Archive for December, 2008

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An American Tragedy: Detroit Meets Reality

Sunday, December 21st, 2008

By David L. Brown

What lies in the future for the American automobile industry? I am a realist now, not a pessimist, so let’s look at the situation from a realistic point of view.

I note that sales of American automobiles and light trucks have dropped by somewhere north of 40 percent since last year. That was as of November, and December isn’t likely to improve that record. That is a substantial drop, and truly bad news for the auto makers.

One might like to think that with a little help they can get back on their feet in a few months and begin to sell new product again, get factories rolling, improve their cash position. But… There are some problems with that.

For one thing Detroit has continued to build cars and light trucks that they cannot sell. That might seem like a poor business decision, but it wasn’t really a current decision at all because years of contract negotiations with suppliers, unions and others set them up so that it is almost impossible to stop making cars that don’t sell. Union workers get paid whether they work or not. Suppliers are contracted to deliver parts and components to assembly factories on a just-in-time basis. Those supplies keep coming, so the auto companies are virtually forced to keep making the vehicles.

I read a report recently by someone who has business contacts with auto company facilities. He described how as he drove to a GM plant he noticed that every abandoned shopping center or unused parking lot for miles around was packed with new, unsold cars. The same story can be seen anywhere that cars or light trucks are made. Dealer lots are also overflowing with inventory and the seriousness of the situation can be measured by the offer I received a few months ago to buy a brand-new 2008 Dodge quarter-ton pickup for 50 percent off of the MSRP. Half-price sales on expensive-to-produce items such as pickup trucks hint at an almost unimaginable level of desperation.

Here is a graph showing market share of U.S. auto sales by the top five manufacturers for the ten year period through November (credit: Wall Street Journal):

autosale.jpgIt is sad to report that the blue line represents GM sales, the orange line is for Ford, and the maroon line is for Chrysler. All zooming steadily down. But what about the other two lines? Sorry, but the green one is for Toyota and the brown one at the bottom represents Honda. The U.S. auto industry has been sinking steadily for more than a decade while Japanese companies took an increasing market share.

Now here is the graph for all U.S. auto sales for the past year, including imports and cars made in America by foreign companies:

48kikpmp.jpg

The blue bars indicate sales of cars and the tan bars represent light trucks. Notice the vicious downward trend starting about last June or July. Keep in mind that this trend is in spite of price reductions of as much as 50 percent off of list. The decline began when the gas prices went through the roof, but the high price of petroleum and other events were also creating other problems for the auto market. Credit began to dry up, causing the suspension of lease programs. Money for purchase loans began to be pulled back. And perhaps worst of all, consumers began to realize that the resale or trade-in values of their present vehicles were so low that they couldn’t afford to get rid of them.

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An Inspiring Tale for the Holiday Season

Saturday, December 20th, 2008

By David L. Brown

It’s not often that I am compelled to wax poetic, but in this holiday season, this one of 2008 in particular, I felt the urge to revisit that old favorite “The Night Before Christmas,” or “A Visit from St. Nicolas.” I have changed the title a bit to fit our present situation and you may notice the words are different, too. Enjoy, and have as Merry a Christmas as you can in these difficult times.

A Christmas Miracle In Detroit, or

A Visit from St. Paulson

Twas the night before Christmas, when all through da City

Not a creature was stirring, not even a kitty.

The auto execs were all hanging on hopes

Of generous bailouts from government dopes.

The workers were nestled all snug in their beds

As visions of overtime danced in their heads.

Mamma in her housecoat and I in my cap

Had just settled down to watch television crap.

When out on the lawn there arose such a noise

I sprang from the  couch thinking “Mus’ be da boys.”

I rushed to the window and gazed in dismay

To see that there still was no Change on the way.

The Moon on the street cast a terrible spell,

Set the city a’glimmer like the fires of hell.

When what through my drug-induced alcohol haze

Should appear but a limo, its headlights ablaze.

The driver jumped out and opened a door

And who should appear but the man I adore.

He was dressed like a Bro’, all gold chains and black

And carried a large money bag on his back.

I jumped up with joy at this sight for sore eyes,

For I knew that my union had delivered the prize.

The man who could halt a bank run in a flash,

And wrap up a Congress like a bundle of trash.

A man who could never be matched or outdone,

It could be none other than Henry Paulson.

He hoisted his sack and gave it a push

And out jumped his help mate, George W. Bush.

The two jolly elves were so pleasant to see

That I cracked a fresh bottle of sweet Tennessee.

I opened the door to welcome my guests

And offered a toast using Jack’s very best.

Hank reached for the bottle and took several swigs

While the other hung back and thought of drill rigs.

Then the Treasury Sec. laughed, a jolly old monkey,

And pulled from his sack a barrel of money.

He threw it around all over the street,

And the neighbors were on it like weevils on wheat.

They snatched up the billions in taxpayer cash

And ran to the WalMart to turn it to flash.

Big flatscreen teevees and cases of booze,

Thousands of movies and basketball shoes,

Hundreds of burgers and buckets of chicken,

Enough of that junk food to make a moose sicken.

Detroit was rescued, the world wouldn’t end,

Gas guzzlers would roll from Detroit’s lines again.

The fat cat execs and corrupt union bosses

Could rest in the knowledge they’d suffer no losses.

So thus ends our tale of Christmas perfection,

Of glorious salvation through mass cash injection.

Santa in his sleigh didn’t show up this year,

But Hank Paulson did bringing holiday cheer.

As he climbed in his limo and slammed shut the door,

I heard him exclaim, “Don’t worry, there’s more!

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The Thin Gruel of Anti-Climate Change Logic

Monday, December 15th, 2008

By David L. Brown

The anti-climate change morons are hitting hard on the idea that the average global temperature hasn’t gone through the roof. They manage to ignore melting sea ice in the Arctic, thawing tundra, and many other signs of climate change.

Here’s the problem with their position: They are looking at “average” worldwide temperatures and concluding that since the averages haven’t changed much, that means that global warming and climate change do not exist.

The problem is that climate scientists have never even once suggested that the Earth’s temperature would rise by equal increments in every place. To the contrary, in fact. But nay-sayers have long made the leap of illogic by saying things such as: “It’s really cold in (fill in name of place) on (date) so there cannot be any global warming.” This goes beyond ignorance to full-bore stupidity, and yet you hear this kind of thing all the time.

Sometimes they even try to convince themselves that global warming would be a good thing, for example, by stating they would have less snow to shovel, or that they could grow coconut palms and bananas in their Minnesota yard.

Okay, let’s play their game. Here we go: I am going to create a plausible climate model that will prove, absolutely prove once and for all (on the basis of the illogic used by global warming nay-sayers) that there absolutely is no global warming. Here are the parameters of this model (keep in mind that this is being presented as an example of reductio ad absurdum, Latin for reducing an argument to the absurd in order to reveal its internal contradictions):

  • The mean temperature of the Equatorial region rises to 527 degrees F.
  • The mean temperature of the Arctic falls to Absolute Zero, −459.67 F.
  • The average global temperature remains exactly what it was in 1953, and therefore no global warming or climate change have taken place.

I told you I was going to take it to the limits of the absurd. But, well, this kind of makes the point that simple-minded conclusions based only on averages don’t quite seem to hold up under scrutiny, do they? But according to the arguments put forth by the anti-climate change nay-sayers, as long as the average temperature has not changed, there is no global warming. Never mind that in this absurd model there might be rivers of molten lead flowing across Brazil, or that the entire oceans have frozen into vast ten-mile-high glaciers in the polar regions. The (illogical) argument states that there is no climate change, period.

Well, perhaps not because any argument based on false logic leads inevitably to a false conclusion. False logic is a favorite tool of pseudoscience and propaganda. It can be boiled down to something like this:

  • 2 = A number
  • 1 = A number
  • Therefore, 2 = 1

Other examples of false and misleading logic include such as: “Einstein did poorly in school; I did poorly in school; therefore I am as smart as Einstein.” Another: “Science cannot explain this; I can explain this; therefore my explanation must be correct.”

So, the fact that it is cold and snowing here in New Mexico today doesn’t mean that there is no global warming. The chain of illogic that nay-sayers might use to claim otherwise goes something like this:

  • Some scientists predict that global warming is taking place
  • It is cold and snowing here in New Mexico today
  • Therefore, there is no global warming

This is pretty thin gruel on which to base an argument against global warming and climate change. The melting tundra, dying coral reefs, receding glaciers, spreading desertification and a host of other signals clearly demonstrate that climate change definitely is taking place. Those who do not wish us to recognize and act against this threat have pretty pathetic arguments to present, and yet it is an inconvenient truth that all too many people are ill-informed and cannot see through the false arguments.

Here is one more example of logic, this time sound and crafted to illustrate the problem at hand:

  • Climate change deniers claim there is no global warming and climate change
  • A vast and growing body of evidence says that global warming and climate change are real
  • Therefore, the climate change deniers are wrong.

There, that should fix it.

Posted in Climate Change, Essays and Opinion, Ethical Issues, Melting Planet | Comments Off

A Modest Proposal Not Involving Irish Children*

Sunday, December 14th, 2008

By David L. Brown

I see from the news that on Tuesday the Federal Reserve is expected to lower interest rates to near zero. Here’s an excerpt from the Reuters story tonight:

WASHINGTON, Dec. 14, 2008 (Reuters) — The U.S. Federal Reserve is expected to drop interest rates close to zero on Tuesday, but anticipated remarks on unconventional methods to dispel a year-old recession are what will really matter.

Economists forecast a clear statement that the U.S. central bank will aggressively deploy so-called quantitative easing measures to shelter the economy from a steepening downturn, but do not expect details of what steps it will actually take.

Those words would accompany a decision by the Fed to lower its target for overnight rates by at least a half-percentage point, economists believe.

A half-point cut would take the bellwether federal funds rate to just 0.5 percent, the lowest on records dating to July 1954, as the central bank battles a recession many think will stretch well into next year.

Remember back in the 1990s when Japan took their interest rates down to zero? It took them more than a decade to even see daylight again after that. Well, I guess that proves that low interest rates aren’t necessarily sufficient to revitalize a sinking economy.

Or does it? I suggest that the problem with that conclusion is that central bankers never take the concept far enough—that is to say, to negative interest rates. When the Fed hits the rock bottom of zero, there’s nowhere else for them to go—or so they believe.

But think for a moment about what negative interest rates could achieve? Banks could borrow federal funds at, say minus five percent, and loan the money to customers at, say minus three percent while keeping a two point profit. The government would pay the banks $50,000 on every million they borrowed, and the banks would pay customers $30,000 on every million they loaned out. You could finance a million dollar house, for example, and the bank would pay you $30,000 a year. Sweet!

Now THAT would go a long way toward solving all our financial problems, wouldn’t you agree?

Actually, negative interest rates paid to banks would make sense only if the banks were required to lend out the money, and at appropriate negative rates, rather than just sitting on the cash. That way it would assure that the economy would be stimulated.

Of course even with negative interest rates there would still be the issue of the principal amounts on the loans. If you bought that million dollar house the negative interest would reduce your payment, but you’d still be required to pay back the principal. And (unless the tax code were to be changed) you’d owe taxes on the negative interest, instead of taking a deduction as you do when you pay positive interest. And finally, the amount of negative interest you would receive would decline as the principal is paid back.

Still, the benefit would be tremendous. It would be sure to stimulate the economy and unlike the concept of lowering interest rates only to zero and then stopping while the economy continues to fall, there would be no limit to how much rates could be reduced.

That would give the Fed the ability to keep applying stimulus until it had the desired effect, whether it took minus five percent, minus ten percent, or even lower rates. What a powerful tool that would be for stimulating the economy.

Of course this is nothing more than a pipe dream. The government would never actually just give taxpayer money to banks, would they? Would they? Oh, wait!

*Footnote: If you need to be reminded, in the 1700s Jonathan Swift wrote an essay titled “A Modest Proposal” in which he suggested as a solution to poverty and famine in Ireland that the Irish should eat their children. He was, of course, being satirical. I am not.

Posted in Economics, Essays and Opinion, Politics | Comments Off

More Panic Among Oil Producers

Sunday, December 14th, 2008

By David L. Brown

Russia has suggested it will join OPEC to cut petroleum exports and thus raise the price of oil. According to a story on Bloomberg.com this morning:

“We have to defend ourselves,” [Russian President Dmitry] Medvedev said in the Ural Mountains city of Kurgan today. “This is our revenue base, both from oil and from gas,” he said. “I believe that we mustn’t rule out any options.”

Defensive measures may include “cutting the volume of oil production and participating in existing organizations of suppliers, and in new organizations, if we can reach such an agreement,” Medvedev said in comments broadcast on state television.

OPEC members will meet on Dec. 17 in Oran, Algeria, to discuss oil output targets. OPEC President Chakib Khelil said Saudi Arabia supports a production cut. Russia, the largest non-OPEC supplier, backs a cut and the country’s deputy prime minister and energy minister will attend the meeting, Khelil said.

“The Oran meeting will decide a severe production cut to stabilize the oil market,” Khelil, who is also Algeria’s oil minister, said in an interview on state radio today. “There is a consensus to reduce production.” The minister didn’t specify the size of the output cut that he would seek.

This is more evidence of the panic that is setting in among oil producers now that prices have dropped far below the levels they were counting on to maintain and even increase their national budgets.

The question is what exactly Russia has to “defend” itself from. The only plausible answer is, from the laws of nature and economics. This is a tinfoil hat response to the drop in oil prices. And it will backfire because by limiting exports the oil producing nations will merely succeed in pushing the world economy downhill further and faster, while encouraging the kind of changes that will reduce the need for oil. Already Americans have reduced their driving by billions of miles since the oil spike earlier this year. Habits are hard to change, but once they do change they tend to stay changed.

In the past OPEC tended to cut oil prices whenever it appeared that the commodity was priced high enough to change demand and encourage alternatives. Now they are on the other side of the equation, trying to push prices as high as they can. This is economic suicide for them.

Don’t get me wrong: I do believe that oil prices will go back up, and they need to because we cannot expect producers to deliver oil at below the cost of production. If on the average it it costs around $80 a barrel to produce oil, then we will have to pay at least that much or supplies will dry up. Only those with low-cost production will be able to continue, and that would mean even worst economic trouble for the West not to mention the collapse of the producing nations’ economies.

Those with production costs at the high end of the scale will probably cease to produce oil, meaning that supplies will drop no matter what OPEC and Russia do. But the oil price spikes of the past year have demonstrated that the world economy has no ability to support oil prices in the $140 range. That event has triggered an unprecedented economic crisis, affecting not least the auto industry.

As we have discussed here many times, the world economy was based on growing supplies of cheap oil. Now we are facing falling supplies of ever more expensive oil. We are on the downhill side of the Peak Oil curve, and no amount of “defensive” actions by Russia and OPEC will change that fact. The more they try to force prices higher, the faster the world will back away from the petroleum economy.

A price in the range of $80 to $100 a barrel can be expected, and that will actually be good for the West because it will allow our economies to stabilize while still providing plenty of incentive for development of alternative energy resources, conservation, and other moves away from addiction to imported oil. It would have the further benefit of moderating the instability on the producing side of the economic see-saw without giving dangerous nations such as Iran, Russia and Venezuela massive infusions of cash that would likely be put to use for evil purposes.

And, why should Russia have to join OPEC to lower its exports? Why, I’m glad you asked that question. The answer is: Because OPEC is an international cartel that amounts to a criminal conspiracy against the West and thieves, like birds, flock together.

It’s time to put everything we can into knocking the underpinning out from under the conspirators and sending them back to their traditional roles as goat herders, camel merchants, vodka consumers or what have you.

Posted in Age of Oil, Economics, Global Security, Politics, Resource Depletion | Comments Off

Breath of Fresh Air at Energy Department

Thursday, December 11th, 2008

By David L. Brown

Here’s some really good news. The incoming Obama administration has picked the Nobel Prize winning director of the Lawrence Berkeley National Laboratory as the new Energy Secretary. I must say it is refreshing to see a first-rate scientist taking this post instead of a politician, industrialist or Wall Street financier.

The new secretary, Steven Chu, is a widely respected physicist who has been a vocal advocate for development of sustainable, non-polluting energy sources. The laboratory he directs has been a center of research into biofuels and solar energy technologies. Here’s an excerpt from an Associated Press article about the announcement of Chu’s nomination to lead the nation’s energy department:

More recently, Chu’s scientific interests have centered on energy and finding ways to replace fossil fuels with other energy sources such as biofuels from plants and converting energy from the sun into a fuel. He has spoken frequently about the need to link the physical and biological sciences with engineering to rally independent-thinking scientists in the fight against climate change.

“Steve Chu is a world-class intellectual,” said Stanford University environmental scientist Steve Schneider, who knows Chu. “When I heard that name (for energy secretary), I smiled.” Schneider said Chu will push hard within the Obama administration for reductions in the greenhouse gas emissions blamed for global warming.

Obama has promised to move quickly on energy issues, including a push for more alternative fuels and to get Congress to address climate change.

Chu frequently has used the bully pulpit in a campaign against global warming and the need for alternative energy and greater energy efficiency. During a lecture last summer in Washington he bemoaned the fact that people too often prefer to spend $1,000 on a granite kitchen counter top instead of improving their home’s energy efficiency.

A few years ago he was one of six Nobel Prize-winning scientists who expressed their concern about global warming by sitting against and climbing into a massive tree on the campus of the University of California at Berkeley for a photograph that appeared in a special environmental issue of Vanity Fair magazine.

This is truly good news for America. For far too long our leaders have ignored or given lip service to the threats of climate change and economic dependence upon fossil fuels. Chu appears to be a dedicated advocate of taking strong action, and he has the credentials and reputation in the scientific community to be taken seriously.

How refreshing the news of Chu’s selection really is can be gleaned from a review of the men and women who have held the Energy post over the past couple of decades. The present Energy secretary, Samuel Bodman is a former CEO of Fidelity Investments and CEO of Cabot Corporation.

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Riding the Petroleum See-Saw

Wednesday, December 10th, 2008

By David L. Brown

This is a followup to my recent essay “An Embarrassment of Oxymorons,” in which I made the point that going forward petroleum would either be priced higher, or would not be available at all. I explained that as an example of why it doesn’t make sense to hold onto past economic models beyond their use-by date.

Right now everyone is delirously happy that gas prices have fallen back to affordable levels. Everyone, that is, except the oil producers. There is no joy in the Land of OPEC. In fact, in oil producing nations economic disaster has resulted from plummeting oil prices.

The sad fact is that oil is no longer cheap to produce, and the economies of countries such as Saudi Arabia, Iran, Russia and Venezuela were riding high on expectations of petroleum prices well in excess of $100 a barrel. Now that those prices have dropped to about half that, those economies are crashing. In Russia, the stock market has dropped by 70 percent. In Dubai, until just weeks ago the shining example of Arab economic ascendancy, property values have plummeted by 80 percent. In Iran, civil unrest is spreading and the possibility of a second revolution is not unlikely.

Yes, it is a nice thing that gas prices are down around $1.60—but unfortunately we cannot expect them to stay there. What the roller coaster petroleum market of 2008 has demonstrated is that the world economy cannot support $100+ oil prices. Some analysts predict that prices will settle even lower, perhaps to $30 a barrel in the near future, and some radicals have even predicted oil prices in single digits.

That will not happen, and for a simple reason. Supply and demand is one factor in setting prices of commodities, but another thing that comes into play is the strike price between buyer and seller. Sellers will not for long sell at below their cost, for to do so means losses. When the demand of consumers is for a low price, and the cost of delivering that commodity is higher, perhaps far higher—the supply will simply dry up. The leverage of supply and demand hits a stop when prices are below production costs. (There is no such hard ceiling at the top end; a commodity will bring whatever consumers are willing to pay, although price resistance is an equally hard limiting factor.)

As I pointed out in the essay on oxymorons, oil producers are faced with a lose-lose situation. The more oil they produce at a loss, the more their economies suffer. If, on the other hand, they stop production altogether—their economies will also suffer. There is no wiggle-room for them.

Right now, they are desperate for all the revenues they can get, and thus continuing to pump oil. But this situation cannot continue, and the longer we enjoy low gas prices in the First World, the more the economies of oil producing nations will suffer. There will be serious declines in standards of living, possible famine. National treasuries will begin to be depleted to make up the shortfall in expected oil revenue.

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Posted in Age of Oil, Economics, Essays and Opinion, Fossil Fuels, Transportation | Comments Off

When Things Go Horribly, Terribly Wrong

Tuesday, December 9th, 2008

As nay-sayers continue to deny that global warming is real, scientists now say that not only is it real, it’s probably too late to do anything about it. Here’s a rather lengthy excerpt from an article appearing today on the web site of The Guardian, a leading British newspaper:

At a high-level academic conference on global warming at Exeter University this summer, climate scientist Kevin Anderson stood before his expert audience and contemplated a strange feeling. He wanted to be wrong. Many of those in the room who knew what he was about to say felt the same. His conclusions had already caused a stir in scientific and political circles. Even committed green campaigners said the implications left them terrified.

Anderson, an expert at the Tyndall Centre for Climate Change Research at Manchester University, was about to send the gloomiest dispatch yet from the frontline of the war against climate change.

Despite the political rhetoric, the scientific warnings, the media headlines and the corporate promises, he would say, carbon emissions were soaring way out of control – far above even the bleak scenarios considered by last year’s report from the Intergovernmental Panel on Climate Change (IPCC) and the Stern review. The battle against dangerous climate change had been lost, and the world needed to prepare for things to get very, very bad.

“As an academic I wanted to be told that it was a very good piece of work and that the conclusions were sound,” Anderson said. “But as a human being I desperately wanted someone to point out a mistake, and to tell me we had got it completely wrong.”

Nobody did. The cream of the UK climate science community sat in stunned silence as Anderson pointed out that carbon emissions since 2000 have risen much faster than anyone thought possible, driven mainly by the coal-fuelled economic boom in the developing world. So much extra pollution is being pumped out, he said, that most of the climate targets debated by politicians and campaigners are fanciful at best, and “dangerously misguided” at worst.

What would it take to head off this scenario? Anderson says that “Only an unprecedented ‘planned economic recession’ might be enough.” He added: “The current financial woes would not come close.”

Ooops, a “planned economic recession.” That sounds like something that would be about as popular as a piranah in the punchbowl. Ain’t gonna happen. And, if my read on the depth and seriousness of our present “financial woes” are anywhere near right, the world economy is already facing unprecedented economic disaster—and yet Anderson says that wouldn’t even start to solve the problem.

The Guardian article continued:

Anderson is not the only expert to voice concerns that current targets are hopelessly optimistic. Many scientists, politicians and campaigners privately admit that 2C is a lost cause. Ask for projections around the dinner table after a few bottles of wine and more vote for 650ppm than 450ppm as the more likely outcome.

Bob Watson, chief scientist at the Environment Department and a former head of the IPCC, warned this year that the world needed to prepare for a 4C rise, which would wipe out hundreds of species, bring extreme food and water shortages in vulnerable countries and cause floods that would displace hundreds of millions of people. Warming would be much more severe towards the poles, which could accelerate melting of the Greenland and West Antarctic ice sheets.

Watson said: “We must alert everybody that at the moment we’re at the very top end of the worst case [emissions] scenario. I think we should be striving for 450 [ppm] but I think we should be prepared that 550 [ppm] is a more likely outcome.” Hitting the 450ppm target, he said, would be “unbelievably difficult”.

As we have been warning here, the problem of climate change is so serious that it could literally destroy civilization. Because of the possibility of sudden feedback and tipping point effects, the climate disaster could come quickly, far faster than humans could act in response. The only hope was (notice the past tense here) to take action in advance of the events. Unfortunately, we seem to be unwilling to do anything significant to avoid the climate crash, any more than the dinosaurs took heed of approaching asteroids. It’s business as usual with politicians, businessmen, and most everyone else on the planet.

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Posted in Climate Change, Melting Planet, Politics, Population Issues, Resource Depletion | Comments Off

Detroit’s Fantastic Freestyle Failure Event

Sunday, December 7th, 2008

By David L. Brown

A few days ago I wrote an essay about the mess in Detroit. This cartoon says it pretty well in visual terms.

detroit.jpg

Yeah, they’ve got a plan. Now. It’s a sad situation, but it underlines the question with which I ended the previous essay. After I pointed out that the U.S. no longer makes televisions, computers, and most of the other “stuff” we buy and use, I asked: How is Detroit different?

Indeed, wouldn’t it make a lot more sense to concentrate on things we need to be doing (renewable, sustainable energy for example) and let the South Koreans and Chinese build our cars. They make great vehicles for far less than anything we can make here (and that includes the Toyota, Nissan and Honda U.S. plants).

Scroll back to read my earlier posting titled “Detroit’s Missed Opportunity—And a Plan.” And don’t miss the other essay posted here today. Titled “An Embarrassment of Oxymorons,” it demonstrates the error in trying to hold onto failed economic models. It’s like the difference between getting into the lifeboat or going down with the ship.

Posted in Economics, Satire, Irony, and Humor, Transportation | Comments Off

An Embarrassment of Oxymorons

Sunday, December 7th, 2008

By David L. Brown

“Sustainable growth.” That’s been the mantra of economists and politicians throughout my lifetime and before. We have been instructed that any economy that is not growing is a sick economy. A society that is static is a dying society. The only values worth considering are “bigger” and “more.” Those concepts are the underlying foundations of the world in which we live, and they all answer to the demand for “sustainable growth.”

But here’s a news flash: That phrase is an oxymoron. That is, a self-contradictory statement. The word oxymoron comes from a Greek root meaning “pointedly foolish.” Here are some more examples to give you the flavor of what oxymorons are: “Deafening silence.” “Giant shrimp.” “Microsoft Works.” “Found missing.” “Genuine Imitation.” “Pretty Ugly.”

Get the idea? Oxymorons are statements that seem on the surface to make some kind of sense, but are in fact foolish and stupid. Why is what we call “sustainable growth” foolish? Simply because nothing can grow, and therefore be sustained, forever. Given time, everything comes to an end, perhaps even the Universe and certainly the baseball season, Indian Summer, puppy love and the rain in Spain. One can pretend to “sustain” a downhill course on a bicycle, but at the bottom of the hill that motion can no longer be sustained. Thus, it was not sustainable in the first place. Neither is economic growth.

But there is something even more foolish than the idea of maintaining “sustainable growth,” and that is to attempt to keep an economic model growing when its time has passed. The only reason we have been able to get this far down the road of never-ending growth is that things have a way of shifting and turning in new directions. That’s not exactly “sustainability,” but it keeps things from running into brick walls—as long as we let the change take place.

In the early 1930s in England, economists worried about the rapid expansion of the telephone business. More and more ordinary people were installing telephones. The trend was a line going aggressively up, Up, UP. And what conclusion did the economists draw from this? Why that by sometime in the 1950s every working girl in England would be a telephone operator. Hundreds of thousands of operators to connect calls for millions of English families and businesses.

Hmm, didn’t happen did it? Nor did the lack of operators prevent the telephone business from growing and growing. Sustainable? Well, certainly not in the model that was prevalent in the 1930s. It was something else that happened, not what was anticipated.

And there’s the problem with trying to hold onto past models, to keep them growing, to “sustain” them even when their proper time has passed. Considering the number of telephones in the world today, and the enormous numbers of calls they handle, if we were still depending on operators to manually plug in each connection there probably would not be enough people in the entire world to do the job. Everyone would have to be a telephone operator, which means that no one would have time to make any phone calls or do anything else, so you can see that we have a serious paradox here, and paradoxes are the very stuff of which oxymorons are made.
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