Resources are finite

Next challenge for “inconvenient truths”

Resources are finite. Our natural capital – rich agricultural soils, ice-age groundwater, population and species biodiversity, and the ability of the biosphere to absorb waste – is especially rapidly dwindling. We need to pay much more attention to its preservation, restoration, and rate of use.

MAHB on bad assumptions

Here is the text of this week’s posting. Please post comments below by clicking on the comments link. These are moderated so your comment will not post immediately.

The continued failure to agree, much less to act, threatens global society with further crop-damaging global heating and an assault on supplies of water for agriculture, as well as inundation of coastal civilization. Climate disruption will also contribute to the loss of both biodiversity and the crucial natural services other organisms help to provide. Add to this deleterious changes in land use, also helping to hobble food production, and the release of synthetic chemicals that are toxifying Earth from pole to pole, and the need for effective, rapid international action on humanity’s environmental predicament is clear. That is especially true since accompanying such assaults on civilization are the growing possibilities of vast pandemics and more resource wars, conceivably nuclear. Even a regional nuclear war between India and Pakistan could end civilization through its impacts on climate and the global economy.

It is clearly time to take a hard look at the false assumptions used by institutions avoiding the growing possibility that global civilization will collapse, just as regional civilizations have fallen throughout history. Institutions do not recognize the seriousness of the problem and do not have the historical memory to connect past collapses with the present predicament. Many fundamental assumptions must be reexamined and overhauled if we are to meet the challenges ahead.

economic bi-furcation

A Tale of Two American Economies

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Nouriel Roubini | Nov 18, 2009

From the Globe and Mail:

While the United States recently reported 3.5 per cent GDP growth in the third quarter, suggesting that the most severe recession since the Great Depression is over, the American economy is actually much weaker than official data suggest. In fact, official measures of GDP may grossly overstate growth in the economy, as they don’t capture the fact that business sentiment among small firms is abysmal and their output is still falling sharply. Properly corrected for this, third-quarter GDP may have been 2 per cent rather than 3.5 per cent.

The story of the U.S. is, indeed, one of two economies. There is a smaller one that is slowly recovering and a larger one that is still in a deep and persistent downturn.

Consider the following facts. While America’s official unemployment rate is already 10.2 per cent, the figure jumps to a whopping 17.5 per cent when discouraged workers and partially employed workers are included. And, while data from firms suggest that job losses in the past three months were about 600,000, household surveys, which include self-employed workers and small entrepreneurs, suggest a number above two million.

Moreover, the total effect on labour income – the product of jobs times hours worked times average hourly wages – has been more severe than that implied by the job losses alone, because many firms are cutting their workers’ hours, placing them on furlough or lowering their wages as a way to share the pain.

Many of the lost jobs – in construction, finance, and outsourced manufacturing and services – are gone forever, and recent studies suggest that a quarter of U.S. jobs can be fully outsourced over time to other countries. Thus, a growing proportion of the work force – often below the radar screen of official statistics – is losing hope of finding gainful employment, while the unemployment rate (especially for poor, unskilled workers) will remain high for a much longer period of time than in previous recessions.

Consider also the credit markets. Prime borrowers with good credit scores and investment-grade firms are not experiencing a credit crunch at this point, as the former have access to mortgages and consumer credit while the latter have access to bond and equity markets.

But non-prime borrowers – about one-third of U.S. households – do not have much access to mortgages and credit cards. They live from paycheque to paycheque – often a shrinking paycheque, owing to the decline in hourly wages and hours worked. And the credit crunch for non-investment-grade firms and smaller firms, which rely mostly on access to bank loans rather than capital markets, is still severe.

Or consider bankruptcies and defaults by households and firms. Larger firms – even those with large debt problems – can refinance their excessive liabilities in or out of court, but an unprecedented number of small businesses are going bankrupt. The same holds for households, with millions of weaker and poorer borrowers defaulting on mortgages, credit cards, auto loans, student loans and other consumer credit.

Consider also what is happening to private consumption and retail sales. Recent monthly figures suggest a rise in retail sales. But, because the official statistics capture mostly sales by larger retailers and exclude the fall by hundreds of thousands of smaller stores and businesses that have failed, consumption looks better than it really is.

And, while higher-income and wealthier households have a buffer of savings to smooth consumption and avoid having to increase savings, most lower-income households must save more, as banks and other lenders cut back on home-equity loans and lower limits on credit cards. As a result, the household savings rate has risen from zero to 4 per cent of disposable income. But it must rise further, to 8 per cent, in order to reduce the high leverage of the household sector.

To be sure, the U.S. government is increasing its budget deficits to put a floor under demand. But most state and local governments that have experienced a collapse in tax revenues must sharply retrench spending by firing policemen, teachers and firefighters while also cutting welfare benefits and social services for the poor. Many state and local governments in poorer regions are at risk of bankruptcy without a massive federal bailout.

Moreover, income and wealth inequality is rising again. Poorer households are at greater risk of unemployment, falling wages or reductions in hours worked, all leading to lower labour income, whereas on Wall Street, outrageous bonuses have returned with a vengeance. With the stock market rising and home prices still falling, the wealthy are becoming richer, while the middle class and the poor – whose main wealth is a house rather than equities – are becoming poorer and being saddled with an unsustainable debt burden.

So, while the United States may technically be close to the end of a severe recession, most of America is facing a near-depression. Little wonder, then, that few Americans believe that what walks like a duck and quacks like a duck is actually the phoenix of recovery.

Economy and realism

We’ve all hard the hype about the economy is getting better. the NYT this morning has the following well-meaning editorial with some sense of correction of the normal upbeat forecasts.

EDITORIAL

Jobless Recovery

If you are looking for an economic recovery you can believe in, the October employment report is not for you.

After contracting for a year and a half, the economy grew in the quarter that ended in September, driven largely by federal stimulus. But government spending, as large and as necessary as it has been, has not been enough to revive hiring.

Unemployment surged from 9.8 percent in September to 10.2 percent last month, its highest level since 1983. At the same time, the economy lost 190,000 more jobs. That means employers have eliminated 7.3 million positions since the recession began in December 2007.

As dreadful as they are, the headline numbers understate the severity of the problem. They also obscure an even grimmer fact: Unless there is more government support, it will take several years of robust economic growth — by no means a sure thing — to recoup the jobs that have been lost.

The unemployment rate includes only jobless people who have looked for work in the past four weeks. The underemployment rate — which also includes jobless workers who have not recently looked for work and part-timers who need full-time work — reached 17.5 percent in October. And the long-term unemployment rate — the share of the unemployed population out of work for more than six months — also continues to set records. It is now 35.6 percent.

The official job-loss data also fail to take note of 2.8 million additional jobs needed to absorb new workers who have joined the labor force during the recession. When those missing jobs are added to the official total, the economy comes up short by 10.1 million jobs.

Taken together, the numbers paint this stark picture: At no time in post-World War II America has it been more difficult to find a job, to plan for the future, or — for tens of millions of Americans — to merely get by.

At a recent meeting at the White House to discuss job creation, President Obama said that “bold, innovative action,” would be needed — from the administration, Congress and the private sector — to undo the devastation in the labor market. Americans are waiting for Mr. Obama to lead the way.

There were good ideas floated at the White House meeting, including bolstered federal support for efforts to retrofit and weatherize homes and public buildings. There was also talk of using government money to establishing a so-called infrastructure bank that would issue bonds to help finance big construction projects.

The country also needs a program that would create jobs for teenagers — ages 16 to 19 — whose unemployment rate is currently a record 27.6 percent. Deep and prolonged unemployment among the young is especially worrisome. It means they do not have a chance, and may never get the chance, to acquire needed skills, permanently hobbling their earnings potential.

We know that more stimulus spending and government programs are a fraught topic. But they are exactly what the country needs. It may be the only way to prevent a renewed downturn. And the only way to create the jobs needed to put Americans back to work. Those are the essential — and missing — ingredients of a sustained recovery.

The problem is the failure to understand the dynamics. The central part of our economy, banks and large ownership, have jettisoned costs, much of it wages, at the periphery, and so while total economic activity is down, the situation has been restructured so that upper class incomes are more or less where they were, with the difference being carried by those who lost jobs. If this picture is correct, there is no motive to go back to the old job picture except solid growth. But people are maxed out on consumptions of some kinds and are not coming back, and growth or even a steady state economy will not work with climate change needs.

SO the conclusion is, I conclude, that there is no recovery possible. What we need instead is a very wide ranging rethinking our economy, how people get incomes and the costs of things that are basic. A focus on local agriculture and new ways of housing – a new  homesteading –. Hoping for a techno-green fix is hypocritical because the motive is to ride a new wave, to make money rather than make usefulness.

wealth transfer

http://www.sciencemag.org/cgi/content/full/326/5953/682

This is important in giving  sense of how power moves in a society, including the US.

Small-scale human societies range from foraging bands with a strong egalitarian ethos to more economically stratified agrarian and pastoral societies. We explain this variation in inequality using a dynamic model in which a population’s long-run steady-state level of inequality depends on the extent to which its most important forms of wealth are transmitted within families across generations. We estimate the degree of intergenerational transmission of three different types of wealth (material, embodied, and relational), as well as the extent of wealth inequality in 21 historical and contemporary populations. We show that intergenerational transmission of wealth and wealth inequality are substantial among pastoral and small-scale agricultural societies (on a par with or even exceeding the most unequal modern industrial economies) but are limited among horticultural and foraging peoples (equivalent to the most egalitarian of modern industrial populations). Differences in the technology by which a people derive their livelihood and in the institutions and norms making up the economic system jointly contribute to this pattern.

Energy Self-Reliant States

Good summary

Energy Self-Reliant States: Second and Expanded EditionPublished October 2009Author: John FarrellAvailable Now – Energy Self-Reliant States 2edHow self-sufficient in energy generation could states be if they relied only on their own renewable resources? In November 2008, ILSR began to address this question in the first edition of Energy Self-Reliant States.  That report included a limited set of resources – on-shore wind and rooftop solar photovoltaic PV – and also examined the potential for biomass-derived transportation fuels.  This updated edition of Energy Self-Reliant States narrows the focus to electricity, but includes virtually all renewable resources on shore and off shore wind, micro hydro, combined heat and power, geothermal, rooftop PV.  We also discuss the potential gains from improving energy efficiency and estimate the per kWh costs for each state to become energy independent.The data in this report suggest that every state could generate a significant percentage of its electricity with homegrown renewable energy. At least three-fifths of the fifty states could meet all their internal electricity needs from renewable energy generated inside their borders.  Every state with a renewable energy mandate can meet it with in-state renewable fuels. And, as the report discusses, even these estimates may be conservative.

via Energy Self-Reliant States: Second and Expanded Edition | The New Rules Project.

3.5 percent growth?

The reason this is important is that  less psychic availability for people thinking much about climate issues, and dealing with climate change requires that everyone feel it is working for them. that is NOT true when people are unemployed or feel threatened by unemployment.

From Krugman in the NYT

 

Growth and jobs

Just a quick note on the GDP report. Obviously, 3.5 percent growth is a lot better than shrinkage. But it’s not enough — not remotely enough — to make any real headway against the unemployment problem. Here’s the scatterplot of annual growth versus annual changes in the unemployment rate over the past 60 years:

BEA, BLS

Basically, we’d be lucky if growth at this rate brought unemployment down by half a percentage point per year. At this rate, we wouldn’t reach anything that feels like full employment until well into the second Palin administration.

PEW on interest in climate change

There are a number of ope ed's and such pointing to this poll showing lees public interest and less credibility attributed to warming.

http://pewresearch.org/pubs/1386/cap-and-trade-global-warming-opinion

there are two issues: first, many more are aware of the issue, but with that awareness come biases that sometime support and sometime undermine the findings. This seems normal as more people are involved. But the negative shift in opinion also is amplified by something more complex: if global warming is rel, given our perceptions of government capability, nothing can happen, so hey, let's look on the bright side, maybbe they are all nuts, or self serving alarmists looking for contracts. meanwhile I've a job to worry about.

In my own casual interviews i am finding that people are deeply concerned and want to turn it off because they feel helpless, and worse, that the pliticians are helpless. Hence lowering warming as a priority issue. the increased concern about economic survival and potential violence always ways heavily.

hence I would not conclude that there is simply less interest in global warming; rather than the perfect storm means increased concen for other issues and decreased priority for global warming (planetary change).

The obvious weakness of the Obama admin to deal with banking, Afghanistan, Katrina, health reform, and Israel/Palestine suggest that the government will not be able to deal with climate. So change the channel.

This means it is our job to show how climate change issues and the other issues are all interconnected, in fact a big deal, and in fact needing systemic responses that might just need to really change things quickly. – doug

The place of the humanities. requires having a humanistic education

I've been thinking about the humanities and their relation to climate change thinking. We live in a society that is very thing oriented, to the point of being comfortable (what's the big deal?) of thinking of humans as things (scripted robots in some social science). The humanities educates us to the realm of other human qualities, from manners to spirituality to the drama of lived lives. So it is not just that humanities brings perspective to the way we think about trying to get climate change legislation and policy. it actually is a requirement first that people even recognize that the human side is important. Until they grant this, perspective from the humanities toward climate change issues (history for eample, or archeology), then those perspectives go unhheded because not even understood.

As sort of catch up, and nudged by a friend who said its good, I am reading The Three muskateers. I always thought it a kind of adolescent book, and read an adolescent targeted vesion when i was about 13. It is just terrific. the louts of youth, nevertheless are always musing about what they ought to be doing, how they ought to live and conduct themselves. Along the way there is also much about how each perceieves their fellow humans, the sly art of diagnosing one's companions. It is really an intense education and easy to imagine the hot shot hedge fund guys acting just as the Muskateers did, full of prride and ego – and insight (oh if only the later!).

What kind of government can cope?

We have a politics that is based on struggles between – among -factions. And with complexity and population increase, it seems to be capturalble by a small handful. Looking at our history, the war against Mexico, the war against the Philippines were small men wielding big newspapers and driving decisions without a full inquiry.

The decision to send trains across the continent, to allow smoking, to fund banks and create a federal reserve – reserved for its owners – were fateful an made some rich and impoverished the country. They were not even honest experiments in adaptation. Such experiments would allow us to go down some path, and, when the results are not good, reconsider. Now special interests own the infrastructure built on past decisions they often paid for.

How do we create a politics that is better at dealing with systemic and holistic issues? Monarchy, plutocracy, oligarchy, democracy? Technicians want a faster system, but more holistic tends to mean slower decision making and implementation. The cautionary principle is driving with the breaks on.

One advantage of monarchy is that because the society is the family, decisions tend to be based on the welfare of the family. The rub is of course that dad want's a larger share, and the kids make bad inheritors of the crown.