I'm still a believer in zero-growth as the new worldwide paradigm. Sadly, to reach that point, there will first have to be negative-growth to reach equilibrium. Negative growth is painful. Sustainable economy
is a reasonable and possible endeavor. Here's the situation as I see it:
1) Price for oil should be a lot higher than it is now. Large-scale concerns (worries about the health of the economies that consume oil) have kept the price artificially low. I find proof of this interpretation in the recent price hike that resulted only from good economic indicators. Price increases usually result from changes in supply or demand, but this price increase at the gas pump resulted only from optimism rather than actual demand. That's how eager the industry is to raise prices to their proper equilibrium.
Oil prices rose more than 2 percent on Monday to their highest since October 2008, after U.S. manufacturing, home sales and jobs data boosted optimism about a recovery in the world's top economy. The U.S. service sector grew in March at its fastest pace in nearly four years while pending home sales also rose, according to the ISM industry survey and a National Association of Realtors report on Monday. That added to optimism following Labor Department data released on Friday showing U.S. payrolls rose by 162,000 last month, the fastest rate in three years. U.S. crude oil for May delivery settled up $1.75 to $86.62 a barrel. Prices have risen by 8.3 percent since March 26, in their steepest 5-day winning streak since December.
2) Full-time jobs aren't coming back. The official unemployment rate seems to have leveled off finally, but that's nowhere near the same thing as a recovery. Also, the "feel" of the economy is worse than the unemployment rate would suggest. This table
shows why. U3 is the "official unemployment" rate, but U6 is better at showing how the typical American is faring under the hardship. U6 is much higher than U3. People are staying unemployed, temp employed, and part-time employed for very long durations. This stall is not the same as "recovery"
3) Our industry (as currently structured) cannot recover unless cheap energy is available. Peak oil has passed, and it's not coming back. Recent news about Obama authorizing drilling off our coastlines is only good press meant to mollify conservatives. It won't actually help our underlying problem. This table
(skip to page 8) shows why.
That link provides a March 2009 presentation from U.S. Department of Energy conference. They point out that after the year 2011, world energy needs will be met by this mysterious white space called "Unidentified Projects
". That's a polite way of saying, "There isn't any more oil." Drilling off the coastline won't erase the gap. Drilling in Alaska won't erase the gap. The problem is that there was a limited amount of oil on the planet, and more than half of it is now gone. The Iraq war was about fighting to keep our hands on some of the last productive fields on Earth.
4) Obama has also announced plans to help build new nuclear reactors. I've already explained
why building new nuclear reactors is the same bad decision as drilling for more oil. Limited resource, dwindling supplies, no long term energy solution.
5) The dollar is toast. World banks are colluding to keep it propped up beyond its natural lifespan. We chose an exponential function for the creation of our currency, and such a decision embeds late-life hyperinflation into the structure of the thing. We've reached that point finally. It's not Bush's asshattery, it's not Obama's lousy financial regulation, and it's not the corrupt Federal Reserve Bank. It's the mathematical model that we chose decades ago for our money. It's absolutely the wrong model.
"The fact of the matter is, the US government is now conducting weekly Treasury auctions that are as large as quarterly auctions were just a few years ago. Exponential increase, anyone? $165 billion in a single week is an enormous pile to unload.
In summary, I think this is what zero growth feels like. This is what life will be like after the crash. (Yes, I said after
the crash.) Learn to live with less stuff (energy, tech, travel), and life will actually be rather nice.
I went out to garden this morning after 8am, but the temperature was barely above freezing. I got my hands in the dirt and they went numb, so I came back inside. It's nearly time to plant, and I'm eager!