The Oil Drum: Europe

The advertising is a brutal reminder, no doubt.. but isn't this also a fine example of 'Capitalism Selling you the Rope to hang it with?' The Messages here are rarely in conformity with the assumptions behind these Ads.. why not take their money to leverage new ideas?

We've all grown up with an increasing awareness of the glowing promises in marketing, and should be able to keep our heads clear as to what they are and are not. Maybe it's even Churchill's 'Protecting the Truth with a Bodyguard of Lies..'

Bob

TOD faces ever present dangers of being co-opted by corporate interests. Those TOD editors who post high tech energy projects can be hired subsequently as consultants or speakers for the industry they have promoted. Without knowing it, they can be rewarded and thus corrupted. This is why governments attempt to regulate the activities of public officials during and after government service, at least for a short period of time.

The mission of TOD can be compromised. TOD posts many technofixs relative to the number of posts dealing with preparations for Peak Oil impacts. The message to the many readers among the public, industry, and government is that we can fix Peak Oil problems. This provides support for a Manhattan Energy Project, instead of what is needed -- a scientific study by the National Academy of Sciences/National Research Council.

One of the main problems with the posting of the technofixes is that rarely if ever do the sponsors provide a real EROEI analysis. A real EROEI analysis must include all of the energy that is consumed in all of processes getting to the final product, from all of the ores, components, and parts from all over the world, and the transportation of parts, products, and employees, and the factories and energy that supplies them, and the salaries of all the employees in a thousand processes and transportation to get the technofix to market and then maintained, and all of the oil, natural gas, and coal that all of these thousands of employees use when they spend their salaries. Opportunity costs must be included too, for example, if biomass is taken out of production. And a real time frame for the life cycle must be established, given that Peak Oil means less oil to maintain everything, and that the power grid will go out.

TOD editors are making a big mistake if they attempt to play the role of the National Academy of Sciences. Rather, TOD can play a role in asking Congress to commission the NAS/NRC to study these issues. We could have a letter writing campaign to Members of Congress. Maybe they would favor this approach. I'm sure that most of them don't know what direction to go in concerning the energy crisis.

Sums up my view pretty well. I get irritated when people advise paying off debt in the current environment. The correct thing to do is take on more debt as long as one can see a way to make the payments and relatively low interest rates can be had.

There is little reward for saving anymore, if there ever was any. Maybe keep enough cash on hand for emergencies. The general policy of the Fed is to make it impossible to earn a real income from savings and eventually wipe them out.

While a relatively small percentage get into trouble with too much debt, for most Americans debt is a protection from the irresponsible fiscal and monetary policy of the government. Add in the crazy foreign adventures of the Empire and debt becomes absolutely necessary to offset the inflationary effects on commodities of permanent war.

Taking on more debt is good? Until you lose your job, and can't afford to finance the obligation. Being tossed out in the street doesn't strike me as sound fiscal policy. Sure, interest rates are relatively low, but domestic savings are at a negative rate right now. How long can the average household keep operating in that kind of state?
Let's say that US households managed to cut their expenditures by 10%. It would be good for their bottom line but devastating for the economy, incurring massive job losses. If they keep going the way they are, they're bled until they have to declare bankruptcy. We have a painful path ahead of us.

In a time of uncertainty, I locked in some certainties. I sold my large(ish) house and paid cash for another one, half the size, 3 blocks from a bus stop. The value of my house may drop, but then so will everyone else's. I may lose my job, but I'll still have a place to live. Gas may go to $10/gal., but I can ride the bus. I'm certain by paying off my house, I'll miss out on some good investment opportunities. I've also nearly eliminated the possibility of losing the capital I do have.
I spent a lot of time talking to my grandmother in the years before she died. The Roaring '20s sounded an awful lot like 1995-2005. She also told me that when the Depression hit, a lot of people thought "It can't happen to me.", but did.

Taking on *fixed interest rate(so they can't jack up rates when hyperinflation hits)* *non-collateralized(so they can't take your house when you lose your job)* debt may be a good idea if you can find it at low interest rates, and you have an easy means of investing it to gain significant return in order to offset inflation...

But if everybody could do that, there wouldn't be a recession. Recessions feed on themself by drying up those opportunities, as well as the money to put into them - If we cause one by pumping m3 to 400% of its previous value, the point where we reach the dollar being worth 25% of its former value (all other things being equal) is not some magic brick wall where we're able to call it over. By that point, everyone's livlihood is shredded, noone trusts investments anymore, banks have failed, everyone has lost their job and is trying to save money in a shoebox. Noone can buy anything from your promising new business because they don't have a job to pay for it.

The economy is not simply combinatorial (for a particular input, you get a particular output), it's the world's most complicated state machine (for a particular input and current condition, you get a particular output).

1) Tax law exists as a punishment tool, not as any balance the books revenue method.

Exactly why we have a "negative savings rate" in the US, and large segments of the population are literally running without financial "shock absorbers".

We have also passed all sorts of copyright and patent law which is being used to inhibit "free enterprise", aka "competition", aka "theft of a business model", as monopolistic enterprises are threatened with someone else who is willing to do the same thing for less.

I feel the rest of the world will look upon the USA as a flower that lasted only a couple of hundred years before its own politicians foolishly crafted legislation which economically suicided the nation for the benefit of a few.

Capitalism is NOT Free Enterprise. "Free Enterprise" is considered THEFT by capitalists as the monopoly model (gang lord's turf) is rendered moot.