Wednesday, June 29, 2011

Snake Oil

Barack Obama's recent decision to release reserve petroleum was one of those head-scratching moments in modern history.  Reaction to it is almost as puzzling, since it seems to mostly depend on one's political viewpoint -- on one hand, those who support Obama politically are applauding the decision, saying it will put pressure on Iran and stabilize oil prices.  Those who don't support him have mocked the decision, pointing out that it was around one day's worth of consumption for the United States, and are chanting "drill, baby, drill!"

Unfortunately, regardless of the fantasy world of most commentators, prices are predictably starting to climb again and the reality of four-dollar-a- gallon gasoline is going to be here before much longer, maybe even before the 4th of July "travel holiday" again (it's up around 25 cents here over the last day or so).  In neither political case, either, does the reality of Peak Oil come up in any of the discussions, so we're still -- as a nation and a civilization -- living in what is looking to be a permanent state of denial.  Even if we opened up previously off-limits in America to drilling (who doesn't want to go to the beach and see oil rigs lining the horizon? -- much nicer than dolphins, waves and seabirds to look at), it would still not make up for where would need to be at to make prices drop significantly.

Apparently, that same permanent state of denial is also extending to the economy and money.  America, politically speaking, is becoming a superpower-sized version of a gambling addict who has already sold most of his worldly possessions to keep playing, and is now borrowing money from one loan shark to pay back to another, so bad are his debts.  All it would take is for one of our creditors to decide to eat their debt and put cement overshoes on us, and the game is over.  Talk of "across the board cuts" makes for good sound bites and lively political discussions among the vapidorati in the old and new media, but has as much chance of happening as I do of flapping my arms and flying.

So, just between Peak Oil and Megadebt, our future in America doesn't look so hot.  As oil grows scarcer and more expensive, it will go to nations who can offer oil exporting nations something of value in return.  Fiat currency is destined to crash, leaving only currencies which are backed by mineral wealth (or some other commodity) as means of exchange.  Since our own currency is built on a smile and a handshake, and is no longer built on anything with at least some physical presence (gold), America is going to sooner or later be turned away at the door when try to buy oil, and $4 a gallon on that day is going to seem like twenty-five cents a gallon does to us now.  We can try to take it by force, but I tend to think that the spectre of scorched earth in the form of burning oil wells would probably throw cold water on that with immediacy and there will be a token trickle released to at least allow Air Force One to fly around to whatever few airfields are left open by then.

I imagine that Barack Obama did what he thought he could at this point -- try to deflate prices a little, hope for the best, that maybe the various oil producing nations would do a little soul-searching and decide to act charitably in the interest of good will and love, or something along those lines.  However, like the larger economy, this is just where reality meets the road.  We have hit the iceberg and are taking on water too fast to stay afloat, we've gone off the cliff and are like the coyote in those brief seconds before gravity catches up to him, we're like the person with terminal cancer who gets coffee enemas because they think they can beat it, pick your own metaphor. 

The haunting scene, early in the Road Warrior, where Max is collecting gasoline from a wrecked car into a pan comes to mind.  It's only a little bit, maybe half a gallon or a gallon, but it's enough to get by another day.  That is where we are now, on a national scale, with releasing reserves in the hopes of driving prices down enough to let the economy creak along a little longer.

Monday, June 20, 2011

No One Need Apply, Part Two

CNN recently ran an article about the employment situation in Zimbabwe.  Apparently, the position of hangman has been vacant for years, but plenty of people are interested in it, just to guarantee a regular paycheck.  I don't know the social attitude toward capital punishment in Zimbabwe, but it seems clear that the social attitude toward being unemployed shares an awful lot with the United States, as large numbers of people take jobs well below their professional skill level and education just to get by.  One reason for the riots in Tunisia was a large class of former college students that were unable to find any work related to their education.

I've been waiting for some years for the "higher education bubble" to burst in America.  Millions of young adults head off to college, still armed with the out of date mindset of a generation before (get a degree, someone will give you a job), all-too-willing to accept decades of debt slavery based on student loans underwritten with bad government debt.  Four years later, or maybe six or eight, these same young adults find themselves with an inescapable debt (bankruptcy laws don't apply) and fewer and fewer job prospects.  At my local chain bookstore, the staff consists largely of English majors who weren't able to find anything else but a minimum-wage job working a register and finding books on a shelf.  This isn't necessarily confined to degrees which don't directly translate to professional training, either -- plenty of people with accounting degrees, law degrees, etc, are facing increasingly poor employment prospects. 

There's a tendency to play the "blame the victim" game here, that people should've known that things sometimes come with strings attached and that there's no guarantee of success.  However, what prospective students didn't realize -- and what our civilization as a whole is still failing to comprehend -- that the ground has shifted beneath their feet, that the world which they were raised in, and people still believe in, simply doesn't exist anymore.  Lots of things are clear in the rearview, but maybe not so much when they're around the next corner. 

It does beg the question of how things will change socially, as we have an increasingly large educated class with little hope of success or life beyond trying to figure out how to pay their minimum loan payments and not find themselves arrested for not coming up with the cash to Sallie Mae or whoever.  Will we see a generation of "refuseniks" arise, who simply don't pay back their loans and form communities around this common burden?  Or will they form political action groups to try to have mass student loan forgiveness?  In an age when we're willing to bail out banks and given planeloads (literally) of dollars to foreign dicators, the latter idea doesn't seem so outlandish.  Finally, will they be primary contributors to political disruption and mass dissent?

If anything, we can see that when the collapse of our systems is in the offing, then like the chaos of a collapsing universe, all sorts of new patterns emerge and things which were once unthinkable become commonplace.  This was the view when the Soviet Union was headed off the edge of the cliff and it wasn't unheard of for soldiers occupying Eastern Europe to be picking over the refuse in garbage dumps for the essentials of life.  It doesn't take much speculation to see that we're on the same track and that, if anything, we flew a lot higher and have a lot farther to fall before it's all over.

Wednesday, June 15, 2011

Chilling Effects

There is a new story (here) out about the forecast solar minimum.  Supposedly, this will be the least active sun cycle seen in centuries.  While the effects of the sun's cycles are not completely understood, the last time the sun was inactive was during the time of the "Little Ice Age," around 1650-1715, when growing seasons got shorter and the weather noticeably colder than it had been for some time in Europe (remember, the Middle Ages in Europe were a time of relative warmth). 

The declining activity of the sun was the subject of a very well-done science fiction movie, called "Sunshine," and has been the subject of numerous other works of fiction.  While this probably isn't the start of something apocalyptic, it's a stark reminder that our life and circumstances are very dependent on things will outside our control.  It's hard to say exactly what would happen in the next few years if this comes to pass.  Food may be somewhat rarer and more expensive, to start with -- something already problematic in a day and age when inflation is beginning to drive the price of food up.

It also really points to the reality of how vulnerable the human race is, that we're stuck on earth for now and the foreseeable future.  What would be the response of the human race if the sun were raging out of control and drastically raising global temperatures? 

In some ways, we tend to assume that a "Dark Age" or "collapse" is a loss of what we already have -- information, wealth, population, etc.  However, if we can look at it another way -- we are simply sitting still, while we need to be steadily advancing as a species and culture.  If we expect that the creation and use of technology is geared to the survival and continuance of our species, then is it not true that failing to advance ourselves is tantamount to guaranteeing our demise? 

Tuesday, June 14, 2011

Flopping Around

I read an article (here) today about the new "Spider Man" musical and how U2 is trying to distance themselves from the production, stating that there is still some work to be done, even as the premiere is hours away.  The musical itself has cost around $70 million to produce and has been panned by the critics.  On top of that, it's apparently safer to be a lumberjack than it is to be a star in the show.  In other words, it's shaping up to be the Titanic of musicals -- just the ticket to be a symbol of the faltering culture of a faltering time.

Looking at the upcoming U.S. presidential election, I confess that I feel the same way about it, too.  The leading Republican candidate's main qualification is that he's been able to raise a lot of funds, without really specifying what he stands for.  The incumbent Democrat president has apparently been overwhelmed by the scope and scale of the problems of the presidency (hint, Mr. Obama -- when none of your party's heavyweights are seeking the top job in politics, the job itself has probably become something of a lemon, with the tires falling off and an engine packed full of Stop-Leak and metal shavings).  Some of the Republican runners-up include department store mannequins and stunt doubles from a torch-and-pitchfork mob.  Ron Paul, probably the most philosophically sound member of the bunch, has been shoved to the back of the pack.  Picking a new emperor is always a dodgy business.  Now, it's becoming a parody.

While the Leibowitz Society doesn't take political sides, the problem remains that a nation without solid leadership in difficult times is going to find itself in worse and worse trouble as people try to figure out which way the wind is blowing during a hurricane.  We need to start figuring out how our systems are going to work when cheap oil is gone and the dollar becomes worthless, not how we can try to keep the barbarians beyond the "limes" of Kabul or Cairo, or how we can keep building homes that will never see an occupant or cars that will have nothing to run on that the average person can afford. 

Monday, June 13, 2011

Gold and the Means of Production

I want to shift gears away from current events for a little back and back to thinking about the future.  Where we all are in life right now is, with some exceptions, probably our greatest potential in terms of what we can do with our personal futures, and also true of the future of society as a whole.  The surpluses of wealth are steadily being eaten up, easily accessible resources are basically gone, the population is well above what the pre-industrial carrying capacity of the world is, and so on.  In other words, we're not at the top of the mountain any longer, as we've slipped down it a bit, but we've caught ourselves at least for a little while and have time to think about it before the next shoe drops.

Reactions to this, of course, are mixed.  Some people choose to basically deny the reality of the situation and continue living as they always have, by spending small fortunes on trivial things and not worrying about their future.  Others take a more long-term view and invest in gold or other things which have traditionally had intrinsic value to them.  Still others prepare by buying things which they think they'll need to survive in a post-collapse world (guns and ammo, preserved food, medical supplies, etc). 

Obviously, spending like there will never be a collapse is probably not a wise decision.  However, I think there are some assumptions in the other two strategies which need to be questioned.  While gold and silver have historically been valuable, until recent years, they have not had any real utility for industrial purposes.  Sure, people could make jewelry from them, but there was always a lingering expectation that said jewelry could be turned back into a means of exchange at some point (supposedly, sailors wore gold earrings for this reason -- something that could not easily be lost if they were washed overboard or shipwrecked).  However, if you're starving and have a bag of gold, but nowhere to spend it for food, then it's worthless.  On the other hand, supplies can be used up or lose their functionality over a period of time.  Ammunition has a shelf life of somewhere between 20 to 40 years, producing ammunition for modern firearms will be difficult in the future, medicines also expire, the food will be eaten sooner or later, etc.

What is lacking here is any sense of having a means of building wealth post-collapse.  A lot of the time, I see people writing about the subject of post-crash life who assume that we're all be living as simple farmers or we'll be rapidly rebuilding as soon as the last of the lights go out.  Both cases seem to be an extreme which isn't practical -- if we just suffered a collapse (in other words, the system that sustain our society have completely failed), then what is going to be left to rebuild with?  Likewise, the assumption that specialist occupations won't quickly re-emerge in a purely agricultural society is also questionable. 

So, I'm still puzzled that people don't put more time/thought into post-collapse professions and businesses and preparing to do something besides simply try to get by.  Consider a person who has some home brewing or wine making skills.  While people often do this as a hobby, and may envision making a little wine after a collapse for trade, why do they not think of scaling it up to be a larger enterprise, maybe employing several people?  The knowledge is already there, but the idea may occur to them too late and they may not have the equipment to do much beyond small batches of production.  However, buying the equipment to make more wine would not be expensive at the current time -- a garage or storage barn full of carboys, airlocks, corks and discarded bottles would be enough to sustain a relatively large-scale operation for some time, taking fruit in trade and trading wine in turn.  Other people that have other hobbies or skills may think about expanding them to be larger-scale operations.  Printing, papermaking, candlemaking, distilling, smithing, weaving, etc, all come to mind.

Ultimately, having some means of production may allow a community to be built around the industry, much like most villages in the middle ages had at least one "cottage indsutry" to produce wealth for storage, improvements or trade.  Likewise for monasteries that relied on production of everything from cheese to wood products to sustain themselves.  People might say "Well, why can't we just use what's out there now for this?"  The issue is that modern production is very process-oriented and relies on decentralized production of materials and processing on a scale too large to be practical for most people.  What do you do with a brewing plant when the electricity doesn't come on any longer?

While I realize that the subject of wealth building is probably a strange one to tackle, when discussing economic collapse, and may be distasteful to some, I think it would be a good idea to define it in broader terms, too.  Adam Smith postulated that when one person can benefit from the fruits of their labors, it's likely that all will benefit as well.  Consider a person who builds a mill in a village that didn't have one.  Yes, they might charge a nominal fee for processing the grain into flour, but people will be able to more effectively use their grain harvest at that point.  Or, another person might build a brewery to let people turn grain into alcohol for long-term storage.  Over time, this will tend to build stronger communities with deeper resources which are more able to weather various problems as they arise.

Lastly, I would point out that one part of the philosophy of the Leibowitz Society is the creation and maintenance of strong communities to serve as centers of information storage and dissemination.  This means that the idea of creating centers of production to help sustain that community makes perfect sense, as well as how it would benefit the individual who maintained that means of production.

Friday, June 3, 2011

Braver New World

One of the signs of an impending Dark Age seems to be a loss of meaning or "way" in society.  We go through the motions, but we lose any sense of relevance of our actions.  Part of this is because we see that what we do will make little difference in the overall course of human civilization and part of it is because we aren't even aware that we have the capacity to effect change.  Or, if you want it boiled down to the essence, we suffer from apathy and ignorance.

Politicians, the media, educators, often get the blame for this state of affairs, but it really makes no more sense to blame them than it does the sun and the moon for someone's bunions.  Politicians spend most of their time trying to get out ahead of where the herd is going and say something that will win some votes.  The media spends all their time trying to battle fiercely for ratings or readership, fighting a rear-guard action against the new media of the web.  Educators take children from homes where education is valued somewhere on the same level as leprosy and try to teach them something, anything, while battling public policy and dodging political potshots. 

I'm not really sure where we could put the blame, where we would define the cornerstone event that led to this problem.  Maybe Huxley was right, that it is impossible to find a limit for man's capacity to endlessly amuse himself.  Prosperous societies never seem to be able to sustain that prosperity.  Is it because people get distracted and don't notice when problems start to crop up?  Or do they just prefer to kick the can down the road because the problem is too huge to address?

I'm really, really not sure what chance America -- and most of the developed world -- has anymore at sustained intellectual growth.  The heroes of yesteryear -- scientists, inventors, tycoons, engineers, explorers -- have been replaced by sports stars, pop stars and actors, all who live shoddy personal lives and can't string two thoughts together.  People like these are what kids aspire to become, while demeaning the contributions of people who actually matter and change the world as we know it.

Some readers might look at this as being one step removed from a "get off my lawn!" type of screed, and maybe it is.  Whatever people may say, there is still likely a vague sense of a loss of purpose and instead they feel unease at being bombarded 24/7 by new and greater distractions, hedonism as a virtue, the lack of adult thought and behavior from most people, the constant search for an endless childhood. 

On the other hand, I think most will agree that we've gone from being a society where things do matter, where we understand what our place in the world is and that we can change it, to a culture of general irrelevance.  The mechanisms of corrective change in the course of our society have completely evaporated and we're left with what is going to be an increasingly bumpy downhill ride even as we see that there's no driver at the wheel any longer.

He's off eating Cheetos and watching America's Got Talent.

Wednesday, June 1, 2011

The Great Contraction

It's been a while since I've posted here -- 80-90 hour workweeks get in the way of doing much else, but at least that's slacked off, finally.  In the meantime, we've seen the Japanese earthquake, a record-challenging years for tornados in America, riots and new wars.  The economy is still the minefield that it's been for years now.  Really, what does it feel like for people these days?  I look at my own job and am willing to deal with the nightmare hours in order to keep it, while it's still around.  It's like standing out in the rain to get a little more of the harvest in, before it's all washed away.  Does anyone else have that sense that the systems we see in place are one bad day away from failing completely?

I just finished looking at (this) story about Wall Street not being able to predict what's going to be a hot item and what's not.  Money managers are scrambling and trying to find out what The Next Big Thing is going to be, so they can retain some shread of credibility.  The problem is that we're no longer in an economy where we can throw dollars at anything and have it stick, no matter how bad it is.  This shouldn't be a real surprise to anyone who's actually part of the real world, not the bank/legal/government/money complex. 

Yet, the punchline of the article is as follows -- "Any bears out there better be careful because the dividend yields on these stocks look awesome relative to all the other investment vehicles out there," Yastrow said. "So bears are going to have to find a new way to express their discontent with the U.S. economy."  Obviously, this proves that some people can say anything with a straight face.  Translated:  "Yes, the economy is in trouble and we can't figure out what's profitable, but we're still (randomly) doing better than anything else."  Maybe.  In other words, we have a slightly less lethal kind of cancer to offer.

Ironically, Yastrow is quoted as saying we're on the verge of a great, great depression earlier in the article.
One of the key factors in the creation of a Dark Age is when systems of commerce break down.  We see political systems rupture, but politicians and governments can come and go without upsetting things to the point where a society is completely destroyed (speaking generally).  However, when the means of production and commerce are disrupted, the whole society is likely to follow.  People don't care much about abstract ideas as long as food's on the table.  When they are starving, they migrate, they revolt, they rob and steal and there is little left standing afterward. 

Now, we're seeing people who simply don't recognize the reality of the situation still running the show.  Worse, they're believing their own propaganda.  The fact that there is little to no real good economic news, that people are trying to find a safe haven for their money and none is all points to an ugly fact that the days of growth are over and we've clearly settled into the long twilight.

Enjoy this summer -- not sure if the next one is going to be quite as carefree.