Mac10 points out that despite falling stock prices, earnings per share are falling faster.
Hint, we are not at the bottom yet.
Crash you sonofabitch. We need CO2 to drop yesterday.
http://ponziworld.blogspot.ca/2016/02/what-tool-believes.html
Author: Rob Mielcarski
By Richard Smith: Green Capitalism: The God That Failed
Richard Smith is a rare voice that speaks to the ineffectiveness of environmental organizations. Green growth is not and cannot be green.
Since the Reagan Revolution of the 1980s, when environmentalists began to turn to the market, “green growth” theorists and proponents have argued au contraire that “jobs and environment are not opposed,” that economic growth is compatible with emissions reduction, that carbon taxes and/or cap-and-trade schemes could suppress GHG emissions while “green jobs” in new tech, especially renewable energy, would offset lost jobs in fossil fuel industries. Their strategy has failed completely, yet this remains the dominant view of leading climate scientists, including James Hansen, and of most environmental organizations.
All such market-based efforts are doomed to fail, and a sustainable economy is inconceivable without sweeping systemic economic change.
http://www.truth-out.org/news/item/21060-green-capitalism-the-god-that-failed
Unfortunately Smith studied economics and apparently did not study physics or biology and therefore incorrectly believes that a different economic or political system can solve our overshoot problems.
It is true that Capitalism has proven to be the most effective system for growth however every other economic and political system has also proven to be destructive to the environment.
The problem is not our economic or political system.
The problem is that humans are consuming a lot of non-renewable energy and materials, and too large a share of renewable resources. Full stop.
And another similar article by Richard Smith…
If we want a sustainable economy, one that “meets the needs of present generations without compromising the ability of future generations to meet their needs,” then we would have to do at least some or all of the following:
- Put the brakes on out-of-control growth in the global North – retrench or shut down unnecessary, resource-hogging, wasteful, polluting industries like fossil fuels, autos, aircraft and airlines, shipping, chemicals, bottled water, processed foods, unnecessary pharmaceuticals and so on. Abolish luxury-goods production, the fashions, jewelry, handbags, mansions, Bentleys, yachts, private jets etc. Abolish the manufacture of disposable, throw-away and “repetitive consumption” products. All these consume resources we’re running out of, resources that other people on the planet desperately need and that our children and theirs will need.
- Discontinue harmful industrial processes like industrial agriculture, industrial fishing, logging, mining and so on.
- Close many services – the banking industry, Wall Street, the credit card, retail, PR and advertising “industries” built to underwrite and promote all this overconsumption. I’m sure most of the people working in these so-called industries would rather be doing something else, something useful, creative and interesting and personally rewarding with their lives. They deserve that chance.
- Abolish the military-surveillance-police state industrial complex, and all its manufactures because this is just a total waste whose only purpose is global domination, terrorism and destruction abroad and repression at home. We can’t build decent societies anywhere when so much of social surplus is squandered on such waste.
- Reorganize, restructure, reprioritize production and build the products we do need to be as durable and shareable as possible.
- Steer investments into things society does need, like renewable energy, organic farming, public transportation, public water systems, ecological remediation, public health, quality schools and other currently unmet needs.
- Deglobalize trade to produce what can be produced locally; trade what can’t be produced locally, to reduce transportation pollution and revive local producers.
- Equalize development the world over by shifting resources out of useless and harmful production in the North and into developing the South, building basic infrastructure, sanitation systems, public schools, health care, and so on.
- Devise a rational approach to eliminate or control waste and toxins as much as possible.
- Provide equivalent jobs for workers displaced by the retrenchment or closure of unnecessary or harmful industries, not just the unemployment line, not just because workers cannot support the industry we and they need to save ourselves.
Nowhere in Smith’s 10 possible solutions does he clearly state the most important thing: Restoration of the planet’s health requires poorer people and/or fewer people.
It seems Smith has fallen into the same trap as the greens he criticizes.
The only possible solution is to reduce total consumption. We can do this by reducing consumption per person and/or reducing the number of people.
Achieving this will be difficult and maybe impossible because it requires an override of evolved behaviors.
Nevertheless, if we fail to voluntarily reduce total consumption, nature will do it for us, soon.
Hat tip Bodhi Paul Chefurka.
By Mac10: Denialation: “This Is Not Already Happening To Me”
A nice piece by Mac10 on denial in the markets.
I have a theory that we can tell how close the next big correction is by the frequency, length, and passion of Mac10’s blogs. He’s been on a tear lately so he must smell blood.
Globalization is burying the Idiocracy one asset class at a time in broad daylight. This week, over-owned momentum stocks, overleveraged hedge funds, and European banks went under the bus. But they’re still pretending it’s not happening. They’re in denial about being in denial.
China, which makes everything we used to make, can no longer compete at $.80/hour, and now they have to devalue their currency. And in the meantime “we” tell ourselves that we’re the “best cappuccino makers on the planet”.
http://ponziworld.blogspot.ca/2016/02/denialation-it-cant-happen-to-me.html
By The School of Life: Wisdom
This lesson on wisdom is very good.
It’s rich and enjoyable enough to warrant multiple viewings and might become a go-to place for me when I’m feeling blue.
If the author were to add a comment that denial is not a defect, but is in fact what makes us human, it would be perfect.
By A Chemist in Langley: On the Empty Platitudes of the Anti-pipeline Advocates
It’s refreshing to run into someone who thinks clearly and is not in denial.
This piece criticizing the unsound logic and deep denial of environmental activists is really good.
book review: The Alchemy of Air by Thomas Hager
The Alchemy of Air is one of the better books I’ve read.
http://www.amazon.com/Alchemy-Air-Jewish-Scientific-Discovery-ebook/dp/B001EUGCTS
As an engineer I’ve always been interested in the history of important science and there is nothing more important than the Haber-Bosch process which uses fossil energy to produce inexpensive fertilizer that enabled the green revolution and human overshoot.
Lest you doubt its significance, 50% of the nitrogen in our bodies was manufactured in a Haber-Bosch factory, and it is the primary reason our population grew from 1 billion to 7 billion over the last 100 years.
In addition, our liberal use of manufactured fertilizer has distorted the nitrogen cycle creating dead zones in the ocean, and contributed to pollution that is causing the decline of trees worldwide.
The Haber-Bosch process also produces the raw materials necessary for explosives and was a major contributor to the lethality of World Wars I and II.
Haber-Bosch technology was adapted to produce gasoline from coal which powered the Nazi war machine, and someday will probably power industrial civilization’s last gasp when real oil becomes too expensive to extract.
There’s a lot more in the book that I enjoyed.
The detailed history of fertilizer and the wars over its scarce non-renewable resources prior to Haber-Bosch was fascinating.
The behind the scenes look at the role of technology and big business in WWI and WWII was very interesting.
The story of how great minds were destroyed by a scapegoat seeking Hitler provides insight into what we’ll likely see in the future.
Lastly, I found the human side interesting in that men who accomplished much and earned great wealth were still unhappy and unsure of themselves.
I’ll be reading it a second time. Highly recommended.
Why We Want Growth, Why We Can’t Have It, and What This Means
I want to talk a little about growth and why it is such a powerful force in society.
Growth is an interesting denial topic because it is obvious, even to a child or uneducated person, that infinite growth is not possible on a finite planet. Yet growth is a top priority for every country in the world, and most citizens. I have a hunch that most of our leaders and citizens do not understand the real reason they want growth which makes this topic even more interesting.
Albert Bartlett argued that part of the problem is that the human brain does not understand the exponential function. He has a point. I have taken about 10 university level mathematics courses and I still needed to create a little spreadsheet to satisfy myself that Bartlett was correct. Anything that grows exponentially, regardless of how small the exponent is, will eventually explode into a hockey stick. So if you want society to become more sustainable, it is not sufficient to argue that we should reduce our goal of say 4% annual growth to a smaller number. Any growth rate bigger than zero is a problem.
But even without this advanced understanding of exponential growth, it is still obvious that growth creates many problems. Why then does almost everyone want growth?
I think most people want growth because most people want the future to be better for themselves and their children. The logic being that in a growing economy there is a good chance my income and wealth will grow. There are other human behaviors that create a desire for growth such as competition for status, the maximum power principle, and our dopamine response to novelty. But I think most people mainly want the future to be better rather than worse. More is a happy thought. Less is a depressing thought.
There is in fact a much bigger reason to desire growth that few people understand and it has to do with the design of our monetary system.
We have a debt based fractional reserve monetary system. Money is not created at the same time that we create real stuff to buy. Money is created in advance of us creating real stuff to buy. In other words, money is loaned into existence on the promise of it being repaid from future earnings. The mathematics of this system requires growth to pay the interest on debt. I may write another essay to explain this in more detail but for the purposes of this essay please assume these statements as true, because they are.
The real reason growth is so important is not because growth will give us a little more next year, it is because growth gives us A LOT more today.
It’s all about debt. An example is probably the best way to explain this.
Let’s assume you are an environmentally aware person trying to live a low impact life. You need and want a place to live. A small used house will suffice. Lets say it costs $200,000. You have a modest income and you are able to save $10,000 per year. In a no-growth economy the only money available to borrow is surplus money saved by someone else. Therefore a no-growth economy has very little credit available and you would probably have to live with your parents and save for 20 years before you could buy the house. In a growing economy, you can save a down payment for 2 years and then borrow the balance of $180,000 to be repaid over the next 18 years. No other people had to save the $180,000 you borrowed. The $180,000 was created out of thin air on the promise of you repaying it with interest. Even though you only own 10% of the house, you get to enjoy 100% of the house now. You do not have to wait 20 years.
This logic applies to everything we typically purchase on credit like education, cars, furniture, appliances, and vacations. For many people struggling today, this logic also applies to necessities like groceries and gasoline.
Back to the original example. You are a green aware person. You did your best by buying a small used house. To enjoy the house now rather than waiting 20 years you needed an economy that is growing. What are the implications of an economy that is growing at say 3%? Anything that grows at 3% per year will double in size every 25 years (5% doubles in 16 years, 2% doubles in 36 years). So if you live for 75 years in an economy that is growing at 3% then the human footprint will be 8 times larger when you die than when you were born. Eight times! Think about that. Imagine you have a baby today and imagine Earth with 8 x 7=56 billion people and an economy of 8 x $108 = $864 trillion dollars when your child dies. Obviously this is not going to happen and we will destroy our home and most other life if we try to get there.
We all need some form of shelter to survive. A house with furniture and appliances and plumbing really does improve the quality of our lives. But we can’t destroy the planet to have a house. What to do?
There are no easy answers to this conundrum. There may be no answer. Perhaps in the long run we won’t be able to live in a nice house. I need to think more about this but my current belief is that if we could constrain our population to zero growth, and if we adopted policies to ensure the economy does not grow, then it probably means that multiple generations of a family need to share a house. For example, in a richer world, newly weds would move into their grandparent’s home and the grandparents would move into the space vacated by the newly weds in their child’s home. In a poorer world, all 3 generations would live in the same house.
There are many other deep implications of a no-growth world.
Most of the technology we enjoy today requires a large amount of up-front capital. For example, a television takes hundreds of people to design, billion dollar mines to extract the raw materials, billion dollar factories to produce its components, a billion dollar global supply chain of ships and trucks for transport, a many billion dollar energy infrastructure for oil and electricity, a billion dollar industry for television program content creation and fiber optic distribution. None of this is possible without a lot of debt to build and maintain the infrastructure.
It’s quite possible that we won’t be able to have advanced technology products like cars and airplanes and televisions and cell phones in a no-growth world.
A no-growth world also has huge implications for governments. Every country in the world today operates with a deficit which means they spend more than they collect in taxes by borrowing money. This in turn means that most citizens enjoy many more services like health care, education, water, sanitation, security, unemployment insurance, and old age pensions than they pay for. This is only possible when governments have access to large amounts of credit and this is only possible in a growing economy.
Politicians usually get elected by promising things to citizens that cost money. Since all countries are already running large deficits, our leaders are highly motivated to achieve more economic growth because this helps them stay in power. This dynamic also explains why government deficits tend to grow and often become dangerously high.
Banks make money by loaning money and more growth means they can loan more money. A no-growth world would have many fewer banks.
The value of a company is primarily determined by the growth rate of its profits. It’s much easier for a company to grow when the overall economy is growing. Managers are often compensated based on share price and are highly motivated to grow their company.
The concept of retiring and living on a pension depends on growth. If the value of money invested by pension funds in company shares did not grow there would not be sufficient funds for most people to live on at retirement. It may not be possible to retire in a no-growth world.
Last but not least, growth is required to maintain the value of the majority of our wealth which is in the form of debt. Without growth it is not possible to make interest payments and the debt will default and lose its value. This in turn will reduce the value of assets purchased with debt. Goodbye investment portfolios and million dollar shacks in San Francisco. Hello a much poorer world.
Clearly there are some very good reasons for growth. At the same time, growth cannot continue forever due to physical limits, and because we are already destroying the planet with our current footprint.
Today’s myriad economic problems and our weird and unprecedented responses to these problems are primarily due to the fact we have hit limits to growth.
Everything we do and make requires energy. By using external energy, in addition to our muscles, we increase our productivity and ability to create wealth. Energy extraction and consumption must increase for the economy to grow. Efficiency can help, but we have already harvested most of what is possible and are bumping up against the laws of physics for any further efficiency gains.
Most of our energy is fossil carbon which is a depleting non-renewable resource and extraction rates cannot increase without higher energy prices. Higher energy prices, above say $80 (not the current temporary $30 deflation price), are not possible because consumers and governments have already borrowed the maximum that is possible, even at zero interest rates.
Most renewable energy costs more than most non-renewable energy, and renewable energy is dependent on non-renewable energy so the price of both tend to scale together. It is therefore unlikely we could run today’s civilization on renewable energy, but even if we could, switching over would require a huge amount of up-front debt that will not be available in our growth constrained world.
It’s too late to change, and it probably never was possible to continue this lifestyle without cheap fossil energy.
Pain is on the horizon. It can’t be avoided. I think a proactive response of conservation, austerity, and population reduction measures might help by slowing us down in a more controlled manner, rather than our current high-speed trajectory towards a brick wall.
In conclusion, the end of growth is a really big issue.
We are not considering wise strategies to mitigate the problem.
We don’t even talk about it.
We deny the problem exists.
We Owe Our Existence to Haber-Bosch
I’ve edited this wisdom to be more accurate:
Despite all our accomplishments, all 7 billion of us owe our existence to a six-inch layer of topsoil and the fact it rains; and 6 billion of us also owe our existence to Haber-Bosch.
https://en.wikipedia.org/wiki/Haber_process
This invention, by far, has had the biggest negative impact on our planet.
Had Haber-Bosch been used with birth control it would have been a mostly positive invention.
I wrote a book review on the biographies of Haber and Bosch here.
By Dermot O’Conner: There’s No Tomorrow
This excellent video was produced in 2012. You can see how people in denial who viewed it then are saying to themselves today that they were right not to worry. Hell, I bought gas today for $0.88 per liter. What’s the problem?
Read some of the YouTube comments for scary insight into the views of our citizens. It’s going to be a gong show when decline begins in earnest.
These comments by the producer in the FAQ speak directly to denial:
Would you do it again if you knew how long it was going to take?
No. In the intervening years, it’s become clear that people are deeply set in their opinions, and that most of the writing/commentary/movies that are made simply reinforce existing beliefs, rather than change them. In addition, dealing with this subject is likely to have one labeled a Eugenicist/Genocidal-maniac/NWO-puppet/Illuminati/Oil-industry-shill/The AntiChrist, or worse.
It would have been wiser to create a cartoon about crime-fighting squirrels with super-powers.
Here is an overview of the film from its home site:
“This is a quick journey through the subjects of oil formation, peak oil, energy, economic growth, and resource depletion. I’ve condensed several years of reading and research into little over half an hour. The most important sequence is around the 17min mark, dealing with Growth…the real subject of the film.”
There’s No Tomorrow is a half-hour animated documentary about resource depletion, energy and the impossibility of infinite growth on a finite planet.
Inspired by the pro-capitalist cartoons of the 1940s, the film is an introduction to the energy dilemmas facing the world today.
“The average American today has available the energy equivalent of 150 slaves, working 24 hours a day. Materials that store this energy for work are called fuels. Some fuels contain more energy than others. This is called energy density.”
“Economic expansion has resulted in increases in atmospheric nitrous oxide and methane, ozone depletion, increases in great floods, damage to ocean ecosystems, including nitrogen runoff, loss of rainforest and woodland, increases in domesticated land, and species extinctions.”
“The global food supply relies heavily on fossil fuels. Before WW1, all agriculture was Organic. Following the invention of fossil fuel derived fertilisers and pesticides there were massive improvements in food production, allowing for increases in human population.The use of artificial fertilisers has fed far more people than would have been possible with organic agriculture alone.”
http://www.incubatepictures.com/notomorrow/tnt.shtml
COP21 Revisited
The more I think about the COP21 debacle the more amazed I become.
Take a deep breath and really think about these 4 facts:
1) 40,000 people flew to Paris and most complained about fossil energy companies.
2) Climate models that include all known feedback loops and/or an honest assessment of geologic history show that we have already emitted enough CO2 to blow well past our previous 2 degree goal. So what did COP21 agree to? They changed the goal to 1.5 degrees.
3) The only action that might reduce the climate change threat is to shrink the economy. This topic was not on the agenda. They didn’t even discuss it.
4) This collection of people have good intentions, care about the environment, and are mostly well-educated and intelligent.
The magnitude of denial is staggering.
un-Denial 