Glimmer of hope

by James A. Bacon

Good riddance to 2011, 365 days of misery that brought us the Gulf Oil Spill, Quantitative Easing 2 and the bulge in Anthony Weiner’s briefs. Most distressing of all, the year marked another failure by the country’s political leadership to address the nation’s fiscal free fall and avert the hard, hard landing that awaits us all.

Readers are well acquainted with my reasons for believing that Boomergeddon is at most a decade away, so I will not belabor them here. Instead, I go against type by listing three positive trends. To be sure, they won’t come close to staving off federal government default, but they do offer a glimmer of hope.

Violent crime is down. Violent crime in the United States has declined to the lowest rate in four decades. The odds of being robbed or murdered are less than half of what they were 20 years ago, and the downward trend shows no sign of abating. Society is so much safer that crime has vanished from the list of Americans’ top worries. As a bonus, coinciding as it does with the highest unemployment rate in 60 years, the downturn discredits the notion that “poverty” and “lack of opportunity” are driving forces behind crime. The experts and other social engineers took it on the chin. They still are at a loss the explain the cultural phenomenon.

Fossil fuel production is up. I’ve long been a proponent of the “peak oil” theory that says oil production has peaked, demand for petroleum products is soaring as China, India and other developing nations become more prosperous, and the price of oil will hit a permanently higher plateau that will cause considerable economic hardship in America’s auto-centric economy. I still believe that. What I did not anticipate was the Marcellus shale revolution. (I’ll withhold any judgment on the environmental impact of the new natural gas-drilling technologies until more authoritative data comes in.) Clean-burning gas will supplant dirty coal as the preferred fossil fuel for electric power generation and, in an added benefit for those who worry about Global Warming, will significantly reduce greenhouse gas emissions.

In a parallel trend, U.S. oil production is rebounding and is expected to reverse much of its 40-year decline. If you include Canada in the mix, the U.S.-Canadian economy could be producing record volumes of oil within five years. North America may never achieve “energy independence,” but we’ll ship a lot fewer dollars to hostile petro-states.

While the greens advocated reorganizing the energy economy around solar, wind, electric cars and other alternate energy technologies that squander billions of dollars in economically inefficient investments — think Solyndra on a trillion-dollar scale — they were blindsided by disruptive innovation coming from the private energy sector. Once again the “experts” are looking pretty ignorant.

Technology innovation continues apace. The advance of technology continues to amaze. Moore’s Law is old hat — we take it for granted that each new generation of computer will be faster, smaller and more powerful. What will really change things is the ability to embed computing devices with voice recognition, artificial intelligence and GPS sensors so (a) we can talk to the devices and (b) the devices “know” where they are.  “Smart” phones are just the beginning. Soon, everything from your car to your refrigerator will be smart as well. If there’s one thing that can bail this country out of its budgetary morass it’s the potential for extraordinary gains in productivity and economic efficiency made possible by technology. Let’s just hope that human-designed institutions can keep up.

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8 responses to “Good Bye and Good Riddance to 2011”

  1. Groveton Avatar


    Good post. However, I think you are falling for the “technology will solve our problems” theory ….

    ““Smart” phones are just the beginning. Soon, everything from your car to your refrigerator will be smart as well. If there’s one thing that can bail this country out of its budgetary morass it’s the potential for extraordinary gains in productivity and economic efficiency made possible by technology.”.

    Many of these technological advances are reducing the need for human labor – especially less educated labor. Self service gasoline pumps with built-in credit card readers are a case in point.

    You hit the nail on the head with your last sentence …

    “Let’s just hope that human-designed institutions can keep up.”.

    I believe this will prove to be the Achilles Heel of conservative logic. The time it takes to retool a workforce is considerably longer than the speed at which jobs are being lost to outsourcing and technological advances. This reality is driving the wealth gap far more than any liberal conspiracy theories about big corporations and/or Wall Street. However, the conservatives have no practical answer to this problem. In fact, their hatred of unions and government employment actually makes things worse. If there is a Boomergeddon in our future there is also a Gappageddon. Conservatives have some ideas about how to avoid Boomergeddon. They have no ideas as to how we can avoid Gapageddon. And, to my thinking, Gapageddon has considerably more potential for chaos.

  2. the middle class though is the golden goose of consumerism….. when the middle class is no more…who are you going to sell all that “stuff” to?

    It was though a well-written tome.. I agree.

    I’m a skeptic of the Geddon theories though because countries are not repossessed by creditors.. they just are forced to stop spending by their creditors and if you look at the countries who previously defaulted on their debt … what actually happened? nothing….

  3. Groveton Avatar


    Suggest you review the Weimar Republic.

  4. LarryG…. or, more recently, Argentina.

    Groveton, You’re right about Gappageddon. It is a major challenge — perhaps as big as Boomergeddon … in the long run. But it’s a slow, corrosive process. Boomergeddon will be sudden, sharp and incredibly painful. (While we’re on the subject, let’s not forget the environmental apocalypse!)

  5. lowkell Avatar

    FYI, the Gulf oil disaster was in 2010, not 2011. The year was bad, but not THAT bad! 🙂

  6. yes.. you can name several countries that have defaulted.

    Can you name very many that have been taken over by creditors?

    what usually happens is that interest rates go sky high and there are investors who see dollar signs in the returns – forgetting that they lose everything when the country goes down hard. The investors get nothing.

    the worst that happens if really ugly austerity policies get imposed..

    Countries don’t end the way corporations do.

  7. Lowell — Oh, Jeez, of all the examples of idiocy and malfeasance I could have picked for 2011, I picked one from 2010! I stand corrected.

  8. Larry, Nobody said that companies end up like companies. They don’t get liquidated (unless you’re Poland in 1939). But if nobody is willing to lend money to the government, if the government collects only $3 in taxes for every $5 it spends, and if government spending accounts for 25% of GDP, default will hurt realllly badly. Ten percent of the GDP will evaporate overnight — and that’s before the ripple of effects of banks being wiped out, foreign creditors going belly up, worldwide recession, etc.

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