Tuesday, August 2, 2011

The Beat Goes On

As the Senate votes today to ratify the so-called debt compromise that permits this country to divert financial annihilation, at least for now, there are numerous elements that have arisen over the past few weeks that should be alarming to anyone that values the notions of democracy including liberty, equality, and the basic tenants of fairness that are inherent to republican forms of governance. While the debt deal guarantees the furtherance of corporate welfare, while stripping away much-needed support to middle and lower income Americans, I fear that this is the least of our concerns at this point in time. The idea that corporate oligarchs who caused the financial meltdown of 2008 not only walk free, but continue to be rewarded for their behavior in the form of bailouts and absurd tax cuts, could cause one's eyebrows to raise in and of itself, but it is far from our only problem. The gap between the rich and poor continues to grow and be codified into policy at an alarming rate never before witnessed in U.S. history, and as multinational oil conglomerates, to name a top offender, reap tax benefits to the tune of $4 billion dollars per year, according to stats from the Congressional Budget Office, while programs such as federally subsidized graduate student loans fall by the wayside in the current budget plan. So, in summation, we have enough money to throw billions at big oil, which by the way, they are never expected to pay back, but we don't have enough to lower the costs of higher education so that millions of our citizens can compete in the future.

The fact that we are now cutting federal spending as the recession still looms large in the rear-view mirror is as idiotic as it is illogical. We cut debt when debt is not our crisis; unemployment and the anemic housing market hold that banner quite well. This deal does nothing to address the real crisis, and in fact, in the face of an unbelievable Democratic retreat on extended unemployment benefits that was supposed to be tied to any debt deficit reduction agreement, the debt deal stands to make the real problem much worse. Republican claims that you can't raise taxes in a recession and that federal debt undermines the nascent economic recovery are, go figure, asinine and not based in any sort of factual information. I still wonder where in the hell these people were during the binge drinking sessions of federal spending under the Bush II years, but I have yet to hear an answer to that one. One needs only look at the history of the Great Depression to see how FDR's deficit spending policies in the early 1930'a resulted in an astonishing 5.2% growth rate, a rate that crashed in 1937 when, you guessed it, pressure from Republicans and business groups forced FDR to cut federal spending in order to attempt to balance the budget. This move caused the recovering economy to spiral back into a near cataclysmic recession, all so some rich asshole could jack off to their fantasies about limited government and free markets. Newsflash: the free market is a sweltering heap of bullshit, and the only thing that has been done policy-wise in the wake of the 2008 crash is to reinforce the pile of bullshit with nothing more than popsicle sticks to make it appear as though it is all the more stable.

Yet at some point this leaning tower of bullshit, as it were, will inevitably come crashing down upon everyone in a shit storm for the ages. In essence, the debt settlement reached by the geniuses on Capitol Hill buys time, and punts our day of reckoning into the near future, but does nothing more as the stinking pile of bullshit looms ominously in the background baking in the record-setting July sun. A sun that comically, according to Rush Limbaugh and the morons at Fox News anyway, was simply, and I quote, "A bunch of lies to advance a political agenda of liberalism"[1] You really can't make this shit up. As Texas bakes in a record-setting drought, and cities as far north as Chicago swelter under triple digit heat, conservative radio and television sticks there collective fingers in their ears, closes their eyes, and in their best impression of a insolent kindergartener chants "lalalalala, this isn’t happening." When you are dealing with folks whose ideas are so extreme that they equate daily temperatures with a political agenda, even though it was so fucking hot out in July that John Boehner only needed to walk outside of his office to gain his orangish tan, you know we are in a world of hurt.

Still, John Boehner's fake bake notwithstanding, income inequality, the feebleness of capitalism, and corporate cronyism push the good old red, white, and blue, further down the tubes towards the title of banana republic, without the nice beaches and decent weather of course, but frighteningly enough the most disturbing development from the debt fight is none of the above. If one examines the course of events that unfolded as the self-inflicted crisis came to pass, the one thing that sticks out like the proverbial sore thumb is the hijacking of a portion of the political process by extremists. In their overzealous reach to throw their weight around, members of the ultra-right Tea Party held the entire country hostage in order to drive home a point. Make no mistake about it, the implications of a default on federal debt would have been immediate and enormous. The fact that there is no historical precedent for the activity suggests just how dumb of an idea it really is. Every president, from Reagan to Bush II enjoyed unfettered extensions of the debt ceiling without any partisan wrangling. This is because of the fact that the debt ceiling is nothing more than an accounting trick used to balance the books and pay for things that Congress has already appropriated for by law. To not raise it calls into question the solvency of not only the economic system, but also the efficacy of our Constitution. Yet that is where we were, at the cliff staring down at an abyss, being led along by the tongue by extreme political factions that do not represent the demographics of the country as a whole. Negotiation is not necessary, succumb to our demands… or else. Osama bin Laden would truly be proud.

The notion that serious observers were actually calling on the president to circumvent Congress and raise the ceiling through executive order is equally troubling, but desperate times call for desperate measures, notwithstanding that pesky little document called the Constitution. As an aside, another one of my favorite questions that I pose to conservatives that never receives a straight answer is that why is it the case that for people who supposedly love the Constitution and the foundations of our democracy so much, why are they always trying to change it? Whether it be balanced budget amendments, flag burning amendments, or homophobic anti-gay marriage amendments, the extremists always want to change the document to meet the needs of their particular crisis du jour.. This time the heavy-handed tactics were quite different though as deal after deal was rejected over the beliefs of a small minority forced the country closer to default.

To be sure, as an equal opportunity offender, I am just as pissed at the behavior of the Democrats and the president in particular in regards to this matter. President Obama has time and again allowed extremists to call his bluff, resulting in an epic cave-in on core principles every time. The lopsided debt deal, the Bush tax cuts, and the near government shutdown represent a troubling trend where the executive branch not only negotiates with terrorists, but capitulates to their full set of demands. The bully pulpit has been shattered, and we are left with a fool's game where sand has been thrown into the gears of democratic government. The precedent set by this, and the broader implications for executive power that accompany these developments, are chilling in their own right because they call into question the ability of the most powerful branch of government to lead at a time when a strong president is desperately needed. The Tea Party played chicken and the most powerful man in the world blinked, plain and simple. And while the main thrust of the blame should be placed firmy at the doorstep of the GOP, and the Tea Party to be more precise, the continued capitulations of the Democratic Caucus and the president are not without guilt.  Meanwhile, as DC politics becomes more strained and fractured, the corporatocracy grows and the new Koch Brother-style oligarchs, backed by their slobbering Tea Party minions, continue their war against the middle class and the poor, dividing the country in the process, and slowly destabilizing and eroding our political system.

Unfortunately, using history as a guide, the endgame is as uncertain as the lead up to the debt crisis. Given the vitriol and hatred that is spewed forth daily on talk radio and television, where untruths and lies are peddled without fear or reprisal or remorse, I continue to fear that this country has a very rocky road ahead. The similarities between our current predicament and the Depression years are way too similar to ignore. During the 1930's, in a relatively unknown episode of history known as the Business Plot, corporate financiers including the J.P Morgan and Dupont empires schemed to overthrow President Roosevelt in a coup d' etat that was to be lead by General Smedley Butler, who fortunately ratted out the plot before it could bear fruit. All of this was done in the name of profit as FDR's plan of Depression-era wealth redistribution was thought to be an assault on corporate bottom lines. Yes, you read that right, American corporate power has attempted a coup on a sitting U.S. president, and I am quite certain that given the right circumstances, they would do it again.

The game of hard ball being played by the far right shows that the machinations of the Koch Brothers, the Club for Growth, and the U.S. Chamber of Commerce, to name but a few of the key players, equate to nothing less than another version of the Business Plot, just without the single assassin. As Tea Party zealots march under the banner of these corporate giants, the clandestine attacks from the oligarchs against the government and against the president continue, which erodes public trust and confidence in these institutions, thus weakening their power. In the name of their holy trinity wet dream of low corporate taxes, minimal oversight of industry, and gutted social services, the oligarchs, and their foot soldier cronies of the Tea Party who continue to deep throat the cocks of their corporate handlers, even though many have much to lose as a direct result of the policies they champion, are now behind the wheel as this country continues to pull itself out of its greatest economic crisis since the Great Depression. Yet these trials will only get worse as peak oil and limited resources drive the market economy further into the toilet, thus shaking up the already unstable pile of bullshit that has been thrust upon us. As such, it is time to learn to make do for ourselves as our government and our economy is and will continue to fail miserably at protecting us and our way of life. More on that point next week….

Until then I remain,

The Heirloom Troubadour

[1] http://mediamatters.org/blog/201107260010#.Ti7QQYTOAWQ.facebook

Monday, July 11, 2011

This Place About to Blow

Last Tuesday night I opened my web browser and, looking to stay ahead of the news out of Capitol Hill over the debt ceiling, was instead greeted on every major American news website not to musings over the fate of budget negotiations or Europe’s sovereign debt crisis, but by ongoing, live, 24x7, shove-it-down-your-throat-‘till-it-comes-out-the-other-end coverage of the Casey Anthony trial. The most egregious of these stories could be found on MSNBC, which prominently featured photos from across the United States of citizens engaging not in civil discourse over the fact that the legislative and executive branches are playing a dangerous game of Russian roulette with the American budget, but rather showed a woman, beer can clenched in her fist, yelling at a television screen, arms flailing wildly, as the verdict was announced. If this was the only photo of its sort, it could easily be chalked up to the camera glimpsing a simple-minded person, watching the judicial process unfold in a bar as if it were the final laps of a NASCAR race. After all, the only thing missing was the corporate sponsorship and the beer helmet, yet this was not the only photo of its kind as the ticker bar crept forward, showing image after image of American citizen after American citizen engaging in some weird, ritualistic behavior over something that they have been led to believe is somehow important to their existence.

Given that last week was Independence Day here in the good Ol’ US of A, there are numerous elements of this scenario that are incredibly disturbing. Is it any wonder that banks can get away with economic destruction, be dubbed “too big to fail,” whatever the hell that means, and all the while the CEOs and other corporate scumbags walk away unscathed, with million dollar bonuses, diamond studded toilets, and federal bailouts while people uninterested in hedge funds and liquidity lose their homes and jobs? Of course not, you see, this is the great shell game that is disguised as American civil discourse these days. Who cares about such stuffy matters as economic policy and domestic tranquility when American Idol is on at 9, and the trial du jour will be featured on the local news at 11? There are far more important things to worry about such as what I will purchase at Wal-Mart tomorrow, on borrowed money, or whether or not I supersize my fries at McDonalds, or whether or not Snooki will be back for another season of Jersey Shore, or whether or not Bounty truly is the quicker, thicker, picker-upper. This, my friends, is what is broadly accepted as social discourse these days, and it is disgusting. Thomas Jefferson and Benjamin Franklin would keel over and vomit through their nose if they were transported forward in time and laid witness to the sad state of affairs that has become the American electorate. Democracy will only thrive in the presence of active civic organizations that foster civil discourse of the type that moves policy forward. In the United States, as political discussions have taken a back seat to Survivor reruns, I fear that our young democracy is on life-support, being fed High Fructose Corn Syrup instead of the life-saving blood transfusion of fresh ideas that it needs.
And we are the only ones to blame. 

You see, the problem is that as a collective, I think we have become too complacent at passing the buck. We find a scapegoat, crucify it, and move on to the next target. Whether its gays, Michael Jackson, Bush, the religious right, the socialist left, Obama, Osama, GI Joe, Santa Claus, or the Keebler Elves, someone else is always to blame for our woes.  Meanwhile my favorite entity, the mystical, magical, and wholly ephemeral “they” tap dances silently in the background fixing things because “they” always have. I have some bad news folks, “they” have taken a short trip to Paris and met up with a hooker that puts out on a nightly basis, “they” are not coming back. While MSNBC, CNN, Fox, the Washington Post, and the New York Times, to name but a few, obsessed over the Anthony trial, a quick perusal of European news sites such as the Irish Independent and the BBC showed that Portugal’s debt rating was recently downgraded to junk status and the Eurozone contagion is rattling markets worldwide as it is feared that Spain and Italy are next, not to mention poor old Erin’s Isle. This was coupled by much better news of Congressional budget negotiations than I could find on any U.S.-based news site and further developments from Japan where the nuclear crisis continues unabated. So, to recap, while Europe slouched ever so closer to a sovereign debt crisis, while radioactive materials continue to spew from Japan, hitting the U.S. west coast on a daily basis, and while the United States deals with the most serious budget discussions perhaps in the history of our nation, the headlines were all related to a sideshow trial.

However, at the end of the day, I think that we cannot expect much more. Casey Anthony is set to cash in big time on the ever present need for the aforementioned national scapegoat. Everyone hates her, yet we still watch. Between her book deals, cable television appearances, and three sequels worth of Hollywood shit on a shingle movies that will all come in due time, she is set to milk the populace of its hard earned cash, big time. To quote the Roman poet Juvenal’s famous 2nd century missive, “give them bread and circuses.” Bread and circuses indeed, as Rome burns we drool on our shoes as the movers and shakers of global finance dictate the terms of our very existence. This stuff could get very real, very quickly, and to quote another highly viable source, the song of popstar teen icon Ke$ha (yes the “s” is a dollar sign, I didn’t make that up), I am afraid that we are at the point where “This place about to blow!”   

As such, it's high time to stop passing the buck, stand back, take a deep breath, and make some hard decisions to get things done. Hopefully those governed will wake up, for the future of our republic is at stake. It is in our hands to fix it and it always has been. As Franklin once told a passerby who inquired over the nature of the type of government being created at the Constitutional Convention, we have a "Republic....If you can keep it." It is our job to "keep it" and as of late, we have failed miserably. In the post-patriotic high of the fireworks and hotdog binge that is the 4th, the challenge is not to but a lapel pin, or put a yellow magnetic ribbon on the back of one's car, it is simply to stay engaged and informed and speak one's mind, for these are all elements that confer the status of citizen, and it is an indicator of health in a democracy that is in desperate need of it. 

More next week....

Until Then I Remain,

The Heirloom Troubadour

Saturday, February 19, 2011

Energy Myths, Energy Legends

So last week we discussed the precarious situation of the world's oil supply that has come to be known as peak oil. While certain members of the American right-wing will insist that peak oil is nonsense because all the petroleum we could possibly need is in the ANWAR region of Alaska, or off the Gulf Coast, the American left is just as guilty of engaging in this type of dangerous wishful thinking when it comes to U.S. energy policy.  This is because nobody in the political machination of the world's premier industrial power, whether Republican or Democrat, wants to engage in the hard mental exercises that necessarily accompany the demise of a civilization. Yet, at the end of the day, debates of this very nature are currently underway throughout the industrial world from London to Wisconsin as nations cope with shrinking revenues and slashed budgets brought about by the global recession.

These debates are not of course framed as steppingstones to the hard choices of the future, but that is exactly what they are, especially when one takes into account wild market fluctuations that will accompany the end of the age of cheap petroleum. Add another credit bubble or two into the mix, along with a good dose of inflation and wage stagnation, and you get a looming economic disaster of epic proportions, and this does not even begin to cover the projected costs of climate change, some of which—high grain prices— are already beginning to be felt.[1] While it is true that economic cycles exist on an ebb and flow of boom and bust, the interconnectivity of the new global economy makes each cycle more protracted and pronounced. Any of the aforementioned elements could bring world markets to a standstill as was the case with the last recession. Now, imagine a tempest so strong that it included not only all of the financial instruments of the modern economy, but also the energy base that is required to keep said economy humming. World markets are still jittery and many, including myself, fear that policies such as quantitative easing that were aimed at pulling the industrialized world out of the last recession did not actually fix anything but instead merely put a drop of antibiotic on a cancer cell. Both are the wrong medicine, and both allow the problem to continue to metastasize to other areas. This is why in a recent Business Insider article, economist Charles Hugh Smith warns of a major economic crash around the year 2020 because of, you guessed it, peak oil, generational cycles, credit bubbles, and inflation/wage stagnation.[2] This isn’t alchemy, monster shouting, or light apocalyptic banter either folks, this is mathematics and sound economic and political theory backed by data which was in fact in existence and screaming quite loudly before our recent crash, the problem was that no one cared to listen.

This is because of the fact that the media, the corporations, the politicians, and the general public alike do not wish to tread into this dark territory. It isn’t good for votes to speak, even in whispers, of looming hard times, and it certainly doesn’t help one figure out what in the hell Snookie is going to be wearing on the next episode of Jersey Shore. Just like some of the rosy chronicles of contemporaries that were written as the Roman Empire crumbled, it is difficult to have enough perspective to properly comment on systemic collapse when one is in the midst of it. Things will get better, they have to, and they always have, so why shouldn't we expect the same this go round? The current archetypal God of our time, the infamous “They” will come to our rescue to keep the gears lubricated because “They” always have. Global temperatures rising? “They” will cool it. Gas prices too high? “They” can fix that too. 

While many worship at the altar of “They” which is inexorably linked to the altar of modern market economics, “They” are royally screwed, along with the rest of us, because the basic scientific tenants of ecology that describe systems exploitation could care less about economic theories or fancy consumer goods. In fact, using history as a guide, it can be said with crystal clear certainty that civilizations that overshoot the limits of their resources do not fair very well in the long run. Medieval Europe provides an excellent case study of this as deforestation linked to overpopulation in England, Germany, and France caused severe economic and social contractions that were not eased until the 14th century Black Death wiped out nearly half of the population. This same phenomenon can also be attributed to other civilizations including Easter Island, the Anasazi, Petra, Rome, and even Nazi Germany to name but a few [3] In each of these cases the societies in question overshot the carrying capacities for their particular biome. Essentially it is a numbers game of too many people trying to live off of precious little resources.

Charles Hugh Smith's Crash Cycle 

Our current predicament is not much better and in many regards, it is quite worse. Instead of running out of wood, we are running out of the fossilized sunlight that the foundation of our entire civilization has been built upon. For some though, even this challenge is no match for progress and the ingenuity of the human mind. In the United States this has taken on an interesting character as the right-wing believes we can drill a hole to the mantle of the earth if need be to gain our energy, while the left-wing worships at the altar of renewables. The problem is that in both cases, the calculations that accompany the mythology of progress are lethally incorrect. Last week we discussed the exorbitant costs of radical fossil fuel extraction such as oil fracking, tar sands, and deep water drilling. Next week we will dive deep into the world of renewables. Suffice to say that while solar cells, electric cars, and wind turbines are all fine technologies at face value, they will not be able to stem the tide of depleted petroleum in the near future. If large-scale implementation of these technologies had been set as a national priority during the 1950's-1970's then peak oil may have been but a mere blip on the radar for the industrialized world, but they were not, and we are far too into the game to change course now.[4] Next week we will talk wind mills and electric vehicles, until then I remain:

The Heirloom Troubadour

Sunday, February 13, 2011

WikiPeaks: The Saudi Oil Dilemma

While I was originally going to use this week’s post to comment on some of the long-standing issues facing international politics, particularly the situation in the Middle East, another news story broke that is just as, if not more important to the West than the Egyptian crisis.
After dismissing my classes on Wednesday I logged onto my computer to check on the latest developments from Egypt. I also needed to login to Yahoo to check my email there and when I did I saw a headline that almost made me fall out of my chair. It was a small banner story which read, “WikiLeaks: Saudis Running Out of Oil.” Whether or not you agree with the methods of WikiLeaks, which is a discussion in and of itself, the fact is that in a leaked cable that was sent from the U.S. Department of State Attache’s Office in Riyadh to Washington, a senior U.S. diplomat discusses a very troubling conversation that he had with Sadad al-Husseini, a geologist and former head of exploration for Saudi oil monopoly Aramco, sometime in 2007. In the meeting al-Husseini confided that the Saudis are unlikely to be able to keep to their OPEC-mandated target oil output of 12.5 million barrels per day much longer because, simply put, they are running out of oil. Husseini indicated that Saudi producers are likely to hit peak oil, which is the point where global oil output hit its high mark, as early as 2012.[1]
What! Saudi Arabia is running out of oil? You don’t say? But there it was, staring at me on the page. This is a serious problem folks, let me explain why. Considering that Saudi Arabia has 1/5 of the world’s entire proven reserves of petroleum, and the United States relies on the Saudis for about 1,081 barrels of oil per day[2], it means that the entire setup of industrial society is in serious danger if Saudi oil is drying up. Urban land yachts and other similar luxuries that dot the streets of the United States are in serious trouble, as are other more pressing matters such as world food prices because without their lifeblood, cheap petroleum, entire systems will grind to a halt.[3]
Before we get into all that though, let’s talk a bit about the concept that is known as peak oil. This concept, which was introduced by Shell geologist M. King Hubbard back in the late 1950’s, delineates the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The pattern forms a bell curve and is explained pretty simply: the more oil we pump out of the ground, the less reserve there is, and eventually, since petroleum is a finite fossil fuel, production reaches a maximum apex and then falls off, eventually to zero, as there is less and less oil to pump. So what is the big deal you ask? Isn’t there plenty of oil to go around? Well the big deal is that given how dependant the industrial world is on cheap petroleum for transportation, food production, and industrial systems maintenance, any disruption to supplies would cause price shockwaves that could do significant harm to the global economy. Think back a bit to 2007-2008 when gasoline prices hovered around $4/gallon. The economic pressure that the price increase placed on American households had a fair amount to do with the global financial catastrophe that quickly followed, even if the media wanted to blame it all on Wall Street. Some, such as industrialist Richard Branson, even predicted the recession’s link to oil prices before the price spiral even occurred. In 2006, Branson wrote that rising oil prices could cause major damage to a weakened world economy in a piece that was largely shunned at the time by the masters of world finance but one that nonetheless proved to be deadly accurate.[4] 
Hubbert Peak
As for whether or not there is more oil to find and pump, that is why this Wikileaks cable is so damning. The fact of the matter is that, no, there is no more oil to go around. While some have wet dreams of infinite fossil fuel, they can chant “drill baby drill,” until they are blue in the face but that will not change the numbers game in their favor. The world is running out of petroleum reserves, plain and simple. Why else do you think energy companies are spending billions of dollars to invest in deep water drilling of the kind that caused the BP fiasco, as well as expensive operations in tar sands, and chemical fracking for oil? It takes about $50/barrel to produce a single barrel of oil from Canadian tar sands, while it costs about $1/barrel to extract light sweet crude from a Saudi oil field.[5] In another case, it costs a whopping $500,000 per day for oil companies to rent a deep-water rig that is capable of drilling at depths over 10,000 feet.[6] That is a huge difference in price, and I don’t know about you but the last time I checked oil companies were profit-driven so it makes no sense for them to resort to more expensive practices unless of course, you guessed it, their cheap sources are drying up.
Take the Saudis for example; while they sit on 1/5 of the world’s proven reserves, including the famous Ghawar Field, they too have undertaken serious offshore drilling efforts in order to reach OPEC production quotas.[7] This fact, coupled with data that clearly shows a significant drop in Saudi Arabia’s ability to deliver on its end of the bargain as far as oil prices are concerned,[8] should give pause to anyone concerned with global energy security. That however is only the beginning of the story. The Wikileaks document proves that the Saudis understand this and American and Saudi officials alike are scared shitless about the implications for global commerce. This is because they understand that while peak oil does not mean the end of petroleum by any stretch of the imagination, it does signal the onset of an era of petroleum production that will result in wild price swings that will easily throw the global economy off balance in the coming years.
You do not have to run out of fossil fuels to be in a world of hurt. From a standpoint of macroeconomics the situation is quite clear. When you start with production estimates following peak oil and subtract this number from both current global demand  as well as projections for the burgeoning petroleum needs of strong emergent economies such as India and China, the solution you get from the equation is not very rosy given that supplies will be short and prices will be astronomically high. In essence, if you can produce 4 million barrels of oil per year but the global economy demands 6-7 million barrels, then there is a serious problem because you are at a net loss of about 3 million barrels.
Unfortunately for industrialized society, this is exactly where we are headed. Indeed, if Saudi peak oil is as imminent as all the data suggests, then the $4/gallon that Americans paid for gas a few years ago will suddenly seem like the good old days and global food prices, which are already soaring, will hover at levels unheard of in the modern era.
The industrialized world has gotten itself into quite a mess with its addiction to cheap oil. No amount of solar, nuclear, or wind energy will alleviate this situation either (more on this next week). We need to look for alternative solutions and change our thinking to see that we can live quite comfortably without all the trappings of modern society. If we practice now, the transition will be livable, but if we continue to cling to the fool’s hope of a future of limitless progress on a limited planet, there will be many long winters ahead.
More next week, until then I remain,
The Heirloom Troubadour