Timeline

In a report written for the edification of the recent G8 Energy Ministers’ summit, the IEA warned of “major cutbacks” in every sort of energy investment as a result of the credit crunch and depressed energy prices, from conventional crude to unconventional to renewables. Over twenty major projects, projected to replace upwards of 2 million barrels per day of depleting production, have been delayed or cancelled. At the same time a new McKinsey report warned of an inevitable energy price spike once the universally expected recovery comes and resurgent demand slams its head on the lower supply ceiling which will be the result of depressed investment and new production not keeping up with decline from existing projects.

 

The McKinsey timetable, which concurs with the general expectation Peak Oilers have had throughout this crisis as investment collapsed, is that if this turns out to be a moderate downturn with a quick recovery, the oil price superspike could come as early as 2010. If the downturn is “very severe” (the report’s term), it may be delayed until as late as 2013.

 

So there’s our window. Between 2010 and 2013. This will be the true “Peak Oil” event. What Peak Oil was always really about was when demand tried to exceed supply, and supply was definitively unable to meet it. We had assumed this would coincide with the all-time nominal supply Peak. Now it looks like, thanks to the supervening bubble crash (that is, the intrinsic unsustainability of exponential debt based on hallucinations, not even taking into account energy fundamentals, turned out to anticipate the fundamentals crunch), true Peak Oil will transpire at a lower absolute supply level, some years after the absolute peak. But the effect will in the end be the same. All the indications, long foreseen by Peak Oilers, and now little by little by mainstreamers like the IEA, is that “recovery” will quickly bang its head into the new Peak Oil supply ceiling.

 

Of course, the mainstream cadres at the G8 took no notice of any of this, but indulged themselves in the regular assurances. This downturn is an epiphenomenon and temporary, and while the lull in energy investment is an issue, it’s still just a temporary glitch which the market will eventually resolve, and infinite growth will soon be restored…..

 

Sometimes it seems difficult to make simple rational and moral assertions, compared to the usual numbers rigamarole meant to obscure the fact that the emperor has no clothes, that the system cannot be sustained. It seems we have to keep saying that growth or new debt must exceed debt service, forever, and that this in turn depends upon an exponentially growing supply of cheap oil. Since oil supply can no longer grow at all, except for a few zombie increments of unconventional oil and “alternatives” like aggrofuels, which can be purchased only with ever increasing money, resource, and blood investments, it follows that this form of civilization must collapse. It is both physically (energy inputs required; the car-based infrastructure) and economically (growth and debt service) unsustainable.

 

[Not to mention the fact that thanks to the last four decades’ orgy of financialization and globalization, and the bonfire of labor protections and the safety net, America’s “economy” has been completely hollowed out, completely stripped of all real assets, completely leached of all real productive capacity. America simply no longer has much of a real economic basis.]

 

The proper response to the growth and recovery boosters is, even if you can cobble together a zombie “recovery” for a little while, what will you do in five years or less when you bang your head on the terminal oil supply ceiling? You think $147 per barrel was high? That’s nothing compared to what you’ll see then. $200 and up, and not as a “spike” but as the new norm. How sustainable will your globalized “growth” be then?

 

What we should be doing is putting all our effort, all our intelligence and imagination, all our rump wealth and the little time we have left, into (1) an Energy Transformation from extreme consumption of centralized fossil fuels and nukes to much lower consumption of decentralized renewables; and (2) a general and thoroughgoing desizing, deglobalization, deconcentration, deconsumption, relocalization, and the restoration of the human imperatives of mind and spirit over totalitarian materialism and the brutal domination which goes hand in hand with it. (Resource domination is always the stalking horse for political and social domination, and material greed always exists in an inextricable dialectic with power and domination greed.)

 

Instead the order of the day is, Prop up zombie GM. Let’s recall, back in the 90s GM was in a good position to transition to a more sustainable model. The economy was booming, providing lots of slack for real innovation, and thanks to a partnership with the Department of Energy American automakers had the world lead in hybrid and efficiency technology (just as America led the world in solar and wind tech, both R&D and deployment). The path was wide open for the kind of true capitalist “voluntary” innovation always mythologized by market fundamentalists.

 

GM, like so many others, instead chose the path of investiture, rent-seeking, obstruction, obscurantism; the standard route by now is to bribe politicians, lobby from K Street, demand subsidies and deregulation, fight fuel efficiency, kill the electric car, deny climate change, entrench on SUVs.

 

And now they’re enfolded in the general top-down effort to prop up the top-down imposed social engineering of cars and sprawl. It stands to reason: this government itself is predicated on propping up the growth/debt/car/sprawl model of civilization. So GM was never so much a capitalist corporation as a necessary component of the corporatist structure. (Of course by now GM is not a capitalist entity by any measure, but a permanent invalid hooked up to the government welfare ICU.)

 

(And of course, even beyond Obama’s ideological preferences it’s politically necessary for him to try to prop up the ramshackle pile of rotting wood at least through 2010. These days it’s always a matter of playing for time and praying for a miracle.)

 

GM is therefore one of the intentional villains in this farce. (I won’t call it a “tragedy”, since classical tragedy implies some level of depth and dignity in your hero or antihero. But this so-called civilization, a cesspool of greed, gluttony, and willful, aggressive ignorance and stupidity, has neither.)

 

But hopefully we won’t have to endure the farce and the terror of the farce much longer. In fin de siecle Europe the watchword was “better a terrible end than terror without end”. And perhaps we can even avoid the terrible end, if we act on our knowledge and use the precious time we have remaining? 2013 is our deadline. This is our challenge and our hope. All our philosophical and moral ideas, to the extent they are circumstantial, must adapt to this reality. So must our political goals. Most of all, our personal preparations, and our nightmares and dreams, fears and hopes, are humming in harmony with this tick tock, awaiting the bell’s toll.

 

Never send to know for whom the bell tolls; it tolls for thee.

 

Whether this is a benediction or a curse is up to us. We are soon to resume the freedom we always claim to cherish.

Charade

There’s been loads of debate on what’s happening in America. Anywhere you can find expositions on capitalism and the end of capitalism or the death of capitalism or the reform of capitalism or how to save capitalism or the triumph of capitalism (this last one usually phrased in a different way). Also whether the putative reform of capitalism is actually socialism, and whether Americans are willing to entertain the term “socialism”, and from there of course to what terms like capitalism and socialism even mean anymore.

 

As to what terms we should use, it’s obvious that America has long been basically a corporatist system, meaning that here neither capitalism nor socialism are ideals, but are just tactics which are applied wherever appropriate to maximize the power and wealth of the nexus of big corporations and big government.

 

(The dream government for business would be something like the Franco regime. It was corporatist, economically “fascist”, with a state-supported religion (opium for the masses). But unlike Hitler or Mussolini Franco had a rational rather than a deranged foreign policy. (That’s why he resisted Hitler’s inducements to enter the war – Franco figured Hitler was cruising for a fall and would drag down everyone with him.)

 

So why has American business supported Bush-style hallucinatory imperialism and K-street thuggery? This shows the fundamental disconnect of all American life from reason and reality. In the twilight of cheap oil and exponential debt we have a void and a shoddy facade where an economy and a safety net should be, so that textbook “business” can no longer function, but only an ever more volatile disaster capitalism.)  

 

Capitalism, democracy, civics, citizenship, rule of law – all these mean nothing. They are nonexistent outside of propaganda pens (“schools”).

 

[I’d like to add here that if we want these things back, we can restore them, but not within the framework of big government, big corporations, the present system which is so terminally rotted, “bigness” itself, and not within the framework of the doomed fossil fuel civilization. We can only build new communities from the ground up. There can be a diversity of these, anything from smallholder capitalism to kibbutz communism, with the uniting principle being human community, as long as the other uniting principle is self-reliance and sustainability. If even the small relocalized communities get back into large-scale trade, specialization, “comparative advantage”, and the inevitable expansion and conflict which must follow from these, then the whole nightmare begins again, only at a smaller level.]

 

Rather, the terms that capture reality are feudalism, corporatism, plutocracy, kleptocracy, lemon socialism, welfare fascism. What these capture is the utter irresponsibility, the sociopathy of American economic life.

 

No one is any longer trying to create, to invent, improve, add value, to make better their own or anybody else’s lives, to shine light on truth. Innovation and talent – using these in their English rather than their nowadays more common Orwellian sense – mean nothing.

 

Rather, everyone at every economic level is trying to get over, to run a scam, to “get rich” (how tawdry and meanly nihilistic the “American dream” is at its core), to pose and not be, to say and not do. If they have the power they steal, spin, obscure, lobby, capture, bribe, obstruct, extort, and sue, to plunder, entrench, monopolize, rig the playing field in their favor, pull up the ladder behind them.

 

If they don’t have the power, they dream of these things.

 

How the banks and the FIRE sector have come to completely dominate the American system is a well-told story by now. I think anyone who is capable of understanding it must understand it by now. And now as Too Big To Fail zombies the big banks have only tightened their stranglehold over the economy and government, and over all measures of what constitutes economic good, bad, recovery, recession.

 

The other pivot of American life, economic, political, and psychological, is the “Global War on Terror”, which is the term encompassing the intensified imperial aggression America requires to secure the resources to prop up its fuel infrastructure, the corporatism which is directly enabled through the expanding military-industrial complex and is also the overarching system being propped up by this empire, and the increasingly constrictive “homeland” police state to repress the dissent all this must provoke.

 

My personal term for the GWOT and the neocon ideology it springs from is resource fascism. It centers on oil, but will soon center on “alternatives”: unconventional oil and agrofuels (we already have the ethanol pseudo-industry as a pure textbook example of a parasite). Here big corporations and mainstream environmentalists, conservatives and liberals, can join hands in trying to prop up cars and sprawl (the core material form of American life).

 

The unreality and the con extend everywhere. If the point of saving GM was to preserve good American jobs (or even just to maintain American military vehicle production, as some have argued), how is this served by letting them completely offshore to China? It’s not. Rather, “saving GM” is a particularly sloppy con job.

 

[I try not to bother tallying examples among small entities and non-rich, non-powerful individuals, since although there’s plenty of corruption there as well, keeping our eyes on the prize means maintaining focus on the crimes of the powerful. It’s these which construct and define the system. (The attempt among republicans to deflect this responsibility by blaming the small fry, so that the mortgage bubble and collapse were the fault of reckless borrowers exploiting the poor good-natured banks, and torture was the work of “bad apples”, is an absurd fraud.) So if we wish to be educated and aware, defend ourselves and fight back, the first rule is to counter-attack something big and bloated.]

 

I wish I had a more rigorously optimistic way to wrap this up this morning. I wrote the first part of it, then did some work in the garden, and now I come back and think about how beautiful out it is. I believe the earth will still be able to heal once the oil wave recedes. As horrible as man’s vandalism has been, it’s still a surface wound.

 

What’s more questionable is whether the human soul can heal. When we look at the systematic ravages in ideology and religion, the perversion of education and despoliation of culture, the psychopathy of science and the apparently universal hatred for the mind, and when we ponder what horrors are likely to convulse the dying decades of the oil age, as the mad genius of oil tries to leave behind it an absolute scorched earth of the spirit once and for all, we must wonder what part of what’s human can be carried through the flames.

 

I don’t know yet what can be done and how to do it, but that’s what I see more and more people trying to figure out. At least this is the most promising sign.  

Some thoughts on GM

 

So, just as many of us predicted from the start, giving the auto companies ad hoc holdover money and a deadline to come up with a plan would lead to…..giving the auto companies ad hoc holdover money and a deadline to come up with a plan. Well, the difference this time is that Rick Wagoner is out, and Chrysler has to engineer a merger with Fiat. Still no word on why Cerberus doesn’t have to put up any money.

 

(From the start it’s seemed to me that if Chrysler’s owner doesn’t believe it can be saved with more cash, why should the government second guess them? Why in this case does the administration know so much better than “the market” and an iconic private equity firm, while where it comes to the banks they keep repeating, Hare Krishna-like, the chant “the government shouldn’t be running banks”?) 

 

While I have no love for General Motors and am opposed to this bailout as well, I still differentiate between an auto manufacturer which, however sociopathic its actions and products (its role in the dismantling of America’s streetcar system; the corresponding invasion strategy of highway construction; the massive social engineering project known as suburban sprawl; SUVs), still did actually produce a real product, as opposed to the big banks which were essentially running a big scam.

 

So I find it telling that Obama is willing to at least make a show of getting tough with GM and Chrysler (though not so much with GMAC and Cerberus), while desperately trying to cater to every frivolous whim of the big bankers.

 

(Though even here the focus is very clearly on what is good for GM, i.e. its bondholders, while the public are even in the picture only as “consumers” who must somehow be induced to buy American cars, that is as a sort of mine. Notice also how even though the UAW has already made significant concessions while the bondholders have made none, the administration propaganda line is that we’re at square one, and “both” are equally obligated to give up things at this point. The bondholders are holding firm, expecting to be bailed out completely. Given how Obama is determined to do exactly that for the bankers, the bondholder intransigence here seems perfectly rational.) 

 

My first reaction was that Wagoner, a relatively small fish, is being sacrificed as misdirection from what is clearly a Geithner/Obama policy priority to maintain the big bankers in their jobs.

 

Of course Wagoner provides a clear example of the rent-seeking neo-feudalist mindset. His commitment to the sprawl-SUV societal model, his refusal to pare product lines, tranform to a hybrid-based business model, the killing of the electric car – these all show how he and the board had become completely calcified in the finance elitist sense of entitlement. Wagoner believed GM had a “right” to exist in that form, and if reality was contradicting the entitlement, it was the government’s job to suppress that reality.

 

So GM’s “business model” was to lobby, fund political action groups, deny climate change, and file lawsuits to preserve its bloated, calcified structure. Beyond that Big Auto for a long time coordinated strategy with Big Oil to enforce the continued existence of the fossil fuel/personal car societal model. This is the essence of corporatism. 

 

I think a clear sign that we no longer have a democratic capitalist system but rather a corporatist one is that no one loses his job even over major screwups. Thus we have:

 

1. No one fired over 9/11.

 

2. Where it came to Katrina, Bush got rid of “Brownie” only under extreme duress. (I would bet that to this day Bush still doesn’t understand what Brown did wrong, or why he had to relinquish him. Just like he probably doesn’t understand why he couldn’t have Meirs on the Supreme Court.)

 

3. To the best of my recollection, no one was ever forced out for incompetence or war crimes in Iraq (although anyone who questioned administration policy or priorities was drummed out immediately); indeed they gave Paul Bremer a medal. This certainly wasn’t for any reality-based measure of performance. Rather it was for an ideological cadre who pushed ahead with his ideologically-defined task even in the midst of a war, even where it was directly counter to the rational fighting of that war (as when he removed the entire professional class of Iraq, pretending it was de-Baathification, when it was really to remove indigenous obstacles to predatory carpetbagging; the dissolution of the Iraqi army was just one element of this “blank slate” agenda). 

 

4. Now no one since Fannie and Freddie is to lose his job over the planned destruction of the global economy.

 

It’s clear that no one but ideologues could think it’s reasonable, moral, or desirable to retain the existing management of these banks, and that in the administration we obviously have such ideologues. That the existing bank management not be fired is a major policy principle for the administration. Otherwise there’s simply no way to explain why the management hasn’t been forced out as a condition of the bailouts.

 

Let’s assume that an administration is committed to a bailout policy; still, where they have roused such political anger, both reason and politics demand that you at least take the simple measure of getting rid of the dead weight management. This could go a long way toward defusing populist anger, which is so easily personalized.

 

That Geithner and Obama have refused to take this step, that they are gratuitously courting such a political backlash, is strong evidence that here, just as with Bush and Bremer in Iraq, we are not in the realm of normal reality-based politics, but in the realm of ideology trying to dominate reality.