Tuesday, April 10, 2007

Open email to some fellow golfers/doom-and-gloomers

Dude (et alios)

Let me put on my “doom and gloom” hat (which I rarely remove- must be why I get “doom and gloom” hat head) and join the fray.

As I’m currently in Mark Twain-land, Missouri, I’ll begin with a quote of his, history doesn’t repeat itself, but it rhymes.

The key, in my view, to empire dominance analysis is discerning the factors that gave rise to the dominance and discovering if those factors are currently helping or hurting.

In Kevin Phillips’ American Theocracy, he argues that the US is the oil empire as Britain was the coal empire and Holland was the wind and sea empire before that. In each case, the dominance in a particular technological form left the nation carrying an obsolete infrastructure as newer technologies and energy realities manifested.

In each case, political leadership, over time, came to rest in the hands of those who owned the infrastructure. Thus, for example, Britain’s coal interests hampered their ability to transition to an oil economy because they were unwilling to write off their investments.

In other words, the earlier alignment of national interest with political leadership’s interest broke down. The political leaders ended up trying to maintain an impossible status quo, dragging the nation down with them.

On a positive note, it isn’t as if the Dutch or British vanished as world powers, they simply gave up the position as driver. Unfortunately, this transition was not a pleasant one.

The die was cast, so to write, on our (in hindsight, foolish, in my view) choice to use the military to try and maintain our oil economy infrastructure when the Reagan administration rolled back the energy conservation legislation of the previous administration.

In the late 70s we imported a third of our oil. We could have (and were then in the process of) made the transition reasonably gracefully then. Now that we import two thirds of our oil, and are predominately led, at a national level, by oil interests, the transition to a world in which oil is not cheap but expensive will be difficult.

The “illegal alien” problem, which is but a mirror image of the, far more pernicious to our way of life, in my view, US corporate wage rate arbitrage (a.k.a. “outsourcing”) is, relatively speaking, and again, in my view, far less of a problem.

Income transfer policies (welfare, et alia) including those to undocumented immigrants are a “cutting the available pie” issue. Choosing, changing and/or maintaining an infrastructure for a way of life is a “size of the pie” issue.

When the pie is growing, how we slice it is less of a concern. Now that it is not growing (or shrinking depending on perspective) we worry about slicing that pie too thinly. A focus on the slicing and lack of concern for the size of the pie is, in effect, leading us to take our eye off the ball. (And as golfers, we know what happens when we take our eye off the ball….. FORE!)

How one slices the pie is an issue of concern to me (and others) but it isn't nearly as relevant to the argument at hand- the decline of the American economy.

We, in the US, as James Kunstler argues, need to give up our dreams of life in the suburbs with an SUV in the garage of our McMansions- a terribly energy intensive way to live. A way of life that made sense in the 50s when we were an oil exporter is silly when we are a large oil importer.

We, in the US, still have tremendous advantages; a well educated (although this too is slipping) population, lots of resources, lots of fresh water (albeit more in the east than in the west where people are moving), a well-connected water transport system and a relatively easily upgradeable rail system. But we need to get to work. And we won’t as long as we think cheap oil is just over the next horizon.

The US media needs to start promoting a new version of the American Dream.

But enough doom and gloom. The weather is (finally) warming and soon we’ll be chasing that little white ball around again. I, for one, plan to do a lot of walking.

Ciao for now


Ruby said...

Hey Dude, check into that so called "cold fusion" more aptly named Low Energy Nuclear Reactions. It's for real, and when that comes online, (probably the Chinese will succeed), we'll have a whole new paradigm.

What will the cold fusion paradigm look like? If we could figure that out, we make those key investments and could cash in all the way there!

It actually looks like the key investments are a good spot of land near a small town with lots of natural resources and local agriculture.

I'm a doom and gloomer! it's so much more fun and a great way to keep a smile on your face through all the panic!

I just was reading this old book called the Economic History of the United States and in it they wrote that when the first white people came to this North American continent, there was at most 1,000,000 native Americans living off the land, maybe no more than 500,000. Now we've got 300,000,000 in the states alone.

Population is the root of all these problems. Cycling through resources, until they're totally depleted.

I'm on the North Coast of California. Loggers are losing jobs, businesses shutting down. They've cut their inventory. What part of "finite" don't people understand?

I'm rambling now. I always enjoy your posts.