A 100-mpg car? Let's start the race

http://www.latimes.com/news/printedition/opinion/la-oe-lungren30jun30,1,1884814.story?coll=la-news-comment&ctrack=1&cset=true
WHAT WOULD happen if the United States were to offer a $1-billion prize for the first American automaker to sell 60,000 midsized sedans that could travel 100 miles on one gallon of gasoline? ... Last month I introduced the New Options Petroleum Energy Conservation Act in Congress to establish a prize for a 100-mile-per-gallon car. To win, a vehicle would have to prove itself commercially viable and meet all federal safety standards. ...(By REP. DAN LUNGREN, a Republican, represents California's 3rd District.)

A fun challenge perhaps. I can't tell if this political hyping, or just a half-baked plan, but it opens discussion at least to the issue that conservation is the fastest response to reducing our demand for oil.

I am most skeptical on the scale of the plan. WELL for 60,000 cars, a $1 billion is an effective $16,667 subsidy PER car, at least to the winning company!

I agree there's been a long line of prizes for technical advances, some more successful than others. Offering prizes for challenges is a little like getting 3 wishes from a Genie from a bottle - you gotta be REALLY careful what you wish for cause you know the Genie may as well give you what you ASK for rather than what you really want!

A scarier issue than getting what you want is setting a good standard. I MEAN what's with 100mpg? Why such an arbitrary goal? Is it too high or too low? If it is too high, there'll be no takers. And then do we LOWER the requirement later when automakers complain? AND WHY limit it to American companies? WHAT IS an American Company? Honda makes cars here, do they count? What if foreign investor want to SELL a solution to American Company XYZ?

AND, what about diesel or hybrid or electric cars? What about SMALLER DAMN cars?

My own thoughts are we can get 100mpg cars already if we focus on building smaller, lower power "city" cars that can meet the needs of perhaps 90% of people now?

I don't know. I'm afraid of genies I guess. Once you let'em out, it's a tricky business.

I guess I don't TRUST tricks to solve problems. WELL, maybe I should say "research" can be rewarded, but "production" seems a problem. I understand the desire to get 60,000 SOLD cars to prove results, but setting a fixed quantity on a questionable quality of results.

Myself, if the challenge were made, I'd ignore it, $1 billion and all. Seriously the strings are too tight for my comfort.

Negative savings?

Averages may mean very little, but twelve months of negative average savings for Americans seem pretty crazy!
http://www.startribune.com/484/story/525849.html
Americans' personal savings rate, the amount of saving left from disposable income, dipped to a negative 1.7 percent in May, down from a negative 1.6 percent in April. The savings rate has been negative for 12 consecutive months, meaning that Americans are dipping into savings or borrowing more to finance a spending level that is exceeding their after-tax incomes.

I guess it is savings relative to income. So it I earn $1000 in a month and spend $1017, then I have a negative 1.7% savings rate for the month.

Definitions are vital in any statistic, and so I'm actually surprised the numbers are as close as that. I don't even know how to measure MY savings rate. If I'm paying extra money to my mortgage principle, is that savings? My DEBT is going down fast ($-wise, even if not %-wise). If I say my "base" spending is say $15k/year and income $45k/year after taxes, then my "savings" is $30k/year? (hidden in debt reduction, and investments in 401k, Roth IRA, CDs, stocks, etc.)

AND WORSE, if there's others like me "saving" $30k/year, then OTHERS must be deficit spending far beyond their means. Well, I know, there's a distribution of savings, a few who save a lot, and a few who are temporarily spending down savings, and most in the middle.

I guess the value in average trends, like a savings rate, is to just show a general direction of economic activity. I don't know if a "sign" positive/negative is important, but higher and lower would seem to be.

So we should save more? Easy for me to say with no dependents and a good job. But I am yet scared and I don't trust this economic engine to continue running debts everywhere!

CO2 as pollutant for regulation?

I don't know too much, but sounds like the Supreme court will rule in 2007 whether CO2 ought to be considered a pollutant to be regulated by the EPA.

As much as I WANT to be environmentalist, it seems a MISUSE of categories. Mercury is a pollutant because it isn't natural in the environment.

CO2 on the other hand is in a dynamic equilibrium in the environment, existing from life cycles and natural sources.

In order to regulate CO2, it must be seen by its source. Specifically fossil fuel burning (or cement production apparently) release CO2 that comes from sources that are outside natural systems, as compared to the natural net flux.

Regulating SOURCES makes more sense than calling CO2 a pollutant.

Overall it seems a lost cause for me, a straw that environmentalist are reaching for because it FIT within a system, but it WILL fail. I can't imagine the Supreme court ruling in favor of the environementalist side.

Regulation WILL happen, but it'll have to take a harder path than EPA pollution regulation.

Sorry!

Our biofuel future

Great podcast/ online at:
http://www.newrules.org/podcast/index.html April 19, 2006: David Morris discusses "America's Oil Addiction" on National Public Radio's On Point

It is an NPR interview of David Morris (optimist) versus (Pessimist), questioning whether biofuels (ethanol, biodiesel, etc) replace oil for tranportation.

It contrasts these two perspective, both which I respect. It is most interesting thatt Morris doesn't seem to want to talk of "powerdown" at all, and implies we can over the long hall rebuild our economy incrementally on technology and solar energy in plants, at least part of our needs.

In contrast XXX basically says the scale of our consumption is far beyond the ability of the environment to support us. Morris purposely forces the issue of the pessimism of XXX. He says optimists rule because they have a reason to get up in the morning and make a difference, while the pessimistic position is too depressing to face.

I might hope in the LONG TERM (1000 years) and a generally lower population (2 billion?) that we might find a balance with the natural systems, depending on solar power, and not depleting the environment.

In the shorter run (<50 years), I basically am a pessimist, believing problems are INTRACTIBLE without a powerdown/conservation as well, and if we WAIT to conserve only when it is demanded, it'll be too late to make a difference to transition within any organized framework. (i.e. poverty will lead to class warfare and economic chaos and the end of democratic instititions.)

I accept Morris's view is perhaps correct "Pointless to give the 'true demands'" will discourage any proactive actions at all to soften the blows ahead. He doesn't bother fighting for the "bigger picture" because we're too far away to reasonably face it.

Anyway, any hope that leads us forward is better than nothing.

The Amish Way?

American essayist said he thought the Amish communities were the best example of a group in the U.S. that avoided the unsustainable nature of our modern world.

I have an affinity to the "voluntary simplicity" response to a unsustainable economy, even if the Amish themselves have to make continual compromises on where the boundaries lie for self-sufficiency versus cooperation with the wider world.

I lean to thinking every household is at some level open to setting boundaries on how it will interact with the wider community. I think every decision has costts and benefits. I also accept in general benefit of cooperation far outweigh the risks, at least in the short term. The "costs" tend to be more measured as long term dependency and loss of "sovereignty", self-determination.

There's also a bigger idea of responsibility for the "sins" of those you trade with. A simple example, if you buy blackmarket products on the cheap, you must recognize that they are probably stolen goods. Therefore you are partially responsible for these crimes. Similarly the entire markets of exploiting natural resources ultimately come down to power structures - one group lays claims over resources and can defend those claims with military power. They might even defend the claims through a bribery system, basically paying off those in power for rights to resources for short term profit without necessarily considering destruction or polluting of the environment, depletion of resources, or the long term sustainability of the communities that grow and thrive temporarily from the short term extractive wealth spend-down.

If you want to be "Amish", you may see your neighbors growing a city on a local gold mine. You have no need for gold, so you ignore them perhaps. A community will grow up for a few decades from the miners and such and finally as depletion is completed, the city is abandoned. Assuming pollution is minimized, you were neither affected by the rise or fall of that extraction.

Alternately perhaps you might have sold your spare food crops to the city, and perhaps even expanded your farms to sell more food. Maybe you even accepted the gold as payment for the food sales. Then you bank your savings, and later on perhaps you'll need something, you have some money/gold to sell for some other product. You didn't "change your lifestyle" for the new wealth, and never considered the income as "dependable", like your land wealth for food which can keep producing year after year.

Now perhaps you're a more experimental Amish community, and while expanding your farms with the new food sales to the mining town, you expand your ambitions. You might hire non-Amish labor to work your lands, and with your profits, your work is decreased, and you have more time to think about the bigger picture and see what you might do that your parents or grandparents can't do.

Maybe you think having access to electricity isn't so corrupting, and get some power lines in, and phones maybe. Heck soon, you gain access to the internet and have communication with other communities and learn from them.

Is it wrong to "invest" in technology that expands your reach and connection to the world? Well, there's still only 24 hours in a day, and lots of good things to do, so admittingly, there's a distracting nature of wealth and influence.

I sometimes tend towards the "destructive" aspects of participating in a larger unsustainable economy, but perhaps the "distractability" aspects of wealth and affluence are the most corrupting?

Is my ambition to pay off my mortgage so bad? That brings up a different aspect of dependency.

My happy Amish community can choose to cooperate with neighbors who have more temporary wealth, and stop when it disappears, but debt opens a whole new can of worms.

The Amish set their ambitions within their resources, living from "savings", but that's not the "optimal way". I mean perhaps an Amish farmer COULD add 500 acres of growings lands with a "gas-powered tractor" in 1 year, OR it could take 10 years to clear by horse and plow. WHO knows how much food the neighbors might buy in 10 years, but they need it NOW. If he doesn't get on the ball to fill the market demand, they'll go elsewhere and his "window of opportunity" will close. SO a clever farmer might borrow money and RENT a tractor and equipment to clear the land in a year, and then HOPE the profits from his food sales will pay for the borrowed money.

This is "smart economics" - take a small risk of debt for a larger opportunity for wealth. Anyone can sit down with some paper and sums and make an educated guess. Perhaps there's a 5% chance of "bust" within 10 years, and a 50% chance of making back 10 times the investment!

Even if you can calculate some good odds, you still have to estimate the risks along the way. WHAT HAPPENS under "bust" - will the farm be forcefully sold to pay the debt? If so, even a 5% chance of bust may be "too high" given a 4 generation farm. Probably a better chance is to scale back your goals so your debt can be paid back no matter what. In the long run, such conservative decisions put you behind your neighbors, but when dealing with short term opportunities, you may outlive their boom and busts.

Let's play the "Leveraged debt" game, okay?

You bet $1, and we flip a coin. If it comes up heads, you get back $2. If it comes up tails, you lose it.
Now comes the interesting part, pretend whenever you win, you can say "double or nothing" and have a chance to double again.
If your luck holds, you might get to $2, $4, $8, $16, $32, $64, ..... all the way up to $1,048,576 perhaps!
That's great wealth from such a small investment right?

Well, yes, but pretty unlikely. Still, perhaps the odds are better. Perhaps rather than flipping a coin, we flip 10 coins, and you win if a SINGLE coin comes up heads. That's pretty good odds, right? You can play THAT game on double or nothing as well!

Specifically your odds of winning $1 million would be (1-1/1024)^20=98.06%

That's all good and fun, but you can go in the opposite way as well, in the abstraction of debt.

I'll lend you $1, and you can bet it in this game. If you win, you can pay back what you borrowed. If you lose, you can borrow more, as much as you like.

Let's say you have a 90% chance of winning each game, if you play 10 times, your chances of winning all 10 times would be 34%, not great. In a double-game, if you lose everything you start over borrowing $1.

But heck, why start with $1 bet if you don't have to? Why not start with a $1 million bet? I mean the odds are still with you.

Lets say you bet $1 million and lost. Well, just borrow another million and bet again, or BETTER borrow $10 million next time. If you're "in control" of when you stop, mathematically you're guaranteed to be a winner!

BUT, the flaw comes when these games are interrupted. WHAT FORCE STOPS you from playing again? If you WIN, you want to play again. If you LOSE, you want to play again! In otherwords, you're going to keep playing, like a rat in a cage with a lever for cocaine injections, you'll stop WHEN the lever stops. When midnight strikes and Cinderella's fantasy with the prince is dispelled into dark reality of poverty.

Our whole economy, based on unsustainable consumption and destruction is a game where the early investors take the biggests risks for the largest rewards and later investors keep trying to play until the game cracks open as a pyramid scheme. It doesn't LOOK that bad because our memories are short and the rewards are high. However much the odds LOOK in our favor, if the game has an ending you can't predict the only way to WIN is to divest NOW whatever your takings.

What does it mean to "divest"? Well, for me it means NOT trying to maximize my debt to maximize my wealth. It means incremental participation, investing ONLY as much as I can afford to lose. It ultimately means no debt is "acceptable."

It is interesting to me. If you're 60 years old now, looking back at 40 years of "hard work" and "prudent investing", along with some marketable skills and talents, you'll probably be sitting on a nice pile of wealth. In such times you'll look to "retire" and "live on the interest" as you can, and "on the principle" as you must. Basically even the "safe bet" can look pretty good then. I mean you might accept more risk for more gain, but you don't NEED to. You might not need interest at all to live on.

However we can compare to a 25 year old today, perhaps with $50,000 in student loans, and another $15,000 in credit card debt you borrowed during school, and maybe another $22,000 car loan. Plus the cool apartments will cost you $1500/month. Well, you've got your education, but all this debt! Will your "education gamble" pay off? Recent history suggests so, but maybe you have "dreams" of joining the peace corps or doing something NOBLE for society BUT such pursuits don't have the income to pay your debts, so you "compromise" and find a job that maybe can make $50,000/year, and "hope it lasts". If disaster strikes, like a recession or your occupation has layoffs, perhaps you'll be forced to take a much lower paying job which will take much longer to pay your debt down. HOW LONG should you work a bad job to pay for a debt?

The young person's options are limited for protecting against risks. A more conservative youth might forgo college and START with the low paying job and SAVE without debt, and take some classes here and there. This "incremental" choice "on average"will leave them behind their higher-risk peers in good times, but allows them "flexibility" for an unknown future. If conditions change, he can "jump", change jobs, find ways of learning skills without needing to get into debt. He can change his mind if he finds his chosen work is unethical or whatever, while the indebted youth is more likely to "compromise" integrity for keeping the income flowing.

Myself, I've been luck to have a little of both, specifically a college education (without debt), and accepted periods of "self employment" where I earned more than I needed and periods of unemployment I lived off my savings. And finally accepted a regular position I felt good about.

I look at my decision in 2003 to buy a house, and however "safe" it would seem to most people, it seemed a big risk for me. I'm used to living on $6000-$12,000/year, and now my mortgage alone costs that much. NOW if I lose my job, I have BIG BILLS - I could lose my house! Okay, calm down, but the risks are there.

I might have tried an incremental approach, saving for 10 years and then buying a house for cash, IF those ten years were fruitful. HOWEVER in those 10 years, the costs of housing may go way up, inflation might send my savings way down. Risks are fuzzy, but overall if things go well, I'll end up FAR ahead for buying in 2003, over 2013, no question.

SO, I'm playing the gambling game - taking debt over waiting, and HOPING for good results. I'm now locked in dependent upon the system to sustain me. Sure worst results, my home is sold and I lose everything, maybe same results as renting and having my savings disappear?

Anyway, I wonder what sorts of decisions a person can make WITHIN an unsustainable economy that can both protect my future AND direct my dependency towards a more sustainable future?

Actually one of the biggest compromise I made for security now is to not have a family. It empowers me financially since I need less and can save more. Perhaps I'll be better able to PROVIDE later for my delaying, or perhaps I'll never have a family, children of my own, and at least I've have more to share with others who have children and taking greater burdens AND risks. Well, it's not like I'm working 80 hours a week. Saving isn't my greatest reason against a family, but having time for myself to explore.

What would it be like to live in a time where children come of age in a world of DECLINING opportunity? I mean a world where generally only a fraction of youth can "make it" into the lifestyles they grew up under? Some people worry about this even now. I don't think we're there yet, except for the "corruptibility" side - young people not being patient to EARN their rewards and compromising too much with debt and spending decades trying to dig themselves out. In short, my hope is that MOST now can get ahead if they hold some prudence in debt and live humbly while they build up their new lives. I can't guess if my hope is reasonable now, or if it'll stay that way, but my guess, along with the "Long Emergence" thoughts of Kunstler, is that things'll get much harder before they'll get better, and there'll be ALOT of belt-tightening, and generally those who accept this earlier will be better off.

Back to the "controlling the end game", the best bet is to stop betting while the game is still good. There's PLENTY if signs things aren't right.

I admit for me there's a FREEDOM issue of work. Even if my time isnt' dominated by work, it does revolve around it. I don't dream of "retiring at 45" or any such thing, but I accept the goal of not needing a high income is empowering, even as I benefit by opportunity now.

I admit I'm blessed and feel very fortuate with my job - very well compensated - good people. The only reason I'd leave is because I know there's only so many hours in the day and week and year and perhaps higher priorities than merely earning money. Biggest reason NOT to jump ship is I'm still a whipper-snapper - still better at imagining I know anything than confidence of a course of action. BUT I figure it's good to have options and WHEN I see a clear direction, I'd like to be able to follow it THEN rather than having to wait 10 years longer to pay off my debt!

Wealth is most about having flexibility, while debt is about waiting to have what you already have! I'm sure wiser people will say there's no difference between wealth and debt except frame of mind. Like the "can't lose gambling games of double or nothing", negatives are as real as positives, and so you can only consider NEGATIVE INFINITY as the actual ZERO wealth, and everything else is PLUS! You can do ALOT when you control the rules!

Sadly I can't seem to think beyond the basic "voluntary simplicity" argument - live simply - incremental risks - pay down debt - invest in the future - invest in what you NEED to live now and what you WILL need in the future.

I live without a car and ride a bike - that seems very empowering to me - and of course I'm blessed to have a good body to transport myself!

I was shopping at the food coop this week, noticed all the fresh fruit was grown far away. Of course all we have now is strawberries so far, but I wonder how to help people "eat locally". Now the apples from Chile costs $3.36/lb, which was more than enough to make me think twice about buying them, but costs still don't always show what's sustainable. What if the coop had a full section on "Local food" that was grown within say 250 miles away? Why do we need to make such artificial boundaries? Partly as "practice" so we can work towards changing our consumption to match what we can hope to have later if energy keeps going up. ALSO we can help DIVERSIFY local production even if costs may be higher. I mean again higher costs are a tricky measure - is growing orange trees in greenhouses in Minnesota a viable source of food? Maybe not?

Anyway that's just one little issue that can make a difference and could use some more people concerned about and working on, and maybe I could help? I mean I don't need to quit my job to make a difference, but maybe if I had no debt, I'd feel more comfortable taking a "6 month vacation" to explore more issues than I can act on now. Seriously somethings are best done as focused effort rather than here and there over years. As-is, I feel like I can't afford a 6-month vacation, not as long as I've got my debt over my head.

Another issue I see is the idea of "intentional households". I expect the biggest place people can "empower" themselves is to make households more diverse and protective. The nuclear family with kids and a stay-at-home mother may finally be a time of the past, and two-income families do have more "security" if they use their extra income to pay down debt and invest, but overall there's value in perhaps larger households working together.

In 1994, 12 years ago I wrote an essay on "What is a household" and started with this set:
What is a household, at a practical and conservative level?
1. It is a small group of people which own land and live upon that land.
2. It is jointly, although not necessarily equally, owned by all occupants.
3. It is able to care for the young and the old.
4. It is able to prepare its own food from relatively basic ingredients.
5. It is able to select services wisely, purchase products wisely, and dispose of wastes wisely.
6. It is able to function with a minimum of regular paid work to people outside the household.
7. It is able to earn at least some regular money without outside employment.
8. It is able to negotiate cooperative work with its neighbors.
9. It values keeping up with the troubles and joys of its neighbors.
10. It values devotion to beautifying the place to bring love and life to it.
11. It values devotion to maintaining traditions and rituals which promote connections.
12. It values stability and permanence; that the place with continue despite the loss of any individual.

Well, ambition of course, but shows "Amish trends" of valuing inner resources first.

In practice still hard to see how it can work. I mean first there's issues of "house size" - my house has 3 bedrooms - how many people could live there? Secondly there's issue of commitment and sharing costs and benefits - how do you know when you've committed your 'fair share' of work, or taken your 'fair share' of benefits? WELL, same issues with any business, and I admit for most "intentional households" there has to be protection for individuals to leave and so "share" like stocks in a company must be considered in some form.

I'm leaning towards the "New tribalism" ideas even as I can't see it fully and that doesn't require shared households. But generally I think a strong household like a business ought to have an external "mission statement" - something it provides to the outside world that can generate income or tradable value. Certainly "rising children" offers benefit to the world, and might not "generate income", but a household can DO things like that BECAUSE it is supported in other ways with income. Well, in this issue specifically, home-day care is the clearest source of income to a household, and a good trade off for a household to keep a "stay at home parent".

I think I must stop, but I'll end just saying that I also have learned that the biggest reason against cooperative affairs is simply freedom to be selfish. The more you share with others, the more demands there are for negociating and fearing your share is too big or too small.

For instance, lets say I want to run a marathon. It'll take hours of training. What GOOD is my personal goal to the community? What is my goal going to take AWAY from the community?

I see my personal perspective as an individual is between wealth and poverty. If I have debt, I'm in poverty. If I have wealth, I'm rich The distinction is made complex between having assets AND debt (with fuzzy equity), but overall my "fear" of a communal arrangement is that I can't as easily "neglect" the needs of others. Now, I don't care if my neighbor has a stroke and needs 80 hours care a week for the next year. I assume THEIR family or insurance or government will provide for them, and whatever LEFT OVER I have is mine to waste or use as I see fit. It's an extravagant position possible in times of abundance.

Anyway, I hope I can find more cooperative arrangements in the future where everyone wins and is better off than had we worked separately.

It's the Amish way, and in tougher times, the only way!

Hehehehe

5th Ballot Results
1298 total
779 for endorse
Hatch 646.5 - 49.8%
Kelley 609 - 46.9%
46.5 for no endorsement - 3.3%

Can you beat this deadheat?! WOW!

DFL endorsement

We have no endorsement:
1. Mike Hatch:510.5 (39.5%)
2. Becky Lourey: 409 (31.7%)
3. Steve Kelley: 370.5 (28.7%)
4. Ole Savior: 1
Total 1291

That is a receipe for "No endorsement!" Only Kelley has said he'll abid the endorsement. THEREFORE supporters for Kelley have ZERO incentive to move their vote. Certainly Lourey supporters are not giving up in a tight second place.

Will 20%+ of Lourey/Kelley supporters "defect" to Hatch? That's the only shot of course.

Will Kelley drop out and endorse Lourey? Little chance. Will Kelley endorse Hatch? Hard to imagine.

If I were a Kelley delegate, I'd go two more votes for "Kelley" and then "No endorsement".

Ah, I'm glad I'm NOT a delegate!

Sinking lifeboats

My post last night made me think some more on the subject of how poverty will increase as energy costs increase (via peak oil).

Assuming there's not financial collapse or hyperinflation, the wealthy will always be able to afford what they want to do. However there is a large middle-lower class that is barely making ends meet right now between debt and cost of living. I suppose an economic downturn would first have the effect of increasing the number of bankrupsies as people with unpayable debt will try to escape.

We all can agree individual debt increases have been irresponsible over the last 5 years, and creditors deserves SOMETHING if people can't pay, so it makes sense to not make bankrupsy "too easy" and if people have some ability to pay perhaps they should be obgligated to continue paying on their debt.

Last year my dad declared bankrupsy with something over $30k in credi card debt, some of it held over from more than 15 years ago, kindly making minimum payments all this time and adding a little more here and there. It's astounding to me to imagine. Now its all cleared and he is free.

It is clear that debt risks becoming a system of slavery. If debt is protected, and opportunity limited, people in debt can be in a position of basically working FOR those they own money to, whom can set the pay rates low enough to take years to cancel the debt. Well, similar sorts of arrangements happen in regards to immigration - in exchange for transporting YOU to a place of better employment, you will promise either money or a fixed period of time you'll work for me.

Anyway, just trying to imagine how things might change under harder times. Obviously individuals are most vulnernable while people with family may be able to gain help to escape exploitive relationships.

Already I've considered this with family and credit card debt. If a person is "suffering" under high credit card debt and interest, I can pretty easily help by paying the debt and having interest free repayments given back to me. All good and well "empowerment". However if the person I'm helping isn't wise, he can get himself back into debt WHILE still paying me, and so I have a risk that I am enabling this person from facing their irresponsibility. Well and as well I REWARD those who lure people into debt by repaying it while I'm talking on the responsibility of getting repaid. So not even an altruistic motive is enough to make a difference.

I can imagine "in the olden days" before credit cards, people lacking means or self-discipline had no access to credit and had to save for what they wanted, or borrow from friends or family. As horrible as this might feel, at least they were "protected" from exploitive debt. Now we're "freer" to get in debt, and "empowered" to get ahead on our own, if we make good decisions.

I certainly worry about freedom to be exploited. I know words are easy, and there's always "mutually gainful" agreements. Debtors trade future time for opportunity. Lenders trade wealth for risk to gain or lose wealth.

I suppose in 1929 when the stock market crashed, mostly those who borrowed to invest were most in trouble, while the rest lost as well, but maybe not everything. I don't know, but I'd expect there's more overall debt now.

Well, all these speculations are beyond me how things might play out. I can "feel for" the lenders as much as the borrowers. At least I recognize risk and lenders are far from secure they'll ever get back what they started with. Still at least they can afford to lose.

An Inconvenient Truth

I saw Al Gore's movie "An Inconvenient Truth" tonight.

I tried to play a skeptic, but I admit over all it played solid, lots of varied evidence of "climate change", a better term than global warming, even if the general trends are up.

Let's set from my scribble notes in the dark:
1) 1957 his professor started measuring CO2 from weather balloons and surprised by the strong progressive upward trend. Al continued watching trends over the decades. He thought others would be astounded in Congress and disappointed.
2) CO2 has seasonal cycles, coming down in the northern hemisphere summer because there's more land mass and plants to take up the CO2.
3) Glacial ice core records measure CO2 back 650,000 years, and CO2 never over 280, except last 100 years, and 380 now and heading towards 500+ in the next 50 years. (He might be implying its all fossil fuel burning, although obviously reduced forests as well in releasing more CO2 and absorbing less)
4) 2004 record tornados in the U.S. 2005 Record hurricanes, vast majority of warmest years have been in the last 14.
5) Climate change means some areas wetter some drier. Africa south of Sahara most drier and droughts increasing. Lake Chad reduced greatly
6) Arctic icecap melting significantly since 1970, ice 40% thinner from submarine measurements. Ice reflects 90% light, and open water absorbs 90% light as heat, speeding melting.
7) Ocean currents warm Europe and sink when cool back to equator, transfering heat. Greenland ice melting might stop flow and send Europe into a freeze, like a 1000 year freeze after the last glacial period.
8) Anarctica and Greenland melting could raise sea level 20-80 feel. (He makes it sound fast, showing changing coastlines, but gives no timescale, and probably, from what I've read, many decades or even centuries.) He does suggest melting surface ice sinks to underside via cracks and can speed glacial flow rates towards the sea.
9) U.S. and China have massive reserves of coal which will add even more CO2 then so far.
10) Population pressures 2B to 6.5B now to 9B in 2050 will continue deforestation, dry rivers. He showed images of Aral inland sea almost dry.
11) He says 850 peer review articles in support of global warming, zero against. Media articles in contrast were 53% on skeptic side.

Overall his political positions were most powerful to me, like Bush administration having nonscientists weaken statements from scientific reports, and the like. And showing vehicle fuel efficiency standards by country was very illuminating, how far behind we are, and showed lowly California trying to rise somewhat, but the automobile makers are challenging even that in court.

The closing credits offered the standard little things we can all do individually to make a difference, and referenced website: http://www.climatecrisis.net/

My personal "fear" is that ALL acts of conservation are insufficient to the problem. That is that we are "past the point of no return." Well, Gore expresses that - going from denial directly to despair, without looking to action.

I'm in despair, even as I act as I can "when it is convenient" at least. I'll bike rather than drive a car, because I like to bike. I bought an efficient furnace because I have the money, and turn th thermostat down to 50F when I'm away and 65F when I'm home. I use the electric company "WindSource" program, paying a little more for electricity to encourage wind power to grow. I use flourescent lights, low flow shower heads. I can grow food in my own garden, and compost food and yard waste. I don't waste any food at all - reduce, reuse, recycle in that order. I have no children of my own. I'll invest more in heating/insulation efficiency, and maybe solar or wind power, as I get my mortgage paid down. I'm fortunate in so many ways, and I'm doing pretty much all I can alone. Maybe someday I'll have a "zero emission home"?

There were represenatives to the Sierra Club at the movie. I suggested a huge fossil fuel tax, like $10/gallon of gas, to curb consumption, and they weren't excited about it, somehow didn't think making people spend more would solve anything, and certainly I admit it is a regressive tax on the poor.

Gore's movie projected the next 50 years of expected CO2 GROWTH, and then contrasted with the application of many systems of reduction to "ramp" production down to the level of 1970.

It's nice to have goals, and perhaps his goals are realistic, and I believe they're worth trying, but I think to be fair Gore ought to face the hard truths himself and say UNDER MY WORLD VIEW (1) You will never fly in an airplane (2) You will not be driving 60mph to work each day (3) Over 50% of your income will be spent on food (4) Over 50% of the workforce will be back on the farm. etc etc etc....

Maybe Gore doesn't project all these "regressions" but I can't see any projection that discounts these as realistic. Either we "powerdown" our demands on the earth, or things will be that much worse.

And the WORST thing is however many "conscious souls" are out there to listen, there's yet the "bottom line" economy raising its ugly head. America is the greatest consumer of energy and greatest waster, and the greatest military spender.

His story of the "slowly boiling frog" is apparently a false analogy, but good point of diminishing returns. Already I think cars have reduced to the point many people are better without them, but how long will it take for people to decide this? Is it a "conspiracy" or "elitist" to suggest poor people shouldn't own cars?

We are approaching a world where the poor must step back from the promises made to them in the land of opportunity. Will they blindly step back, or will they fight back? Where is democracy when the wealthiest 1% own 50% of the wealth and are uneffected by costs of anything?

I don't want to be called a communistic, and I figure I can escape this by saying "I don't want power" and "I don't want to control power of other", but if I take that path, that means I'm surrendering the future of humanity to "power to those to take it".

I don't know what more I can do, Mr. Gore. Comments are welcome....

Localized Currency?

I've heard various opinions supporting localized money systems as a way to strengthen local communities. Seems good in a theoretical level, but hard to see how it might work in practice. I mean if I have a business, do I charge one rate for dollars, and one for say "locales" or whatever? And once I accumulate locales, how do I exchange them for dollars for products that must be purchased outside the system?

It is easier to see maybe how a local currency might work in an economic depression where the local community has more labor than money. Usually local currencies are measured in the basis of "man hours", or one hour of work. A secondary intrinsic value is property. If have no money, but own property (without a mortgage) I can "borrow" against it. If I borrow a local currency, then I have local money to spend. I might use that money to start a business and if it is sucessful I can pay off the loan.

Easy to play games, but hard to see how a dynamic system can work without actually trying it as an experiment. There's questions I can't see - how the currency supply can increase and decrease (well, basically via borrowing), and how to control inflation or deflation of value.

Money is a deceptive system in that ultimately the RULES allow some to gain wealth and others may lose wealth and fall into debt they can never repay. Some transfers of wealth come through variations in skills and ability and motivation, some through general good management versus extragant spending. Money is supposed to also encourage risk taking to a degree that overall wealth of the community can increase.

The fun thing for me is to try to imagine making measures of local ownership of resources and productivity. Ultimately you can see two dual views of the economy between public and private wealth. That's sort of where it gets interesting. Private wealth allows individual freedom, and becomes a reward system for good work. Public wealth allows common assets to be recognized and decisions made that help strengthen the community and allow people without great private wealth to participate.

I'm not trying to promote "communism", but I see there are decisions that must be made between private and public ownership and "wealth redistribution" is always a "threat" when private accumulations of wealth threaten the public greater good.

Well, maybe easiest to see at the level of a "household". Starting perhaps with a married couple, you can imagine extremes of (1) Completely disjoint (private) resources (2) Complete union (public) resources. In extreme-1, money accounts are separated, and shared expenses might be split down the middle - even as each person writing half a check for every expense. In extreme-2, all money is collected in a common pool, and all discretionary spending must be done through consensus.

Now add a "local currency" to the household, say under the "union" system where all "external" money is shared. Perhaps external work and internal work are both assigned a pay value based on hours. This local currency could then be exchanged with discretionary money for external spending. If surplus external money starts drying up, then the exchange rate can increase.

So maybe a local currency makes sense if all external money is shared. In extreme-1 where there's no common money, it would seem to make more sense to use the external money directly for internal compensation. So if one person does more "in house" labor, that person can be paid for it.

A middle-system would have my-money, your-money, and our-money. This is clear without a local currency, and useful. The clear shared expenses come from our money, and each pays into "our money" based on external income, and gets out from "our money" based on labor or allowance system. Adding a local currency here seems complex, since then we have 5 or 6 accounts.

So a "pure" local currency (communistic style) would say that individuals within the community don't own ANY external currency, that all external currency is owned by the collective and exchanged as external income comes in, or external spending goes out. A very "local self reliant" collective can make this work well, while a collective that is in constant interaction with external currency would make this a real pain.

A system where we all individually have both external and local currency seems rather complicated - everything is priced twice and shifting exchange values means you're not sure what anything is worth. Ultimately the local currency isn't worth the administrative costs.

Hmmmmm

Energy Security

I know it is obvious, but I wonder if knowing something can make a bitter pill more acceptable?

The U.S. imports something like 60% of our oil consumption, depending on who you quote. Domestic production will decrease no matter how much money we invest, and the best we can do is to plug a billion small holes in our production dam and slow the bleeding. Given world market oil costs anywhere under $100/bbl, and U.S. oil production will continue to increase year after year, if only from increases in population if nothing else.

The U.S. uses 1/4 of the world's oil production, and consumption is growing slowly, while China and India, the two most populous countries have their oil consumption still in an exponential increasing rate. Even if we can be sure they'll never catch up to us on a per capita basis, that is merely because supply won't exist for us all.

The U.S. imports something like 12 million barrels of oil a day, at $72/bbl, that's about $315 billion dollars/year bleeding from our economy. How long can this last?

The estimated U.S. trade deficit for 2005 was $710 billion.
http://www.cbsnews.com/stories/2006/01/12/business/main1203762.shtml

Crazy stuff, but the projected 2006 military budget was about $419 billion EXCLUDING the costs of the war in Iraq and Afghanistan!?
A priceless graphics in comparison with other countries countries: (2005)


I've mentioned such facts to people in the past and they say "Of course we spend more on our military, we're a rich country!" It is funny how "militant" the antitax movement is in reducing the government, but the military spending is a sacred cow no one dares touch, except dogooder peaceniks of course whom are to be ignored as unrealistic idealists.

Obviously as well, we all know that WE PRINT THE MONEY, so we're not really paying for our military, our imports, or debt, we're letting foolish foreigners take our worthless paper promises in exchange.

Anyway, of course this is all insane, but is there anything to do except wait for the crash?

If you imagined a rational public dialogue, what would it focus upon?

The issue of "Energy Security" for me is the simplest example of a measure for our future. We can be SURE without any doubt that oil cost will continue going up until the economy breaks down. THEREFORE, could we not suggest changing directions BEFORE that break down, at least to reduce our dependence now while we still have some economic motion for correction? Can we really trust a crisis economy will have the choices for reform we need WHEN it comes?

We have the Strategic Oil Reserve - a big 60 days of U.S. consumption, and 100 days of U.S. imports. When the two 1970's oil crisis occured, we didn't have any buffer, and so we're better off perhaps, but that's just a short term solution.

My MINIMUM response to danger is to set up an "Emergency Oil Conservation Program" which would define how oil consumption might be reduced significantly within a few months of a crisis beginning. Secondly it would consider what prices the economy can handle without complete collapse.

Well, you could say "let the market handle it", that's fine, and when oil hits $250/bbl and gasoline hits $8/gallon, people can pay or not as they like. Some will be able to conserve and that demand suppression will lower the prices.

BUT what about "price gouging" claims? Even if Oil companies only control a minority of oil production, they'll be profitting greatly from a shortage. If domestic production costs $20/bbl and oil sells for $250, can we just say that's okay, and tax their profits?

You can subsidize gasoline - offer nontransferable coupons for poor people, perhaps for $4/gallon gas. Well, I don't like subsidies, but for short term hardship, it makes sense. It's a messy thing, who is deserving? I'd probably integrate it into other aid programs - like food stamps. So THESE programs need to be able to handle HUGE quick increases in applications under times of crisis.

As always, subsidies are useful for short term crises, but ought to be considered temporary, like 1-2 years. That gives applicants one to two years to adjust their life demands for gasoline, assume the crisis/recovery continues that long.

NOW to PAY for this subsidy, my leaning is to increase the fuel tax. I mean we want the subsidy to smooth out the hardship, but someone has to pay for that.

Well, out of time, but these questions seem useful - what preparation can we have - ASSUMING we're not going to change before the crisis?

For longer term mitigation, I do have some leanings towards electricalization of transportation at least in cities - trains, maybe even buses - since I've heard they are more energy efficient. Plug-in hybrids may be useful, although I've not yet heard a good estimate of the battery replacement costs, whether they will go down over time. The good thing about electricity at least is wind power has a lot of room for expansion.

Overall, I accept higher prices are the only legitimate force for change, and so things will happen by necessity.

It just depresses me to see the things we could be doing now and chose not to because prices are still low.