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  • Turning point for oil, and us at Forget the Rest
    oil patch will soon be bankrupted by the higher price And that will cause the price of oil to collapse again And so on until the last industrialist dies His cause of death will be listed as whiplash the shaken industrialist syndrome if you will Or then again we may not Global deflation is another possibility You can see many others One way or another as Tim Morgan Life After Growth reminds us not all the claims on future work and productivity in an oil based society claims which we denote by money i e debt will be honored Pacta sunt non servanda in such cases Overall value as originally defined must be destroyed or redefined So welcome Zen Welcome Thoreau who said You must get your living by loving There is a new economy waiting latent right now organized around solidarity stewardship and the timeless theme of simple living and high thinking Take it or leave earth a cinder Meanwhile there will be haircuts The powerful few will get bailouts the powerless will get bail ins or simply raw expropriation until they decide to do something about it Another way to say it is that our civilization is entering a Chapter 11 bankruptcy process still operating but not all debts will be fully honored The New Great Game is in part a game of musical chairs though the music will be very discordant and fatal to many Meanwhile those who have printing presses for money will begin cranking them up faster under various names which is happening Of course if the U S can force countries to accept use and hold freely printed dollars we will do that as much as possible Returning to the main story peak conventional oil production occurred in 2005 This delivered a noticeable shock to our economy before and quite likely contributing to the Great Recession named prematurely surely Steve Kopits at the time Managing Director at Douglas Westwood explained a year ago that in 2005 various mileposts suddenly appeared in the history of oil conventional oil production peaked vehicle miles per capita in the U S began declining U S vehicles owned per capita began declining and U S airline departures declined as well see slides 16 32 33 37 From 2005 to now what modest growth in world oil supply we have seen has been entirely due to unconventional oil oil from shale formations from oil sands and from ultra deep offshore wells This is very expensive oil and it comes with all sorts of problems Some of what is produced from shale formations is so light it is not even oil as that term used to be understood It produces very little diesel fuel All this is extreme oil desperate oil last resort oil And we can t afford to pay for it even with weak environmental and transportation standards so for the moment it s being slowly priced out Meanwhile depletion and rust never sleep The upshot after all the

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  • Season of the Witch at Forget the Rest
    also may have seen the peak in actual crude oil production oil exclusive of natural gas condensates from which fewer products can be made In any case oil prices are now four times higher than in 2002 and the capital expenditure necessary to produce a new barrel of oil has risen five fold since 2000 for independent oil companies The portion of GDP devoted to obtaining energy is rising fast in the U S and most countries as is the energy necessary to obtain energy and raw materials In the U S at least no economic recovery has ever occurred under these circumstances and none we believe can or will occur This conclusion made stronger by massive and rising inequality the offshoring of most of our productive industry and skills and the cancerous growth of finance Real capital formation in U S society as a whole has very likely already come to an end or will do so in the present decade The present shale oil bubble will definitively pop very soon by 2016 we believe plus or minus a year this is not the place to go into this in detail Not only is real as opposed to nominal capital formation ending but critical infrastructure is not being well maintained with consequences that could become irreversible As for U S natural gas prices must increase dramatically to hold onto today s production levels for a few more years There is no long lived U S shale gas bonanza Worldwide the liquid fuel situation is worse The International Energy Agency IEA warned of potential oil shortages this year if OPEC by which is meant Saudi Arabia the other OPEC members being already maxed out cannot find a way to provide an extra 1 million barrels per day This concern predates the recent conquests by the Islamic State of Iraq and Syria ISIS World crude oil production is increasing only very slightly now condensates included and only because U S shale oil production has been rising quickly for now Food prices are strongly correlated to oil prices and political instability to food prices Climate issues tend to be couched in normative terms we should do X to avoid Y Climate implores that we act to save ourselves and our planet Oil by contrast and energy in general commands independent of anybody s views about anything All notions of stability and prosperity and of rising federal tax returns under the present taxation paradigm so important to federal planning and budgeting including in the nuclear weapons business are now out the window We have written about this a little at Forget the Rest Congressional Budget Office CBO growth projections have been too optimistic in recent years Federal spending caps are set using these projections under the Budget Control Act The real pie is not growing There is no rising tide that will lift all boats and there will never be henceforth Progressive liberalism as we know it today has no foundation in reality

    Original URL path: http://lasg.org/wordpress/2014/07/04/season-of-the-witch/ (2016-02-16)
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  • Vienna Conference vigorously advances efforts to ban nuclear weapons at Forget the Rest
    weapons are seen as having security value The non military destruction they entail is relegated to collateral damage if it is discussed at all By contrast in the humanitarian law and morality or weapons of mass destruction paradigm it is the morally and legally transgressive qualities of nuclear weapons as almost universally regarded which are the starting point for discussion In this paradigm any security benefit supposedly gained by nuclear possessor states by nuclear threats i e deterrence or by nuclear use is inherently immoral corrosive of existing law and anticivilizational However uncomfortable it may be to the nuclear weapon states and the states which participate in nuclear deterrence through nuclear sharing or extended deterrence arrangements it is a matter of settled law that mass murder genocide or the global destruction of life that would result from nuclear winter can never be justified by any supposed political or military outcome Needless to say we believe the second paradigm is a more factual and fertile starting point for discussion It does not exclude the universal need for security in all its aspects but in doing so it does not privilege the security desires of one set of countries over others It puts human security not state power relations in the foreground The fruitfulness of the humanitarian approach can be seen in the far reaching arguments for an explicit ban on nuclear weapons and deterrence that were read to the Conference from His Holiness Pope Francis by Papal Nuncio Silvano Tomasi It is a powerful testament An excellent and detailed overview of the conference and its meaning is available from Reaching Critical Will The following three articles by Dr Rebecca Johnson shown here with summaries are recommended The Austrian pledge to ban nuclear weapons 15 December 2014 Driven by the imperative of human security for all Austria pledged at the HINW conference to work to stigmatise prohibit and eliminate nuclear weapons in light of their unacceptable humanitarian consequences and associated risks Nuclear survivors testimony from hell to hope 9 December 2014 Participants at the HINW Conference were screened for nuclear contamination yesterday before listening to testimony from survivors mobilising for the abolition of nuclear weapons in what Pope Francis called our common home Gathering speed to ban nuclear weapons 8 December 2014 The Third International Conference on the Humanitarian Impacts of Nuclear Weapons HINW opens in Vienna today with arguments for humanitarian disarmament growing in strength This time the UK and the US will attend What will be the likely outcome We can also recommend these blog posts from the conference by John Loretz of the International Physicians for the Prevention of Nuclear War IPPNW December 9 2014 The Austrian Pledge December 9 2014 Vienna conference builds on foundation laid in Oslo and Nayarit December 8 2014 CSF Vienna day two the writing on the wall December 7 2014 The courage to ban nuclear weapons ICAN Civil Society Forum opens in Vienna The whole Vienna Conference can be seen on YouTube here

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  • Forget the Rest
    to vote People riot when they perceive that they have little to lose They want material benefits and opportunities which they are denied They want respect and dignity and these come with a material as well as a social and political price tag This economic decline so fast in historical terms it will be called a collapse in retrospect will probably be a good thing because the way we live has unleashed a climate catastrophe which if not quickly reversed will not may destroy civilization and most life on earth This will happen very fast indeed it is happening now What we do in the next decade is likely to be determinative of the outcome on a scale of centuries Unfortunately merely decreasing emissions no matter how steeply is almost certainly no longer enough We waited too long What each of now does or fails to do has consequences that far exceed the apparent ambit of our lives Each of our voices is now more important than ever Does the individual know said Jung that he is the makeweight that tips the scales Well no in our experience the individual generally does not know and many people do not want to know We are seeing a great deal of understandable fear in our communities fear of information fear of discussion fear of commitment People are shit scared for darn good reasons and many of you are hiding whether you know it or not Scared you may be just as we are but please do not hide We often hear I can t do any more than I am Jung does not imply doing more and neither do we We don t need more we need less And there is a problem with doing period Doing generally means some variant of busyness Why can t we dispense with our precious notions of choice 99 of which amount to mere consumer choice and be willing to set aside some of that slavery and accept a degree of freedom There s no deferred gratification involved here The freedom is instant Neither does the individual in our experience know why she or he is that makeweight The individual in our experience in the United States is generally very far from free The individual wants a certain political outcome but does not know that it is the wholly accepted process not the outcome which is the liberating and majestic experience Although the Study Group works closely with two branches of government and we litigate in the courts we know these activities are not remotely sufficient in themselves to save our country from its intensifying decline compounded of factors very familiar to all of us Neither will mere reform rescue this poor state from its downward spiral Whither New Mexico world capital of weapons of mass destruction Bulletin 167 03 27 13 Reform in all its modes will not preserve the diversity of life on earth now in its sixth great extinction crisis In fact we do not know what will be sufficient or if anythin g will be sufficient At the Study Group we ve been discussing our converging crises for many years many of us for decades Two things are clear First nothing we see on the contemporary political scene in the U S today is sufficiently efficacious to prevent major disruptions to our lives and families Second our present level of comfort the American Way of Life as we have known it since World War II including the ecosystems that support us in the living landscape and waters is being stripped away How dire things become and how quickly and for whom and for how many and how we each experience these conditions socially psychologically economically and spiritually are in crucial ways up to us Our society will have the crises but will we seize the opportunities The old world the assumptions and conditions that have formed our politics and intellectual assumptions up to now is dying Our new world must be brave or we will have no world at all For others including our children to survive we now need to travel the path of nonviolently withdrawing legitimacy and energy attention time and money from those institutions and activities which act far outside human ethical norms The goal is not disengagement and certainly not any sort of purity as self satisfying as that can temporarily be Our goal is rather engagement political engagement Nothing we do or try to do in the household and corporate realms merely will be enough without political engagement Goodness knows I don t mean voting that charade of legitimacy Vote certainly but voting merely no longer counts as democratic participation Running for office is altogether another and more effective thing to do especially in a primary In our long experience our congressional delegation cares about little else than winning They have no platform or plan for government let alone knowledge or any significant interest in the crises our society faces except as these are reflected in potential votes in the coming election Their attention cannot be gained in any other way than by threatening successful reelection either through running for office or through discouraging donations to the electoral process by which votes are bought through propaganda campaigns In any election for national office these days votes serve to legitimize oppression and global environmental destruction One chooses the least bad candidate as best as one can but this process will never right itself under the current corrupting influence of capital Nonviolent noncooperation is powerful and effective more powerful and wise than anything else There will be casualties We must find effective ways to rebel if our family responsibilities allow If we do not we must help others do so Hedges quite rightly distinguishes between those who are hors de combat and those who are not Shielding a Flickering Flame Nov 24 2013 Some are calling for a constitutional insurgency Brecher Climate Protection The New Insurgency Dec 28 2014 others for an uprising Hedges It comes to the same thing Here is Hedges T hose who defend corporate totalitarianism including the leaders of the two major political parties fatuous academics pundits and a bankrupt press must be driven from the temples of power Mass street protests and prolonged civil disobedience are our only hope A failure to rise up which is what the corporate state is counting upon will see us enslaved The Last Gasp of American Democracy Jan 5 2014 David Holmgren called one of the founders of permaculture in this review by Albert Bates calls for Crash on Demand that is a strategic decoupling by masses of youth and elders from the economic system that is the crashing the planet s ecological stasis in Bates summary This is an ugly picture or so it may seem Yet the spectacle of millions of lives crushed by the quest for corporate profits and our comfort and the silent winking out of the beautiful creatures who have been our companions for thousands and millions of years now that is ugly Let us hope it quickly becomes too ugly for us to bear and I mean us not unnamed others and let us work together to quicken that day That s our foremost wish for 2014 and we hope you will consider it closely and conscientiously with us Yes we will continue and deepen our normal work but these are not normal times any more as we will explain face to face if given the chance as well as in these posts and our bulletins Commentary Add a comment Lighter fare some reasons the sheep went to the slaughter November 10th 2013 by Greg Mello Why did the sheep go and oh so placidly to the slaughter One can quickly think of a few possible reasons She thought we should all get along She thought it was a vote for the lesser evil Resistance seemed futile at least that s what the butcher said The butcher and all his friends made her feel so special She got a grant All the best sheep were going and she could wear her best outfit It seemed like a great career move at the time The butcher told her she wasn t qualified to decide so she thought it best to get a degree perhaps in slaughterology before deciding whether or how she might escape She couldn t really decide what else she could do She didn t think it could really happen to her It was after all so unfair What had she done to deserve it Thinking about slaughter was negative and she didn t want to encourage those kind of thoughts She was just too busy to help the other sheep organize an escape She believed it was God s plan When her friends called with an escape plan she had already told the butcher she d go She didn t care anymore Instead of escaping she went to a distinguished Lannan Foundation lecture about slaughter An experienced meditator she had learned to be one with everything Rather than organizing an escape she decided to pray and went to meditation retreats She thought her parents would approve of her more if she went She thought her children wanted her to go Instead of escaping she always made sure her purchases were green organic Fair Trade and recycled She had strong opinions against slaughter and so did all her friends That she thought should be enough She always voted and donated generously to the butcher s campaign She even saw him at events They were friends Her friends worked for the butcher and she certainly didn t want to offend them She sent many emails and letters to the butcher telling him she disapproved of slaughter and thought she d done her part She d donated money to a group that said they had practically stopped slaughter She went to meetings about escape once or twice but they were rather troubling so she didn t go back There were a few things she wanted to do before she died and escape was not one of them Commentary Add a comment Perfect storm April 4th 2013 by Greg Mello Today I want to take up the theme of why assumptions of economic normalcy for the rest of the present decade are misplaced It s a big subject and this is a long post Even so much of the weight of the argument is carried by referenced articles Cassandra had a credibility problem So it s interesting that the editors of the New York Times those august arbiters of elite public discourse gave prominence in the Sunday editorial section to a long jeremiad and prophecy of economic doom by David Stockman Reagan s first budget director State Wrecked the Corruption of Capitalism in America March 30 2013 Given the prominence of Stockman s op ed I ll start there In my view Stockman got a lot right in that essay much of which certainly not all reads pretty well from the left side of the political spectrum I wonder if his libertarian streak and pure market faith make his comments about class war by the rich against the poor and his dark prognosis for the U S economy and polity palatable to the Times His own right wing history made his essay far more interesting than if Noam Chomsky or Chris Hedges or Gaius Publius e g here on the predator class had said something similar As of yesterday three days later it was still the most frequently blogged of recent Times articles There are plenty of liberal economists happy to jump all over Stockman for what I would consider the less important parts of his essay or to make ad hominem comments about Stockman and the economic blood on his hands That s easy there s plenty of it It is much less easy to dismiss Stockman s indictment of the long running class war or his critique of current official fantasy predictions or his forecast of where today s government failures will lead to massive asset deflation zero sum austerity 1 and virulent political conflict Stockman writes Since the S P 500 first reached its current level in March 2000 the mad money printers at the Federal Reserve have expanded their balance sheet sixfold to 3 2 trillion from 500 billion Yet during that stretch economic output has grown by an average of 1 7 percent a year the slowest since the Civil War real business investment has crawled forward at only 0 8 percent per year and the payroll job count has crept up at a negligible 0 1 percent annually Real median family income growth has dropped 8 percent and the number of full time middle class jobs 6 percent The real net worth of the bottom 90 percent has dropped by one fourth The number of food stamp and disability aid recipients has more than doubled to 59 million about one in five Americans On the left Robert Sheer It Wasn t David Stockman Who Wrecked the Economy 04 02 13 takes note of this passage and approves For all of the strident attacks on Stockman s column I have yet to read a serious critique of his most brazen claim that the bailouts and quantitative easing that have saved Wall Street and brought the stock market back to historic heights represent class warfare with the vast majority of Americans on the losing side Marcus Brauchli The Great Deformation The Corruption of Capitalism in America by David Stockman 3 29 13 assesses Stockman s ideas and new book for the Washington Post concluding like his fellow Times editorial peers that the warning flame is well worth the candle But here s the thing Even as he indulges his spleen Stockman produces a persuasive and deeply relevant indictment of a system dangerously akilter Over the past 40 years the United States has become a strange fantasy land where many politicians think deficits don t matter regulators are closely entwined with their charges and the Federal Reserve manages the economy through high stakes high risk experimentation The financial turmoil of the past few years is just a glimpse of what lies at the end of the road we re on Stockman warns It is no surprise that fellow polemicist and iconoclast James Kunstler is also quite positive about Stockman s book Are You Going To Entropy Faire 4 1 13 He is inimitable I quote at length because I think the future of the country would be brighter if more people read Kunstler Things are breaking loose Holes have appeared in the fabric of fraud and lies that passes for the world money system They are black holes gravitationally sucking in the things breaking loose and as these things cross their event horizons they will never be seen again These things I speak of are the collateral for vast nebulae of falsely generated debts and obligations that were never intended to be honored i e regarded as real As they vanish down the wormholes of time they take with them their pretenses of money value meaning they leave reverberations of impoverishment in the shadowy place that the real world has become Stockman is out with a new book The Great Deformation that manages to concentrate all the requisite outrage in one gale of rectified objurgation It is a pleasure to read Stockman former budget director under Reagan and Michigan congressman call out the villains from Reagan to Bernanke to Paulson to Rubin and scores of others in the most opprobrious terms Stockman characterizes the financial action of recent decades as a leveraged buyout of the USA and it sure looks that way If you travel around the towns of the upper Hudson Valley once an industrial corridor full of Jimmy Stewart type burgs it s beginning to look like the country Borat grew up in Everything of value that wasn t nailed down was taken and everything that remains is broken including the ragged population On Sunday night wire stories had Cyprus close to going Icelandic that is hoisting the middle finger to Brussels and repudiating the money owed That option may end up seeming more attractive to virtually everybody in the broke world including even the young college loan debt donkeys of the USA groaning under their loads as they stand idle in the barren fields of unemployment So here s the point If Stockman is generally right about our present condition what prospect is there for real economic growth anytime soon And if there isn t real economic growth and so also greatly increased tax revenues what will become of all the current spending and deficit reduction plans In particular what will happen to multi hundred billion dollar plans to build new nuclear submarines bombers missiles warheads and the like As Stockman put it America will descend into an era of zero sum austerity If he means austerity as economic reality the future tense doesn t apply We re there now but much worse is coming If he means austerity as a fiscal policy in which growth in some programs can only occur if there are corresponding offsets in others that too is our current reality The Congressional Budget Office CBO by contrast sees boom times just ahead The Budget and Economic Outlook Fiscal Years 2013 to 2023 economic projections here in xls The CBO predicts that the U S GDP growth for the current year and ensuing decade will average 4 8 nominal and 2 75 real These averages are achieved by a nominal GDP growth that climbs to up to 6 6 by 2016 at the peak of a predicted three year boom before slowly settling back to steady recession free growth henceforth As Stockman notes CBO is counting on the U S economy producing 16 4 million new jobs in the next decade even though it produced only 2 5 million in the last one Federal revenues will grow wonderfully under such conditions the CBO predicts Federal revenues will increase by roughly 25 percent between 2013 and 2015 under current law CBO projects That increase is expected to result from a rise in income because of the growing economy from policy changes that are scheduled to take effect during that period and from policy changes that have already taken effect but whose full impact on revenues will not be felt until after this year such as the recent increase in tax rates on income above certain thresholds As a result of those factors revenues are projected to grow from 15 8 percent of GDP in 2012 to 19 1 percent of GDP in 2015 compared with an average of 17 9 percent of GDP over the past 40 years Under current law revenues will remain at roughly 19 percent of GDP from 2015 through 2023 CBO estimates I think these CBO predictions are worthless Officially we are roughly at zero sum austerity in fiscal policy right now using current law inflation corrected spending caps 2 Using more realistic inflation measures i e ones that include a measure of dark inflation as will be shortly discussed federal spending is now shrinking in real dollar terms and will shrink further in the coming years If the CBO predicted revenue growth does not materialize all federal budgets and all plans based on them including NNSA and DoD nuclear weapons modernization plans incorporate a considerable degree of political risk Would dramatically increasing deficits over the coming decade to accommodate these spending plans rather than deficit reductions as current law and political consensus requires be politically tenable It is not unrealistic to suppose that federal budgets might shrink this decade even in nominal terms if tax revenues decline In real terms especially if dark inflation is considered actual purchasing power could then rapidly decline posing great risks to NNSA projects Potential offsetting cuts in non defense federal programs could be electorally untenable and if enacted could through their greater Keynesian macroeconomic leverage 3 throw the country into yet deeper recession and thus lower federal tax revenues even further This is more or less what austerity programs seem to be achieving elsewhere Neither do I believe the official portrait of our present condition John Williams Shadow Government Statistics has been keeping spreadsheets of headline economic data calculated using a constant methodology rather than one that changes through the years This is how Williams analysis portrays recent real GDP growth in comparison to the official history graph hyperlinked to original Thus in Williams view the U S has been in a double dip recession since 2000 There was no jobless recovery because there was no recovery in this view and I submit it accords with most peoples experience The official illusion of real growth in any current quarter is created by subsequent revisions of prior quarters and more so by the hedonic adjustments substitutions geometric weighting owner equivalent rent and other adjustments that have distorted the consumer price index CPI Williams The difference between the red and blue lines above is a measure of dark or hidden inflation Besides creating the illusion of economic growth when there is none another effect of grossly underreporting inflation is to cloak real negative interest rates for borrowers Why not borrow if loans will be repaid in deflated currency This reality considerably fueled the pre 2008 speculative bubble according to Tim Morgan Global Head of Research for Tullet Prebon in a remarkable report Perfect Storm Energy Finance and the End of Growth pdf to which we now turn 4 In the report s words This report explains that we need only look beyond the predominant short termism of contemporary thinking to perceive that we are at the confluence of four extremely dangerous developments which individually or collectively have already started to throw more than two centuries of economic expansion into reverse Before the financial crisis of 2008 this analysis might have seemed purely theoretical but the banking catastrophe and the ensuing slump should demonstrate that the dangerous confluence described here is already underway Indeed more than two centuries of near perpetual growth probably went into reverse as much as ten years ago emphasis in original From the executive summary The economy as we know it is facing a lethal confluence of four critical factors the fall out from the biggest debt bubble in history a disastrous experiment with globalisation the massaging of data to the point where economic trends are obscured and most important of all the approach of an energy returns cliff edge The 2008 crash resulted from the bursting of the biggest bubble in financial history a credit super cycle that spanned more than three decades How did this happen The Western developed nations are particularly exposed to the adverse trends explored in this report because globalisation has created a lethal divergence between burgeoning consumption and eroding production with out of control debt used to bridge this widening chasm The reliable data which policymakers and the public need if effective solutions are to be found is not available Economic data including inflation growth GDP and unemployment has been subjected to incremental distortion whilst information about government spending deficits and debt is extremely misleading The economy is a surplus energy equation not a monetary one and growth in output and in the global population since the Industrial Revolution has resulted from the harnessing of ever greater quantities of energy But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel I believe this is all pretty much spot on 5 This report is really worth a close read not just for the ideas but for the clarity of presentation It is in this last bullet that we dimly see a potent macroeconomic cause for rising intentionally darkened inflation Take a look at Morgan s rough estimate of the underlying trend in energy returned over energy invested EROEI his Figure 5 13 6 From the report Remember that what is being measured here is not the value of energy but its cost as a proportion of the value that we derive from it Cost and value could only be the same if no surplus existed which would also mean that the economy could not exist either Our assessment of the trend in EROEIs is shown as the red line in fig 5 13 On this basis our calculated EROEIs both for 1990 40 1 and 2010 17 1 are reasonably close to the numbers cited for those years by Andrew Lees For 2020 our projected EROEI of 11 5 1 is not as catastrophic as 5 1 but would nevertheless mean that the share of GDP absorbed by energy costs would have escalated to about 9 6 from around 6 7 today Our projections further suggest that energy costs could absorb almost 15 of GDP at an EROEI of 7 7 1 by 2030 Though our forecasts and those of Mr Andrew Lees In search of energy in Patrick Young ed The Gathering Storm Derivatives Vision Publishing 2010 may differ in detail the essential conclusion is the same It is that the economy as we have known it for more than two centuries will cease to be viable at some point within the next ten or so years unless of course some way is found to reverse the trend emphasis added For the way to reverse the ominous trend keep reading Chris Martenson s prognosis is similar to Morgan s his final conclusion is the same as ours here at the Study Group The Real Reason the Economy Is Broken and Will Stay That Way More and more economic sinkholes 2 12 13 We are far enough and deep enough into the most heroic monetary and fiscal efforts ever undertaken to finally ask why aren t these measures working Or at least we should be Oddly many in DC on Wall Street and the Federal Reserve continue to steadfastly refuse to include anything in their approaches and frameworks other than more of the same The framework we operate from around here is simply encapsulated in the observation that there has never been global economic recovery with oil prices above 100 over barrel That is shorthand for the idea that oil is the primary lubricant of economic growth and that it is not just the amount of oil one has to burn but also the quality or net energy of the oil that matters If we want to understand why all of the tried and true monetary and fiscal efforts have failed we have to appreciate the headwinds that are offered by both a condition of too much debt and expensive energy Neither alone can account for the economic malaise that stalks the world We could similarly look at the Federal Reserve balance sheet or excess reserves or a dozen other indicators that all say the same thing The money supply has been expanded enormously And what do we have to show for it Not much Since 2005 real that is inflation adjusted GDP has only expanded by 0 9 on an annualized basis On a nominal basis not inflation adjusted the number is only 2 9 far below the 5 6 required to sustain a banking system dependent on exponential growth in that range As I see it the economy is broken and it will stay that way Our only hope for an alternative would be to immediately cut our losses in those enterprises that do not make sense in a world of increasingly expensive liquid fuels and invest heavily in those things that will help us transition to a future without fossil fuels emphasis added Eric Janszen writing before the depth of the 2008 crash anticipated Martenson s last point and is also worth quoting in detail The Next Bubble Priming the markets for tomorrow s next big crash February 2008 Harper s Our economy is in serious trouble Both the production consumption sector and the FIRE sector know that a debt deflation Armageddon is nigh and both are praying for a timely miracle a new bubble to keep the economy from slipping into a depression We have learned that the industry in any given bubble must support hundreds or thousands of separate firms financed by not billions but trillions of dollars in new securities that Wall Street will create and sell Like housing in the late 1990s this sector of the economy must already be formed and growing even as the previous bubble deflates For those investing in that sector legislation guaranteeing favorable tax treatment along with other protections and advantages for investors should already be in place or under review Finally the industry must be popular its name on the lips of government policymakers and journalists It should be familiar to those who watch television news or read newspapers There are a number of plausible candidates for the next bubble but only a few meet all the criteria Health care must expand to meet the needs of the aging baby boomers but there is as yet no enabling government legislation to make way for a health care bubble the same holds true of the pharmaceutical industry which could hyperinflate only if the Food and Drug Administration was gutted of its power A second technology boom under the rubric Web 2 0 is based on improvements to existing technology rather than any new discovery The capital intensive biotechnology industry will not inflate as it requires too much specialized intelligence There is one industry that fits the bill alternative energy the development of more energy efficient products along with viable alternatives to oil including wind solar and geothermal power along with the use of nuclear energy to produce sustainable oil substitutes such as liquefied hydrogen from water emphasis added Janszen doesn t mention climate in this passage but climate considerations alone require this emphasis all else aside By the way Janszen s nuclear hydrogen idea didn t pan out It was never practical To its great shame Sandia National Laboratories ostensibly full of smart engineers peddled this notion for some years when an hour or a day with a pencil and calculator would have shown it to be a fantasy I don t know if the White House or anybody in Congress actually believes that current economic policies are going to bring about real economic growth let alone the sudden boom over the next five years predicted by CBO I don t know to what extent policymakers have absorbed the nagging disconnect between reported inflation and what people actually experience when they go to the grocery store the doctor s office and the gas station and what that discrepancy really means for economic and fiscal policy One thing that it means as Stockman of all people points out is that there is a huge flow of money from wage earners to the investing class Another is that we are in economic decline not growth It means there is no economic recovery now jobless or otherwise and there won t be one The illusion of economic growth couldn t be more finely tuned for public consumption if it were invented by George Orwell himself I am the last person who would know how to prevent an economic or financial crash But I can add and subtract and so must conclude with Janszen for the reasons he mentions and others that the only economic frontier big enough and rich enough to make a difference in the U S economy given the energy quality crisis which besets us and with the correct political and social alignment to liberate our society s creative energies and with a large enough local component that cannot be off shored lies in the process of weaning ourselves from fossil fuels To save what our economy or rather to save what we can of it we need to invest in renewable energy energy conservation and dramatic fuel economies in transportation The opportunity does not lie in an all of the above energy strategy which would destroy our climate and therefore our country and civilization that s really more an electoral strategy than an energy strategy The opportunity does not lie in nuclear energy which is in effect parasitic on the present fossil fuel economy as discussed here at note 2 and is strongly affected not just by ordinary dark inflation of cost but another kind of dark inflation of risk Both were mentioned here The conditions for successful massive investment in this new frontier are more ripe than is usually appreciated as Paul Gilding notes Victory at Hand for the Climate Movement March 2013 They could be made riper fast by concerted revenue neutral government action On the other hand they will be forestalled by the DOE supported belief that a Magic Technology Innovation Fairy will come and make everything easy It won t be easy far from it It will be austere Economic changes of great magnitude are always accompanied by great social changes and this one would be too the nature of which is in our hands The no action alternative is massive deleterious social change To repeat our economic energy and climate problems are huge Only huge Schumpeterian change on the scale of World War II has any hope of realistically addressing them with the alacrity needed Timid efforts will be OBE overtaken by events most likely in this decade The economic decline described by Stockman Morgan Martenson and others may be very intense and very sudden as David Korowicz has pointed out in two important analyses Tipping Point Near Term Systemic Implications of a Peak in Global Oil Production An Outline Review Feasta The Risk Resilience Network 2010 and Trade Off Financial System Supply Chain Cross Contagion A study in global systemic collapse David Korowicz Feasta 2012 Degrowth in the sense of a soft landing is unlikely Our backs are truly to the wall As financial and underlying economic systems grow more stressed their sensitivity increases to possible triggers for the collapse described by the above authors The trust necessary to do business may be an early casualty as Erich Kuerschner pointed out to me One such trigger could be federal budget cuts As Richard Heinberg reminds us current deficit spending is about 7 of GDP Deficit Reduction Recession Feb 26 2013 Any significant effort to reduce the deficit will likely decrease GDP by roughly that same amount throwing it into negative territory Heinberg concludes that a recession in 2013 is a mathematical near certainty 7 Another trigger is oil prices increases in which have been precursors to 10 out of 11 post World War II episodes of recession in the U S good references and commentary by Gail Tverberg here Many geopolitical events e g war could be precursors to a spike in global oil prices The U S economy is now made of glass An excellent analysis by the new economics foundation The economics of oil dependence A glass ceiling to recovery 2012 using two somewhat distinct analytical approaches points to the 2014 2015 period as the likely time frame for a further economic downturn barring any oil price shocks in the meantime Recession could delay impact with the glass ceiling And so this long blog post concludes My conclusions include something like the following A permanent economic downturn is inevitable and imminent if indeed it has not been underway for some years now Only a massive urgent investment in moving away from fossil fuels can mitigate or adapt to this downturn which will otherwise steepen perhaps precipitously Dark inflation and increasing economic and political risks should predispose decisionmakers to front load renewable energy energy conservation and non or minimal fossil fuel infrastructure investments All

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  • 2016 February Archive at Forget the Rest
    important as nuclear weapons in their view So there haven t been any such negotiations and won t be Nothing significant will be possible in disarmament diplomacy until this perceived legitimacy is removed The voluminous testimony legal analysis and activism that has been done so well since the Cold War has not accomplished this Facts no matter how brilliantly they are presented haven t availed and won t The dictates of public conscience no matter how voluminous prestigious and authentic the appeals haven t availed and won t Declarations by the great and the good haven t availed and won t Legal decisions haven t availed and won t Mere gestures by states which cost little and bind nobody U N resolutions for example haven t availed and won t Why Because none of these excellent activities are consequential that is binding decisions taken by states for the purpose of making nuclear weapons illegal Only states can remove the present de facto legitimacy which is very real to the nuclear weapon states and therefore to everybody and this can only be done by making nuclear weapons illegal States can only accomplish this through law conventional law which is to say by a treaty that prohibits nuclear weapons By definition there is no other way Nuclear weapons will be legal de facto legal and de jure legal as well as morally necessary in the eyes of those who possess them until they are made illegal This work of delegitimation has to be done by non nuclear weapon states not by nuclear weapon states The latter will resist Without a treaty on the table the various well intentioned and indeed excellent statements by diplomats are really just opinions and postures Given the short working time of the OEWG I hope that all involved will make every effort to help leading states focus on negotiating or more realistically laying the groundwork for negotiating a treaty prohibiting nuclear weapons Anything else will play into the hands of the nuclear weapon states and their weasel allies again by de focusing diluting delaying distracting and dividing our efforts If the OEWG fails to achieve a clear path to make nuclear weapons illegal there are other ways forward We think the 30th anniversary of the Reykjavik summit October 11 12 1986 would be a good time to unveil a ban treaty for signature The nuclear weapon states obviously oppose prohibiting nuclear weapons and can play no constructive part in negotiations These states have never played any constructive part in multilateral disarmament negotiations over the past 25 years full stop Their weasel allies generally also have opposed and will oppose practical disarmament measures for now So calls to make negotiations universal are quite premature and misplaced Godspeed to everybody Our thoughts and prayers are with those of you who are there 2 A Ban Treaty would be very powerful including in the U S without U S participation A ban treaty would be the natural culmination of the

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  • 2016 January Archive at Forget the Rest
    difference and that difference is less than might appear For example is the risk of nuclear escalation from an accurate B61 12 detonation significantly and knowably different than that from detonating a B61 4 So then how is the B61 12 more usable or more credible as a deterrent than the B61 4 it is to replace How is the proposed new bomb smaller in this sense from the point of view of prospective nuclear war To take another example we say that the combination of high accuracy stealthy delivery forward basing and selectable yields enables the B61 12 to address a larger target set all of which is certainly true to some extent But what is the actual increment of that B61 12 target set beyond the target set of a life extended B61 4 with the same forward basing same stealthy delivery and the same original selectable yields In other words how much of this bomb s purported greater utility is just hype What about collateral damage then Wouldn t that be smaller Well blast overpressure and thermal deposition from nuclear weapons scale with the 1 3 power of the yield so the B61 12 s highest yield 50 kt would produce a given overpressure or thermal pulse reaching to 67 the radius of the B61 3 s 170 kt explosion or to 52 of that from the B61 7 s 360 kt To my view this is not an impressively smaller bomb in this sense either In what important sense for civilization or for the target country would the detonation of a B61 12 be much smaller than that of any other nuclear bomb or warhead Would a blast of more than three times the size of Hiroshima be more acceptable So I would say that Broad and Sanger have fallen into the trap of privileging the nuclear war fighting perspective Unfortunately most arms control discourse about this bomb does so also The great bulk of arguments against this weapon have rested on its novel features The differences are real but narrow and overall they do not touch or refute enough of the real political and strategic motives for pursuing this bomb That is one reason they fail You could say that we who oppose this bomb have too often confined ourselves to arguments that are so narrow that they are logically and factually flawed For example we say that the B61 12 costs more than a simpler LEP That is true But what if spending money hiring new weapons engineers and supporting the labs and plants and giving them all something to do are goals not costs And of course they are In that case the greater the cost the better And in comparison to the goal of keeping NATO nuclear and Europe in the U S geopolitical orbit the cost of the B61 12 is beyond trivial What about the increased risk of nuclear war it appears to represent Yes every gain in deterrent credibility

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  • 2015 December Archive at Forget the Rest
    hopeful fantasies are the norm It is toward this group that the distortions and strategic silences of the elite press and the misdirection and distancing practices that usually dominate academia are especially aimed We have to re educate ourselves and it has to be done in part bodily through action and socially as well as intellectually Denial and distancing are to be expected in any heavily propagandized society organized largely around material possessions and the elaborate system of faith based beliefs that supports it Richard Norgaard identifies our dominant religion as economism in a particularly cogent recent essay The Church of Economism and Its Discontents In response to this weakening of personal relations and increasing distance from nature economism glorifies the individual and rationalizes material greed Economic models focus on the individual assume utility maximization treat society as the sum of individuals and omit society s influence back on the individual Care for others and the land may give people utility but there is no obligation to care This view runs contrary to all major religious traditions effectively competing with the teaching they provide emphasis added Economism in other words is anti religion This cult pervades our society s whole mental sphere In its practical application it is little more than the worship of money We train our best and brightest to be its acolytes its excellent sheep I qualified our basic tasks with the adjective effective We all aspire to effectiveness in our political action but the fact is that effective action is quite rare among liberals and progressives They are losing and they are taking us down with them Too many people want to believe in almost anything Technology will save us Bernie will save us Hillary will save us Renewable energy will save us Just fill in the blank What this kind of hopeful ideation means is that we hope we will be able to remain prosperous and secure keep on shopping and keep taking climate destroying vacations halfway around the world We would be wrong in all of that We have a doctor friend in Santa Fe who often says by way of parting benediction Avoid optimism It is very good advice given his and our environment of pervasive brightsiding see Ehrenreich Bright sided How Positive Thinking Is Undermining America In many circles and not just those of New Age would be magicians negative thinking is not allowed Illusions must be maintained We are all awash in fallacious positive propaganda about our economy which is deteriorating not improving and this process will continue about climate policy baby steps are too slow to matter and neither the administration nor Congress has proposed even baby steps the Clean Power Plan won t help the climate about oil and gas reserves depleting not increasing with new oil increasingly unaffordable about the U S role in the world principally responsible for the wars underway today as David Stockman recently explained about our democracy almost nonexistent on a national level and

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  • 2015 November Archive at Forget the Rest
    contracts and projects are at stake This is not Manzanar The significance and continuing legacy of the Manhattan Project is politically contentious and disputed This significance is central to the Park idea The original bill S 507 at sec 2 2 A and SA 2492 at a 2 A quotes a panel of experts who state that the the development and use of the atomic bomb during World War II has been called the single most significant event of the 20th century Really Creating such a Park inherently endorses the Manhattan Project and its modern day successor activities as positive national achievements Indeed that is the purpose of the Park Supposedly objective background materials supporting the Park proposal are already one sided significantly incomplete and or historically incorrect Bechtel National Park The balkanization of ownership and control of these sites between federal and powerful non federal actors ensures in practical terms that NPS will be subordinate to these other actors For example Los Alamos National Laboratory LANL is operated by a for profit consortium of contractors Los Alamos National Security LLC which annually receives and spends in the neighborhood of 2 2 billion LANS and DOE jointly control access security safety and maintenance at LANL LANS is a highly interest conflicted party DOE does not manage these sites Quite simply this proposal aims to use NPS for propaganda purposes for the state and for its contractors This will be quite apparent and jarring to many domestic and international visitors The propaganda aspect of the proposed Park is oddly invisible to many well intentioned supporters The Park Adds No Real Value The proposal does not involve significant natural or national resources and is therefore not harmonious with core National Park missions The DOE properties at LANL involved in this proposal are basically worthless ugly sheds and bunkers These sites will not provide a comprehensive picture of the Manhattan Project which occurred at dozens of sites not three Extensive interpretative museums concerning the Manhattan Project already exist at Los Alamos and elsewhere Some are taxpayer funded Extensive resources are available on the internet for those who are interested Few if any of these sites will be tourist draws or provide marginal economic value to the surrounding communities At LANL that s a fantasy Some sites are already national landmarks It is not clear there is any added benefit to National Park status At Los Alamos Park status will not add preservation value These assets are already protected Some sites will be accessible by the public only rarely and under guard and public access will interfere with the national security missions underway surrounding those sites At other sites public access may interfere with cleanup activities Public enjoyment referencing here the NPS mission will be minimal for these locations The Park Will Be Costly and Hard to Administer The cost of the proposed Park which is not yet fully known will compete with the massive maintenance backlog in the National Park system Or if

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