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One of the more interesting things about yesterday's economic news was the very obvious connexion between the unemployment number and oil prices. What links the two is debt, the defining feature of what I have called the Anglo Disease, ie the highly unequal economy whereby the rich and the financial sector (almost the same thing these days) capture most of the income but hide it by providing cheap debt to the middle classes so that they can continue to spend.

Oil has played a fascinating side role in my Anglo Disease series, allowing the debt bubble to go on for much longer than expected. But now, instead, it is accelerating the crash. Let me take you through the whole cycle.

Anglo Disease diaries
Countdown to $200 oil diaries

A good summary of what the Anglo Disease is about can be found in this diary, written up as an Op-Ed text, but let me tale you through the concept again:

  • the name mirrors that of the Dutch disease, which was coined to describe the impact of the rapid development of the oil&gas sector in the Netherlands on therest of the economy: the high profitability of the new sector captured a high share of investment, thus weakening other parts of the economy, which were partly neglected; in addition, the fact that it created a large boost to exports pushed the currency up, thus further making other industrial activities uncompetitive in what was a largely export-oriented economy. The "Dutch disease" describes that shrivelling of the rest of the economy as money flowed to oil&gas producers.
  • in today's economy, the cannibalistic sector is not oil&gas, but finance. Bankers, through debt, have the ability to convert future cash-flows into immediate profits. Such immediate returns attract more capital, talent and resources (which cannot go to other sectors) and impose an iron discipline on the rest of the economy: those that provide the debt want to ensure that the future cash-flows will indeed materialize, and move in to ensure a relentless focus, in the underlying activities, on profitability at the expense of all other criteria. The immediate contribution of the financial world to measured GDP and growth makes it a popular industry, thus reinforcing its influence - and spreading out its way of thinking, focused on monetary gains and financial "efficiency." So not only the rest of the economy gets squeezed for any extra drop of profitability, but the language of financial analysts becomes the dominant one of not only economic discourse but also political discourse;
  • one of the more attractive features of the financial world, for its promoters, is its ability to concentrate huge fortunes in a small number of hands, and promote this as a good thing (these people are said to be creating wealth, rather than capturing it). Making money, lots of it, is the ultimate arbiter of not just success, but also morality;
  • of course, the reality is that such wealth concentration is created by squeezing the rest, as is obvious in the stagnation of incomes for most in the middle and lower rungs of society. This is not so much wealth creation as wealth redistribution, from the many to the few. But what has made this unequality (the fundamental feature of the Anglo Disease) tolerable is that the financial world itself was able to provide a convenient smokescreen, in the form of cheap debt, provided in abundance to all. The wealthy used it to grab real assets in funny money, and the rest were kindly allowed to keep on spending by tapping their future income rather than their insufficient current one;
  • in a nutshell, the debt bubble hid the class warfare waged by the rich against everybody else, conveniently trapping those that could not or would not live within their means in the system, by making their livelihood increasingly dependent on not rocking the boat.
  • but the debt bubble was (duh) a debt bubble, and it is now bursting, as it inevitably would. What matters is how the pain is shared, and, right now, it does not look as it will be shared the same way the loot was on the way up. The whole cycle was just a way to permanently transfer wealth from the many to the few. It was wilfully created by the combination of ultra low interest rates as set by the Fed (thus my moniker of "Bubbles" Greenspan), tax cuts for the rich (Bush's helpful but hardly invisible hand) and the permanent propaganda for liberalisation, deregulation, "reform" and "freedom."

The outside world had a role in this bubble, because part of the squeeze on the working classes was made possible by the threat of outsourcing and offshorisation to China, India et al (which kept wages in check and workers tame), and a lot of the bubble was in turn funded by the surplus ash generated by these countries through their exports and their policies to keep their currencies weak (to maintain their price competitivity), which had them accumulate huge amounts of dollars which they then lent back to the US via the purchase of Treasurys.

This is where oil shows up for the first time in the story, as the growing demand from China, India et al. started pushing prices up as this happened at a time when supply was suddenly become tighter.

Paradoxically, the oil price increases provided an additional boost to the debt bubble: while they started biting into consumer spending, they also generated a new round of cheap liquidity, as oil producing countries suddenly found themselves with huge amounts of money, in dollars, which they could not, or chose not to, spend right away - presto, these were invested into Treasurys, ie loaned to the US. This provided the liquidity to finance consumer spending in the US (including for gas) and kept the interest rates on long term debt very low (demand for bonds pushes the price for bonds up, and thus brings the yield, is the interest rate, down). This happened at a time when the Fed had finally decided to increase its short term rates as it could no longer justify the extravagantly low rates of 2001-2004 and created what Greenspan called his "conundrum" - that apparent disconnect between short term and long term interest rates. It was just the bubble going on afterburner, thanks to oil prices.

Effectively, the liquidity created by high oil prices hid for two years the fact that the bubble was bursting.

But now, everything is aligned - in the wrong direction:

  • the debt bubble is bursting, as long announced by observers not blinded by greed or ideology, with all the expected pain: the real estate crash, the banking crisis, the foreclosures, and the coming inevitable recession;
  • the income capture mechanisms set up during the bubble have not been reversed, so the pain is falling disproportionately on the poorest, and the finance world (ie the rich) is being bailed out. The rescue of Bear Stearns may have inflicted pain on shareholders, but it saved bondholders, which is unprecedented and ominous. Public discourse is still largely about "reform", tax cuts and "letting the market" solve things;
  • and oil prices are still going up, and are biting increasingly hard into people's incomes. They are going up because of global trends (oil production from friendly regions are inconveniently declining now, after a couple of decades temporarily hiding the reality of global scarcity; the countries that piggybacked on the US debt-fuelled growth have prospered and are consuming more, oil  producing countries are booming and using more oil themselves, and their growing prosperity makes them more assertive and less willing to listen to Western pleas to produce more and/or to let oil majors have access to their resources: thus, for a combination of political and geological reasons, oil supply is stagnant), and our own economicwoes will not be enough to bring them down: they will thus worsen the economic outlook here;
  • an additional factor that comes in is that an alternative to the dollar exists: the euro. For the first time, the rest of the world has the possibility to store value elsewhere than in dollar-denominated instruments. The debt bubble was largely a dollar phenomenon, and the easiest way to deflate it is to lower the value of the dollar. Gold played that role in the past, but it's not that convenient a tool; now the euro is the perfect outlet to express skepticism about the value of the dollar. As this makes investors less keen to hold dollars able to actually do somethign about it, it WILL drive interest rates up in the US, after many years of flows the other way round keeping them down.

Yesterday was a perfect demonstration of these links. Beyond the bellicose words againt Iran coming from Israel, what drove the markets yesterday was the announcement that the unemployment rate had gone up a lot more than was expected (to 5.5% instead of the 5.1% predicted by analysts). That announcement, in turn, made the markets brutally change their expectations about future Fed rate changes. They had been expecting increases in the coming months, to fight inflation, but increases are impossible, politically, at a time when unemplyment is going up rapidly. The expectation of lower short term rates in turn drove the dollar down (especially as this came the day after the European Central Bank said that it would increase rates itself this summer). The flight away from the dollar then pushed commodities up, and in particular oil. As speculators had been betting on oil prices going down, they were wrongfooted and had to abandon their positions brutally to avoid further losses, thus magnifying the price increase (an aside here: speculators were betting on oil going down not up).

So there you have it: wage stagnation (Anglo Disease) and oil production stagnation (the fundamental driver of the Countdown diaries) combining in a perfect storm. But hey, the financiers are still sitting pretty, and will say that more "reform" and "deregulation" and tax cuts are needed.

Maybe it's time to stop listening to what is highly self-interested drivel, and take back what they grabbed: it's not theirs. And maybe it's time to actually worry about using lots less oil (and gas and coal).

And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

Originally posted to Jerome a Paris on Sat Jun 07, 2008 at 05:40 AM PDT.

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Comment Preferences

  •  Tip Jar - 7 June (292+ / 0-)
    Recommended by:
    Brian Bell, clb, Ed in Montana, Joe Bob, jmart, vicki, Demosthenes, northsylvania, RedMeatDem, catdevotee, Asak, comrade, Odysseus, decisivemoment, melo, SarahLee, teacherken, ks, laurak, Trendar, Hornito, Detlef, abarefootboy, marcvstraianvs, Gooserock, Powered Grace, BigOkie, RunawayRose, sacrelicious, Shockwave, wu ming, TJ, tacet, cotterperson, hyperstation, Jay C, martianchronic, eeff, devtob, frisco, sobermom, object16, exNavalOfficer, sardonyx, opinionated, bronte17, mftalbot, BlackGriffen, howd, dlcampbe, nyceve, MD patriot, ATinNM, roses, altoid, javelina, slatsg, nargel, juslikagrzly, bewert, IM, nicta, fight2bfree, Spatz, jhpdb, BmoreMD, baxxor, pakaal, joliberal, betson08, AbsurdEyes, Eddie Haskell, alizard, barbwires, dkmich, walkshills, Redbug, NapaJulie, fran1, 3cardmonty, bablhous, kd texan, eve, Josiah Bartlett, bibble, Jersey Joe, rapala, gradinski chai, G2geek, maybeeso in michigan, Bluesee, pacplate, TexasTom, Alexander G Rubio, Jeffersonian Democrat, BluejayRN, enough, Sparkalepsy, greatferm, JanetT in MD, unclejohn, ek hornbeck, irate, Cmyst, drewfromct, Brooke In Seattle, reflectionsv37, ratzo, Sweet Georgia Peach, fixxit, Annalize5, Pam from Calif, Sun Tzu, LUH 3417, EdlinUser, dunderhead, GreyHawk, ladybug53, Kayakbiker, eaglecries, rosabw, QuickSilver, CT yanqui, blue jersey mom, paxpdx, techno, ScottAC, Anna M, sodalis, LithiumCola, bookwoman, JanL, troutwaxer, Bernard, Asinus Asinum Fricat, fhcec, xaxnar, Jim P, RJDixon74135, Nowhere Man, Mother Mags, xrepub, ksingh, andreuccio, Paul Ferguson, dus7, esquimaux, ainwa, myboo, Milly Watt, Opakapaka, ActivistGuy, Ellicatt, Gorette, Yellow Canary, Hear Our Voices, KenBee, greenearth, NBBooks, sravaka, tecampbell, StrayCat, gatorcog, imabluemerkin, Caoimhin Laochdha, happy camper, Dauphin, bleeding heart, justCal, vcwagner, OMwordTHRUdaFOG, ER Doc, nywolf, profh, rsie, va dare, means are the ends, Dreaming of Better Days, 1864 House, shaharazade, Downtowner, kurious, FMArouet, Snarcalita, Granny Doc, Hedwig, expatyank, SeekCa, Leap Year, Aaa T Tudeattack, DBunn, Cliss, we are 138, One Pissed Off Liberal, JohnnySacks, J Royce, Elco B, dotsright, Cronesense, overlander, camlbacker, FWIW, california keefer, offgrid, terryhallinan, drbloodaxe, yoduuuh do or do not, edsbrooklyn, LillithMc, SJLeonidas, terabytes, lurks a lot, Shadowmage36, twinpeaks, Unbozo, dolphin777, Seneca Doane, brentmack, Killer of Sacred Cows, SeaTurtle, millwood, jhop7, TexasTwister, MichiganGirl, JohnnyRook, willb48, Terra Mystica, TomP, gizmo59, rmonroe, GANJA, nom de paix, Clio2, Justus, Captain C, Youffraita, bill warnick, poyma, Remembering Jello, blindyone, CenFlaDem, OrdinaryGal, dewley notid, Serpents Sorrow, Pitias, Gemina13, Ron Shepston for Congress, Grass, In her own Voice, RevenantX, rhutcheson, Tennessee Dave, mdprogressive, csaw, Jakob, ARS, WereBear, fatbeagle, SciVo, EquationDoc, Daily Activist, John Shade, Virginian in Spain, DClark4129, jemjo, allep10, Losty, common green, cs, audiored, Jameson, EmmaKY, FundaMental Transformation, carolh11, choosinghope, Wendy Slammo, kfd313, NCrissieB, dtruth, Norbrook, CalGal47, Wyote, TidBits, sovery, budr, roadbear, little lion, BenDisraeli, fleisch, CC Lee, electrum, NY brit expat
  •  Well, they have stopped making Hummers. (25+ / 0-)

    That's a start.

    CHRISTIAN, n. One who believes that the New Testament is a divinely inspired book admirably suited to the spiritual needs of his neighbor. A. Bierce

    by irate on Sat Jun 07, 2008 at 05:46:31 AM PDT

  •  Your Diary is so - right on! Do we have a (6+ / 0-)

    cure for the disease? Oh yeah, elect Obama. We sure do have our work cut out for us!

    •  I hope Obama challenges (5+ / 0-)

      the futures trading issue.

    •  What has Obama said that justifies that? n/t (1+ / 0-)
      Recommended by:

      Can the last politician to go through the revolving door please turn off the lights?

      by Migeru on Sat Jun 07, 2008 at 06:21:13 AM PDT

      [ Parent ]

      •  That's why i put forth (2+ / 0-)
        Recommended by:
        Cliss, Killer of Sacred Cows

        the challenge.  Obama should confront this head on.

        •  here's the problem.... (29+ / 0-)

          Let's say you have a choice of two ways to make money: one, by lifting a 50-lb. weight, and the other by lifting a feather: which would you choose?

          The analogy is to this:  

          Let's say you have a corporation.  You can make money by manufacturing physical "stuff" or you can make money by shuffling paper back and forth.

          Making physical "stuff" costs more, and is more risky in many ways, than shuffling paper around.

          Profits on physical stuff are slow; paper profits flow at the speed of electrons.  

          And the result is...

          Companies that make money on physical stuff can't possibly keep up with companies that make money shuffling papers.  The former languish, the latter soar.  Money becomes concentrated in the hands of the latter.  As a result they gain political power, which they use to skew the overall market in their direction, thereby making more money, thereby giving them more political power, thereby enabling them to skew the market further...

          So now Obama tries to talk about the economy.   He knows what the answer is: go back to making physical stuff: for example investing in energy infrastructure, manufacturing, and so on.  He knows he has to tighten the leash on the financial sector.  

          Problem is, he's talking to a nation where economic power has been concentrated to an unimaginable degree in the hands of those who make money shuffling paper, as per Jerome's diary.  

          If he speaks truth to that particular power, they will use their control of the entertainment conglomerates to nail him to the wall.  

          So he has to tone it down quite a ways.  

          Beyond that, he has to demonstrate economic expertise in a manner that will impress enough of them that they actually get on his side or at least don't oppose him.  And he has to do it in a manner that will attract support of those who manufacture physical stuff.  

          Difficult task.  

          Though his line to Wall Street:  "How will I manage the economy?  Watch how I manage my campaign", was absolutely world-class brilliant.  

          In effect he's demonstrating business skill, demonstrating he is an effective CEO.  He's done that exceptionally well: run a tightly disciplined campaign, handled his campaign finances exceptionally well on both the income and expenditures sides, and demonstrated a keen knowledge of competitive dynamics to pull a come-from-behind victory.  

          McCain's comment about not having economics smarts, should be used relentlessly by Obama.  "Listen to what he (McCain) just said, and watch what I just did (running my campaign like a successful company)."

          So, we'll see what happens.  

          Life in interesting times.

      •  Not much (3+ / 0-)

        He does propose a significantly higher capital gains tax (28% vs 15%, IIRC), and a repeal of Bush's supply side tax cuts, but he really needs a real plan here. Hopefully he has one that has not been articulated because it would turn off voters here (yes, that says terrible things about our electorate)

  •  Don't you wish? When this is what's necessary: (31+ / 0-)

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    This is what we get:

    Deregulate to encourage growth. Cut taxes to encourage growth. Remove environmental protection policies to encourage growth. Screw up everything to encourage growth (and for a few folks).

    "One cannot be pessimistic about the West. This is the native land of hope." Wallace Stegner

    by Mother Mags on Sat Jun 07, 2008 at 05:48:21 AM PDT

  •  Borrowing for the Wrong Reasons (28+ / 0-)

    Debt can be a good thing, even government debt.  But you have to get something of value for it.  In other words, dollars borrowed to build bombs to blow things up are, ultimately wasted because there is less of value left when you are done with it.  Dollars borrowed to build (or even to repair) the electrical grid, bridges, schools, highways, etc., leave something of value that is useful in an economy.  That borrowing generates a payback.

    And borrowing because of an ideological bent to reduce taxes, therefore guaranteeing that any spending is dependent on borrowing, is fiscal foolishness that primes the inflation pump.  That is not to mention the more sinister motives that certain administration sell tax cuts on ideological grounds while in reality pursuing a policy of wealth transfer from the poor to middle upward to those who already have much.

    There is hope that the next US administration can somewhat right the ship.  But it will be a difficult task.

    Good luck to all of us.

  •  How many dollar increase in crude price (10+ / 0-)

    is required to wipe out the stimulus package?

    Be ashamed to die until you have won some victory for humanity. Horace Mann (and btw, the bike in kayakbiker is a bicycle)

    by Kayakbiker on Sat Jun 07, 2008 at 05:59:57 AM PDT

  •  Volcker did in fact raise Fed rates at a time of (8+ / 0-)

    rising unemployment and was applauded for it by Wall Street, IIRC.  The poltical chops to do so are probably still in residence there.  Indicative of both the power and insanity in those circles.  At that time anyway ('77+).  So it continues.  Bailouts perpetuate bad behavior.  No end in sight, or maybe a "very sticky" one, for the rest of us.  Now I'm really depressed.  Must drink excessively to support a countercyclical, onshore industry.

    TFTD, as always.

    It's full of stars... Travis Childers (MS-01): Blue Dogs change the political landscape by moving the right to the left, one district at a time.

    by Terra Mystica on Sat Jun 07, 2008 at 06:00:01 AM PDT

    •  Bernanke is going to be forced into (5+ / 0-)

      Raising the Interest rates by the ECB Chairman.  When Trichet came out and said they would be likely raising rates to confront inflation in July right after Bernie said he was "concerned" about the dollar's strength, the dollar's collapse just steepened.  Thing is, interest rates need raised, market be damned.  Volcker knew wtf he was doing, and was willing to basically kill any chance Carter had for being reelected by confronting inflation head on and raising rates...Bernie is too much an arm of the Bush Administration to have such ability.

      OH-16: John Boccieri will finally end 36 years of Regula Rule.

      by marcvstraianvs on Sat Jun 07, 2008 at 06:08:56 AM PDT

      [ Parent ]

      •  While I agree with your point that Bernake is a (2+ / 0-)
        Recommended by:
        Odysseus, opinionated

        tool and Bush has politicized everything he has touched (by design, imho), I have never seen the wisdom or positive outcome from raising Fed funds rates to counter inflation resulting from external/foreign (in this and the '70s case) oil (or other) prices.  It has always seemed to me to penalize Main Street, to the betterment of Wall Street.  In a consumer society, that has a double whammy (biz can't expand, and consumers can't buy), all to counter something that is already raising the cost of living and doing biz to everyone, and which has a fairly low correlation to interest rates (at least Fed fund rates).

        That may seem glib or simplistic, but it seems to me that the historical (pre-70s) link between domestic, closed-loop, debt-funded expansion in that era, and resultant inflation does not apply now.  Or then to be honest.  Beginning in the '70s our economy shifted rapidly into an open-loop/global system.  I'm not sure we have caught up to that fact even now.

        Volcker was the last of the "old rules might apply" Fed Chairmen.  For that I can't fault him.  It almost makes me yearn for the '70s, if only for a return to the independence of "independent" agencies (as you point out).

        It's full of stars... Travis Childers (MS-01): Blue Dogs change the political landscape by moving the right to the left, one district at a time.

        by Terra Mystica on Sat Jun 07, 2008 at 08:31:40 AM PDT

        [ Parent ]

    •  Need serious fiscal policy (6+ / 0-)

      Fed has a role to play, an important one, but it can't take the place of a grown-up Administration and a Congress willing to stand up to Wall Street when necessary.

    •  We're 'printing' money at a 16% growth per year (7+ / 0-)

      Prices are rising quite fast in all sectors excepting real estate and labor (of course).

      "Some may say words are change. But you and I know words are cheap."
      -- Hillary Rodham Clinton, 2008

      by GW Chimpzilla on Sat Jun 07, 2008 at 07:31:25 AM PDT

      [ Parent ]

      •  I'm not an expert, but from the Wiki: (0+ / 0-)

        The number of Ms usually range from M0 (most narrow) to M3 (broadest) but which Ms are actually used depends on the system. The typical layout for each of the Ms is as follows:

        M0: Physical currency. A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. M0 (M-zero) is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency. This measure is known as narrow money because it is the smallest measure of the money supply.[6]

        M1: M0 + demand deposits, which are checking accounts. This is used as a measurement for economists trying to quantify the amount of money in circulation. The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency.[7]  

        (Normal people)

        M2: M1 + small time deposits (less than $100,000), savings deposits, and non-institutional money-market funds. M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions.[8] M2 is key economic indicator used to forecast inflation.[9]

        (Top 10%)

        M3: M2 + all large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets. The broadest measure of money; it is used by economists to estimate the entire supply of money within an economy.[10]

        (Top 1% and large, non-offshore corporations)

        My broad characterizations in bold, based on my suspicion of net worth/assets.

        It seems to me that your graph is yet another one of the biggest cases against "trickle down" economics (median income being the other, that I know of).

        Something really has to change on this.  Thanks for making me look it up.

        It's full of stars... Travis Childers (MS-01): Blue Dogs change the political landscape by moving the right to the left, one district at a time.

        by Terra Mystica on Sat Jun 07, 2008 at 09:56:58 AM PDT

        [ Parent ]

  •  I am musing on something related (21+ / 0-)

    one thing we have seen is a real reluctance by some Aemrican leaders to take meaningful action on energy and global warming because they claim it will make no difference given the current increases in energy (including coal and petroleum consumption) in the expanding economies of India and China.

    Similarly, many individual Americans seem to feel it is foolish to take individual action that might lessen the impact.  This is actually more rational than the inaction on the national economic level, because some Americans do not have the resources to make the upfront changes that would allow long-term changes on energy consumption to take place.  They cannot easily replace less efficient personal vehicles, appliances, furnaces or air conditioners because they do not have the resources for the initial investments and our policy of using tax writeoffs for those who take such actions is insufficient to offset those upfront costs.

    Still, we can begin to make a significant difference by smaller steps - thermostat changing, driving less, walking more, combining trips, slowing down how fast we drive on open roads.  Unless and until we demonstrate our commitment by such actions, how will we be able to convince government and industrial leaders that these are matters that are significant to us?


    Those who can, do. Those who can do more, TEACH! If impeachment is off the table, so is democracy

    by teacherken on Sat Jun 07, 2008 at 06:03:35 AM PDT

  •  I think speculation is playing a much larger part (14+ / 0-)

    in rising prices than some are willing to admit. Here is an excellent article from WAPO that discusses the matter:

    Investors' Growing Appetite for Oil Evades Market Limits Trading Loophole for Wall Street Speculators Is Driving Up Prices, Critics Say

    ..better that money be spent in the U.S. building windmills than squandered in the ME for Bush-McCain to tilt at them. -andydoubtless

    by Hornito on Sat Jun 07, 2008 at 06:05:43 AM PDT

    •  Funny thing is (10+ / 0-)

      I don't think speculation is the word for it.  Do people right now have any way to get to work etc without the use of gasoline?  Not really.  Is the demand for oil just going to continue to rise with the wealth increases in the far East?  Yes.  Not really speculatory, more of a sure thing.  With the dollar getting massacred, all these retirement funds, rich folks, smart folks, college trusts, and hedgers have jumped headlong into commodities, and it really is a good move when you have Bernanke cutting rates down to 2% for the market, dollar be damned.

      OH-16: John Boccieri will finally end 36 years of Regula Rule.

      by marcvstraianvs on Sat Jun 07, 2008 at 06:13:58 AM PDT

      [ Parent ]

    •  How many hedge funds are big oil trying to affect (4+ / 0-)
      Recommended by:
      melo, Hornito, greenearth, Clio2

      the price of the oil they will be selling?
      That's what I would like to know. Are we seeing the big money of big oil playing the futures to control the price and make even more profits for themselves? I would like to know how the Carlysle Group is doing, if in fact they are, with any oil futures investments?
      Its time for a correction, too bad that the US has so overextended its influence that it now is uneffective and impotent. Looks like more devaluation is on the way which will only make the cycle churn up the average person harder and faster.
      This anglo disease, is there any cure short of beachcombing?

    •  Here is the Senate hearing the article references (2+ / 0-)
      Recommended by:
      melo, Hornito

      Here is Senator Cantwell's hearing on Energy Market Manipulation.  Witnesses included George Soros, University of Maryland Law School Professor Michael Greenberger (Clinton-era head of Commodity Futures Trading Commission), Inland Oil Company President Gerry Ramm, Federal Energy Regulatory Commission official Lee Ann Watson, and Consumer Federation of America representative Mark Cooper.

      It's 2-1/4 hours but it is chock full of expert testimony, evidence of the importance of speculation, and very specific measures that would get the former Enron traders who're driving a lot of this at Morgan Stanley and Goldman Sachs back out of the crude market:


      Beccause it's not http, I can't make it a direct link, but just copy it into your browser's address bar and let it go to work.

      This hearing is an eye-opener, but it offers strong cause for hope.  If Congress cannot force the Bush Administration to reverse its policies, at least the next president CAN make a dramatic impact on the inflated price of crude in his first days in office.

      Some of these witnesses may be wrong.  Some of them might be dramatically wrong.  But I have a hard time seeing how anyone could explain the current precipitous rise in prices with addressing the evidence and arguments presented in this hearing.

      "Proud to be part of DailyKos -- the Best Political Team on . . . well, ANYWHERE"

      by Alden on Sat Jun 07, 2008 at 02:04:06 PM PDT

      [ Parent ]

      •  Excellent. Now, if we can get something more... (2+ / 0-)
        Recommended by:
        melo, Alden

        than a "sternly worded letter", maybe something will happen. I think the greed-heads have gone a step too far, and people will soon be after them with pitchforks and ropes if they don't change their ways. Of course, greed is almost genetic with these people, so we shouldn't hold our breath.

        ..better that money be spent in the U.S. building windmills than squandered in the ME for Bush-McCain to tilt at them. -andydoubtless

        by Hornito on Sat Jun 07, 2008 at 06:30:31 PM PDT

        [ Parent ]

  •  How does the market self determine when... (18+ / 0-)

    Taxpayer dollars bail out Bear Stearns?
    Big mistake in this bail out as it establishes a precedent that bushco will not hesitate to exploit.
    Should have bit the bullet and let the nabobs pay the price for bad behavior.

    St. Ronnie was an asshole.

    by manwithnoname on Sat Jun 07, 2008 at 06:08:19 AM PDT

  •  While adjusting my tinfoil hat: Appears the (15+ / 0-)

    Bu$hCo. Misadministration plans to daily perform some insane act of near-sabotage, in order to make job of incoming Dem Prez even more difficult!!

    Putting into place some dreadful policies in Iraq even as I type. No words are adequate to describe how fucking angry I am at the economic situation!!

    Commander Chimpy "Mission Accomplished" McCodpiece began his first term as pResident with a healthy state of affairs -- and has proceeded to run the country into the ground.

    If we were to have our own "Bastille Moment", I'd be cheering from the sidelines. Let's tear down the NYSE building first!

    Aloha   ..  ..  ..

  •  Jerome, why do you hate freedom? (13+ / 0-)

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    Can the last politician to go through the revolving door please turn off the lights?

    by Migeru on Sat Jun 07, 2008 at 06:20:02 AM PDT

  •  that was great (2+ / 0-)
    Recommended by:
    Killer of Sacred Cows, carolh11

    You hit on some real thought provoking issues and linked them in a way I had never seen before, unfortunately I think your conclusion of "Tax the rich" is anorexic at best.  If you would just continue down the path and look deeper into the families / institutions that hold the real global wealth and power, then you might reach a different conclusion.   With that said, I still think this was one of the better diaries written in a while.   Great job.

  •  You've got to be kidding (1+ / 0-)
    Recommended by:

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    I would like to see that.  Heh.  In my dreams.  

    So far, all I see is various Officials going around promising to do something by 2050.  That's after the die-off.  It will be easier to take action after massive famine.

    And yes, I do recognise that the blockquoted text is ironic, rather than serious.  It is ironic, right?

  •  Medvedev (7+ / 0-)

    I read this article this morning and thought it was interesting: Medvedev blames US for global financial troubles

    Another economy based on oil and gas rising up.

    "The true measure of a man is how he treats someone who can do him absolutely no good." --Samuel Johnson

    by joanneleon on Sat Jun 07, 2008 at 06:40:41 AM PDT

    •  Of course, (6+ / 0-)

      and Russia might be in a position of unprecedented strength here. It has an export sufficit, relatively stable relations with its neighbours (barring Georgia), a stable political landscape, and has, in recent years, enjoyed a revival of industry, especially light industy, so vital to the living standard of the population. Add that to the fact that it's an oil and petrol exporter, and you see a nation reborn.

      Brzezinski said in a highly interesting interview that the US' primary concern with regard to foreign policy are Europe and Russia: The first has a much healthier economy (excepting Great Britain, the US' faithful lapdog in all things, economy, lifestyle, and obesity), a large market, a stable currency and is technologically advanced, while Russia has an enormous amount of resources which are just looking for a marked, and increasing tensions vis-a-vis China are encouraging it to look for allies westward. What better ally for Russia than Europe?

      Much of Washington's foreign policy makes sense if regarded through such a prism: Divide Europe and contain Russia.

      Omne malum nascens facile opprimitur, inveteratum fit plerumque robustius. - Cicero

      by Dauphin on Sat Jun 07, 2008 at 08:18:45 AM PDT

      [ Parent ]

  •  VERY meaty and worthwhile diary. Many thanks. n/t (3+ / 0-)
  •  Thank you for your diary (6+ / 0-)

    The thing about energy efficiency and financial markets, when a consumer uses less energy by making changes to their home (as I did) the utility companies raise rates, because people are using less fuel.  From a global warming standpoint it's still a good think, but in terms of economics, the consumer can't win.  One thing that has been demonstrated through this latest oil crisis, Americans will get out of their cars and use public transportation if it's available to them.  Alas, not enough public transport is available to most Americans and what we do have is standing room only and leaving people behind at the curb.  I applaud the companies who have gone to 4 day work weeks and let people telecommute.  

    Winning without Delay.

    by ljm on Sat Jun 07, 2008 at 06:53:14 AM PDT

    •  Public transportation is essential (16+ / 0-)

      We lucked into an apartment in the city yesterday. We will be moving over the next month (our lease here doesn't expire until the end of July). We'll be able to take public transportation to school once we move, and that will save a LOT of money in terms of gasoline costs. We'll hold onto the car for the important drives: going to see my kids and my father.

      I'm glad we got this apartment now, because it's going to get nasty when all the other people in the suburbs start moving back into the city centers to take better advantage of public transportation. I can see the writing on the wall; gasoline here is at almost $4.40 a gallon for the cheap stuff.

      One of the hardest-to-convert areas when it comes to public transportation is Southern California. We're so heavily dependent on having cars and having independent control over where we go. That's going to have to change, and soon. The bus system is ridiculous; buses are confined to each county, so if you live over the county line, you can't take a bus to work from your little home in the 'burbs. Public transportation infrastructure needs to be dramatically increased and developed in this part of the state so that people who are really hurting due to the rise in fuel costs can get to work and school without burning up 400-600 bucks a month in the gas tank.

      Every time I see a Hummer or an SUV these days, I want to scream.

      The truth shall make you free - but first it shall piss you off.

      by Killer of Sacred Cows on Sat Jun 07, 2008 at 07:24:59 AM PDT

      [ Parent ]

  •  Bayesian analysis ... (12+ / 0-)

    Making money, lots of it, is the ultimate arbiter of not just success, but also morality

    ... of the inner sanctum of the Church of the Invisible Hand (they won't let me in directly) indicates that the first two commandments are:

    1. The love of Money is the root of all Good.
    1. Them that Has Gets.

    As for this:

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    That could make manufacturing competitive again in America ... but not without finance reform.

  •  You're wrong. (10+ / 0-)

    It's program.  Not programme.

    Otherwise, you're spot-on.

    And don't forget the greed, the utterly unabashed greed of the Big Oil (company) magnates.  I know that you and I have disagreed to an extent about this, with you contending that my view is overly simplistic.  But as someone who embraces parsimony, I can't discount what's plain on its face, to wit:  that Big Oil's obscene profits break new records every quarter.  They are this era's Robber Barons.

    This nation, and world, simply must, absolutely must, undertake a cooperative, public/private partnership to switch the global economy from fossil fuels to alternatives (old, old news of course).  But this program needs to make the Manhattan Project, or the Apollo Missions, look like a weekend picnic.  The U.S. needs to lead.

    Obama's our best, and maybe last, hope to avoid the likes of a "Road Warrior"-esque cataclysm.  I mean, who really wants Mel Gibson as the "leader" of the so-called Free World, huh?


    "We in the gloam, old buddy," he said, "We definitely right in the middle of it." -Larry Brown

    by BenGoshi on Sat Jun 07, 2008 at 07:02:31 AM PDT

  •  Astounding!!! (10+ / 0-)

    Yesterday the bush was on air asking to double down on our current failed econ policy. I would laugh if it was not so serious. Tax cuts, elimination of death tax this fool needs an instant lobotomy and be institutionalized asap.

    If anyone had the time to watch the hearing last week on markets manipulation was shocking. During it which I think you can find on CSPAN, a professor at Md University said I think it was Goldman Sachs owns the largest portion of heating oil in the NE. That is insane!

    In 2004 the British paper got it right, "how could 53 million people be so stupid!"

    The Guardian in the UK has a great article out on McBush III, Mr. 994 out of 998 in his Annapolis Graduating Class.
    "Will the real John Mcbush Stand Up.

    •  Impeach, try, convict (1+ / 0-)
      Recommended by:

      and sentence the jerk to live in public housing, on a welfare income, for the rest of his life.

    •  Yes, here's the link (1+ / 0-)
      Recommended by:

      Outstanding hearing, one of the most interesting things I've ever seen on C-SPAN.

      Here's the video:


      Because it's not http, I can't make it clickable.  But just copy the link into the address bar in Firefox and click next.  Or put it directly into RealPlayer.

      The witness consensus is that 25-50% of the current price is due to speculation by purely financial interests, mostly because of the Bush Admin's permissive interpretation of the "Enron loophole" Phil Gramm put into law allowing unregulated, untrackable transactions in energy.  Greenberger refers also to a multitude of sham transactions that would be blatantly illegal in any regulated commodity market.  Several of the witnesses state that we're just seeing a new Enron debacle unfolding, with the very same traders working for new masters.

      "Proud to be part of DailyKos -- the Best Political Team on . . . well, ANYWHERE"

      by Alden on Sat Jun 07, 2008 at 02:12:46 PM PDT

      [ Parent ]

      •  P.S. Download it while you can (0+ / 0-)

        The only page on cspan where I found a link to the video states that most of the links on that page are available for less than 15 days.

        "Proud to be part of DailyKos -- the Best Political Team on . . . well, ANYWHERE"

        by Alden on Sat Jun 07, 2008 at 02:14:39 PM PDT

        [ Parent ]

      •  "Tie the trading down to the physical reality... (1+ / 0-)
        Recommended by:

        ...and you can dampen down the speculation."

        That's one of the Greenberger's quotes.  

        "Proud to be part of DailyKos -- the Best Political Team on . . . well, ANYWHERE"

        by Alden on Sat Jun 07, 2008 at 02:16:09 PM PDT

        [ Parent ]

  •  This dovetails nicely with Bad Money (4+ / 0-)

    by Kevin Phillips. It's a follow up to his book American Theocracy and is very timely.

    Some things have gotten worse since AT and a little has gotten better. But at least it's a lot clearer as to where things are heading. Though the economy is heading downwards there are a few hopeful signs that we will be able to endure the next few years.

    "Never have so few taken so much from so many for so long."

    by londubh on Sat Jun 07, 2008 at 07:23:59 AM PDT

  •  Jerome (5+ / 0-)
    Recommended by:
    melo, betson08, esquimaux, shaharazade, Justus

    This is why I love your posts:

    What links the two is debt, the defining feature of what I have called the Anglo Disease, ie the highly unequal economy whereby the rich and the financial sector (almost the same thing these days) capture most of the income but hide it by providing cheap debt to the middle classes so that they can continue to spend.

    Well put.
    Thank you.

    This primary has become not one damned thing after another, but rather one damned thing over and over.

    by middleagedhousewife on Sat Jun 07, 2008 at 07:33:26 AM PDT

  •  Old diary (22+ / 0-)

    This was previously posted as a rant against Brown and Bush for calling on OPEC to produce more oil. It still seems appropriate.

    Excuse me!

    Listen nutcase politicians, and yes that includes you Mr. reduce the gas tax McCain, and you Mr. pump more oil Brown, and you Mr. "I lost money in oil" Bush.

      1. Oil is a finite resource! That's right. There is only so much of it.

      2. The UK and the USA have passed Peak Oil. Production in both your countries is declining. Why? Because there is only so much of it and you have already produced most of it. There just is not that much left.

      3. Others do not have to produce more oil, or any at all. It's a free world. If they are smarter than us and and are unwilling to produce at low prices, hey, that's their right.

      4. To get others to produce the oil you want you have to "bribe" them...with money. That's one reason why prices are high.

      5. If you pay with paper money and you debauch your currencies, they will want more paper. The Pound and the Dollar are being debauched every day by the inflationary, debt fueled policies of the UK and the USA. Don't be surprised if prices for oil go up in your currency.

      6. There isn't that much scope to produce more any price. In case you haven't noticed there is almost no excess production capacity available in OPEC, only some low quality crude that no one wants because it costs too much to refine. So why don't you try producing more yourselves first..oh I have almost run out already.

      7. You could try getting the Chinese and Brazilians and Indians, and Russians to use less...but good luck. You see the US uses 20% of the world's daily supply of oil, while only having 5% of the world's population. So you can try getting them to use less...but they may just...laugh in your face.

    But hey I do have one tip for you folks:

    TRY USING LESS Pretty radical, right? But guess what?
    It is possible.
    It is profitable.
    It is sustainable.
    It is environmentally friendly.
    It's not that hard.
    It reduces carbon emissions.
    It reduces the trade deficit.
    It reduces money sent to Saudi Arabia.
    It reduces money sent to Russia.
    It reduces money sent to Venezuela.
    It reduces money borrowed form China.
    It stimulates innovation, creates new industries, and creates new jobs.

    I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

    by taonow on Sat Jun 07, 2008 at 07:35:30 AM PDT

  •  excellent... (2+ / 0-)
    Recommended by:
    Cliss, Killer of Sacred Cows

    I look forward to reading your analysis in detail later in the day...

    when I have time.

    Thank you.

  •  I think your coinage is unfortunate. (4+ / 0-)

    First off, the greatest Democrat ever - that would be Eleanor Roosevelt - was Anglo, of Dutch Extraction.  

    Although she was wealthy, her attitude toward poverty and suffering was outstanding, and she was a tireless advocate of economic equity.

    Thus painting all Anglos, including Anglo leadership as some kind of monolithic class of stupid and indifferent people is somewhat, well, how do I say this, racist.

    Suppose I posted a thread stating that indifference and hostility to European moslems was "Franco disease."   This would be unjust, since many French people, in and out of government, are not anti-Arab.

    But that's an aside.   I was talking with my wife the other night on how France took risks in energy management that were unpopular elsewhere - especially among irrational cults - and how the taking of these risks have lead to huge rewards.   France has the world's greatest energy system, excellent mass transit based on electricity, and the world's greatest electrical generation system with respect to scale.   The fact that France is reaping rewards for its vision in one case is hardly a statement that the French system is superior to the American system in all cases.

    Obviously, energy and the economy are intimately related, but that is hardly news.   Obviously financial panics are a part of capitalism.   The great President of the United States, US Grant, had to deal with such a panic in the 1870's.   So what?  Actions have consequences.

    But too much is made of conflating economic systems and energy systems.   I am personally sick to death of the way every choice in energy is addressed in terms of economics.   It makes no difference to me whether nuclear power is adopted by communists, as in China, or in mixed economies, as in France or Sweden, or libertarian countries like the United States.   It only matters that it is adopted.

    I am frankly thrilled that oil prices are rising, since I am less concerned with oil price than I am concerned with oil's dangerous waste.   I have long argued that the price of oil should reflect its external cost as well as its internal cost, and were that the case, it would already be well over $500/barrel, if not more, and about as widely used as whale oil is used.

    I have also long argued that the world's energy crisis and dangerous fossil fuel waste crisis would be managed by catastrophe, and not by reason.   This has proved to be the case.

    I was chatting with the conductor on a local train on my way back from a business trip on Tuesday.  I asked him if ridership was way up.

    "Oh yeah," he said.   I remarked that I felt really stupid for ever having driven to the airport, even when oil was $30/barrel.   He said, "Oh yeah."

    There's a hell of a lot of new transit cars on order for SEPTA, the Philadelphia mass transit system.   New lines are being added in New Jersey - although the first, regrettably will not be delivered, until 2009, but they are a start.

    We are planning new nuclear plants here in New Jersey, at least 3, hopefully more.

    But we are waking up.   I expect President Obama will make great strides in helping us to heal, whether we are stupid "Anglos" or not.

    •  Well (24+ / 0-)

      "Dutch disease" was not seen as an insult by the Anglos who coined it (the Economist), so "Anglo Disease" is fair game, especially as it describes an ideology that has come out of the Thatcher and Reagan doctrines, and that is pushed for the exclusive profit of the City of London and Wall Street in New York.

      And when you'll have lived through just one day of the mass of insults and invective hurled at France and continental Europe from the English language media, you'll take a kinder view of the fact that I have, indeed, chosen a pointed word, and I stand by it.

      As you note, the French economic system and its infrastructure work, and were State-organised, built and financed, and that's an unforgivable sin these days.

    •  small quibble on word usage (7+ / 0-)

      the anglo in "anlgo disease" refers to the source of the disease, not the health state of anglos in general.

      The medical corollary would be "pancreatic cancer" - its not that the pancreas is cancerous, its that there is cancer in the pancreas.  Similarly, its not the anglos that are disease, theres disease in the US and UK financial systems.

      •  Also, it has nothing to do with race. (2+ / 0-)
        Recommended by:
        Odysseus, Jerome a Paris

        It is used in this sense:

        From Wikipedia

        Anglo is a Late Latin prefix used to denote "English-" in conjunction with another toponym or demonym. The word is derived from Anglia, the Latin name for England, and still the modern name of its southeastern portion. Anglia and England both mean "Land of the Angles", a Germanic people originating in the north German peninsula of Angeln.

        It is important to note that Anglo is not a technical term. There are linguistic problems with using the word as an adjective or noun on its own. For example, the 'o' in Anglo means 'and' (Anglo-Saxon means of Angle and Saxon origin), so there is only an apparent parallelism between Latino and Anglo. However, a semantic change has taken place in many English-speaking regions, so that in informal usage, the meanings listed below are valid.

        Part of the misunderstanding arises from our narrow American-centric view of the world, and our co-opting of the term in apposition to the other culturally created terms such as "Latino."

        In government demographic data collection, they don't use "Anglo" and "Latino" to designate a person's race. They use "White" and "Hispanic."

    •  Reagon = Thatcher (1+ / 0-)
      Recommended by:

      Clinton = Blair
      Bush = Cameron? (leader of the Conservative Party in Opposition currently in UK)

      The UK seems to follow the USA in political and economic thinking. Do not look to the UK for an answer to current economic problems, unless you are happy with the sort of policies Bush has.

      Brown (current PM in UK) is no way near as unashameadly pro-state as Obama, even if (as some suspect) he would like to be if he could get away with it.

      Cameron wants tax-cuts, deregulation, private sector answers (increased charity work, decreased role of state in social security).

  •  carbon-credit based wealth creation (4+ / 0-)

    "The wealthy used it [debt] to grab real assets in funny money, and the rest were kindly allowed to keep on spending by tapping their future income rather than their insufficient current one;"

    Good, we'll pay off our debts with inflation-dollars.

    Wealth creation.  As you know, our US Economy depends on oil.  Since the 1960's we have heard time and again from our political leaders that Middle East instability is a threat to our economy.  Why the hell didn't we do something about our oil dependency then, instead of let ourselves get in a worse and worse situation.  

    Gore was floating that idea around about carbon-credits.  This would be a way to simulate "wealth-creation" down a different avenue than oil consumption.  Similar to paying your child for good grades, versus rewarding bad behavior.  Any business that finds or devises a way to provide a service with less use of gas burning engines, or pollution free services, gets subsidized by the government.  I'm not sure if subsidized is the right word here.  But you can be darn sure our government is subsidizing the oil industry, just by the military support and assistance provided.  The US Military is one hell of a private security officer.

    Say, for example, a company that could provide local delivery services with a team of,say, bicycles.  A citizen could place his order, and the courier shows up to run the errand for him.  With so many electronic services available it isn't necessary to jump in the car and drive across town.  Just stay home and save money, don't spend it, save it!  The incentive to the consumer is that the service is now cheaper than the gas he'd put in his car.

    This is just one idea that I came up with at the moment.  Humans are creative and resourceful, if we break out of that idea of "this is the American way of life and I have a right to drive my gas=guzzling car whereever I want" we can make some changes.  Of course, with cancerous big business constantly tripping us up, leading us astray with 'free credit cards' (there's an oxymoron for you).  

    Why is it the only automobile choice available is based on the combustion engine??? Why can't I have a car with a sail on it??  Why are roads only build for cars and not pedestrians?

    Where is all this government money for carbon-credits going to come?  Um, the money they spent on the Iraq war would have more than covered it.  It COULD easily be done, but again the wealthy prevent it in a myriad of ways by capturing the wealth for itself.  Largely the reason the general tv-watching public thinks Al Gore is a buffoon,or worse, those beliefs were bought and paid by the same people that now own your life.  

    We have been outright told to spend, spend, spend.  It's GOOD for the economy.  That is the biggest lie.  In true capitalism system, saving and investment is needed, NOT spending.  When individuals put money into private savings account, NOT acquring debt, a healthy economy arises.  This was the point we were at until around the time Reagan's Savings And Load bandits raided the US coffers the first time in the early 90's.  Since then wealth has been robbed from the American worker by taking his retirement plans, his health services, his job and now his house.

    I love your first line, and I'm with you all the way

    "And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis."

    The force of public opinion cannot be resisted when permitted freely to be expressed. Thomas Jefferson

    by Thea VA on Sat Jun 07, 2008 at 07:57:17 AM PDT

  •  Sweet potatoes (5+ / 0-)

    are being re-engineered by North Carolina State University (NCSU) scientists as source of ethanol and bioplastics to help the U.S. bioproducts industry’s reliance on corn. The researchers' goal is to embed enzymes straight into the starch-rich tuber, so that it grows its own bioconversion enzymes and processes itself into biofuels. This would be yet another example of 'third generation' energy crops, which are being developed by several biotech firms and science teams...

    The industrial sweet potato can produce twice the starch content of corn – the leading source of ethanol in the U.S. Using plants from China, Africa, and South America, the NCSU scientists have created hybrids with starch contents over 50 percent higher than the sweet potatoes most Americans eat. These industrial sweet potatoes are capable of producing 'tremendous amounts of biomass', mostly starch-based. More starch means more sugars that can be fermented into ethanol.

    •  Bio-Fuels (2+ / 0-)
      Recommended by:
      AaronInSanDiego, Clio2
      Currently using agriculture lands to produce bio-fuels means starvation in the developing world.  This may change but with the heads of the World Bank, FAO, & etc calling for an increase in ag production to the same extent as the Green Revolution and the introduction of Dwarf Wheat  without previous investment into research necessary for developing such ...

      I'm not holding my breath.

      "...[one] must still have Chaos in oneself to be able to give birth to a dancing star." Nietzsche

      by ATinNM on Sat Jun 07, 2008 at 09:05:24 AM PDT

      [ Parent ]

  •  Sugar cane ethanol (4+ / 0-)
    Recommended by:
    laurak, rsie, Justus, BenDisraeli

    A textbook on renewable energy[8] describes the energy transformation:

    At present, 75 tons of raw sugar cane are produced annually per hectare in Brazil. The cane delivered to the processing plant is called burned and cropped (b&c) and represents 77% of the mass of the raw cane. The reason for this reduction is that the stalks are separated from the leaves (which are burned and whose ashes are left in the field as fertilizer) and from the roots that remain in the ground to sprout for the next crop. Average cane production is, therefore, 58 tons of b&c per hectare per year.

    Each ton of b&c yields 740 kg of juice (135 kg of sucrose and 605 kg of water) and 260 kg of moist bagasse (130 kg of dry bagasse). Since the higher heating value of sucrose is 16.5 MJ/kg, and that of the bagasse is 19.2 MJ/kg, the total heating value of a ton of b&c is 4.7 GJ of which 2.2 GJ come from the sucrose and 2.5 from the bagasse....

    The 135 kg of sucrose found in 1 ton of b&c are transformed into 70 liters of ethanol with a combustion energy of 1.7 GJ. The practical sucrose-ethanol conversion efficiency is, therefore, 76% (compare with the theoretical 97%).

    One hectare of sugar cane yields 4000 liters of ethanol per year (without any additional energy input because the bagasse produced exceeds the amount needed to distill the final product). This however does not include the energy used in tilling, transportation, and so on.

    One hectare is 2.471 acres.

    This means Brazil can get about 400 gallons of ethanol per acre.

    A oil barrel holds 42 gallons.

    Brazil can get almost 10 barrels of ethanol an acre.

    At $200/barrel oil, a tropical acre could produce ethanol worth about $1,500 a year as a motor fuel.

    The US government should make a major effort to develop sugar cane that can be grown much further north, perhaps even on the USDA grounds in Washington, DC.

  •  Jerome a Paris (0+ / 0-)

    Breaking it down, scientifically, as usual. Nice.

    The moral arc of the universe is long, but it bends towards justice. - Martin Luther King, Jr.

    by easong on Sat Jun 07, 2008 at 08:05:50 AM PDT

  •  Palm oil (2+ / 0-)
    Recommended by:
    Odysseus, Justus

    In 2004, Malaysia produced 14 million tons of palm oil from more than 38,000 square kilometres of land, making it the largest exporter of palm oil in the world.

    That's about 350 tons per square kilometer or about 1.5 tons/acre.

    That's about six barrels per acre for biodiesel.

  •  great piece, Jerome (0+ / 0-)

    I read up more on the "anglo disease" series you linked too, great stuff.  Scary, but still great.  Its a little much for me to get my head around it all the way on the first read.

    Here's to hoping that saner heads prevail...

  •  Knowing you can't cover it all (6+ / 0-)

    in just one diary, but the international strategic implications for the US are epoch-making.

    There was a study done in the mid-90s that showed if the US military was a nation, it would be the 4th largest consumer of oil in the world. Maybe that's changed with China & India's increasing use, but the point remains the same. We have a vast military to try and control the fuels, which we need to have a vast military.

    But as the price of oil increases (which goes hand in hand with the value of the dollar decreasing--even if oil reserves were constant, which they aren't) the military becomes proportionately more expensive to maintain.

    While we've been going insane over here, the rest of the world has been planning for the post-US Hegemony world. One example (and for the first time just this week I saw the US Press mention it) BRIC--Brazil, Russia, India, and China--who've been having all sorts of beneficial arrangements among themselves.

    Problem here, is our ruling class are pretty much cornered rats at this point. The intelligent thing, which you wrote

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    is not choice A for the pure psychopath faction, which is well-represented. An excuse for outright dictatorship would appeal to them more.

    Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

    by Jim P on Sat Jun 07, 2008 at 08:32:23 AM PDT

  •  Gov does diddley squat while Rome burns (6+ / 0-)

    I'm a long time Obama supporter but even he needs a reality check.  His proposal $ 150 billion over 10 years comes to $ 15 billion per year.  We are spending that in Iraq each month.  So he isn't serious about energy independence.

    Roughly speaking we can become energy independent by using electric transportation.  The energy sources would be approximately the following:

    10% Wind
    10% Tidal
    05% Geothermal
    10% Solar
    10% Natural gas
    15% Coal
    30% Nuclear
    10% Conservation/efficiency

    •  I like (1+ / 0-)
      Recommended by:

      that you've proposed something specific.  It's a start.

    •  Solar energy alone can handle a lot more (1+ / 0-)
      Recommended by:

      than 10%, as PV technology fades away.

      Titanium based solar conversion, directly into hydrogen can be a reality in less than 5 years, if the government would invest some money into the R&D.

      Titanium dioxide crystals, using nanotechnology will likely break through the PV based concept of producing electricity - researchers are already looking at other materials to use solar energy to split water.

      The hydrogen produced can be used to heat, to produce electricity or power vehicles, and theoretically can be done totally off grid.

      "If you want to go quickly, go alone. If you want to go far, go together." We need to go far, quickly.

      by shpilk on Sat Jun 07, 2008 at 01:02:33 PM PDT

      [ Parent ]

  •  Jerome, what do you think about those 150 calls? (1+ / 0-)
    Recommended by:

    Talk on the street were those interested in those front and now back month $150 calls on the Nymex.  BTW, have you seen the latest open interest figures in the CFTC's Commitment of Traders report?  If one includes the spreaders in the non-commercial section, speculators are now approaching 40% of the open interest in the NYMex's crude contract.

    Blackadder: Actually, I think he's the most over-rated human being since Judas Iscariot won the AD31 Best Disciple Competition.

    by Johnny Venom on Sat Jun 07, 2008 at 08:52:13 AM PDT

  •  My favorite phrase in this diary (9+ / 0-)

    class warfare waged by the rich against everybody else

    That should be the phrasing used in as many places as possible.  I'm tired of losing the war.

    I am become Man, the destroyer of worlds

    by tle on Sat Jun 07, 2008 at 09:16:17 AM PDT

    •  Seconded! (3+ / 0-)
      Recommended by:
      laurak, NoMoreLies, esquimaux

      Ever notice how "class warfare" has become a taboo subject?

      "Geez, no one's gotten a raise in years. WE're hurting out here..."


      "But, I'm just saying I'm barely getting paid enough to buy a loaf of br--"


      "The World Is Flat" means, "Expect a pay cut before we fire you." -Me

      by mftalbot on Sat Jun 07, 2008 at 09:58:53 AM PDT

      [ Parent ]

    •  I tell you what... (1+ / 0-)
      Recommended by:
      Jerome a Paris

      could we try just

      "...warfare by the rich against everbody else"?

      Per Strunk & White Rule 1: Omit needless words. The word "class" is not necessary here to get the idea across.

      Per my own Rule 2: Omit words with problematic connotations. One connotation of "class" warfare is Marxism. We are so past that. Another is a system of formal social "classes," which in America may or may not be accurate, but is denied by some.(Certainly we don't have "classes" in the European sense of legally recognized aristocratic status determined only by who begat whom.) Whether the very rich in the U.S. today should be described as a "class" may not be important in practice. Why open a potential diversionary issue?

      Cheers. Fantastic diary.

    •  It's not just class warfare: (2+ / 0-)
      Recommended by:
      Jerome a Paris, Cliss

      a lot of this "extra money" spent on oil is going directly to regimes which support terrorism, and horrible human rights abuses, and into the pockets of corporate criminals.

      This 'speculation' is really nothing more that a form of intimidation, speculators are making a killing on the rest of the planet.

      Until we can wean ourselves off this poison, it's long overdue to nationalize all the oil and gas companies, worldwide and take them off the stock markets.

      They have become wholly criminal organizations that support war and death, and operate against the interests of humanity.

      "If you want to go quickly, go alone. If you want to go far, go together." We need to go far, quickly.

      by shpilk on Sat Jun 07, 2008 at 12:54:33 PM PDT

      [ Parent ]

  •  Can't we harness gas produced by our bloviating (2+ / 0-)
    Recommended by:
    AaronInSanDiego, Cliss

    congress and administration? Since our republican senators just stymied global warming legislation, there must be some use for them other than setting policy. I did some calculations on the back of a napkin, I figure the gas produced by these assholes over the last seven years is enough to power America for the the next twenty.

    I have an irrational faith in reason.

    by the fan man on Sat Jun 07, 2008 at 10:22:55 AM PDT

  •  The a Paris Commune sings! (2+ / 0-)
    Recommended by:
    Jerome a Paris, In her own Voice

    Arise, ye oil futures contracts
    Arise, ye prices at the pump
    Empty barrels thunder for a tax cut
    And our future's in the dump!

    Those who do not move, do not notice their chains. Rosa Luxemburg

    by ActivistGuy on Sat Jun 07, 2008 at 10:23:01 AM PDT

  •  So What Should We Do? (1+ / 0-)
    Recommended by:

    One interesting question your explanation raises is "what should we have done differently?", but of course it's too late to do that now.

    However, we are about to change administrations, even if not the plutocracy that underwrites them all. What should the policies of 2009-2012 be, building on the ruined foundations of 1776-2008?

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Sat Jun 07, 2008 at 10:31:34 AM PDT

  •  Car Trains (7+ / 0-)

    Congress has OK'ed a $45 million MagLev between LA and Vegas. We could make transit more efficient in the US by linking major transit points with car-carrying express trains that link to the local infrastructure (road, rail, and air and ship) at those points. Here's a solid example for the Northeast that would benefit the whole country, and thereby the world (to the US' credit).

    We should make the Feds build a "car train" that people drive their cars onto at stations in Boston, NYC, DC, Albany, Buffalo and Champlain (NY, across the border from Montreal). We should put the train in a tube under the water in the Atlantic, Hudson/Champlain, Delaware/Chesapeake and Erie canal, which won't need rights of way or disruptive construction schedules. Linking together the Midatlantic, New England and Canadian transit points that carry so much of America's (and the world's) traffic.

    There's a vast swarm of traffic on the highways (I-95, I-87 and I-90) that runs basically between those cities (really including Toronto and Montreal), pumping pollution and chewing up gas all along the way. Make stops at one point between each terminal and it will carry lots of subregional traffic, too. If the train goes 300MPH, the speed up/down between the stops would make NYC/DC a reliabe 90 minute trip, with a station between Philly and Wilmington only 45 minutes away. DC to Toronto only 4 hours, and you can drive off (or drive on) anywhere in the 5 stops between.

    Fast, reliable, safe. Because the train's energy can be generated at large power plants near fuel ports and scrubbed centrally, energy efficient and much cleaner. These routes could haul cargo trailers most of the time, when not full of passenger/car trains.

    The increased efficiency (in time, energy any pollution) should pay for the construction within a reasonable span of years, probably not much longer than the time to construct (which should happen simultaneously between the cities).

    There might even be a case for hydropower using currents and tides in the waterways in which the tube runs. That infrastructure could deliver quite a lot of longterm benefits beyond transportation, especially as development fills in the corridor spreading between the stations, just as it already did with the rivers/canals, roads and indeed original railways between those points.

    If the Feds and the states (NY is the obvious one) funded a $100B investment (about 9 months of the Iraq War) in this rail, using only US contractors employing permanent residents, prioritizing employment of people who've lived along the route for at least 5-10 years, the payoff in economic development would be vast. The Springfield Interchange outside DC carries over 430,000 vehicles per day alone; there's got to be at least 5-10 million vehicles a day on these routes (all of which seem to pass through NYC :). $100B is only 10,000x that amount, or something like 300 years at $1:vehicle:day. At an average $10, that is only a 30 year payback, for about 40 miles cost of gasoline. The current cost of a 150 mile drive between consecutive stations, including gas and tolls, is at least $35, so such a project could pay back in something like a decade or two, including cost overruns and deluxe features. Since it would probably take about 5-10 years to complete any segment (which should all be built in parallel, or at least several connecting segments like Philly/NYC, NYC / New London, NYC/Kingston), that means payback is on the timescale of construction, which is a perfectly reasonable investment term. When considering the payoff in energy, pollution, productive time, safety, employment, and all the saved expenses and increased taxes from that cleaned up transit, this is probably the best investment we could make outside healthcare and education.

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Sat Jun 07, 2008 at 10:36:46 AM PDT

    •  Low Mass Transit (7+ / 0-)

      Certainly, transit needs rethinking.  One of the most prevalent arguments against lighter cars is their fate in collisions with heavier vehicles.  "Delivery systems" such as your proposal could protect cars from each other during periods of greatest speed, so that vehicle weight could be greatly reduced.  

      Toyota has proposed a carbon fiber version of the Prius that would weigh under 1000 lbs. and operate at 150 mpg.  Toyota's subsidiary Daihatsu is working on a light car that will do even better.

      In fact passenger vehicles could come much close to bicycle weight.  I'm working on a compressed air powered car that will weigh no more than 400 pounds.  In one configuration it will fold to park!

      We really need to get back to Jimmy Carter's r&d tax credits for alternative energy development.  Nearly 30 years lost!  Time to become leaders again!

      The Shock Doctrine by Naomi Klein -- best book ever, I nominate for a Nobel Prize!

      by xaxado on Sat Jun 07, 2008 at 11:09:18 AM PDT

      [ Parent ]

      •  Compressed Air? (0+ / 0-)

        What's the advantage of storing the car's energy in compressed air? Isn't a safe air pressure tank going to weigh as much as a liquid H2 tank and fuelcell? What's the efficiency of compressing and decompressing the air, in %energy lost between whatever powers the compressor and the power delivered to the wheels?

        "When the going gets weird, the weird turn pro." - HST

        by DocGonzo on Sat Jun 07, 2008 at 11:38:39 AM PDT

        [ Parent ]

        •  air car (2+ / 0-)
          Recommended by:
          KenBee, Cliss

          Compressed air cars are currently in production in Europe and India.  The principle only works with a very light vehicle weight, since the true energy density of the storage medium is low.  My design makes the car frame from "fat" carbon fiber tubing, which serves as a safety cage and air tank.  The outer shell is fabric, so in a sense we have a mobile tent.  The look would be much like the Daihatsu in the second link in my post above.

          The compressor required to charge the tanks could actually be tiny and operate from microcurrents generated locally by wind or solar.  So overall net energy delivery efficiencies could be quite good.

          Normal IC engines work on compressed air also, but the compression/expansion is part of a combustion cycle that involves a lot of heat, so metals are required for the "pressure vessel" parts.  By leaving out the heat of combustion a lot of weight reduction is possible.  The compressed air pressure can also be scavenged into a pneumatic suspension system for more weight savings.

          Hydrogen fuel in liquid form has formidable unresolved issues.  Net energy delivery is still uncertain and there will be cost barriers to break through.  It may be great, but the development will require huge concentrations of capital.  The air car may not be so capital intensive, and could break dependence on "fungible" fuels altogether.  My hope is that cars can be sold by Ikea as flat pack kits, put together by friends over a BBQ, sort of like the old time community barn raisings.  We can dream, can't we?

          The Shock Doctrine by Naomi Klein -- best book ever, I nominate for a Nobel Prize!

          by xaxado on Sat Jun 07, 2008 at 12:20:48 PM PDT

          [ Parent ]

        •  compressed air efficiency (3+ / 0-)
          Recommended by:
          DocGonzo, KenBee, Cliss

          Your question is good and I don't know the answer.  Here's a link to one researcher's work.

          Quite a bit of work on the subject is in research labs all over the world.  I'll post a diary if I can pull together something more informative.

          The Shock Doctrine by Naomi Klein -- best book ever, I nominate for a Nobel Prize!

          by xaxado on Sat Jun 07, 2008 at 12:24:23 PM PDT

          [ Parent ]

  •  That's been my take for some time now. (3+ / 0-)
    Recommended by:
    Jerome a Paris, NoMoreLies, Cliss

    The 1980's should have clued everyone in on what was really going on. The fundamental weakness insanity of the America economy is that it is increasingly based on people playing games with money, and every 'reform' has been aimed at rigging the games in favor of those with all the winnings.

    Gordon Gekko is still out there, and he has lots of friends. They put Bush in the White House, they own John McCain, they literally own the traditiional media, and they'll do everything they can to stop Barack Obama from getting anything through Congress that might inconvenience them.

    If you look at Gekko's speech to stockholders, how much has changed?

    The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.

    Greed is right.

    Greed works.

    Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

    Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.

    And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

    You know what? It's time for Michael Moore to re-release Fahrenheit 9 11. Watch the trailer now and reflect on how the last 5 years have vindicated Moore. It should be run on all of the major TV networks. Maybe the country is finally ready to look at what's been going on.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sat Jun 07, 2008 at 11:19:56 AM PDT

  •  Hi, Jerome. Congratulations on the turbines. (6+ / 0-)

    And thanks for this great article.  It's one of your best. I particularly liked your thoroughly understandable explanation of the credit bubble and the dollar peg to oil prices.

    I'm still struggling with the term "Anglo disease".  It seems to me, that part of the problem with America is that Americans don't realize we are the problem.  At least our system of civilization (including lifestyle, banking, energy, education, everything) is -- completely diseased.   So I will 'see' your Anglo disease and I will 'up' you a metastasized version - the Anglo-American disease.

    Living here in America and knowing what I have known all these years, it has been my greatest wish that average Americans would realize the pain and destruction that is being caused by our way of life, so they can make a change.  Now here we are, with our financial chickens coming home to roost and we can finally feel it.  I guess the old saying really is true for the masses - you have to see it to believe it.  Oh well, better late than never - I hope.

    As to your comments - again great analysis.  I would add an interesting twist that most people don't know about.  There is at least one more sizeable oil field discovery that has not been announced because they want to wait until all this is settled with Kyoto and the new system and everything else.  To a savvy businessman there is no point putting something onto the market that is made obsolete while you are in progress of developing it.  Or on the other other hand if the prices are going to skyrocket, why make a contract that you will immediately regret.  Once all this new system transition is settled, further decisions will be made.  At which point oil prices may once again be repriced.  

    I think this is what certain talking heads are referring to about the prices coming down soon.  But the truth is, IMO, we are a ways off before stabilization.  Unless of course we have drastic demand destruction.

    Once the alternative energy sector gets more widespread traction (which should be soon) people are gonna all see the oil business for what it is - a dying business - fuel for fossils.

    But in the meantime the "income capture" segment of the economy has been dealt a serious blow.  How we follow that up with regulation in the form of banking sector regulation, coupled with incentives for businesses to go green, etc. - as opposed to greenwashing - which is more of the smokescreen you were talking about -- that will determine the future of where this hot mess called earth is headed.

    I guess this is one of the reasons I call it Anglo-American disease.  How America deals with the disease effects everyone else.  Darn, what an unfortunate position to be in if we haven't got good leadership.

    Anyways.... Bravo for the turbines and great article.  You are definitely part of the solution.

    •  Hey Jerome, I forgot something... (2+ / 0-)
      Recommended by:
      Jerome a Paris, Cliss

      I gave two examples of why someone would wait at this junction before revealing a new oil field, I forgot one of the most important.  If someone had an untapped oil field at this time, they might justifiably fear that if the location were revealed there might suddenly be "discovered" evil terrorists there and a then war ensue, if you know what I mean.

      If oil = war, some 'new system' business people think maybe it's best to take a pass until the outlook changes on the terror and violence front.

  •  Not Anglo Disease -- call it Reaganomics (1+ / 0-)
    Recommended by:
    Jerome a Paris

    Or to be more accurate Reagon-Thacheromics.

    We should pin the blame for what is happening right where it belongs -- remind everyone where conservative economics comes from.

  •  yeegads! (5+ / 0-)

    I read through this nodding the whole way about permanent redistribution and so on, and wondering the whole while  "so what do we do now?"

    I'm awfully glad you at least gave us a teaser of an answer...though how? and "with whom?" still spring to mind:

    And, wonderfully, a programme to invest in housing and vehicle energy efficiency, renewable energy, and infrastructure, paid for by massive tax hikes on the rich, will help solve the current recession and the oil crisis.

    On the plus...Jerome and Bonddad up on the rec list today? Reminds me of days gone by : )

    "Get informed, and let it change you."--wonderingmind42's chemistry professor

    by DemocracyLover in NYC on Sat Jun 07, 2008 at 12:24:04 PM PDT

  •  Demand is already down. (2+ / 0-)
    Recommended by:
    AaronInSanDiego, Jerome a Paris

    Technologies to use sunlight to split water using abundant, relatively inexpensive materials is close, within 5 years.

    The anger I have over these price increases is that the bulk of the extra money is going to corporatists, terrorists, dictators, clowns and criminals.

    This 'extra money earned' is being driven by speculation, and should be put to use forwarding conservation, shifts away from traditional fuels and development of off-the-grid independence for electricity.

    "If you want to go quickly, go alone. If you want to go far, go together." We need to go far, quickly.

    by shpilk on Sat Jun 07, 2008 at 12:50:29 PM PDT

  •  Thank you again (3+ / 0-)
    Recommended by:
    Jerome a Paris, NoMoreLies, Cliss

    for another excellent diary on economic reality.    The question now is how do we get most of America to stop watching the TV Lobotomy box and notice.  

    One part I think you left out is the continuing expansion of the military-industrial-complex.  That sector of the economy is not suffering at all - like the banking and finance sector. The building of new weapons systems for  "enemies" that don't even exist is still the biggest drain on the economy.  It's totally out of control.  Just imagine if all that money was put into renewable energy....

  •  Nonsense. (0+ / 0-)

    Jerome has predicted 15 of the last 1 recessions.

    This is the worst kind of hindsight sophistry.  Sure, most of what he says above is factual and presented in a sophisticated and stylized manner, but the evidence for the causal connections is all a bunch of nonsense, and the apparent genius of this theory is exactly why it fails: there is no "Anglo disease."  

    The phenomenon is simply called capitalism.  

    It is and always will be, whether you are for it or against it, a system that pushes wealth up and survives politically by including just enough people.

    The question then is irresponsible stewardship like Bush, or mostly responsible stewardship like Clinton, or earlier Democratic presidents.

  •  If we do not cut military spending, (3+ / 0-)
    Recommended by:
    Odysseus, Jerome a Paris, Cliss

    we will not be able to do squat about any of these problems.  Even taxing the rich is no solution.

    It is going to take a major investment to get away from oil.  The money needed is going to the military.

  •  I just wonder... (4+ / 0-)

    ...why the people of Janesville, Wisconsin who are being laid off by G.M. could not be put to work building the fuel efficient cars people are waiting in line for. Eight dollar gas will create far more new jobs than it destroys if we just lose the insane leadership in this country that has promoted a culture of waste and environmental destruction.

  •  A very interesting and coherent analysis (3+ / 0-)
    Recommended by:
    Odysseus, Cliss, cs

    As an economist who focusses primarily on the "real" economy, I often find analyses of the financial system, dreary and often incoherent (with the exception of Hyman Minsky and his "school"). I thoroughly enjoyed this piece and agree wholeheartedly with your conclusions.

    I just wanted to raise a point relating to the rising price of food which, I may be wrong, but believe is being compounded by other factors besides the rising price of oil. The policies of the CAP (e.g., destruction of produce) were established to literally keep agricultural prices high. Secondly, increased production of bio-fuels have contributed as well. The production of Bio-fuels means that land is not used for the production of food-stuff. Starving people in the 3rd world is not IMHO an humane way of dealing with rising oil prices. If we instead destroy rain-forests that are not being used in agricultural production, the environmental damage will be long-lasting and compound current problems rather than ease them. Too much long-term environmental damage has been done so that there are areas of the globe which are unable to be used for production of foodstuffs (unless we consider genetically modified products and that opens a whole new can of worms).  Finally, development and trade policies were pushed on third-world countries forcing them to shift from production of foodstuff in favour of production of luxury fruit and veg for export to advanced capitalists countries (e.g. Egypt under Sadat). Agricultural production does not rapidly respond to price changes, you just cannot change the type and nature of production like is possible in industrial production.  

  •  Oil - an unusual resource. (2+ / 0-)
    Recommended by:
    melo, Jerome a Paris

    A few years ago, someone posed the question to Mr. Cheney about oil resources.

    The reality had already become known: oil is a finite resource.  
    a) there's a limited supply of oil.  It's non-renewable meaning, once it's gone it's gone.  We can't make any more of it.

    b) we're currently using oil at unsustainable levels.

    The question was posed to Mr. Cheney, "Why don't we start conserving gas?"
    Cheney: "I don't think that conserving gas is the right thing to do." (no other explanation provided).
    When I heard that, I knew that oil is a strange resource which doesn't follow normal rules of usage.  When a vice-president advocates using all of it, even if it means our own demise, future be damned, you know something's up.

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