Thursday, June 28, 2007

Storm Clouds

The latest authority to acknowledge our impending crisis, based on finite resources that we nevertheless continue to plunder without reserve or foresight, is the chief economist of the IEA (International Energy Agency), Fatah Birol. In essence, as reported here, "the chief economist of the International Energy Agency (i.e. the intergovernmental body created after the oil shocks of the 70s to coordinate the West's reaction to energy crises) effectively says that peak oil is just around the corner, and that without Iraqi oil, we'll be in deep trouble by 2015."

While one wishes to think well of the leaders of one's nation, the level of cynicism that arises - based on the utter lack of seriousness with which our leaders are addressing this unavoidable gathering of stormclouds - mounts without halt. Then again, perhaps the evidence of their deep concern is hidden in plain view. If truth be told, the most reasonable and best explanation lying behind the invasion of Iraq was to allow us all to continue our charmed if reckless lifestyle. All those critics of the invasion - and they are now legion - need to ask themselves about their complicity in the perceived grounds for the invasion: the "non-negotiable" American way of life. While we damn the invasion, we continue to build out the suburbs, to drive without pause, to shop without bothering to calculate our income against our debts, and to count our winnings in the stock market roulette. Viewed in the most charitable light, the war in Iraq was undertaken to allow us to continue our unsustainable way of life, if even just for a few more years.


Many now widely acknowledge the folly of the invasion without further recognizing the deeper folly of the motivation that underlie it and its continued presumptive authority. We decry how the invasion was conducted without momentarily questioning whether our conduct and efforts of our leaders to facilitate this conduct contributed to the belief that there was no other course. On the one hand, Americans have shown little capacity or desire to be told the truth, above all, that we must do with less, that consumption and waste are not our natural birthright. There was, for instance, no outraged rejection of George Bush's suggestion that the patriotic response to 9/11 was to go shopping. This immaturity has been facilitated by our political leaders, who have told us for the past thirty years that we could have tax cuts without worrying about deficits, that we could have economic growth without concern for its effects on future generations, and that we could transfer the wealth of the nation to other sovereign nations who do not intend our good.

The simplest explanation for this widespread irresponsibility is that such pandering helps politicians win elections: Ronald Reagan, for instance, won in part by decrying Jimmy Carter's purported un-American calls for conservation and acknowledgement of limits. While Jimmy Carter had and has many faults, telling the truth in 1979 was not one. The more malevolent explanation, and one not mutually exclusive to this first, is that our continued recklessness benefits the plutocrats of our society who have greatest access to our politicians. Our plutocrats once believed that what was good for our corporations was good for America. This is no longer the case: they now believe that what is good for their bottom line is good for themselves. The smart money is moving offshore, and our business leaders hire lawyers to advise them how not to hire American workers. The business class comes daily closer to being a treasonous class, but that's the glory of globalization. It is deeply ironic how the liberal professoriate's praise of cosmopolitanism and globalization plays so well into the anti-patriotic profit motive of our plutocrats. Our so-called intellectual class are philosophic enablers to the corporate class that they purportedly decry - but this relationship was present at the creation of liberalism.

While the pandering of our leaders and the temptations of our plutocrats may have seeped deeply into the citizenry - and, by all appearances, most of our fellow citizens are not well-disposed to hearing the truth - nevertheless, it is within the realm of possibility to imagine a leader who would have the capacity, the prudence, the patriotism and talent to deliver the hard news to the American citizenry, and thereby appeal to the better angels of their nature. The nation once accepted the sacrifice of the flower of a generation that men should not earn their bread from the sweat of another man's brow. Surely our nation has the fortitude to reject again this temptation born of Original Sin, to earn our bread instead through proper forms of work and acknowledge limits on human efforts to master nature and one another.

Sunday, June 24, 2007

Against Nature

I had an interesting discussion over the weekend with a liberal reader of this "blog" who wanted to know why I was so worked up over Peak Oil and had nary a word to say about global warming. It was a good question, and one I've been reflecting on quite a bit over the course of today (my initial response, by the way, was to point out that in all likelihood we'll experience some severe civilizational dislocation in coming months and years as a result of peak oil, whereas global warming will be largely experienced in the way a frog experiences being slowly warmed to a boil, so, I tend to worry more about the more immediate apocalypse. While a wholly provisional answer, it's probably true).

But, really, it is a good question, and I think I have arrived at something of an answer: when I learned about "peak oil" - that is, the imminent depletion of roughly half the world's oil reserves, and by far the easiest accessible and cheapest stuff - it finally made sense to me why a political philosophy that I had long held to be fundamentally false - modern liberalism - nevertheless had prospered for roughly the past 100 years and had gone into hyper-drive over the past half-century. Modern liberalism - the philosophy premised upon a belief in individual autonomy, one that rejected the centrality of culture and tradition, that eschewed the goal or aim of cultivation toward the good established by dint of (human) nature itself, that regarded all groups and communities as arbitrarily formed and therefore alterable at will, that emphasized the primacy of economic growth as a precondition of the good society and upon that base developed a theory of progress (material as well as moral), and one that valorized the human will itself as the source of sufficient justification for the human mastery of nature, including human nature (e.g., bio-technological improvement of the species) - is against nature, and therefore ought not to have "worked." The argument that I and others have made is that liberalism is premised upon a false understanding of human nature. If so, however, it ought not to have done as well as it has, essentially colonizing most of the planet and transforming it in its own image. When something is against nature, it tends to lose: nature sets the standard and establishes the limits by which creaturely endeavors stand or fall. We humans might believe ourselves capable of breathing underwater, and we will be able to do that for a very short while, but eventually nature will win and anyone trying to inhale H20 will be dead. Or, we might think that we can throw ourselves off a cliff and fly - and one could try that and indeed fly, but only downward, and only for a very short while. Nature differentiates between political theories for real human beings and political theories that are nothing more than fantasy. And, I have held, liberalism is one of the greatest delusive fantasies ever contrived by humans.

Except, that is, for the tricky fact of the human capacity to control nature. We've figured out ways to breath underwater and fly off cliffs without dying, after all. The modern project - as set out by such thinkers as Machiavelli, Bacon, and Hobbes, was the effort to subject nature to human control and dominion. It scored some early and important victories, overcoming some nasty diseases and making it possible for us to live longer and sometimes better lives. But still, other than some random bohemians who actually believed that they could largely escape from the kinds of cultural arrangements that seemed necessary to cultivate new generations of people, most people didn't live their lives in accord with the basic assumptions and the ultimate aims of the liberal project. Most people were bourgeois traditionalists, that hated class by Marx and his progeny.

While the nineteenth century was the era in which the philosophy of progressive liberalism took shape (Comte, Mill, Marx, Emerson), it took the twentieth century to really make liberalism seem to be a truly viable universal political philosophy. Suddenly autonomy seemed available to everyone: the ability to live authentically was democratized; culture became a fashion statement, not a way of life which shaped and formed a person's character; and the ability to get up and go was not only universally extended, it became a prerequisite for a well-lived life. The age of the bourgeois bohemian was born, and that of their offspring, the meritocratic "organization kids." Unless students in my classes come from cities like New York, Boston or San Francisco, it's unlikely that any of them will return to their home towns. That would be a betrayal of their education, nay, their upward mobility. We raise our children not to contribute to the communities in which they are raised - to carry on the work that was bequethed to parents by their parents and their parents before them - but to light out for the territory. The idea of tradition as a necessary contribution to the formation of human character seemed like one of those old fashioned contraptions that modern progress was able to do away with. Cultivation went out in the same way as the butter churn, the washboard, or the scythe.

How is it that we could live the past 100 years, really and most intensely the past 50 years, in contradiction to what centuries of humanity held to be true about human nature? Once I began reading about the peak of world oil production, scheduled to begin about now (if it hasn't already) after only about 150 years of use and 50 years in which we have transformed human civilization in its image, it suddenly made sense to me: liberalism was able so radically to defy nature for a time because it had an incredible external energy source - oil - and we humans had deluded ourselves into thinking that what must have been true for the course of our own lifetimes must always be true. We had reordered the way we live our lives in ways made possible by a one-time use of an energy form that took hundreds of millions of years to form, and which was basically exhausted by about two generations of humans living in the north-western hemisphere who lived lavishly, who spent and wasted without hesitation, and who expended this inheritance without thought of tomorrow or the costs to be borne by future generations. It was truly a glorious time to be alive (if you were one of these light-skinned people). Glorious, that is, if you really didn't give a damn about the next generations.

Because what these approximately two generations had done was to break a vital link of transmission and knowledge - one that the liberal fantasy theory had believed could be broken, but that real human beings knew could not - that is, until they convinced themselves that they had enabled themselves to progress beyond such stultifying and limiting sets of precepts and hard work. Who needed neighborhoods when we could live in McMansions? Why worry about relatives assisting in the raising of children when we had Sesame Street and Barney? Why grow and make the kids food produced locally when we could buy them convenient sized Lunchables (TM) and Capri-Sun (TM) juice packs? Why let them run around through the neighborhood with other kids when we could drive them in SUVs to their "playdates" or any number of adult-organized events that could eventually go on their resumes or they could be safely at home practicing simulated violence on their Game Cubes (TM), especially considering the evening news fostered our fears that there was a killer and a pedophile behind every suburban berm?

Oil has been the silent but world-altering source of our collective delusion that we could live in this way and get away with it. It has allowed us to contrive a civilization based upon a theoretical fantasy, and to make it functional for about a century, during which time we took the exceptional for the ordinary, the unnatural for the given, the hubristic for the norm. We have reshaped the world to accord with a self-delusive fantasy, with the only stipulation being that there continue to be unlimited quantities of this external power source that would let growth and its attendant power over nature go on forever. Most of us assume there's no problem with this basic presupposition - except that we are about to discover that you can only defy gravity for so long, as the example of Icarus ought to have served as a reminder.

And as I was thinking about this today, I happened to pick up a collection of essays by Wendell Berry called "The Gift of Good Land," and read an essay written in 1979 entitled "Energy in Agriculture." And there, in several paragraphs, Berry had figured out nearly thirty years ago what is only now starting to work its way through my thick head and will begin, sadly, to rise to the level of consciousness of our countrymen in coming months and years. He wrote:

In recent years, "something was gaining speed in our country that I think will seem more and more strange as time goes by. This was a curious set of assumptions, both personal and public, about 'progress....' For years this set of assumptions was rarely spoken and more rarely questioned, and yet it has been one of the most powerful social forces at work in this country in modern times.

"But these assumptions could not accomplish much on their own. What gave them power, and made them finally able to dominate and reshape our society, was the growth of technology for the production and use of fossil fuel energy. This energy could be made available to empower such unprecedented social change because it was 'cheap.' But we were able to consider it 'cheap' only by a kind of moral simplicity: the assumption that we had a 'right' to as much of it as we could use. This was a 'right' made solely by might. Because fossil fuels, however abundant they once were [!], were nevertheless limited in quanity and not renewable, they obviously did not 'belong' to one generation more than another. We ignored the claims of posterity simply because we could, the living being stronger than the unborn, and so worked the 'miracle' of industrial progress by the theft of energy from (among others) our children.

"That is the real foundation of our progress and our affluence. The reason we are a rich nation is not that we have earned so much wealth - you cannot, by any honest means, earn or deserve so much. The reason is simply that we have learned, and become willing, to market and use up in our time the birthright and livelihood of posterity....

"And so energy is not just fuel. It is a powerful social and cultural influence. The kind and quantity of energy we use determine the kind and quality of life we live. Our conversion to fossil fuel energy subjected society to a sort of technological determinism, shifting population and values according to a the new patterns and values of industrialization..." (pp. 127-128).

Wow!!

So we have enjoyed this collective delusion, this liberal theoretical fantasy-made-real for the past fifty years, and are perhaps only now realizing that we are going to have one hell of a hangover headache in the morning. When our children have fantasies we praise them and marvel at their imaginative creativity. When adults have fantasies, they sometimes have the tendency to become political philosophies, and for most of human history have been relegated to the quaint and fascinating genre of utopian literature. However, with the twentieth century, and in the wake of the modern belief and commendation of the conquest of nature, these political fantasies gave rise to the ideologies of fascism and communism and relegated millions of people to premature death for the sake of creating a world that accorded with our fanciful political delusions. Modern liberalism believed that it was free of such self-delusion, but only because it was powered by a limited and diminishing energy source that made the delusion work for a time. Liberalism, ironically, provided the theoretical justification to pursue "power after power that ceaseth only in death"; having provided the impetus to the pursuit of the irresponsible use of the earth's inheritance, it will now ravage future generations. It would have been yet another quaint political fantasy that oddballs might have studied, except that it provided the philosophical justification for employing the energy that made it work for a time. This delayed our realization that it was yet another political fantasy, a delay that is likely to prove catastrophic.

Modern conservatism was born out of a reaction against dangerous political fantasies. It first stood up - in the person of Edmund Burke - against the mad ideology of the French Revolution. It stood up against fascism and against communism. But now most of its (American) voices defend our current delusion as solid and real, as something defensible on conservative grounds. Conservatives rightly decry the decline of culture, the assault on the family and the unlimited infanticide of our abortion regime, but find nothing else wrong with the basic arrangement and largely do not question whether our political and economic arrangements have contributed to what we denounce. Books will be written about how this could have happened. But, perhaps we are not long from the day when conservatives will realize the fantasy they have themselves been purveying, and will demand that we prepare ourselves now for a post-petroleum reinstatement of human culture, cultivation, and tradition.

P.S.: Given a backlog of writing projects and piles of books I wish to read, I plan to post here about once a week during the summer, and not at all during the month of August, when I will be blissfully out of range of any internet connection.

Wednesday, June 20, 2007

Coming Home to Roost

The Washington Post featured two recent columns by economic writers Steven Pearlstein and Robert Samuelson , and much like writers for the Economist, Wall Street Journal and Bloomberg, both warned of the growing likelihood of a severe downturn in the economy as a consequence of our decades-long splurge of easy credit and growing debt burden. Samuelson notes that we are likely "to discover that the long period of cheap credit has left a nasty residue." Pearlstein speaks of the distinction between the current era of cheap credit and "normal times," and predicts that "sanity will be restored" - though it won't be a pleasant return to normalcy.

Here's a scary part of the column by Pearlstein:

"It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.

"But the damage won't be limited to Wall Street and its investors. For if we've learned one thing in the past 20 years, it is that what happens on financial markets, in booms and in busts, can have a big impact on the rest of the economy.

"Without the billions of dollars flowing each year to financiers and corporate executives, there will be less money to trickle down to car salesmen, yacht makers, real estate agents, third-home builders and busboys at luxury resorts.

"Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines.

"And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption.

"It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.

"The recent decline in home prices and the meltdown in the market for subprime mortgages are the first signs that the air is coming out of the credit bubble. Already, those factors have shaved half a percentage point off the economic growth rate. And you can be sure that there will be a much larger impact on jobs and incomes from a broad decline in stock and bond prices, a sharp tightening of credit and the turmoil that both of those will create in the murky derivatives markets."

When "sanity" returns, it's not clear that we will have many options other than some serious belt-tightening and lots of unpleasantries, like foreclosures, bankruptcies, deprivation and unemployment. It's becoming clear that the economy is beginning to enter a period that economists tell us isn't supposed to happen, namely that economic condition that we experienced during our first national experience with Peak Oil - "stagflation." Even as prices of basic commodities - above all oil and food - are inexorably increasing, our economic system is poised to enter a period of recession if not depression-like conditions. Unlike past instances, it's unlikely that the Fed will be able to bail us out: unlike the market crash of 1987 or the dot.com crash of 2000, cheap credit is not really an option given the worries over inflation - inflation that will not go away in times of shrinking worldwide energy supplies. The Fed also cannot realistically lower interest rates, since the risk of further sell-off of U.S. bonds by foreign holders would only increase. And, unlike the 1970s, the Saudis won't bail us out by pumping more oil - growing evidence suggests they can't. Like our first encounter with stagflation, the experience will be very unpleasant indeed, one without an end in sight, and one that not many people of this generation are prepared to experience.

Tuesday, June 19, 2007

Securing our Borders

I wrote:

"I'm willing to bet that many of our most fervent anti-immigration voices also drive really big vehicles. Funny how the two might be connected."

D. B. Kenner replied:

"I don't get this comment. Is it axiomatic that those who want secure borders, want to stem the tide border-related crime, want living wages for low-income jobs, and who care about decline of American sovereignty under Bush are hypocrites and drive gas-guzzling cars?

Everything you outline in this post is of concern to many of us who want secure borders. Here's what's connected: cheap oil and cheap labor; global trade and unprotected borders; declining wages and fat cat criminality; a corn-soaked food industry and a cheap labor-loaked economy."

Mr. Kenner is right to call me out on this: my aside was referring to some comments by Alan Greenspan, who was noting that declining production of the once giant Cantarell oil field in Mexico was going to decimate the Mexican economy and Mexican social services and drive more illegal immigrants to America to look for jobs. My aside - to link thoughtless American driving habits to the immigration problem - is actually far more complicated that I suggested, of course. Greenspan's comments intimated that unless oil prices rise even more substantively than they already have, the Mexican tax base will wither and the crush of people crossing the Rio Grande will only grow. So, it's probably a good thing that Americans - pro- and anti-illegal immigrant alike - drive lots of SUVs and continue to burn lots of fuel, since that will ensure that prices continue to rise and will help keep money flowing into the Mexican government coffers. Of course, the secondary benefit of that petroleum price increase is the undermining of the American economy, ensuring that fewer illegal immigrants will even want to come to America, so I guess that's a good thing, if stemming the tide of illegals is at the top of one's list.

My passing comment was really intended to highlight what are often unconscious behaviors by even critics of illegal immigration that support the widespread existence of illegal immigrants. We like cheap products, and thus "the Market" seeks cheap labor to produce those products as cheaply as possible. In many cases, we seek those cheap labor markets legally (often after making laws that legally formalize the practice, e.g. NAFTA, etc.), and we then enjoy large quantities of cheap products produced by overseas labor. However, not all cheap labor can be done overseas (though alot can, including dentistry!), so a cheap local labor market has developed to do various kinds of menial work that most Americans are not willing to do as cheaply as illegal immigrants are willing to do. So, we may not like illegal immigrants in themselves, but we like our cheaply produced agricultural products, our cheaply produced housing, our cheaply plucked chickens and cheaply slaughtered cattle, our cheap child care and cheap care for the elderly. As with many vices, a "black market" has developed to feed our moral weaknesses - in this case, our unwillingness to pay what things actually should cost. In this sense, the outsourcing of basic manufacturing overseas is driven by the same fundamental impulse as the blind eye that has largely been turned to illegal immigrants until fairly recently. The most basic form of this vice is the pursuit of the lowest price; more profoundly, it is the avoidance of forms of work or compensation for such work that would force us to pay the actual cost of things - either in hard work or deferred gratification. At the heart of this impulse is the gnostic effort to escape from "drudgery" identified by Wendell Berry and ably described by Jason Peters.

Opponents of illegal immigration demand that we secure our borders in order to ensure our "sovereignty," but will doing this meaningfully ensure our sovereignty in an age of outsourcing and "the service economy," of massive foreign ownership of US government debt and our reliance on "foreign oil" (a.k.a., oil)? Why do we not hear from illegal immigration opponents any arguments on behalf of paying higher prices for citizen-produced goods? Organic markets have sprung up to ensure that certain kinds of goods have been produced humanely (e.g., free range chickens or grass-fed cattle), and tend to be a mainstay in Blue State cities (e.g., Whole Foods, etc.). Couldn't some illegal immigration critic begin a supermarket that would sell "citizen-produced" products or housing tracts built only by citizen-contractors? How about a fast food chain with only citizen-produced ground beef and chicken nuggets? Would our consumers flood them, in spite of the higher prices? Would it force producers who use illegal immigrant labor to start doing employment I.D. checks? Think of what happened last time there was a "Buy American" effort. The dominance of Wal-Mart throughout Red State America (not to mention Blue State America) does not inspire confidence.

Sure, by all means let's secure our borders. Nevertheless, the argument that securing our southern border will ensure our "sovereignty" just rings a bit false in an era in which America demands "everyday low prices," and as a result is everyday more beholden to Saudi Arabian oil, Chinese plastic products and Far Eastern purchasers of our debt. Practicing the primary end of sovereignty - self-governance - would go a long way to securing our borders.

Saturday, June 16, 2007

More Wackos

Golly, I'm just so sick and tired of these wacko, fringe publications predicting that the world may be about "to plunge into a new Dark Age" due to peak oil. Talk about hyperbole!!! Here's the latest rant, published by some crazy outfit called "Business Week." Among some of the outrageous claims the obviously deranged author advances are these numbers:

"All alternatives—geothermal, solar, wind, etc.—produce only 3% of the energy supplied by oil. If oil demand rises by 2% while output remains flat, generation of alternative energy would have to expand 60% a year. That's more than twice the rate of wind power, the fastest-growing alternative energy. And all this incremental energy would somehow have to be delivered to transportation (which consumes most of the oil produced each year) just to stay even with the growth in demand."

So, this raving madman draws the following set of conclusions: "With nothing to fill the gap, global economic growth would slow, stop, and then reverse; international tensions would soar as nations seek access to diminishing supplies, enriching autocratic rulers in unstable oil states; and, unless other sources of energy could be ramped up with extreme haste, the world could plunge into a new Dark Age."

Well, I don't know about you, but I've had enough of these fringe publications and their lunatic rantings. From now on I'm sticking to the mainstream business press, which wisely recognizes that "the market" will take care of the problem, if there really is a problem at all. "Business Week" - with a wacky name like that, you know it must be run by a bunch of people on drugs or something.

Friday, June 15, 2007

Cha-Ching

Critics of the idea of peak oil point out - quite rightly - that there's plenty of black gold left. This is true - but peak oil isn't an argument that we're about to run out of the stuff. Rather, the theory is based upon the readily observable phenomenon of what happens when you get most of the easy stuff out of the ground (remember pictures of those gushers? That was oil escaping the earth under the power of its own pressure, something that's more a memory than a reality). What is left in the ground is harder to get out, that is, it gets more expensive to produce. The easiest way to explain this is EROEI: "energy returned on energy invested." In its heyday in the 1940s, the U.S. was getting the equivalent of 100 barrels of oil for every barrel it invested in retrieving it. Nowadays we're fortunate if we get around 15:1, which is still pretty good. Compare to some other EROEI numbers: wind, 5:1; solar, 4:1; tar sands, 1.5:1; hydrogen, 1:1; and, my favorite, ethanol, approximately -1:1. That's right - the alternative energy future being pushed by our political leaders is a net energy loser, once you calculate the amount of petroleum inputs needed for fertilizer, pesticides, and processing. Can anyone say "government subsidies"?

Basically, you can't get something for nothing, though the society we built during the day of the 100:1 EROEI was based on that fantasy. We will experience Peak Oil not in the form of running out of the stuff, but in the form of higher prices. So, when you read the paper, you too can start making the connections - it's really fun! So, for instance, a front page story in today's New York Times notes the jump in interest rates last week that will make the cost of borrowing (housing, capital investment, etc.) more expensive. Watch all the fun when all those ARMs start adjusting (well, it's happening already, with foreclosures reported today to be at historic highs)... Why did the interest rates go up? Inflation, of course. Where's the inflation coming from? Well, the article doesn't really say: "Producer Prices" rose nearly 1% in May - but what made the cost of production go up that much? Do your own investigative reporting...

Sometimes, however, the paper will even do some of the work for you! Here's an article on the front of today's business page of the Washington Post: "The Rising Tide of Corn: Ethanol Driven Demand Felt Across the Market." Two dots are connected here: our food prices are rising because of the demand for ethanol (which is, recall, a net energy loser, so we're actually getting hit twice - once in our food prices and again through our taxes, in the form of agricultural subsidies). Our entire food system is based upon cheap corn (a product whose price has gone up over 42% over the past year) - everything from our sweeteners (corn syrup) to our carbohydrates (corn meal) to milk and meat (corn fed beef), to eggs (corn fed chickens), not to mention all the corn-derived additives (maltodextrin, anyone?). As Michael Pollan points out in his great book "The Omnivore's Dilemma," we're as close to being made out of corn as the Incas were. Except that we grow our corn by dousing it in petroleum (fertilizers, pesticides), so actually we're mostly made out of oil in the form of corn.

Now, the article makes two of these connections - it notes that "the nation's unquenchable thirst for gasoline - and finding an alternative to what's been called our addiction to oil - has caused an unintended consequence: The cost of the foods that fuel our bodies has jumped." One question the Post reporter doesn't ask, however, is why we don't just buy more oil so that the price of corn can drop and food can become cheaper again. Inquiring minds want to know... Once you begin to make the connections, you realize that everything we assume about our society is about to change. The growth economy will be a thing of the past. We will have to get by with less. We will have to change our patterns of living. The suburbs will become unsustainable. Living in a community will not be a hippie option. And, that's if things go relatively well....

"We're Doing it to Ourselves"...

...according to T. Boone Pickens, one of the richest men on the planet and one of those fringe crazies who think we have passed the peak of worldwide oil production. Yea, he's so crazy, he's laughing all the way to the bank. What are we doing? Well, for starters, we're driving up the price of oil by using so much of it to power our happy motoring paradise, air-conditioning the desert, making more plastic than we can throw away and basing most of our diet on the stuff.

But, that's not all. Alan Greenspan notes that the decline in oil production in Mexico - the Cantarell oil field has been crashing for several years now, and taking with it most of the tax and income base of the Mexican government - is only going to worsen the influx of immigrants looking for better financial futures. I'm willing to bet that many of our most fervent anti-immigration voices also drive really big vehicles. Funny how the two might be connected. Alan Greenspan suggests how we'll keep the yearning masses at home: gas prices will have to offset declining production. Don't want Mexican immigrants? Pay more for gas.

And, what do our fearless leaders in Washington tell us? Blame it on the oil companies. Yea, that's it: must be those malevolent corporations. Because the last thing a leader might suggest is that we're doing it to ourselves.

Thursday, June 14, 2007

"The Nation" Gets Real

Here's an article by a Wall Street private equity investor that was published in yesterday's issue of "The Nation." The author describes the connections between the invasion of Iraq, the decline in worldwide oil production (dare we call it by its name?), and the falling dollar. In sum, it describes some of the financial symptoms of the decline of the American empire. This is not typical stuff for "The Nation," to worry about America's fiscal solvency (many of their normal domestic policy fantasies, oops, I mean proposals, would only add to our national fiscal woes), but it's a telling one. The article is one more piece of evidence that elements of the Left and the Right are becoming indistinguishable in their decrial of the short-sighted policies of the past eight years - and let's be honest, the past 30, at least - that have doomed our children to a life of hardship. This article might just as easily have appeared in "The American Conservative" (or here, by a former Reagan hand and National Review author), and touches on many themes that have been discussed in some previously linked writing by Andrew Bacevich.

The article is better than most at articulating the close connection between the weakening dollar, our debt regime and the perils of declining worldwide oil production (others do a good job, however). In short, we are facing the decline of the purchasing power of our currency as a result of our ongoing spree to finance (mostly by debt) our happy motoring paradise in the face of declining worldwide oil reserves and our incapacity to control what remains. For several decades we have relied upon the recycling of petro-dollars to prop up the American economy, even as the republic has shipped most of its actual production overseas and has transformed itself into a "consumer nation." Our only real collateral during this spending and borrowing spree has been our currency, the default world reserve currency for the purchase of, above all, petroleum.

In an understated moment, the author notes that "certain nations are evidencing a declining interest in accepting the dollar as a medium of exchange. It was in October 2000 that Saddam insisted that Iraq’s oil be paid for in euros. But now Russia wants payment for the energy it exports in rubles. Venezuela and Iran insist on euros. Kuwait has recently unpegged its dinar from the dollar in favor of a basket of currencies." To anyone who thinks that there wasn't a weapon of mass destruction in Iraq, just bear in mind that in 2000 Iraq effectively pushed the self-destruction of the American economy to its next logical step. Imagine if we couldn't just print dollars to buy oil anymore! Imagine if we had to buy Euros or Rubles or Dinars in order to purchase our favorite drug! Imagine if other countries didn't have to buy dollars anymore when they wanted to buy oil! Guess what would happen when all those bonds held in Asia started flooding the market in a scramble to get out of a worthless currency? People might actually discover that we're broke!! In effect, the linking of the dollar and international trade in oil has provided an actual source of value for the dollar - something akin to a gold standard - making it possible for the U.S. to run up its fabulous levels of unrepayable debt that would have forced any other nation to declare bankruptcy. Iraq's intention to sell oil in Euros was effectively the brandishing of an actual weapon of mass destruction (as far as the American economy was concerned) before 9/11, and the house of cards might have held up a few more decades if only we had successfully scared the rest of the world away from even thinking of trading oil in a currency other than petro-dollars. Oh well. Too bad for the kids. My advice to the youngsters: learn a skill. We're going to have to start making things again, because we're not going to be able to buy them on the cheap anymore.

UPDATE:
In a shocking development, China is selling off American bonds. Stock up on those plastic goodies while you can - prices at Wal-Mart are about to change direction, not to mention your house...

Wednesday, June 13, 2007

Demotivation

From our friends at Despair.com - a bit of disinspiration to start your day...




And, in case that leaves you any hope,

Tuesday, June 12, 2007

Afoot

Something is afoot: in Op-Eds in both today's New York Times and Washington Post, David Brooks and Peter Beinart (respectively) note the crack up in the conservative coalition. Beinart notices the difficulty that the conservative coalition is having maintaining the pairing of the East Coast liberal business establishment (which he calls conservative!!!) with the heartland "populists," a coalition that Reagan managed to put together, due simultaneously to the stupidity of the post 1960's Democrats who allowed the party to be captured by libertarian elites, and Reagan's exploitation of that stupidity and his knack for fomenting racial fears in the nicest possible way. David Brooks observes the coming of a new culture war (new? where have you been, David?), which pits educated liberal individualist elites against backwater stupid people who care about communities. Both come across as pretty sanguine about the prospects of healing the conservative coalition (Beinart recognizes that the populists are now pitted against the Republican elite, but that could change once there's an anointed liberal Democratic nominee - a Hillary nomination would do the trick; Brooks is pretty confident that we can educate the rubes to get with the program, but urges his NYT readers not to offend them too much in the meantime) - but, what I find interesting about both columns is the deeper anxiety evinced by each over the potential for damage to the military-industrial complex that such a populist rise could portend. The chattering classes are worried, no doubt about it. Dare we hope that their worries are not misplaced?

Monday, June 11, 2007

Richard Rorty, RIP

Richard Rorty has died. He was one of the leading 20th century American philosophers, a lucid and accessible writer who wrote about the most profound philosophical thinkers of the era, and contributed to the revival of interest in the American pragmatic tradition.

He was considered to be a pragmatist - like Dewey before him (one of his philosophical heroes), he rejected the idea of "foundations," or philosophical truths that could be identified by reasoned reflection. As quoted in the NYT obituary, he held that "no area of culture, and no period of history gets reality more right than any other." He admitted to having had a youthful attraction to Leo Strauss (he was an undergraduate at the University of Chicago) but came to reject the "Platonic" view of truth in favor of Dewey's pragmatic understanding of knowledge - the truth was what "worked" in particular human communities.

Pragmatism is sometimes portrayed to be a more attractive philosophy than it actually is. We gain a certain knowledge by doing things, and through such accumulated practice tradition comes into being. In a sense, Edmund Burke's defense of tradition was made on "pragmatic" grounds: tradition contains a certain wisdom of the ages, a respect for previous generations and an acknowledgement that each generation is incapable of creating the world anew. Sometimes commonsense accounts of pragmatism portray it to be a kind of developmental traditionalism.

However, Rorty - like Dewey before him - revealed the flaws of philosophical pragmatism, which is premised upon a rejection that there are better or worse ways of life in accordance with human nature. For Dewey and Rorty, the idea of human nature was simply one of those "truth claims" that was as unjustified as any other. In effect, humanity is itself infinitely elastic, a product of the societies in which people find themselves. For this reason, Rorty (and Dewey) believed that democracies are better than any other living arrangement for the reason that they permit the widest possible development of new forms of human life. "Democratic humans have more being," Rorty wrote in one of his last books, "Achieving Our Country." We have "become" more, bigger, and better than previous humans who have occupied the planet. Rorty is one of the major contemporary proponents of a worldview that I have discussed and criticized in my book, Democratic Faith.

Rorty was the grandson of Walter Rauschenbusch, the great proponent of the Social Gospel. This lineage was important, for Rorty was clearly deeply influenced by this tradition that regarded revealation as ongoing in this world, as being actualized by the efforts and interventions of human beings. Rauschenbusch believed that it was through human exertion that we would finally create the Kingdom of Heaven on Earth, and not the ultimate gift of grace (Augustine didn't finally get rid of this old and pervasive heresy). Rorty took Rauschenbusch's claim to the next logical point - to reject the invocation of religion altogether, which seemed beside the point once it was maintained that humanity alone was responsible for its own redemption. Thus, for Rorty, religion was "a conversation stopper" - a faith claim that could not be discussed or refuted, but more importantly, most often a belief system that posited certain limits to human perfection that Rorty's pragmatism rejected. In effect, Rorty's own position was really the "conversation stopper": either you believe in human perfectibility or you don't. Considering Rorty's own belief in humanity's capacity for achieving its own redemption, of our attaining "more being" in a democratic age, and in our Promethean capacity for self-creation without limit - a belief that gave rise to unchastened optimism about our capacities for development (without adequate worry about our propensity for viciousness) - one has to conclude that he was one of the late-twentieth century's greatest and most representative men of (democratic) faith.


ADDENDUM:
Peter Lawler - who has written about Rorty in his book Postmodernism Rightly Understood - has also noted Rorty's passing and considered his legacy here.

Friday, June 8, 2007

Your Tax Dollars At Work

As reported in yesterday's New York Times, our government will spend 1.5 BILLION dollars (a.k.a., tax revenues) to assist those 20% of Americans who watch television using "rabbit ear" antennae. This amount will cover several million vouchers to purchase new digitally compatible conversion boxes, as well as fund the public announcements informing people of the impending change to digital.

Television watching is now one of the basic rights of American citizens. The article mentions that if people don't make the conversion, they won't be able to exercise their right to watch such programs as David Letterman and "Desperate Housewives."

Or, maybe the argument is that if people don't convert to digital, they won't be as well informed. Ahem. If that's the argument, then why don't we take that 1.5 billion and buy them newpaper subscriptions. Or, better still, pay them NOT to watch television. They'd get better information is we subvented trips to the local barber shop.

My favorite quote from the article:

"'The moment coming is the end of something that has been around for 60 years — conventional television — and it has been a wonderful era,' said Richard E. Wiley, a former chairman of the F.C.C. who led a government advisory panel on what was then known as 'advanced television' from 1987 to 1995."

Just think of it: "Desperate Housewives"! A wonderful era indeed.

Thursday, June 7, 2007

A Nation with the Soul of a Church

Peter Lawler has a nice response to my Chesterton exerpt here. I responded at "No Left Turns," and paste it below as well.

"Thanks, Peter, for the thoughtful comments. I want to assure you that I don't slight Chesterton's admiration for American universalism as articulated in the Declaration, a creed that led Chesterton to conclude that "America is a nation with the soul of a Church." Yet, Chesterton is also aware not only of the dangers of such universalism (as the exerpt of my essay points out), but that such universalism can only be relevant to lived human life when it's contained and animated within a definite structure. Chesterton writes in "What I Saw in America," “the experiment of a democracy of diverse races … has been compared to a melting pot. But even that metaphor implies that the pot itself is of a certain shape and a certain substance; a pretty solid substance. The melting pot must not melt….. America invites all men to become citizens; but it implies the dogma that there is such a thing as citizenship." Elsewhere in the essay he writes that the creed in practice "is not internationalism; on the contrary, it is decidedly nationalism." To put a finer point on it: if ours is the nation with the soul of a church, we need to recognize that a church has a definite form and structure; it is a communion of particular people, even as its members aspire to know the universal, above all, the divine.
In short, in the full essay I don't stint on Chesterton's admiration for America's universal creed, but in our cosmopolitan age especially (no less during his own time, combatting such cosmopolitan liberals as H.G. Wells and G.B. Shaw), it is important to point out that even such a universalistic creed itself is in need of a home."

Moreover, Peter hardly needs be reminded that Chesterton, along with other perceptive analysts of America like Orestes Brownson and John Courtney Murray, noted that one limiting factor on America's universalistic creed was the fact that America wasn't wholly formed or completely founded upon Enlightenment philosophy. Here's another snippet from my full essay on Chesterton, where Chesterton acknowledges a pre-modern basis for the American polity:

"Chesterton contended that America could not simply be understood as a nation formed out of the whole cloth of enlightenment philosophy. While there could be no denying that America’s founding philosophy was grounded in the rationalism of the Enlightenment, Chesterton nevertheless detected a mixed lineage, and in particular an older substratum that underlie the apparently new philosophy of modernity. “The real quality of America is much more subtle and complex than this; and is mixed not only of good and bad, and rational and mystical, but also of old and new. That is what makes the task of tracing the true proportions of American life so interesting and so impossible” (What I Saw in America [WA], 182). For Chesterton, America was a palimpsest, a “new” world founded on the tenets of liberal self-interest and the rights of man, which overlay but could not entirely obscure the self-sacrificing devotion to “public things” that for which he lauds the Stoics and Romans (WA, 185-6). These positive affirmations of public devotions, in his view, “redeemed the dreary negations of the eighteenth century” (WA, 186). In America, Chesterton believed he discerned an “old-world atmosphere of the new world,” but worried that the republican ideal might increasingly “lie in ruins” (WA, 187).

Wednesday, June 6, 2007

Freedom!!!!

It's a free country!

Well, maybe not. As explained in this article, the American economy - our vaunted free market - is more or less subject to the whims of a Kingdom. The oil that makes us free from places. The plastic that makes us free from frugality. The fertilizers and pesticides that make us free from the tyranny of growing food. It's just so great, being so free! Don't you feel secure at night, knowing your future lies in the hands of the Saudis?

Well, maybe if we say it enough times, it must be true. Freedom.... Freedom... Freedom!!! OK, all better! How do you say it in Arabic? Maybe "pretty please?"

Sunday, June 3, 2007

One Word...

"Plastic."

OK, let me try to figure this out. A Saudi company - Sabic - is going to buy a plastics division from General Electric. In order to fund this purchase, they are going to borrow 9 billion dollars from four banks. One of these banks is GE Capital. So, GE will give Sabic several billion dollars; Sabic will give this money back to GE, plus interest.

How will Sabic pay this money back? Selling plastics. And to whom? You can be sure that China will buy a whole lot. How will China pay for all that plastic? Using the money they earn selling plastic to the U.S., over and above what they spend buying our bonds.

What does the U.S. do with the liquidity they gain from selling debt? Among other things, they buy petroleum from the Saudis. The U.S. will use this petroleum in several ways. One use is to power our machinery in the Middle East, better to help those struggling nations to create free market economies so that they sell us their plentiful supplies of petroleum. Lots of those machines are made by ... GE! And why do we need so much petroleum? So we can have plenty of gas to drive to Wal-Mart and buy lots of cheap plastic things made in China. How do we buy all those plastic things? We charge it to our plastic!! How are we going to pay it off? Our growth economy, so-called, as long as we can keep the petroleum flowing.

Does anyone else suspect that something is amiss here? My suggestion of the day: don't buy things made out of plastic. Wash dishes. Bring your own bags to the supermarket. Fix things that are broken. Don't throw the stuff out - it never goes away. If there is another civilization millions of years from now, they might find fossil fuels, but maybe they'll think the better of using it when they also exavate a solid worldwide layer of plastic from the I.E. (Idiot Era).

Thinking about this cozy alliance of nations and corporations, I can't begin to grasp all the connections. Looks like what used to be quaintly called money-laundering - a legal and global version, if no less corrupt and corrupting.