Sunday, January 31, 2010

Happy Days Are Here Again

Worst unemployment picture since WWII

Obama Doesn't Know What He's Doing

Long-term unemployment skyrockets

Middle class collapsing

Dependency on government a growing addiction for Americans

This is the Obama - Pelosi age, the age of the oxymoron "social justice." Destroying the country to save it is the path that radical revolutionaries often take -- from Mugabe to Castro to Chavez to Kim to Pol Pot to Stalin to Hitler and so on.

Captain Obama at the wheel, the USS America headed onto the rocks, and in the ballroom Pelosi is gathered with Greenpeace, the trial lawyers, labour union bosses, the IPCC, Al Gore and the carbon traders, and a host of lobbyists, singing "Happy Days are Here Again!"

Pay no attention to those deep grinding noises coming from below. Those are just some noises left over from the previous administration. Captain BO has increased speed to full ahead, so we will soon be out of the rough spots.

Previously published at Al Fin Potpourri

Hello Unions? Good-Bye Prosperity!

Physical capital—some of it in the form of natural endowments such as a deep-water harbor, much of it the product of human investment in dwellings, factories, offices, and infrastructure—is, of course, a profoundly valuable partner in both our work and play. The greater the quantity and quality of such capital (all else the same), the higher will be our productivity and wages and the more stimulating, satisfying, and comfortable will be our leisure hours.
Such capital will, however, always be a tempting target for interest groups seeking to redistribute some of its returns from its owners to themselves. Since physical capital is immobile, it can be “taken hostage” by opportunistic actors and its value appropriated in ways that will soon be described. And since it is durable, the ill effects of such actions will generally be disguised for years or decades. _PDF CATO PDF

Cities represent a concentration of both populations and capital. Persons looking for opportunities flock to cities for jobs, higher education, and for political connections to various syndicates and collectives -- both licit and illicit. Labour unions are an important political collective, representing a bridge between licit and illicit political organisations.

Detroit was once a very wealthy city, bursting with opportunity. Among the many organisations and collectives that flocked to Detroit to grab a peace of the booty, were the labour unions. the early decades of the 20th century unions usually represented less than a tenth of Detroit’s labor force. And, as we have seen, the city’s growth was spectacular, while its industrial base produced enormous wealth not just for entrepreneurs, managers, engineers, and traders, but for laborers as well. In 1930, there were 275 U.S. counties with at least 5,000 manufacturing workers within their borders. Those in Michigan’s Wayne County (which includes Detroit and adjacent cities such as Dearborn, Hamtramck, Highland Park, and River Rouge) earned average wages higher than those in all but three other counties—which contained Youngstown and Warren, Ohio, and Gary, Indiana (where the nation’s largest steelmakers had facilities). Manufacturing wages in Detroit exceeded the national average by fully 33 percent, and when compared to wages in smaller factory towns elsewhere the contrasts are even more dramatic: factory workers in El Paso, Texas, earned only 60 percent as much as those in Detroit, while workers in York, Pennsylvania earned 56 percent as much and those in Greenville, South Carolina, 40 percent as much. Detroit’s absolute and relative prosperity is difficult to reconcile with pro-union rhetoric during this period (and historic treatments since), which stressed the need for countervailing power for workers in the face of employers’ unfettered monopsony power. 
 ...Though firms in Detroit and other American industrial cities had kept unions more or less at bay for the first third of the 20th century, the onset of the Great Depression created an extremely favorable ideological and political environment for unionization. The erroneous but widespread belief that falling wages and prices were a cause of the Depression rather than necessary adjustments to restore growth in employment and output contributed (along with many other factors) to the passage of several pieces of federal legislation that encouraged the cartelization of labor and product markets. Of central importance was the National Labor Relations (or Wagner) Act, which eliminated many of the strategies commonly used by firms to defend the quasi-rent value of prospective or existing physical capital. For example, it took labor disputes out of the courts and vested enforcement of the Act in a politically appointed National Labor Relations Board; prohibited several “unfair labor practices” judged to be obstacles to organization; and enforced exclusive bargaining and union pay rates for all workers—whether union members or not—in Board-certified bargaining units. But, as we will see, by limiting defenses against the appropriative actions of labor cartels, such legislation would actually increase firms’ reliance on the remaining ones—especially redeployment of productive capital to less vulnerable locations and input substitution. Again, this would have dire consequences for “union towns.”
The results were particularly dire for Detroit as a union town. Several additional cities in Michigan, Illinois, Ohio, Pennsylvania, New Jersey, California, and other states with strong union control have paid "the ultimate price" for their affiliation with unions: crime, poverty, capital flight . . .

Labour unions have largely plighted their troth to the US Democratic Party, as shown by campaign contributions of unions to the two majour parties.
Wherever the Democratic Party controls, labour unions rule -- and prosperity will fly away sooner than later. With the election of the radical-left Democratic Party congress and president, unions were gleeful in anticipation of a rising dominance by unions over commerce and industry nation-wide.

But something odd happened on the way to the celebrations. Somehow, "the people" -- the ones the unions and the DP are supposed to be looking out for -- began to catch on. The working classes began to understand that the DP and the unions did not really care about them, but instead were only looking to line their pockets. If the next elections were held today, neither Obama nor much of the DP contress would fare well.

Small, local unions can sometimes give workers an advantage when they are under dire circumstances. But the benefit is usually only temporary and limited to a small percentage of the population. As the ripples of union interventions spread throughout the economy as a whole, glaring problems begin to reveal themselves. Union pay and benefits rise out of all proportion to the productivity contributed by the workers themselves. Society's resources are mal-distributed as special interests take over the divvying up of the booty. Prosperity and opportunity fly out the window.

That is where many US cities find themselves today, and where the entire country will find itself if the Obama - Pelosi reich is allowed to carry out its radical agenda of "social justice" and "environmental justice."

Friday, January 29, 2010

A Story You Will Not Likely Hear About in the MSM

Does anyone really know what happened to trigger the financial collapse of US and world markets in September and October of 2008? Henry Paulson was US Treasury secretary at the time, and his memories of the events appear to be vivid.
Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.

“The report was deeply troubling -- heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”

...Paulson said he was surprised not to have been asked about the Fannie and Freddie bonds during a trip to Moscow in June. “I was soon to learn, though, that the Russians had been doing a lot of thinking about our GSE securities,” he said of his meeting with Dmitry Medvedev, who succeeded Putin in the Kremlin the previous month. _Bloomberg_via_BusinessInsider
The economic leaders of the US were clearly panicked in the early fall of 2008 by what they felt was a "near-collapse" of the entire economic system. The panic was transmitted to the US president and the US congress, who rushed a large economic rescue through in record time. I disagreed with the bailout at the time, but it was obvious that US leaders were thoroughly spooked. They acted out of desperation to "save the economy", unlike the later Obama administration bailout plans which were deliberately laid out to help Obama supporters -- and no one else.

I remember watching a news clip of Putin confronting Bush at the Beijing Olympics. Putin smirked as he walked away, and Bush appeared to be in shock. Something of an unfriendly nature was communicated between the two men. Of course, the Russian invasion and occupation of Georgia was just beginning at the same time.

The massive selloff that triggered the desperate actions of the US government originated somewhere. The idea that it may have been orchestrated by powers unfriendly to the US government is not a new one.

But the combination of economic sabotage with military aggression is precisely what one would expect from either Russia or China.

China already has the ability to temporarily obliterate the worth of the US dollar on international markets if it chooses. It is unlikely that China participated fully in Putin's scheme. But wealthy international supporters of Senator Obama's campaign for president may well have seen some benefit to their candidate, should the US economy falter in an emphatic manner, just before the election. Certainly Putin, at least, has enjoyed much more freedom of play and international influence since Obama's election -- despite Russia's economic problems and ongoing demographic and public health collapse.

The really important things that are happening every day, behind the scenes, are unlikely to ever be revealed by the media. But you can be assured of hearing everything imaginable about the sex life of Tiger Woods.

Tuesday, January 26, 2010

China is Making Waves Around the World.

...that prosperity also attracts more Han Chinese immigrants, which dilutes the ethnic Tibetan majority, and angers ethnic Tibetans. StratPage
China needs lebensraum, and it intends to get it by hook or crook. Occupying Tibet and Xinjiang is not enough. China needs Taiwan, it needs Siberia. China needs Africa and it needs more of Central Asia. China needs big parts of South and Central America, and China needs as much of the Caribbean as it can get. China needs room to grow. But is it possible that China is getting ahead of itself here?
China's economic invasion of Africa in the last decade has been running into more resistance. The Chinese custom of importing Chinese to do the work, including manual labor, for construction projects, has caused increasing anti-Chinese feelings in African countries. There, high unemployment, and cultural differences, are leading to more clashes between Chinese and the locals. Chinese firms are being forced to hire more locals. The Chinese don't like this, because the Chinese work harder and more efficiently, and the locals don't like being ordered to try and keep up. This Chinese invasion is spreading to the Middle East, South America and sensitive (to India) nations like Nepal.

...the Chinese market is what drives Chinese economic growth now. The export market is gravy, and a way to learn how to build better products and steal technology.

...All this economic activity has increased Chinese dependence on the sea. This is unique in Chinese history, for in the past, China was self-sufficient and ignored naval matters. No more. The admirals are pointing out that, without control of long sea routes to Africa, Australia and South America, the Chinese economy would choke.

...Decades of the "one child" (for urban couples especially) policy, and the preference for baby boys, has created a girl deficit. In the next decade, over 20 million more Chinese men, than women, will be looking for mates. Already, legal brokers, and less legal gangsters, are supplying the shortage by attracting (or kidnapping) young women from neighboring countries. This is not popular with the neighbors, and causing increasing tension. _Strategy Page

Analysts who assume that China has grown out of its need for foreign export markets are getting ahead of themselves as well. China built up a healthy trade surplus during a time of global economic expansion. But China could easily use up its nest egg attempting to create a booming domestic economy when its current method of governance is not arranged to deal with domestic prosperity.

China's top-heavy wealth disparity is manageable as long as the top-heavy CCP can keep an eye on most of the powerful men in China, and as long as the government can control the technology of information and wealth transfer. If China is to develop a truly prosperous domestic economy -- instead of just talking about it ad nauseum -- it will inevitably lose an unacceptable amount of control.

Mark Steyn thinks that China will break on the basis of demographic stresses. But I suspect that China will crack wide open on the basis of its inability to deal with the contradictory forces arising from a prosperous expansion while attempting to enforce totalitarianism at the same time.

It is likely to end either in war, or warlordism.  China has known much of both over the millenia.  It is likely to know much more.

Monday, January 25, 2010

It's Not Lying If You Follow the Rules.....

And if you are a radical crusading for the new utopian order, there are no rules. Everything is a scripted deceit meant to engineer the new radical utopia. There is no truth, there is no meaning except the goal. Power to the (radical) people.

Remember: never let a devastating catastrophe that ruins millions of lives go to waste. Use it to your advantage. Crusade on, radical engineers of society. There are no rules for you.

Xtra: The first installment of "The Revolutionary Holocaust" by everyone's favourite beloved talk show host, Glenn Beck.

More Videos Here

The type of pseudo-intellectuals who are attracted to left radical ideas are precisely the persons whom no one who has anything important to do would miss were they to fall off the edge of the planet. People precisely like Barack Obama, whose followers consist mainly of zombies and opportunists.

The key to removing the ability of these miscreants to do harm, is simply to demonstrate that they are not needed.

Thursday, January 21, 2010

Mr. Obama Needs a Robot er, Reboot

Once hailed as the Messiah and the Chosen One, Mr. Obama has run onto hard times -- a mere year after assuming the US presidency. Despite the unfailing support of the news and entertainment media -- the media's willingness to ignore Obama's gaffes, miscues, and absurdities -- the US public is getting tired of Mr. Hopey-Changey. Particularly since an extended financial recession and jobs crisis can be laid right at the door of Obama and the Democratic Congress.

Obama and Pelosi were warned not to pursue the nationalisation of the health care industry, the automobile industry, and the banking industry in the middle of a credit crunch and a jobs shortage, but the left-radical crusaders had waited too long to put their boot-print on the lone superpower of the world. In their eyes, the US had stood in the way of world socialist reform -- whether under the guise of climate change or under the naked banner of "social justice." Now, after a year of Obama - Pelosi, the US is much deeper in debt with nothing good to show for it, and no relief in sight.

The US public is slowly catching on to the emptiness of Obama's soaring rhetoric, and the destructiveness of his true ambitions. They are beginning to vote against the Obama - Pelosi agenda. Even formerly supportive international observers are beginning to question whether there is any substance behind the now threadbare emotions barely propping up the Obama bandwagon.
US President Barack Obama suffered a painful defeat in Massachusetts on Tuesday. With mid-term elections looming, it means that Obama will have to fundamentally re-think his political course. German commentators say it is the end of hope....

...This week, ... a week when Obama should have been celebrating the first anniversary of his inauguration -- may have been the president's worst yet. Scott Brown, an almost unknown Republican member of the Massachusetts Senate, defeated the Democratic candidate Martha Coakley for the US Senate seat vacated by the death of Senator Edward M. Kennedy. The defeat in a heavily Democratic state not only highlights Obama's massive loss of popular support during his first year in office, but it also could spell doom for his signature effort to reform the US health care system.
German commentators? Check back in 50 years to see if an independent Germany still exists outside of the Dar al Islam. While their own country is being taken over by outsiders, German commentators take their valuable time to advise President Obama on how to retain his revolutionary momentum despite apparent losses in special elections. Just kidding. It is always interesting to get an outside view -- while it lasts. ;-)

The question: Does Mr. Obama need a robot? Perhaps a robot that looks and talks like him, but has a better rounded personality? A robot who says one thing and then does the same thing he says he will do, for a change? A robot who actually serves his constituency instead of serving special interests both within the US (unions, trial lawyers, investment banks) and outside the US -- while at the same time taking strong actions to hurt the backbone of the US economy and destroy US employment?

Such an Obama robot replacement might come as a relief to the American people. German commentators would of course be appalled. They had been so much counting on an American president whose policies -- while dysfunctional -- were in agreement with their own sensibilities.

Sunday, January 17, 2010

Jews Hate Palin but America Needs a Change

America has suffered under recent changes that leave it with little hope. The hard working self-determination of America's founder population is rarely seen in a Washington DC that is focused upon stripping the US' private sector for the benefit of FOBs. The trend for America is decidedly downward -- unless the nation turns away from a corrupt dependency upon hyper-centralised government, and toward stronger, more independent-thinking citizens.

America's Jews represent a hard working and high achieving segment of the nation's population that ordinarily might appreciate a politician who espouses hard work and independence for citizens. But a majority of American Jews express outright animosity toward the Tea Party movement, and toward politicians who hold traditional American Founder's values. Why?
On one level, part of the explanation lies in misunderstanding and media-induced panic...The press ran with the story, despite its falsity, that Palin was a Buchananite...An Obama spokesman chimed in the same day, telling a Florida paper that “Palin was a supporter of Pat Buchanan . . . a Nazi sympathizer.”

The notion was planted that Palin herself was, by association, anti-Israel, and Jews remained convinced of that, despite her unflinching support for the Jewish state, the presence in her gubernatorial office of an Israeli flag, and her eagerness to attend a rally protesting Mahmoud Ahmadinejad’s visit to the UN in the fall of 2008 (which was canceled at the behest of Obama supporters, no doubt to deprive Palin of that platform)

...In her first national interview, Charles Gibson of ABC News mangled the details of a June 2008 talk she gave at the Assembly of God church she attended in her hometown of Wasilla. “You said recently,” Gibson told her, “in your old church, [that] our national leaders are sending U.S. soldiers on a task that is from God.” Palin had actually said something far different. She had encouraged the assembled to “pray for our military men and women who are striving to do what is right also for this country, that our leaders, our national leaders, are sending them out on a task that is from God.”

...Popular Jewish and non-Jewish female politicians—from Senator Diane Feinstein to Madeleine Albright to Hillary Clinton—have been modest to the point of frumpiness in appearance and professional in style, and therefore perfectly acceptable to Jewish women who aspired to similar positions of responsibility. Palin was another story... _Commentary
But America is clearly in trouble, and if some American Jews choose to reject a return to the national policies which made it possible for their forbearers to thrive in the US in the first place, perhaps it will be such reactionary Jews who are left behind this time through.

What are some of the things that rational Americans wish to happen -- to restore prosperity and a future to the floundering ship of state and the country at large? Interestingly, it is not just the libertarians and the Tea Party movement that see how badly the US government has bumbled its way into the abyss of suicidally corrupt incompetence.
An economy built upon constant and relatively free innovation is inherently difficult to sustain in a democracy. This is not so much a matter of anti-market ideology as of the painful realities of economic change. Innovation forces change, and the pain involved tends to be felt immediately while the benefits are usually diffuse and harder to perceive in the short term.

It is therefore natural for people to organize to prevent the spread of significant innovation. The original Luddites were cotton weavers who, in the throes of Britain's Industrial Revolution, responded to their displacement by automated weaving technology directly: They smashed looms. In America, people in similar situations rarely assault property en masse, but they do form political coalitions to pass laws that restrict innovation. It is understandable that the enormous waves of innovation always sweeping over a dynamic free-market economy will arouse great unease and opposition. But for that economy to prosper, the unease and opposition must be overcome. _National Affairs
Jim Manzi's piece in National Affairs is worth reading in its entirety. Manzi attempts to prescribe a solution to the Obama - Pelosi quagmire without actually stepping on too many toes, or offending the sensibilities of the mainstream pseudo-intellectual "elite" too badly. An impossible task. Yet he scores some telling points.

Wealth must be created before it can be enjoyed, shared, and transferred.  The Obama - Pelosi reich has demonstrated that it has no idea how to create wealth -- it only knows how to confiscate.

The emergence of sustainable global wealth will only occur with the coming of sustainable global trade.  Under the O-P policies, the US will sink ever lower into debtorship, the US dollar will shrink to little value, and the international economy will suffer for the loss of a stable force for global trade and commerce.

The pseudo-intellectual elite running America's newsrooms, classrooms, publishing houses, entertainment studios, and huge financial trading houses, do not have the interests of ordinary Americans at heart.  These pseudo-intellectuals now have a US government that they can support, obfuscate for, lie for, and pretend to suffer for.  But more Americans who belong in the productive class are beginning to understand the ways in which they have been led unwittingly to support an established order that is willing to use and toss them away like pawns.

If one is not a FOB, then one is not held in any value by the faux elite who are temporarily in charge of most of the mechanisms of state, education, and popular culture.   That crystal clear fact is being disseminated rapidly through the new media.  The repercussions of such a growing awareness among the middle classes and productive classes are beginning to play out.

Al Fin does not see politics as the path to the next level.  But smart politics can  prevent a great deal of human misery, and create conditions that allow the next level to develop more smoothly.

Don't be stuck on stupid.

Thursday, January 14, 2010

Be Prepared for Anything

An Ice Age is an example of a long term survival setting. If you are prepared to survive an ice age, you are prepared for almost anything. But the chances are that you are like the residents of New Orleans during Katrina -- not even prepared for a few days without electrical power, ATMs, and supermarkets. Where do you go to learn to prepare, beyond the silly mainstream media offerings of "survival-lite"?

Preparedness Pro is a website that offers good articles on survival and preparedness, as well as on-site, hands-on preparedness classes. For example: Are you interested in a backup generator for your home or cabin? Backup Power Generators: Part 1, Part 2, and Part 3 take you through the selection process and tell you where you can obtain them for the best price.

Survival Blog is a well-known and respected personal effort by James Wesley Rawles. Survival Blog offers a wide range of survival advice -- much of it provided in letters and emails relating first-person experiences with different devices and approaches to surviving difficulties.

The Survivalist Blog is another well-known preparedness blog. Here is his "Best of 2009 Survivalist Articles".

The Prepper E-Book site offers practical articles from The Survival Mom on a wide range of "be ready" topics. Example: this posting provides links to 9 articles on the topic of "bugging out / evacuating" in a hurry. By preparing ahead of time, you can have what you need, where and when you need it. There is also a prepper forum where people can compare experiences and recommendations with others with similar concerns.

Tactical Intelligence is a site that deals largely with "gear" -- survival implements that are either ready-made or improvised.

The sites above usually have links to other prepper and survival websites and services. There are at least hundreds of them, but it is generally best to start with those that are well known that serve a wide audience. You can find fairly decent free online survival videos at YouTube and other "how-to" video sharing sites listed on the Al Fin sidebar in the "Reference" section.

So, how would you prepare for an ice age, anyway? Ice sheets have been known to grow miles thick. How does one live, stay warm, grow food, maintain transportation networks, and provide schools, health care, power, sanitation, and other essential services when the land is covered with ice 1 mile thick?

First, you need a large source of combined heat and power -- a nuclear plant is ideal, a coal or bitumen / kerogen plant might also work. You would need plenty of fuel to last hundreds of years. (You should begin to see the advantage of a nuclear plant, thinking of fuel volume for that length of time. Remember that next level humans will live hundreds of years or longer, on average.)

Second, you need a method of distributing heat over a large area, preventing that area from accumulating snow and ice on a year-to-year basis (winters may last 9 or 10 months). Al Fin ice age architects recommend redundant systems of conductive, convective, and radiative transfer of heat. A village-sized geodesic dome incorporating a network of heat-pipes should provide safe shelter for the community itself. Similar structures for croplands should extend the ice-free area well beyond the residential zones. (Crops and living zones will require artificial lighting most of the year -- confirming the wisdom of locating a nuclear power plant close by. Imagine trying to survive an ice age with solar and wind power!)

Third, you need to provide a wide range of human expertise for your community -- and sound means of transferring that expertise to new members. The community will need to provide its own power, water, farming, health care, education, defence, sanitation, entertainment, maintenance, construction, search and rescue, clothing, and a wide range of other services generally overlooked.

Fourth, although the coming ice age is unlikely to progress to "Snowball Earth" -- when the ice reached the equator from both North and South -- it won't hurt to plan for extremes. To achieve a Minimum Viable Population, plan for a village of about a thousand breeding pairs -- or a group of villages whose combined populations provide a thousand breeding pairs. (Most geneticists may recommend a founder population of at least 10,000 breeding pairs, but Al Fin geneticists have discovered that 1,000 breeding pairs should be sufficient for most situations where "time-to-discovery" of other compatible human populations is no longer than 10,000 years.)

Fifth, follow a plan of expanding the "ice-free zone" around your village(s) and agricultural / industrial / power generation zones. Always incorporate your ice-melting infrastructure into any new construction. Nature will never stop trying to defeat your efforts, so you must never stop using your brain and body to assert your own intentions.

Prepare yourself mentally, physically, and emotionally to be a survivor. Then begin prepping for yourself, your family, your closest associates. Learn, teach, experiment. Always think in terms of "what could go wrong, and what could I do about it?" That should teach a bit of humility, and hopefully provide motivation for what you will have to learn to know and to do.

More: The Lifeboat Foundation has several projects dealing with existential risks which might be helpful in the event of a glaciation, including space habitats and "lifeshield bunkers." Josh Hall has devised a "weather machine" concept that would have the power to throw the Earth into an ice age, to bake the planet beyond livability, or anything in between.

Previously posted at Al Fin

Wednesday, January 13, 2010

US Economy Suffers Under Utopian Ideologue

U.S. Chamber of Commerce President Tom Donohue warned the U.S. faces a double-dip recession because of the taxes and regulations under consideration by the Democratic Congress and President Barack Obama.

Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse,” Donohue said in a speech providing the Chamber's outlook for 2010. _TheHill

Going John Galt?  Why not?  Nothing in the Obama - Pelosi agenda is oriented toward the practical need for more work opportunities for millions of unemployed and underemployed Americans.  Nothing in the O - P master plan will boost small business startups and proprietor owned and run businesses.

Why instead would not the...small business person pull in his horns and wait out the statist experiment, as our present 10% unemployment rate suggests is actually now happening.....

....what we are witnessing millions of times over are the following conclusions of the small entrepreneur: “This guy hates me and what I stand for, and wants to appropriate lots of what I make and give it to others he likes better. Therefore I am not going to take any risks, since he’s either going to take lots of what I already made or even more of what I hope to make.” _VDH

This is the age of skyrocketing government debt without end.  The entire point of most of the ongoing debt appears to be redistributing wealth and opportunity away from productive persons toward others who are more likely to vote for O - P and friends.

...The relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies… _PrisonPlanet

A utopian ideologue who happens to also be an incompetent clown. And you zombies thought things couldn't possibly get worse!

Sunday, January 10, 2010

South America's Very Own Zimbabwe

The Venezuela of Hugo Chavez is in the early stages of a Mugabe-style economic revolution. Never underestimate the ability of a left-populist dictator to destroy a once thriving economy.
The consumer price index for Caracas posted a 28.6% year-on-year increase in November. Inflation for last year is expected to come in below the 31.9% level posted in 2008.

The country's entrenched inflationary problems, which economists blame on sputtering domestic production unable to meet consumer demand, are compounded by shrinking economic activity. The economy now faces declining activity and high inflation, the classic symptoms of stagflation.

The Venezuelan economy contracted 2.9% in 2009, confirming the country's first recession in five years, according to preliminary estimates published Dec. 29 by the Venezuelan central bank. _WSJ

Venezuela devalues currency

Venezuela on the verge of devastating electrical power collapse

Currency black market thriving in Caracas

24% of Venezuelans live in abject poverty

All your banks am belonging to us

Mr. Chavez is a social reformer, a believer in social justice -- just like Mugabe and Obama. If the policies of Chavez result in the same type of devastation for Venezuela as Mugabe has brought to Zimbabwe, surely it is just a coincidence?

Mr. Obama is maneuvering the US economy into the same landing approach pattern as his predecessors, Mugabe and Chavez. Zimbabwe has already landed ($1 trillion dollar bank notes etc). Several others are on the same approach. A soft landing cannot be guaranteed.

Tuesday, January 05, 2010

Peak Oil Doom: Is It Logical?

A large number of websites are devoted to the idea that western civilisation is doomed by "Peak Oil." The Oil Drum is one of the most popular such sites, and you can find many others on their blogroll. The definition for Peak Oil appears to change as predictions from the old definitions inevitably fail.

To understand the reality behind Peak Oil better, here are two well reasoned analyses:

Michael Lynch "Crop Circles in the Desert" PDF
... the number of drilling rigs in Saudi Arabia is not very different from what it was three decades ago. The increase seen in the last 20 years reflects rising production and the need to offset depletion, plus the recent expansion program. Andnote that the U.S. industry is currently employing 1,400 rigs, more than40 times as many as Saudi Arabia.76 Thus, in order to believe the thesis that Saudi oil output is near a peak, it is necessary to believe that production costs will soar and productivity decline in a manner never seen before, contradicting both resource economics and industry experience. Incremental change is the norm, particularly when dealing with large numbers, and the possibility that costs could become prohibitive in the short term due to depletion is essentially absurd.

Robert Rapier "Reflections on the Saudi Wars"
If you simply rationalize away wrong predictions, you will likely continue to make them. But I have also learned that people using shoddy analyses to make predictions are also unlikely to own up to failed predictions. There appears to be a strong correlation between them embracing shoddy analyses that gives them the "right" answers - and rationalizing when the "right" answers turn out to be wrong.

Two recent news stories relevant to peak oil:

Fears of Oil Depletion are Exaggerated
"Assuming an extraction rate of 35 per cent, the Arab oil deposits in place could reach 2,738 billion barrels. This means the oil quantities that cannot be extracted by present technology are around 1,809 billion barrels, which are nearly 645 billion barrels above the world's proven oil resources. These quantities, if they can be extracted, will meet the world needs for 60 years.

Peak Oil: Are We There Yet?
Though oil may peak some time in the future, CERA concludes that there is little doubt that existing and potential future resources can support capacity growth through 2030.
Fossil fuels are a finite resource -- given the long period of time necessary to create them. That is a truism. You are not justified in making a leap to the assertion: "world oil production has already peaked!" You must support such an assertion using undisputed facts. The Peak Oil Doom movement has avoided the use of supported logic, in favour of emotional appeals to "the scarcity instinct," that deep fear inside many humans that keeps telling them that doom is just around the corner.

Hydrocarbons, on the other hand, are not a finite resource. Hydrocarbons are an infinitely renewable and sustainable energy resource that wait only for human ingenuity to catch up to human vision.

Peak oil does, in fact exist in one form -- political peak oil. Policies being put in place by Obama's DOE and EPA virtually guarantee high energy costs in the US and a greater need to import overseas oil. The Obama - Pelosi government is stepping all over the US energy industry's ability to produce energy of almost all important forms -- oil, coal, gas, oil sands, oil shale, nuclear, etc. Such destruction of home-grown energy potential is sure to constrict US economic growth.

"Green energy" initiatives cannot come close to making up for this government-induced energy starvation. Such economic suicide could only be based upon ideological obtuseness -- in this case, carbon hysteria.

Obama is incapable of learning and changing. His brain was fixed in its stupidity at a very early age. Only by getting rid of the entire cabal of death-wishers that populate the US government executive and legislative branches (and many federal courts) can the US economy genuinely recover.

Self-limiting delusions such as peak oil, global warming catastrophe, overpopulation, widespread environmental devastation, etc. are the mental shackles that prevent us from growing a better world.

Obama Casts a 10 Year Shadow ++

The Next Decade Will Be Hell .... Peter Schiff

US Economy to Perform Poorly over Next Decade .... WSJ

US Growth Prospects Bleak Next Decade .... Reuters

Apocalypse 2010 .... Ambrose Evans-Pritchard

Is Obama Screwing Up the Economy? ...... Eric Schmidt

US Government Expansion Threatens Recovery .... WSJ

Another Bubble Decade ... BigMoney

Obama Turns Away from Growth Policies to Pursue European Collapsism . . . NYTimes

European company executives pessimistic . . . . EuroIntelligence

US Dollar and Treasury Bonds at Risk via New Fannie Mae and Freddie Mac Debt Monetization ..... Market Oracle

Obama Presides over a Futility Economy .... Jim Kuntsler

Will Americans Revolt over Government Incompetence and Corruption? .... Nat. Review

Peak Oil Dooms Us All ..... Randall Parker

Who Has a Clue What to Do? .... Robert Rubin in Newsweek

American Economists Cannot Agree on Proper Course Out of Obama Depression .... WSJ

Previously posted at Al Fin