Facts are Stubborn Things
Drink the long, Drink the long draught
Drink the long draught for the Big Priest
Check the record, Check the record
Check the guy’s track record
He is not Appreciated
So drink the long, Drink the long draught
Drink the long draught for the Hip Priest
— The Fall
First, the International Energy Agency, despite its European address, the IEA was founded by none other than America’s greatest practitioner of modern realpolitik — blut, eisen, und oil, Mr. Kissinger, the IEA “sounded the alarm about a potential oil supply crunch and higher prices.” The IEA states it was wrong about American oil shale calling it “a surge, rather than revolution.” You know, kind of like Iraq.
To drive the point home, today the FT has a piece by Mohammad Al Sabban, "a professor of economics at the King Abdulaziz University in Jeddah and a former senior adviser to the Saudi oil minister." Mr Sabban says, "for the production of tight oil to continue at increasing rates, the industry must overcome environmental challenges. According to the 2012 report from the US Environmental Protection Agency, fracking produced 280bn gallons of toxic wastewater, 45,000 tons of air pollution and 100m metric tons of carbon dioxide-equivalent global warming pollution," thus, "Saudi Arabia will continue to be the most influential energy producer for years to come because of its record of moderate pricing and as the most dependable, secure source of oil." My there’s humor here a plenty, but lets look at the leakage of fact, most importantly the need for water in fracking.
The AP has a story about how the oil industry is learning to “recycle” its fracking waste water. The AP writes,
"Fracking operations require millions of gallons of relatively clean water. Each time a well is drilled, about 20 percent of the water eventually re-emerges, but it is packed with contaminants from drilling chemicals and heavy metals picked up when the water hits oil. Until recently, that water was dumped as waste, often into deep injection wells."
I guess that’s a “recycling landfill,” call it American environmentalism."Many companies, each using slightly different technology and methods, are offering ways of reusing that water. Some, like Schlosberg’s Water Rescue Services, statically charge the water so that waste particles separate and fall to the bottom. Those solids are taken to a landfill, leaving more than 95 percent of the water clean enough to be reused for fracking.”
"By the end of the year, the oil giant BP is expected to complete work on new equipment that will more than triple the amount of petroleum coke produced by its Whiting refinery on Lake Michigan. The project will turn the sprawling Indiana plant into the world’s second-largest source of petroleum coke, also known as petcoke, and Chicago into one of the biggest repositories of the high-sulfur, high-carbon waste."
“BP this week confirmed that all of its petcoke is shipped a few miles across the state border to sites in the East Side and South Deering neighborhoods. Residents say black clouds of dust blow off uncovered piles of petcoke and coal in the area so frequently that people are forced to keep their children inside with the windows closed.”
So, that’s a pretty good number of facts about oil in 2013. It’s getting heavier and heavier and more and more expensive, while the Sauds remain the key link in the global oil pipeline, which is lucky that they’re our #1 ally in the Mid-East, despite the rarely recognized fact of their propensity to blowing things up, including much of the Middle East, but how would any good American find fault with that? And of course, it must be added the great public service provided by the American taxpayer of making sure oil flows through the Gulf to the world, no matter how great the fires raging around Gulf shores. These costs are never accounted in the cost of oil, the American budget, or anywhere else. But why should they? 9.9 out of 10 economists will tell you the price of oil has nothing to do with the health of the global economy or an international money system built on cheap oil. Phew, and they want you to take them seriously about anything else.
Facts are stubborn things.
one for the professor
"Unfortunately for the cause of democratic governance, the industrial revolution weakened the accumulated (democratic)experiential tradition. In the first instance, the dynamics of the controlling market that materialized under capitalism inexorably yielded enormous concentrations of economic power that not only narrowed the range of sanctioned political debate but also produced transparent social excesses and human suffering. In recoil, alarmed democrats shifted their attention from a focus on building democratic civil society to a new objective: harnessing the state as an a instrument of ameliorating gross social inequities. The parameters of public discussion therefore gradually contracted in the twentieth century to a narrow argument over the merits and useful extent of state participation in the economy. At the decision making level, civil society and the accompanying practices of civic humanism virtually disappeared as politics became a truncated discussion among competing and cooperating elites. In this abbreviated political context, recurring economic depressions and other social strains eventually produced the sundry adjustments that comprise the essential ingredients of modern welfare capitalism. These adjustments were brokered by political parties managed by distant elites. The parties themselves constituted a skeletal stand-in for civil society, for they were essentially unoccupied by the citizenry, which merely visited them briefly on election days. Forms of welfare, it was discovered, generated remote bureaucracies that heightened popular preoccupation with rules administered by the state, even as the forms themselves distanced people from each other and, effectively, from basic political decision making." - Lawrence Goodwyn, Breaking the Barrier, The Rise of Solidarity in Poland
Professor Goodwyn was someone who in a paragraph, or even a sentence, could say more than most in a book. The professor was about making people think. He considered it important. Getting people to think is one of the great radical acts of politics going back to at least the Greeks, who of course put Socrates to death for undermining the thinking of Athenian youth. Larry just got tenure at Duke, where he tried to get people to think about democracy, which remains a very radical concept beause it forces you to think about power. All real power doesn’t like to be thought about, just accepted. The above paragraph from Breaking the Barrier challenges much established thinking about contemporary politics by clearly defining its confines. This is a great service for providing perspective on the latest round of political dysfunction in DC.
It’s important to understand the core political “division” which defined American politics in the 20th century. Professor Goodwyn accurately defines it, “The parameters of public discussion therefore gradually contracted in the twentieth century to a narrow argument over the merits and useful extent of state participation in the economy.” In understanding this, it removes a little of the huff and puff about the present bad DC reality-show. The defunders and defaulters attempt to quell Obamacare is simply an old fight about the role of the state. Maybe more importantly, the supposedly pro-state interventionists have always been rather halfhearted about it, certainly never as fervent supporters as old Europe, or the Eastern Europeans and their experiments with total national-state power. The state interventionists latest lukewarm support of the role of the state is Obamacare itself, which advocates the virtues of the insurance industry and large medical conglomerates much more so than it purports a role for the state.
The distinctly American anti-state ethos came with the republic’s founding. The one thing the professor understood well was the historical anomaly this republic was, and for all its faults, in the late 18th and across much of the 19th century, the US provided some true small “d” democratic experience, certainly more than anything experienced in Europe at the time or since. From that limited experience, we learned the architecture of democracy is de-centralized. For almost a hundred years across much of the US, the government any particular citizen encountered was local - city or county. This encounter was in many instances participatory, the citizen part of the process — this is self-government. As Larry pointed out, it was Jefferson’s insightful democratic understanding that any large democratic structure was comprised of smaller “elementary republics.”
Across the 19th century as the nation industrialized, these elementary republics lost power to the states, federal government and corporations. Political economic power increasingly concentrated in DC and in centralized industrial corporations. Thus the most amusing aspect of America’s anti-statists is their refusal to recognize the necessity of the growth of DC for the growth of their favored corporate conglomerate. Though pro-statists, liberals particularily, never had much difficulty with that. The great liberal Democratic moment that dominated American politics for a half-century, the New Deal, was a simple acceptance of the DC/corporate conglomerate partnership. The professor, for all his democratic empathies was a liberal, though with an understanding liberalism and democracy were never necessarily synonymous. He once imparted the New Deal wasn’t much more than “a compact between the oil companies and banks” — ho ho, lot of truth to that. And if you don’t believe that, take a read of Arthur “the eternal liberal recurrence” Schlesinger’s 1956 piece, Liberalism in America — Phew, American liberalism was always mighty thin gruel to fuel a healthy body politic.
Which brings us to the much more interesting part of our latest DC “crisis,” the Republicans’ threat to default. Unfortunately, as it now plays out, this is simply just another aspect of the 20th century debate of the role of the state. However, this an opportunity, a “teachable moment,” on the question of money. The money question has been removed from political debate for over century, that folks is power. And if you want to understand, and you should, the last great debate on money in America, read the professor’s The Populist Moment: A Short History of the Agrarian Revolt in America, one of the great works on American history. The Populist Momentshows the last fight for control of our present money system. A fight between what remained of our yeoman farm democratic republic and the new banking system and their debt-money. The banks won. Their power soon institutionalized with the creation of the Federal Reserve in 1913. A staple of 19th century politics, questions about money in the 20th century became relegated to cranks and various conspiracy theorists. Again, that’s real power.
In fact, there’s a great story about the professor and one of his students, William Greider. Bill went to a talk by the professor in the early ’80s and told him he wanted to write a history of the Fed, and the professor, knowing talking about money was a fool’s errand in America, told him in no uncertain terms, “Don’t do it.” Nonetheless, a few years later, Greider put out the excellent Secrets of Temple, a history of the Fed and America’s great inflationary period of the 1970s. Greider learned what it was like to talk about money in America, particularly getting people to understand money is created from nothing, and in a bank debt-money system, this creation process is controlled by the banks. “It’s like telling people there is no god,” he declared. Greider didn’t get hemlock or Duke tenure, he got a desk at “The Nation.”
Well whatever questions about god, money has a certain reality and despite all societal illusions, it’s rather straight forward. The modern bank debt-money system developed across 19th century America. Its development intricately tied to industrialism. So much so, that many of the problems presently facing the money system are tied directly to the current transformation of the industrial system, but I’m jumping ahead of the narrative. When the republic was founded, there were only three banks in the entire country. This is the most important point to understand; the republic, industrialization, the corporation, and the modern bank debt-money system were all birthed in the same era, only the first proved to have much or any democratic composition.
At the start of the 19th century, as industrialization geared up across the country, banks began to proliferate. After Andrew Jackson killed the 2nd National Bank, there was a period that might be described as “democratic money.” During this brief couple decades ending with the Civil War, banks sprang up across the country, providing the currency that helped build great swathes of the nation. This currency was banknotes. While banknotes had been around for some time, invented by the Chinese a thousand years before, it took until the 19th century for them to become a large part of the common currency. Banknotes were simply paper issued by banks, that could in theory, though at times not in practice, be reclaimed at the issuing bank for a “hard” specie currency such as gold or silver.
However, it’s imperative to understand banknotes were not based on specie stored in the bank vault, but on debt owed by bank customers. When banks made a loan, they simply accounted it an asset and released more banknotes based on the money due — very simply this is bank debt-money — the basis of our present money system. The greatest reason this system worked, or worked as it has, is the tremendous economic growth accomplished with industrialization. As long as a bank made a loan that was fully paid back, the banknotes released were “good” money. In the 19th century, almost all debt created was investment debt based on creating future wealth. The massive rise in consumer debt of the last several decades is a new phenomenon, and in ways part of the growing problems of the money system. Consumer debt creates no new wealth, in fact just the opposite, it consumes established wealth.
It took a century for the bank debt-money system to evolve into what we know today and it didn’t happen without great turmoil. The entire 19th century saw a series of monetary crises, also known as “bank panics.” In these panics, faith in large amounts of established debt was collectively and simultaneously questioned, resulting in the failing of much debt, even some good debt. Failing debt caused a massive contraction in money. As bad or questionable debt lost value, the money system contracted, thus too the economy, causing great economic dislocation.
By the 1880s, at the time of the Populists, the nation’s banking system was increasingly consolidated along the east coast, extensively in New York. These institutions were creating the debt, or as bankers like to say, providing the funding for the latest great industrial project — the railroads. As the railroads snaked their way across the continent, they allowed greater control over farm produce markets. The mass of yeoman farmers, now stretching, all the way across the prairies to Texas and Nebraska found themselves in ever greater debt. The fall’s reaping never produced quite enough money to payoff the debt of the spring’s sowing. The farmers thought, talked, united and rebelled against the money system, but the banks won out. The yeoman farmer republic with its economic independence and thus political power, the democratic foundation of Jefferson’s republic, was finished. Industrialism represented by the banks and railroads, along with a much less democratic order, triumphed.
In 1907, another great Bank Panic occurred. The now dominant east coast bank establishment decided it needed a quasi-government entity to help quell such future panics, thus was born the Federal Reserve. The Fed is for all practical purposes the banks, it is the institutionalization of the bank debt-money system. If you need proof of this, just look at the top of a dollar bill, it is a “Federal Reserve Note,” that is a banknote. The Fed’s first and foremost job is in times of panic, the most recent in 2008, to create money to help lesson the contraction of bank debt-money. The Fed simply prints or these days electronically creates money and distributes to the banks. Thus, the banks gained a total monopoly on the money creation process, and to be able to create money is the prime power component of any money system.
As a historian of democracy or more precisely a historian of that still unanswered question what causes a people continually put upon to one day stand up and say, “Enough,” Professor Goodwyn's The Populist Moment records the final victory of the establishment of our very undemocratic money system. With our bank debt-money system, we have allowed the banks great control of our economy. They decide what gets built or not and how things work. Today, with six banking institutions responsible for 60% of all bank activity, bank power is consolidated at the most unprecedented level in American history. In regards to the present government default “crisis,” under the constitution, the government has every right to simply print the money it needs, that is create it. Instead we abdicate this authority, making government go through the banking system to get bank debt-money.
In the last several decades, the bank debt-money system has changed. There is no longer as profitable correlation between the creation of debt and economic growth. Ever greater amounts of debt are not leading to greater economic growth. There are many reasons for this growing failure including; the end of the era of cheap oil, the growth in consumption debt, and fully established industrialized societies simply don’t experience, that is, they don’t need the levels of growth of an agrarian system first industrializing, such as the US did when the bank debt-money system evolved in the 19th century. Today, ever more debt and the Fed’s protection of bad debt, simply upholds a failing status quo, constraining every aspect of the system while further indenturing the majority.
What the present crisis really represents is the growing dysfunction of American politics, government, and the money system itself. 20th century political debate on the role of the state is no longer sufficient not just for democratic discussion, as that’s always been limited, but the future itself. The question of the construct of government in the 21st century is as essential as debating its role. The domination of industrial technologies is waning, a new era of quantum technologies, to this point best represented by the networked microprocessor is causing massive dislocation in industrial practices, values, and institutions, making some institutions, particularly those information based, more powerful and undemocratic than ever. If money at its core is a power system and its greatest value lies in its information content, even if that is simply nothing more than a gross quantitative value, what does this mean when new information systems creating and manipulating massive amounts of information contain certain qualitative values, and have no need to be transferred into bank debt-money to be utilized? In such systems, what is the equivalent of the yeoman farm that gives each and every person a certain independence and thus the power to be a citizen in ways the industrial job never allowed? What are the associations or the “elementary republics” by which each of these citizens combine with others to become political?
Of course, none of this will be questioned in the circus that is our present politics, a bad show put on by exhausted “elites,” who from whatever congregation they claim their own, are simply repeating the insolvent doctrines of a past era. Our institutions are increasingly reactionary, incapable of meeting a future that will either require they are massively reformed or fade to obsolescence. Yet, we have no politics to deal with these questions. Unlike the 19th century, the construct of money remains firmly above politics, at best, the 20th century constraints of the state’s role remain i.e. how much regulation? Yet, this is mostly a moot question, as the election’s process, the one remaining avenue for any sort of citizen input has become corrupted and coopted to the point of being close to impotent.
The great question is will the American people come together and create a new politics for the 21st century? And to do this, it is necessary to create a new political culture for the old one is decrepit and eminently anti-democratic. What might make the American job-holder/consumer reclaim their most important identity, that of the equal citizen, coming together to begin the necessary reform of their politics and self-government? This a question the professor concluded begins with a little learning and thought, coming to life with discussion and action. All democratic politics is seemingly simple as that.
war and peace
“For reasons known or unknown to us the French began to drown and kill one another. And corresponding to the event its justification appears in people’s belief that this was necessary for the welfare of France, for liberty, and for equality. People ceased to kill one another, and this event was accompanied by its justification in the necessity for a centralization of power, resistance to Europe, and so on. Men went from the west to the east killing their fellow men, and the event was accompanied by phrases about the glory of France, the baseness of England, and so on. History shows us that these justifications of the events have no common sense and are all contradictory, as in the case of killing a man as the result of recognizing his rights, and the killing of millions in Russia for the humiliation of England. But these justifications have a very necessary significance in their own day.”
“These justifications release those who produce the events from moral responsibility. These temporary aims are like the broom fixed in front of a locomotive to clear the snow from the rails in front: they clear men’s moral responsibilities from their path.
“Without such justification there would be no reply to the simplest question that presents itself when examining each historical event. How is it that millions of men commit collective crimes—make war, commit murder, and so on?” - Lev Nikolayevich Tolstoy, War and Peace
In the summer of 2002, I covered a good deal of ground across this country, talking to a lot of people. I said to them all, “They’re going into Iraq.” In response, I was met pretty much universally with a blank stare. I concluded with absolutely no doubt, they’re going and no opposition would form to stop them. So, I decided to be as far away as possible from not just one of the great blunders of American history, but one of the sublime idiocies of a great power in world history.
I arrived in Johannesburg, South Africa eight months before the start of “Operation Iraqi Liberation.” My sojourn started with Global Green as an official participant in the United Nations World Summit on Sustainability. We did some great work there, advocating the then radical sum of $50 billion to help kick-start the global solar industry, which would need to wait another five years and the Chinese. We also did a couple good things with the former Governor of California, then Mayor of Oakland, and now once again Governor of California - boy, that’s almost a title worthy a Jesuit. In Johannesburg, the then Mayor “didn’t know” whether he was for or against the Iraq incursion. This is not surprising. At the time, the Mayor still had some aspirations to assume the purple, and if you have presidential aspirations in America, you must make clear you’re ready to kill. Previously, in 1992, the then ex-governor presidential candidate made the point he would send troops into Haiti, publicly demonstrating a very presidential will to kill. “Jerry, don’t you think,” I asked at the time, “That almost two centuries of relations between the US and Haiti demonstrates one thing — the best possible thing for the Haitian people might be if we left them alone?”
I spent the last several months before the start of the Iraq Occupation watching the clouds tumble off Table Mountain. I was staying in small family run guesthouse in the Bo-Kaap neighborhood of Capetown. Half the third floor was an open-roof terrace, opening right on the bottom of Table Mountain. The other half of the top floor was a common room where late into many nights I’d watch CNN or the BBC with some Europeans and one of the sons of the family who was in high school. He kept saying/asking, “This is the start of World War III isn’t it?” A question still unanswered.
History is long and for whatever necessary justifications you want to make in any given day, the matters of war and peace Tolstoy argued, never fall neatly, except for the killing. With tremendous justification, one could make a case the current mess in Syria is a direct result of the Iraq occupation, but it would only be partly right. The present situation in Syria also has direct ties to the 1953 CIA coup overthrowing the duly elected prime minister of Iran and replacing him with the Shah. The elected Mohammad Mosaddegh committed the great crime of nationalizing Iran’s oil industry — bye-bye Anglo-Iranian Oil Company, i.e. BP. This was unacceptable to the Dulles brothers amongst other great men in DC.
We should always keep in mind the unending epic bungling of the bipartisan American foreign policy establishment. Syria is the culmination of decades of US policy best described as “one mistake after another.” Including the bipartisan policies advocated by many in the spring of 2003, that it would be a good idea to blow-up the Middle East. Despite the fact, the region at the time was largely American clients and allies, while the so called hostiles — Iraq, Iran, Syria — were completely contained, and another, Libya, was even starting to work with us. Yet, it became official American policy to blow-up the region. Truly and stupendously one of the greatest imperial blunders of world history.
So, things have gone to plan and Syria bloodily forges the next link in the chain explosion. But a couple weeks ago, a funny thing happened on the way to critical mass. The current president had a case of nerves and called for a congressional vote. An act of anachronistic republican quaintness for such a post-modern imperial figure, don’t you think? Wish I could have been at the State Department or DOD and watch the reactions to that little presidential improvisation. It reminds us all of right before the launch of Operation Iraqi Liberation, then Illinois State Senator Barack Hussein Obama’s opposition to the occupation, but showing his presidential aspirations in the same speech, he deliberately pointed out he wasn’t against all wars, just this one — a presidential will to kill. On this, he has been good on his word.
In the last few days, Mr. Obama’s case of bad nerves has become a full scale fiasco, with a little help of the Secretary of State, who personifies the nihilistic and brutal incompetence of contemporary Washington DC. The Secretary let loose, “rhetorically,” an international solution. The Russians immediately jumped on it, followed by a host of others including the Syrians. Most importantly, for now, it took the air out of our war establishment’s bellows, allowing the brave men and women of our Congress to scurry quickly away from what looks a precarious vote. They can read polls. The American public is exhausted with unending wars. Lord, what would the American people be saying if they were forced to pay for these continuous military misadventures, instead of putting-off the costs by indenturing their progeny? How much of the $16 trillion national debt built-up from the first oil crisis in 1973 is from costs for “securing” the Gulf and the world’s remaining conventional oil supplies? That’s never a question asked amongst polite company in the chandeliered dining rooms of our weapons manufacturers, nor in any election debate.
Whatever today’s necessary manufactured justifications, Syria is about oil, as was the Iranian coup in 1953 and almost every US action taken in the Middle East between the two. We should all keep in mind, the deal sort of put on the table by the Secretary of State is the same one given to Mr. Hussein in 1991. Two years later, the UN weapons inspectors declared Iraq had dismantled all their chemical weapons, which as you’ll remember, were no justification for us to go to war when Iraq used those weapons against the Iranians only a few years before. Then for eight years, the Clintons refused to accept the UN’s verification, crushing the Iraqi economy with sanctions and the Iraqi people with continual bombing. Let’s especially not forget the great bombing of Baghdad days before Mr. Bill’s impeachment. No lack of will to kill by this 60’s draft-dodger. The justification — weapons of mass destruction — the same phantom weapons promoted by W. in the months leading up to the launch of the Iraq Occupation as I watched from Capetown five years later.
So, whatever in the near term happens with Syria, and whatever the justification, it will by no means be a solution. Though it’s a good time to remind your Congressperson that voting for further killing in the Middle East means one simple thing, they will not get your vote in the next election. For an elected official’s mind, this is a fundamentally reptilian message, one, all will get, especially if you vote the whole lot out. More importantly, it’s time to ask ourselves, how are we going to transition away from an oil dependent economy? We can start by transferring a whole lot of money from the military budget. This would be a debt to saddle on your kids, a not immoral justification. In fact, for each of us, it’s a moral responsibility. In writing of the great events of world history, Tolstoy had a very small “d” democratic view of morality.
oil and the global order
Bushes are in disagreement with the heat
L L L L A A A A
This is my happening and it freaks me out
— The Fall, This Nation’s Saving Grace
A few years back, Gore Vidal told a story about a friend of his in the Soviet Union, some of you remember the Soviet Union right? It was the big threat before Al-Qeada. Gore commented to his Soviet friend that he was remarkably well informed about the world despite Pravda being his main source of global news. His friend simply replied, “You must know how to read Pravda.” Gore was making a point about “our own Pravda,” the New York Times. Brothers and sisters how many read the NYT who don’t know how?
One thing about good propaganda is any actual truth it can incorporate makes the disinformation or untruths seem more viable. All readers of the NYT remember they were big propagandists for the Iraq Occupation on the front page with Judith Miller, so it’s interesting to see a nice piece about Iraq oil today, lots of truths.
The six o’clock alarm would never ring
But it rings and I rise, wipe the sleep out of my eyes
The shavin’ razor’s cold and it stings
You once thought of me as a white knight on a steed
Now you know how happy we can be
Our good times start and end, without dollar one to spend
But how much baby, do we really need?
Cheer up sleepy Jean, oh what can it mean
To a daydream believer and a homecoming queen
- Daydream Believer
One of the things about living in an era of great change is grand illusions of established power shatter at an ever faster pace. One of le grandest illusions offered by our industrial political economy has been the idea of something called “oil markets.” In the scripture of modern free-marketeerism, the allegory of oil markets are the equivalent of the transfiguration or maybe the virgin birth. The simple fact is oil’s not been a market since Mr. Rockefeller established his monopoly, yet in over a century how many times has the term oil markets been repeated, particularly in such august financial journals as the Wall Street Journal or Financial Times?
So as the financial press with each passing day gets ever more difficult to discern from the funny papers, the FT has a most amusing story about EU regulators busting into some of the oil majors for price fixing - ho ho ho - that would be price setting. That’s what the oil companies do, just like the Libor “scandal” where it was discovered banks set interest rates. Nonetheless, the FT through the comedy, and all good high comedy reveals a little truth states,
— John Lee Hooker
Since the election of Shinzo Abe five months ago and his pledge to do whatever necessary, or was that Draghi, maybe it was Chairman Ben, the Nikkei has gone up 75% - chart here - who says there’s no money to be made?
TOKYO (AP) — Japan’s parliament elected Shinzo Abe as the nation’s prime minister on Wednesday, ending three years of rule by liberal administrations and bringing back to power the conservative, pro-big business party that has run Japan for most of the post-World War II era.
Abe, whose nationalist positions have in the past angered Japan’s neighbors, is the country’s seventh prime minister in just over six years. He has promised to restore growth to an economy that has been struggling for 20 years.
Jeremy Grantham, the Heretic as Reformer
Mother of Rome, delight of Gods and men,
dear Venus that beneath the gliding stars
makest to teem the many-voyaged main
and fruitful lands—for all living things
through thee alone are evermore conceived,
through thee are risen to visit the great sun — before thee,
Goddess, and thy coming on,
flee stormy wind and massy clouds away,
for thee the daedal earth bears scented flowers,
for thee waters of the unvexed deep smile,
and the hollows of the serene sky
glow with diffused radiance for thee!
Divine one, give my words Immortal charm.
Lull to a timely rest O’er sea and land the savage works of war,
for thou alone hast power with public peace to aid mortality;
since he who rules the savage works of battle, puissant Mars,
how often to thy bosom flings his strength O’ermastered by the eternal wound of love
— and there, with eyes and full throat backward thrown,
gazing, my Goddess, open-mouthed at thee,
pastures on love his greedy sight, his breath hanging upon thy lips
him thus reclined fill with thy holy body, round, above!
Pour from those lips soft syllables to win Peace for the Romans, glorious Lady, peace!
- Titus Lucretius Carus, De rerum natura
So it is obvious, or certainly should be, to have any understanding of the global economy, one cannot ask an economist of any stripe. The same goes for those in the financial community, but in the depths of this darkness a light has shone. I cannot more highly recommend this Jeremy Grantham interview. Mr. Grantham is a stockbroker and made a lot of money in the past four decades. He has turned heretic to financial and economic orthodoxy by simply looking at the nature of things.
As a true radical, from the Latin, “to the root,” Mr. Grantham starts not with a bunch of theories or faiths, but looks at natural resource numbers for a finite planet. Mr. Grantham undermines the impossible faith at the root of all establishment economics — infinite growth on a finite planet. Mr. Grantham makes a number of important points, here’s three of the most important:
1)We are at the end of the fossil fuel era both for environmental reasons, in the case of coal and natural gas, and depletion in the case of oil.In less than an hour, Mr. Grantham destroys the foundation of modern economics, showing that it is and always has been little more than a secular scripture for certain power structures. But do not despair if you’re so inclined when illusions are broken, Grantham also offers a path for the future. In looking at our political economy, the foundation is not economic principles but natural resources. Accounting for the value and costs of natural resources, in their extraction, molding, and resulting impacts is the foundation of all economy. Secondly, what technologies are used in the processes of extraction and molding of resources defines the political economic culture. Finally, the culture, institutions, and values of political economy are dependent on natural resources and technologies.
2)The era of cheap oil is over, what we deem modernity is built on oil, and economists of all stripes haven’t a clue on how to account for the value of oil in the present economy.
3)The idea that more debt creates growth is simply not true. That since 1982 when the banks took complete control of the economy, total debt was 1.4 times total US GDP to today, debt is 3.5 times, economic growth has slowed. Meaning whatever side of the debt debate you’re on, it’s not providing any light.
Change has come, we are at the end of the fossil fuel industrial era. The questions of money and finance dominating our current economic “debate”, matter little. The continued pumping of money by central banks into a system that is failing, and it fails because it increasingly has no relation to natural resources, does little more than slow inevitable and necessary change. The longer we continue a futile attempt at upholding the present status quo, the more we insure change will be catastrophic — for that brothers and sisters is the nature of things.
May we all soon be heretics.
Oil Industry Propaganda
im useless but not for long, the future is coming on
i see destruction and demise, corruption in disguise
so mother fuckers remember what the thought is
i brought all this so you can survive when law is lawless
i aint happy, im feeling glad, i got sunshine in a bag,
im useless but not for long my future is coming on
is coming on
it’s coming on
- Gorillaz and Del the Funky HomoSapien
After following matters of oil for much much longer than I care to think, in the last year propaganda from the industry has been thickerer than black gold, Texas Tea, Canadian Tar. One great pitch, forget about “peak oil” we’re going to soon reach “peak demand” - hallelujah brothers and sisters!
This piece today in the FT should go under advertising, call it Judith Miller oil reporting, do you readers of the New York Times remember Judith Miller, she was an oil reporter. It states,
and in subhead the nut
Yes brothers and sisters, investment, or in other words costs, as opposed to production. Because remember North Sea production peaked in 1999 at 4.5 million barrels a day, it’s down to around 1.5 million barrels a day today, so with my numbers thats a decline of 66% in 14 years. Supposedly, this record investment will in five years add half million barrels, I dont think they’re counting decline rates in that, whatever, it aint Mrs. Thacther mid-80s North Sea, she was the original Tony Blair ya know? nor sure as hell not Nasdaq 5000, hummers in the oval office, 1999 ten bucks a barrel - oooh Bubba!
Breaking the Chains of Authority and the Confines of Present Imagination
"We are at the very beginning of time for the human race. It is not unreasonable that we grapple with problems. There are tens of thousands of years in the future. Our responsibility is to do what we can, learn what we can, improve the solutions and pass them on. It is our responsibility to leave the men of the future a free hand. In the impetuous youth of humanity, we can make grave errors that can stunt our growth for a long time. This we will do if we say we have the answers now, so young and ignorant; if we suppress all discussion, all criticism, saying, ‘This is it, boys, man is saved!’ and thus doom man for a long time to the chains of authority, confined to the limits of our present imagination. It has been done so many times before." — Richard Feynman — QED: The Strange Theory of Light and Matter
When we think of “chains of authority,” invariably we think of political, cultural and economic institutions. The act of separating power into these structures is an authority of its own. What we rarely consider with “chains of authority” is technology, and it is technology, and specifically industrial technology, that is faltering, offering no solutions to the fast metastasizing challenges of global political economy. Without breaking the chains to this technology and continuing to confine our imaginations to industrial thinking, we shall commit humanity’s greatest sin – shackling the future.
“The valley could yield 10 billion barrels, Tullow estimates, enough to supply Kenya for three centuries or the U.S. for about 18 months.”
good thing we’re doing 2 billion in “car resarch”, I did a book party here in the high desert last weekend, and this old new left guy, when I said getting people to leave their car at home one day a week, scoffed, “that’s politics?”
“The highest and noblest,” I replied.