[R-G] [BillTottenWeblog] Penetration

[Bill Totten]

Clusterfuck Nation

by Jim Kunstler

Comment on current events by the author of
The Long Emergency (Atlantic Monthly Press, 2005)

www.kunstler.com (June 23 2008)

My new novel of the post-oil future, World Made By Hand, is available at
all booksellers.
____________________________________


The telling moment last week was Robert Hirsch's appearance on the CNBC
morning "Squawkbox" financial show in which he proposed the probability
of $500-a-barrel oil within "a three-to-five-year time-frame".
Squawkhead Becky Quick was clearly nonplussed by the stolid Mr Hirsch,
author of a (then)-startling 2005 US Dept of Energy report (since
referred to as the Hirsch Report and buried by the Secretary of Energy)
that warned of dire effects on the American way of life as the Peak Oil
predicament gained traction.

Perhaps more reality-challenged was the uber-idiot Larry Kudlow on
CNBC's night-time money show, who kept repeating the mantra "drill,
drill drill" when presented with signs that something other than "oil
speculators" was driving up the price and creating global scarcity.
These idiots always return to the shibboleth that "there's plenty of oil
out there". What they don't get is that even while the world is enjoying
the all time peak of production (somewhere around 85-million
barrels-a-day), that same world is demanding at least 86-million barrels
- so even though there's more oil than ever, there's not enough. And the
gap is only bound to get bigger.

The difference between what's available and what's demanded is being
felt by poor countries and poor people in richer countries. Third world
nations lacking their own oil are simply dropping out of the bidding,
and the lower classes in the US are having to choose between buying
gasoline and velveeta. The floods in the corn belt will surely aggravate
the problem here in the USA. Lunch breaks may soon be a thing of the
past for WalMart Associates. Maybe they'll just play video games on
their cell phones in the parking lot to allay their hunger.

Meanwhile the notion that drilling drilling drilling offshore the US and
up in Alaska will solve this problem shows how incredibly misinformed
the news media itself is. The probability is next to zero that anything
found off California or Florida would even fractionally offset ongoing
depletion in the handful of old, established super-giant fields that the
world gets most of it oil from. By the way, I support the idea of
drilling in Alaska's ANWAR reserve because I think it can be done in a
sanitary way and, more importantly, it would get the idiot cornucopian
right-wing assholes to finally shut up about it - before they discover
that it contains less than half a year's oil supply for the US at
current rates of use.

Also on the "meanwhile" front, the OPEC meeting Sunday at Jeddah, Saudi
Arabia, was simply a desperate dodge, a mummery, a kabuki theater of
powerlessness. Once again, the Saudis are pretending that they can
increase their production - in essence, pretending that they actually
have some power in the game. As Jeffrey Brown has pointed out on
THEOILDRUM.COM, the Kingdom will still show a steady three-year decline
over their 2005 production rates even if they're able to goose current
output as much as they say they will in 2008.

All this reality content is beginning to penetrate the collective
consciousness in the US, but the result is mostly panic or paralyzed
disbelief rather than any set of intelligent responses. For example, I
got a call from one of Katie Couric's producers at CBS news on Friday.
Somehow, they had noticed that oil prices were becoming a problem in
America. They called me for a comment. The scary part was they were
clearly treating the issue as a "lifestyle" story. Did I think more
suburbanites would move downtown? And would that be a good thing ...?
They have no fucking clue how broadly and deeply these dynamics will
affect the life of this nation, or even our ability to remain a nation.
Also, by the way, this demonstrates how the nightly network news has
become the equivalent of the old "women's pages" of the daily newspapers.

The parallel universe of the financial world is showing the strain of
all this oil anxiety - since, after all, oil is the primary resource for
running industrial economies. It has been some time since the banker
boyz embarked on their fateful venture to alchemize a new mutant strain
of investment instruments to replace the tired old stocks and bonds
which represented the hope for production of surplus wealth from
industrial activity - now mooted by the oil story. The idea of the
mutant investments was to produce wealth with no real wealth-producing
activity. This old trick, formerly known as Ponzi finance or a "pyramid
scheme", was naturally self-limiting, and in a way that would prove
ultimately very destructive to society as a whole. In fact, it has
fatally undermined the legitimacy of the entire financial system, and a
state of comprehensive nausea has set in as we all witness the
dissolving foundation of the US economy under a tsunami of debt that
will never be repaid.

The markets seem to know this, the more vocal playerz are squawking more
about it, some banks are issuing frightening "duck-and-cover" warnings,
using horror movie phrases such as "... worse than the Great Depression
of the 1930s ..." and the general public is sinking into the quicksand
of bankruptcy, repossession, and ruin. I haven't been to any lawn
parties in the Hamptons this year, but I imagine that eczematous anxiety
rashes are competing with suntans and Versace separates out there this
year. Really, we're right back where we were last year about this time,
only worse. Oil has doubled, food is outasight, the levees have broken,
the people who run things are shitting their pants, and everybody is
waiting for a whole lotta other shoes to drop.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/06/penetration.html


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