Bacon's Rebellion

What’s the world coming to? The Russian SVR, successor to the KGB, has inundated us with long-term moles who are on deep cover and penetration missions of middle school soccer games and “Six Sigma” management principles. Their goal is to infiltrate American ruling and opinion-making circles and wait in place for the big move, if it ever comes.

In his previous post, “On the Fourth,” EMR suggested using the metric, “U.S. Net National Savings as a Percentage of GDP,” as an indicator of the extent to which U.S. society is preparing for the future. Why is savings so important? As EMR often says, the benefits of civilization are expensive. We have three choices: (1) Save the capital ourselves to pay for those benefits, (2) borrow the capital from foreigners, or (3) live without the benefits.

Since the 1980s, the U.S. has chosen Option 2. We can continue borrowing until our level of indebtedness gets so high that foreigners stop lending to us. It is the thesis of “Boomergeddon” that such a day will come, probably some 15 to 20 years from now (although with each passing month I am tempted to advance the date by several years).

To grasp our sad state of affairs, view the chart (based on OECD data) at the top of this post. That compares the household savings rate (excluding business and government) of the U.S. to that of other nations in the 2006-2007 time frame. Our consumers then were among the most profligate in the world. Since then, the household savings rate has ticked back up to between 3% and 6%, still a fraction of what it will take to pay for all the things that need paying for.

The good news is that between higher savings and defaults consumers have reduced their liabilities significantly since the Global Financial Crisis, although they still have a long way to go before the household debt/income ratio return to rates prevailing in the early 1980s, as shown in the chart above (based on Federal Reserve Bank data).We can be grateful that consumers are not actively mortgaging the nation’s future. But consumer reluctance to spend does create a short-term problem in an economy in which consumer spending accounts for 70% of all economic activity.

On the positive side, U.S. business is piling up large sums of cash — the most since the 1970s. (This chart comes from the PIMCO Group website.) On the positive side, U.S. business is strengthening its balance sheets. On the flip side, this helps explain why the rate of job creation is so low. Businesses would rather hang on to their cash than invest in growth. Unfortunately, slower economic growth = lower tax revenues = higher deficits = higher national debt.

As we all know, the big deficit spender in recent years has been government, especially the federal government. We can argue all day long as to whether deficit spending is needed to spur economic recovery, but the fact remains that the spending is occurring and the deficits are mounting, bringing Boomergeddon — the day the government cannot borrow any longer in public markets — that much closer.

One last chart. When it comes to total indebtedness, the U.S. is not the most profligate of all advanced nations. As can be seen from chart at left published in the Economist (based on data published by the McKinsey consulting firm), that distinction belongs to Japan.

Unlike the U.S., however, Japan, Britain, France, Italy and Germany have resolved to shrink their deficits. Whether they will succeed in doing so remains an open question. But having peered into the abyss of sovereign default, the major European countries apparently have made the decision to suffer the pain of a potential double-dip recession today than the conflagration of a meltdown in sovereign debt a decade from now.

So, how does this tie in to EMR’s discussion of environmental sustainability? It will take mucho dinero to make the transition from our current energy-intensive, natural capital-depleting economy to an economy that is environmentally sustainable. As EMR frequently observes, the window of opportunity to develop efficient human settlement patterns at reasonable expense closed back in the 1980s. It will be far more costly to do so now, even if we were committed to doing so, which we are not.

Right now, Americans are still enjoying the benefits of a global capital glut, but that inexpensive capital will disappear as the world’s largest economies shift from being net savers to net consumers of capital and as governments commandeer an ever increasing share of that limited supply of capital to cover their deficit spending. In another 15 to 20 years, the window will slam shut — with plywood boarding bolted on, to boot — on any hope of redeveloping our human settlement patterns in more efficient configurations.

Boomergeddon is going to be a real bummer.

The Risse Household has celebrated the 4th of July for as long as EMR can recall.

During WWII there were pot luck barbeques in the live-oak-shaded picnic grove next to the orchard. Households with members serving in the military from that part of the Santa Inez Valley – some years one or more were home on leave – and Households stationed at Camp Cook who were living off-post on nearby farms were guests of honor. The first 4th of July after The War ended, there was fireworks at the Lompoc Airport and a lug of cherries – no cherry bombs.

In the Northern Rocky Mountain Urban Support Region the 4th was often celebrated with fellow trail crew members – college students who were working for the Park Service for the summer. Home made ice cream and newly ripe Flathead Lake cherries were on the menu. No fireworks, roman candles start forest fires, even in July.

It was only after THE ESTATES MATRIX was completed that EMR fully realized how profoundly different the world was after 4 July 1776. It was not JUST that date but 4 July 1776 was the most important landmark in the fifty years from 1770 to 1820. This era included the American Revolution, the French Revolution, the Haitian Revolution the Louisiana Purchase and the War of 1812. As documented by THE ESTATES MATRIX, that period witnessed Fundamental Transformations of the Estates that manage human society.

Now it is time to embrace new set of Fundamental Transformations. These Transformations are required to accommodate what has happened since 1800 with respect to the economic, social and physical context of human existence.

These Transformations must evolve in a way that preserves the rights of all citizens and not just the privileges of individuals, Agencies, Enterprises and Institutions who have taken control at the top of the Ziggurat.

Which brings us to 2010 and Bacon’s Rebellion.

Jim, Larry, Groveton and Peter continue to throw rocks at empty pigeon holes.

Citizen need those rocks – and all those that are tossing rocks – to work together to rebuild a foundation that will support a sustainable society now that there are 6.9-Billion humans who are dependent on the remaining Natural Capital.

Enough of having fun with red meat. It is time to get to work.

Things are not looking good.

Groveton may be right that, in light of recent events, the traditional Donkey Clan will not be able to win an election for 20 years, if ever.

Based on that criteria, it will 40 years, if ever, for the traditional Elephant Clan to win an election. The friends of Big Enterprise are not riding a wave of popularity.

A recent CNN poll: (“Who is to blame for the current economic conditions?”) Donkey Clan 24 percent, Elephant Clan 48 percent, Both 24 percent, Undecided 4 percent.

On the current trajectory neither Clan will ‘win.’ The way the cards are being played, there will again be a 49.9 percent to 51.1 percent split between two coalitions beholden to least-common-denominator platitudes and fueled by The Anger of Ignorance.

Groveton says the stock market is a ‘leading indicator’ of the economy.

EMR suggests a better indicator is the US NET National Savings as a percentage of GNP. (See CNNMoney’s 30 June reprint of a Fortune article “Personal savings rate: worse than we thought.”)

The stock market is a gambling venue.

Personal savings rates, and more important the “US NET National Savings as a percentage of GNP,” is an indication of individual and Organizational commitment to preparing for the future.

Recall Jared Diamond’s the two criteria for avoiding Collapse…

See “Collapse, An Appreciation” Column # 64, 8 Aug 2005.

Fundamental Transformations OR count on your fingers the number of times that you will be able to celebrate the 4th of July in public and without guilt.

Happy Fourth!

EMR

Yes… the flying car. Air cruising speed of 115 mph, range of 450 miles. The retail price of 130 quid will give it limited market appeal. Yet… according to this UK news report, 70 people have already forked over a hefty down payment for an advance order.

In 1955, then-Senator John F. Kennedy wrote the book “Profiles in Courage”. The book documents eight US senators who took tremendous political risks by supporting unpopular causes. President Kennedy’s book won the Pulitzer Prize.

Everybody in America should be quite concerned about Paul Krugman’s most recent Op – Ed piece in the New York Times. Mr. Krugman is a staunch and loyal supporter of Barack Obama. However, Krugman is now saying that the current recovery may very well collapse leaving the economy in what he is calling The Third Depression. His recent Op-Ed piece can be found here.

In order to understand the magnitude of Krugman’s recent column it’s important to understand a bit about Mr. Krugman himself. Krugman is a Yale and MIT educated economist who won the Nobel Prize in Economics in 2008. His academic credentials are beyond repute.

However, in addition to being a pre-eminent economist Krugman is also a liberal’s liberal. Like his credentials in economics his credentials in liberalism are also beyond repute. Mr. Krugman writes a twice weekly Op – Ed piece in the New York Times. He is a long time and bitter critic of George W. Bush to the point that he often seems to exhibit Bush Derangement Syndrome (BDS). Finally, he has written what I can only imagine to be the world’s shortest book – The Conscience of a Liberal. If you look up “liberal” in the dictionary you find Nancy Pelosi’s picture next to the definition. However, if you look up “coherent liberal” it will be Krugman’s hirsute likeness next to the definition.

For the last 18 months Mr. Krugman has been heaping praise on Barack Obama in general and Mr. Obama’s economic policies in particular. Which is why Krugman’s recent Op – Ed piece is so shocking. At first, he seems to be admitting that the New Keynesian economics theory which he and President Obama espouse has failed. However, a closer reading of the Op – Ed piece reveals that Mr. Krugman actually thinks that New Keynesian economics is just what the world needs. Unfortunately, the world is just too dumb to realize the economic healing power of the monetary printing press. Mr. Krugman finds special fault with the recent European belief that endless spending and deficits may actually be harmful. It seems that Krugman and Obama have accomplished the seemingly impossible – they have “out liberaled” Europe.

Despite all this apparently bad news I see three rays of light in an otherwise jet black sky. First, Bacon’s new book ought to be a best seller if we are really headed for a Third Depression. Hopefully, Mr. Bacon will remember all of us “little people” when we send him e-mails asking, “Hey buddy, can you spare a dime?”. Second, even uber-liberal Paul Krugman has stopped blaming Bush and moved on to the somewhat improbable thesis that it is the Europeans who are the new villains. Finally, Ed Risse’s long running predictions of doom and gloom may be coming true. Perhaps his prescription for reducing the inevitable pain will gain a wider audience.

Hoo-ah! My first column in the online op-ed section of the Washington Times:

The financial media put a positive spin on a joint statement Sunday by the wealthiest members of the Group of 20 countries that they would halve their deficits by 2013 and stabilize their debt burdens by 2016.

In the words of the Wall Street Journal’s lead story, the announcement was “a signal to international markets and domestic political audiences” that the G-20 countries “are taking seriously the need to wean themselves from stimulus spending.” Wrote the New York Times: “The action … signaled the determination of many of the wealthiest countries … to now emphasize debt reduction. And it underscored the conviction of European nations in particular that deficits represented the biggest threat to their economic stability.”

What both newspapers neglected to mention is that the goals require virtually no change in U.S. fiscal policy in the near term and only modest changes by the second half of the decade – at least if you believe the 10-year budget forecast prepared by the Obama administration. For all practical purposes, President Obama could have announced, “The Europeans can do whatever they want. We’re not budging from the status quo.” More.

Hopefully, there will be more columns to come — addressing less arcane topics than G-20 summit announcements.

Three years ago, Prince William County achieved notoriety by adopting legislation that was supposedly designed to stem illegal immigration but in reality harassed Latinos, many of whom are hard-working and law-abiding.

Bacon’s Rebellers seem to have tired of commenting on DeGrowth for now.

Much more on that topic later – first EMR considers what comes AFTER the Autonomobile and why small REALLY IS beautiful but before that…

A short item on important reading and viewing:

Bill Lucy (Prof. William H. to his friends) at UVA has a new book out titled “Foreclosing the Dream.”

EMR does not yet have a copy – the publisher (APA) is intent on slowing the economy by taking over a week to ship a book. However, based on the review in “New Urban News” and on the material on the publishers web site it is well worth ordering.

“Foreclosing the Dream” continues the theme of his last two books – the decline of ‘sub’Urban settlement patterns and revival of housing in the Core, especially close to the Zentrum and near shared-vehicle station platforms.

This time he focuses on what the location of mortgage foreclosures tells us about the future of human settlement patterns. Larry G’s neighbors will NOT be happy.

Lucy takes a nation-state wide view – the 62 largest MSAs which are the New Urban Regions of about a million population and larger. He is limited by existing data sources and lack of a Conceptual Framework to working with county data and so it is a broad brush look, but he draws some striking conclusions.

EMR has recently looked at price trends and foreclosure data by 10 Mile Radius Bands for the National Capital SubRegion and found trends which point in exactly the same direction as Lucy’s work with county data.

“Foreclosing the Dream” offers real hope that the strategy outlined in PROPERTY DYNAMICS could be an important step.

As quoted by the reviewers, Bill is still struggling with woeful Vocabulary limitations and lack of an overarching Conceptual Framework, but we will work on that with him – if he will just listen :>)

On the viewing front:

MGM (Marcellus Gas Man) suggests those interested in THE OTHER petroleum disaster tune into HOB at 9:00 PM this evening for “Gasland” on the Marcellus Shale issue.

WaPo has a review in Style today.

Have a great week.

EMR

DEGROWTH – SHRINKING TO SURVIVE THEN PROSPER

(Ed Note: Thanks to a number of constructive comments here is a better version.)

DeGrowth is a resurgent survival strategy for contemporary civilization:

Step One: The footprint of human consumption must shrink so that most humans — and ALL other species — do not have to perish just so a few humans at the top of the Ziggurat can survive for a while longer in luxury and superabundance.

Step Two: Transition to a Steady State Economy where consumption is in Balance with sustainable and renewable resources. In this way, ALL species have the opportunity to prosper because of the Balance between consumption and regeneration.

At the end of March this year 500 citizens turned up in Barcelona for the Second International Conference on Degrowth (aka, ‘DeGrowth,’ a topology which makes it clear that the focus is on the rate of GROWTH and achieving Balance).

In April a similar gathering was held in Vancouver. DeGrowth is popular in Regions such as the Vancouver New Urban Region (NUR) which is # 4 on the 2010 Mercer Quality of Living Survey Best 50. (The Barcelona NUR is #44 and the Paris NUR is # 34 on the Mercer list.)

The first international conference on DeGrowth was held in Paris in 2008. The Paris conference produced a declaration that defines ‘degrowth’ as “a voluntary transition towards a just, participatory and ecologically sustainable society.” The declaration states that “if humans do not bring global economic activity into line with societal needs, the result will be a process of involuntary and uncontrolled economic decline or collapse.” One may assume this use of ‘collapse’ is the same as ‘THE Collapse’ articulated by Jared Diamond.

From these statements it is clear that DeGrowth is in the enlightened self-interest of ALL humans, not just a few at the top of the Ziggurat.

The Barcelona conference organizers have posted a ‘virtual conference’ that provides links to the visuals from many of the key presentations. The presentations are grounded in science and history. There is data on topics that range from Happiness to the Wealth Gap and from Equity to the History of Steady State Economy. Those familiar with the classical steady state authors, Herman Daily, et. al., as well as with the recent writings of McKibben, Florida, Reich, Diamond and others, will feel right at home. Go to www.degrowth.eu and judge for yourself.

Enterprise Media did not seem interested in covering the Barcelona conference. Information about the conference turns up via Google but there are no obvious links to Enterprise Media coverage. Wikipedia has a detailed summary of ‘degrowth’ and documents why DeGrowth is a ‘resurgent’ survival strategy as opposed to a new strategy.

The OVERARCHING perspective of DeGrowth is that CONSUMPTION cannot exceed the capacity of renewable resources, PERIOD.

Most of the presentations appear to assume that humans are already in OVERSHOOT. OVERSHOOT has been temporarily masked by humans living on exploitation and consumption of Natural Capital. For this reason SHRINKING consumption is the FIRST step on the path to a sustainable trajectory. (The movie “HOME” is a good place to get a graphically powerful overview of this reality. http://www.youtube.com/watch?v=jqxENMKaeCU )

The overall objective of DeGrowth that can be gleaned from the presentations is to peacefully and equitably evolve lower per capita consumption AND lower the number of consumptors through enlightened self-interest including rational population trends via pillow talk – not war, famine or state dictates.

DeGrowth goes far beyond the typical concern for ‘conservation.’ As far as EMR is aware, only ASAP in Charlottesville is addressing these issue in the Commonwealth.

The Bottom Line is that it will not be possible to maintain civilization with great disparity between the per capita wealth of those at the top of the Ziggurat and those at the bottom.

Further, Balance must exist WITHIN every Ziggurat at Community, Region, MegaRegion, Continent and Globe scales.

On the specific topic of “growth”:

DeGrowth advocates would agree with Edward Abbey:

“Growth for the sake of growth is the ideology of the cancer cell.”

Perpetual growth of consumption is not just impossible, to advocate perpetual growth of consumption is immoral.

Seeking to stimulate growth / consumption and controlling the profit to promote the prosperity of a specific cohort of humans has a long tragic history. That is true whether the cohort is an:

 Ethnic group (Hitler / Aryans)
 Self appointed and / or hereditary ‘leaders’ (North Korea)
 Governance philosophy (communism for example)
 Religious belief (you choose one), or
 Economic system’

No sustained application of ‘growth for the sake of prosperity’ for a special class is even conceivable in a ‘flat’ world with:

 Wide-spread literacy,
 Instant communications / information dissemination, and
 Weapons of mass destruction.

As noted at the outset:

DeGrowth is a ‘resurgent’ survival strategy for contemporary civilization, it is not a new idea.

DeGrowth advocates that the human consumption footprint must SHRINK so that most do not have to perish in order so that for a few to prosper.

DeGrowth advocates transition to a Steady State Economy where consumption matches sustainable and renewable resources so that ALL have the opportunity to prosper, not just a few at the top of the Ziggurat.

The goal of ALL having the opportunity to prosper was the idea of the Founding Fathers in the United States 235 years ago except that:

1. ‘ALL’ did not include slaves of either sex, Females of any class, and most of the males that did not reside at the top of the Ziggurat, and

2. It was assumed (and made nation-state policy by Andrew Jackson) that there existed in the US infinite resources which could be consumed by citizens to achieve their individual health, safety and welfare.

Humans have come a long way, but they have even farther to go to achieve a sustainable trajectory.

The perspective at SYNERGY is that DeGrowth will only succeed when there is a Critical Mass of citizens that understand the need for Fundamental Transformations in settlement patterns, in governance structure and in economic systems. Anything less comprehensive will just lead to disputes akin to how many angels can dance on the head of a pin.

The SYNERGY perspective is based on a thesis that is 2,300 years old, first articulated by Aristotle:

Human settlement patterns are an organic system. See The Shape of the Future.

The successful evolution of human settlement patterns must be founded on an understanding of organic systems. Action to achieve a sustainable trajectory must start at the smallest scale – the Unit, the Dooryard and the Cluster and proceed up to the Neighborhood, the Village, the Community and the Regional scales. Dictates from ‘the state’ or ‘the nation-state’ down do not work. See TRILO-G: How to Make the World a Better Place One Alpha Community at a Time.

An education strategy that may work would be Study Circles that set Sweden on the path to a sustainable trajectory.

EMR

DeGrowth – Shrinking to Survive THEN Prosper

DeGrowth is a resurgent survival strategy for contemporary civilization.

First, the consumption footprint must shrink so that most do not have to perish for a few to survive. THEN DeGrowth advocates movement to a Steady State Economy where consumption matches sustainable and renewable resources so that ALL have the opportunity to prosper, not just a few at the top of the Ziggurat.

At the end of March 500 citizens turned up in Barcelona for the second International Conference on Degrowth (aka, DeGrowth, a topology that makes it clear the topic is ‘growth’).

It is not surprising that about 150 – 30 percent of the total – registered as being ‘from Spain’ including 19 who wanted it known they were ‘from Catalonia, thank you’ (New Urban Regionalism at work within the EU).

It may be of comfort to Euro bond holders that the other PIGS were not as well represented (Portugal – 4, Ireland -1 and Greece – 2). There were 9 representatives from the US including both Richard Register from EcoCities and Brian Czech from the Center for the Advancement of the Steady State Economy (CASSE).

In April of this year a similar gathering was held in Vancouver. The Vancouver New Urban Region is number 4th on the 2010 Mercer Quality of Living Survey Best 50. Barcelona is #44, Paris is # 34.

The First International DeGrowth conference was held in Paris in 2008. The Paris conference produced a declaration that defines ‘degrowth’ as “a voluntary transition towards a just, participatory and ecologically sustainable society.” In other words, enlightened self-interest for the majority.

The declaration states that “if humans do not bring global economic activity into line with the societal needs, the result will be a process of involuntary and uncontrolled economic decline or collapse.” In other words DeGrowth is enlightened self-interest focused on what is best for ALL humans, not just a few at the top of the Ziggurat.

In an impressive display of the power of the Internet, the Barcelona conference organizers have posted a ‘virtual conference.’ This one page provides links to the visuals from many of the key presentations. The presentations are well founded in science and history. There is data on topics that range from Happiness to the Wealth Gap and from Equity to the History of Steady State Economy. Those familiar with the work of Florida and Reich will feel right at home. Go to www.degrowth.eu and judge for yourself.

Enterprise Media did not seem to be interested in covering the Barcelona conference. Information about the conference turns up via Google but there are no obvious links to Enterprise Media outlets. Wikipedia has a detailed summary of ‘degrowth’ and documents why DeGrowth is a ‘resurgent’ survival strategy.

The OVERARCHING perspective of DeGrowth is that CONSUMPTION cannot exceed the capacity of renewable resources, PERIOD.

Most of the participants seem to assume that humans are already in OVERSHOOT. OVERSHOOTERS have been temporarily living off of the consumption of Natural Capital. For this reason SHRINKING consumption is the FIRST step to a sustainable trajectory. (The HOME movie that Groveton recommended is a good place to get a beautiful overview of this reality.)

The overall objective of DeGrowth that can be gleaned from the presentations is to peacefully and equitably evolve lower per capita consumption AND lower number of consumptors through enlightened self-interest including birth control via pillow talk – not war, famine or state dictates.

This goes far beyond the typical concern for ‘conservation and only ASAP in Charlottesville seems to be addressing this issue in the Commonwealth.

The Bottom Line is that it will not be possible to maintain civilization with great disparity between per capita wealth at the top of the Ziggurat and those at the bottom. Further, Balance must exist within the Ziggurats of Community, Region, MegaRegion, Continent or Globe scales.

On the specific topic of “growth”:

To quote Edward Abbey:

“Growth for the sake of growth is the ideology of the cancer cell.”

Perpetual growth of consumption is not just impossible, to advocate perpetual growth of consumption is immoral.

Growth and prosperity for a specific:

Ethnic group ( Hitler / Aryans )

Self appointed and / or hereditary ‘leaders’ (North Korea)

Governance philosophy (communism for example)

Religious belief (you choose one) or

Economic system

Is not possible in ‘flat’ world with wide-spread literacy, instant communications / information dissemination and weapons of mass destruction.

As noted at the outset:

DeGrowth is a resurgent survival strategy for contemporary civilization. First, the consumption footprint must shrink so that most do not have to perish for a few to survive. THEN DeGrowth advocates movement to a Steady State Economy where consumption matches sustainable and renewable resources so that ALL have the opportunity to prosper, not just a few at the top of the Ziggurat.

That was the idea of the Founding Fathers except that ALL did not include slaves of either sex, females of any class and most of the males that did not reside at the top of the Ziggurat.

Humans have come a long ways, baby. But they have even farther to go to a sustainable trajectory.

It is the perspective at SYNERGY is that DeGrowth will only succeed when there is a Critical Mass of citizens that understand the need for Fundamental Transformations in settlement patterns, in governance structure and in economic systems.

That perspective is based on an idea that is 2,300 years old and first articulated by Aristotle:

Human settlement patterns are organic systems.

The evolution of organic systems must be founded on an understanding of those systems and must start at the smallest scale – the Unit, the Dooryard, the Cluster, the Neighborhood, the Village and the Community and work UP. Dictates from the nation-state down do not work. See TRILO-G: How to Make the World a Better Place One Alpha Community at a Time.

EMR