Today's quote:
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand
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In turn, our candidates plug into this silly belief by making promises and pledges during campaigns that defy credulity - yet their constituents actually believe these obfuscations and untruths (lies).
Think back to the 2008 campaign: "You can't tell me we can put a man on the moon but we can't solve America's energy crisis." - then candidate Obama speaking to the uninformed... and taking advantage of their ignorance.
Dear Mr. President: "Can you hear me know?" Obama (and McCain) knew full well that there is no comparison in American History for what we are confronted with.
The political will necessary to put a man on the moon is chump change next to the coming Oil shortage - not least of which is that our political leaders view this as a "problem" to be "solved" when it is more likely a "condition" that needs to be managed gracefully - its kind of like getting older... in that this "condition" is inevitable.
Getting back to why politics will fail us, and why this is entirely a "self rescue event"... nobody in Washington is concerned with anything other than the mid-term elections. The Republicans smell blood, and will likely take at least one house back and end the Democratic dominance in Senate. The Dems? Their leaders want to hold on to their chairman posts. In a political environment like that who is looking out to 2020 to figure out the best policy responses?
Answer: No One In Politics.
So, its up to you to take care of you and yours - just as it has been since man emerged from caves and dug his plow into the dirt. For a little over 50 years we have had a "safety net". Did it help? Perhaps on the individual level, certainly not on the macro level, and in the final analysis the safety net that was the family became eviscerated by the government run safety net(s) that were funded by cheap Oil... talk about your unintended consequences.
Now, the doomers will tell you that this means we are all going to starve to death, society is going to break down, yada, yada, yada. Of course there will be protests and unrest and maybe a riot or 2. Big deal. Life will go on (with some casualties along the way. After all, life is a contact sport), and because people have to eat they are going to be too busy trying to scratch out a living to be protesting too much. The big question is: How fun/secure/satisfying is your life? Most of that is up to your own ideas and your own enlightened self interest, and some of it will be decided by the political outcomes that arise AFTER Oil shortages decimate our economy - because during that time we will be far more interested in affixing blame.
OK, so we have established that "its all up to you". What is all up to you? That, is for you to decide. For me, it means establishing myself and my family in small city, with agreeable weather, in a home that we can afford to live in come hell or high water, in an area with rainfall, rail service, a hospital, a university, etc... in a state that has low property and income taxes. To engage in commerce (I have a wife and family to provide for), as well as my hobbies, and stay the heck out of politics.
I bring this up because IF Oil imports decline at the pace of the past 3 years, 2010 imports will be 9,157,500 barrels per day ("bpd"), 2011 imports will be 8,333,405 bpd, 2012 will come in at 7,583,398 bpd, 2013 - 6,900,892 bpd, and 2014 - 6,279,812 bpd.
Said another way: From 2006 to 2014 total petroleum products available to the U.S. will have declined a little over 30%, and if it were not for ethanol being included in that number, 35%+.
No rational person can believe that the outcome for the economy will not be earth shaking if the above mentioned rate of change remains constant. (Actually, Jeffrey Brown's models show that the rate of change would dramatically accelerate in the 2011-2016 period, if memory serves.)
Its all about Oil available for import. There is no "alternative" in the time frame discussed that is going to add a single NET kilo/cal to equation. There is NO WAY TO KNOW if this is it - as far as the rate of change in the volume of imported Oil. If I were sure of anything, I would not need my day job. Still, given the data, the most probable outcome is that over the next 5 years the U.S. is going to experience a significant decrease in the supply of petroleum... not that it will end in 5 years... its just that that should be the most profound adjustment period. Of course, given the time frame, being off by 5 years wouldn't be that hard, either. But there are only 60 months in a 5 year time frame. As each month ticks off the data should make the outcome more and more clear.