Why America & China's Future Plans Are Totally Nuts

[xchrom]

http://www.alternet.org/economy/america-and-chinas-terrible-plans-future



Societies periodically go insane. Fallacious memes sweep through a frightened and confused populace and bad things happen, bad choices get made. Two bad ideas in particular infect the American thought-o-sphere these days: 1) that non-cheap oil can keep all the rackets of consumerism going; 2) that we can offset all the quandaries of non-cheap oil with accounting fraud and debt creation.

These ideas present themselves in the places of greatest authority and influence. The president says “we have a hundred years of shale gas.” The Wall Street Journal says that an inflating Dow Jones index stands for a growing economy. My recent favorite came out of the increasingly demented New York Times on Saturday: Even Pessimists Feel Optimistic About the American Economy. Quoting an econ professor named Tyler Cowen from George Mason University The Times said:

The recent surge in domestic oil and gas production signals “the start of a new era of cheap energy,” he said, while less expensive online education programs could open the door to millions of people who have been priced out of more traditional academics.

That was a two-fer of stupidities since A) it ought to be self-evident that $90-a-barrel oil is not cheap oil, and B) that because of A, there’s unlikely to be lucrative employment for people who learn double-entry book-keeping on their laptops. In fact, anyone who actually learns math over the Internet must conclude that $90-a-barrel oil will crash all the supposedly normal operations of a consumer society, including the ability of oil-and-gas companies to get the capital investment necessary for further oil production.

[FarCenter]

1. Energy will continue to be available -- but it won't be cheap

The increasing cost of energy will drive down GDP/capita globally.

Note that the unrest in Indonesia and Brazil are directly related to the cost of transportation and energy. Higher energy prices will cause emerging economies to fail to emerge. India will be the biggest casualty.

[Junkdrawer]

2. WAY too thoughtful. Doomed to drop like a rock.

Sorry.

[xchrom]

3. !

ah well.