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359 comments on DrumBeat: June 26, 2008
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359 comments on DrumBeat: June 26, 2008
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Declining Russian Oil Production Could Lead to $200 Oil and “Global Recession,” Says Deutsche Bank
There has been considerable discussion on this list as to what $300, $400 or $500 oil would do to the economy. Perhaps we do not need to get that high before we create a global recession, perhaps $200 oil would do it. And of course a global recession would kill enough demand to keep oil from going any higher…for awhile.
The problem would be, of course, that we would never come out of that recession because the supply of oil would never increase. Global oil supply will continue to gradually decrease. And the global recession will simply get a little worse each year until it is a full scale depression. And the recession will get a little worse each year until it turns into a complete global meltdown, a total collapse of the world as we know it.
Of course that is the best case scenario. It may not be gradual. Hoarding and warfare may cause the decline in oil supplies to be rather dramatic instead of gradual. In that case the collapse would be sudden and dramatic rather than gradual.
Ron Patterson
Very soon after learning about Peak Oil, I came to the realization you just summarized. Expensive oil (whether technically peak or not) will put the breaks on the world economy. However, even if demand is reduced, depletion continues, so any equilibrium point will only be temporary until it is eroded by depletion and the decline continues. Any atttempt at recovery will kick up demand, which will kick up prices and strangle the recovery.
I think this will happen to a greater or less extent, even if we're successful at developing alternatives. Alternatives will take time and money, and both are going to be hard to come by. The transition is going to be painful.
We do, however, have a lot of control over how painful it is going to be. I'm just not very optimistic that we will do the right things as a society. I'm pretty sure we'll panic and make the problem worse, maybe a lot worse. I hope I'm wrong, but I'm trying to be prepared for the worst.
This is partly why I have always favoured power-down scenarios (having less children to achieve smaller populations, working towards low energy life-styles, etc (note: that does not mean anti-technology or not using technology as some people seem to get fixated on with power-down talk)).
Every time we try to find alternatives to power and supply raw material for BAU, we will be strangled by the continuing depletion and erosion of the very system upon which we DEPEND for survival. As one article above notes, we are not separate from our environment. The techno-fix ideas always come across as very simplistic, and seem to willfully fail to take into account the complexity of the systems that drive our economies...
I am in favour of many technophile ideas, but only if they are not being touted to keep BAU ticking along in what appears to be an unrealistic and deluded way.
The problem with this Deutsche Bank release, like so many similar, is the two zeroes.
Because it means that they have no idea what price the market will sustain before collapse. If they had a model to feed $200 into, and analyse the results, they could ask the model about $190 and $180 as well.
Whether the motivation is name recognition for Adam Sieminski, 'advertising' for the bank, or some sort of market influence, I have no idea.
What it's NOT about, is the bank having any idea how the market will react - the two zeroes prove that much, at least.
Thanks for pointing out what is not obvious to many-these are advertisements for Deutsche Bank.
Jaymax, everything is just an estimate. All Deutsch Bank can possibly hope to do is just get it in the ballpark. If Deutsch Bank said something like "$205 oil will cause a worldwide recession" we wood whoop to the high heavens and ask "how can they be that precise?" We all realize that the $200 figure is just a wild ass guess. We all know they really mean "somewhere around $200 oil will cause a worldwide recession".
Come on, quit nitpicking and give them a break. I appreciate the estimate even if they cannot be precise.
Ron Patterson
Hmmm, I disagree - I think they pretended to provide information, which doesn't entitle them to a break - but anyhow - this is much less interesting than the remainder of your post which it triggered, so I shall shut up anyhow :-)
Whilst oil is at the highest price it is still not as high as the previous oil shock when compared to GDP of the world. To reach that it would have to go to about $195 and of course then we had a pretty serious recession. Of course supplies of oil increased soon afterwards which they probably won't this time round.
"People will wonder why every new recession is a little worse than the previous one"
Richard Heinberg in "the end of suburbia".
BTW, I see an upbeat in war retoric towards Iran.
"President George Bush intensified the rhetoric against Iran last week, accusing Tehran of putting the Middle East “under the shadow of a nuclear holocaust”. He warned that the US and its allies would confront Iran “before it is too late”."
http://www.timesonline.co.uk/tol/news/world/asia/article2369001.ece
"THE US military chief is to meet his Israeli counterpart in Tel Aviv this week in a move that gives new impetus to speculation about a pre-emptive strike against Iran's nuclear capabilities.
Tensions were further heightened by a suggestion from former US ambassador to the UN John Bolton that the US and Israel could attack Iraq's fledgling program between the time a new president was nominated in November and the date the incumbent, George W. Bush, left office in January. "
(That should not read Iraq, but maybe they copy-pasted from early 2003)
http://www.theaustralian.news.com.au/story/0,25197,23917181-2703,00.html
"The trip has been scheduled for some time but U.S. officials say it comes just as the Israelis are mounting a full court press to get the Bush administration to strike Iran's nuclear complex."
http://www.cbsnews.com/stories/2008/06/24/eveningnews/main4206201.shtml
My, oh my! Let's hope George Dubya isn't too caught up in the 2008 holiday spirit. What a nice Hanukkah present to the Israelis and office warming Christmas gift to a new administration. Then again, if the general public is miffed over the dearth of sugar plums and play stations and SUVs under the yule tree b/c of struggles to pay fuel and transportation costs (if they have a place to live at all?) then what a wonderful light display to keep everyone festive and amused.
All cynicism aside, though, I don't think the US will attack Iran despite Ahmadinejad's rhetoric, the neo-cons ambitions, or Israeli anxieties. Yes, George Dubya may want to be remembered as a courageous war president who faced down America's enemies, but I suspect even he knows that this action would be a deadly genie for everybody, including Americans. Posterity is likely looming larger in the President's sights these days.
I hope, here, reason will prevail.
The US doesn't have to bomb Iran, Isreal has said they will. Just a matter of timing .
If Israel bombs Iran, Iran will launch various attacks conventional and unconventional near and far. At that point the US will have to bomb Iran.
Israel is a state of the US isn't it? I mean they will be bombing Iran with US Funded US built planes what the difference?
So by that logic, Iraq and Afghanistan are states of the US. We gave them weapons too.
If they were a state they would pay taxes. Israel is a very great net liability to the US.
I believe they pay us through intelligence information!
they are a co dependent state. we give them a billion of arm's and financial aid. while they keep the arab world divided so we can get cheap oil.
It is painfully obvious that what is about to happen on the macropolitical scene is of Biblical proportions. I am not one to blame any particular individual, like all of these demagogues on talk radio blaming everyone from the current Chief Executive to Rosie ODonnell; No, we are all to blame on this one. The grace period on payments for our profligate lifestyles is just about up and the only thing that will help us through this unprecedented period of time will be faith and hope. Faith that God will see us through it, and hope in the coming Kingdom of God that every human being will hear about before the end comes. It will not be by might or power that we will justify ourselves - that mistake is a constant axiom of history - it will be by the Spirit of God, if I may be aloud to say so.
"...Faith that God will see us through it,..."
IMO thats what got us into this mess, what allowed us to rape the planet, allowed us to forsake nature, indeed provided the mandate to over power, subdue, conquer nature.
Placing faith in God in light of what's about to come down will guarantee that the wrong paths will be followed.
Strip yourselves naked (metaphorically) and succumb to NATURE or NATURE will take care of you, but not in a nice way.
It's not nice to fool Mother Nature
Cheers!
Cool it on the rant, souperman2. For you, faith (trust) in humanity and reason may offer the best path to solutions ahead. Fair enough. Please bear in mind, however, that faith in God and the use of reason are not always estranged bedfellows. Some of the best minds in human history have been attached to very devote people. Intelligence and religious expression need not be seen as mutually exclusive.
Collectively, whether religiously minded or disengaged, we've all had a share in enjoying the benefits of the fossil fuel age. The pending fall-out from our over-indulgence and cavalier attitude towards nature could very well be severe. But how best we will be able to face that severity, even in a worse case scenario, will depend upon how well we treat one other. Our personal survival could well depend upon neighbourly values, order and decency. The best in human beings: love, gentleness, kindness, self-control, generosity, honesty, may in the end prove to be invaluable. Many people see these things as divine gifts.
Secularists, regardless of background, do not have a monopoly on virtue. Atheists can be as obdurate, narrow-minded, and zealous in their treatment of others and as blinded to wise decision-making as anyone else. It doesn't matter if you're an Osama Bin Laden, an Ian Paisley, a Stalin, or a Robespierre, the result is the same. Fanaticism can show itself in many forms and in many guises.
Meanwhile there are devote people everywhere who are keenly aware that humanity has much to answer for in its stewardship of creation.
My final thought. All the power to you as you place your hope in the faculty of reason and common sense. But to others, if faith in God will see you through this, then all the power to you too. Respect is a good first step in building and bridging those relationships that we many come to count on.
Right on, Souperman2.
Zadoc seems an excellent guy and a smart poster, but since he has asked you to cool your rant, I'll ask you not to. Thus do i refute the up and down arrows.
Human delusional thinking and ability to rationalize anything that feels good has laid waste to the planet, and this continues apace. Airing one's delusions makes them fair game for comment.
And if you want anyone to listen to you about anything, first, they have to respect you. A belief that telling someone they are delusional is somehow going to help, is considerably more delusional than the very beliefs you are attacking.
At the very least the delusion that treating someone's belief as 'fair game' is likely to somehow influence those beliefs can much more easily be shown to be a delusion than the beliefs attacked, and is therefore less rational.
I stand by my up-arrow :-)
EDIT: 'cos I'm revising for an exam tomorrow on Science Communication, here's the slide that just popped up:
Fundamental truths. How does attacking someone's beliefs, even if you can prove they are delusional, achieve anything, other than build a tighter and smaller in-group with those who already vigorously agree with you?
If humanity is delusional, why follow?
Did I say follow humanity, or follow God?
I think you missed the point.The Bible teaches to deny yourself and that the greatest is the one who serves others.Does that sound like feel good rationalizing.
Thats alright greenish, God will give you a chance to put your money where your mouth is, if you really care about the earth and the well being of humanity - when TSHTF you will have a choice - conform or be cast out.
Better to be cast out, believe me.
"... IMO thats what got us into this mess..." i.e. Religion.
Believe it or not souperman, If you are referring to man made religions I would agree with you to a point - secular humanism is a religion likewise - people who put their faith in men.
I do not adhear to either one however, for in truth both are very similar to one another. They both have a misguided faith in men. Yeshua (Jesus) was perhaps the most anti-religious human being to ever walk the earth. If you carefully read the accounts in the Gospels He consistantly went against the prevailing man made systems that were in place, because in reality, these systems are always at odds with the truth.Religions of every kind, be it Christian, Judaism, Islam, Buddism et. al. may start of with knoble intentions but always invariably morph into man made systems that glorify men and follow mans principals and not God's.Humanism likewise follows this axiom of history.Communism, though atheistic, was a cult based upon the personality of one individual - first Lenin, then Stalin.Shall we even mention the Nationalist Socialist movement in pre war Germany.We should not deceive ourselves into thinking that we ourselves are immune to this kind of deception.
You could say however, that I myself am in this category by putting my complete fath in Yeshua (Jesus) and what He taught.And honestly you would be correct.But as Bob Dylan once said "you gotta serve somebody."
Now the American form of Christianity is perhaps the most misguided of all, but they, in reality, are not faithful Christians, but faithful Capitalists.Again, whether it is Capitalism, Socialism, Communism or any other so called civilized order of government, they are all man made and in the end will not work in bringing true egalitarianism to the world(which is the goal God has established by bringing Yeshua into the world).Read Zbigniew Brzezinski's new book "The Choice", and this eminent statesman will bring you too the same conclusion. Unfortunately, he leaves you hanging with a fatalistic point of view concerning the future if you wish to ever see true egalitarianism.
Ones politics IS ones religion.
One thing that you will never hear on your television, or radio, or any other form of religious or secular outlets is a scripture found in the Book of Revelation chapter 12 - "...God will destroy those who destroy the earth..."
When I read these words they convict me, for I know that, realistically, I have played a part in the systematic disorder of the balance God has established in creation by my own consumerism.And no green movement of any kind - unless it means going back to the horse and plow (producing, not consuming) - will ever work.
There is only one way "...Do unto others as you would have them do unto you..."
"...earn your bread by the sweat of YOUR brow..."
If everyone lived by these rules, the world would be a much better place wouldn't you say?
God is very fair with mankind, and He will provide a way out for individuals who seek the truth.To find the answer, however, you have to read the Bible for yourself. No one can seek God and truth for you but you yourself.
While I am squarely in the atheist camp, I used to be in the believer camp and understand how it "feels" to those who remain committed to their beliefs.
To my fellow atheists I say:
Forgive them for they know not what they are
and they have no free will over it anyway.
It does no good to preach truth to those who were born and raised in the lie. Their brains cannot absorb the noises that you make. So why waste your time?
Do you actually believe that your fellow species mates are "rational" and can be changed by speaking rationally to them? If so, you are the irrational one. All of human history, the wars, the overpopulating, the rise and fall of grand civilizations points to one conclusion:
We are no more rational than yeast.
So if some yeast mates in our petri dish choose to believe in the great Yeast-oh-whoa, or whatever name their deity goes by (and the miracle of the unleavened yeast), then I say, God bless them. Let them go on in their stated state of mind. Converting them won't really change the outcome. Yeast will be yeast. Just as beast will be beast. They are all merely trying to be fruitful, to multiply and to gain dominion over the Earth. Why agitate our petri dish with some more of this useless noise? Let it go.
Our last energies should be focused on how to survive without the spice, not on how to convert them that can't help themselves anyway.
Good advice and well-said.
But as a matter of aesthetics, kowtowing to the insane leaves much to be desired. Those with imaginary friends are free to listen to the voices, but if they inject them into conversation, they DO become fair game for comment.
I'll meet folks halfway, though: don't tell me about your deities and I won't say you're delusional. Can't say fairer than that.
Yep. It's been cooking for a long time, but the window in which it can happen is narrowing. Fallon the unwilling was replaced by Petraeus the willing. Plus many other pieces have been put into place.
This will throw all our linear and not-so-linear projections into the wastebasket. Chaos and disaster. Which some apparently believe they can find advantage in. Woe betide us.
Interview with Ray McGovern:
http://www.radiodujour.com/people/mcgovern_ray/mp3/20080625_alexjones_ra...
Yes, unfortunately Congress is in the process of abdicating it's Constitutional right to declare war.
Right now their are 208 cosponsors on HR 362 that calls for a blockade of exported petroleum to Iran. This is a brilliant measure to put pressure on the Iranian regime. What could go wrong?
The bill also calls for boarding ships departing from Iran. This is it. The bill passes through the House and the Senate tag along bill SR 580 passes. Bush forms a blockade. The clock begins to tick. Iran runs the blockade- shots are fired. Bush orders a bombing. Not only did Bush not start the war but Congress is the one that called for the action. The missiles fly from Iran and destroy the sitting duck fleet in the Gulf. Now anyone that opposes this war is Un-American.
Game, set, match Cheney---- unless the American people can stop these bills from going through.
I think BushCo. waited too long to move against Iran. Anything aggressive done between now and the elections will be viewed as a 100% political maneuver to help McCain's campaign. The US mood will not go as before with Iraq guaranteed and would only help Obama. I don't think for a millisecond that Obama couldn't turn any of that into a win for him. He's a pretty savvy framer in his own right.
Yes Bush's approval rating going down to 23% does make the possibility of an attack on Iran less likely BUT not outside of the realm of possibility.
This is a stealth plan---HR 362-- read the bill and marvel at the evil genius of it made by a very desperate group of individuals who have billions of dollars riding on an invasion of Iran.
Cheney can not be counted out yet. As long as he is in power he will hatch plans to bomb Iran. This current bill in the House and Senate is absolutely masterful.
The American people are absolutely against invading Iran but they want to put pressure on the country. Therefore HR 362 will go through. AIPAC doesn't waste so much time and energy on frivolous bills. This is important to them and they have sunk a lot of effort into this.
Explaining the logic of the bill involves going over a lot of history that is old hat for TOD readers but oh well---
While FDR was on vacation Dean Acheson passed the law that made it difficult for the Japanese to buy petroleum.
The law did not declare war on Japan. It did not authorize force. It did not even call for an embargo on Japan.
But the result was that the U.S. that provided 80% of Japan’s petroleum disallowed the Japanese from purchasing oil from the U.S. Thus Japan needed to invade the Dutch West Indies or pull out of China. In order to protect themselves from an American countermeasure they destroyed the fleet at Pearl Harbor.
The neocons know their history. They know that Iran doesn’t refine their own oil. They know that once we stop petroleum shipments the clock is ticking for Iran. They either run the blockade or their military is inoperable and their economy is destroyed. They will commit force first which will allow the U.S. to “defend itself.”
That is the brilliance of the bill. Of course the bill does not authorize force. The authorization will be given by Iran.
Or... Iran experiences enough unrest to shake off the control the Mullahs have over the troubled country (Iran is barely 60% Persian, and the Mullahs have antagonized most of the minorities there for a long time),
Or... Iran's junta decides to stop funding its puppet militias in Iraq & Lebanon, and retreats from antagonizing the US.
You mean the al-Maliki government? I guess we'll have to step up funding if Iran cuts back.
No, I refer to al-Maliki's competition.
Apuleius
After all we know about the run-up to Iraq you think that there is anything the Iranians could do to appease Bush. As McClellan has said: once he decides to do something he doesn't listen to anybody.
This is not about nukes or militias this is about controlling the Persian Gulf after we have gone over the peak.
As much as I enjoy reading West Texas I know that the neocons are not going to allow the ELM to play itself out. They are not going to be caught looking stupid and incompetent after the peak. We will blame the Mullahs for the gas lines not the incompetency of Bush/Cheney.
It's more like the CGM--- the Chaos Gulf Model. Create war in the Gulf- cut off the Chinese and play a game of last man standing.
"cut off the Chinese and play a game of last man standing."
I'll one up you. New virulent strain of Bird Flu cycles through Asia and the third world and we rapidly deploy a vaccine to ourselves and allies. Too bad we did not have the ability to make more and share. Theres some demand destruction.
The al-Maliki coalition is comprised of the most pro-Iranian forces in the country. His competition is anti-Iranian (Sunnis) or neutral towards Iran (Sadr). The latest version of the neocons "big lie" is that Iran is opposing the al-Maliki government. Bush has in effect handed Iraq (at least the non-Kurdish part) to Iran on a silver platter. That's why US troops can never leave. That's why the neocons are so adamant about attacking Iran: they've done nothing since day 1 that didn't benefit Iran.
And what makes the irony meter go entirely off the scale is that Chalabi (who sat behind Laura Bush at the 2nd inaugural and who was telling the neocons the US would be welcomed as liberators with flowers in the streets) was an Iranian agent all along. In effect Iran suckered the US into taking out Saddam for them -- not that the neocons needed a lot of encouragement. But then that's the source of the old saw, "you can't cheat an honest man".
None of the Shia factions in Iraq harbors overt pro-Iran sentiment. The Iranian regime has been racist towards its Arab minority, and all the Iraqi Shia know this. Iranian militia sponsorship has been purely for reasons of expedience, to make sure nobody in Iraq gets a monopoly on the use of force. Hence their back&forth on that with the different factions.
Al-Maliki rules at the pleasure of the Supreme Council of the Islamic Revolution in Iraq (SCIRI), which has changed its name recently to hide its ideology better from its new American allies. SCIRI was formed in Iran, and organized Iraqi exiles to fight for Iran in its defensive war against Saddam Hussein. These exiles now form the Badr militia that murders opponents of the current government. SCIRI is taking money from both Iran and Bush to pretend to deliver their agendas, and stealing money from the Iraqi people. People are rising up against such a treacherous government and taking aid from anyone they can.
America is the imperialist. Do you understand? We were the bad guy in Vietnam. We are the bad guy in Iraq. We will be the bad guy in Iran. We are starting wars that would not have happened without us. Saddam Hussein attacked Iran years ago thinking his buddies in Washington would approve. He attacked Kuwait after clearing it with the US ambassador.
Do you think everything would be great in the world if we had gone to war in 1979 to keep the Shah in charge? I say the world would be better if we had not overthrown Mossadegh in 1954. The only way to begin to make up for our past crimes is to stop committing new ones.
Bases in 120 countries is an empire. We are imperialists.
The competing Shia militias were brewed out of the same batch, for the same reasons.
As for being the "bad guys" in Vietnam, I went to school with ex-boat-people. They know full well who the bad guys were and who the worse guys were. It takes a will-to-believe to make America the big bugaboo here.
You went to school with the boat people. You didn't go to school with the Viet Minh fighters who rose against the horrible French tyranny (slave labor in the 1930s) and defeated it against overwhelming odds, only to have half their victory stolen by US conniving at Geneva. You may hate it, but the Communists beat white Christian capitalists, and their corrupt Catholic puppets were given half the country on the expectation of a referendum in 1956 that the US told the Catholics to cancel. The CIA found Ngo Dihn Diem in a monastery in California and put him to work organizing Catholic land barons fleeing the north to steal land in the south - they weren't even from there! Diem then murdered perhaps two hundred thousand of these brave Viet Minh rebels because he knew they were plotting against him. That's more than all the people murdered by Communist re-education camps. But it's dwarfed by the 1 to 2 million Vietnamese killed mostly by US forces and US taxpayer-financed forces in the war to prop up a fake government that hated it own citizens.
But the Reds murdered rich, honkie-dressing folks. Our boys murdered poor people who couldn't stand it anymore. Will we repeat this pattern of bigotry and mass murder everywhere on Earth where we now must steal oil? Our leaders want everyone who says NO to American corporations to be branded a terrorist and exterminated. Their way will cost us 3/4 of a trillion dollars next year, and rising.
200,000 dead in Guatemala
500,000 dead in Indonesia (1965-66)
Hundreds of thousands more dead in Indonesia (East Timor)
A million dead in Iraq.
These people all died because they got in the way of American power. Like the starving people of Sadr City who denounce the new oil deal. Explain to me why they deserved it.
Well said.
They deserved it because they were not superior beings equal to us Ayria-mericans. It pains me because I love this country, but we in the USA are not all that much different than the citizens of Nazi Germany. Our leaders play on our fear of the stranger and on our need to feel that we are superior. We, for our part, all too willingly rush forward to suck on that self-gratifying teat.
One scene I keep seeing over and again in my head is from Michael Moore's "Fahrenheit 9/11": an Iraqi mother who has lost her child to an American bomb looks up to the sky and begs god (her god) to explain to her why she deserved this? What did she do that was deserving of this horrible punishment?
The answer: She was born not American.
"Rich honkie dressing folks:" you mean Viet-Kulaks, perhaps?
No. The boat people came from all walks of life. They were not necessarily rich, nor Catholic, nor French-influenced. Simply people written off by the communist regime for any of a wide number of reasons. And being written off in Vietnam is a permanent, inherited status, as shown by those wealthy Catholic Montagnards.
In order to protect themselves from an American countermeasure they destroyed the fleet at Pearl Harbor.
Even there! Read Day of Deceit by Stinnett, based on FOIA material. They were set up (not that the Japanese regime were nice guys by any stretch), just as they are trying to do to the Iranians. Stinnett, a veteran of that front, doesn't criticize FDR for having done it (only way to get us in the war on the Eastern front) -- only for having hung Kimmel and Short out to dry.
Unfortunately, FDR's maneuver is the model for these guys (and undoubtedly he wasn't the first).
Japan was engaged in an aggressive war just as much as Germany was. It was certainly justifiable to go to war to prevent such brutuality. I wish it could have just been done more plainly. The US could have just declared war against Japan, saying they were engaged in a war of aggression and were responsible for torture and executions and other war crimes (which is completely true) and the US would come to the defense of Korea, China, etc. No subterfuge needed, and they would have still had the extra fleet!
I am more ambivalent about our right to go to war against Japan.
America caused the Great Depression. The GOP Congress in 1930 passed the Smoot-Hawley tariff act which wrecked Japan's economy. FDR was a free-trader, but by the time he got into power the trade war could not be stopped. Japanese fascists argued that the West betrayed Japan, and the lost trade must be replaced by a brutal empire in China. Because of US neutrality laws and our weak military, FDR had very few options to punish Japan for its vast crimes. But the trade sanctions he chose were a mistake. Japan's erratic policies were a result of its very fragile resource base; without our oil Japan had to chose between total collapse and all-out war. Never, ever try to force a military government to back down in the eyes of its own people. The generals, like their current counterparts in Burma and North Korea, justified their rule by their ability to be strong, so they couldn't back down. A better option would have been to arm China, which was against the law then, and America had no real weapons industry before 1940. China's ruler Chiang Kai-Shek was a mass murderer in his own right.
We needed better options, but our ignorance about Japan and how it would and could respond was large. Economic sanctions have been proven again and again to backfire, yet after Vietnam and Iraq I think any civilized person would consider invasion to be insane. The problem is, the more options you give a president, the more damage you do to the Constitution. Besides, we know perfectly well that America is very hypocritical in which aggressors it chooses to punish, and which it chooses to cover up for. Ask the generals of Indonesia (East Timor, etc), or Saddam Hussein (Iran, 1980).
While, I would agree that the US has done some bad things and some dumb things in the early 20th century, that doesn't let Japan off the hook. Moral principles need to be applied equally to different parties.
As many people say (and I would generally agree) the US has largely created its own problem with regards to oil supply. They used up most of their own (and polluted the world in doing so) and now are dependant on others. They are taking virtually no steps to conserve and switch to alternative energies and social arrangements necessary to maintain order and at least some minimum living standard. The US has become arrogant and assumes everyone's oil is theirs even though it happens to be under "their" sand. The US has no right to anyone else's oil. They need to balance their books.
So, if we are to be consistent, we must say essentially the same thing about Japan. They didn't *have* to go on an imperialist rampage of murder, torture and occupation in order to get "their" resources. They could have also chosen to live within their means.
Now, in both cases, it would be nice if all the countries in the world would agree to trade fairly and help each other out, but I don't see that happening any time soon.
Also, note that I'm talking here about a country deciding to add tariffs to some of its exports, or deciding it doesn't like some other country and doesn't want to trade with them. Any country certainly has that right, even though it might not usually be a smart thing to do. Setting up blockades is completely different and would be properly viewed as an act of war.
I really really have a lot of respect for s390. However, I think this goes too far (not the the US doesn't deserve a significant part of the blame), but there clearly were a lot of other players whose ignorance and greed set up the depression, and the militarist/fascist response to it. No doubt our blunders, and our insulting racism helped the militarists gain power in Japan. I also admire Japan, and her people. But at the same time, I find them a bit scary. We've seen them go off the rails once, and their particular determination of seeing a path taken through to its logical end -no matter the cost, -or even the value of the end, nearly destroyed her in 1945.
H.R. 362: 10,000 Teachers, 10 Million Minds Science and Math Scholarship Act
Title I - Science Scholarships
Title II - Mathematics and Science Education Improvement
But the scariest part is Section 207 -
Replaces the term "master teacher" with the term "teacher leader" each time it appears in the Act.
Or even worse, Section 209 -
Requires the Director to report to Congress within two years on the extent to which IHEs are donating used laboratory equipment to elementary and secondary schools.
Boarding ships was the sticky point in the Cuban Missile Crisis, the closest we ever got to Armageddon. Thank God we had grownups in charge back then.
I agree. Looking back at the Cuban Missile Crisis, the world went to the brink and only stepped back because Kennedy put McNamara in charge of the blockade and was willing to bargain away the Jupiter missiles in Turkey.
But as you know this is the opposite situation. This is a blockade to start a war.
The plan was most likely hatched when Bush visited Israel. After his meeting with Olmert both men were all smiles and Olmert came out of their meeting confident that the U.S. would confront Iran.
http://www.israelnationalnews.com/News/News.aspx/126416
Later Nancy Pelosi met with Olmert and they discussed the plan. Pelosi has denied that the request for a blockade was made by Olmert.
http://www.reuters.com/article/latestCrisis/idUSN21431390
After Pelosi came back AIPAC launched their hundreds of lobbyists to push bill HR 362 and SR 580
http://www.ajc.org/c.ijITI2PHKoG/b.1122051/k.8A96/Action_Center/siteapps...
The campaign has been very successful keeping under the media radar and gathering 208 cosponsors in the House.
http://www.dailykos.com/storyonly/2008/6/25/1838/11009
Once the bill passes, then the arch-duke will lie dead and events will quicken.
Thanks for your perspective neoconned.
You are a true patriot and I applaud your efforts.
I would venture to speculate that if we had GWB/Cheney in the White House then we would not be here to talk about it now.
Can anyone find a credible link to this HR 362? The Library of Congress is showing this as invalid.
This is what I found on house.gov:
H.R.362 : To authorize science scholarships for educating mathematics and science teachers, and for other purposes.
I did not find anything relevant to the topic on HR 362 with a quick look, but this:
http://www.aipac.org/Publications/SourceMaterialsCongressionalAction/SRe...
sounds like what neoconned is talking about.
Thanks, I found it here too.
http://www.thomas.gov/cgi-bin/query/z?c110:H.CON.RES.362:
Don't know why I couldn't find it going through the House bill search system, "Thomas". Found this through a Kos diary.
I think it's important to differentiate two different economic scenarios involving rising oil prices:
1. Oil prices increases in an environment of increasing total energy availability to the global economy will cause reallocation of economic activity--the money is still being spent, it's just being spent by Saudi princes on Gulfstream jets rather than by Ohio factory workers on a new Ford F250. This has the potential to slow economic growth as the new allocation of economic activity results in many prior capital expenditures (e.g. the Ohio factory) being underutilized. However, it could also spur increased economic growth (in global aggregate) as new infrastructure projects are required to accommodate the redistribution (see UAE for an example). It isn't clear to me that increasing oil prices--no matter how high--are enough to break the world economy IF the total amount of energy available to the global economy continues to increase.
2. Oil price increase in an environment of declining total energy availability will lead to less total economic activity over the long-term. This is the effect warned against by Deutsche Bank, but I don't think they adequately separated out the difference between 1 and 2. I don't think we will necessarily see a GLOBAL recession/slow crash until the total energy availability begins to decline. Thoughts?
You nailed it. Total global energy and wealth continues to increase-a lot of the USA problems would exist with $20 oil. If you were titled the Chief Energy Poobah at Douche Bank people would be very impressed.
It sounds as though you are looking at a longer time scale than Deutsch Bank.
In case 2 you are both in agreement, but even in case 1 you are perhaps assuming more fungibility of energy sources than is realistic, at least in time spans of less than many years.
Leaving aside the difficulties of oil exporters spending the money with any efficiency at all, and the ill-consequences for them of the cost of their imports also going through the roof, you have disruptions galore putting a spoke in the wheel of the world economy.
With petrol at $200/barrel, many in America will be thrown out of work, or unable to afford to get to work - how then are they going to pay for still more expensive oil?
In Europe gas prices and home heating are likely to match oil price rises, with disastrous effect.
Huge amounts of the capital of economies would be worthless, from homes in the exurbs and SUV's to aircraft factories.
How would an increase in Saudi's current account surplus repay that?
Longer term it might be possible to stage some sort of recovery, if solar panels for instance fell enough so that total energy inputs could be increased, but in the interim the world economy would have suffered a huge blow, and the value of capital stocks would be much lower.
This is on the bright side - chain reactions of bankruptcies by Governments, companies and individuals could drag things down to a much, much lower level.
EDIT:
In addition, the demand destruction will happen where most of the production of everything but oil is done.
To give a concrete example, high natural gas prices raise fertiliser costs, and in poor countries especially this will greatly reduce food yields, and mean that even such disposable income as they have is lower, so they can't for instance afford that new solar cooker, hitting the people who would have made it and further shrinking the economy.
In richer countries it will make the financing of alternative energy sources much more difficult.
So much of the money is reallocated to luxury expenditure in oil exporters, new SUV's for instance,from essentials and additions to productive capacity in other countries.
Great analysis Dave, you make some important points.
Are you suggesting oil will rise to $200 with no additional inflation?
I think fast rising fuel prices will leave wages/salaries, business and other remuneration behind in the short term but food, consumer goods and services prices will rise in proportionally to the rising cost of energy with lag times governed by the various government's economic and industrial legislation.
If the cost of energy rises too fast for the economy to compensate then that would lead to a crash. Probably the airline industry would be an example.
IMO an actual scarcity of energy, (not rising costs if they can be passed on) which prevents business from continuing their normal profitable practices will fuel (a pun) the coming economic crash.
I don't believe or understand this or maybe it's just cornucopian dreamin'.
"if solar panels for instance fell enough so that total energy inputs could be increased".
You may have inflation or no inflation, but either way you have an increase in real costs - ie a lot of money which would have been used for personal consumption in the oil importers will end up in the pockets of oil exporters, however you slice the inflationary pie it is a loss of disposable income.
In my view oil at $135/barrel is already plenty high enough to lead to a crash - it is just being masked as different fiddles are used to disguise that fact that the banks are bankrupt.
I'm not sure what you are saying about solar panels.
The costs from First Solar which has audited accounts were $1.29/watt in the first quarter of 2007.
They were aiming to reduce that by around 50cents to achieve true grid parity.
However since the price of other electricity sources has risen since that we will be nearer to grid parity now.
Prices do not reflect costs at the moment as demand is high, but a lot of extra capacity is due to become available within two years.
In many areas of the world then, although importantly not in most of Europe or Japan it is likely that within, say, five years more electricity will be available at reasonable cost, although probably well above the very low prices the US has historically paid.
None of that helps that massive amounts of capital will be rendered useless, and hence production will have taken a huge hit.
The easy way of looking at it is at a personal level.
If your job was in the aircraft industry, and you had a nice house in the far suburbs and drove a SUV to get there, so you and your family were worth $1 million, how much would that now be worth?
Everything you had would have melted away.
The enormous numbers of jobs in the financial services industry are mostly engineered products, a result of inflating the money supply.
That trick is now being seen through, and millions of jobs will go.
Don't buy any hotels in Hawaii, either.
The money that is lost and the assets made worthless do not go anywhere, they do not get transferred to the oil exporters and continue to have value, they are pure loss. If they were sold to the oil exporters as part payment, they would still be worth virtually nothing.
The losses amount to many trillions of dollars.
I am afraid those loses are largely going to be realized. But of course savy people with the right timing will do very well picking over the remains of the bad investments. It may very well be very remunerative to pick up those Hawaiin hotels -but not until their price has completely crashed, and they can be had to a penny ot two on the dollar. Likewise with the physical, and intellectual property of the American automobile industry. A lot of infrastructure, and industrial equipment will be sold off at bargain basement prices. That could be an enormous opportunity for the people who can figure out how to make good use of it in the post peak world. But of course, the value of the new usages will in nearly all cases, be much less than what had been planned by their earlier owners.
"...Likewise with the physical, and intellectual property of the American automobile industry..."
I have very little sympathy for the American automobile industry. GM with Exxon & Firestone bought up street car systems around the country and scrapped them.
The American automobile industry have fought hard to shape the CAFE laws so they can be worked round = avoided. Just what is so wrong with producing economical cars???
I had a similar thought this morning after seeing the GDP #s
The US and indeed the World can have level or even growing economy. It just means a lot more money being juggled around by a lot less people.
How long can this trend continue before it can no longer be hidden?
Whose GDP numbers? Don't believe everything you read...
http://www.shadowstats.com/alternate_data
Cheers
That CPI number certainly feels a lot more "right" than the official one.
Ministry of Truth (from the novel 1984):
http://en.wikipedia.org/wiki/Ministry_of_Truth
In general it reasonable to me but in both cases it appears that you may be ignoring the breakdowns in the supply chain that occur with shortages.
Shortages will make everything, in both cases, much, much worse.
I can see a relatively healthy economy take small and intermittent shortages in stride.
But significant, long-lasting shortages will soon turn a healthy economy into a very unhealthy one. Imagine if your heart randomly stopped working for a few minutes every day. In no time you'll cancel your vacation plans and turn your attention inward instead of pursuing whatever you have going on at the moment. Quite quickly your time will be consumed with figuring out how to alleviate the heart stoppage, how to work around it, etc. etc.
-André
I don't think shortages will be quite as catastrophic as that. If your heart stopped working, you'd be dead. Mere shortages...I think we'll adjust to them. They already do in many other countries. Fuel and food is rationed, factories shut down due to lack of parts or power and workers go home without pay. There may be electricity only part of the day, or to some industries but not others.
I've lived in places where the power supply was uncertain or nonexistent, where the roads might be closed for weeks due to bad weather, cutting off supplies...and people adjust. They expect such things to happen, so it's not nearly as disruptive as it might be in the US.
Shortages of computer parts leads to no internet. Routers don't last very long and we don't make them. Thinka about it.
I think we'll adjust to living with a sporadic or even nonexistent Internet. Believe it or not, there are people alive today who lived just fine without the Internet.
As I have argued before, I think that some form of Internet will survive for a long time because the EROEI of the information it contains is so high. People in dire straits will find they can live without cable TV, but that the Internet contains a lot of priceless information that will help them survive. (For example, information on energy conservation techniques, growing food, etc.)
Even if bandwidth is much reduced and we're only connecting thru dial-up or public access terminals, I think it will last much longer than you seem to.
Also don't forget that the Internet's very structure as a relatively decentralized network will make it far more resilient than many other networked system we depend on.
Maybe we should try to make it even more decentralized. How about using the evolving cell-phone networks to act as a serverless Internet, with every cell as valuable as every other, acting as relays?
An interesting idea, Having just gone throught a cell phone debacle(losing cell phone and getting new one) I suspect that when power that runs all the towers that are used for the phones, or the satellites that are part of the overall infrastructure get into trouble, the cell phone network will crash.
Maybe we should try to make it even more decentralized.
Look into INN and UUCP. The way the 'old timers' (post Bnews) would have passed about alt.physics.oil.is.gone
But why would it contain that information?
IMO, this is what the "Internet is too valuable to die" theory misses. The information on the net is there because 1) someone is paying for it or 2) someone is making money off of it. That's going to change, and when it does, the Internet will be far less valuable.
Think of all the valuable sites you visit, and ask yourself who is paying to keep that site online and spending their time updating it...and if they will continue doing so if there's a second Great Depression or worse.
The Internet may survive, but I think it will be a form far less useful. Either as a kind of ham radio or telephone type communication to other people, or as a way to deliver government propaganda.
Not just government propaganda. Look at all the ads! The trend may be towards a different form of television where the vast majority of the content is prepared ahead of time for the "consumer's" consumption and paid for by someone who is looking for a positive monetary return on their investment. That means information for the sake of information will not exist, it will be information as another means to a profit, like what the cable news shows are now.
"The internet may survive"
Your comment hits the core of what many users of the internet miss. The internet is dependant on the energy infrastructure, and if it goes down, then the internet goes down.
All of the towers and satellites can only deliver their content IF the power to run them is up and running.
Also, there is the loads and loads of servers out there that are expensive and time-consuming to maintain and upgrade. If there is not profit to be made from it or if govt funding gets pulled for that purpose then there is no reason to keep them running or at least they will not be carefully nurtured. This will in turn leave them vulnerable to a host of secondary problems, like hardware failure and cyber attacks.
Since certain servers are so vastly interconnected, this can have a cascading effect in certain branches and regions of the internet infrastructure. As fast as the internet bloomed, it could as quickly be winnowed or snuffed.
The internet is a distributed collection of autonomous systems. Most of those will keep running. The infrastructure - IANA, RIPE, APNIC, and the DNS cabal are all very lean and will keep working. High bandwidth commercial ventures will fade away but as long as there is any telecom equipment powered up the net will be there. We may see lower bandwidth and a return to the preweb days in terms of what it does, but the value will be retained. Google has become our library of Alexandria and I don't see that going without catastrophic issues taking it out ...
Disagree. Google is a for-profit corporation. They make their money selling ads, among other ways. They have their own gas-fired power plants to support their massive server farms.
What happens when the cost of running their server farms spikes, while their ad revenue plummets? Corporations aren't really designed to contract. I suppose the government might take it over and run it as a public service, but think about how they've politicized things like the CDC and the EPA, and ask yourself if Google will still be valuable when it's run by the government.
People invest in ventures like Google because they expect them to grow and make money. When it becomes clear that that's not going to happen, who will want to invest, and why?
At 1.6 megawatts -- and with an electricity output capable of powering approximately 1,000 average California homes -- Google said its project is the largest solar installation to date on any corporate campus in the United States and one of the largest on any corporate site in the world.
===
They used to monitor production here, but I can't find it.
This was from about a year ago, the first week it was up.
Solar Electricity Generated at the Googleplex
Last 24 Hours: 9,900 kilowatt-hours
Last 7 Days: 19,368 kilowatt-hours
Since Jun 18, 2007: 19,368 kilowatt-hours
9,900 kilowatt-hours is equivalent to ...
41,250
alarm clocks for 24 hours
6,184
dishwasher cycles
21,120
hairdryers for 15 minutes
3,600
loads of laundry
Yeah, and it's still just a drop in the bucket compared to their total energy use. A stunt, some have said.
I would also argue that Google is not really our Library of Alexandria. They prune dead links very quickly, from their cache as well as from their search results. Google is a great way to find what's online now, but it doesn't save information from sites that are gone.
The Wayback Machine might be a better candidate for a Library of Alexandria comparison. They do keep archived versions of web sites, including those that are no longer on the net. But I don't expect them to survive a Great Depression type economic crisis, either.
The problem with the library at Alexandria is that it was a case of too many eggs in one basket. One big fire and it was all gone.
We do still have a lot of ancient texts, but that is entirely thanks to documents being stashed away here and there. Distributed, rather than concentrated, storage of knowledge is our best bet for long term preservation of our civilization's technological and cultural patrimony.
Acid-free archival quality paper is still the best bet for long term storage of texts. Anything that is technology-dependent is also vulnerable to technological obsolescence or just plain technological non-availability.
One of the best works of fiction to actually think about these issues was Millers' A Canticle for Liebowitz. An order of monks was formed in the aftermath of a nuclear holocaust, and one of their rules was to always carry a book with them. They called themselves "bookleggers". Maybe this idea should commend itself to each of us: make an effort to accumulate a personal library of books that are really important to have and to preserve, and then make a point of entrusting them to someone that values them when it is time to pass them on to the next generation.
Yes. I remember the dot-com crash. Suddenly, things many of us had taken for granted, like free Internet connections, went away. My web hoster went out of business, and I had to find a new (and more expensive) one.
I could afford to pay for services that had once been free, but some of my friends could not. It was serious hardship for them.
And I think the dot-com crash was small potatoes compared to what's coming. This has been the worst June since the Great Depression.
Sometimes I wish I was one of them ;-)
We may lose YouTube and lolcats will be a thing of the past (Leanan is excited by this pronouncement) but the internet will be one of the last human communication endeavors to fail. So long as anyone at all builds a PC of any sort we can keep something up and running. I curse ethernet for the goofie LAN protocol that it is, but the whole planet runs on it now and we'll keep it moving with whatever junk we can scrounge for a long, long time ...
We do have the historical precedent of other societies that have collapsed, or just found themselves isolated from the rest of the world. There is a progressive giving up of things as they must concentrate their scarce resources and limited time and effort on only the most important things. The most complex technologies are usually the first to go. The only exception is where religion is involved. The Easter Islanders gave up their boat building and sailing technologies, even though those would have allowed them to stay in communication with the rest of the world and were thus extremely valuable. They kept up their stone idol production technologies right to the bitter end, because their religious beliefs told them that those were important.
What we could see is an inexorable giving up of the internet, webpage by webpage, link by link, IP address by IP address, until it gets to the point where a critical mass is lost and it goes back into a number of non-connected nets, which then gradually shut down one by one until there is nothing left but fading memories, then legends, then myths.
Catastrophic collapse usually happens in systems which can't degrade gradually, especially in those that are highly centralised.
The reverse of the internet, in fact.
Server farms do indeed use a lot of power, so they have tended to be placed where they can be guaranteed supply, by hydroelectric, for instance.
You also have the issue of how profitable the use of the power is - sure, the PV array by google is mainly for PR purposes, but even if they had to pay for a substantial amount of their power that way, they are well placed to do so.
Whilst coal is still cheap they may not bother though.
If fuel is more expensive then as computers are replaced that will assume more importance as against power.
Then you have the question of what could be done to degrade the system gracefully.
I have a 2MB bandwidth. Would the old 56k still be useful? You bet.
That is 32 times less info going through the pipeline.
However, the airline industry is also in very great trouble, so compare the energy needed to videoconference vs fly to meetings.
Not much power in the house?
Internet on the phone will do the trick.
It will be one of the last products of man to fail, if it does.
Routers last for decades: They have no moving parts. I won't speak for disk drives.
The Sputnik generation has a couple of decades left, and there are thousands of us who can still build a router out of old televisions.
Usenet, which needs neither routers nor nailed up connections, remains the 80/20 point of the internet.
Theremins? Probably. Routers, not so much.
"there are thousands of us who can still build a router out of old televisions."
Well, maybe out of newer televisions with FPGAs.
Consumer electronics do not have FPGAs. They have ASICS. Similar in development, but very different in production.
there are thousands of us who can still build a router out of old televisions.
No.
But do go ahead to prove this claim.
Show where a 100 transistor (or so) TV can work like a 100K+ transistor router.
Another issue tied up in your argument is to what degree the wealth being transferred to a Saudi Prince gets reinvested in economic activity vs. being "sunk" into hard assets (eg. gold, real estate) that would not generate any increased economic activity. If the energy pie is increasing then investments in growth make more sense than in an environment where decreasing energy supplies make economic growth a steeper hill to climb. If it was my oil and I believed total energy was decreasing, my best investment might be to leave it in the ground until I needed it.
It seems to me that the high price senario doesn't choke off investment money, it just changes who has ownership of it. There is at least anecdotal evidence that the Gulf states are making substantial investments in alternative energy. I could easily imagine them funding the industrial investments needed to function in the world economy, even in places such as Europe, America, and India. Its just that the new captains of global industry will soon from a completely different nationality than we are used to seeing (i.e. primarily Arab). We might be uncomfortable with that, and our new bosses may be less sympathetic to our needs than the current crop, but it doesn't sound like a total disaster.
It will be interesting when global trade comes to a grinding halt and the U.S. finds itself with no manufacturing capability. Hammering out spoons by hand will be fun! Oh, yeah, and all our computer stuff isn't made here either. As they say, I wish us rots of ruck.
no
I'll flip your burger, you"ll flip mine
see? it works
Increasing prices of transportation fuels are slowly unwinding the gains many companies reaped from "globalization" just a decade ago. The natural evolution in such an environment is to "reinvent" our companies once again to depend on more regional/local service and resources. THIS is a bust for huge growth plans of many large companies, but it will be a hard and necessary lesson. Contraction is the name of the game for survival.
I was in a workshop about the future of world oil supplies with Adam a few months ago, and though I can't write what he said in specific, I can say that his remarks made it very clearly obvious that he is just a traditional commodity market analyst and really does not understand energy in a fundamental fashion, nor the role that oil in particular has played over the last century. He was absolutely vehement that "everything will turn out ok" and rejected analyses by other well-known energy and oil experts that we face a transition that we are totally unprepared for. He's a very nice guy, otherwise.