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The Bottom Line on the New Energy Economy
Resilience
In With The New
Part III of As Economic Growth Fails, How Do We Live?

Image Credit: Dilmen (cropped) Wikimedia Commons

by Craig A. Severance
December 30, 2011

We need a map for uncharted territory as we enter this New Year, as the realization is dawning we are dealing with an economic crisis of an entirely different character than ever before.  Our industrial civilization is reaching limits to growth, and we don't know how to live with that.    

Part I of this series of three articles addressed the four major challenges we now face, there dubbed "The Four Horsemen of the Economic Apocalypse": 1) Too Much Debt; 2) Resource Limits; 3) Destruction and Decay of Infrastructure; and 4) Greed.  Bottom line: this crisis is much deeper and more permanent than we've been led us to believe.  "Recovery" to former patterns of growth simply won't happen.  We must now adapt to new realities, as individuals and as a society. 

Part II of this series, "Out With The Old", discussed the end of seven "Dead End" unsustainable practices that will falter and decline.  We won't pay our unpayable debts or keep impossible promises.  We can't keep importing more than we export and borrowing the difference.  Our Empire will shrink back.  Our use of fossil fuels will decline as we experience Peak Oil and Peak Coal .  We must cure Sick Care.  We will repeal laws that mandate opulence and forbid prosperity.  Finally, we will "drop the shopping" for worthless junk and refocus on the best of what it means to be human. 

In With The New: Seven New Ways of Living That Will Work.   In this third and final article in this series, we will discuss seven new ways of living which we can adopt as economic growth fails. They are not revolutionary (revolutions never achieve their utopian visions because of something called "human nature").  Rather, they may allow us to "muddle through" the best we can right now with what we already know how to do. 

We will do these things because they will work -- and we certainly need to stop doing things that don't work, and find new ways that will work:

Click here to read entire article.



As Economic Growth Fails, How Do We Live?

Part II: Out With The Old



 Image: Wikimedia Commons (PD)

by Craig Severance
December 22, 2011

There is a growing consensus the world economy is in a lot more trouble than politicians and media talking heads are letting on.  The four major headwinds to growth were covered in Part I of these three articles, and there dubbed "The Four Horsemen of the Economic Apocalype":

1.  Too Much Debt
2.  Resource Limits
3.  Destruction and Decay of Infrastructure
4.  Greed

That article was a brief summary of the extreme challenges we now face.  These next two articles are an attempt to move beyond this understanding of what has gone wrong, to develop a sense of what we can do now, as individuals and as a society. 

We cannot "set things right" in the sense of restoring things to the way they once were, but we must begin now to adapt to the new realities if we are to reduce suffering and continue an advanced culture.  Today's article, "Out With the Old", will discuss the end to seven unsustainable practices.  In the next and final article in this series, "In With the New" will discuss new ways of living we can adopt as economic growth fails. 

Out With The Old -- Seven Outcomes as Economic Growth Fails:

Before we allow our society to sink into a chaos of devastation and deprivation, there are many wasteful, or otherwise doomed, practices that will end.  The "Out With the Old" list is not a proposed agenda for politicians to adopt.  They are too committed to the existing order to voluntarily make these changes.  Rather, the end of these practices will come (and much of this is already happening) as pragmatic realities sink in.  They are unsustainable Dead Ends, so they will not be sustained:

Click here to read entire article.




As Economic Growth Fails, How Do We Live?
Part I: The Four Horsemen of the Economic Apocalypse

by Craig A. Severance
December 15, 2011

As recently as a year ago it was considered heresy to suggest economic growth would not soon resume. Now, however, as The Big Engine That Couldn't has faltered for several years, it is becoming increasingly clear the economy is running off the tracks.  Both investors and the public are beginning to realize the long-revered goal of endless economic growth is failing.  

Anger and fear are widespread, as the livelihoods and hopes of ordinary Americans are being destroyed.  Anger runs among the "99%" over economic injustices that favor the "1%".  Fear, however, may run among 100% over this question: How do we live when economic growth fails? 

How Do We Live?  These three articles will briefly lay out our current predicament, and discuss ways we can cope.  Today's post will cover four major reasons -- dubbed here "The Four Horsemen of the Economic Apocalypse" -- why nothing seems to work anymore.  In the second post, next week, "Out With the Old", will cover the inevitable end to seven unsustainable practices.  The final post in this series, "In With the New", will discuss seven ways of living which we can embrace in a world with failing economic growth. 

If we act purposefully now as individuals and as a society, we may help to avoid the most chaotic and destructive effects of collapse.  First, we need to understand what has gone wrong -- which we will discuss in today's post.  The adaptations laid out in the next two posts represent ways we may find a "softer landing" -- but we cannot expect a return to what we came to believe was "normal".  

Three Years to Get Back to 2007 Levels.   After the close of 2nd Quarter 2011, the U.S. Bureau of Economic Analysis published its official estimates of U.S. Real Gross Domestic Product (GDP).  By the end of 2nd Quarter 2011 the U.S. economy was officially producing about the same as its end of 2007 peak -- in other words, essentially no overall economic growth for 3 1/2 years.


Image Source: Shadow Government Statistics

Less Per Person.  Though the economy was no larger, U.S. population had increased, so as of the end of 2nd Qtr 2011 there was 3.5% less GDP to go around per person in the U.S. than at the end of 2007.  (By comparison, there was a 35% increase per person in China over this same period.) 

Heading Into Decline Again?  Having just officially climbed back to 2007 GDP levels, it seems like a really bad dream the economy could once again start heading backwards.  Yet that is exactly the prediction experts are now making.  On November 7th, the Economic Cycle Research Institute, a group with a stellar record of predicting recessions, re-affirmed its recent call the U.S. economy is once again slipping into recession.  So that no one would mistake what that means, in its September 30 press release, the group said bluntly, "Here's what ECRI's recession call really says: if you think this is a bad economy, you haven't seen anything yet."  Also, on November 25th, Deutsche Bank revised it projections and is now warning of a "deeper" Eurozone recession. 

Even Worse Than We're Being Told?  As bad as the official numbers noted above may seem, the actual story is likely even worse.  John Williams of Shadow Government Statistics notes that government methods of counting inflation in prices have chosen to statistically ignore many price increases, and thus count a misleading share of observed sales as economic growth.  Calculating the same way the government previously used to measure the inflation rate, SGS shows a much higher inflation rate that is more in keeping with everyone's experience of skyrocketing fuel and food costs, health premiums, etc.  With distortions removed, SGS estimates the U.S. economy has actually been stagnant or shrinking for most of the last decade:

Source: ShadowStats.com



Why Nothing Seems to Work Anymore: The Four Horsemen of the Economic Apocalyse.   The news that a bad economy is now expected to get even worse is particularly crushing with so many still out of work, and after so much money has been spent.  Leaders debate austerity or stimulus, but common sense says something more must be happening.

The "Four Horsemen of the Economic Apocalypse" have been revealed by many astute observers.  Researchers and analysts such as Chris Martenson ( "The Crash Course" video course, and book) and Richard Heinberg ("The End of Growth") have written extensively about the first three Horsemen.  The original Tea Party movement (which began as anger over government bailouts of Wall Street), and the Occupy Wall Street movement have focused attention on the fourth Horseman.  To know what lies ahead, we need to know what is wrong:

Click here to read entire article.



Living Better in 'The Finite World'
A Finite Sustenance is Challenge of Our Time

Earth Seen From Apollo 17: Wikimedia Commons

by Craig Severance
December 31, 2010

A lot of things we use every day are about to get much less affordable. 

That's the bottom line impact for the average family looking ahead at this next decade.  This next ten years will be the time when serious world resource shortages begin to take hold, especially the expected Peak of world oil production.  

Will we be able to grow jobs if we have no money left after filling our gas tanks?  Who will be hurt the most?  Will our entire civilization experience a catastrophic Collapse when world oil and other critical supplies begin to decline?    

Most importantly -- is there still hope we can actually live better

The World is Not Just Us.  Though Americans are still hurting, prices of essential supplies and fuels (deemed Commodities by traders) are now rising because of greater world demand

World population is increasing, and people almost everywhere now live on a lot less than we do here.  Exploding economies such as China and India have been growing at rates over 8% per year. 

They need to use more, just to meet their basic needs.  No problem with that, except for this fact: there isn't "more".  

The Finite World.  We don't have the whole Universe to supply our needs.  We live on this little round ball called the Earth, and it is finite.  You can make your way around it in just a few hours in a space shuttle.    

This little globe has been a really great kitchen cupboard to explore, but it seems we've just about opened all the drawers to all the pantries.  Yet, more company keeps arriving and sitting down at the dinner table. 

Graphs and charts (see links) can tell the story of depleting key minerals and especially the limits to production of our Master Resource, crude oil.  

Common sense tells the story just as well.  We don't live in an abstract world of infinite x and y axes.  We live in a real, physical, world where there is only so much -- of anything.   
 
Something Has to Give (and it is).  With more people clamoring to use the same resources, the Law of Supply & Demand is kicking in.  Prices for basic resources -- oil, metals, grains, cotton -- are all rising, much faster than many people expected just a few months ago.  Just this week, predictions were circulating of $5 per gallon gasoline soon in the U.S.



Data Source: Dec. 31, 2010 Current Interactive Charts

An Economist's Finite World.  Nobel winning economist Paul Krugman posted a tantalizing New York Times column this week entitled The Finite World.   I say "tantalizing" because Krugman came very close to challenging the economic profession's central dogma -- the assumption of endless and infinite economic growth -- but in the end he backed away. 
.
As more and more people in formerly poor nations are entering the global middle class, they’re beginning to drive cars and eat meat, placing growing pressure on world oil and food supplies. 

And those supplies aren’t keeping pace. Conventional oil production has been flat for four years; in that sense, at least, peak oil has arrived. True, alternative sources, like oil from Canada’s tar sands, have continued to grow. But these alternative sources come at relatively high cost, both monetary and environmental ....

So what are the implications of the recent rise in commodity prices? It is, as I said, a sign that we’re living in a finite world, one in which resource constraints are becoming increasingly binding.
This won’t bring an end to economic growth, let alone Mad Max style collapse. It will require that we gradually change the way we live, adapting our economy and our lifestyles to the reality of more expensive resources. (emphasis added)

Krugman then deflected from examining the full implications of The Finite World, and redirected to his main purpose. 

It turns out the main point of Krugman's article was to argue that current increases in commodity prices "have no bearing, one way or another, on U.S. monetary policy."   Krugman has been a promoter of economic stimulus, and was merely using this piece to defend against attacks that rising world commodity prices are a sign the world is devaluing the U.S. dollar. 

The Great Precipice.   Like a car careening in the dark, inches away from an unseen chasm, Krugman came right to the edge seemingly unknowing of the breach he almost vaulted.  

If he had continued pondering the implications of The Finite World, he would have seen that economic growth may drop off a cliff when the economy's basic fuels and supplies become too scarce.  How can you make and deliver more and more products, unless you have a ready supply of more raw materials and fuels?  

Click here to read entire article.



Not Arks or Fortresses, But Cities of Light

Image: Wikimedia Commons

by Craig Severance
December 24, 2010

Over the last several months a clear shift in focus can be seen in the energy and climate community.  After political leaders refused to adopt broad measures to prevent the coming energy, economic and climate cataclysms, many of those who fought valiantly for public actions are now visibly turning toward preparations for catastrophe.   

Whereas the talk of the day just six months ago centered hopefully around when the U.S. Senate would adopt an energy and climate bill, now more often than not we are reading predictions of the Collapse of our industrial society.

The forces now converging are so immense as to be overwhelming.  There is an emerging sense it is already too late to avoid major disruptions to our way of life from Peak Oil production.  Climate change seems to have reached a tipping point where the world climate is increasingly unstable. Added to these natural forces, the economic picture brings more bad news almost daily as debts mount with no hope of repayment. 

With these type of forces in play, it is no wonder many feel it is more urgent now to learn how to grow one's own food, than to follow the latest statements from Congressional climate zombies.  

Angst Over "Turning Inward".   Though there is a palpable sense of impending change, there is still confusion about how or even if families should be warned to prepare.  

Are we just being selfish if we try to save ourselves and our loved ones?  Do efforts to build personal and local resilience even have a chance, if the society at large does not join in?  Shouldn't we still be spending all our time pressuring Congress to pass national mandates?

Survival in Isolation Fruitless.  Gail Tverberg, a long-time editor of The Oil Drum, notes in a recent interview at Transition Voice,  “If I plant a garden and all my neighbors are starving, I’ll have to share it with them and it’s not going to go very far.”  

                                 

Preparation for major changes must always start with one's own family.  However, the model of the Ark -- where Noah and his family survived and left the rest of the population to drown -- is flawed.    In Noah's Ark No Kind of Escape Plan Transition Voice Editor Erik Curren deflates the "Ark" fantasy:

But imagine if, in the hours as the water started to rise before the heavy laden Ark took float, that Noah’s neighbors finally realized he was not crazy, but was in fact the only guy who was prepared to survive disaster. Frightened mobs could have stormed the Ark to try to get aboard, wielding rope ladders with grappling hooks. Rich people could’ve sent archers to force Noah to let down the gangplank. Warlords of a neighboring tribe could’ve rushed in a catapult.

And even if none of them were able to board the ship, at least they could have put enough holes in the hull to ensure that the Ark would sink. For the doomed, sabotaging someone else’s escape plan can be a final desperate comfort.

Curren's debunking of the notion we can set up little "Arks" may leave some feeling they can solve the security problem with a Survivalist style Fortress  -- essentially a well-armed Ark.  However, I doubt many will have enough "Guns, Gold and Guts" to survive the inevitable trip away from the Fortress to obtain supplies.    

Light in Darkness Only Model That Can Work.   Knowing the Ark and Fortress ideas won't work is invaluable, as this revelation strips away the illusion of  a "safe and secure" future isolated from what happens to the rest of your community.   

What is left will not be safe, but instead requires courage and generosity. 

We are left with the only model that can work: be a Light in the Darkness

Click Here to read entire article.




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