Cassandra, Jeremiah, and me

People have gone to deserts for more than 2000 years to find solitude, inspiration, meditation, and freedom. This website delves into some aspects of desert life in the early 21st century with a geographical focus on Newberry Springs, California. The front page is my blog and the links on the right deal with a few resources in a local context.

Books

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Guns, Germs, and Steel by Jared Diamond; why Europeons overwhelmed the First Americans and not the other way around.

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Collapse by Jared Diamond; how and why societies fail.

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The Party's Over by Richard Heinberg; oil, war, and the fate of industrial societies.

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Twilight in the Desert by Matthew Simmons; do you think OPEC has lots of oil?

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Beyond Oil: The View from Hubbert's Peak by Kenneth Deffeyes; one of the best descriptions of peak oil by a colleague of M. King Hubbert.

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Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb; how shit happens that we have no way of predicting and it makes a big impact.

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Overshoot: The Ecological Basis of Revolutionary Change by William R. Catton; one of the best descriptions of the fix we're in -- a classic.

Superclass

In his sixth book, Powerdown, Richard Heinberg lays out four alternative future scenarios for how society will deal with the energy crisis. His premise is that oil production is set to plateau then decline and that energy use by humanity will decline along with it. Note that even if alternative energy sources could offset depletion of petroleum reservoirs, per capita energy consumption would still decline due to increasing population. Heinberg's four scenarios are:

Last One Standing – where nations fight over dwindling resources.

Powerdown – where everyone cooperates to reduce resource consumption.

Waiting for a Magic Elixir – where everyone lives in fantasyland until the shit hits the fan, and

Building Lifeboats – where the ships of state go down and a few manage to survive on rafts.

I think another unacknowledged assumption here is nationalism. Heinberg implicitly assumes that nation states will continue to act as discrete entities. But to me it looks like that notion has started to become archaic over the past couple of decades. Look at the former Soviet Union, for example. It broke up into how many 'stans? Then Yugoslavia taught us about Balkanization. Over the same period all of the former warring nations of Europe decided to become a Union. So I'm going to dredge up another archaic idea, a class society, propose a fifth alternative future scenario, and call it Superclass.

Throughout most of civilization people were born into classes or castes and stayed there all their lives. In Western Europe there were the nobility. In Egypt the Pharaohs. In India the Untouchables. Hardly anyone ever went from peasant to software mogul. Nowadays, even though we cling to a Horatio Alger myth in America and idolize common folks – mostly athletes, actors, and musicians – who have made it big, nearly everyone is stuck pretty close to their status at birth. Apples don't fall far from the tree. We also see that the rich get richer and the poor get poorer. The minimum wage hasn't gone anywhere in decades while, at the same time, corporate executive salaries are on the order of tens to hundreds of millions of dollars a year. In the U.S. less than 1% of the population controls over a third of the wealth. There are about 1000 billionaires in the world. Keep in mind that a billionaire is one thousand times richer than a millionaire. And perhaps 10,000 people control most of the resources on the planet. Members of this Superclass have much more in common with each other than they do with people in their own nation, country, and hometown.

Now if you look at dwindling resources on a per capita basis, there's plenty to go around for 10,000 people if the rest of us 6.7 billion all live in mud huts on a bowl of rice and cup of water a day. No doubt the Superclass can fly their Gulfstreams around the world to poker parties with each other until the sun burns out. Peak oil would mean nothing. All they have to do is concentrate the wealth and keep the masses pacified. And it doesn't have to be a conspiracy, merely a natural evolution. So what kind of evidence might you look for to support or refute this hypothesis? You would look for evidence of concentration of wealth and pacification of the masses. How about lots of people on mood drugs like Prozac? More money to big pharma and lots of happy zombies. How about millions of people addicted to teevee and all the broadcasters owned by a few big corporations? African Americans have been one class with a rebellious streak, perhaps because of their treatment, and hard to pacify. How about a lot of them locked up in prisons operated by big corporations? Debt servitude. How about lots of people in over their heads on mortgages and credit card debt they can't pay off and a bankruptcy law written by the bankers? Wars. Notice how most of the soldiers are people seeking economic improvement and big corporations get the multibillion dollar no-bid contracts? Dieoff. Starve a lot of the very poor and make health care too expensive for the rest. Here it seems almost as if Mother Nature is in cahoots with the Superclass. Every time there is a tidal wave, typhoon, or earthquake it takes another 100,000. Look around and I think you'll find more evidence.

In this scenario peak oil is not an issue for the Superclass. Maybe that explains why you don't hear much about it in the media.
  • teosinte @ 20:07 

    Managed Democracy

    Throughout the years I've been reminded repeatedly that democracy is the best form of government and capitalism is the only sure way to run an economy. On both of these points I have only two thoughts: one, I don't know, and two, I'd like to find out. Consider the argument for democracy here in the world's greatest. As I understand it, democracy is rule by the people. Or in a more modern sense, the people vote to elect representatives to carry their water at a parliamentary governing body. One person, one vote. But what have we this year? I hear on the news that Florida and Michigan are being "punished." You can't punish a state, you can only punish the people living in that state. So sorry people in Florida and Michigan. You don't get to choose between the woman whose spouse is a former president and the man of partial African American descent. You've been ruled out of the "democracy" by a small committee of powerful people somewhere. And what are these beasts called Super Delegates? It would appear as though the votes of some of the Superclass are worth more than hundreds of thousands of the votes of ordinary people. Unless you live in Florida or Michigan. Then your votes aren't worth anything at all. As Sheldon Wolin puts it, we live in a managed democracy where the façade of democracy is useful as it provides an illusion of legitimacy to those who hold power over us. Most of the common people have figured this out and don't even bother. But, wouldn't you know it, their apathy is also useful to those who hold power. It makes the system easier to manage.

    For all practical intents and purposes it appears that our economy is more centrally managed than the Soviet Union's ever was. Adam Smith had this idea that individual buyers and sellers, each offering what they had and bidding for what they needed, was an invisible guiding hand that directed goods and services from producers to consumers in the most efficient possible manner at the right price. But you and I don't sell watermelons or buy shoes from the cobbler. We sell our time and buy our necessities from a few major, globalized corporations whose board members all sit on each other's boards. They give us options as a multiple choice. Coke or Pepsi? Would you like fries with that? They tell us what we should want on teevee, where they own all of the wavelengths. They set the prices and we can either pay or not.

    Move up the scale and what's the most important price of all? It's the price of money. Is that set in the marketplace between buyers and sellers? No. It's set in a secret meeting of a small committee of bankers called the Federal Reserve. All of the other big players: Goldman Sachs, Lehman Brothers, JP Morgan, etcetera wait outside the door for the whisper then the markets react. How is this all that different from the centrally planned Soviet system, which we were told caused that Union to disband?

    Democracy and Capitalism are probably good ideas. I really would like to find out. But it's unlikely that we ever will. Scarcity will come because of peak oil. Hunger and want will stalk the poor. Foundations of McMansions will settle and crack on poor soil. And when it's time for the mask of Managed Democracy to drop and reveal its true face of Inverted Totalitarianism, the people won't resist. No, they will rush forward to embrace the new police state. If there is not an official place to rat out one's neighbor, who might be engaged in the subversive practice of growing watermelons to buy shoes, the people will demand that one be established.



    • teosinte @ 22:07 

      Cut 'em loose

      Dmitry Orlov makes a recommendation in his new book, Reinventing Collapse, that is sure to win over the law and order crowd. Orlov claims we're going to have to release convicts from prison sooner or later so we ought to do it sooner and gradually rather than later and all in a big whoosh. His point is very practical. Once our complex society can no longer support a large percentage of our population on free room and board they're going to be cut loose. And when that happens there'll be a spree like we've never seen before.

      How did America, land of the free and home of the brave, come to have the largest percentage of its population incarcerated of any nation in the world? Larger even than South Africa and Communist China. One factor is that politicians can always run a 'crack down on crime' campaign and get elected. Law abiding folks, who are most of the voters, want their neighborhoods to be safe and sane. Next the newly elected Congress Critters pass laws making common activities illegal. People get sent to jail for having a few seeds of a plant that grows wild along roadsides in the Midwest and happens to make you hungry when you smoke it. One strike you're in and three strikes you're really in, forever. Draconian sentencing laws can send someone to prison for life for borrowing a bicycle if they happened to have screwed up a few times in the past. Finally, we turned the prisons over to corporations to run in a businesslike manner. And what do businesses need most? More customers.

      Yesterday I answered the call to perform my sacred civic duty to serve on a jury of an accused person's peers. As far as the legal system is concerned, I'm the flip side of the same coin. Just like the accused, I get told when and where to appear and if I don't show up on time then all of a sudden I'm on the other side of the coin. Most of the people who are summoned want nothing more than to be excused. You can see them visibly squirm as they lie to the judge. Anything to get out and get away, back to their mundane existences. The pool of potential jurors was so small in the courtroom, and so many people had excuses, that there weren't twelve people sufficient to start the trial. You could see the judge's frustration. Then I was the last one up and started an argument about a finer point of principle. Contrary the judge's instructions, I will decide the case on the basis of both the facts and the law.

      "The jury has a right to judge both the law as well as the facts in controversy."

       John Jay, First Chief Justice U.S. Supreme Court, 1789.

      "The jury has the right to determine both the law and the facts."

       Samuel Chase, U.S. Supreme Court Justice, 1796.

      "The jury has the power to bring a verdict in the teeth of both law and fact."

       Oliver Wendell Holmes U.S. Supreme Court Justice, 1902.

      "The law itself is on trial quite as much as the cause which is to be decided."

       Harlan F. Stone, Twelfth Chief Justice U.S. Supreme Court 1941.

      It looked like the judge wanted to come over the bench and strangle me. First I got a long lecture and then, when I persisted, another long lecture. I was dismissed and a jury wasn't seated.

      More and more people live in prison, in a kind of graduate school for learning the criminal trade. When they get out they know more about their careers than when they went in. Having half of the criminal population in prison at any one time means the resource (i.e. the victims) can support twice the overall size of the criminal population. More people with a criminal record means fewer people qualified to serve on juries (and keep in mind the minimum mandatory ratio is 12 to 1). So when do we reach the tipping point or are we already there? Those same people who sit on juries also pay taxes for the upkeep of the convicted. If prison corporations aren't making a profit they can tell the politicians, "pay us more or we'll start opening cell doors." It looks to me like privately run prisons can both incarcerate the convicts and hold the people and politicians hostage. And if we don't pay up they will cut 'em loose and go into business posting armed guards around the mansions of the rich.
      • teosinte @ 18:58 

        Harbingers

        The ancient Greeks were so perceptive of the human condition that everyone since, from Shakespeare to the Ottoman Turks, has studied their writings. In the Aeneid as told by Virgil, Cassandra, daughter of King Priam and Queen Hecuba of Troy, spurns the love of Apollo, god of light and reason. Out of spite he curses her to foretell the future but be believed by no one. Poor Cassandra foresaw the coming of the Greeks and the fall of Troy. She saw through the ploy of the Trojan Horse while everyone around her thought she was mad.

        In every culture from ancient history on there are tales of those who said aloud that shit was going to happen only to find themselves mocked and ostracized or worse. Jeremiah told the Israelites they were about to be carried off to Babylon and the governor's son had him arrested. The story of Henny Penny comes down to us from the Jataka Tales of Buddhist Indian folklore circa sixth century BCE. Crying "wolf" too many times characterizes our disdain for the bearer, or worse prophesier, of bad news because we all know the boy was just doing it to entertain himself. For balance I'm looking around to find tales of someone seeing a dark future, everyone gathering around to do their best, work together, and forestall the worst of it. I'm still looking.

        So why would anyone stick their neck out and say out loud in a public way that our multitudes swarming over the planet, our rapacious consumption of resources, our dominion over fish and fowl to the point of extinction, all the markers of our very success as a species, are the harbingers of our own doom? Some of these modern day Cassandras are tenured professors and more or less untouchable. But I know from observation that they take serious hits to their career by speaking thusly. I suppose one could make an evolutionary argument – groups that listened to the voices of doom avoided catastrophe and went on to propagate their genes yada yada. But if that were really the case then those myths would dominate our collective memories and not Chicken Little. Personally, I think the Greeks were right. We, the Cassandras, have been cursed by the god of reason.

        In the months after September 11, 2001, I started to share with a few colleagues my thoughts on energy flows through our complex society and what that foretold for our likely future scenarios. "Look at this," I said as we bombed down I-40 in two tons of hurtling Chevy Tahoe. "Do you think that this can go on forever and what happens if it can't?" Needless to say, I quickly developed a reputation as a Conspiracy Theorist. That's our culture's way of marginalizing anyone who doesn't parrot the daily wisdom emanating from the teevee. Now a funny thing. Those very same people come sneaking back into my office wanting to borrow books on peak oil. They want to know how high the price of oil has to go before all of those alternative sources they've been promised suddenly come on line. They even listen to the subversive concept of "energy return on energy invested." You know what this means, don't you? This means it's too late to do anything about it. And when you hear about it on teevee, that means the horse got out of the barn.
        • teosinte @ 19:35 

          Resilience

          Resilient is a new buzz word in ecology. And it seems like only yesterday when ecology was a buzz word. A resilient ecosystem is said to be able withstand shocks and rebuild itself when necessary, or have adaptive capacity. The economy might be thought of as human ecology. After all, they have the same Greek root – eikos meaning house. When a coyote eats a rabbit that's part of the ecosystem. When a human eats a rabbit it's part of the economy, where the rabbit may have been raised by a Burmese farmer, prepared by a French Chef in New York and served to a Saudi on a cheap American vacation.

          The Native Americans had a resilient economy. If the crops went bad maybe the Mesquite beans up in the hills were doing OK. Hopefully some buck bagged a deer on the hike up there to find out. When the Mesquite beans played out it was time to roast agave and pick prickly pear. They had alternatives. They had plans B and C and D. They had adaptive capacity. Modern Americans believe we have resilience because we go through this charade of a presidential election every four years. Nixon was pretty bad, remember? But whew! We elected Jimmy Carter and it was a whole new era until the Shah was overthrown, the American hostages were held on teevee for months, the helicopters burned in the desert, and the price of gas went through the roof. I suppose most of us middle aged people remember the gas lines best. But then it was a "new morning in America" and the Gipper told Gorby to "tear down that wall." Oh never mind that Iran Contra stuff going on in the basement. After all we whupped Grenada's butt, the only successful U.S. invasion of a country full of poor people in my lifetime. Then there was a standing ovation in Congress for the wimp who ripped Saddam a new one and eight years of Bubba's peccadilloes. Now after 7 years of Dubya we just know things have to go better with Barry. We also believe we have a good personal financial plan if we buy lottery tickets every week on our credit cards.

          Do you think about diesel when you go grocery shopping? How many people think about groceries when they get cut off on I-15 by a semi? Instead what do we do? We heave ourselves out of the car, waddle into the supermarket, pull frozen boxes out of the freezer aisle, and swipe our plastic card. Maybe we're in a hurry so we drive through Mickey Dee's. We know nothing else. Prehistoric people were hunter gatherers. Our ancestors were farmers. We're shopper gatherers. Our ecology is diesel tractors, natural gas fertilizers, diesel combines, diesel semi trucks, and the checkout line. There is no alternative. We have no plan B. Diesel goes to $4 a gallon. There's grumbling and resentment. Diesel goes to $4.50. Congress has to do something. Diesel goes to $5. Fear is on people's faces. Diesel goes to $6. Any little blip: an explosion, a pipeline, an assassination; little old ladies get trampled in a panic and the shelves go bare. What are you going to do?
          • teosinte @ 21:03 

            The Been Theres

            There is a class of American, and probably other elites, who are the Been Theres. You'll know them by their discussion of geography. You might mention Costa Rica in some casual conversation and they'll say, "Oh yes, I've Been There." Or mention Italy and you'll hear, "we've Been There. We went last summer on our anniversary." They might know nothing at all about the people or the culture but they can probably tell you a good place to eat. We were interviewing a German this week and I happened to ask, "what part of Germany are you from?" "Dusseldorf," he replied. "Oh that's one place in Germany I've never been," my co-interviewer cut in. "But I have been to Munich," he continued, making sure we both knew of his Been There credentials.

            The culture of the Been Theres is wide and shallow. They know mostly about the hotel where they stayed, the restaurants where they ate, the airports, and maybe a few well known tourists attractions. They know little about the people or local history because one has to live in a place for some time to experience that. I stayed in a hotel in Boston one night, near the Logan Airport, then drove up to a private high school for rich kids in Andover, New Hampshire. I was there for a Gordon Conference but I didn't learn as much about the area as I would have by studying a map and doing a web search. A few years later I was back and this time drove south to Plymouth. There I saw the Rock that is one of the foundation myths of America. Oh what a farce. Pick a rock, any rock, and there it is. God's destiny for his sole, chosen people.

            My Grandparents never aspired to Been There status. In his later years my Father's Father would venture off the ranch to visit his offspring diaspora and return so thankful to be home that he would swear to never pass through the gate and onto the highway again. You can see a photo of the windblown sandhills he loved so much at this link. My Mother's parents made their annual trip to the West Coast to see their daughter and grandkids so many times that they had each stop memorized, kind of like my annual trip to the Midwest now to see them. Only one in our family has made it to the Been There league and she's in Honduras this week

            But the Been Theres have some hard times coming. Their ranks will be squeezed. The Middle Class riff raff will soon become former Been Theres (Has Been Theres?). Big silver birds are landing for the last time; the corporations that fly them are merging and folding. Soon an airplane ticket will once again be a real status symbol. In the back you'll see the business class wadded into fetal positions, their knees under their chins, and up front will ride the Superclass, having grapes on gold platters peeled for them by voluptuous serving wenches. Who knows, maybe the engines will be running on biodiesel made from grain that poor starving wretches are not eating.

            Me, I have no more desire than my Grandparents. I look at my small patch of windblown dirt and see the whole richness of the Earth. I look up at the Newberry Mountains and see exotic horizons. I look around at my neighbors and see all of the diversity of humanity. It's an ego that needs a passport. It's a mind that needs a place

              Stimulus payment

              At our core we as a people are having a discussion about the very nature of reality. I owe this thought to John Michael Greer, writing about second hand ideas (or in this case third hand ideas or perhaps recycled beer cans). On one hand we have the "better and better" crowd where America is the best. On the other hand we have people's careers invested in collapse. Personally, I'd rather have my career invested in a big retirement stash. How can you go your whole life predicting the end, being mocked and ridiculed as Chicken Little, only to have everything turn out fine and for everyone to live happily every after? You know then that you are damned sure vested in the end times, if only for vindication. As Greer points out, this discussion has gone on since Cassandra went moping about Troy, going on and on about how the Greeks were coming. Nobody, however, who is going hungry at the moment, and of this I am very sure, has any doubt about reality. USA Today ran a piece (link might not work) on bread lines. Some people even called to see if someone would pay their cable bill. Having gone hungry myself a few times in my first few years out of the nest I can attest to its marvelous capacity to focus one attention on the truly important things in life from an ecological and sustainability point of view. The panicked screeching from the cable teevee folks, I'll bet, is caused by the psychological realization that they are gradually moving towards a lifestyle more common in Bangladesh rather than hunger.

              Then today in the mail comes a letter from my dear old Uncle Sammy with butter for the soup kitchen bread. What about tax relief, I wonder? How about a good ole tax rebate? But no, this is a stimulus payment. Our Uncle is borrowing money from someone, maybe the Chinese, to pay us to be stimulated. I feel a heady rush of excitement coming on. Why can't we stimulate the economy the old fashioned way by fighting wars that nobody wants or buying weapons that no one should ever use? Or maybe we are and even that's not working. So it's time to butter the bread lines.
              • teosinte @ 19:17 

                Supply and demand

                Please, please," said Dubya, "please pump more oil" on his knees before the King.

                U.S. President George W. Bush met Saudi King Abdullah in Riyadh earlier on Friday to ask for more oil from OPEC to tame record oil prices. (Reuters)

                "Supply and demand are in balance today," said Saudi Oil Minister Ali al-Naimi.

                Of course. Supply and demand are always in balance with the sliding scale of price. And price is sliding up. Oh it's the speculators. No it's the weak dollar. What does investment banker Matthew Simmons think? Could it be supply? Perish the thought.

                In the gay nineties you couldn't find a single party goer who thought the music would ever stop. Now we've "hit a rough patch," as our dear retro leader tells us. And you can't throw a rock without hitting a doom and gloomer. Once upon I time I was the only one in these parts, known contemptuously as Dr. Doom around the office; believer in Conspiracy Theories. Now I'm an optimist by comparison. On the other side you'll always have the cornucopians. Technology will save us because "we have big brains" (anonymous BLM employee). But the discussion now seems to come down to how bad is it going to be? We have the hard landers, the soft landers, the skeptics, and the clueless. And we aren't even in an officially declared recession yet. How will it play out? If we only knew.

                There are about 6.5 billion people on this planet and probably 10,000 or less control most of the resources. You know you are one of this superclass if you travel around in your private Gulfstream jet. One likely option is that this superclass diverts grain out of the stomachs of poor people and into the tanks of their Gulfstreams. This option is ecofacism.

                Don't hold your breath for equality. Democracy is doomed, if it ever existed. The superclass is going to need a police state to keep the masses under control and there will be a lot of goons for hire.

                I see enormous motorhomes driving down Newberry Road pulling oversized SUVs and I wonder what the drivers think about all of this. Maybe: 1) gas is high, 2) Arabs have all of the oil, and 3) they are evil.


                • teosinte @ 22:59 

                  Solar Farms

                  One might look up and think there's a new gold rush going on in the Mojave. Folks are lined up in a long queue with sun farm applications at the Bureau of Land Management for every open spot of desert. A few days ago I made the outrageous, heretical claim that alternative energy would not be profitable anytime in the next few decades, or at least that's what Exxon Mobil thinks. Now here we have famed oilman T. Boone Pickens buying wind turbines. What gives? Well, most likely, I was wrong. But there's more to the story, as always. First there was the Energy Act of 2005 that cuts tax breaks and has a "soft" requirement to implement "renewables". Next there's the California's Renewables Portfolio Standard that was established by Senate Bill 1078, which requires the state's retail sellers of electricity - investor-owned utilities, electric service providers, and community choice aggregators, to get 20 percent of their retail electricity sales from eligible sources of renewable energy by 2017. California's energy agencies subsequently committed to achieving the 20 percent target by 2010; seven years early. This is not market demand, it's central government planning – that horrible committee we claimed brought down the Soviet Union. This isn't necessarily a bad thing, though. After all, solar probably has an energy return on energy investment of about 10 or so. Still, if you try to go off the grid with solar and batteries you are going to be paying a lot more for juice and have a big maintenance headache on you hands. This problem is particularly acute in the need for batteries. You could spend $2000 for just enough lead acid batteries to run a freezer and they'll last maybe three or four years. By then the price could double.

                  But enough of these laws and tax incentives. The whole Earth is a solar collector and has been for four billion years. Nearly every likely spot on the planet is covered with solar receptors called plants that turn radiation into energy called carbohydrates. Already we intercept 40% or more of the planet's primary productivity for our mass of humanity. Now we're going to intercept the rest for the machine? Let's hope not. Let's collect solar on the margins where it is of no use to the ecosystem. That means solar on our roofs, not virgin desert. My recommendation – lobby for a law to force the power companies to buy surplus electricity from individually owned sources at the peak retail rate. Then plant panels and wind towers where ever they fit into your landscaping and have the checks direct deposited.

                    Standard Myths

                    Free speech radio (KPFA) is in its spring fund raising season and there are a few new documentaries to check out. The first two thirds of The Eleventh Hour, narrated by Leonardo DiCapprio, seemed nearly truthful; albeit breathless in a dramatic orchestra pounding panic. Yes it's getting a little warm and the ice is melting but this film is a tornado siren in Oklahoma. Then it waltzes off into fantasy land. All we have to do, you see, is restructure our economy, relocalize, and start using all of that abundant, renewable, clean energy that's out there for the taking. The last hour was a rapid fire of half truths and make believe. Yes there is enough solar energy falling on planet Earth to power all our cars, trucks, tankers, industry, electrical grid, and then some. We know that. If you can't do the calculation for yourself I'm sure you can find it on the web. That's not the point. How do you propose to cover the Earth with solar collectors and still leave room for the ecosystem? What do you plan to eat after farms are converted to power plants? Did you factor in the efficiency loss of converting solar to electricity to hydrogen then distributing it to a transportation network? How much energy and materials will it take to build that infrastructure and where will it come from? Yes we could save a lot by localizing our living spaces and restructuring the economy. But do you think that you'll just wake up one morning and it will be done? These people are actors not engineers. Next they have to explain why the economy and civilization are not moving in the direction of all that clean, abundant, renewable energy. It's those evil corporations, you see. They've addicted us to oil and now they're deliberately squeezing the supply to drive up prices and obscene profits.

                    We have here the beginning of a new and powerful myth. When something goes wrong, and especially when it happens to us, we expect two things. We expect someone to bail us out and we need someone to blame. Exxon Mobil is a perfect villain. Not only is it the largest corporation in the world but its first quarter revenue was up 34% to $117 billion and profit was up 17% to $10.9 billion. We're the damsel in distress and who will be the white knight riding to save us?

                    But whether you think capitalism and profits are good or evil, I'm sure we can agree that Exxon Mobil is out to make a profit, which leads to some questions. Exxon Mobil's production is declining so why isn't it plowing all that profit into exploration? If there is all that clean, abundant, renewable energy out there then why isn't Exxon Mobil moving into that market? It seems that if we are suddenly going to transition to solar, wind, and biomass then the biggest energy company in the world would want to be our supplier. What is Exxon Mobil doing with its profits? Well, it seems that Exxon Mobil is buying its own stock.

                    In the spirit of Bill of Occam I offer a few answers. Exxon Mobil is not plowing money into exploration because it is not a good return on investment. At some point we know that it will take more energy to find and produce a barrel of oil than comes out of that barrel of oil. Likewise at some point it also costs more. Exxon Mobil thinks we are at the point where the rate of return, i.e. the profit, is too small. Why isn't Exxon Mobil moving into the clean, abundant, renewable energy market? Because that market is not profitable and will not be anytime in the next few decades. Anyone who thinks wind, solar, and biomass are profitable is welcome to put solar panels on their roof, a wind turbine in their backyard, and an ethanol plant in their garage. Keep track of your receipts and you'll find it's a conceit. Why is Exxon Mobil buying its own stock? Obviously because it thinks it's a good deal. As we slide down the oil curve those proven reserves will become precious. As the oil fields are depleted the price will skyrocket. Finally, why does Exxon Mobil tell analysts like Jim Jubak that it's long term planning is for oil at $50 per barrel? Because he is a useful idiot.


                    It is a philosophy of deception. Sun Tzu, The Art of War.
                    • teosinte @ 19:08 

                      Smell the Coffee

                      Everyone was talking about the stock market and their portfolios in 1997 when I flew to Tucson for a job interview. That's all the couple in the seats behind me on the airplane talked about – how much their stocks were up, what to buy next, hot tips. The next morning when I stopped for coffee on my way to the Harshbarger Building the people at the next table over were talking about the stock market. Even then, as a bottom-feeding graduate student, I could see it was time to sell. In 2006 I stopped at a Borders book store in Bakersfield. Nearly every book on face display in the business section was about how to flip houses. The gig's up, I thought. Time to pay down the mortgage and credit cards. The crowds rush to every good thing and trample it to death until it's not a good thing anymore; everyone looking around at his neighbors to see if they have found a better deal. Recall the gold rushes of the nineteenth century. Hordes rushed to Sutter's Mill, they dashed to Comstock, they pounded dirt at Cripple Creek and everywhere they went they left behind holes in the earth and piles of tin cans. Now everyone is talking about the high price of gasoline. Is it time to sell commodities? Is a crash in oil and grain futures coming? Should we sell the silverware and pawn our gold jewelry while we still have a chance at the high prices?

                      One is up, the other is down, and they're not symmetrical. Think of it this way. People are notoriously bitter complainers. Any little slight is a serious insult and by God we are entitled to our entitlements. We may pay only as third as much for gas here as they do in Europe but if gas goes to four bucks this summer, watch it become the campaign issue. Both candidates, heads and tails, will promise to make it right. House prices go down a little and house owners start screaming. Then comes Uncle Sammy riding to the rescue. Does this mean house prices will go back up? Or does it simply mean that people whine? If someone found the Comstock Lode under his house you could be damn certain he'd keep quiet about it. That is until his snoopy neighbor found out and the rush was on. Hold on to commodities or buy in because we've got a long way to go. And get some earplugs unless you want to go deaf from the howling.

                      We've got a long ways to go down this curve of dissipating energy and everyone will expect a bailout. As I look out the window I see U.S. military garrisons around the world. I see six lane freeways packed full of cars and trucks. I see outwardly rational people believing that we are in a little dip and things will soon get better. I see a delusional fantasy of the world's sole remaining superpower running F-16s and Abrams tanks on solar panels. I see glassy eyed suburbanites believing they're going to go buy a nice little hydrogen powered antigravity pod to zip around in once gas gets too expensive. No, I don't think it's time to sell commodities. I think it's about time to get ready to duck when these people wake up.
                      • teosinte @ 20:55 

                        Tower of Babel

                        How clear that single note sounds from the Mighty Wurlitzer Organ that is the mainstream media. If your information source is Cable News you quickly realize there is only one correct way to view the world. No matter where you turn, CNN, FOX, ABC, CBS, MSNBC, PBS, NPR, the song is the same. Only the tempo and pitch vary. If, on the other hand, your information source is the internet you find a fractured, kaleidoscope of alternate views. A lot of truth can be found on Democratic websites such as buzzflash.com that tell you Democrats are good and guns are bad. But if you're like me you think having a gun around the house is about like having a hammer, and almost as useful. Democrats and Republicans look like two sides of the same coin. Many good websites will tell you about the evils of central banking. I certainly think fractional reserve banking, up to and including the Federal Reserve Act of 1913, is part of the problem. But they lose me with the argument that peak oil and climate change are smokescreens for conspiracy. One good site that I read often is obsessed with Israel. No doubt it's a thorn in the side of a sensitive part of the world. I can wade through that to find bits and pieces of news hard to find elsewhere. It loses credibility, though, by taking the position that global warming is part of a plan to raise taxes. Climate change is one place where I think we should stick to the data and models. Contrarian views should be examined, of course, but scientifically where hypotheses must be testable and falsifiable.

                        Contrast this Tower of Babel to the clarity of greed and ambition. No wonder those whose sole motivation is accumulation of wealth and power can submerse their differences in unity of purpose. That's why the course of the nation will not change no matter who is elected in November. The only discussion will be about methods, not objectives. The real discussions go on in private and the objectives are drowned out by all that organ music.

                        • teosinte @ 15:28 

                          Conflicting Reports

                          It's tough to make predictions, especially about the future.

                           Yogi Berra

                          That's why I tend to cut the pundits some slack in their endless prognosticating. Maybe we are on the brink of recession, maybe the next boom is about to begin. We are either at death's door, the doorstep of Heaven, or both. But it seems at first glance that the present and recent past should be easier to call, at least until one looks at the conflicting reports coming in. Then the present and recent past appear as cloudy as the future. This has been the character of American life for my entire existence. For example, why did John's head jerk backwards in the first Kennedy assassination if the bullet hit him from behind? I was five years old and even then I knew that if you hit a ball with a stick it went away, not towards you. Anyone who paid attention in the later part of September, 2001 knows the facts can be muddled. And I couldn't possibly hope to chronicle all the bizarre statements that have issued forth hence from the almighty authorities. Now here we have the so-called "DC Madame", Deborah Jeane Palfrey hanging herself in her mother's garage. She did indeed have dirt on the high and mighty. How convenient. I wouldn't think so much about this, after all. Let the investigation take it's course. But almost before she could be pronounced dead the media found someone to quote that she'd been planning it all along while a radio clip posted on the web had her saying she'd never kill herself and if she was found dead it would look like a suicide. Then it all goes down the memory hole. That was Winston Smith's job at the Ministry of Truth in George Orwell's novel, 1984. Winston Smith was a petty bureaucrat with the job of rewriting history as it happened. Now we see that this wasn't a novel so much as it was either a prediction or a plan. First we smell the bullshit then we get used to it. What's next?

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