years. In his last year, he reneged on his famous promise of "No New Taxes" and raised them, bringing the tax income back to where the rate of debt increase was not so high. The Neo-conservatives promptly threw him out of office by ensuring he did not get reelected. He left Clinton with a $4.5 Trillion debt load.
Thanks to his policies, Clinton managed to get the growth of the debt down to 0.32% (one third of one percent) his last year in office. Had his policies been followed for one more year the debt would have been reduced for the first time since the Kennedy administration. The last year Mr. Clinton was in office the nation borrowed 18 billion dollars.
When Bush Jr. came into power with his promise to cut taxes, he had to borrow 133 billion to compensate. It has only gotten worse since then, as Bush has in his seven years as President, grown the National Debt from Just under to $6 Trillion Dollars to it's current $9 Trillion Dollar level. That is an average of $428,571,428,571 per year.
facts and figures lifted from here: United States National Debt (1938 to Present) - An Analysis of the Presidents Who Are Responsible for the Borrowing by Steve McGourty
The massive amount of debt that we have outstanding is mostly owned by the members of OPEC and China. They bought the debt as a way to perpetuate our "non-negotiable way of life", as it propped up the American economy. Plus, they had to have somewhere to stash all of that income that they made off of our buying their oil and cheap manufactured goods.
In recent times, there have been rumblings about the ability of the United States to service (pay the interest) on all of this debt. When the Fed "prints" more money by waving it's magic wand and allowing more money to be pumped into the economy, the devaluation of the Dollar that results is known as inflation. This has caused the U.S. Dollar to fall in value as compared to the currencies of other, more fiscally responsible nations. To wit, for the first time in ages( if not ever) the Canadian Dollar is worth more than the U.S. Dollar. This means that products that we purchase from overseas will cost us more. Considering that the manufacturing base of our economy has shifted overseas in the last 20 years, this affects almost everything we buy.
The Housing Collapse:
The housing market has had a long and profitable run. Since 1997, home prices have skyrocketed across the nation. In inflation adjusted numbers, a house that sold for $92,000 in 1997 appreciated $171,000 by the beginning of 2006. see the NY Times graph to support these figures at http://pics.livejournal.com/tnrkitect/pic/000wa2pd This was in part fueled by the Fed's dropping of interest rates as a way to stimulate the economy after 9/11, and further exacerbated by the shenanigans of mortgage companies.
Potential home buyers were enticed with low interest rates, and were constantly inundated with the message that home ownership is the only way to live, that only losers rented, and that it was an American's inalienable right to live the American Dream © with a big house on a acre of land in the Suburbs.
Mortgage companies dreamed up new ways of financing those who did not qualify for a traditional fixed rate loan, such as adjustable rate mortgages (where a low teaser rate is offered for the first "x" number of years, then it adjusts to whatever the market rate is), interest only loans (only the interest on the loan is paid, leaving the amount owed unchanged), and simple shoddy lending practices (lending money for more house than a person can afford).
This worked great while house prices continued to rise, as people were able to sell their house for more than they paid for it should they get into financial trouble. Bankers on wall street came up with a new way of slicing and dicing risky loans and selling them as investments, seemingly removing the risk from the loans as far as they were concerned.
People also were getting into trouble by taking out 2nd and 3rd mortgages on their homes, which were sold to them under the innocuous name of "Equity Line of Credit". So long as the value of their home kept increasing, they were fine. But few lenders explained to their clients what would happen should home prices start falling.
A major portion of the economy was based around the massive number of new housing going up, and the subsequent furnishing of said houses by the new owners, not to mention all of the useless accoutrement that the new owners felt they needed to maintain their house (whoever decided leaf blowers wee a good idea should be shot). And if they bought a used house instead of a new one, then there were all of the upgrades and renovations they had to do to make it their own. We won't even mention the way people super-sized their houses, adding rooms, or merely square footage to every room, necessitating more cooling and heating, and more upkeep.
As the news has been telling us recently, the bubble has burst. This is having ramifications all across the economy, as foreclosures and bankruptcies are up (bankruptcies are up despite the new laws the administration pushed through making them harder to obtain).
All of this is taking a toll on the economy, and reducing people's ability to spend money.
For a complete dissection of the housing boom, see the Wikipedia article here: http://en.wikipedia.org/wiki/United_States_housing_bubble
Suburban Sprawl:
This is related to The housing bubble, in that the skyrocketing prices of housing drove many people to the suburbs and the exburbs to find reasonable pricing. Farmers found out that the most profitable legal crop that they could grow in their fields was new housing. Contractors rushed to knock together housing as cheaply as possible for those who the lenders threw money at, jacking up the cost by adding square footage, upgraded finishes, and making the construction techniques used more complex just to raise the prices.
As the population spread out, density went down, commutes went up, and unforeseen ills began to crop up. Communities could no longer afford to build or maintain the infrastructure to support their new, spread out populace, and either had to raise taxes or go broke. Zoning was enacted that categorized and isolated the elements that are needed to make a vibrant community, and segregated them into their own little enclaves, making it nearly impossible to do much of anything with out a vehicle.
To really get a good synopsis of the ills I am talking about I will point you towards James Howard Kunstler's Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape
Peak Oil:
There have been reams of information and books written on the topic, but I'll do my best to make it as succinct as possible. "Peak oil" is the catch phrase that describes the phenomenon of the world reaching its peak in oil production, and the subsequent problems arising therein. It is not that we are running out of oil, (we are not) but rather, it is the point at which the production begins it inexorable decline regardless of the demand for oil or the amount of additional drilling and attempts to boost production.
Considering that oil underpins every facet of our post-industrial society, this will be a problem. Considering that the signs are pointing to the peak occurring anywhere from 2 years ago to 2012, this problem will occur in our lifetimes, and actually quite soon. Considering that China and India, the two most populous countries in the world are just now beginning to elevate their economies to "be like America" and adding their demand for oil to that of the U.S., it is a problem. Considering that oil was the basis for the "Green Revolution" in agriculture, in which the use of tractors, chemical based fertilizers, chemical based pesticides, and irrigation pumps increased the crops exponentially and thus increased the number people that could be fed, this will be a problem.
Sensing a theme here?
The alternative energy sources available aren't up to the task of supplanting oil any time soon. Projections currently have them making up a paltry 4% of our national needs by 2015, and taking until 2035 to even meet 35% of them.
To get a more thorough grounding on the topic of peak oil, I point you to this Peak Oil Primer on Energy Bulletin.net and invite you to look at another Howard Kunstler book, The Long Emergency
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So what does it all mean?
Well, as I stated at the beginning, any one of these problems would be difficult to overcome solo, combined together and it is a true recipe for disaster.
Global climate change is on a time delay, in that even if we immediately stopped producing any and all greenhouse gases, we would still continue warming for another decade or so. This is due to the majority of the Earth being made of water, which as we know, takes longer to heat up and cool down than air does. So the inputs that are causing the effects we are seeing now actually occurred about a decade ago.
In a way, we are lucky. Thanks to Peak Oil, we have no chance of keep on in a business as usual aspect, regardless of the wishes of those in positions of power. The climatic predictions that are so dire are based on this business as usual scenario, and thus we will not experience them, unless they are too meek of predictions. (Climate scientists are flipping out about the record breaking loss of ice coverage in the Arctic Ocean this past summer, as their models did not predict that amount of ice loss for another couple of decades.)
There is not enough time to develop the alternative sources of energy to replace oil. Even if there were, there is not the political backbone in any of our officials to do what it takes to do so.
The next few years are going to be tough for all of us. As the demand for oil begins to outstrip supply, prices will skyrocket. If we think $90 a barrel oil is bad, (it reached a peak of $92 this past week) wait a few years. Since our entire way of life is built on oil, all the products that make use of oil in some fashion will skyrocket along with it.
Food production is going to drop, as there will be no way for the farmers to afford to buy fertilizer for their fields. The massive amounts of chemicals that have been poured intobthe fields have resulted in killing all the microfauna and microflora that make the soil rich in nutrients for the crops. The typical large farm has soil that is little better than sand now, and requires the massive amounts of fertilizer to maintain crop yields. They will either deal with greatly reduced crop yields, or switch back to a more sustainable way of farming where the soils fecundity is rebuilt using organic matter. Regardless, in the short term, it will not be pretty.
What is left may be diverted into ethanol production, as the agricultural corporations (like Archer Daniels Midland) are heavily invested in ethanol plants. Since they are the suppliers of seed to the farmers, there is a good chance that the farmers will have no choice but to sell the crops back to them, if they want seed for the next crop.
Meat and Dairy prices are already feeling the effects of one quarter of the corn crop being diverted into ethanol production for fuel. This is because the demand for the corn has driven the prices up, making the ranchers and dairy farmers have to pay more for feed for their cows. Imagine what it will be like if there is less to go around, and the ethanol plants demand to get the same amount of corn.
So there will be a scarcity of food to feed the populace. History teaches that when a populace goes hungry while the rulers enjoy their feasts, revolutions take place. We will come back to that topic in a bit.
We already know about the sad state of the roads and bridges in the nation. The collapse of the I-35 bridge in Minneapolis earlier this year was just a precursor of what is to come. You think the potholes are bad now, consider for a moment all of those miles of asphalt. Now consider that asphalt is an oil byproduct, at one point considered a waste, but now often refined into higher grades of fuel. Less oil means more is made into fuel, leaving even less for asphalt production. No asphalt means fewer and fewer potholes get filled in, and the roads begin to revert back to dirt paths.
Not that this will matter that much, since the primary use for the roads is the delivery of goods via trucking. When you consider that fuel is getting more and more expensive, and that the oil that make the tires and lubricants for the engines and axles are getting more and more expensive, what do you think happens to freight rates? Pretty soon, the cost of trucking goods across the nation will become cost prohibitive. Some of the freight will divert to the railroads, but those same railroads will not be able to carry the additional freight without major upgrades to their infrastructure.
Even more worrisome is that many communities no longer have any rail service, as the trucking lines were able to take all of the railroads business while oil was so cheap. This drove the railroads out of business, or at least out the towns they once served. Many towns and cities have turned the old railroad right of ways into bike paths and jogging paths, which although nice to have, only serve the locals, and can no longer serve as connections with the outside world.
Personal transport is going to be affected in a major fashion as well. Currently, if you don't have an automobile, you are a second class citizen. As the effects of peak oil take firmer hold, more and more people will be forced to curtail their driving due to not being able to afford to fuel up. this is problematic due to the development patterns (sprawl) that have shaped our nation over the past 60 years. This of course assumes that these people are still living in their houses in the suburbs and exburbs, as the rates of foreclosures are skyrocketing.
Many people will be forced out of the middle class back into the poor house. I fear that rates of suicide, violence, and murder will skyrocket along with the growth of the dispossessed. People will resort to any means necessary to feed and clothe themselves, to merely survive. We may see the military mobilized against our own citizens. Society will take a blind eye to this destruction of the last vestiges of our Republic, as it devolves into a dictatorship.
Big business will transform itself, from global entities back to regional and local entities. The production of luxury goods will crash, while those things necessary to survive will gain prominence. This transition will result in massive upheaval in the economy, and may be akin to a second Great Depression.
There is a good chance that it will be the surviving big business calling the shots politically, and I would not be surprised to see the virtual enslavement of those members of the populace that are in default on their debts as a way to work them off. After all, if there is no fuel to run the tractors and harvesters, someone will have to do the work of sowing, weeding, and harvesting by hand. Indentured servitude may reappear in our society. Life will become cheap, and existence hard.
If we are lucky, our political leadership will rise above the partisan bickering and pandering to big business and take measures to ameliorate the worst of the hardships. I'll leave it to you to decide the likelihood of that happening.
What to do?
GET. OUT. OF. DEBT.
This is the first, and most important thing that you can do to protect yourself. If you are beholden to no one, then no one has any leverage over you. If all you need is to find food, clothing and shelter, rather than to figure out how to repay your debts, life will be much easier. You will be able to get by on much less, and do what you want instead of what those you are indebted to want.
Get rid of the cable or satellite TV, bring your own lunch instead of eating out every day, learn to do with less. You get by by doing without. Pay down your debts. If your old car is running fine, there is no need to get a new one. Don't try to "keep up with the Joneses" unless you plan on continuing to keep up with them in debtor's prison.
Start learning and using new skills that will be useful in an energy constrained world, such as knitting, sewing, woodworking, gardening, et al. If you gain the skills now while they are still unnecessary, then you will have a leg up on those around you when you need them, and therefore better prepared to get by comfortably.
If at all possible, move closer to your work. The less you spend on fuel, the more you can spend on debt reduction. Also, when the time comes that you can't afford fuel, or it becomes scarce, your commute will still be possible if you are close enough to ride a bike.
Conversely, make note of your local public transportation, and figure out how to use it to get to and from work. (this of course assumes that you have public transit in your community).
Postpone spending on luxuries such as travel until after you are debt free and can afford to pay cash for it.
True, what you have read above sounds grim, bleak, and hopeless, but there is hope to found in it as well. The transition period, which will most likely be referred to as the "Terrible Teens" in future history books, will cause a great deal of upheaval, but it will pass. Those who prepare for it will position themselves to have the easiest time of it all.
I for one hope to be pleasantly surprised by what unfolds, that it ends up being a lot less harsh than that I depict above. In reality, I would hope for a scenario similar to that which Alan Drake, a public transit expert with expertise in redeveloping systems, recently posted on The Oil Drum.
His scenario was developed to give life to the dry facts and figures being generated by the models being studied at the Millennium Institute. It is a vision much more upbeat and positive than the results of most of the scenarios run by them, yet there is still a lot to be concerned about.
Check it out here: USA 2034: A Look Back at the 25th Anniversary Year
Regardless, the times are interesting, and change is in the wind. The best that you can do is get your house in order, prepare for the worst, and hope for the best.