[Peakoil] Jim Kunstler this week on the energy predicament in the USA

[Keith]

Time provide a little levity into the energy predicament. Here is Jim Kunstler this week.
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Gassy Politics

http://kunstler.com/clusterfuck-nation/gassy-politics/

September 9, 2013

      First: Paul Sabin’s stupid op-ed in The New York Times Saturday shows how intellectually bankrupt and pusillanimous the “newspaper of record” has become, in step with the depraved and decadent empire whose record-keeper it supposedly pretends to be. Sabin is flame-keeper for the theories of the late cornucopian demi-god Julian Simon, a business school professor whose great idea stokes the wishful thinking that has overtaken a class of American leaders who ought to know better, and spread through the public they serve like a fungal infection of the brain. The core of Julian Simon’s great idea is that material resources don’t matter; human ingenuity will overcome all limits.

     Maybe that’s a temporarily comforting thought for leaders in business, media, and politics, who don’t want to face the realities of peak resources and climate change, but it guarantees a harsher economic outcome since the wishful public will do nothing to prepare for the very different terms of daily living that are already shoving them into hardship and desperation.

     Julian Simon, who died in 1998, is best remembered now for a bet he made in 1980 with biologist Paul Ehrlich, author of The Population Bomb. The bet was supposed to determine whether the converging difficulties of our time should be taken seriously. The two men picked a menu of commodity metals and bet whether the price would rise or fall by 1990. Ehrlich bet that scarcity would drive the price up; Simon bet that they would go down. Simon won the bet only for temporary circumstantial reasons, namely that the last great discoveries of cheap, easy-to-get oil ramped into full production by the mid-1980s and pushed a final orgy of global industrial development until 2008, when things really started falling apart. By then, Julian Simon has been dead for a decade.

     Simon’s idea lives on in the wishful thinking around shale oil and gas, which have led the American public and their leaders to believe that we’re in an “energy renaissance” that will lead to “energy independence.” Just the other day, Senator John McCain made the inexcusably dumb remark that the US is now a net oil exporter. This is a man who ran for president five years ago, talking completely out of his ass.

     Now oil is well over $100 a barrel, a price that the American economy, as currently configured, cannot endure. That price is crushing the kind of activity we have depended on lately: the house-building and lending rackets associated with the creation of suburban sprawl. $100 oil is especially corrosive to the problems of capital formation, because without more racket-driven “growth,” we can neither generate new credit, nor pay the interest on old credit. We’ve used accounting fraud in banking and government to cover up this failed equation. But it has only led to greater deformities in markets and a general fiasco in the management of money all around the world, and it is spinning out of control right now. If these conditions were to crash the global economy and the price of everything fell in a deflationary depression, with oil back under $60 a barrel  — then it would not pay enough to frack the shale rock, or drill miles under the ocean, or do any of the very expensive operations of what’s called unconventional oil recovery.

     For The New York Times to keep hauling out the sorry-ass figure of Julian Simon to “prove” a specious and dangerous point surely shows the limits of one thing: intelligence in the media. Because of that and other related failures in the transmission of ideas, this is now a nation that cannot construct a coherent narrative about what is happening to it.

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Keith Thomas
myrmecia at gmail.com
+44 74 2929 4146
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