Ever watch the movie "BraveHeart"? There is a line in that movie that goes something like this... The "Babe" says to the "Hero" - "Peace is made in such ways..." to which our hero replies "Slaves are made in such ways".
Many Americans seem to have sussed out the things that have enslaved them: Student loans, mortgage debt, political policies at all levels, ridiculous family law, competitive materialism... young people seem to be rejecting most of this, with the exception of student loans, with which many are still stifling their lives... but you can really see it in the housing market. While the Fed/Bernake/Goldman and the rest of the resident anti-Christ are busy trying to reflate that market it appears that they have run out of suckers... and that's a good thing!
The increase in total credit engineered by the Fed and TPTB over the past 40 years has not worked out for The People, if I may make use of understatement. Perhaps unwinding that circumstance will.
Things have changed. Nominally, the U.S. economy has "grown". Anecdotally, I doubt much of that growth. Immigration and fertility are down, and in the past the biggest component of economic "growth" was population growth. This is a critical issue... while this circumstance will throw a wrench into future tax assumptions and demolish our ability to fund the military and social programs I see this as a very, very good thing. "Slaves are made in such ways"... as is obesity, depression, addiction... America's people, for the most part were not unsatisfied with the "direction" the country was taking until the 1970's (with the glaring exception of the really, really stupid war mongering of Korea and Viet Nam). What brought the dissatisfaction? I assert that the addiction to Oil, T.V., and the market's return to labor equilibrium with the rest of the world. While the boomers and X'ers might bemoan whatever it is they bemoan... the circumstances they viewed as "normal" (when there is truly no such thing) are not the normal of young people today... and these people will eventually get on with it... and these young people were not born into families from America's Left, who forgot what happens to those that do not replace themselves... they die out... won't be long now... bye-bye...
Gasoline availability per capita is down well over 14% since 2005 (please see my previous post for California gasoline consumption and then add in the 1.1% increase per year in population per year. While the U.S. Census Bureau believes that the U.S. population will hit 420mm in 2050, I think those folks need to take their fingers out of their nose...) and the price reflects the market's role in rationing that declining resource by price.
U.S. grain production has tilted heavily to corn due to ethanol's now firm entrenchment in the liquid transportation fuel market... But we have run out of corn acres, or at least I assert that we have... why else would corn farm land have quadrupled in the past decade? (Here's the wheat production chart.) The U.S. now consumes nearly 1/2 of its corn crop in ethanol production... it is extremely unlikely that ethanol can claim much more, unless Americans prefer transport fuels to meat, milk, and eggs... and the price of food stuffs relative to The People's ability to afford them is already quite high, even if, as a percentage of income, food costs are near historical lows... the big change during the past 40 years? The percentage of FICA and property taxes of total income confiscated was just too much of John Q. Public's income for him to be able to feed his kids AND his parents (via Social Security and Medicare). If you doubt this... please explain the "temporary" payroll tax cut... which will never be undone.
So what is the "Good News"?
The Good News is this: The People can no longer fund the government's power grab of The People's freedoms... We cannot fund the government's military, security, and social program apparatus... this is a beautiful thing, though the media will spend every waking minute convincing you otherwise. Time will heal these wounds (with you or without you), and we, The People, can get back to making our own decisions about the way we want to live our lives - accepting both the rewards and consequences that come from being a "Free People".... what does it mean to be "free"? We have seen the Left's and the Right's version...
For our purposes here... Free to succeed and fail (however you define that). Free to educate our children as we see fit (and this will be helped by being forced to think for ourselves, rather than being told what to think by the NEA and the $200k Liberal Arts colleges... $1 Trillion in student loans, with over half in default/deferment gives you a pretty good idea of the negative cost/benefit analysis there). Free to engage in contracts of our own making (rather than the one-size-fits-the-local-divorce-attornies-just-right Bull Sh#! we have now). Free to accept the freedom of others. (“If you are not free to choose wrongly and irresponsibly, you are not free at all” - Jacob Hornberger.) Free from a majority that rejects the Rights of the political minority (rather than the silly way we tend to identify "minority" now) so enumerated in the Bill of Rights. Free to reject the materialism and consumerism that gave the government the opportunity to enslave us in the first place.
Recapturing these freedoms without violence will only be had by starving the beast... Oil and the popping of the credit bubble have set that in motion. The incredible coincidence of the decline in the fertility rate makes a resource disaster far less likely... especially when matched with a (so far) modest rate of change in the decline in Oil supply.
(Please see the 5th graph down at my friend Stuart Staniford's excellent blog. Crude and condensate, the stuff we make transportation fuels out of, has seen no growth in production in spite of large price incentives. While it is true that there is a long capital investment cycle... it ain't this long. Of course, there has been a large increase in NGPL's... that's nice for the petro-chemical industry, but it doesn't do a thing for transportation fuel... well, except for propane vehicles... and ethanol's 2 million bpd might, MIGHT, have a million bpd left to go... and then again, it might not. Peak Oil is here... and even if the inevitable decline in production is not... that decline in availability is here for the U.S.)
In the final analysis on Oil supplies - and hence the U.S. economy - its all about the rate of change. As for the politics and economics of it all... Political upheavals sometimes lead to very positive outcomes, and in this regard I am rather more optimistic for America.
(Please see the 5th graph down at my friend Stuart Staniford's excellent blog. Crude and condensate, the stuff we make transportation fuels out of, has seen no growth in production in spite of large price incentives. While it is true that there is a long capital investment cycle... it ain't this long. Of course, there has been a large increase in NGPL's... that's nice for the petro-chemical industry, but it doesn't do a thing for transportation fuel... well, except for propane vehicles... and ethanol's 2 million bpd might, MIGHT, have a million bpd left to go... and then again, it might not. Peak Oil is here... and even if the inevitable decline in production is not... that decline in availability is here for the U.S.)
In the final analysis on Oil supplies - and hence the U.S. economy - its all about the rate of change. As for the politics and economics of it all... Political upheavals sometimes lead to very positive outcomes, and in this regard I am rather more optimistic for America.