Thursday, July 28, 2011

debt tantrum on a sinking ship...,

postcarbon | President Obama and House Speaker Boehner are both right, but they’re both tragically wrong. And unless they can somehow wake up and see why they’re wrong, we all lose—big time.

Let me explain. But to do so will require setting three levels of context.

The immediate context is of course the fact that Republicans have created a political crisis by refusing to raise the nation’s debt ceiling unless they achieve their priorities of dramatically reducing government spending—primarily on social programs.

A larger context is the fact that the U.S. is still reeling from an epic credit crunch. During the past decade, home prices were bid up to unrealistic levels and the financial industry magically and dramatically expanded the resulting bubble with the helium of securitization and derivatives. When the bubble popped, government bailouts and stimulus packages were deployed to prevent bank failures and help stanch the exploding levels of unemployment.

The even bigger, and most important, context is that we are entering a new historic era. Oil prices are high due to the ongoing depletion of giant, easy-to-produce oilfields discovered back in the 1950s and ’60s, and the substitution of expensive oil from deepwater drilling and tar sands. Other non-renewable resources are also becoming scarcer. On top of that, the climate is changing and weird weather is helping drive up food prices. Oh, and let’s not forget, the oceans are dying. Altogether, it seems reasonable to conclude that economic growth—fueled during past decades by cheap energy and raw materials, but also made possible by a stable climate—is coming to an end.

So here we are, facing an enormous, unavoidable long-term problem (the need to transition the economy to a sustainable post-growth mode while minimizing the human suffering that is likely to ensue in the interim); a medium-term need to deal with a recession that could at any moment relapse to 1930s levels; plus an optional short-term crisis (the fight over raising the nation’s debt limit).

Okay, that’s enough context. Let’s view the arguments of both sides from this expanded perspective.

14 comments:

nanakwame said...

Should I buy Richard Heinberg’s book?

nanakwame said...

Here is James Fallow's take

I have learned not to bore people with my expressions of amazement at the array of food in ordinary grocery stores, the size and newness of cars on the street, the splendor of the physical plant for universities, museums, sports stadiums. And honestly, by now I’ve almost stopped noticing. But if this is “decline,” it is from a level that most of the world still envies. James Fallow
http://www.theatlantic.com/magazine/archive/2010/01/how-america-can-rise-again/7839/2/

umbrarchist said...

Americans have spent 50 years perfecting a new and improved form of decline.

It would be interesting to have photographs of some neighborhoods from the 50s and 60s to compare them to today.  There have been clear declines in places where the TV cameras  do not show up so much.

What is so great about the newness of the cars?  That is one of the problems.  Those cars only last 10 years.  I wonder how many railroad cars in this country are 40 years old.  I think every auto company knows how to make cars last 30 years or more and since human beings do not change shape they could probably have more comfortable seats.   Why did we never get cars with turbine engines?

Maybe this decline will eventually cause a decline of stupidity but many people will have to figure out that economists are technologically moronic LIARS.  Just because a car looks new does not mean it is not a piece of junk.  Compute that auto depreciation for the last 50 years!
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CNu said...

It struck me as a typically silly and pointless drive-by comment Umbra. Did you happen to take note of how many folks NASA laid off this past week? My preferred reference point would be the grandiose sweep of the vision I first witnessed at the age of 5 in 2001 A Space Odyssey - and the now increasingly derelict and mission-free status of national aeronautics and space administration...., it won't be too terribly long before the time-warp plainly evident in Havana becomes equally plainly evident in many, many spots across the U.S..., matter fact, I tend to witness it every other saturday morning when I make one of pilgrimages to Abarrotes Mi Familia and to the SuperFlea up on Independence and St. John's Ave's respectively.....,

Big Don said...

And the parasites are starving now... http://www.boston.com/lifestyle/health/articles/2011/07/28/ranks_of_hungry_children_swell_worrying_doctors/

umbrarchist said...

By the time I saw 2001 I had built so many plastic model cars it was obvious they were mostly just making useless variations just for the sake of appearances.  The variations obviously made no engineering sense.   I haven't been to an autoshow since before 2001 premiered.  I kid you not.  I HATE CARS!!!  But it wasn't until 1976 that I noticed all of the depreciation was ignored and it wasn't because it was plainly stated in any economics book.  It was one of those cases of noticing WHAT WAS NOT BEING SAID thangs.

The funny thing is that I have talked to a few degreed economists.  Some of them had not noticed the fact.  They just memorized what they were told.  They hadn't thought about it enough to notice what they were not told.
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Rembom said...

"Parasites"?  Where does that shrewd assessment come from? The article is about a survey of several emergency rooms across the country.  Are you saying that people who use emergency rooms are, as you so decorously put it, "parasites"?  Presumably emergency rooms don't see many Alzheimer patients.

Big Don said...

The article was about society's unproductive poor folks who can't afford to properly feed their (most likely bred-OOW) kids because taxpayer-funded benefits to these non-working useless-eaterparasites won't stretch far enough...

Tom said...

To the right wing, poorly compensated = parasite

Rembom said...

That's quite a narrative you've developed in your Alzheimer addled pate.  Have you paid any attention to what's happening in food pantries across the country?  Unemployment?  Wages?  If you could manage a moment or two of clarity from your chronically beleaguered thought process, you would find that many of the actual food pantry customers don't fit the repugnant profile in your head.  You're living in a cartoon fantasy, rather fitting as you make yourself into a cartoon.

Oh, about non-working "useless eater parasites".  Just to make it explicit, that's Hitler jargon.  No, really.  Look it up.

CNu said...

that, and the timeless "lives devoid of value" and "life unworthy of life" - nothing quite so bracing as the classics eh?

Big Don said...

Some of Hitler's policies weren't all that shabby - he just picked the wrong group to do it to.  How much sense does it make to babysit a two million serious criminals  behind bars at $50K/yr each??   BD would have welfare types eating soylent-felon instead of charging up their state-supplied debit cards so they can feed at TacoTime and KFC......

nanakwame said...

You may have a point, we must look at the past with some distance. This is why some are talking of a benevolent coop. Obama has folks in his own party wisphering in the ear, wouldn't that be ironic. Don't think So. The problem with the discussion is that TOP down violence and open would drive this nation into smaller fiefdom and violent. You can't separate A Open Police State and violence. I find folks connection of a real past, weak;    50 years, "The Goats" we allowed to place such deep, frozen fear on their nation, so why not in  "America."   btw Prison work is here

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