The Teeming Brain

It’s the funniest and most pathetic fraud I’ve come across in quite some time.

A couple of months ago,, in March, the Rev. Bill Keller, founder of a Florida-based fundamentalist Christian “ministry” named Live Prayer (and yes, it deserves the scornful quotation marks), publicly challenged Oprah Winfrey to a debate about religion. Here’s the YouTube clip:

In the clip Keller announces to the world that Oprah Winfrey, because of her promotion of Eckhart Tolle’s book A New Earth, is leading people to hell. At one point he tells her, “God will take you down. It was God who raised you up and it is God who will take you down.” He concludes by not only asking but demanding – he uses the word itself — that she engage him publicly in a debate about religious matters.

To my surprise, Fox News gave Keller a huge platform by interviewing him remotely about his views on Oprah. (Or maybe I shouldn’t be surprised. After all, it’s Fox News we’re talking about.) The ostensible justification for the einterview was the kickoff of Oprah’s network reality show Oprah’s Big Give but Keller devoted the whole of the three-minute interview to explaining why he believes Oprah is “the queen of the New Age gurus.” He even called her “the most dangerous woman in the world,” since she is “leading people down the path of destruction” if “you believe that the Bible is true and Christ is the only way to be saved.”

Here’s the YouTube clip of the Fox interview:

And now, most recently (as of April), Keller has posted to the Internet a video of the supposed interview he ended up conducting with Oprah. You can watch it below, but first be advised that the whole thing is a fraud. When I saw the title of the video, I was momentarily shocked that Oprah would even give the guy a second thought. Then as I went to click the link, before the video even started playing, I thought the thing had to be a fraud. Then I thought, “No way. He wouldn’t be that ballsy.”

But in point of fact, yes, he would. Observe:

What Keller has done is to create the illusion that he is debating with Oprah, with him sitting in a chair in his personal production studio and asking Oprah questions while she answers via video link from the studio where she held her webcasts for A New Earth. But what’s actually happening is that Keller has simply recorded himself asking the questions and then edited in segments of Oprah talking to the camera during the Tolle webcasts. He asks her what she thinks of Jesus Christ. Then he inserts a clip of her talking about her understanding of Christ. And so on.

I watched the video with a mixed emotion of hilarity and incredulity. Even when I caught on to what Keller was doing — which took about 30 seconds; it’s really a clumsy piece of work he’s put together — I kept thinking there was no way he could play it straight all the way to the end. I thought he would have to break down at some point and admit that this was all a simulated debate. I figured he would justify it by saying something along the lines that he had to do it this way, since Oprah wouldn’t respond to his challenge and the issue was so danged important.

But no, he played it as genuine all the way through. If you watch the video, I hope you pay particular attention at around six minutes into it when Keller cuts back to a shot of his own face while the Oprah clip keeps on playing. He winces. He rolls his eyes. He mugs shamelessly for the camera to show his disdain  for what Oprah is saying. Then he starts taking her to task and laying down “the truth” for her. In other words, he really works hard to pull off the illusion that he really is debating her live, and that she really is present on the other end of a video linkup, responding in real time to his questions and comments.

Not since the glory days of deliriously fraudulent, fatuous, and breathtakingly funny Robert Tilton in the late 80s and early 90s have I witnessed such televangelistic gall. Tilton fell like an anvil dropped from the Empire State Building after ABC’s Primetime newsmagazine exposed him for what he was. I have to wonder whether Keller will suffer a similar fate, since he seems to be possessed of the same astonishing audacity and cartoonish presentation. If Sister Oprah decides to turn her baleful eye upon him, we can know that his fall will be great indeed.

Not incidentally, aside from his really amusing theatrics and lies, the man also amuses by mispronouncing Tolle’s last name as Toll, like in “toll bridge” (the name is correctly pronounced “Toll-ay”) and claiming that Oprah is promoting something called “A Course on Miracles” when it’s actually “A Course in Miracles.” He can’t even bother to get his facts straight, so it’s hard to take him seriously.

But then, he positively begs not to be taken seriously via the media persona he has deliberately cultivated. Is he maybe winking at us all as he drives home his schmaltzy schtick? I don’t think so but I can’t rule it out. So in the absence of evidence either way, I’ll just adopt an attitude of (sharp-edged) amusement toward him and enjoy the show.

GENERAL COMMENT FROM CARDIN:

The meltdown has not been cancelled

America’s economic crash and fall from international supremacy are still proceeding nicely, notwithstanding the proliferation of early calls for “the end of the credit crisis,” which seems to be bandied around as a psychological euphemism for “Everything’s great again!” and also notwithstanding the proliferation of claims that there is no oil and energy crisis beyond prices that are high only because of the supposed mass activity of greedy speculators, and there’s lots of oil in various new and capped off wells anyway, and the whole market’s being manipulated just to drive up prices and hurt the little man, so it’s all just a made-up problem that could be fixed if only somebody would sue the bastards!

Ahem. Like I said, things are still melting down nicely despite early calls for the “all’s clear” signal. People around me in daily life here in southwest Missouri are starting to feel and talk about the definite squeeze they’re feeling from high gasoline prices, high food prices, difficulties with health insurance (something they’ve talked about for years), and more. And if they think the portion of their money that’s currently being eaten up by these things is already proving a bit of a strain, hoo boy, do I cringe to think what’s coming next.

But anyway, this week’s Headlines from the Meltdown post is coming late because of an exceptionally busy week and a half that I recently endured. And also anyway, I’m going to be transitioning back to posting about a wider swath of topics here at The Teeming Brain than just the matter of the mounting economic crisis that has dominated my blogging attention almost completely for maybe six or seven months now.

That said, I certainly encourage you to continue watching good headline aggregator sites (e.g., Prudent Bear), including ones that tend toward the overtly apocalyptic (e.g., the Breaking News page at Life After the Oil Crash, Carolyn Baker’s site, and others). And also watch mainstream financial news sites like Yahoo’s and CNN’s money pages, and like Bloomberg. It’s especially instructive to note how the performance of the financial markets on any given day can be so schizophrenically at odds with the same day’s news, events, and political pronouncements in this new order of things.

So anyway, enjoy the ride. Protect yourself and your loved ones. Brace for massive change. Educate yourself. And keep your wits about you.

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Civilization’s Last Chance

Bill McKibben, The Los Angeles Times, May 11

[Note: This op-ed is primarily about the urgency of addressing the problem of climate change due to mounting levels of carbon dioxide in earth's atmosphere. In the opening paragraphs, excerpted below, McKibben does a nice job of placing the issue in the context of the wider passel of crises facing us all right now and, via their current pattern of relentless convergence, battering even constitutionally heedless Americans into submission to the fact that Big Problems are afoot.]

Even for Americans — who are constitutionally convinced that there will always be a second act, and a third, and a do-over after that, and, if necessary, a little public repentance and forgiveness and a Brand New Start — even for us, the world looks a little terminal right now.

It’s not just the economy: We’ve gone through swoons before. It’s that gas at $4 a gallon means we’re running out, at least of the cheap stuff that built our sprawling society. It’s that when we try to turn corn into gas, it helps send the price of a loaf of bread shooting upward and helps ignite food riots on three continents. It’s that everything is so tied together. It’s that, all of a sudden, those grim Club of Rome types who, way back in the 1970s, went on and on about the “limits to growth” suddenly seem … how best to put it, right.

All of a sudden it isn’t morning in America, it’s dusk on planet Earth.

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Numbers Racket: Why the economy is worse than we know

Kevin Phillips, Harper’s Magazine, May 2008

[Note: This excerpt is from a version of the article that is itself an excerpt from the full piece, which is available online only to subscribers.]

If Washington’s harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it actually is.

The corruption has tainted the very measures that most shape public perception of the economy — the monthly Consumer Price Index (CPI), which serves as the chief bellwether of inflation; the quarterly Gross Domestic Product (GDP), which tracks the U.S. economy’s overall growth; and the monthly unemployment figure, which for the general public is perhaps the most vivid indicator of economic health or infirmity. Not only do governments, businesses, and individuals use these yardsticks in their decision-making but minor revisions in the data can mean major changes in household circumstances — inflation measurements help determine interest rates, federal interest payments on the national debt, and cost-of-living increases for wages, pensions, and Social Security benefits. And, of course, our statistics have political consequences too. An administration is helped when it can mouth banalities about price levels being “anchored” as food and energy costs begin to soar.

The truth, though it would not exactly set Americans free, would at least open a window to wider economic and political understanding. Readers should ask themselves how much angrier the electorate might be if the media, over the past five years, had been citing 8 percent unemployment (instead of 5 percent), 5 percent inflation (instead of 2 percent), and average annual growth in the 1 percent range (instead of the 3–4 percent range). We might ponder as well who profits from a low-growth U.S. economy hidden under statistical camouflage. Might it be Washington politicos and affluent elites, anxious to mislead voters, coddle the financial markets, and tamp down expensive cost-of-living increases for wages and pensions?

….The real numbers, to most economically minded Americans, would be a face full of cold water. Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession. If what we have been sold in recent years has been delusional “Pollyanna Creep,” what we really need today is a picture of our economy ex-distortion. For what it would reveal is a nation in deep difficulty not just domestically but globally.

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Economy and the World in Crisis: Gas, Food, Thought

Global Politician, May 11

Crisis is defined first as a “turning point” and secondly as a “crucial situation.” Currently the world is deep into the latter as it relates to energy and food, though inevitably the present situation will evolve into the former. The international community, and particularly the United States, must be willing to think differently about energy, food, and the environment. The current paradigm, as expressed by consumption and inaction, reflects an underlying belief that there will always be more and that this crisis, and others before it, are temporary. Just as society had to accept that the Earth is not flat and the Sun is the center of the universe, we must now accept that oil is not a renewable resource and that how we live today will determine how our grandchildren live tomorrow. We must think about problems in a new way or we will never generate a new reality; we are, in fact, destroying our current reality.

The gas crisis is primarily the result of demand exceeding supply. The increased consumption of emerging economies in Russia, China, and India are adding pressure to a supply already strained by extreme over-consumption in the United States (which accounts for 25% of all oil and gas used in the world). There are also emerging economies in the Middle East experiencing rapid growth as a result of oil profits, which are in turn withholding greater amounts of produced oil for internal use. The dependence of the Western World on oil allows oil-producing nations to use the price and production of crude oil as a unique form of economic sanction and a highly effective political tool. The U.S. wars in Iraq and Afghanistan, coupled with generally tense relations between the West and Middle East, only serve to exert more stress on the global oil markets. Certainly this is an oversimplified explanation of a complex situation, but one need not be an economist or a geologist to understand that one day, in the not so distant future, the oil will run out.

….Like the gas situation, the food crisis is also chiefly the result of the demand/supply ratio; however, with the gas crisis the pressure is on the demand side of the equation (for now), whereas with the food crisis the pressure is on the supply side. It is true that there is an increased demand on the world’s food supply from swelling populations and incomes in China and India, and the rising gas prices are forcing the cost of producing and transporting crops up, but at the root of the food crisis are more fundamental environmental and agricultural issues.

….Neither the gas crisis nor the food crisis is the real problem. The problem is not the mortgage crisis, the AIDS crisis, or a crisis of economics. The real crisis is one of thought. As a world, a society, as people – we are in the midst of a thinking crisis. Instead of focusing on how to get cheaper gas, we must think about how to fuel our world and our lives without gas. Instead of thinking about feeding the world today, we must figure out how to sustain a larger global population tomorrow. We must accept that once we change our thinking, we must align our behavior accordingly. We must learn to value progress over convenience, life over lifestyle. We must acknowledge that we are citizens of a global community, and realize that neither nature nor natural resources recognize our superficial political boundaries.

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The high price of oil is NOT a bubble

Paul Krugman, The New York Times, May 12

“The Oil Bubble: Set to Burst?” That was the headline of an October 2004 article in National Review, which argued that oil prices, then $50 a barrel, would soon collapse.

Ten months later, oil was selling for $70 a barrel. “It’s a huge bubble,” declared Steve Forbes, the publisher, who warned that the coming crash in oil prices would make the popping of the technology bubble “look like a picnic.”

All through oil’s five-year price surge, which has taken it from $25 a barrel to last week’s close above $125, there have been many voices declaring that it’s all a bubble, unsupported by the fundamentals of supply and demand.

So here are two questions: Are speculators mainly, or even largely, responsible for high oil prices? And if they aren’t, why have so many commentators insisted, year after year, that there’s an oil bubble?

….[T]he rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth.

….[A] realistic view of what’s happened over the past few years suggests that we’re heading into an era of increasingly scarce, costly oil.

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BusinessWeek predicts ‘global turmoil,’ advises companies to prepare for large-scale events with ’seismic’ impacts

BusinessWeek.com, April 29, 2008

Recent headlines — Citigroup’s layoffs, Iceland’s sudden downturn, worldwide food shortages, etc. — suggest serious global turmoil is ahead. All companies, and multinationals in particular, should be prepared to withstand it.

Unfortunately, many are not. Traditional forecasting and budgeting systems produce linear projections insufficient for risky, uncertain times. What’s needed is scenario planning, where companies stress-test their strategies and processes against a wide range of future scenarios to identify their vulnerabilities. Thus informed, the companies can adjust them to be more responsive and resilient.

But scenario planning often takes a backseat to more immediate concerns: developing new products, fighting an aggressive competitor, meeting earnings targets. So when large-scale external events hit, their impact is seismic.

[Note: The remainder of the article offers advice to companies about scenario planning in the face of the predicted global turmoil.]

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The Ticking Credit Card Time Bomb

Peter Schiff, Financial Sense University, May 9, 2008

For those holding out hope that the American economy can miraculously avoid a long and deep recession consumer credit is often viewed as the wonder drug that can cure all manner of economic ills. As such, this week’s report showing $15 billion growth in consumer credit was widely heralded as proof of America’s economic strength and resilience. However, we are now suffering the after effects of too much debt, and our salvation cannot be found in more of the same.

Credit card debt, which now stands at whopping $957 billion nationally (approximately $3,000 for every citizen) has, in recent years taken on a different role in American life. While in the past cards were used primarily to purchase big ticket items, spreading out costs over many months, they are now increasingly used to bridge the gap between cost of living and the diminishing purchasing power of Americans who have been taxed mercilessly by inflation. By buying with available credit instead of unavailable cash, consumers are not simply postponing the pain of higher prices, but compounding it by adding interest to the cost of everyday purchases. In addition, as home equity credit is now unavailable to fund large purchases, many consumers are turning to non-deductible, higher cost credit card debt as the last remaining life line. As such, credit card debt compounds steadily, and for many borrowers, becomes increasingly impossible to pay down.

….It should be painfully obvious that expanded consumer credit is not evidence of improvement, but simply, deterioration. Unfortunately, when it comes to understanding the economy, there is little common sense on display. By going even deeper into debt just to make ends meet, American consumers are digging themselves, and our entire economy, into an even greater economic hole and laying the foundation for the next major credit debacle. It’s fitting that just as both Treasury Secretary Paulson and JP Morgan CEO Jamie Dimon declared that the worst of the crisis has past, we are on the verge of kicking the whole thing into a much higher gear!

….Soon, as credit card delinquencies rise and losses on pools of securitized credit card debt mount, those supplying the credit will finally get wise to the fact they will never get their money back. As a result the market for such debt will dry up even more quickly than did the market for subprime mortgages. Cards will therefore be much harder to come by and will have much lower limits then they do today. Limited to only the cash in their wallets, Americans will finally be forced to dramatically curtail their spending, and the recession will finally gather serious momentum.

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Get Ready to Spend $6000 a Year on Gas

The Christian Science Monitor, March 14

Two years ago a leading economist published a study provocatively titled: “What would $120 oil mean for the global economy?” Answer: a global recession, if the price stayed there for a year.

Now the future has arrived, with the United States and other nations getting a double whammy from both the mortgage crisis and oil futures hovering at $120 per barrel. If oil prices stay stratospheric, the cost of fueling cars and planes could slash US economic growth up to 2.3 percent and global growth by 3.6 percent, says Robert Wescott, former chief economist of the president’s council of economic advisers and author of the $120 oil report.

While many energy-security experts worry about a terrorist attack that suddenly crimps global oil supplies and hammers the US economy, Dr. Wescott and other experts say a terror attack is hardly the only, or even the worst, oil threat the nation now faces. “What we are seeing today is more of a slow-motion, rolling oil crisis rather than a sharp shock, yet ultimately we end up with the same sorts of impacts [as a terror attack],” says Wescott, now president of Keybridge Research, a Washington economic-consulting firm.

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The Risk Economy

James Howard Kunstler, Clusterfuck Nation, May 4

[T]he basic situation is this: the world is awash with bad investment paper. The standard of living in the US can’t be supported on debt anymore. The people of the US don’t produce enough real value to service their debts. Institutions can no longer be supported on debt gone bad. Something’s got to give — meaning something has to bring the US standard of living down to a level consistent with our declining actual wealth.

Everything else going on right now is a dodge. The Fed maneuvers, the “coordinated actions” of the western central banks, the postponements of default, the non-disclosure of contents in bank portfolios, the pretense that risk alone is a kind of fungible resource that can be endlessly traded to generate fees — all this fucking nonsense will only make the eventual unwinding much worse.

Personally, I doubt that it can go on more than a few more months. The velocity of everything is going up past the “red line” where things really fly apart. The increased velocity of non-performing mortgages and deadbeat credit card accounts is one thing that can’t be hidden or escaped. America will feel and see very vividly when the repossession teams rush families from their homes, when the pickup truck is taken away, and when the pink slip appears in the pay envelope. Meanwhile all the higher-end banking shenanigans will only debase the dollar and make it more difficult for people already in distress to buy gasoline and food.

If the bankers and treasury officials collude to prop up one more failing big bank a la Bear Stearns, the political fallout for Wall Street could be lethal. In any case, I think we will have a way different sense of ourselves as a society by the time the election comes.

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Preparing For What Future?

John Michael Greer, The Archdruid Report, May 7

The current round of global troubles — the peak of conventional petroleum production worldwide, soaring prices and incipient shortages in other commodities, spiraling breakdowns in the international debt market, and the fraying of America’s global empire — marks, in this analysis, the onset of one of the periods of crisis mentioned above. If this is the case, we face several decades of serious social, economic, and political turmoil, with a high likelihood that many of these troubles will spill over onto the battlefield. As I’ve suggested elsewhere, the period between 1929 and 1945, with its economic crises, political horrors, and global power struggles ending in a brutal world war, may make a tolerably good model for the period now dawning around us.

If I’m right — and every discussion of the future needs to start with those unpopular words — the future for which we have to prepare has two aspects, one overarching, one immediate. The overarching aspect is the slow curve of decline I’ve called the Long Descent, the final trajectory of industrial civilization toward its death. The immediate aspect is the need to deal with the particular round of crises breaking over us just now.

….[I]t’s problematic to insist, as a number of internet bloggers did recently, that the discovery of a new oil resource in North Dakota means that peak oil is no longer a problem. On a global scale, with most of the world’s oil producing countries and most of its supergiant fields already in decline, the Bakken shale simply doesn’t make that much difference, and planning for a future that will allow us to keep up the extravagant energy-wasting lifestyles of the recent past will likely have disastrous results.

Yet it’s just as problematic to insist that the current wave of crises will inevitably spin out of control into a fast crash that will bring industrial civilization to its knees. That claim carries its own agenda of actions for the future, and if the claim turns out to be inaccurate, many elements of that agenda could all too easily prove to be dysfunctional. Moving to an isolated rural area and making a go of subsistence farming is not a viable strategy for everyone, for example, and even those who are well suited to that life might turn out to have made a dysfunctional choice if the fast crash fails to arrive on schedule.

If the end of the industrial age turns out to be a longer and more complex process than fast-crash advocates suggest, in fact, isolated rural areas may not be the best places to start small farms at all. Truck gardens and organic food production on the outskirts of small and mid-sized cities will be much better positioned to thrive in a world where markets still exist but transport costs are a major limiting factor. In some areas this is already happening; the explosive growth of farmers markets, community-supported agriculture schemes, and direct sales of local produce to local restaurants have put down the foundations on which local and regional food production networks could easily grow. Fostering the emergence of such networks could contribute much to the future. So could the evolution of many other economic specialties that are irrelevant in the context of a fast crash, but not in the more complex terrain I suspect the future holds for us.

….[Y]ou won’t find many people preparing to make the transition from today’s high-tech economy to the less complex, more impoverished, more fragmented, but still industrial economies that I expect to emerge from the Great Recession and global troubles of 2010-2030 or thereabouts. Nor will you find many people seriously taking on the role of cultural conserver that will be desperately needed if many things of value are to get through the deindustrial dark ages of 2200-2600 or thereabouts, and reach the successor cultures that will emerge beyond it. As I see it, these are among the crucial tasks before us; they could make the long road to the deindustrial future more bearable, and pass on important gifts to the future; but…they will not happen if the people who could make them happen get caught up in premature proclamations of triumph or catastrophe.

GENERAL COMMENT FROM CARDIN:

America’s bill is due. Are you ready to pay?

For those of you who still don’t know — and just where in God’s name have you been? –- Richard Heinberg is a major voice in the collective peak oil/economic meltdown/peak civilization conversation. He’s awesomely smart, insightful, sensitive, educated, and well informed. In short, he’s somebody you should listen to when he talks. An excerpt from the bio at his Website paints the picture nicely:

Richard Heinberg is the author of eight books….He is a Senior Fellow of Post Carbon Institute and is widely regarded as one of the world’s foremost Peak Oil educators. He writes a regular column for The Ecologist, and has also authored scores of essays and articles….He has appeared in numerous video documentaries, including Leonardo DiCaprio’s 11th Hour.

The full MuseLetter that the first item below is excerpted from features an extended report on the current coal situation as well as Heinberg’s complete introduction to the second edition of When Technology Fails by Matthew Stein. It’s all great reading, especially when you consider it in light of what he says at the end, which is what’s appears below.

For those raised in the short-attention-span-theatre of contemporary media culture, the nutshell version of what Heinberg is saying is this: America’s monstrous growth binge is now coming to a crashing end. The bill has just come due for our profligacy. And we’re all going to pay for it very deeply and for a very long time to come.

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It’s Happening (economic collapse, famine, etc. — the entire peak oil scenario)

Richard Heinberg, MuseLetter #193 / May 2008

There is a surreal quality to the experience of seeing the unfolding of unpleasant events that one has predicted. Plenty of times over the past few years I’ve said, “I want to be proven wrong!” Who in their right mind would wish to see economic collapse and famine? But it was obvious that, given the direction our society is headed, these must be the consequences. Now, with oil at $117 a barrel, the US economy teetering, and food riots erupting in Haiti, Egypt, and Asia, one could perhaps gain some satisfaction in saying “I told you so.” But what faint compensation that would be. We are all going to have to share the bitter fruits of our society’s century-long growth binge, whether we have criticized it or participated wholeheartedly. The only silver lining is the possibility that now, at last, as the trends (Peak Oil, the failure of growth-based economics, the failure of industrial agriculture, climate chaos, and so on) are becoming so starkly clear, policy makers will begin seriously to contemplate a Plan B (or C, as Pat Murphy insists). For those of us who have been lobbying in that latter direction for some while, this is no time to let up, but rather the ideal moment to redouble our efforts.

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Emptying the Breadbasket: Transformation of U.S. agriculture means end of cheap wheat

The Washington Post, April 29

At Stephen Fleishman’s busy Bethesda shop, the era of the 95-cent bagel is coming to an end.

Breaking the dollar barrier “scares me,” said the Bronx-born owner of Bethesda Bagels. But with 100-pound bags of North Dakota flour now above $50 — more than double what they were a few months ago — he sees no alternative to a hefty increase in the price of his signature product, a bagel made by hand in the back of the store.

“I’ve never seen anything like this in 20 years,” he said. “It’s a nightmare.”

Fleishman and his customers are hardly alone. Across America, turmoil in the world wheat markets has sent prices of bread, pasta, noodles, pizza, pastry and bagels skittering upward, bringing protests from consumers.

But underlying this food inflation are changes that are transforming U.S. agriculture and making a return to the long era of cheap wheat products doubtful at best.

….Wheat’s fall from favor, little noticed when it was cheap, has been long coming. Though still an iconic symbol of American abundance — engraved on currency and praised in song — the nation’s amber waves of wheat have been increasingly shoved aside by other crops. The “breadbasket of the world,” which had alleviated hunger and famine since World War I, now generally supplies only a quarter of world wheat exports.

U.S. farmers are expected to plant about 64 million acres of wheat this year, down from a high of 88 million in 1981. In Kansas, wheat acreage has declined by a third since the mid-1980s, and nationwide, there is now less wheat in grain bins than at any time since World War II — only about enough to supply the world for four days. This occurs as developing countries with some of the poorest populations are rapidly increasing their wheat imports.

….[I]n the long run, said USDA wheat analyst Gary Vocke, “The forces leading to the trends are still in place.” Though supplies may rebound, he and other experts doubt that prices will drop to prior levels.

That poses serious concerns for countries that historically have counted on the United States to have inexpensive wheat on hand to cushion shocks.

….”With low stocks and a weak dollar, things fly off the shelf faster than they used to,” said David Brown, chairman of the American Bakers Association’s commodity task force. “There’s just not enough acreage coming back into production to replenish these stocks.”

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Outlook for oil supplies ’signals a period of unprecedented scarcity’

The New York Times, April 28

As oil prices soared to record levels in recent years, basic economics suggested that consumption would fall and supply would rise as producers opened the taps to pump more.

But as prices flirt with $120 a barrel, many energy specialists are becoming worried that neither seems to be happening. Higher prices have done little to attract new production or to suppress global demand, and the resulting mismatch has sent oil prices spiraling upward.

“According to normal economic theory, and the history of oil, rising prices have two major effects,” said Fatih Birol, the chief economist at the International Energy Agency, which advises industrialized countries. “They reduce demand and they induce oil supplies. Not this time.”

A key reason that supply is not rising to meet demand is that producers outside of the OPEC cartel — countries like Russia, Mexico and Norway — have been showing troubling signs of sluggishness. Unlike the Organization of the Petroleum Exporting Countries, whose explicit goal is to regulate supply to keep prices up, the other countries are the free traders of the international market, with every incentive to produce flat-out at a time of high prices.

But for a variety of reasons, like sharply higher drilling costs and nationalistic policies that restrict foreign investments, these countries are finding it difficult, if not impossible, to increase output. They seem stuck at about 50 million barrels of oil a day, or 60 percent of the world’s oil supplies, with few prospects for growth.

….Analysts at Barclays Capital said last week that non-OPEC supplies were “seemingly dead in the water.” Goldman Sachs raised similar concerns last month, saying that growth in non-OPEC supplies “can no longer be taken for granted.”

….“What is disturbing here is that things seem to get worse, not better,” an analyst at Goldman Sachs, David Greely, said. “These high prices are not attracting meaningful new supplies.”

….The outlook for oil supplies “signals a period of unprecedented scarcity,” an analyst at CIBC World Markets, Jeff Rubin, said last week.

….Oil prices might reach more than $200 by 2012, he said, a level that would probably mean $7-a-gallon gasoline in the United States.

….The International Energy Agency estimates that current investments will be insufficient to replace declining oil production, let alone increase overall output. The energy agency said it would take $5.4 trillion by 2030 to increase global output, a level of investment that is unlikely to be met. It said a crisis “involving an abrupt run-up in prices” could not be ruled out before 2015.

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Waking Up from the American Dream (how the U.S. federal government helped create this crisis)

CBS News (reprinted from The New Republic), May 2

In the midst of the subprime crisis, there’s an important question that analysts and policymakers have neglected: Did so many people need to own homes in the first place? The dream of home ownership has long been part of the American experience, but, as the federal government steps in to artificially support borrowers and lenders with tax credits that encourage more spending or with public spending that keeps over-indebted borrowers in unaffordable homes, we ought to consider whether it’s time to wake up from that dream.

Indeed, we ought to consider what role the federal government has played in creating this mess. By stimulating home ownership while failing to account for the reasons home ownership is valuable to society, Washington has simply sought to buy our votes with our own debt. As the subprime crisis accelerates and threatens to spread through prime and near-prime markets, policymakers face a watershed moment. To keep us from an economic nightmare, they need to replace the dream of home ownership with policies that actually increase wealth — not just the illusion of it.

….For the past decade, Americans have increasingly relied on the appreciation of their homes, rather than the returns of their labors, to support themselves, creating an unsustainable and destabilizing economic mirage. Home ownership will — and should — remain a goal, but only if it brings with it the long-term commitment that a mortgage traditionally implied. Home ownership is a social good as long as it allows buyers to build equity — an investment not only in their house but in their community — but a home without equity is really just a rental with debt.

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Why most folks in the future won’t fly: Peak oil and the end of air travel as we know it

Tom Whipple, Falls Church News-Press, May 1

It is clear we are going to see major changes in air travel shortly.

For some time now, airlines have been eliminating frills, raising prices, filling the planes and effecting whatever other economies come to mind. After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount.

Knowledgeable observers are expressing doubts these moves will be enough. People are starting to talk about $200 oil which implies that airline fuel costs will double again. Newer aircraft are more efficient, but the improvements are nowhere near what is necessary to keep up with surging fuel costs and, as Continental Airlines concluded this week, there is not enough financial benefit in a merger to keep up with costs.

….In short, airplanes simply can’t make money while charging affordable fares at current, much less prospective, fuel prices. The era of 500 mph travel for most people is nearly over.

….Ten or 15 years from now, air travel is likely to be significantly reduced; will be patronized by business travelers or the very wealthy; and will be limited to trans-oceanic or long-distance flights between major population centers.

….There is still a remarkable amount of denial in the airline business. This week Airbus released a forecast showing that the number of large commercial aircraft will grow from 15,000 to 33,000 in the next 20 years and that the number of passengers will triple.

If there is to be a long-term future for air travel, it is unlikely to be with liquid fuel powered turbines driving heavier than air devices.

….Over the longer run, the development of hydrogen powered aircraft might prove feasible or perhaps lighter-than-air dirigibles might be developed to the point where they can move people and goods efficiently over long distances. In any case, the day of the ubiquitous kerosene-powered jet transport which revolutionized travel for many of us in the second half of the 20th century is likely to be shorter than most realize.

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California water shortage is worst in decades

The Los Angeles Times, May 2, 2008

California communities face a strong possibility of water shortages and even mandatory rationing this summer because of record dry weather in March and April, a fast-shrinking snowpack and below-normal reservoir levels, state officials said Thursday.

The bleak news, contained in California’s final Sierra snowpack report of the snow season, means a second consecutive year of water anxieties in a state heavily dependent on water from the melting snow in the Sierra Nevada.

“I have not seen a more serious water situation in my career, and I’ve been doing this 30 years,” said Timothy Quinn, executive director of the Assn. of California Water Agencies. An outmoded delivery system and court rulings that protect endangered fish are also straining the system, he said.

“This is a harbinger of relatively tough times, not just for this year but for a set of years,” Quinn said.

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Melbourne: A city on the edge

The Age, May 3

[Cardin comments: The general significance of this story for all of us not living in Melbourne is, of course, the way the evolution-in-progress of that city into an inner core of "haves" surrounded by a periphery of "have nots" -- with a distinct socioeconomic culture and way of life pertaining to each -- may be a harbinger of what all developed countries can expect to occur not just in their urban areas but everywhere, as a matter of general cultural and socioeconomic transformation, during the early stages of the peak oil crisis.]

Looming peak oil and plunging housing affordability are especially troubling for a sprawling, car-reliant city such as Melbourne. The city’s rail network stopped expanding with its suburbs long ago, leaving two-thirds of residents beyond its reach and creating a massive imbalance between inner and outer Melbourne.

….For all intents and purposes, Melbourne is humming. The smart set from Sydney love visiting for its laneway boutiques and bars, its mix of bold new architecture and Victorian nooks and crannies. So perfectly Victorian are the old streetscapes of Carlton and Fitzroy that the National Trust wants them world-heritage listed. So wonderfully eclectic are the city’s architecture and fashion scenes that RMIT University’s Leon van Schaik lists Melbourne as one the world’s great design hot spots.

Sydney architect Elizabeth Farrelly is a huge fan, saying Melbourne has that “indefinable chutzpah that makes cities hum”. “How could Sydney get it so wrong?” she asked provocatively in a Sydney Morning Herald article a year ago. “Sydney remains bigger, but Melbourne makes the running.”

But appearances can be deceiving. Farrelly is talking about the Marvellous Melbourne of the last century with some interesting latter-day nips and tucks. If she cared to venture into Melbourne’s outer suburbs, it is fair to assume that she would detest them as much as she does those that confront her in Sydney. The Melbourne celebrated by the likes of Farrelly is increasingly mythical, an inner hub that bears little resemblance to its outer wheel.

And while inner city inhabitants might be heard railing against McMansions and gated suburban estates, their world is effectively a similarly gated community — only the cashed-up have access. That means most Melburnians are locked out of the place that contains the cool jobs with the abundant public transport and bike paths that service them, as well as its cafe society, its bars and its theatres. Ironically, too, for all our cultural diversity and rich migration history, inner Melbourne risks becoming mono-tonal. The diversity that Lord Mayor John So constantly praises is fast disappearing.

….So glaring is the splitting of Melbourne into geographical “haves” and “have nots” that even developers raise concerns about the future social consequences.

….Many of those who do migrate to the fringe, according to planners, risk becoming trapped by what is referred to as distance decay — stranded away from jobs and infrastructure. And property prices taking that factor into account will always lag inner-city values, making people’s ability to trade up — and out — of less-advantaged neighbourhoods almost impossible.

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The Great Reckoning: For America it’s the end of the instant gratification, shop-till-you-drop lifestyle

The San Francisco Chronicle, April 27

It’s a global shift that some are calling the Great Reckoning. For a generation, economists warned that Americans were living too large. With wallets crammed with credit cards and home-equity loans available to any homeowner who could sign his or her name, consumers went on a debt-fueled buying binge. Living rooms bulged with the latest in snazzy electronics and garages filled with shiny new cars and trucks. Restaurants were fully booked, and airlines whisked happy passengers to dream vacations around the world.

Now, that shop-till-you-drop, I-want-it-all-and-I-want-it-now era may be coming to an end. It couldn’t last because it was built on a mountain of money borrowed from overseas.

….[T]he housing crash, a severe credit crunch and a dizzying fall of the dollar are depriving the nation of the means to keep on borrowing and spending. Foreigners have become wary of underwriting the U.S. standard of living. The flow of outside investment is slowing.

In effect, the United States has maxed out on its national credit card. Like it or not, that’s one of the most important things now forcing a new standard of frugality on free-spending Americans.

“We’re going back to the good old days of living within our means,” said David Rosenberg, chief North American economist for securities giant Merrill Lynch.

….The years from the early 1980s until recently were a long boom for American consumers, even though their incomes grew slowly if at all during much of that period. “There was a lot of air under this economic expansion,” Rosenberg said. “It was engineered by an unprecedented increase in (borrowing) that involved practically every area of consumer credit.” Consumer debt reached levels never seen before and, by the end of 2007, the household savings rate fell below zero.

The United States is now in the early stages of a prolonged period of belt tightening, a contraction not seen in decades.

….”We’re seeing the birth pangs of a new economic structure,” said Neal Soss, chief economist for the securities firm Credit Suisse First Boston. “The next year or two or three will be about the transition to a new equilibrium. Consumption by households will grow more slowly than their incomes, which is the exact opposite of the last 25 years when consumption grew faster than incomes.”

….”This is not the end of the world. It’s not Armageddon,” Rosenberg said. “It doesn’t mean we’re going to have to live in a cave or a hut or an RV. The areas of retrenchment are in things we can do without, such as cutting out that extra vacation.”

The current period marks the finale of the post-World War II era when the United States stood unchallenged atop the world’s economic pyramid and the dollar reigned as the one truly global currency, many observers say. Now the nation must deal on more equal terms with a rising China and India, a united Europe and a powerful bloc of Asian manufacturing nations. Even Latin America, the long-time underperformer in the global economy, is flexing its muscles.

“The world has become multipolar,” said UC Berkeley international economics expert Barry Eichengreen. “Our dominance will decline.”

In places such as Asia, where Uncle Sam long wagged his finger at nations that mismanaged their economies, “there is a peculiar sense of satisfaction that the United States has received its comeuppance,” Eichengreen said.

The catalyst for this transformation has been the traumatic collapse of the nation’s housing market.

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End of America’s buying binge signals much trouble — and profound changes — just ahead

The Los Angeles Times, April 30

[Cardin comments: Please note the subtext that's present in this and the similar article located directly above: that the the era of Americans living beyond their means on ginormous credit, zero savings, and the economic largesse of other nations was ultimately a GOOD thing. After all, isn't that obviously the point that's being made when the end of said era is pegged as a bad thing? This just goes to show how thoroughly nutsoid (to coin a new term that I rather like) our collective thinking has become, when what's considered "bad for the economy" is actually what's manifestly beneficial for human life, the human spirit, planet earth, and the Big Picture. The great E.F. Schumacher nailed the matter a generation ago, right on the incipient edge of this cultural catastrophe back in the 1970s, in his book Small Is Beautiful, when he pointed out that an economic system based on perpetual growth is divorced from reality. He wrote,

Can such a system conceivably deal with the problems we are now having to face? The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment. We must therefore study the essential nature of the private enterprise system and the possibilities of evolving an alternative system which might fit the new situation.

We're presently experiencing an entirely Schumacherian moment. The man is being revealed as a prophet more and more every day by current events, as are the members of the Club of Rome, who brought us The Limits to Growth during the same 1970s era. Geez, do you think we'll listen to them this time around, when events are forcing us to?]

For a generation, Americans snapped up clothes tailored to every demographic, bought the latest sport utility vehicles and piled on the wide-screen TVs.

No more. The nation’s long buying binge appears to be over. And that’s probably bad news for the economy.

Today, when the government issues its first snapshot of growth in 2008, the role played by U.S. consumers will appear smaller and faded compared with the past, when, year after year, their spending became ever more important to the economy.

“We’re at a watershed moment,” said Jay P. Feldman, an economist with Credit Suisse in New York. “The era of consumers living beyond their incomes is at an end.”

….The abrupt slowdown in consumer spending has already wreaked havoc with retailers, especially auto dealerships, furniture showrooms and apparel stores. Auto sales fell 12% last month compared with a year earlier, according to AutoData Corp., which compiles industry statistics. More than 2,100 retail stores have been shuttered since January and more than 6,500 are likely to be by the end of the year, according to the International Council of Shopping Centers.

A string of mid-size chains, including furniture sellers Levitz, Bombay and Domain, catalog retailer Lillian Vernon and electronics firm Sharper Image, have gone bust. And home goods giant Linens ‘n Things is tottering on the edge, having missed making recent interest payments.

….If Americans ultimately decide that their longtime strategy of low savings, high debt and reliance on stocks and housing no longer works, the results could be big, and unpleasant. People would have to save more, rather than rely on price appreciation to cover spending. They’d have to consume less. Businesses, in turn, would have to find new consumers elsewhere, especially overseas.

“Nothing’s going to reverse a generation of behavior overnight,” said Feldman, the Credit Suisse economist. But “what the markets are signaling is we have to consume less and export more.” Doing so would make for a very different — and considerably less heady — America than that of the last quarter of a century.