#150: The management of hardship


Though just over a month has passed since the previous article (for which apologies), work here hasn’t slackened. Rather, I’ve been concentrating on three issues, all of them important, and all of them topics where a recognition of the energy basis of the economy can supply unique insights.

The first of these is the insanity which says that no amount of financial recklessness is ever going to drive us over a cliff, because creating new money out of thin air is our “get out of gaol free card” in all circumstances.

This isn’t the place for the lengthy explanation of why this won’t work, but the short version is that we’re now trying to do for money what we so nearly did to the banks in 2008.

The second subject is the very real threat posed by environmental degradation, where politicians are busy assuring the public that the problem can be fixed without subjecting voters to any meaningful inconvenience – and, after all, anyone who can persuade the public that electric vehicles are “zero emissions” could probably sell sand to the Saudis.

And this takes us to the third issue, the tragicomedy that it is contemporary politics – indeed, it might reasonably be said that, between them, the Élysée and Westminster, in particular, offer combinations of tragedy, comedy and farce that even the most daring of theatre directors would blush to present.

From a surplus energy perspective, the political situation is simply stated.

SEEDS analysis of prosperity reveals that the average person in almost every Western country has been getting poorer for at least a decade.

Governments, which continue to adhere to outdated paradigms based on a purely financial interpretation of the economy, remain blind to the voters’ plight – and, all too often, this blindness looks a lot like indifference. Much of the tragedy of politics, and much of its comedy, too, can be traced to this fundamental contradiction between what policymakers think is happening, and what the public knows actually is.

Nowhere is the gap in comprehension, and the consequent gulf between governing and governed, more extreme than in France – so that’s as good a place as any to begin our analysis.

The French dis-connection

Let’s start with the numbers, all of which are stated in euros at constant 2018 values, with the most important figures set out in the table below.

Between 2008 and 2018, French GDP increased by 9.4%, equivalent to an improvement of 5.0% at the per capita level, after adjustment for a 4.2% rise in population numbers. This probably leads the authorities to believe that the average person has been getting at least gradually better off so, on material grounds at least, he or she hasn’t got too much to grumble about.

Here’s how different these numbers look when examined using SEEDS. For starters, growth of 9.4% since 2008 has increased recorded GDP by €201bn, but this has been accompanied by a huge €2 trillion (40%) rise in debt over the same decade. Put another way, each €1 of “growth” has come at a cost of €9.90 in net new debt, which is a ruinously unsustainable ratio. SEEDS analysis indicates that most of that “growth” – in fact, more than 90% of it – has been nothing more substantial than the simple spending of borrowed money.

#150 France SEEDS summary

This is important, for at least three main reasons.

First, and most obviously, a reported increase of €1,720 in GDP per capita has been accompanied by a rise of almost €27,500 in each person’s share of aggregate household, business and government debt.

Second, if France ever stopped adding to its stock of debt, underlying growth would fall, SEEDS calculates, to barely 0.2%, a rate which is lower than the pace at which population numbers are growing (about 0.5% annually).

Third, much of the “growth” recorded in recent years would unwind if France ever tried to deleverage its balance sheet.

Then there’s the trend energy cost of energy (ECoE), a critical component of economic performance, and which, in France, has risen from 5.9% in 2008 to 8.0% last year. Adjustment for ECoE reduces prosperity per person in 2018 to €27,200, a far cry from reported per capita GDP of €36,290. Moreover, personal prosperity is lower now than it was back in 2008 (€28,710 per capita).

Thus far, these numbers are not markedly out of line with the rate at which prosperity has been falling in comparable economies over the same period. The particular twist, where France is concerned, is that taxation per person has increased, by €2,140 (12%) since 2008. This has had the effect of leveraging a 5.3% (€1,510) decline in overall personal prosperity into a slump of 32% (€3,650) at the level of discretionary, ‘left in your pocket’ prosperity.

At this level of measurement, the average French person’s discretionary prosperity is now only €7,760, compared with €11,410 ten years ago.

And that hurts.

Justified anger

Knowing this, one can hardly be surprised that French voters rejected all established parties at the last presidential election, flirting with the nationalist right and the far left before opting for Mr Macron. Neither can it be any surprise at all that between 72% and 80% of French citizens support he aims of the gilets jaunes (yellow waistcoat) protestors. “Robust” law enforcement, whilst it might just temper the manifestation of this discontent, will have the almost inevitable side-effect of exacerbating the mistrust of the incumbent government.

Because energy-based analysis gives us insights not available to the authorities, we’re in a position to understand the sheer folly of some French government policies, both before and since the start of the protests.

From the outset, there were reasons to suspect that the gloss of Mr Macron’s campaign hid a deep commitment to failed economic nostrums. These nostrums include the bizarre belief that an economy can be energized by undermining the rights and rewards of working people – the snag being, of course, that the circumstances of these same workers determine demand in the economy.

After all, if low wages were a recipe for prosperity, Ghana would be richer than Germany, and Swaziland more prosperous than Switzerland.

Handing out huge tax cuts to a tiny minority of the already very wealthiest, though always likely to be at the forefront of Mr Macron’s agenda, looks idiotically provocative when seen in the context of deteriorating average prosperity. Creating a national dialogue over the protestors’ grievances might have made sense, but choosing a political insider to preside over it, at a reported monthly salary of €14,666, reinforced a widespread suspicion that the Grand Debat is no more than an exercise in distraction undertaken by an administration wholly out of touch with voters’ circumstances.

Whilst Mr Macron has appeared flexible over some fiscal demands, he has ruled out increasing the tax levied on the wealthiest. This intransigence is likely to prove the single biggest blunder of his presidency.

Even the tragic fire at Notre Dame has been mishandled by the government, in ways seemingly calculated to intensify suspicion. Rather than insisting that the restoration of the state-owned Cathedral would be funded by the government, the authorities made the gaffe of welcoming offers of financial support from some of the most conspicuously wealthy people in France.

This prompted some to wonder when corporate logos would start to appear on the famous towers, and others to ask why, if the wealthiest wanted to make a contribution, they couldn’t have been asked to do so by paying more tax. It didn’t help that the authorities rushed to declare the fire an accident, long before the experts could possibly have had evidence sufficient to rule out more malign explanations. After all, in an atmosphere of mistrust, conspiracy theories thrive.

The broader picture

The reason for looking at the French predicament in some detail is that the problems facing the authorities in Paris are different only in degree, and not in direction or nature, from those confronting other Western governments.

The British political impasse over “Brexit”, for instance, can be traced to the same lack of awareness of what is really happening to the prosperity of the voters – whilst “Brexit” itself divides the electorate, there is something far closer to unanimity over a narrative that politicians are as ineffectual as they are self-serving, and are out of touch with real public concerns. Similar factors inform popular discontent in many other European countries, even when this discontent is articulated over issues other than the deterioration in prosperity.

At the most fundamental level, the problem has two components.

The first is that the average person is getting poorer, and is also getting less secure, and deeper into debt.

The second is that governments don’t understand this issue, an incomprehension which, to increasing numbers of voters, looks like indifference.

It has to be said that governments have no excuses for this lack of understanding. The prosperity of the average person in most Western countries began to fall more than a decade ago, and any politician even reasonably conversant with the circumstances and opinions of the typical voter ought to be aware of it, even if he or she lacks the interpretation or the information required to explain it.

Governments whose economic advisers and macroeconomic models are still failing to identify the slump in prosperity need new advisers, and new models.

A disastrous consensus

Though incomprehension (and adherence to failed economic interpretations) is the kernel of the problem, it has been compounded by the mix of philosophies adopted since the 1990s. Following the collapse of the Soviet Union, an informal consensus was created in which the Left accepted the market economics paradigm, and the centre-Right tried to be ‘progressive’ on social issues.

Both moves robbed voters of choices.

Though the social policy dimension lies outside our focus on the economy, the creation of a pro-market ‘centre-Left’ has turned out to have been nothing less than a disaster. Specifically, it has had two, woefully adverse consequences.

The first was that the Left’s adoption of its opponents’ economic orthodoxy destroyed the balance of opposing philosophies which, hitherto, had kept in place the ‘mixed economy’, a model which aims to combine the best of the private and the public sector provision. The emergence of Britain’s “New Labour”, and its overseas equivalents, eliminated the checks and balances which, historically, had acted to rein in extremes.

Put another way, the traditional ‘Left versus Right’ debate created constructive tensions which forced both sides to hone their messages, as well as preventing a lurch into extremism which, whilst it might sometimes be good politics, is invariably very bad economics.

The second, of course, was that the new centre-ground – variously dubbed the “Washington consensus”, the “Anglo-American model” and “neoliberalism” – has proved to be an utterly disastrous exercise in economic extremism. One after another, its tenets have failed, creating massive indebtedness, huge financial risk and widening inequality before finally presiding over the wholesale replacement of market principles with the “caveat emptor” free-for-all of what I’ve labelled “junglenomics”.

As well as undermining economic efficiency, these developments have created extremely harmful divisions in society. Whilst Thomas Piketty’s thesis about the divergence of returns on capital and labour is not persuasive, the reality since 2008 has been that asset prices have soared, whilst incomes have stagnated. This process, which has been the direct result of monetary policy, has rewarded those who already owned assets in 2008, and has done nothing for the less fortunate majority.

There is a valid argument, of course, which states that the authorities’ adoption of ultra-cheap money during and after the 2008 global financial crisis (GFC I) was the only course of action available.

But the role of policymakers is to pursue the overall good within whatever the economic and financial context happens to be. So, when central bankers launched programmes clearly destined to create massive inflation in asset prices, governments should have responded with fiscal measures tailored to capture at least some of these gains for the unfavoured majority.

Simply put, the unleashing of ZIRP and QE made a compelling case for the simultaneous introduction of higher taxes on capital gains, complemented by wealth taxes in those countries where these did not already exist.

Failure to do this has hardened incompatible positions. Those whose property values have soared insist, often with absolute sincerity, that their paper enrichment is the product entirely of their own diligence and effort, owes nothing to the luck of being in the right place at the right time, has had nothing whatever to do with the price inflation injected into property markets (in particular) by ultra-cheap monetary policies, and hasn’t happened at the expense of others.

For any younger person, often unable to afford or even find somewhere to live, it is necessarily infuriating to be lectured by fortunate elders on the virtues of saving and hard work.

It’s a bit like a lottery winner criticizing you for buying the wrong ticket.

A workable future

The silver lining to these various clouds is that future policy directions have been simplified, with the paramount objectives being (a) the healing of divisions, and (b) managing the deterioration in prosperity in ways that maximise efficiency and minimise division.

Any government which understands what prosperity is and where it is going will also reach some obvious but important conclusions.

The first is that prosperity issues have risen higher on the political agenda, and will go on doing so, pushing other issues down the scale of importance.

The second conclusion, which carries with it what is probably the single most obvious policy implication, is that redistribution is becoming an ever more important issue. There are two very good reasons for this hardening in sentiment.

For starters, popular tolerance of inequality is linked to trends in prosperity – resentment at “the rich” is muted when most people are themselves getting better off, but this tolerance very soon evaporates when subjected to the solvent of generalised hardship.

Additionally, the popular narrative of the years since 2008 portrays “austerity” as the price paid by the many for the rescue of the few. The main reason why this narrative is so compelling is that, fundamentally, it is true.

The need for redistribution is reinforced by realistic appraisal of the fiscal outlook. Anyone who is aware of deteriorating prosperity has to be aware that this has adverse implications for forward revenues. By definition, only prosperity can be taxed, because taxing incomes below the level of prosperity simply drives people into hardships whose alleviation increases public expenditures.

In France, for example, aggregate national prosperity is no higher now (at €1.76tn) than it was in 2008, but taxation has increased by 17% over that decade. Looking ahead, the continuing erosion of prosperity implies that rates of taxation on the average person will need to fall, unless the authorities wish further to tighten the pressure on the typical taxpayer.

Even the inescapable increase in the taxation of the very wealthiest isn’t going to change a scenario that dictates lower taxes, and correspondingly lower public expenditures, as prosperity erodes.

A new centre of gravity?

The adverse outlook for government revenues is one reason why the political Left cannot expect power to fall into its hands simply as a natural consequence of the crumbling of failed centre-Right incumbencies. Those on the Left keen to refresh their appeal by cleansing their parties of the residues of past compromises have logic on their side, but will depart from logic if they offer agendas based on ever higher levels of public expenditures.

With prosperity – and, with it, the tax base – shrinking, promising anything that looks like “tax and spend” has become a recipe for policy failure and voter disillusionment. This said, so profound has been the failure of the centre-Right ascendancy that opportunities necessarily exist for anyone on the Left who is able to recast his or her agenda on the basis of economic reality.

Tactically, the best way forward for the Left is to shift the debate on equality back to the material, restoring the primacy of the Left’s traditional concentration on the differences and inequities between rich and poor.

On economic as well as fiscal and social issues, we ought to see the start of a “research arms race”, as parties compete to be the first to absorb, and profit from, the recognition of economic realities that are no longer (if they ever truly were) identified by outdated methods of economic interpretation.

Historically, the promotion of ideological extremes has always been a costly luxury, so is likely to fall victim to processes that are making luxuries progressively less affordable. Voters can be expected to turn away from the extremes of pro- public- or private-sector promotion, seeing neither as a solution to their problems.

This, it is to be hoped, can lead to a renaissance in the idea of the mixed economy, which seeks to get the best out of private and public provision, without pandering to the excesses of either. Restoration of this balance, from the position where we are now, means rolling back much of the privatization and outsourcing undertaken, often recklessly, over the last three decades.

Both the private and the public sectors will need to undergo extensive reforms if governments are to craft effective agendas for using the mixed economy to mitigate the worst effects of deteriorating prosperity.

In the private sector, governments could do a lot worse than study Adam Smith, paying particular attention to the explicit priority placed by him on promoting competition and tackling excessive market concentration, and recognizing, too, the importance both of ethics and of effective regulation, both of which are implicit in his recognition that markets will not stay free or fair if left to their own devices.

For the public sector, both generally and at the level of detail, there will need to be a renewed emphasis on the setting of priorities. With resource limitations set not just to continue but to intensify, health systems, for example, will need to become a lot clearer on which services they can, and cannot, afford to fund.

Starting from here

Though this discussion can be no more than a primer for discussion, there are two points on which we can usefully conclude.

First, a useful opening step in the crafting of new politics would be the introduction of “clean hands” principles, designed to prove that government isn’t, as it can so often appear, something conducted “by the rich, for the rich”.

Second, it would be helpful if governments rolled back their inclinations towards macho posturing and intimidation.

A “clean hands” initiative wouldn’t mean that elected representatives would be paid less than currently they are. There is an essential public interest in attracting able and ambitious people into government service, so there’s nothing to be said for hair-shirt commitments to penury. In most European countries, politicians are not overpaid, and it’s arguable that their salaries ought, in some cases at least, to be higher.

There is, though, a real problem, albeit one that is easily remedied. This problem lies in the perception that politics has become a “road to riches”, with policymakers retiring into the wealth bestowed on them by the corporate sponsors of ‘consultancies’ and “the lecture circuit”. This necessarily creates suspicion that rewards are being conferred for services rendered, a suspicion that is corrosive of public trust, even where it isn’t actually true.

The easy fix for this is to cap the earnings of former ministers and administrators at levels which are generous, but are well short of riches. The formula suggested here in a previous discussion would impose an annual income limit at 10x GDP per capita, which is about £315,000 in Britain, with not-dissimilar figures applying in other countries. It seems reasonable to conclude that anyone who thinks that £300,000, or its equivalent, “isn’t enough” is likely to have gone into politics for the wrong reasons.

Where treatment of the “ordinary” person is concerned, there ought, in the future, be no room for the intimidatory practices which have become ever more popular with governments whose real authority has been weakened by failure.

One illustrative example is the system by which council tax (local taxation) arrears are collected in Britain. At present, the typical homeowner pays £1,671 annually, in ten monthly instalments. If someone misses a payment, however, he or she is then required to pay the entire annual amount almost immediately, compounded by court costs of £84 and bailiff fees of £310. Quite apart from the inappropriateness of involving the courts or employing bailiffs, it’s hard to see how somebody struggling to pay £167 is supposed to find £2,067.

This same kind of intimidation occurs when people are penalized for staying a few minutes over a parking permit, or for exceeding a speed limit by a fractional extent. Here, part of the problem arises from providing financial incentives to those enforcing regulations, a practice that should be abandoned by any government aware of the need to start narrowing the chasm between governing and governed.

We cannot escape the conclusion that the task of government, always a thankless one even when confined to sharing out the benefits of growth, is going to become very difficult indeed as prosperity continues to deteriorate.

There might, though, be positives to be found in a process which ditches ideological extremes, uses the mixed economy as the basis for the equitable mitigation of decline, and seeks to rebuild relationships between discredited governments and frustrated citizens.

344 thoughts on “#150: The management of hardship

  1. Tim and anyone else who is interested. I’ve been watching ‘Thatcher : A very British revolution’ on the BBC. It has been of very great interest as a reminder of how the UK was back in the 1970’s (when I bought a flashy stereo cassette deck which included Dolby noise reduction with my first wage)

    A few things struck me – firstly her steadfast intent to have good money and not spend what we didn’t have (although economists will argue that’s what we should have done when the economy took a dive after the Conservatives took power in 1979)

    The destruction of British manufacturing – could we have made our base more competitive or was our productivity so bad that throwing investment after it would have led to nothing.

    The ‘Big Bang’ of 1986 which the Government hoped would halt the decline of London banking due to over-regulation and the dominance of elitist old boy networks (obviously this did lead to financial adventurism).

    Even her enemies had to admit that the UK in the 1970’s was in terminal decline having suffered 25% inflation at one point and dire productivity – so something had to be done.


    • @ewaf88
      In 1960 I was working the midnight to 3 shift in the college computer room. In the back, covering perhaps 400 square feet, was a vacuum tube computer that the Navy had given us. Nobody ever tried to make it work. In the front, I worked on an IBM 1620, the first generation of ‘solid state’ computers. It covered the size of a desk. By that point, it was clear that the limiting factor was the number of transistors one could put on a chip, and how to get rid of the heat. But there was no doubt that computers would become ever smaller. And that’s what happened. We even, eventually, got Dick Tracy’s wristwatch communications device…except it has a different form factor and isn’t that small yet, more because of limitations of humans looking at tiny objects than anything else, I think.

      As for the helicopters, the engineers I socialized with knew about the energy cost of flying versus a rolling wheel.

      Where we went pretty badly wrong was in believing that we were headed toward a ‘leisure society’. Instead, we got a screen time, high stress, poor health society.

      Don Stewart

    • Hi mine was just a light hearted comment as a response to the horrible Primart clothes.

      Predictions about the future have always predicted a better World but the truth is no one can really predict what is going to happen except of course the rapid decline of affordable oil.

      I certainly remember large magnetic tape computers and the din they made.

      You’re right about our high-tech World which has certainly caused us stress. The less said about the effects of social media the better.

    • @ewaf88
      In 1983 I moved to a large city in the Midwest where the company had a plant manufacturing chips. My next door neighbor worked at the plant, but I did not. I learned that they were steadily losing money on each chip they made, because the Asians were much better at quality control and thus got more usable chips out of each batch. But the plant itself was making money. How? They had an antique vacuum tube operation. There was a modest but steady demand for vacuum tubes. One reason was the Soviet Union. The Soviets were convinced that it was just a question of time until the Americans attacked with nuclear weapons. (And we now know America came close to doing that.) A vacuum tube would survive the electromagnetic pulse from an atomic blast, but a chip would not. I was sworn to secrecy, but maybe after all this time the government won’t prosecute me under a 1917 law which has never been used before.

      Don Stewart

    • Hi that’s interesting- older tech often is more durable – for example you can use a sword to in battle to hack – but it can’t be hacked.


    • All too true; a failing economy and society, truly dreadful management, the first stirrings of the immigration/riots nightmare, and the arrogance of unions had to humbled – although it went too far, I am in favour of strong but intelligent unions as a counterpoise to the arrogance of capital – however in popular mythology now, it was ‘Thatcher the Witch ‘who did Britain in, an unredeemed evil.

      A columnist in The Guardian recently argued for taxing away ‘pensioner wealth’ (so much better in the hands of the benevolent state than your own!) and one comment was ‘serve them right, they ruined this country, they voted for Thatcher, they should pay’.

      I do think it’s as important to pay attention as much to the ignorant and stupid as to the intelligent and well-informed, as that often drives politics and voting…….

      Every country lives by myths, only partly rooted in the real history. I see this in Spain, too.

  2. This documentary from a few years ago already, gives an idea of what will happen if the US accidentally powers down, as seen from incidents that have actually occurred relatively recently. Decades of neglect of basic and even crucial infrastructure has left the country surprisingly vulnerable to even small predictable events, let alone climate change driven, more volatile ones:

    https://www.youtube.com/watch?v=pducRLyDmiY (The last ~20 mins are about the electric grid)

    It’s a massive irony, that when superficially our civilisation now looks more sophisticated than ever before in human history, we have never been so vulnerable, given our lifestyle can only work with these population numbers at a finely balanced calibration of energy cost and supply. Shake that even slightly and the whole house of cards comes crashing down, because we have lost so much resilience via lack of diversity. So despite all the high-tech improvements, almost everything still depends on electricity, in turn near-totally dependent on high-concentration hydrocarbon inputs.

    • MMT will fix the plumbing. I’m sure. Because the farther the intermediate of exchange distances itself from reality, the better it does its job.

  3. Tim, are you able to reveal the current growth in debt compared with GDP for Australia, and what the components of the new debt are?

    I’ve been trying to do the numbers and can’t seem to get a ratio higher than about 1.6:1. Is there a simple way to understand this calculation? If the last SEEDS number I saw for Australia(4.35:1 2015) is true, I need to be highlighting the problem to my community. Our ECOE in 2015 was 7.9%, where are we now?

    Do I need to pay for the latest SEEDS dataset, and if so, what does it cost and where do I order it?

    • Hi Phil

      How to make SEEDS data available, either to interested individuals or to organizations, is something I’ve never quite finalized (there always seems to be something else more urgent). But I can certainly find a way of providing you with at least some of this for Australia.

      I might also do an article on Australia, as the numbers have some interesting features.

      I’m going to suggest that you remind me about this in the second week of June – this is because new debt data is due in early June.

      For now, here are some of my 2019 projections, aggregates, calculated in local currency:

      GDP: +2.1%
      Clean GDP (adjusted for borrowing effects): +1.0%
      Prosperity (CGDP less ECoE): +0.8%
      Population: +1.6%
      Prosperity per capita: -0.8%

      The ECoE number you cite for 2015 is, I think, the ECoE of consumption, which now stands at 9.2% (2019). But net energy trade affects this significantly, and favourably, giving an overall ECoE for the economy of 5.6%.

      I hope this helps.

    • Thanks: he’s to be congratulated for attempting a broad ideological survey.

      But should nationalism have ‘expired’?

      Is it invariably ‘far-right’ as he maintains? It needn’t be, logically.

      But if the Left (and the EU totalitarian-corporatists) self-identity as ‘internationalist’, -eg Barnier, Varoufakis, etc – then the nationalists must be ‘far-Right’, in their eyes.

      The most conspicuous feature of our age is the resurgence of nationalism, across classes, and the failure of an insulated elite to respond adequately, intelligently, and with pragmatism.

      And disdainfully calling it ‘populism’ certainly won’t make it go away, but rather add fuel to the flames: never a good idea to patronise getting on for half the electorate or whole regions of a country. …..

    • @Xabier and Others
      Here is one of the real problems in a short animation:

      I’m not aware of a similar animation of the debt/ increasing inequality/ resource depletion/ bankruptcy cycle that we discuss here, but I think all of us can imagine such an animation.

      These are the real problems. Labelling people as ‘liberals’ or ‘conservatives’ or ‘populists’ doesn’t further any real discussion. There are those ‘who have ears to hear, and eyes to see’….and those who have ears to hear and eyes to see but discern some way to turn disaster into personal profit…and those who have ears and eyes but can neither hear nor see.

      Don Stewart

    • Yes Xabier. Nail on the head. They won’t make it though, the ever less environment will unleash beasts we’ve seen before. Their efforts will chop their heads. Because they lie and they cheat. They are not leaders, they are deceptionists. And we, we cannot cope with it, Neanderthals as we are. Well, i guess someone has to be in charge.

    • @Xabier

      Nationalism is about language, culture, history, myth and custom. It is a visceral concept not a “rational” one – that is why it’s powerful ( My country – right or wrong).

      However, there is arguably an economic dimension to this. Are we better served by diversity or sameness? It seems to me that diversity is the fertilizer of innovation; the more diverse we are the more we can develop in different ways independently of each other which gives more chances of discovery. The neoliberal World described by Stiglitz does, in my view, tend towards monopoly and oligopoly and is the enemy of innovation and discovery.

      The other thing not mentioned by Stiglitz is the role of politics and institutions in all this – and I don’t mean left or right issues. What I mean is that nationalism implies political diversity and pluralism and it is in this pluralism and flexibility of national institutions that innovation can thrive.

      I can’t see that nationalism has “expired”.

    • ‘it’s due to be published in the autumn and should be in stock at charity shops by Christmas’ Dead right – I’m sure I’ll be able to pick it up for 99p on the Amazon book exchange.


    • Am I off base or does this article assume infinite growth on a finite planet? Because if it does, it’s useless, IMO.

    • Useless in energy terms, maybe Ken. It’s about our current financial system. I like to read different takes about our future so my understanding improves. The oil/$\gold ratio is mentioned several times, our current fiat system is on its last leg, and Trump scales down globalization. So if the fiat currency system stops working, trade collapses >50% in the coming years, what’s next?

  4. US bullied 36 countries in one week
    Does anyone think that the Trump Administration can single-handedly bring down the global economy? They have begun to talk about ‘wars’ with Canada and Mexico. Trump says he prefers to lay waste with economic war rather than bombers.

    It’s really hard for me to figure out what is happening in Washington. On the one hand, we have several large corporations and a couple of ‘green’ organizations announcing that they back a tax on carbon. On the other hand, the Administration writes to Republicans that ‘there is no reason to agree to anything in terms of climate change, because it is a hoax’. Will the corporations who have crafted finely detailed supply chains involving both the US and Mexico and Canada rebel? It’s hard to see some alternative leader they could get behind.

    Don Stewart

    • Trump has called Meghan Markle ‘nasty’ who unsurprisingly will be looking after her baby when he meets the royal family during his visit.

      I personally feel that Trump is showing signs of the onset of dementia.


    • Dementia or no it’s gratuitous rudeness which I find extraordinary for someone in his position.

  5. Re. Mr Trump and so on, it seems to me that we’re witnessing something close to a breakdown in sanity. Here are some examples.

    First, and relevant to Mr Trump, politicians seem to be losing sight of two critical features of democracy.

    The first of these is that democracy cannot function unless the losers accept the outcome. The Dems in the US, and the Remainers in Britain, seem unable to accept this, with the Dems trying to impeach the president, and the Remainers trying to prevent “Brexit”. Does the outcome of a vote mean nothing, unless you win?

    Second, parties and individuals are supposed to do what they promise to do. Mr Trump did, after all, promise to get tough with China over trade, and with Mexico over illegal immigration. Both main UK parties made manifesto commitments to implement “Brexit”.

    In economics, there seems to be a growing belief that we can fix debt excesses, pension provision chasms and ludicrous asset price inflation by printing money.

    Environmentally, people are being told that we can fix the problem without inconvenience, just with EVs and renewables.

    All three, I suspect, are evidence of some form of collective dementia, by no means confined to any one individual………….

    • Hi Tim

      I think it’s a bit worse even than you portray it.

      Many MPs want to reverse Brexit without appearing to do so and play complicated games in Parliament which many look on with bemusement and ignorance.

      But the LibDems have taken this a stage further, not only with the vernacular election slogan. In an interview on Sky around three weeks ago Vince Cable said we should revoke Article 50 and just cancel Brexit. The interviewer, Adam Boulton, was somewhat taken aback and said words to the effect of: “That’ll put us in a mess won’t it?” to which Cable replied: “Well, we’re in a mess anyway.”

      Here we have the leader of a party that is openly and brazenly saying that we should totally ignore the 2016 vote and simply reverse the referendum result and to hell with the voters. One really wonders what these people are thinking.

    • Politically and more broadly, the UK position looks increasingly hopeless. All other aspects of government have been put on autopilot whilst politicians pursue their grubby schemes around “Brexit”. Public trust in the system is ebbing away.

    • https://www.youtube.com/watch?v=M80YDSDr4JU The whole interview with David Starkey is worth the time but this snippet is very good.
      The English Democrats Judicial Review case is discussed in this interview by Robin Tilbrook a Solicitor and two Yorkshire men, one of who is very much like Owen Jones in looks but not opinions. @44 minutes is the bombshell

    • I share your frustration Tim, and I too believe that the world has gone mad. Now then, I suffer Bipolar disorder and my medication keeps me on the straight and narrow. My psychiatrist tells me that I have to be ‘objective’ when dealing with others as they are unable to keep up with the speed my brain works.

      So who’s problem is that? I feel the same about this mad world – it’s their problem – TPTB – they created it – I am merely a bystander immersed in my disbelief. Keep up the good work Tim – who knows – maybe someday they will take notice of the sane ones?

    • An accurate,(alas) and dispassionate assessment : which is why we all come back here!

      Acquiescence in the result of a fair vote is valuable, rare historically and fragile: they have no idea, I suspect, what horrors they are preparing in destroying this delicately-balanced political culture.

  6. England; Global Sea Change
    If one looks only at Brexit, or even expands ones views toward rising nationalism across Europe, one may be missing the Big Picture. I suggest taking a look at this essay by Charles Smith in California:
    “That era ended a decade ago, and the illusion of growth has been generated by the temporary artifice of debt and money-creation.
    As a society, we are ill-prepared for the end of “politics is the solution.” No wonder being a politician is no longer fun.”


    Don Stewart
    PS I think Charles is missing the business about using political power to enrich oneself. Look at the obscene ‘speaking fees’ politicians can extract from corporations eager to manage the tax code and the federal budget. Politics isn’t exactly the sort of fun you have playing with your child or your dog, but it sure can make you a lot of money.

  7. Charles Smith Essay; Lincoln and American Civil War
    A continuing source of strife, excuses, and rationalizations in the US has been Thomas Jefferson’s role as the enunciator of human rights (the Constitution said nothing about the rights of citizens, until Jefferson intervened) while practicing slavery on his property. If we look at Benjamin Franklin’s role, we find that he was a loyalist until he concluded that the Crown would drain the colonists of their newfound wealth. Franklin broke with his own son over the monetary issues. So we can look at the American Revolution has an event which occurred because some very influential people found that their wealth was threatened by a government they could not influence.

    During the Civil War, one of the first battles won by the Union was in the low country of the Carolinas. Using the new innovation of rifled cannon, the Union destroyed a fort at the mouth of the Savannah River, a fort which Robert E. Lee had inspected and deemed ‘impregnable’. The Union commander promptly proclaimed that the slaves were now free. Lincoln rescinded his order. Apparently in a political judgment that in order to sustain support in border states such as Maryland and Kentucky, he needed to first win the war and later free the slaves. Later, Lincoln issued his own Emancipation Proclamation which applied to territories conquered by the Union armies. The Proclamation and the prospect of freedom brought hundreds of thousands of former slaves into the Union Army, materially aiding the Union cause.

    The Southern aristocracy understood that the foundation of their economy was slavery. They did not understand that the economy could be rebuilt with the former slaves as essentially serfs, but without the most horrible atrocities associated with slavery. And so, Lincoln ruined the Aristocracy, which led to the establishment of a shuffled aristocracy (perhaps such as the collapse of the Soviet Union led to oligarchs).

    I believe we are currenty experiencing three tidal waves of change:
    *Ordinary people are losing prosperity due to increasing ECoE and globalization and some other trends. Many perceive that they cannot influence the government to act in their favor.
    *Elites are more or less in political control across the globe, and are managing politics to cement their dominance. No Lincoln has arisen to upset that applecart.
    *Technology has given the elites unprecedented power to manipulate public opinion. As I mentioned previously, the originator of the 5 star movement in Italy perfected some methods which Nigel Farage went to Italy to study. And now, most of the members of the EU parliament are members of non-traditional parties. When the US was established, the idea was a Republic, not a Democracy. The landed aristocracy which dominated the writing of the Constitution were definitely not Democrats (with the ambiguous exception of Jefferson and a few others…..Thomas Paine was no longer influential.) As the US spread to the West, democracy became a stronger influence, and many western states adopted Referenda as a genuine law-making procedure…California being a notable example. While Referenda used to be regarded as subversive by the elites, with the new powers conferred by Google and Facebook, I think they now see them as useful tools.

    Don Stewart

    • Anna Comnena observed, in the late 11th century, that the common people of the Byzantine Empire could easily, but unpredictably, be swayed this way or that by circumstances, a clever speaker and their own capricious whims, and the Imperial family had to take that into account. Nothing new under the sun…..

      The Establishment thought to use new social media as a tool of monitoring and thought control, and Five Star and Farage, etc, have adroitly turned it against them.

      I see in The Guardian that nationalism is characterised – once more – as ‘far-right and dangerous’, in an article on the need for a ‘national’ government as the only solution to the Brexit impasse.

      In the end, the Establishment will deem referenda to be dangerous and regressive if the vote goes against them, and progressive and benign if the vote goes their way.

      Our fate, however, will be decided not by referenda, pretenders to power,, string-pullers and manipulators, think-tanks and party donors, but by physics: I find that consoling, like contemplating geological time….

    • @Xabier
      If you haven’t seen it, look at EnergySkeptic for Alice Friedemann’s consolation.
      Don Stewart

  8. Questions : Will Brexit increase or decrease the amount of energy required to transport vital goods into the UK?

    If we start sourcing goods from other countries will they be produced with more or less energy than comparable EU goods.

    Please forget about politics for the moment because as we know we live in energy based economies not monetary – therefore net energy use should be the overriding factor.

    • I’m more than happy to leave the politics out of it. I also think the relevance that “Brexit” itself has on the energy economy is less than is often supposed.

      The critical driver of energy use is prosperity which, in the UK, is in established decline. This means that energy use, both direct and indirect, is falling.

      The critical issues now are twofold.

      First, will the decline in prosperity accelerate from its recent, quite gradual trajectory? The answer there seems to be yes.

      The second question is whether there will be a sudden or climacteric deterioration, perhaps associated with a domestic, local or global crisis of some sort. We don’t yet have an answer to this second question, though the odds in its favour are lengthening.

      The sourcing of goods from other countries is a function of the ability to pay for them. As this ability erodes, so will purchases.

  9. Politics; Energy
    I’d like to offer my two cents on the question of whether the energy problems can be understood without getting into the politics. This is a long video, but if you really want to understand what humanity is up against, both technically and politically and psychologically, I think you can’t ignore the fact that it is one big ball of thread.

    It is not possible to address the ‘climate problem’ separately from ‘who makes the decisions’ separately from ‘who controls the resources’ separately from ‘how can social humans organize themselves to survive’ separately from ‘where will the resources for remediation come from’ separately from ‘the biology and physics and chemistry’ and ‘what does intergenerational justice look like’ and so on and so forth.

    Specialists can get us into many blind alleys. For example, take a look at how Jehne shows that cows are essetial for the quality of the grass, which produces the chemicals which degrade the methane the cows produce. This is a circular chemical system which very few people seem to understand. We cannot make intelligent decisions without having some understanding off such linkages. Ask yourself if the political and scientific leaders have not failed miserably by ignoring the role of water?

    Telling experts to mind their narrow business is a luxury we can no longer afford.

    Don Stewart

  10. Here again is the ECoE-Red Queen in action as Low Hanging Fished Out

    Twice as Many Fishing Vessels Are Chasing Fewer Fish on the World’s Oceans

    Since 1950, the number of boats has gone from 1.7 million to 3.7 million, even though fish stocks have crumbled

    “The boom in fishing vessels doesn’t mean there’s plenty of fish in the sea. In fact, it’s quite the opposite. To understand the health of fisheries, ecologists calculate “catch per unit of effort (CPUE)” or the amount of effort and resources it takes to catch a fish. Fishing boats today only catch about 20 percent of the fish for the same amount of effort as boats in 1950, reports Erik Stokstad at Science.

    “[D]espite its advanced technology and increased numbers, the modern motorized fleet is having to work much harder to catch fewer fish,”


    • Dr Scanlon,
      Ugo Bardi’s investigations of historical collapses of fishing helped him develop and articulate the idea of the “Seneca Cliff,” – the growth and collapse structure of human exploitation of finite resource. Unlike a nice bell-shaped curve, the Seneca cliff is characterized by an abrupt and steep decline. Bardi thinks this is what will happen with oil.
      See https://cassandralegacy.blogspot.com/2015/01/seneca-again-collapse-of-uk-fishing.html
      “There are several historical examples of the Seneca cliff; in the case of fisheries, it is especially evident in the case of the Canadian cod fishery and for the Caspian Sturgeon; but it is evident also in the case of the UK fishing industry. Note, in the figure above, the steep decline of the landings of the late 1970s, it is significantly steeper than the growth of the left side of the curve. This is the essence of the Seneca mechanism. And we can see very well what causes it: the start of the decline in production corresponds to a rapid growth of investments. The result is the increase of what the authors of the paper call “fishing power” – an estimate of the efficiency and size of the fishing fleet.

      The results were disastrous; a textbook example of how to “push the levers in the wrong directions”, that is, of a case when the attempt to solve a problem worsens it considerably. In this case, the more efficient the fishing fleet was, the more rapidly the fish stock was destroyed. This is a classic mechanism for falling down the Seneca cliff: the more efficient you are at exploiting a non renewable (or slowly renewable) resource, the faster you deplete it. And the faster you get into trouble.”

  11. A few notes from a broad view of the landscape in the US

    *Dr. Morgan has predicted the subsidy of fossil fuels. Take a look at this article. My point is not to debate all the claims, just to note that there are now positive political moves in the US to require ordinary people to subsidize ill-advised fossil fuel and nuclear ventures.

    *Renewed scientific interest in the foundations of human well-being…for which some fossil fuels may be useful but most likely not the damaging quantity we consume today.
    #Daniel Christian Wahl’s essay reflecting on what he learned at the Santa Fe Insitute decades ago about the knowledge and feeling of being part of a natural system:

    (The original publication was Medium, but that is a ‘pay to read’ publication and the reprint here is free.

    #From Kelly McGonigle, a health psychologist at Stanford:
    Sometimes a scientific study is published that makes me say, “Wow.” One such study was published in Nature on May 23, and I want to share it with you.

    The research design was incredibly complex, and you can read the whole study here through open access. But let me just give you the take-away. As Mark Thorton, one of the neuroscientists who conducted the research, sums it up, “When you think about a person, your brain may represent them as the sum of the mental states you think that they frequently experience.”

    If someone frequently observes you being angry, when asked to think about you, their brain enters a state that closely matches what it looks like when they imagine being angry. If someone frequently observes you being grateful, thinking about you will trigger the brain’s understanding of gratitude.

    The brain seems to keep track of all a person’s common mental states, rather than latching onto one core emotion. So the people who know me best might ‘know’ me as curiosity + anxiety + empathy + insomnia + kindchenschema.

    This study made me think about the social consequences of the emotions we choose to express, as well as our mental habits. So often we think of these states as internal experiences. But they are also how we present ourselves to the world. And according to this new study, they powerfully shape how others understand who we are.

    My summary of it all:
    While science is busily discovering that our current dominant focus on screens and money is leading to rapidly escalating epidemics of Clinical Depression and other signs of ill health, and while some really smart people knew that all along, the illusions of money and the ability of the Super Rich to capture the political process to make sure that they stay Super Rich is not a hopeful sign.

    Don Stewart

  12. When the student is ready, the teacher appears
    If you were skeptical about my statement that too much cheap energy is a bad thing for humans, please take a look at this article appearing today:

    ‘Highly processed’ foods have been made possible by cheap fuels. And highly processed foods will kill people prematurely (the only really logical conclusion from looking at the data…regardless of the fact that it wasn’t a prospective, random, study).

    The fact that a carrot grown in a kitchen garden generates virtually no GDP while a toxic food-like substance generates a whole lot of GDP and a whole lot of suffering and death….if of no interest to most Economists and Politicians and the local Chamber of Commerce. The money illusion, along with screens, is our mortal enemy.

    What would a rational use of fossil fuels look like? Perhaps some shade cloth produced in a factory which allows one to extend the ‘carrot season’ in one’s kitchen garden?

    Don Stewart

  13. Rereading Donella

    Taking another look at Donella Meadows’ final words to us, after too long an interval:
    ‘If I could, I would add an Eleventh Commandment: Thou shalt not distort, delay, or sequester information. You can drive a system crazy by muddying its information streams. You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.’

    And, if I had to characterize almost all governments and almost all global corporations, it would be that information should be hidden. The Powers That Be can (must) be trusted to do what is in the common interest. Those, like Chelsea Manning and Julian Assange who tell the public the truth, must be killed one way or the other.

    Don Stewart

  14. Banana Republic on the Potomac
    If we had been lucky, the British would have burned Washington to the ground in 1812. Unfortunately, we apparently have to deal with the mess. See The Automatic Earth today. Jim Kunstler has been beating this drum for a while, pointing out very similar things, and generally annoying people who wish it was all over. But the wheels of justice grind slowly but very finely.

    Don Stewart

  15. Coping with Bad News

    Recent studies show that rates of severe depression are rising rapidly in both the UK and the US. If you search on the articles you can find a baker’s dozen as people come up with all sorts of reasons for the increase. The Forbes writer even claims that its just better diagnosis and it is really a hopeful sign, because now people can get help. Which would be OK if there was any convincing evidence that treatment is better than placebo…but there isn’t. We also know that record numbers are taking prescription anti-depressants. This while anti-social behaviors have been falling. A cynic would say that the young people are too depressed to go out and raise a ruckus. The most consistent evidence to me is the recent finding, from the UK, that the young are more insulated from the real world than ever before. As I recall the numbers, about 10 percent of the young are essentially never outside…particularly among the poverty class. What happened to poor kids playing stickball in the streets, or basketball on city courts?

    What is clear to me is that there is no ‘authority figure’ to turn to. Would anyone in Britain trust a study directed by the UK parliament? Would anyone in the US believe that Donald Trump could appoint a learned council to look into the matter? Would anyone believe a study funded by Facebook? Where is Will Rogers when we need him? Or at least Oprah Winfrey?

    I should also note that while the media likes to blame the Millennials, the rates of depression have risen dramatically across all age groups in the last few years.

    If the test of a society is how it is dealing with problems, it seems that at least the US and the UK are failing.

    Why Millennial Depression Is on the Rise
    Depression Diagnoses Up 33% (Up 47% Among Millennials): Why There Is An Upside

    On the positive front, Dmitry Orlov notes that 5 years ago Mrs. Merkel identified the 3 most important problems in the world:
    *The Russian annexation of Crimea
    *ISIS in Syria
    *Ebola in Africa
    Dmitry notes that the Russians solved all 3. The Russian Federation seems to be a good place for the people in Crimea…they now have 3 official languages…Russian, Ukrainian, and Tatar. Russia systematically killed the ISIS fighters in Syria, and Dmitry gives you the numbers. Finally, the Russians invented a novel drug for Ebola. I found the press release. I don’t believe anyone in the US or the EU has ever mentioned it. Unless it makes money for UK or US drug companies it doesn’t exist.

    Consequently, we are failing to satisfy Donella Meadows requirement for accurate and fast information. My inclination is to blame those in power….how can they admit that things are going badly on their watch?

    Don Stewart

  16. Sorry, this is off topic but may be of interest to this group because we are all concerned with exogenous shocks to the current fragile system we inhabit. The flooding in the Midwest US, coupled with a tropical storm that is expected to arrive next week, threatens to destroy a system of Mississippi river control that would change the course of the river away from the deep water port of New Orleans, wreaking major long-term havoc on the U.S. economy with God knows what collateral consequences. US media have ignored the climate disaster unfolding in the US in favor of the far more important coverage of Russia! and Trump’s clownish behavior. You can find a good summary of the threat, however, at Tom Lewis’s blog, Daily Impact, his post dated June 4.

    • This is a new one on me. Perhaps relatedly, I’m surprised that we don’t more often hear about the outlook for water supply in California.

      Meanwhile, I’m still shocked at Mr Trump’s apparent endorsement of some of the worst possible candidates to replace Mrs May. Perhaps, though, he aims to help Nigel Farage, by getting the Conservatives to make a really bad choice?

    • It does seem to me Tim, that a significant number of the plates that were being kept spinning nicely now seem to be wobbling significantly.

      In just one day and to name just a few we have, Ford Bridgend plant closure, the Arcadia retail group restructuring, the fairly rapid drop in the price of oil, the European Commission’s threats vis the Italian Budget Deficit. There was more on the USA’s trade war with Mexico and India and China and …..

      I’m not sure if the problems at Neil Woodford’s funds are isolated or a harbinger for things to come.

      I Think it’s going to be an interesting summer.

    • Ladydog70:

      Indeed, so much so that I am struggling to keep up with everything! Here, in no particular order, are some comments:

      – China is in the late stage of a debt-fueled boom. All sorts of volumetric measures are tumbling, often by double-digit percentages, including sales of vehicles and domestic appliances, chips, small electric motors used throughout industry, smartphones, etc.. The P2P lending sector has collapsed. Corporate bond defaults are soaring, exposing problems with reported cash holdings (which often don’t exist), and domestic credit ratings (often extremely over-generous). Having said they would do the opposite, the authorities are pouring in liquidity, with the number for January alone equal to 5% of annual GDP.

      – This is having, or will have, serious knock-on consequences, in areas such as global trade, foreign direct investment, transport of goods, demand for commodities, property and other asset prices as Chinese investors either stop buying or turn sellers. Whole categories of global product sales are going into reverse with the China effect – cars, trucks, smartphones, components and so on.

      – The UK economy seems to be imploding. In addition to retailing and hospitality, and the disastrous outsourcing/PFI sector, we’re now seeing downturns in travel, cars, steel, communications, construction, with services likely to be next, and even on-line retailing has stopped growing. “Brexit” uncertainty doesn’t help, mainly because all other areas of policy seem to be on autopilot, which is absurd in a fast-changing world. If I was an international investor I’d be pulling out of anything GBP-related.

      As for Neil, I don’t know any more than you do, but I have had meetings with him, albeit quite a long time ago, and was very impressed, so I can only assume a horrible run of bad luck. He struck me as bright, likeable and ultra-trustworthy. Up until last year his track record was superlative.

    • PS On the UK situation, the protracted process of replacing Mrs May is risible. There seem to be about 1300 candidates (I’ve lost count), only two or three of which look like sensible choices (Mr Raab, Mrs Leadsom and Penny Mordaunt), and at least two of which scare me to death. Even then, the situation won’t have changed. By the autumn, the UK could very well face a severe economic crisis with nobody on the flight-deck. Mr Corbyn seems to have lost the plot, and I really can’t see TPTB letting Nigel Farage become PM.

    • Just for 12 months; reverts to 3% after that. No free lunch here, just a discount (for an arrangement fee).

  17. As interesting as the summer of 1914, perhaps……

    The expedients and fudges and stop-gaps (what a gap! a whole decade of illusory BAU) of 2008 do seem to be breaking down: first increasingly dreadful industrial data, and now, gradually, services being eroded.

    Can this possibly be papered over, perhaps for a shorter period ?

  18. Tad Patzek, Power, Population; Hardship
    I call your attention to
    and especially Figure 6 which shows the strong correlation between power production and population.

    Beginning in the 1950s the Odum family in the US formulated the Maximum Power Principle. That is, all living creatures seek to use the maximum power they can get their hands or paws or fins or leaves on. Power is energy per unit of time.

    I suggest that Tad’s Figure 6 presents some of the existential questions we face, right about now. Tad notes that there is some evidence that our ability to produce more power is failing. Dr. Morgan might add that rising ECoE puts an end to increasing power usage (at least for all purposes other than power production). So the system which has been working for the last couple of centuries, and particularly since WWII, is at risk.

    I see conflicting possibilities. Patzek strongly supports limits to population growth in order to retain more power for the individual who are actually alive. If we examine the graph in detail, we can see that from the American Civil War until WWI, population growth outpaced power production. I suggest that two technological developments may have played a role in that:
    *agricultural implements which permitted more production without power, such as mowers and reapers and harvesters and so forth
    *advances in public health, which reduced epidemics in cities such as London and Paris

    Then after WWII, as Tad notes, the US went on a power trajectory which was unprecedented….initially without a population increase in the same proportions, which accounted for the sense in the US that increased wealth (power) was our birthright. (I was born before the US entered WWII, and still regard the older power relationships as ‘normal’.)

    A figure showing historical relationships does not give us answers, and there is no guarantee that what has worked for decades will continue to work. I suggest at least the following possibilities:
    *Power will fall as in Tad’s Figure 5, but without the safety net of wind and solar
    *Power will fall as in Tad’s Figure 5, but humans will choose to build the safety net of wind and solar.
    *Humans will choose to limit population in order to maximize personal power, not family power
    *Humans will reproduce until all the declining power is used by 20 billion impoverished individuals
    *The Singularity Occurs, which gives us enough Power to turn the Planet into cinders
    *Universal Enlightenment occurs, and we discover that happiness happens between the ears, which doesn’t require much power at all.

    Whatever possibilities that you, personally, choose or expect, it seems to me that Tad’s Figure is a pretty good framework for thinking about the subject.

    Don Stewart

  19. If I may but in! I would welcome any comments on the potential of geothermal energy.

    • Geothermal has tremendous potential if you happen to live in Iceland. Otherwise, not so much.

      Pumping cold water into a deep well to extract the heat seems simple enough until you consider:

      1. The rock cools when you heat the water, so you must have a lot of rock surface area exposed. How do you do that? Fracking??

      2. When a lot of rock surface area is exposed to the universal solvent lots of salts are dissolved. Those salts ruin your turbines/heat exchangers.

      You can find BS about extracting low delta T energy from the ocean (or whatever – one proposal i have seen involved running pipes into space) it does work in the lab, and with sufficient investment i suppose one could turn a turbine and produce electricity. The obvious and insoluble problem is the low EROI. ( https://www.renewableenergyworld.com/ocean-energy/tech.html )

  20. “Falling diesel fuel demand in China.”

    Hello everybody. Although I’ve been reading the blog for a long time, it’s the first time I’m commenting so I take the opportunity to thanks Dr. Morgan for your inestimable work. I’m really looking forward your new post to give some light in these obscure days.

    I take your attention to this piece of new that, if confirmed, it can only shows that China is collapsing:


    “Diesel demand in China fell 14% and 19% in March and April, respectively, reaching levels not seen in a decade”.


    • Thank you, and welcome.

      As you’ve been visiting this site for a while, you’ll know that I’ve been saying for a long time that China is the largest single economic (as opposed to purely financial) vulnerability in the system. Far too many outside observers are impressed that China has doubled her GDP over a decade, but fail to notice that she’s had to almost quadruple her debt in order to do it. The next article here is likely to be about China. A point I’ll be keen to bring out is that Chinese policy priorities are wholly different from those of the West, which adds to much outside incomprehension.

  21. “Falling diesel fuel demand in China”

    Hello everybody. Although I’ve been reading the blog for a long time, it’s the first time I’m writing so I take the opportunity to specially thank Dr. Morgan for the inestimable work and the rest of the people commenting so interesting topics. I can only say that I’m eager to read the next post to give some light to this obscure days where are living.

    I would like to draw to your attention of this piece of new that, if confirmed, it could show the beginning of China collapse:


    It’s specially revealing the graph inside, which can be summarized in: “Diesel demand in China fell 14% and 19% in March and April, respectively, reaching levels not seen in a decade”.

    Comments are more than welcome.


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