George Ure keeps laying it on the line:
"Think about this...Where does interest come from in a sound money system? Say there is $20 in the whole world and you have it all. I am flat-ass broke. I borrow $10 at 20% interest all due in one year.
Spin the clock forward one year. You still have your other $10-spot. I have gotten back that $10 and am ready to pay you. But, since I also have to pay you $2 of interest, just where the hell do you suppose that comes from?
Answer: We 'make it up'. Someone off stage prints it up and throws it in.
Except, of course, the making up is incredibly convoluted in an abracadabra sort of way."
Thursday, February 5, 2009
Wednesday, February 4, 2009
The Lazy Way to Save the Planet
From George Ure's blog today (http://urbansurvival.com/week.htm):
"If you want to solve most of the world's growing list of environmental issues, here's a dandy - simple solution: Have everyone start working 3-days a week. All of a sudden, greenhouse gases, energy depletion, and all kinds of other problems become manageable. Focus on the stuff that matters: gardening, reading, personal relationships...forget the dollar mania! Let crooked banks fail - the country made it through the crisis in the past, and we will again."
I think he's on to something, seriously.
"If you want to solve most of the world's growing list of environmental issues, here's a dandy - simple solution: Have everyone start working 3-days a week. All of a sudden, greenhouse gases, energy depletion, and all kinds of other problems become manageable. Focus on the stuff that matters: gardening, reading, personal relationships...forget the dollar mania! Let crooked banks fail - the country made it through the crisis in the past, and we will again."
I think he's on to something, seriously.
Monday, February 2, 2009
Response to State Rep. Brian Boquist's Opinion Piece Against the Economic Stimulus
Note: I submitted this to the Salem Statesman-Journal as a guest opinion; they have published some of mine before but didn't take this one. Maybe they have too much of a backlog right now. Anyway, I'm posting it here.
"Brian Boquist Impressive, But Ignores Free Market's Recent Demise"
Sunday's Opinion by Brian Boquist showed him to be a thoughtful, reasonable person, at once making a strong case against expanding government debt while also advocating cooperation with some of President Obama's ideas. Boquist fears both the growing deficit and the negative side-effects of government intervention. He is correct in pointing out these dangers, but he fails to address the fact that it was the free-market Bush administration that started down this path with the Bear Stearns rescue, the AIG and Fannie/Freddie bailout and the $650 billion TARP bailout. In fact the economic collapse of the past few months has done much to discredit a pure free-market approach among thinkers and policy makers. As George Bush said, he put aside his economic principles when faced with what advisor's told him would be a collapse worse than the Great Depression. There is much political support for the sort of massive stimulus Obama and the Democrats are proposing precisely because there is little confidence that the system will fix itself. It so happens that there is another school of economic thought advanced by John Maynard Keynes advising the government to engage in massive spending in these sort of situations. This was tried during the Great Depression and critics say that it failed and that this proves the idea has no merit; supporters say that Roosevelt did not spend enough when he tried it, and that it was his eagerness to return to a balanced budget that kept the stimulus from working. A noted Keynesian is recent noble laureate Paul Krugman, who argues that the current $850 billion plan is also too small. Some may find fault with the details of the pending stimulus plan, rightly pointing out that it includes a lot of democrat pet projects and ideology. David Brooks' Sunday column warned that trying to do everything at once just weakens what could be good programs if they were done right with more thought and planning. He suggests that it would be better to just accomplish economic stimulus more directly by something like a payroll tax cut. I confess that I voted for Obama and don't see anything wrong with the winner of an election taking an opportunity to advance his agenda in this situation if it still accomplishes the overall objective. After all, the Bush approach to Hurricane Katrina relief had lots of small business and pro-business incentives. But we're talking about a lot of money here, and I too would like to see this debt used most efficiently. My choice would be to spend it on improving public transit and rebuilding passenger rail service. I think Brian Boquist's best advice was his humorously intended suggestion about planting a garden and learning to cook from scratch. In fact, "learning to cook from scratch" is a good analogy to how we all should begin to extricate ourselves from this economic system. It's very possible that the stimulus won't work and that the perils of greater national debt will come back to haunt us. We would be better off finding ways to live without money, since needing money requires us to depend on this system. This may sound like crazy talk, but if enough houses go into foreclosure it seems possible to me that people may be allowed to just stay in their houses. In this case the defaulting homeowners have become "too big to fail". If you have shelter and can raise your own food, you're pretty close to being able to live without money. This is how the people in the Soviet Union dealt with their economic collapse in the 1990's.
"Brian Boquist Impressive, But Ignores Free Market's Recent Demise"
Sunday's Opinion by Brian Boquist showed him to be a thoughtful, reasonable person, at once making a strong case against expanding government debt while also advocating cooperation with some of President Obama's ideas. Boquist fears both the growing deficit and the negative side-effects of government intervention. He is correct in pointing out these dangers, but he fails to address the fact that it was the free-market Bush administration that started down this path with the Bear Stearns rescue, the AIG and Fannie/Freddie bailout and the $650 billion TARP bailout. In fact the economic collapse of the past few months has done much to discredit a pure free-market approach among thinkers and policy makers. As George Bush said, he put aside his economic principles when faced with what advisor's told him would be a collapse worse than the Great Depression. There is much political support for the sort of massive stimulus Obama and the Democrats are proposing precisely because there is little confidence that the system will fix itself. It so happens that there is another school of economic thought advanced by John Maynard Keynes advising the government to engage in massive spending in these sort of situations. This was tried during the Great Depression and critics say that it failed and that this proves the idea has no merit; supporters say that Roosevelt did not spend enough when he tried it, and that it was his eagerness to return to a balanced budget that kept the stimulus from working. A noted Keynesian is recent noble laureate Paul Krugman, who argues that the current $850 billion plan is also too small. Some may find fault with the details of the pending stimulus plan, rightly pointing out that it includes a lot of democrat pet projects and ideology. David Brooks' Sunday column warned that trying to do everything at once just weakens what could be good programs if they were done right with more thought and planning. He suggests that it would be better to just accomplish economic stimulus more directly by something like a payroll tax cut. I confess that I voted for Obama and don't see anything wrong with the winner of an election taking an opportunity to advance his agenda in this situation if it still accomplishes the overall objective. After all, the Bush approach to Hurricane Katrina relief had lots of small business and pro-business incentives. But we're talking about a lot of money here, and I too would like to see this debt used most efficiently. My choice would be to spend it on improving public transit and rebuilding passenger rail service. I think Brian Boquist's best advice was his humorously intended suggestion about planting a garden and learning to cook from scratch. In fact, "learning to cook from scratch" is a good analogy to how we all should begin to extricate ourselves from this economic system. It's very possible that the stimulus won't work and that the perils of greater national debt will come back to haunt us. We would be better off finding ways to live without money, since needing money requires us to depend on this system. This may sound like crazy talk, but if enough houses go into foreclosure it seems possible to me that people may be allowed to just stay in their houses. In this case the defaulting homeowners have become "too big to fail". If you have shelter and can raise your own food, you're pretty close to being able to live without money. This is how the people in the Soviet Union dealt with their economic collapse in the 1990's.
Thursday, December 18, 2008
Slow Motion Cascading Effects
From George Ure's daily report http://www.urbansurvival.com/week.htm
"This is like watching one of those 'rooms full of ping pong balls on mouse traps that demonstrate how a chain-reaction works' except that this one happens like molasses. Seems like about one data point per quarter:
*Q2 08: Oil goes way up.
*Q3 08: Passenger travel falls
*Q4 08: Fall accelerates
*Q1 09: Airplane makers likely to cut production rates, lay off humans.
*Q2 09: Hotel/rental car consolidations/failures ought to make headlines
*Q3 09: Another round of airline consolidations
*Q4 09: More travel fall off....
And that's how a Depression looks."
"This is like watching one of those 'rooms full of ping pong balls on mouse traps that demonstrate how a chain-reaction works' except that this one happens like molasses. Seems like about one data point per quarter:
*Q2 08: Oil goes way up.
*Q3 08: Passenger travel falls
*Q4 08: Fall accelerates
*Q1 09: Airplane makers likely to cut production rates, lay off humans.
*Q2 09: Hotel/rental car consolidations/failures ought to make headlines
*Q3 09: Another round of airline consolidations
*Q4 09: More travel fall off....
And that's how a Depression looks."
Monday, November 24, 2008
Kunstler's Suburbs vs. Jeff Vail's
Jeff Vail (www.jeffvail.net) in his latest post proposes an interesting future for the suburbs that is very different from the bleak fate Jim Kunstler describes (www.kunstler.com). Vail mentions research by John Jeavons into sustainable small-scale agriculture, showing that only 4,000 square feet per person is needed. This assumes a vegetarian diet, but also requires no outside input of fertilizer etc., and is achieved by growing 60% high carbon produce such as corn in order to provide compost for the soil. Since the average size of the suburban lot is larger than a city lot (Vail mentions 1/4 acre), the suburbanites at least have the space to do this.
I think Vail has a good point, and also has made the correct observation in his last few posts that we're basically stuck with the suburbs and that those who live there will have to keep living there because they won't be able to sell their houses in order to move, and even if they could then the new occupant would replace them (note to reader, the assumption here is that gasoline will be scarce or expensive or both - I know that's not true right now, but remember a few months ago?) He also has argued that commuting costs can easily be negated by measures like car pooling.
So his argument interesting, but I still think that the suburban model for current society is a great inefficiency. What he proposes is taking this model and turning it into something more like the rural past, so that it becomes efficient again. But it is no longer the suburbs then. I know it's just semantics - and I think he has given a good solution to this problem.
The big question is can people who live in the suburbs accept this.
I think Vail has a good point, and also has made the correct observation in his last few posts that we're basically stuck with the suburbs and that those who live there will have to keep living there because they won't be able to sell their houses in order to move, and even if they could then the new occupant would replace them (note to reader, the assumption here is that gasoline will be scarce or expensive or both - I know that's not true right now, but remember a few months ago?) He also has argued that commuting costs can easily be negated by measures like car pooling.
So his argument interesting, but I still think that the suburban model for current society is a great inefficiency. What he proposes is taking this model and turning it into something more like the rural past, so that it becomes efficient again. But it is no longer the suburbs then. I know it's just semantics - and I think he has given a good solution to this problem.
The big question is can people who live in the suburbs accept this.
Thursday, November 13, 2008
What Happens When the U.S. Defaults On Its Debt?
Okay, this is unthinkable, right? Unfortunately not. Europe 2020 http://www.europe2020.org/?lang=en , a website that forecasts political and other events and their impact is predicting that the U.S. will default this Summer (2009). This site has been warning about our current financial debacle for several years, and they seem to have called it right so far. An article in Money Week was also talking about the possibility of a U.S. default. A CNBC article shows that as we keep increasing our national debt by bailouts and other capital injections (in order to prevent financial collapse), at some point our credit rating will be lowered, which will lead to the default. Martin Hennecke, senior manager of private clients at Tyche is quoted:
"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.
The problem we face is this: we need to throw huge sums of money into our economy to keep it from collapsing, but we don't have the money, so we have to increase our debt. But increasing our debt will at some point cause the same kind of collapse, when our credit rating is lowered.
What happens to us when we default? I think at that point we will be on our own, i.e. limited to only the resources within our borders. That means very little oil. Think about the implications of that for a minute. All military activities abroad will have to stop, and the basic routine of all daily life will no longer work. The good part is that we are a vast nation still with much natural wealth, and we should be able to produce all our own food and shelter, but only if we totally redesign how we go about it. So farming must now be by manual labor rather than machines, using no chemicals for pest control or fertilizer (because all these things depend on oil). Food must be grown near where it is used. Jobs in our traditional economy will be totally useless and will disappear. They have no value since they are based on trade with the rest of the world, rather than on producing things that we need here. It seems that the only way this can happen in an orderly way is for government to create basically a command economy of some sort and assign people to roles in it. Maybe this can be done through incentive rather than directive, but we may not have time for that. And I know, China and the Soviet Union have proved that this doesn't work. So what is a better alternative?
Do you believe this can happen in the United States without massive social disorder and perhaps revolution? We better pray that it can.
"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.
The problem we face is this: we need to throw huge sums of money into our economy to keep it from collapsing, but we don't have the money, so we have to increase our debt. But increasing our debt will at some point cause the same kind of collapse, when our credit rating is lowered.
What happens to us when we default? I think at that point we will be on our own, i.e. limited to only the resources within our borders. That means very little oil. Think about the implications of that for a minute. All military activities abroad will have to stop, and the basic routine of all daily life will no longer work. The good part is that we are a vast nation still with much natural wealth, and we should be able to produce all our own food and shelter, but only if we totally redesign how we go about it. So farming must now be by manual labor rather than machines, using no chemicals for pest control or fertilizer (because all these things depend on oil). Food must be grown near where it is used. Jobs in our traditional economy will be totally useless and will disappear. They have no value since they are based on trade with the rest of the world, rather than on producing things that we need here. It seems that the only way this can happen in an orderly way is for government to create basically a command economy of some sort and assign people to roles in it. Maybe this can be done through incentive rather than directive, but we may not have time for that. And I know, China and the Soviet Union have proved that this doesn't work. So what is a better alternative?
Do you believe this can happen in the United States without massive social disorder and perhaps revolution? We better pray that it can.
What the Election Means
Last week the United States of America elected Barack Obama President by a clear margin. I voted for him and believe me I am very happy that he won. I was moved to tears by the historic implications of his acceptance speech in Grant Park, as was Jesse Jackson, and it sounded like Jim Lehrer either had a frog in his throat or maybe he too was overcome by the moment. John McCain was gracious in defeat - I believe this was the real John McCain finally free of the burden of running for president, now able to be himself.
As great as this is from a historic perspective, it does nothing to change the grim financial and social circumstances we are facing. It does offer some hope, however. First of all, it means that people are ready to try something different, and we also will have a president who ran on "change" (though the specifics were not defined). And we cannot discount the new goodwill we should have from the rest of the world, and the prospect of repairing some broken relationships.
People are ready to try something different, but how different? And even if they are ready for the kind of radical social change that will be required to survive (see my next post), will Barack Obama be bold enough to risk this kind of action? It is tragic in many ways that he has inherited a set of problems decades in the making that will most likely make him or any president look like a failure. I wish him well and hope for great things from him, we are going to need an inspiring leader in the next few years.
As great as this is from a historic perspective, it does nothing to change the grim financial and social circumstances we are facing. It does offer some hope, however. First of all, it means that people are ready to try something different, and we also will have a president who ran on "change" (though the specifics were not defined). And we cannot discount the new goodwill we should have from the rest of the world, and the prospect of repairing some broken relationships.
People are ready to try something different, but how different? And even if they are ready for the kind of radical social change that will be required to survive (see my next post), will Barack Obama be bold enough to risk this kind of action? It is tragic in many ways that he has inherited a set of problems decades in the making that will most likely make him or any president look like a failure. I wish him well and hope for great things from him, we are going to need an inspiring leader in the next few years.
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