selling on the collapse

SELLING ON THE COLLAPSE


A great many people are under the illusion that any day now our great fearless leaders will jolt upright from their slumber, shout in glorious proclamation “hallelujah” and begin directing us towards a sustainable future in which we happily peddle our bicycles around our green village tending our organic asparagus and repair our windmills with locally grown wood. And perhaps that might happen if we could stop all current economic activity and redirect it centrally by an enlightened intellectual genius. Now, while you are contemplating the odds on that, please excuse me while I painfully extract that monkey out of my ass ( he could fly out but I’m such a tightass that there are some birthing pains ). You can’t direct folks against their own self interests. That includes the idiot that draws down the desert water table to keep his lawn green, the idiot that cuts down the last of the jungle hardwood trees using the last of the oil to transport it to China to make gee-gaws to sell to Yuppie Scum. You can’t force people to build green technology alternate energy if they will lose money on it ( if your solar panel cost $100 to make and the Chinese type is $90, you can’t sell enough of yours to pay back the bank loan interest rates. Even if the loan interest is only 1% ). People are going to promote their own future needs without regard to the “smart” way of doing things. If the economic advantage is to grow, you grow. Nobody cares if the oil is running out, the soil is depleted, the nearest farm to the mega-city is three hundred miles away and transportation costs are extreme. They only care about buying the wife shoes, the mistress diamonds, sending junior to Harvard and hopefully having enough left over to survive the implosion of Social Security so they can retire from this soul crushing piece of crap job that sees their arteries clogging, their hair falling out in clumps and their daily evacuations full of blood.

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This is what happens in a collapse ( both economic and energy draw-down ): economic interests stop becoming general enrichment and start becoming a fight for a dwindling share of the wealth. Before, there was enough for everyone. Now, not so much. You must understand this to understand why prices go up, why your pension is going to fail before you ( even with bloody stools ), why taxes go up as government shrinks, why your job won’t survive as long as the mortgage and why you will see a whole host of lifestyle crushing events very soon. Yes, it is nice to think we can muddle through until the end of our lives, but a contraction isn’t a straight line event but rather an exponential snowball into an avalanche process. You can’t worry about one or two things getting worse, but dozens if not scores. For instance, it isn’t just that the banks need bail-outs which cause government deficits to double ( banks are a suck ass parasite but have burrowed into every modern transaction economically so they are now essential to the current system surviving ), but also that the banks stop extending credit because of shrinking margins they now have which disallows investment and encourages sell-offs. Lack of credit slows down the economy as well as the higher inflation and taxes caused by the government deficits. Now every business facing lack of credit must cut quality, short change the future, raise prices and triage.

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Budweiser beer was sold to a Belgium firm. Old news, but a good example. Beer is a perfect gauge for our economy. Beer sacrifices food to become a luxury. Right there you are measuring surplus land and energy, irrigation, land prices, fertilizer costs, transportation issues, etc. And beer comes in disposable containers. The cost of smelting and transportation of a liquid over hundreds of miles, the real estate for bottlers and warehouses, to include the cost of loans for that equipment. Beer tells you in advance the direction of all these factors because it is a luxury rather than a necessity. The shrinking surplus for luxury is a barometer of the economy which is almost all demands for surplus. And the barometer clearly read “shrinking supplies, added cost”. The A-B folks said, screw this noise. Let’s sell this bitch off and make it someone else’s problem. Well, the Belgians have made it their problem. By making it your problem. Beer has doubled in cost. The profitability has decreased, what with all the rising inputs coupled with another layer of corporate debt, but everyone but the beer drinker is happy and glad for their income. And this is a non-critical industry. Next up, your favorite bridge to work.
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Your county government is in trouble. All the industry moved overseas, the housing bubble crash halved property tax income and at the same time every idiot making twenty grand a year thinks it is welfares problem to feed his family because he can’t make a budget to save his life ( not that the county is complaining too much about the extra Food Stamp money since each recipient is paying into the local economy through cell phone taxes, gasoline taxes, fast food joint taxes, cable TV taxes, etc. ). So revenue is down and spending is up. You’ve already laid off half the Sheriff Department so you don’t have to worry about an extra few million a year in pension costs in fifteen years. But you still need to cut expenses. So you sell your bridge to a corporation for $1 and half of all toll revenue. As a local, your taxes have increased but you still can’t drive for “free” anymore now that a toll bridge is between you and work. Okay, it is only $6 a day which is twenty minutes wages, and far less than the extra gas money it takes to get there. But that isn’t the only cost. To rub salt into the wound, you will one day end up in the river the hard way.

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Corporations are not known for long range planning. They maximize this quarters profits, make the CEO a nice bonus. When the inevitable blowback happens, they cash in their golden parachute and let the next idiot untangle their problem. Your toll bridge operator is inevitably going to play with the balance sheet to shrink declared profits by declaring costs for worker pensions and maintenance. But they will declare bankruptcy long before that money sees its way to either and the former CEO will have squandered that extra cash. Okay, the county would have done the exact same thing, but at only half the cost to the taxpayer. My point here is the increased cost for the same outcome.

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Look at GM or the airlines. Screw the retirees, and the taxpayer. Socialize the loses and privatize the profits. There is no money in transitioning to a sustainable future, but there is plenty in picking over the corpse of our current system. All the remaining money and credit is going into squeezing the last profits out. There is nothing left to invest in for the other end of the Oil Age.

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My e-mail is jimd303@netzero.com
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