Finding Employment in Post-Peak Oil America

“How fortunate for governments that the people they administer don't think.” - Adolph Hitler, Socialist and Mass Murderer (but then I repeat myself)

If you, like me, are an American it matters little if "Peak Oil" has happened to the world because the probability that it has happened to the U.S. is approaching certainty (probability of 1.00 = certainty).

I linked this article in my most recent post. The Class of 2008 and 2009 are still scrambling to find jobs... and here comes the class of 2010. Are Oil imports into the U.S. down because of the economy, or is the economy partly down due to the decrease in imports? Without doubt the debt situation is worse than Oil at this moment but that does not mean that constricted Oil and high energy costs are not doing their work as well... and perhaps its more than that...

Over the last five months, only one job materialized. After several interviews, the Hanover Insurance Group in nearby Worcester offered to hire him as an associate claims adjuster, at $40,000 a year. But even before the formal offer, Mr. Nicholson had decided not to take the job.

Rather than waste early years in dead-end work, he reasoned, he would hold out for a corporate position that would draw on his college training and put him, as he sees it, on the bottom rungs of a career ladder.

Hmmm... Fair enough. Ok, exactly what was his training in?

“I worked hard through high school to get myself into the college I did,” Scott said, “and then I worked hard through college to graduate with the grades and degree that I did to position myself for a solid job.” (He majored in political science and minored in history.)

The sad fact is that this young man has no training. He has an education. An education in Political Science is not being trained... Training, as in surgical/engineering/mechanics/plumbing/welding/shoe repair means you can actually DO SOMETHING useful at the end of your training.

Read this self-serving BULL SH*T from Rutgers University when asked "what can I do with a Poli Sci Degree?" The response? In a word - NOTHING. They claim they teach you how to think... and that is really all you need (and I agree with that part)... problem is, they (these private universities) charge $200,000 to give you a certificate that says you probably know how to think but that you really don't know how to do anything. That's great. Thinking is abstract and conveniently for the Universities it cannot be measured.

Let me ask you something... do you really think 4 years of part time class work and full time partying gives one better thinking capabilities than going to work, opening a business, saving money, buying a home, selling to gain customers/clients, servicing them, and reading humanities type material for 15 hours per week? Really?? No you don't. The problem is you don't get a certificate, a "union card" if you will, in the form of the sheepskin that SAYS somebody affirms you.

Look at this from OTHER side of the trade. IF, (IF!), any of the above claim from Rutgers was true, then Lifelong earnings should increase for each hour of course credit earned - a student who dropped out with only 3 hours left should earn 98% of the increased lifetime value of what a grad earns, a second year drop out should earn 50% of the of the difference between a high school grad and a college grad (I know, I know... the metric is not perfect... are they ever?)... but according to payscale.com's director of quant analysis, Al Lee:

“Essentially, if you don’t graduate, you’ve not only lost money to tuition, you’ve also lost wages that you would have earned by working instead of going to school. A non-graduate’s time in school creates, more or less, a net zero in their lifetime earnings,” says Lee.

I'd like to repeat that last line - "A non-graduate’s time in school creates, more or less, a net zero in their lifetime earnings". It then follows that it is not the increased ability to think, but an institutional affirmation (a degree) in ANY subject that creates opportunity for those fortunate enough to have the resources and support system to navigate the college educational system (otherwise each and every college experience would lead to increased "thinking" ability and the enhanced economic benefits that comes from such "think" training... I am desperately trying to suppress a laugh... tee hee!!) to its conclusion.

Life is not fair. Smarter people earn more money, and they congregate in "better" schools with Alumni connections and placement offices... One look at the U.S. Supreme Court should give you a hint. Over the years Justices hailed from all manner of Law Schools. Today? 5 schools DOMINATE the Court. Are there really no smart people graduating from the University of Texas, or U. of Colorado, or Auburn? Really??!!

If you can get into Harvard, Yale, Princeton, Stamford, or Columbia (or the other 10 TOP, TOP schools)... by all means, don't pass that up. They are worth the price of admission. Paying $200k for an also ran private school? You gotta have rocks in your head. Paying anything for a Poly Sci degree? In this economy? HAHAHAHAHHAHAHAHAHAHALOLOLOLOLOLOLOLOLOLOLOLOHEHEHEHEHEHEHEHEHAWHAWHAWHAW

Sorry, that got away from me.

These "also rans" are in the business of false promises and exaggerated claims. Don't let them bag you. Peak Oil has hit the U.S. The full repercussions of this are unfathomable, but it doesn't take too much thought to see clearly that wasting 4 to 8 years studying something that cannot earn you a living is probably not a great idea.

In the end, people that successfully interpret their environment prosper.

A History of the American Economy - Part 4

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." P. J. O'Rourke (the funny thing about this quote is that it is a favorite on "Right Wing" web sites... sounds awfully Libertarian to me.)

Continued from Part 3

During the last 25 years of the 19th Century the U.S. bumped in and out of Recession - despite seemingly endless bounties of Oil, timber, coal, fisheries... and population growth. The 8 years following the civil war so overinflated capital investment that over-capacity existed until nearly WWI - 35 years later!

(If there was ever a sillier reason for the outbreak of War than WWI I simply cannot determine it. I think one could very effectively argue that the War was fought because it could be fought, and the financial system desperately needed an inflationary event. It is often said that WWII was a "Just" War, and taken on its own that might be so... I would argue that there was only ONE World War with a 20 year armistice. Without WWI, the Nazi's likely do not exist, or at least do not come to power, and without conflict in Europe Japan likely does not risk attacking the U.S.)

The Federal Government's budget in 2010 is slightly more than 26% of GDP, and that means nothing to people voting today... but when you consider that up until WWII the Federal budget had averaged something like 3% of what was then called GNP you get an idea of just how much Government intrudes into our lives. (Did the U.S. have nearly 2% of the adult male population in prison in 1900? NAFC.) Was the U.S. out and about as the "World's Cop"? NAFC. Were you responsible for your own problems? You bet. Was beer, surfing, sex, camping, eating, etc... still fun? You bet. I would argue that what little benefit came to American's lifestyle as a result of this massive increase in Government spending came at a horrific price.

(I read in detached awe the writings of Heinberg and Kuntsler. For the most part these are some exceedingly bright fellows, but their noodle must get overcooked when they try to express rational thought about economics. Most of the American lifestyle that these guys rail against, and I am with them, was created by the politicians and regulators on THEIR SIDE OF THE FREAKING ISLE!!!! These guys HATE the auto, but it was the democratization of transport that destroyed the environment and created suburbia! They HATE corporations (BTW, so do I... but for an entirely DIFFERENT reason... the way I see it, the onset of the shareholder Corporation gave the Left the perfect tax collection point to go forth and increase the size of the Government relative to GDP (and increase Government's ability to f**k with us) nearly 10X in less than 75 years) but it was the UAW and Steel Workers Unions that were the template (AND the funding source for the Left during much of the 20th Century, without which there would BE NO Left) for the Public Employee Unions that are destroying the fiscal stability of the state, city, county and local governments. The same guys that can grasp ERoEI with NO technical background suddenly go deaf, dumb, and blind when somebody points out that since there is a FINITE amount of fossil fuels then there is a FINITE amount of carbon that can make its way into the atmosphere... Guys... Guys... you can't get a little bit pregnant... and I realize that you guys make a living at this and must continue to appeal to your goof ball fan base (of which I count myself as one)... but your economic arguments are just silly even if they have appeal to economically illiterate populating the protest-just-about-anything set.)

I want to skip around for a moment and pass through the 00's, teens, and roaring twenties (though I will be back), and point out that Samual Clemmons (Mark Twain" really knew what he was talking about when he said:

"What gets us into trouble is not what we don't know... it's what we know for sure that just ain't so".

The media reconstructs history for reasons that should appear obvious, yet many in the electorate believe them! Read this excellent argument as to why the argument that the U.S. Government's policies during the 1930's are NOT what made the Great Depression what it was.

and we will talk more...

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Oil imports into the U.S. at the half year mark have declined 5.8% over this time in 2009. We are 54 months into a oil import decline averaging just under .7% per month.

Price does NOT matter as much as VOLUME.

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There are NO COINCIDENCES. I have NO IDEA what U.S. intelligence agencies picked up from China, but this is serious stuff and bears watching. I have maintained many times on this Blog that you will know when China has come to the conclusion that their U.S. Bond paper will never be paid back: They will take Taiwan by force. Just because I am an anti-War/anti-Empire Libertarian DOES NOT mean I reject the idea that the U.S. must maintain a strong National Defense. Fighting really dumb wars for an extra decade of Oil imports that puts us in extreme danger because we are stretched so thin is an outrage. OUTRAGE. The world is still a ugly, mean spirited place.

A History of the American Economy - Part 3

"If you have ten thousand regulations, you destroy all respect for the law." – Winston Churchill

...continued from "A History of the American Economy - Part 2"

There is this sense in American Media that the world began in the "Post War Period" (I often found that phrase somewhat dysfunctional, as if we live in the period when man came to his senses and wars are no longer fought...). That the end of WWII ushered in a brave new world unconnected to the past. Perhaps the advent of Television and mass communication had something to do with this.

In fact WWII WAS a dividing line of sorts in that immediately after the War the U.S. had almost of the world's Gold and almost all of the world's productive capacity - but that was not a permanent condition... we just thought it was.

The American Industrial Revolution meant Railroads ("RR"). In the years immediately after the Civil War the Railroad industry was the second largest employer after agriculture (Government jobs were not a significant portion of employment). The expansion of the RR's created markets where none existed and dramatically expanded those that did and provided access to farmland and natural resources that seemed almost boundless. And they were, from a short term economic view, boundless - attracting overwhelming investment for goods and services that could not find a market, leading to the inevitable bust. The 8 year period of over investment and over-capicity gave the U.S., and the world (although who gave who what is up for debate; the idea that this Depression was caused by the stock market crash in Vienna in May of 1873 is just as silly as the idea that the stock market crash of '29 caused the Depression of the 1930's) a nearly 25 year period of deflation and alternating recession and stagnation that did not let up until the end of the century.

During that time the U.S. was not a world power and the U.S.$ was NOT the world reserve currency. The British Pound filled that function. Accordingly the American people had to fund their own government spending, as well as provide for their own end of life needs (Even Presidents. The president at the time of the Panic of 1873 was U.S. Grant. Grant lived most of his post-presidency in poverty, even enduring bankruptcy. It was not until 1958 that a presidential pension was passed into law).

It is worth noting that while the U.S. economy was in almost constant recession during the last 25 years of the 19th Century the population was exploding with U.S. cities experiencing a 15 million person growth spurt. Even so, the majority of Americans lived on farms or small towns supporting farm land. at the turn of the Century. To understand what life was like for the over 30% of Americans employed in agriculture a definition of a "farm" is in order. Most farms had a small family house, often one large room with lofts. There was no indoor plumbing for toilets or the kitchen sink. Water was had from a well. There was no heating or A.C. Sanitation was an outhouse. Cooking was done outside in a "cook tent" until heat was desired in doors. Most boys went to school until 8th grade (so did many, but fewer, girls), but the graduation test for an 8th grade education in 1900 would stump 90% of the kids at the best high schools today. For farm families, at 14 you were a man and you had skills (and not video game skills).

"Roads" we merely dirt wagon paths and when wet they were mostly impassable. Local transportation was by wagon. Socializing was done in town on Saturday night and Sunday Church - hence, the Saturday night bath. Yes, there were the RR's but once off of the line, everything was transported by horse and carriage.

There were no federal income taxes... and if there were, how would they be collected? Most people today work for corporations or governments - easy collection points for the forced extraction of payroll deductions. Not so in the late 19th Century. The U.S. economy was as much a barter economy as a currency economy - particularly in rural communities. Trading using gold and silver NOT minted by the U.S. was also common place. I would argue that people were "freer" than now, but life was unforgiving. There were no social "safety nets" to speak of other than "faith based" charity - and that was not much.

In the absence of Corporations there existed REAL capitalism. If you failed, you went bankrupt. Life was an ongoing meritocracy.

(I am being summoned and will continue this shortly)