Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Month: March 2016 Page 1 of 4

The End of the Age of Oil

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On March 31, 2016

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Has the last oil boom ended?

Electric cars will be cheaper to own than conventional cars by 2022, according to a new report.

The plummeting cost of batteries is key in leading to the tipping point, which would kickstart a mass market for electric vehicles, Bloomberg New Energy Finance (BNEF) analysts predict.

This is very good news for the world, and though the technology is certainly not carbon neutral, it is better than oil, the energy used to charge the battery can be kept relatively clean. Once upon a time, that energy was coal and other conventional energy sources, but coal is now more expensive than solar, and the price of solar is continuing to drop.

While this is good for the world, it’s going to be very, very bad for many countries. The oilarchies’ days are numbered. I will state right now that I doubt that Saudi Arabia’s monarchy will survive this.  Countries that are heavily reliant on oil, especially expensive oil, are going to be in trouble. The same is true of natural gas.

All resource booms end. Eventually resources are replaced. Once there was a huge rubber boom in Brazil: Then we learned how to make synthetic rubber.

We might get one more oil boom, but that’s it.

So: Alberta oil sands oil? Done. The Alberta-dominated Conservatives damaged terribly the Canadian manufacturing sector during the last oil boom by refusing to acknowledge that the high Canadian dollar affected manufacturing sales, but the good days won’t be coming back to Alberta.  It’s possible that Alberta has a key resource which will boom in the future of which I’m not aware (entirely possible), but if it doesn’t, Alberta’s high-flying days are done.

Go down your list of major oil exporters and look at the prices they need per barrel to make a profit. A lot of them are going to have to reduce production of the most expensive wells. This process will continue for years. Saudi oil production costs per barrel are under $10, but the price they require to keep their society running is much higher.

Cheap energy is an economically good thing. But the effects of dislocation will be immense.

Unfortunately, while this is great news for the environment, it is all too late to stop runaway climate change. Methane locked into land and ocean will be released now. It is too late, we have passed the point at which the process of global warming became self-reinforcing. It is now a vicious cycle and cannot be stopped by simply reducing carbon emissions.

Whoops!

We knew this would be the case, and we decided not to do anything about it. Let no one tell you otherwise.

A large amount of the world is going to become essentially uninhabitable due to heat. Climate change will change rainfall patterns and many areas will experience a decrease in agricultural productivity. Combined with aquifer depletion, conventional agriculture will take a huge hit.

This is a fixable problem. We can grow ten times as much food as standard agriculture in small, intensely cultivated plots, even indoors. We will have cheap energy. The remaining oil can be used for fertilizer until we have better solutions.

The next problem is water. Large parts of the world will not have enough fresh water. Water reclamation, desalinization, and other technologies around water are key here.

Geopolitically, there will be water wars. Watch nations where major rivers cross borders, and the up-river nations will want to take “more.” Canada, which has most of the world’s lakes, is in great danger from America, who will want that water in amounts and at prices for which we should not settle. Meanwhile, the US may drain the Great Lakes faster than they are replenished.

The mass migrations of this period will make the current “immigration crisis” look tame. It will be worse even than it is for the countries taking the biggest groups now (none of which are European).

Sea stocks are collapsed already, and will collapse past commercial fishing viability. Essentially, all the fish you eat will be “farmed.” Ocean acidification has killed the Great Barrier Reef, but the greater risk is that the ocean’s ability to absorb carbon may effectively end.

Combined with our continued deforestation, the lack of carbon fixing capacity, along with these various vicious cycles, could lead to a runaway climate change worse than virtually all the models I’ve seen are predicting.

If we had sense, we would be transitioning from conventional to intensive agriculture NOW (well, ok, 15 years ago minimum). We have spare workers–we do not have a spare Amazon. If we had sense, we would pay Brazilians and other mass deforestors more to stop what they’re doing than they get from continuing. We must mass-reforest, and re-wild land, and do so NOW.

This is also to avoid collapse of the biosphere, an event which is within the realm of possibility. If such a collapse occurs, humanity will go with it.

Our continuing reliance on very non-competitive markets to create what we need in time may wind up dooming our race. Markets are great and useful in this situation, but market support (such as was used for decades to create the computer industry) can jumpstart industries, cutting years to decades off the time it takes for prices and costs to drop sufficiently for mass adoption.

However, in general, the way we do Capitalism is going to have to change. Capitalism may need to be replaced with something better, but even if it continues the vast waste must end. The doctrine of planned obsolesence, for example, must go.

A world where we aren’t constantly producing crap we either never needed in the first place or wouldn’t need if we allowed engineers to design products to last will be a much nicer place to live, anyway. Yes, there’s a lot of work to be done to mitigate the coming disasters, but there is so much work going on which shouldn’t be done at all that we would most likely wind up working less and living better.

Those who survive, anyway.

The Age of Oil is coming to end. Did it last 20 years too long? Is the Age of Humanity also to end?

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What Matters Is Character (Terrorism and Rights Edition)

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On March 29, 2016

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This chart tells you not about terrorism, but about the nature of the people living in and running Western Europe today.

terrorism attacks from 70 from Quartz

So, not even close to peak.

Yet Europeans in the 70s did not get rid of their civil liberties in the way that France, for example, has. They also did not react with the frankly embarrassing pant-wetting fear we have seen. Maybe that’s because, in the 70s, there were still plenty of people around who remembered World War II.

Terrorism is a serious threat to developed nations only because of the way we react to it. We, or our leaders, or both, seem determined to give up liberties and freedom over a danger far less likely to kill any of us than walking across the street.

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Russia Sells Six to Seven Billion Dollars of Planes After Syria

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On March 28, 2016

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Not a bad return indeed:

What I wrote November 13th, 2015:

What is happening in Syria is a demonstration that Russia can be counted on to help its allies—meaning its customers. It is a demonstration that Russia’s new weapons, and particularly its cruise missiles and airpower, are comparable to US product, and maybe, even in the case of its most advanced fighter/bomber, better.

It is a demonstration that if you buy Russian you aren’t buying crap that US-supplied forces can roll right over any more.

Putin: If he’s not the world’s most capable leader, he’s certainly in the running. One doesn’t have to like him, or approve of him, to acknowledge this.

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Stopping Deflation? Dead Easy. So Why Isn’t It Being Done?

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On March 27, 2016

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As with many problems we face today, this is a solved problem.

About half of the New Deal can be summed up as “wage and price supports.” The post-war economic paradigm in the West was also about making sure prices and wages rose.

Avoiding deflation, by the way, is mostly about ordinary people’s income. If you don’t want deflation, make sure ordinary people are getting more money, faster than inflation and that they’re spending it.

Oh, there’s a bunch of other stuff, most of which comes down to: “Don’t let any oligopolies or monopolies form without subjecting their prices to close control.” That means both “not too high” and “not too low.” Think classic regulated utilities.

“You will charge enough to pay your employees well, keep the infrastructure in good shape, and make five percent a year. No more, no less.”

(Five percent is an example, other (lowish) numbers can be used.)

We have, or are flirting with, deflation right now because we refuse to give ordinary people money in a way which makes them think they can afford to spend it.

We allow inflation in the worst possible areas, like housing and rental prices in cities with jobs, and luxury goods, but that’s pretty much it.

If you let fixed costs have inflation above income increases, then everything else is going to have to suffer deflation, because it is discretionary. Gotta eat and have a warm place to sleep, first.

If a government wanted to end inflation, it could be done easily enough.

First, you go back to progressive taxation on corporations and rich people, without loopholes, based on, “If you earn the money in our country you pay tax on it here.” Yes, there will be attempts at dodging (especially by multinationals); yes, there are ways to deal with them.

Then you spend the money in a way that produces local jobs and creates a tight market.

Here’s your dead simple idea: Every building in your country must be at least energy neutral, and all the energy infrastructure must be made “smart” so this can be done properly.

Financially, your central bank says, “We will accept “energy savings bonds at 98 percent,” thus creating a market for it.  Your government offers the loans. Your mortgage guarantee authority says, “We won’t guarantee any mortgage for a building which is not, at least, energy neutral.”

If you can grow some big ones, larger industrial countries must even slap a tariff on things like solar panels, so the manufacturing is done at home. The actual refitting of buildings, of course, can’t be offshored.

Lots and lots of jobs. A tight market. Raises for people in the building trades. A boom.

There are plenty of other ideas like this, because there are plenty of other things that need to be done.

The direction must be long term. It would take a long time to refit all of America’s building stock. Companies can invest in that, because they know it will still be going on in ten years. Likely longer.

Now, for this stuff to work, you must understand that high, progressive taxation is necessary. All that money will end up in a corporation or rich person’s pocket eventually. The government then takes it back and recirculates it. (Yes, MMT people, we could just print the money and forget the wealth effect, but that’s a terrible idea because oligarchies are terrible societies in which to lie.)

You should also go hard on monopolies and oligopolies (start with the app stores, which charge 30 percent–but that’s another article).

The point is simple enough: there’s a lot of stuff we should be doing, and doing that stuff would end deflation if we were serious about it. It would also make the economy a lot better for ordinary people.

This has been another episode of “how to do policy.” I remind readers that good policy is easy, and that I don’t write about it often because the problem is not good policy ideas, or how to fix our problems (we know how to fix most of them), but that our current political-economic organization does not want to implement policy that helps the majority of people if doing so will upset current concentrations of money and power.

Some sectors can die, yes (coal now, oil in the next 15 years), but the structure cannot change.

So, if you’re British, figure out how to get Corbyn elected in the face of the endless propaganda against him. If you’re in the US, Bernie is your (current) best bet. In general, figure out how to overthrow your current systems, which includes the people running them, and how to do it in such a way that there isn’t a counter coup. (This is a larger question than just electing a leader, as the UK’s Labor Party and media are currently at pains to teach Britons.)

We’ve blown the incremental change chance. Revolution will now be necessary. In some countries, it will be largely peaceful. In others, it will be stopped and stagnation will continue until destruction.

And in still others, it will be the guillotine.

Those who make peaceful rev…well, you know the rest.

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Hillary Clinton Is a Monstrous Politician

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On March 23, 2016

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Ok.  I’ve had enough. Let’s speak truthfully about Hillary Clinton:

She voted for the Iraq war and defended that vote for years.

She was a primary driver behind the Libyan war.

She was involved in the cluster-fuck that is Syria.

She was for the “welfare reform” and three strikes laws during her husband’s administration. She actively spoke for them, thus, she is culpable.

She opposes the reinstatement of Glass-Steagall.

She has blamed homeowners for the financial crisis.

Henry Kissinger, a man who has a great deal of responsibility for two genocides was her adviser while she was Secretary of State, and he is her personal friend.

Hillary Clinton supported the Iraq sanctions which killed half a million Iraqi children or so.

She has compared Putin to Hitler.

It is a fact that Clinton is a bad person, who has championed policies which have killed a lot of people, and which have impoverished many others.

No Realpolitik case can be made for these policies: They have clearly made the world a more dangerous place, vastly increasing failed states and terrorism. These policies were unethical both in and of themselves, and massive suffering have been direct results.

I have been told by people who know her that she is a wonderful, concerned friend, and very warm in small groups.

I care about that as much as I do about the fact that Americans thought that George W. Bush was “someone who they wanted to have a beer with.”

Clinton, as a politician, has supported terrible policies. Moreover, she has not learned from these policy failures. For example, after Iraq, she supported Libya.

I am tired of the “lesser evil” argument; but it is not clear to me that Clinton is the lesser evil.

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Toronto Ex-Mayor Rob Ford Dead

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On March 22, 2016

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I live in Toronto.

Rob Ford was a bad mayor.

He also was caught on tape smoking crack. The Toronto police had him under surveillance and were well aware that he was doing illegal drugs.

They did not charge him.

Somehow, however, the man who filmed the incident wound up in prison.

He was also violent, nearly tackling a female legislator.

There was something sad about Ford. Something broken.

But he was a public figure. He wasn’t even charged for crimes that would have put ordinary people (and certainly poor blacks) in prison. He was a bad mayor, and overall, he was a bad man.

The fact that he is dead does not mean we should forget these things.

I would add that “Ford Nation” presaged the Trump phenomenon. Trump is smarter, better organized, and not a drug addict, but he is appealing to much of the same demographic. Ford’s followers felt he wasn’t “an ordinary politician” and that he “told the truth.” He did not parse as part of the problem.

Unfortunately he was incompetent, mean, and a drug user. Those facts had a bearing on how he ran the city.

If there is an afterlife, I wish him nothing but the best there. I ask that no person, no matter how evil, be condemned to some insane “eternal hell.”

That fact does not alter his record, which is that he did a great deal of harm.

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Slow Posting

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On March 22, 2016

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I’ve been traveling, thus the light posting. Should be back to a more regular schedule Tuesday or Wednesday. Hope you’ve all been well and enjoying the circus!

Why Poor White Males Are the Core of Trump’s Support

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On March 17, 2016

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This is not hard to understand. Wages for working class white males peaked in 1968, forty-eight years ago. Coincidentally, I was born 1968.

I am not young.

For their entire working lives, conditions for working class males have been getting worse.

“Free trade” has not worked for them. China joined the WTO in 2000. Here’s what happened.

Manufacturing Employment

Now, imagine that chart adjusted for population increases.

So, for damn near 48 years, poor whites have done terribly. For forty-eight years, ordinary politicians have promised to do something about it, and nothing has improved.

Do not tell me, or them, that they are “privileged.” Yes, it is better to be poor and white than poor and black, and better to be a poor white man than a poor white woman, but people who are in pain do not react well to some smug, upper-middle-class jerk telling them they are privileged when their lives are clearly terrible.

It is a FACT that working class whites will not see any improvement worth mentioning under any normal politician, including Clinton. They may see an improvement under Trump, they certainly would under Sanders.

They are voting for what they see as their interests, and they are not necessarily wrong. Certainly, Trump is more likely to help than Clinton, as the chance of Clinton helping them is zero. Zip. Nada.

It is insanity to expect poor white males to accept 48 years of decline and not get angry. It’s perfectly reasonable for them to respond to a man who offers them a better life in a way that is different from all the politicians who have failed them in the past.

Trump does not feel or campaign like an ordinary politician. Poor whites read this as: “He might not betray us like all the normal politicians do.”

At the least, it is worth a try.

Now, when I say “poor whites,” smart people should hear “people who are willing to be violent.”

Who mans America’s actual fighting regiments? That’s right, poor whites.

Who are your police? Who are your prison guards?

Right. Even if they make decent money as a cop or guard, they’re poor whites by culture: Scots-Irish core.

These are bad people to alienate to the point where they are willing to turn, en-masse, to a demagogue.

Just saying.

You may not like this, but the cold reality is that you need to keep the people who enjoy violence under control and, ideally happy–wanting other things more than they want to crack skulls. At the least, you make sure that they spend all their time killing and hurting each other and poor brown people, not their “betters.”

You have to be real stupid to lose control of your society’s fighting class. You have to be real stupid to degrade them over a period of decades, to employ them en-masse in jobs where they beat up other people.

Demonizing poor white men as “trailer trash” has simply alienated them. Telling them they are all sexist, racist scum has not “raised their consciousness.” Strangely, they don’t think that all the people who tell them they’re bad are right. Instead, they think those people are assholes.

In many cases, they’d like to give a good beating to said assholes. For example, Kevin Williamson:

If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my own native West Texas, and you take an honest look at the welfare dependency, the drug and alcohol addiction, the family anarchy—which is to say, the whelping of human children with all the respect and wisdom of a stray dog—you will come to an awful realization. … The truth about these dysfunctional, downscale communities is that they deserve to die.

You have treated these people like shit. You know how you get treated at bad jobs? Like disposable trash who can be ordered to do anything?

People become how they are treated. You have to feed the better parts of them if you want those parts to win. If half the “good jobs” available to these people jobs that involve violence, if the remaining non-violent jobs (manufacturing) are disappearing, and if the rest of their jobs are ass, you should not be surprised that they become mean.

You make them this way, then you demonize them for it.

Trump does not talk to these people like he despises them. (Neither does Bernie.)

Clinton does. She’s pandering, she knows it, and it comes through. The disdain drips.

The quality of life for the average “white male” peaked in 1968. Then, you call them trash, they have almost no good jobs, and you’re surprised they’re angry? You think they aren’t human? You think they are Jesus, and can be treated like crap for longer than most of them have been alive and that there won’t be consequences? You think that because other people are treated even worse, they will sublimate their own mistreatment?

Worse, you marginalized them and then used them as your primary violent enforcers?

That’s not just immoral, that’s crazy stupid.

Remember, they don’t just hate people who are brown. They hate most rich whites. And by rich, they mean a lot more people than the actual rich.

Treat people like trash, and don’t be surprised when they come back to bite you.

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